ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO DISMISS RICHARD EIDSON’S COMPLAINT AND SCOTT AND APRIL BELL’S COMPLAINT
Plаintiffs Scott and April Bell (“the Bells”) commenced this action on April 3, 2013, alleging that Scott Bell suffered harmful side effects following a spinal fusion operation in which his surgeon used a spinal fusion device produced by Medtronic, Inc. and Medtronic Sofamor Danek USA, Inc. (collectively, “Defendants”). ECF Bell No. 37, 13-CV-01502, Bell First Amended Complaint (hereinafter “Bell complaint”).
Defendants now move to dismiss both amended complaints pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. ECF Bell No. 42; ECF Eidson No. 39. This Order addresses both motions to dismiss.
The Court vacated the hearing on Defendants’ motion to dismiss the Eidson complaint. ECF No. 57. The Court-held a hearing on Defendants’ motion to dismiss the Bell complaint on May 8, 2014 concerning only the statute of limitations issue. Having considered the submissions and oral arguments of the parties, the relevant law, and the record in this case, the Court GRANTS IN PART with prejudice and DENIES IN PART Defendants’ motion to dismiss the Eidson complaint, and GRANTS IN PART with prejudice and DENIES IN PART Defendants’ motion to dismiss the Bell complaint.
I. BACKGROUND
A. Factual Allegations
1. Infuse Device and Premarket Approval
The Court reviewed the factual background of these cases in its October 3, 2013 Order. See Eidson,
Medtronic Sofamor Danek, USA, Inc. manufactures a medical device known as the Infuse Device (“Infuse”) which stimulates bone growth in spinal fusion surgeries. Bell Complaint ¶ 2; Eidson Complaint ¶2. Infuse consists of three components: (1) the active ingredient, a liquid form of the protein rhBMP-2 which stimulates bone growth, (2) a metallic spinal fusion cage (the “LT Cage”) to stabilize and hold in place the liquid protein, and (3) a spongy carrier for the protein. Id. ¶ 34; Id. ¶ 33. The FDA in July 2002 granted Infuse premarket approval (“PMA”) as a medical device under the Federal Food, Drug, and Cosmetic Act of 1938 (“FDCA”), as amended by the Medical Device Amendments of 1976 (“MDA”). Id. ¶¶58, 63; Id. ¶¶45, 60. Following this approval, Defendants were permitted to sell the Infuse Device. Id. ¶ 44; Id. ¶43.
The FDA’s approval letter stated that the Device may be implanted (1) from the anterior (front) abdomen, (2) for purposes of a single-level fusion, (3) within lumbar spine levels L4 through SI, and that In
Plaintiffs allege that beginning in 1999, Defendants were aware that medical studies had found evidence of severe side effects associated with the off-label use of Infuse, particularly excessive bone growth. Id. ¶¶ 103-105; Id. ¶¶ 104-105, 123. Despite this knowledge, Defendants embarked on a vigorous campaign to promote off-label uses of Infuse by establishing consulting/royalty agreements with physicians who advocated off-lаbel uses. Id. ¶¶ 120-121, 179-184; Id. ¶¶ 119-120, 178-183. Defendants also funded studies and articles by opinion leaders that omitted mentions of the risks of off-label use or understated the incidence of adverse effects. Id. ¶¶ 105, 127; Id. ¶¶71, 104, 126. In addition, Defendants failed to report adverse events suffered by patients who used Infuse off-label to the FDA, and by April 2008 Defendants had reported only 262 of an estimated 50,000-250,000 adverse events. Id. ¶ 319; Id. ¶ 309. This failure to report led to the omission of these events from the FDA’s publicly accessible MAUDE database. Id. ¶¶ 113, 280; Id. ¶¶ 111-112, 279. These activities led to investigations by the Department of Justice resulting in a $40 million settlement and Corporate Integrity Agreement on July 18, 2006. Id. ¶¶ 146-150; Id. ¶¶ 145-149. Defendant’s promotion of off-label use also led to significant controversial media coverage in the Wall Street Journal and the New York Times. Id. ¶¶ 96, 185, 191; Id. ¶¶ 95,184,190-191.
2. Scott Bell’s surgery
In February 2005, Scott Bell underwent a spinal fusion operation in which his surgeon, Dr. Seago, used Infuse in an off-label manner by implanting it by posterior approach and by failing to use an LT Cage. Bell Complaint ¶ 286. The Bells allege that Defendants directly and indirectly encouraged his surgeon to use an off-label procedure. Id. ¶287. Dr. Seago did not inform the Bells that the operation would involve rhBMP-2, and the surgical consent form Mr. Bell signed inaccurately implied that the surgery would instead involve a natural iliac crest bone graft. Id. ¶ 290, 292. Only the hospital’s “sticker page” of equipment used in the procedure notes the use of an artificial protein graft. Id. ¶ 293. After his surgery, Scott Bell experienced increased pain and was told by Dr. Seago that this was due to a “biological phenomenon.” Id. ¶ 291. On March 2, 2007, Scott Bell was diagnosed with advanced bony overgrowth in the area of his spine targeted by the surgery. Id. ¶ 288. Scott Bell underwent corrective surgery for this overgrowth on May 3, 2007. Id. Neither Dr. Seago nor any of Scott Bell’s other physicians ever informed him that Infuse was used in his surgery and may have contributed to his side effects. Id. ¶¶ 294-296.
As a result, Plaintiffs Scott and April Bell bring five causes of action against Defendants in connection with Infuse: (1) fraudulent misreprеsentation/fraud in the inducement (id. ¶¶ 299-311); (2) strict products liability—failure to warn (id. ¶¶ 312-327); (3) negligent misrepresentation (id. ¶¶ 328-338); (4) negligent failure to warn (id. ¶¶ 329-353); and (5) loss of consortium on behalf of April Bell (id. ¶¶ 354-356).
