Naz, LLC v. Philips Healthcare
2:17-cv-02882
| E.D. La. | Mar 8, 2018Background
- NAZ, LLC and Ad Neuro purchased a Philips Ingenia 3.0T Omega MRI (a "complete package") and entered into negotiations and post-sale service/installation arrangements with Philips; plaintiffs allege Philips represented the package would meet their specific clinical purposes.
- MRI was released to plaintiffs in December 2014; clinical use began January 5, 2015; within days technicians observed calibration issues and cover separation; Philips engineers quenching the MRI released helium through a roof vent and the MRI became inoperable.
- Plaintiffs allege Philips’ engineers left a roof opening after the quench, rain entered, and plaintiffs incurred approximately $850,000 in property repair costs; plaintiffs also allege the MRI support/installation was inadequate, requiring extensive repairs, delayed reactivation until April 2016, and that the promised software/hardware component was never delivered.
- Plaintiffs sued (April 4, 2017) asserting gross fault and multiple breach-of-contract theories (including breach of installation/service agreements and failure to deliver a complete system) and sought a broad list of damages including property damage, lost profits, and non-pecuniary and punitive damages.
- Philips moved under Rule 12(c)/56 to dismiss or for summary judgment on the property-damage claim as prescribed and precluded by the Louisiana Products Liability Act (LPLA), and under Rule 12(b)(6) to dismiss certain categories of damages as legally unavailable or duplicative.
- The court denied Philips’ Rule 12(c) / summary judgment request on prescription/LPLA grounds (finding plaintiffs plausibly alleged separate installation/service contract breaches that caused the property damage) and granted in part the Rule 12(b)(6) motion by dismissing punitive/exemplary and non-pecuniary damages but denied dismissal of economic-loss categories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs’ property-damage claim is barred by the LPLA and/or prescribed | Plaintiffs say damage was caused by Philips’ engineers breaching installation/service agreements (contract claim with 10‑year prescriptive period) | Philips says the damage was caused by the product/quench and thus governed by the LPLA with a 1‑year prescriptive period, so the claim is prescribed | Court: Denied summary judgment; plaintiffs plausibly alleged contract-based damage distinct from product defect, so claim not facially prescribed at this stage |
| Whether summary judgment is appropriate on prescription given documentary evidence | Plaintiffs say factual disputes (existence/scope of separate service contract) make summary judgment premature | Philips relies on email and discovery showing plaintiffs knew cause earlier, supporting prescription | Court: Summary judgment premature — factual disputes about contractual obligations and causation remain |
| Whether punitive/exemplary and non‑pecuniary damages are recoverable | Plaintiffs originally pleaded them but concede they are not recoverable under Louisiana law | Philips seeks dismissal of these categories | Court: Granted — punitive/exemplary and non‑pecuniary damages dismissed as unavailable under Louisiana law |
| Whether specific economic‑loss categories should be dismissed as duplicative | Plaintiffs assert those categories are recoverable economic losses tied to contract/tort claims | Philips argues certain listed categories are duplicative and should be dismissed | Court: Denied dismissal — plaintiffs may plead particular economic damages; court will prevent duplicative recovery at later stages |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard requires factual plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plaintiff must plead facts raising a plausible claim)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment: genuine dispute exists if reasonable jury could return verdict for nonmoving party)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must show evidence that could lead a reasonable jury to find for it)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment appropriate when nonmoving party fails to establish essential element)
- Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305 (Rule 12(c) standard mirrors Rule 12(b)(6))
- Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242 (dismissal motions disfavored; treat well‑pleaded facts as true)
- Priester v. Lowndes Cty., 354 F.3d 414 (plaintiff entitled to offer evidence; dismissal only if no set of facts could support relief)
- Boyett v. Redland Ins. Co., 741 F.3d 604 (in diversity cases, apply forum state substantive law)
- Chevron USA, Inc. v. Aker Maritime, Inc., 604 F.3d 888 (LPLA subsumes claims for damage caused by a defective product; distinguishes product versus contract/service‑caused damage)