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Connell v. Lima Corporate

United States District Court, D. Idaho

January 30, 2019

JEFFREY D. CONNELL and JANET CONNELL, husband and wife, Plaintiffs,
LIMA CORPORATE; LIMA USA, INC., an Indiana corporation; and JOHN DOE CORPORATIONS I through V, Defendants.




         Six motions are pending before the Court: Lima Defendants'[1] two motions to exclude certain evidence (Dkts. 97 and 106), and motion for summary judgment (Dkt. 104), as well as Connell Plaintiffs' motion to exclude certain evidence (Dkt. 73), motion for partial summary judgment (Dkt. 98), and motion for leave to amend the complaint to add a claim for punitive damages. (Dkt. 99.) All six motions are fully briefed, and the Court heard oral argument on each motion from the parties on January 22, 2019. After careful consideration of the record, the parties' briefing and oral argument, as well as relevant authorities, the Court will grant Defendants' motion for summary judgment.


         In April of 2011, Plaintiff Jeffrey Connell underwent a total hip revision surgery at Saint Alphonsus Medical Center in Boise, Idaho. (Dkt. 1-6 at 3.) Plaintiff Janet Connell is his wife. Id. at 1. During the surgery Dennis McGee, M.D. implanted a femoral stem prosthesis. Id. at 3. The device implanted in Mr. Connell was sold to St. Alphonsus by Rose & Associates, a medical device distribution company. (Dkt. 59 at 4.) Rose & Associates contracted with DJO Surgical to distribute hip prosthesis systems in Idaho and other states. Id. at 3. The hip system implanted into Mr. Connell consisted of three parts: a revision hip stem, a femoral neck, and a safety screw. (Dkt. 113-3.) As discussed in detail below, the two main parts of the hip system, the stem and the neck, were manufactured in Italy by Defendant Lima Corporate S.p.a. (Lima). (Dkt. 112-1 at 3.)

         At the time of his revision surgery, Mr. Connell was 49 years of age, approximately 6 feet tall, weighed 217 pounds, and had a Body Mass. Index (BMI) in excess of 28. (Dkt. 59 at 5.) X-rays of Mr. Connell taken prior to his revision surgery showed he had proximal bone loss in his femur. (Dkt. 104-22 at 2).

         In October of 2014, the femoral stem portion of Mr. Connell's hip prosthesis fractured while he was performing his work as a plumber-just three and one half years after implantation. (Dkt. 1-6 at 3.) Doctors at the University of Utah removed the failed hip prosthesis and implanted a different type of hip system. Id. at 3-4. The failed hip prosthesis was discarded after it was removed. (Dkt. 104-2 at 7.)

         DJO produced a Product Complaint Report after investigating the fracture incident. (March 26, 2015 report, Dkt. 113-5.) According to DJO's report, the definitive root cause of the stem fracture could not be determined at that time because the hip stem was discarded and thus not available for inspection or testing. Id. at 3.

         On August 9, 2016, Jeffery and Janet Connell filed a complaint against Lima Corporate, Lima USA, Inc., and the DJO entities. (Complaint, Dkt. 1-6.) Plaintiffs asserted product liability claims under Idaho law based in strict liability, negligence, and breach of warranty, as well as a claim of negligent infliction of emotional distress against all defendants. Id. In July of 2018, the DJO entities and Plaintiffs reached a settlement and filed a joint motion to dismiss all claims against the DJO entities. (Dkt. 62.) The settlement prompted a period of hard-fought discovery, concluding with the Court granting Plaintiffs' and DJO entities' motion to dismiss in November of 2018. (Dkt. 95.) As a result, the Lima entities became the only remaining defendants in this matter.

         On November 19, 2018, Lima filed the present motion for summary judgment, arguing, primarily that, because it was a component supplier of medical device parts for DJO's hip system, all claims against Lima are preempted by the Biomaterials Access Assurance Act (BAAA). 21 U.S.C. Section 1604 et seq. However, as noted above, numerous motions are currently pending before the Court. The motions include Plaintiffs' motion for partial summary judgment on Lima's affirmative defense of comparative fault as to Dr. McGee and DJO (Dkt. 98), as well as a motion to amend the complaint to add a claim for punitive damages. (Dkt. 99.) The other motions are evidentiary in nature whereby the parties seek to exclude certain evidence from trial. (Dkts. 73, 97, and 106.) Although the Court carefully considered the parties' briefing and arguments on all of these motions, the Court will first analyze the merits of Lima's motion for summary judgment based on BAAA preemption. As such, the facts that follow relate specifically to whether the BAAA so applies.