On November 11, 2008, Plaintiff Richard Eidson underwent a spinal fusion operation that utilized Infuse in an off-label manner by implanting the device from the back, by using a multi-level fusion, and by failing to use an LT Cage. Eidson Complaint ¶285. Eidson alleges Defendants directly and indirectly encouraged his surgeon, Dr. Smith, to use an off-label procedure. Id. ¶ 285-286. After the surgery, Eidson began experiencing pain, weakness, decreased sensation, and decreased reflexes in his legs and back pain. Id. ¶287. On May 14, 2012, he was diagnosed with fluid-filled cysts within the vertebral bodies where the surgery had taken place, and now has severe pain, reduced sensation, strength, and reflexes in his lower extremities. Id. ¶288. He has also suffered bone resorption and bone overgrowth. Id. ¶ 12.
As a result, Eidson brings four causes of action against Defendants in connection with Infuse: (1) fraudulent misrepresentation/fraud in the inducement (id. ¶¶ 290-302); (2) strict products liability—failure to warn (id. ¶¶ 303-317); (3) negligent misrepresentation (id. ¶¶ 318-328); and (4) negligent failure to warn (id. ¶¶ 329-342).
B. Procedural History
Plaintiffs Scott and April Bell filed their original complaint on April 3, 2013. ECF Bell No. 1. Defendants filed a Motion to Dismiss the Complaint on May 14, 2013. ECF Bell No. 10. Plaintiffs filed an opposition to the Motion to Dismiss on July 1, 2013. ECF Bell No. 20. Defendants filed a reply on July 22, 2013. ECF Bell No. 24.
Plaintiff Richard Eidson filed his complaint on May 6, 2013. ECF Eidson No. 1. Defendants filed a Motion to Dismiss the Complaint on May 28, 2013. ECF Eidson No. 9. Plaintiff filed an opposition to the Motion to Dismiss on July 1, 2013. ECF Edison No. 18. Defendants filed a reply on July 22, 2013. ECF Eidson No. 21.
On October 3, 2013, the Court granted Defendants’ motion to dismiss as to the Bells’ claims and granted in part and denied in part Defendants’ motion to dismiss as to Eidson, giving both plaintiffs leave to amend.
Plaintiffs Scott and April Bell filed a First Amended Complaint on November 15, 2013. ECF Bell No. 37. Defendants filed a Motion to Dismiss the First Amend
Plaintiff Richard Eidson filed a First Amended Complaint on November 15, 2013. ECF Eidson No. 38. Defendants filed a Motion to Dismiss the First Amended Complaint on January 8, 2014. ECF Eidson No. 39 (“Eidson MTD”). Plaintiff filed an oрposition on February 7, 2014. ECF Edison No. 46 (“Eidson Opp’n”). Defendants filed a reply on February 21, 2014. ECF Eidson No. 47 (“Eidson Reply”).
II. LEGAL STANDARDS
A. Motion to Dismiss Under Rule 12(b)(6)
Federal Rule of Civil Procedure 12(b)(6) permits a party to move to dismiss a complaint for failure to state a claim upon which relief can be granted. To survive a motion to dismiss, a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
A court is not required, however, to “ ‘assume the truth of legal conclusions merely because they are cast in the form of factual allegations.’ ” Fayer v. Vaughn,
B. Federal Rule of Civil Procedure 9(b)
When sitting in diversity, a court applies Federal Rule of Civil Procedure 9(b)’s heightened pleading standard to any state law causes of action sounding in fraud or deceit. See Vess v. Ciba-Geigy Corp. USA,
C. Leave to Amend
If the Court determines that the complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “should be freely granted when justice so requires,” bearing in mind that “the underlying purpose of Rule 15 ... [is] to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith,
D. Requests for Judicial Notice
While a court generally may not consider evidence or documents beyond the complaint in the context of a Rule 12(b)(6) motion to dismiss, Federal Rule of Evidence 201(d) provides that “[a] court shall take judicial notice [of an adjudicative fact] if requested by a party and supplied with the necessary information.” A court may take judicial notice of any fact that is “not subject to reasonable dispute in that it is either (1). generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned.” Id.
A court may consider documents “whose contents are alleged in a complaint and whose authenticity no party questions,” despite such documents not being physically attached to the pleadings. Knievel v. ESPN,
Defendants have filed Requests for Judicial Notice in support of their motions to dismiss both Plaintiffs’ complaints. ECF Bell No. 44; ECF Eidson No. 41. With regard to Defendants’ motion to dismiss the Bell complaint, the documents as to which Defendants request notice are pre
With regard to Defendant’s motion to dismiss the Eidson complaint, Exhibits AH, for which Defendants request notice, are the same as those contained in the Request for Judicial Notice accompanying Defendants’ motion to dismiss the original complaint. See ECF Eidson No. 10; ECF Eidson No. 41. Plaintiffs have not filed an opposition to these requests, and for the reasons set forth in this Court’s October 3, 2103 Order, the Court grants Defendants’ request for judicial notice with regard to those exhibits.
However, Defendants also request judicial notice of one document not contained in the Request for Judicial Notice accompanying their motion to dismiss the original complaint. The newly included document, Exhibit' I, consists of a Medtronic “Important Medical Information” label regarding the use of Infuse. ECF Eidson No. 41, at 2. Defendants assert that Exhibit I is the warning label in effect at the time of Eidson’s surgery. Id. at 3^4. The Court based its grant of all Defendants’ previous requests on the fact that “all of the documents at issue appear on the FDA’s public website,” and were matters of the public record. Eidson,
III. REGULATORY BACKGROUND AND PREEMPTION LAW
Before addressing Defendants’ arguments, the Court sets forth the regulatory background and legal framework for preemption.
