807 N.W.2d 343
Mich. Ct. App.2011Background
- Merck manufactured Vioxx; FDA approved it in 1999 for several indications.
- Michigan filed MFCA claim in 2008 alleging Merck fraudulently marketed Vioxx and Michigan Medicaid reimbursed prescriptions.
- Plaintiffs seek recovery of Medicaid overpayments and unjust enrichment.
- Merck moved for summary disposition arguing MFCA claim is a product-liability action barred by MCL 600.2946(5) for FDA-approved drugs.
- Trial court denied summary disposition; the Supreme Court reversed and remanded to apply the statute’s plain terms under MCL 600.2945(h) and (5).
- Court addresses whether MFCA claim is a product-liability action and whether the losses are “damage to property” under the statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MFCA claim is barred as a product-liability action. | Michigan (plaintiff) contends MFCA claim is not a product-liability action. | Merck contends MFCA claim falls within 600.2946(5) as a product-liability action. | Yes, barred as product-liability action. |
| What constitutes a 'product liability action' under 600.2945(h) and (i). | Claims involve fraud/false representations, not traditional product liability. | Claims fit the production-based definition of damage to property under product liability. | Damages to Medicaid payments deemed 'damage to property' from production; action barred. |
| Whether monetary overpayments constitute 'damage to property' under 600.2945(h). | Money lost constitutes property loss due to the product's production. | Only physical damage to property qualifies as damage to property. | Monetary loss qualifies as damage to property for product-liability purposes. |
| Does the MFCA claim fall within an exception to the absolute defense (fraud with FDA dealings) or otherwise survive? | Exceptions exist for FDA fraud, but court treats MFCA claim as barred. | No exception applies here; FDA-related fraud falls outside MFCA scope. | Except for FDA fraud, MFCA claim barred by 600.2946(5). |
Key Cases Cited
- Taylor v Gate Pharm, 468 Mich 1 (2003) (FDA approval immunizes drug manufacturers from certain product-liability claims)
- Maiden v Rozwood, 461 Mich 109 (1999) (de novo review of summary disposition; pleadings focus)
- McElhaney v Harper-Hutzel Hosp, 269 Mich App 488 (2006) (interpretation of statutory language; plain meaning governs)
- Neibarger v Universal Coop., 439 Mich 512 (1992) (economic loss doctrine and product liability context)
- Garrás v Bekiares, 315 Mich 141 (1946) (money as property; damages include economic loss)
- Reiter v Sonotone Corp., 442 U.S. 330 (1979) (injury to property and economic loss analysis)