         1. 2009 Supply Agreement

         In April of 2009, Encore Medical, doing business as DJO Surgical, entered into a written supply agreement with Lima. (Dkt. 103-3.) According to the agreement's terms, as the “Seller, ” Lima agreed to supply to DJO, the “Purchaser, ” with “parts … used in or incorporated into a joint prosthesis system, including without limitation, the Components and Instruments, all in accordance with the terms and conditions” of the agreement. Id. at 4. The agreement described the Seller as being “engaged in the design, development, manufacture, distribution and sale of, among other things, the Components … for use in, among other things, total joint replacement systems.” Id. Whereas the agreement described the Purchaser as being, “engaged in the design, development, manufacturing, distribution and sale of, among other things, joint prosthesis systems.” Id.

         The agreement defines Components as “parts developed and/or manufactured by Seller and designed for incorporation into joint prosthesis systems.” Id. at 27. “Revision Modular Stems” are included within the agreement's list of Components. Id. at 36. The agreement describes a revision stem as being “made up of two components, a diaphyseal stem and a femoral neck.” Id. at 31. The agreement provided that Lima was to manufacture stems in six different diameters and two different lengths. Id. Likewise, Lima was to manufacture the neck portion in varying specified sizes. Id. Lima was also to “manufacture the Components […] in accordance with the applicable current Purchaser approved drawings […] and the applicable delivery specifications.” Id. at 5.

         The Supply Agreement specified other details pertinent to the question before the Court, including that Lima granted to DJO a non-exclusive license and right to use Lima's trademarks in marketing materials. Id. at 14. Title to the Components passed to DJO at the place of shipment, and DJO assumed all risk of damage to such Components. Id. at 9. Accordingly, the agreement provided that all Components received by DJO were “subject to inspection and performance testing, if any, to determine the Components'… conformity to the … Specifications.” Id., Section 4.01.

         The Supply Agreement also set forth terms to govern regulatory matters related to the Components. Id. at 10. Both Lima and DJO agreed to “comply in all material respects with all applicable Laws that pertain[ed] to the activities for which Seller and Purchaser [were] each responsible under [the] Agreement.” Id. However, the agreement also assigned DJO the responsibility for obtaining, in DJO's name, all regulatory certifications to allow “Purchaser and Seller to sell the Product and all Components” in the United States, “including all FDA clearance letters and 510(k)s.”[2] Id. The agreement required Lima to “assist” DJO in obtaining the certifications by providing declarations of conformity and certification, technical files, licenses and registrations, and specifications. Id. Lima agreed also to provide DJO with immediate notice should it obtain information that indicated a material defect that could affect the safety or efficacy of any of the Components. Id.

         DJO further agreed to comply with the FDA's Medical Device Reporting requirements, as set forth in 21 C.F.R., Part 803. Id. Again, Lima agreed to assist DJO by providing information necessary for compliance with the reporting requirements. Id. Finally, among these terms of the agreement related to regulatory responsibilities, Lima and DJO both agreed to submit to the United States Food and Drug Association (FDA) “any necessary reports of removals, corrections, or other field actions” respecting “the Product and Product's Labeling” and “the Components.” Id. at 12.

         2. DJO's 510(k) Application to the FDA

         With the Supply Agreement in place, on July 31, 2009, DJO submitted a 510(k) application to the FDA. (Dkt. 113-2.) The application requested FDA clearance for use of a new hip stem. Id. at 2. In the application, “DJO Surgical” was identified as manufacturer of the “DJO Modular Revision Femoral Hip Stem, ” which the application described as being “made up of a modular stem coupled with a proper neck by means of a ‘Morse' taper stabilized during the implantation phase by a safety screw.” Id. DJO's application referred to the three parts as a “system.” Id.

         Of particular note, DJO's 510(k) application included a section titled, “Packaging and Sterilization.” Id. at 8. Therein, DJO described the process by which it would package, label, and sterilize the parts of the hip system to ready them for commercial distribution. Id. The process involved DJO completing the following; First, DJO placed each component into multiple polyethylene peel pouches. Id. Next, DJO air vacuumed and heat sealed each pouch. Id. DJO then placed the components in a container, separated by protective packaging, including die cut paperboard and foam pads to restrict movement. Id. DJO affixed product labeling to each portion of the packaging, from the innermost pouch to the outer container. Id. DJO included its Instructions for Use and tracking labels inside the carton. Id. Next, DJO shrink-wrapped “[t]he entire packaged assembly.” Id. According to the application, DJO sterilized the product “after the implant [was] packaged and ...

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