A. Federal Regulation of Medical Devices
In 1976, Congress enacted the MDA, which “imposed a regime of detailed federal oversight” over the entry of medical devices. Riegel v. Medtronic,
B. Federal Preemption
1. Express Preemption
Defendants move to dismiss Eidson’s complaint on the ground that all of his state law claims are expressly preempted by the MDA. The MDA contains an express preemption provision:
[N]o State or political subdivision of a State may establish or continue in effect with respect to a device intended for human use any requirement—
(1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and
(2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter.
21 U.S.C. § 360k(a). The Supreme Court established a two-step framework for analyzing express preemption under the MDA in Riegel,
State law claims can escape preemption only if they are based on state duties “parallel” to federal duties stemming from the FDA regulations. See Stengel v. Medtronic Inc.,
2. Implied Preemption
The MDA also prohibits suits by private litigants to enforce the provisions of the Act, requiring that all such actions “shall be by and in the name of the United States.” 21 U.S.C. § 337(a). The Supreme Court, in Buckman Co. v. Plaintiffs’ Legal Committee,
The Supreme Court in Buck-man impliedly preempted a plaintiffs claims alleging that a device manufacturer made misrepresentations to the FDA during the PMA process. Id. at 348, 121 S.Ct.
Together, express preemption and implied preemption provide only a “narrow gap” through which a plaintiffs claims must fit in order to survive. Perez v. Nidek Co., Ltd.,
IV. ANALYSIS
A. Analysis of Defendant’s Argument that the Bells’ Claims are Time-Barred
The Court first addresses Defendants’ argument that all of the Bells’ claims are time-barred. Bell MTD at 4-8. In its October 3, 2013 Order, this Court dismissed the Bells’ claims with leave to amend, finding that the claims were barred by the statute of limitations because the Bells’ complaint did not allege sufficient facts regarding the discovery rule. Eidson,
In their amended complaint, the Bells have included the following assertions regarding their delay in discovering Defendants’ wrongdoing and filing their suit:
(1) “At the time of his surgery on February 24, 2005, Dr. Randall Seago did not inform plaintiff Scott Bell that he was using rhBMP-2 by any name (INFUSE®, BMP), and did not obtain his consent to use rhBMP-2.” Bell Complaint ¶ 290.
(2) “Mr. Bell’s consent form does not mentioned [sic] rhBMP, BMP, or INFUSE®. Instead, ... the consent implies that bone was to be taken from Mr. Bell’s iliac crest, not that INFUSE® would be used.” Id. at ¶ 292.
(3) “The operative report itself does not mentioned [sic] the use of rhBMP-2. Only the separate ‘sticker page,’ which is the hospital’s record of devices and equipment used during the procedure, mentions the use of rhBMP-2.” Id. at ¶ 293.
(4) “When plaintiff Scott Bell experienced increased pain after his surgery, Dr. Randall Seago told him that his pain was due to a ‘biological phenomenon’ in terms of the way Mr. Bell’s bodyuniquely reacted to surgery. Dr. Seago did not state, or imply in any way, that Mr. Bell’s pain and other symptoms were- potentially the result of any product used during the surgery.” Id. at ¶ 291.
(5) “At no time did any of Scott Bell’s treating physicians inform him that rhBMP-2 had been used in his surgery.” Id. at ¶ 294.
(6) “At no time did any of Scott Bell’s treating physicians inform him that any product defect of failure might have caused or contributed to his new symptoms.” Id. at ¶ 295.
(7) “Until April 2012, Scott Bell had no reason to suspect, and did not suspect, that any product defect or failure might have caused his symptoms.” Id. at ¶ 296.
(8) “In April 2012, Scott Bell’s mother saw a lawyer commercial regarding lawsuits involving MEDTRONIC’S INFUSE® device. She mentioned this to Scott Bell, asking whether that device might have been used in his surgery. Within two weeks, in April 2012, Scott Bell contacted a lawyer in order to find out whether this device had been used in his surgery and might have contributed to his injuries.” Id. at ¶ 297.
(9) “Despite diligent investigation by Plaintiff into the cause of his injuries, including numerous consultations with Mr. Bell’s medical providers, the nature of Plaintiffs injuries and damages, and their relationship to INFUSE® was not discovered, and through reasonable care and diligence could not have been discovered, until a date within the applicable statute of limitations for filing Plaintiffs claims.” Id. at ¶ 298.
Defendants argue that the Bells have failed to plausibly allege facts regarding why their failure to file a timely claim should be excused. Bell MTD at 4-8. The Court disagrees.
A federal court sitting in diversity on a state law claim must apply the state statute of limitations. Bancorp Leasing & Fin. Corp. v. Agusta Aviation Corp.,
First, the Court concludes that it is plausible that the Bells were not on inquiry notice until April 2012. The discovery rule “delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action.” Fox,
Here, in light of the Bells’ allegations, the Court finds that the question of when the Bells were on inquiry notice of Defendants’ alleged wrongdoing is a question of fact, and cannot be decided as a matter of law at this stage of the proceedings, because the Bells’ allegations do not support only one reasonable conclusion. While Defendants argue that the only reasonable conclusion is that the Bells were on inquiry notice by May 2007 when Scott Bell underwent corrective surgery for his bony overgrowth or at the latest by 2008, Bell MTD at 8, it is plausible that the Bells were not
Defendants’ arguments to the contrary are unavailing. Defendants argue that the Bells should have been on inquiry notice by May 2007 because the reasonable person would have requested his surgical records from his initial surgery after having to go through corrective surgery in May 2007. Bell MTD at 6. Defendants claim those records would have revealed the alleged wrongdoing because the Bells’ own complaint concedes that the separate sticker page to the operative report, which is the hospital’s “record of devices and equipment used during the procedure,” mentioned the use of rhBMP-2, the protein used in Infuse. Id. (citing Bell Complaint at ¶293).
Second, Defendants argue that even assuming the Bells were not placed on inquiry notice by May 2007, they should have been placed on notice by 2008 because their complaint alleges that the off-label use of Infuse was the subject of widespread media attention as early as July 1, 2008, including articles that stated that off-label use could lead to bony overgrowth of the type whiéh Scott Bell was experiencing. See Bell MTD at 6-7; Bell Complaint ¶ 96 (discussing September 4, 2008 Wall Street Journal article linking off-label use of Infuse to “unwanted bone growth near nerves” and stating that 75 percent of adverse events reported to the FDA involved off-label use); id. ¶ 201 (noting a May 19, 2009 New York Times article regarding Defendants coming under investigation by the Department of Justice for off-label promotion of Infuse); id. ¶ 94 (citing how FDA issued on July 1, 2008 a “Public Health Notification” warning about the “serious complications” that may arise from off-label use). Defendants’ argument fails because it has been rejected by California courts. In Unruh-Haxton v. Regents of University of California,
Similarly, in Nelson, the plaintiffs cause of action arose from her use of a diet drug sold as Redux. Id. at 1204, 48 Cal.Rptr.3d
Federal courts applying California law have come to similar conclusions. See, e.g., Yumul v. Smart Balance, Inc.,
The Court further notes that even assuming the Bells saw these media articles, it is plausible that the articles would not have put the Bells on notice because the Bells allege they had no idea that Infuse was used in Scott Bell’s surgery. This point distinguishes this case from Soliman v. Philip Morris Inc.,
In sum, the Court cannot conclude that the only reasonable inference to be drawn from the Bells’ allegations is that a reasonable person in Scott Bell’s position would have been on inquiry notice at the latest by 2Ó08. Thus, Defendants have not met their burden of showing that the Bells suspected or should have suspected the wrongful cause of Scott Bell’s injuries by 2008.
Second, the Court explаins why the Bells have pled sufficient facts showing (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. “Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to filé'suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” Jolly,
The Bells have met their burden with respect to the first prong of the Fox test by alleging the time and manner of discovery, i.e., when they were on inquiry notice of Defendants’ alleged wrongdoing. Their complaint makes clear how and when Scott Bell discovered facts sufficient to put the Bells on notice. The complaint alleges Scott Bell was alerted in April 2012 by his mother based on a television commercial she saw, after which time Scott Bell contacted a lawyer to investigate. Bell Complaint ¶ 297. The Bells have also pled sufficient facts with respect to the second prong of the Fox test by alleging that they acted with reasonable diligence to discover the cause of his injuries and were unable to have made earlier discovery despite such diligence. Bell Complaint ¶ 298. Standing alone, such allegations would be deemed conclusory and would fail to withstand dismissal. However, the Bells allege additional facts that support their allegations, as elaborated above. For example, they allege that they made “numerous consultations with Mr. Bell’s medical providers,” id. that his doctor never informed him Infuse was to be used in the surgery, that Scott Bell’s consent form never mentioned Infuse but implied that the bone was to be taken from his iliac crest instead, that his doctor told him his pain was due to a “biological phenomenon” and did not mention it could be caused by any product used during his surgery. Id. at ¶¶ 290-296. These allegations could support the inference that a reasonably diligent person would not have made an earlier discovery by investigating further, given that Scott Bell may have reasonably relied on his doctor’s statement that the cause of his injuries was just a
Finally, the Court notes that four of the cases cited by Defendants, namely Jolly, Norgart, Fox, and Gutierrez, are readily distinguishable from the instant .case. “In both Jolly and Norgart, the court emphasized that the plaintiffs had ample reason to suspect the basis of their claims.” Fox,
Because the Court finds that the Bell complaint alleges sufficient facts to satisfy the pleading requirements of the discovery rule, the Court rejects Defendants’ argument that the Bell complaint must be dismissed as time-barred.
B. Analysis of both Richard Eidson and the Bells’ Fraudulent Misrepresentation/Fraud in the Inducement Claims, Negligent Misrepresentation Claims, Strict Liability Failure to Warn Claims, and Negligent Failure to. Warn Claims
Both Eidson and the Bells bring the same four causes of action: (1) fraudulent misrepresentation/fraud in the inducement; (2) negligent misrepresentation; (3) strict products liability failure to warn; and (4) negligent failure to warn. The Bells also bring a fifth cause of action: loss of consortium on behalf of April Bell. The Court addresses April Bell’s consortium claim in Part IV.C below. In this section, the Court addresses both Eidson and the Bells’ fraudulent misrepresentation/fraud in the inducement claims, negligent misrepresentation claims, strict liability failure to warn claims, and negligent failure to warn claims. Defendants raise the exact same arguments against each of these four claims in their motion to dismiss the Eid-son complaint and their motion to dismiss the Bell complaint. Thus, the Court addresses Defendants’ arguments together with respect to both Eidson and the Bells’
Defendants argue that all of. Plaintiffs’ claims are expressly and impliedly preempted, Eidson MTD at 4-18, and that their fraud claims are not pled with the requisite particularity and fail to state a claim under California law. Eidson MTD at 19-21. Plaintiffs respond that their claims are not preempted, are pled with the requisite particularity, and state valid claims under state law. See generally Eid-son Opp’n. The Court discusses each of Defendants’ three arguments in turn below.
1. Preemption of Plaintiffs’ Claims
The Court first addresses whether each of Plaintiffs’ claims are expressly or impliedly preempted under federal law.
а. Fraud-based claims: fraudulent misrepresentation/fraud in the inducement claim and negligent misrepresentation
The Court will consider Plaintiffs’ two fraud-based claims together: Plaintiffs’ fraudulent misrepresentation/fraud in the inducement claim and negligent misrepresentation claim. The Court concludes that neither claim is expressly or impliedly preempted.
In its October 3, 2013 Order, the Court noted that Eidson’s original complaint was unclear as to precisely what conduct by Defendants formed the basis of Eidson’s fraud-based claims. The two fraud-based claims evaluated in the October 3, 2013 Order were the fraudulent misrepresentation/fraud in the inducement claim and strict products liability misrepresentation claim. The Court held that to the extent Eidson’s fraud-based claims alleged misrepresentations or omissions in the FDA-approved warning labels accompanying Infuse, such claims were expressly preempted because “requiring Defendants to alter the Infuse Device’s warnings and label in order to provide extra warnings beyond those already approved during the PMA process would impose labeling and warning requirements ‘different from, or in addition to’ federal requirements.” Eidson,
After the October 3, 2013 Order, Eidson amended his complaint to allege two fraud-based claims: fraudulent misrepresentation/fraud in the inducement, and negligent misrepresentation. Thе first, his fraudulent misrepresentation/fraud in the inducement claim, is the same as in his original complaint because he left it unaltered. The second, negligent misrepresentation, is a new claim because Eidson changed his original strict products liability misrepresentation claim to a negligent misrepresentation claim. The Bells also have amended their complaint to allege two fraud-based claims: fraudulent misrepresentation/fraud in the inducement, and negligent misrepresentation. The Bells’ fraudulent misrepresentation/fraud in the inducement claim is substantively identical to the fraudulent misrepresentation/fraud in the inducement claim in Eidson’s amended complaint, and the Bells’ negligent misrepresentation claim is substantively identical to the negligent misrepresentation claim in Eidson’s amended complaint.
As to the Plaintiffs’ first fraud claim, fraudulent misrepresentation/fraud in the inducement, Defendants urge dismissal on the grounds that this claim “still appears to challenge the sufficiency of the Infuse Device FDA-approved labeling.” Eidson MTD at 7. Plaintiffs’ oppositions suggest rather that this claim is based on fraudulent conduct in the course of off-label promotion. Eidson MTD at 4. As to the second fraud claim, negligent misrepresentation, that claim alleges that Defendants negligently made misrepresentations or omissions in the course of promoting Infuse for off-label use. Eidson Complaint ¶¶ 318-328. Defendants urge dismissal of this claim on the grounds that any cause of action based on off-label promotion is expressly and impliedly preempted. Eid-son MTD at 15,17.
The Court analyzes Defendants’ challenge to the Plaintiffs’ two fraud-based claims together below and concludes that Defendants have not provided any persuasive reason for the Court to change its original conclusion in its October 3, 2013 Order that the fraud-based claims are not expressly or impliedly preempted to the extent they are based on fraudulent conduct in the course of off-label promotion,
i. Express preemption
Plaintiffs’ fraudulent misrepresentation/fraudulent inducement and negligent misrepresentation claims are not expressly preempted because they impose state tort law duties that parallel federal requirements. Defendants argue that because off-label promotion is not necessarily a violation of federal law, state claims based on such promotion cannot be parallel to federal requirements. Eidson MTD at 13-14. However, as the Court noted in its October 3, 2013 Order, courts in the Ninth Circuit have generally held that device manufacturers are prohibited by federal law from promoting or advertising off-label use because such promotion is deemed to be false or misleading. See Eidson,
Even assuming off-label promotion per se does not constitute a violation of federal law as Defendants argue, see Eidson MTD at 13-14,
Other courts that have confronted these very same issues in cases involving these very same Defendants have similarly held that fraud-based claims alleging deceptive off-label promotion escape express preemption. See, e.g., Alton v. Medtronic, Inc.,
ii. Implied Preemption
The Court also finds that Plaintiffs’ fraudulent misrepresentation/fraudulent inducement claim and negligent mis
Defendants ask the Court to reconsider this holding, arguing that Perez v. Nidek Co., Ltd,
Perez is easily distinguishable. Perez’s claim was based solely on the device manufacturer’s fraud by omission—failure to notify patients that the device was not approved by the FDA for certain off-label usеs. Id. at 1112-13. Unlike Perez, Plaintiffs are not accusing Defendants sim
Indeed, courts in the Ninth Circuit have distinguished the claim at issue in Perez from fraud claims based on off-label promotion of Infuse, holding that the latter claims are not impliedly preempted. See, e.g., Houston v. Medtronic, Inc.,
b. Failure to Warn Claims: Strict Liability Failure to Warn and Negligent Failure to Warn
Plaintiffs bring state law causes of action for strict liability failure to warn and negligent failure to warn. Eidson Complaint ¶¶ 303-17, 329-42. In its October 3, 2013 Order, the Court was uncertain as to what precise theory formed the basis of Eidson’s strict liability failure to warn claim, but surmised two possible theories. To the extent the claim was based on Defendants’ failure to include warnings beyond those in the FDA—approved label or failure to issue appropriate warnings regarding the dangers of off-label use, the claim was expressly preempted. Eidson,
i. “Overpromotion”
Plаintiffs’ first theory underlying their failure to warn claims alleges that “MEDTRONIC breached its duty by over-promoting INFUSE® to Plaintiff and Plain tiffs physicians for use in off-label procedures.” Eidson Complaint ¶¶ 309(a), 336(a). The Court concludes that because these claims challenge the sufficiency of the FDA-mandated warnings issued by Defendants, Plaintiffs’ failure to warn claims based on an overpromotion theory are expressly preempted.
Plaintiffs allege that “[a]ny warnings MEDTRONIC may have issued concerning the dangers of off-label use [... ] were insufficient in light of MEDTRONIC’S contradictory prior, contemporaneous, and continuing illegal promotional efforts and overpromotion.” Eidson Complaint ¶ 309a (emphasis added). The California Supreme Court has interpreted state law failure to warn claims sounding in “overpro-motion” as one way to attack a warning that is facially sufficient to satisfy a manufacturer’s duty to warn, but the efficacy of which is undermined by aggressive promotion by the manufacturer. See Stevens v. Parke, Davis & Co.,
Plaintiffs’ second theory alleges that “MEDTRONIC breached its duty in that, in the course of promoting INFUSE® for off-label use (a use which the FDA had not reviewed or approved and for which the FDA had not reviewed or approved any written warnings), MEDTRONIC both affirmatively misrepresented and omitted information regarding the risks of the very off-label use MEDTRONIC was promoting.” Eidson Complaint ¶¶ 309(b), 336(b). This Court held in its October 3, 2013 Order that a failure to warn claim based on Defendants’ failure to issue appropriate warnings regarding the dangers of off-label use beyond those required by the FDA is expressly preempted because a “failure to warn claim that imposes obligations on - Defendants beyond those imposed during the PMA process ... imposes warning requirements ‘in addition to’ federal requirements.” Eidson,
Preemption analysis hinges on the extent to which state law liability can be imposed on a Defendant who has complied fully with the FDA requirements. See Riegel,
Moreover, every district court to apply California law to analogous facts has held that California’s failure to warn cause of action is preempted. See Houston,
iii. Failure to Report Adverse Events to FDA
a. Express and Implied Preemption
Plaintiffs’ third theory underlying their failure to warn claims is that “MEDTRONIC breached its duty in that it failed to warn Physicians by failing to communicate the growing number of adverse events [regarding off-label use] to the FDA from 2002 to 2011, as it was required to do by federal law.” Eidson Complaint ¶¶ 309(c); 336(c). The Court’s October 3, 2013 Order held that Eidson’s strict liability failure to warn claim based on failure to report adverse events to the FDA escaped both express and implied preemption. Eidson,
As this Court previously held, Stengel is apposite and controlling as to both express and implied preemption because it involved highly analogous claims to those at issue here. In Stengel, the Ninth Circuit held that an Arizona state law negligence claim based on failure to report adverse events to the FDA regarding Defendants’ device was not expressly preempted because the “state-law duty paralleled] [the] federal-law duty” to report events to the FDA.
Stengel also held that the state law claim escaped implied preemption, as the “state-law claim [was] independent of the FDA’s pre-market approval process that was at issue in Buckman.” Id. at 1233. Unlike the claim at issue in Buckman, the plaintiffs in Stengel were not suing simply to enforce FDA requirements; they were suing under the theory that the defendants’ failure to report to the FDA directly violated their duty to warn consumers. The state law cause of action could thus exist independently of any federal requirement to report adverse events to the FDA. See Stengel,
Defendants ask the Court to reconsider its previous finding that Plaintiffs’ claims are not expressly preempted, claiming Stengel is distinguishable because its reasoning was based on Arizona’s state law duty to warn third parties while California state law does not require a similar duty to warn third parties rather than direct consumers. Eidson MTD at 15, 17. However, Defendants are wrong to make this distinction because California law—like the Arizona law at issue in Stengel—requires a manufacturer to discharge its duty to warn consumers by communicating warnings to a third party in circumstances where such a warning is necessary to put consumers on notice of the danger. See Persons v. Salomon N. Am., Inc.,
Defendants also argue that Plaintiffs’ claims based on a failure to report adverse events to the FDA are impliedly preempted because the duty to report such events exists solely by virtue of the FDCA. Eidson MTD, at 18-19. The Court rejects this argument, as the Ninth Circuit confronted and rejected this argument in Stengel. California’s duty to warn of product dangers—including its duty to warn third parties, if appropriate and necessary—exists independently of any federal law. Just as in Stengel, Plaintiffs are not attempting to act as a private enforcer of the FDCA. Rather, they are seeking to hold Defendants liable for violating then-state law duty to warn them of known
Most lower courts—both federal and state—that have analyzed and applied Stengel to California state law failure to warn claims premised on a failure to report to the FDA have held that the claims escape both express and implied preemption. See, e.g., Ramirez,
b. Causal Nexus
While the Court’s October 3, 2013 Order held that Eidson’s failure to warn claims escaped preemption to the extent they were based on a failure to report adverse events to the FDA, the Court nonetheless dismissed those claims because Eidson had failed to show how the failure to report caused his injuries. Eidson,
Plaintiffs have sought to cure this defect by referencing a study by a Dr. Carragee which finds that by April 2008, Defendants had reported only 262 of an estimated 50,000-250,000 adverse events involving the off-label use of Infuse. Eidson Complaint at ¶¶255, 309(c)(iii)-(v). Plaintiffs also claim that “[t]he FDA maintains a MAUDE database on reported adverse events, which is a public database known to, and discussed in, the medical community, including Plaintiffs physicians” and that “[i]f MEDTRONIC had communicated adverse events to the FDA as required by law, this would have effectively warned plaintiffs surgeоn of those adverse events—both directly and through the discussion of those adverse events that would have followed in the literature and at meetings plaintiffs surgeon attended.” Id. at ¶¶ 309(c)(iii)-(x), ¶¶ 336(c)(viii)-(x). Defendants cite to Hawkins,
In the instant case, Plaintiffs have amended their claims to include additional facts about the specific nature of Defendants’ failure to report. As such, the reasoning in Hawkins no longer applies. By including facts relating to Dr. Carragee’s study, Plaintiffs have shown that (1) Defendants underreported adverse events on a large scale, and (2) plaintiffs’ surgeons would have had access to adverse reports if they were properly submitted. Eidson Complaint ¶¶ 249-254, 309(c) (iii)-(x), 336(c)(viii)-(x). At the pleading stage, these allegations are sufficient to support a reasonable inference that had Defendants made the required reports, Plaintiffs’ physicians would have been put on notice of the danger of off-label use of Infuse and may have elected to conduct the surgeries differently. Id. at ¶ 314 (“Plaintiffs physician would not have [] used INFUSE® off-label by utilizing a posterior approach, using INFUSE for an off-label indication, and by using INFUSE® without an LT Cage and in a manner otherwise not approved by the FDA had they known of the true safety risks”). Other courts have аllowed claims against these same Defendants to proceed based on Dr. Carragee’s study. See Houston,
The Court now addresses Defendants’ argument that Plaintiffs’ fraud-based claims—fraudulent misrepresentation/fraud in the inducement and negligent misrepresentation—should be dismissed because they are not pled with the necessary particularity under Federal Rule of Civil Procedure 9(b). Eidson MTD at 3, 19-20. Federal Rule of Civil Procedure 9(b) provides that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). The Court already held in its October 3, 2013 Order that Eidson’s fraud-based claims— fraudulent misrepresentation/fraud in the inducement and strict products liability misrepresentation—satisfied Rule 9(b). Eidson,
Similar claims have withstood Rule 9(b) challenges in this Circuit. See Alton,
3. Failure to State a Claim under California Law
Finally, the Court addresses Defendants’ argument that Plaintiffs’ fraud-based causes of action fail to state a claim under California law. Eidson MTD at 8, 21. Defendants assert that Plaintiffs’ fraud claims are tantamount to a general “fraud-on-the-market” complaint in which a plaintiff seeks to hold a defendant liable for misrepresentations that mislead consumers generally rather than the plaintiff or the plaintiffs agent specifically. Id. The California Supreme Court has held that such “fraud-on-the-market” claims are not cognizable under California law; plaintiffs must plead that they or their agent relied on the misrepresentations in order to maintain an action sounding in fraud. See Mirkin v. Wasserman,
C. Analysis of April Bells’ Loss of Consortium Claim
April Bell’s loss-of consortium claim alleges that as a result of Defendants’ actions, her marital relationship with her husband has suffered. Bell Complaint at ¶ 356. In California, the spouse of an individual injured by a third party has a (jause of action for loss of consortium: the loss of conjugal fellowship and sexual relations. Rodriguez v. Bethlehem Steel Corp.,
Defendants argue that April Bell’s loss of consortium claim fails as a matter of law because it is a derivative claim and “all of the claims upon which April Bell brings her claim are preempted and/or otherwise barred under California law.” Bell MTD at 25. Thus, Defendants argue her claim is preempted as well. Id. The Court grants in part and denies in part Defendants’ motion to dismiss April Bell’s
V. CONCLUSION
With respect to the Eidson complaint, the Court DENIES Defendants’ motion to dismiss Eidson’s fraudulent misrepresentation/fraud in the inducеment and negligent misrepresentation claims based on fraudulent conduct in the course of off-label promotion because such claims are not expressly or impliedly preempted. The Court DENIES Defendants’ motion to dismiss Eidson’s failure to warn claims based on Defendants’ failure to report adverse events to the FDA because such claims are not expressly or impliedly preempted. The Court GRANTS with prejudice Defendants’ motion to dismiss Eidson’s failure to warn claims based on Defendants’ overpromotion of off-label use of Infuse and based on Defendants’ deceptive off-label promotion because those claims are expressly preempted.
With respect to the Bell complaint, the Court DENIES Defendants’ motion to dismiss the Bells’ fraudulent misrepresentation/fraud in the inducement and negligent misrepresentation claims based on fraudulent conduct in the course of off-label promotion because such claims are not expressly or impliedly preempted. The Court DENIES Defendants’ motion to dismiss the Bells’ failure to warn claims based on Defendants’ failure to report adverse events to the FDA because such claims are not expressly or impliedly preempted. The Court GRANTS with prejudice Defendants’ motion to dismiss the Bells’ failure to warn claims based on Defendants’ overpromotion of off-label use of Infuse and based on Defendants’ deceptive off-label promotion because those claims are expressly preempted. The Court GRANTS IN PART AND DENIES IN PART Defendants’ motion to dismiss April Bell’s loss of consortium claim.
IT IS SO ORDERED.
Notes
. As this Order addresses two related cases brought by different plaintiffs, this Order will continue to follow the convention established by this Court's October 3, 2013 Order by using the following nomenclature for docket numbers in the Bell case: "ECF Bell No. X,” and the following nomenclature for docket numbers in the Eidson case: "ECF Eidson No. X.”
. Both Plaintiffs' First Amended Complaints include two causes of action (negligеnt misrepresentation and negligent failure to warn) not included in their original complaints. Plaintiffs justify the inclusion of these new causes of action by insisting that they allege the same misconduct set forth in the "Strict Liability—Misrepresentation” claims in their original complaints and that Plaintiffs have merely "relabeled” that claim. Bell MTD Opp’n at 10-11; Eidson Opp’n at 7-8. The Court’s October 3, 2013 Order advised Plaintiffs that they would not be permitted to "add new parties or causes of action without a stipulation or order of the Court.” Eidson,
. Defendants filed notices of supplemental authorities on March 7, 2014, March 13, 2014, March 20, 2014, March 27, 2014, April 8, 2014, April 16, 2014, and April 30, 2014. ECF Bell Nos. 48, 49, 50, 51, 53, 54, 55; ECF Eidson Nos. 48, 49, 50, 51, 52, 53, 54. The Court has considered these supplemental authorities.
. For a full discussion of the Court’s reasoning in granting all these judicial notice requests, see Eidson,
. In the Bells' Opposition, they also concede that the sticker page listed "the make, manufacture, model, and identifier for the devices and equipment used during [the] procedure,” which means they concede that the name “Infuse” and the name of the manufacturer of Infuse, i.e., Medtronic, appeared on the sticker page. Bell Opp’n at 4.
. For purposes of citations, the Court refers only to the Eidson complaint and the Eidson MTD, Eidson Opp'n, and Eidson Reply throughout the rest of this section, although the reader should bear in'mind that the Court intends to refer as well to the identical sections in the Bell MTD, Bell Opp’n, Bell Reply, and Bell complaint. The briefing by both parties in both cases is substantively identical except with respect to the arguments concerning the statute of limitations issue and loss of consortium claim in the Bells' case, which do not appear in the parties’ briefing for the Eidson case. The Bell complaint and Eidson complaint are also substantively identical except for the fact sections regarding Scott Bell and Eidson’s surgeries and the additional allegations in the Bell complaint regarding the Bells' delayed discovery of Defendants' alleged wrongdoing and April Bell's loss of consortium claim.
. In its October 3, 2013 Order, the Court held that the first prong of the Riegel express preemption test was "clearly met” because the PMA process subjected Infuse to FDA “requirements” within the meaning of Riegel. See Eidson,
. Courts have reached different conclusions as to whether truthful off-label marketing violates federal law. Compare Dawson v. Metronic, Inc., 3:13-CV-663-JFA,
. A device under the MDA is defined as “mis-branded” if its advertising is false or misleading in any particular way. 21 U.S.C. § 352(q). The FDCA prohibits the introduction into interstate commerce of any mis-branded device. 21 U.S.C. § 331(a). Accordingly, any false or misleading promotion of a device that is used in interstate commerce violates federal law.
. In Buckman, plaintiffs who suffered injuries from the use of bone screws in spinal surgery brought state law fraud actions against a consultant who secured FDA approval for the screws. The plaintiffs claimed that the defendant secured FDA approval only by fraudulently misrepresenting the intended use of the screws during the application process, thereby causing the FDA to wrongly grant approval and leading to plaintiffs’ injuries. Buckman,
. The Court does not reach the question whether Plaintiffs’ failure to warn claims based on overpromotion are also impliedly preempted.
. Plaintiffs’ oppositions do not provide any argument with respect to Plaintiffs’ overpro-motion theory. Defendants argue that Plaintiffs’ failure to warn claims premised on an overpromotion theory must be dismissed because overpromotion "is not a cause of action in California.” Eidson MTD at 10 n.4. Defendants are incorrect. California courts have approved jury verdicts on failure to warn claims based on an overpromotion theory such as the one Plaintiffs raise here. See, e.g., Stevens v. Parke, Davis & Co., 9 Cal.3d 51,
. The Court does not reach the question whether Plaintiffs' failure to warn claims based on deceptive off-label promotion are also impliedly preempted.
. Defendants also question the validity of Dr. Carragee's study by claiming that Dr. Carra-gee is not impartial, Eidson Reply at 4 n.l, and attack the plausibility of Plaintiffs’ assertion that accurate reporting would have convinced their surgeons to act differently because the Infuse label itself already warned of the dangers of off-label use and because Plaintiffs’ complaints allege that the FDA issued a “Public Health Notification’’ warning about the dangers of off-label use before their surgeries. Eidson Reply at 5; Eidson MTD at 9-10. The Court does not find Plaintiffs’ causation argument so implausible as to fail scrutiny under Twombly. Defendants’ arguments are best resolved by a jury. See Coleman,
. Defendants also claim Plaintiffs have failed to allege causation with respect to all of Plaintiffs’ claims based on “off-label” promotion. Eidson MTD at 8-10. Specifically,. Defendants claim Plaintiffs make "no attempt to tie any statements or other activities allegedly constituting off-label promotion to [their] surgeon[s],” id. at 8, and that Plaintiffs "do[] not identify one event before [their] surger[ies] involving any so-called key opinion leaders in which off-label promotion allegedly took place.” Id. at 9. The Court is not convinced. Plaintiffs’ complaints allege several actions by Defendants that took place prior to plaintiffs' surgeries and which could have influenced the likelihood that his physician would use Infuse off-label. These include (1) kickbacks to physicians and opinion leaders between 1998 and 2003, Eidson Complaint ¶ 141; (2) improper activities by Defendants' sales force at unspecified times, but prior to August 2009 and therefore plausibly prior to Eidson's 2008 surgery and Bell’s 2005 surgery, id. at ¶¶ 155— 159; (3) misleading statements made by paid “opinion leaders” Timothy Kuklo and Rick Sasso in a 2006 conference call regarding the dangers of Infuse off-label use, id. at ¶ 185; and (4) five allegedly falsified scientific journal articles paid for by Medtronic and published between 2003 and 2008, id. at ¶¶ 86, 186, 205, 212, 217. Defendants argue that none of the pre-surgery articlés involved precisely the same off-label procedure that was used in the surgeries. Eidson MTD at 9. While this is true, it is implausible to assume that a doctor considering the risk of using Infuse in a lumbar fusion would totally discount any lessons to be learned from scientific articles discussing the risk of bony over
. Defendants also argue that fraud claims similar to those Plaintiffs make here were dismissed for failure to satisfy Rule 9(b) in Hawkins v. Medtronic, Inc., 1:13-CV-00499 AWI SIC,
. Mirkin recognized that "misrepresentations to the plaintiff may be communicated indirectly through an agent or third party,” but the plaintiff must show that the third party relied on the misrepresentations. Id. at 1096,
. The Court also notes that it declines to dismiss this action at this stage for failure to adequately plead reliance in light of how Plaintiffs have not yet had the benefit of discovery and the opportunity to depose their physicians to determine which precise meetings they attended, articles they read, and promotions they received and relied upon.