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Kaiser v. Johnson & Johnson

United States Court of Appeals, Seventh Circuit

January 14, 2020

Barbara Kaiser, Plaintiff-Appellee,
Johnson & Johnson and Ethicon, Inc., Defendants-Appellants.

          Argued May 21, 2019

          Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 2:17-cv-00114 - Phillip P. Simon, Judge.

          Before Flaum, Kanne, and Sykes, Circuit Judges.


         Barbara Kaiser had surgery to implant the Prolift Anterior Pelvic Floor Repair System, a transvaginal mesh medical device that supports the pelvic muscles. Within a few years of her surgery, Kaiser began experiencing severe pelvic pain, bladder spasms, and pain during intercourse. Her physician attributed these conditions to contractions in the mesh of the Prolift. Kaiser had revision surgery to remove the device, but her surgeon could not completely extract it. He informed her that the painful complications she was experiencing were likely permanent.

         Kaiser sued Ethicon, Inc., Prolift's manufacturer, and Johnson & Johnson, its parent company, seeking damages under the Indiana Products Liability Act, Ind. Code §§ 34-20-1-1 to 34-20-9-1. (Johnson & Johnson has no distinct role in this litigation, so we refer to the defendants collectively as "Ethicon.") After a two-week trial, a jury found Ethicon liable for defectively designing the Prolift device and failing to adequately warn about its complications. The jury awarded a hefty sum: $10 million in compensatory damages and $25 million in punitive damages, though the judge granted Ethicon's motion for remittitur and reduced the punitive award to $10 million.

         Ethicon's appeal is a broad-spectrum attack on the judgment, starting with an argument about federal preemption and moving through several issues of Indiana product-liability law, a claimed evidentiary error, and challenges to the compensatory and punitive damages. We reject these arguments and affirm.

         One issue in particular warrants special mention upfront. Our caselaw interprets the Indiana Product Liability Act to require a plaintiff in a design-defect case to produce evidence of a reasonable alternative design for the product. The Indiana Supreme Court disagrees. See TRW Vehicle Safety Sys., Inc. v. Moore, 936 N.E.2d 201, 209 (Ind. 2010). The state supreme court's decision controls on a matter of state law, so we apply TRW rather than our own contrary precedent.

         I. Background

         A. Prolift

         Barbara Kaiser suffers from pelvic-organ prolapse, a nonlife-threatening condition that occurs when pelvic muscles loosen, causing nearby organs to press into the vagina. This condition can lead to several medical complications like uncomfortable pelvic pressure and incontinence.

         Ethicon developed Prolift as a treatment option for patients with this condition, and in 2009 Kaiser had surgery to implant the device. Some detail about Prolift is necessary to understand her case and the arguments raised on appeal. The device is essentially a precut section of polypropylene mesh connected to six mesh arms. A surgeon inserts it through the vagina, pulls it through the vaginal wall, and anchors the arms to muscles in the hip, thigh, and groin. The device was designed to reinforce the pelvic muscles and prevent further organ displacement.

         Ethicon began marketing Prolift in 2005. It included an "Instructions for Use" package insert that warned: "Potential adverse reactions are those typically associated with surgically implantable materials, including infection potentiation, inflammation, adhesion formation, fistula formation, erosion, extrusion and scarring that results in implant contraction." It also cautioned that "[transient leg pain may occur and can usually be managed with mild analgesics."

         Patients soon reported serious problems with the Prolift. Relevant here, the mesh would often contract, causing severe pain and bladder problems. Scar tissue could also form around the device, preventing a complete removal if complications occurred. In these cases Prolift's complications frequently became permanent. Following years of complaints and FDA scrutiny Ethicon took Prolift off the market in 2012.

         B. Regulatory Background

         The FDA cleared Prolift for sale in 2007. The clearance process features prominently in this appeal, so we take a moment to describe the FDA's role in regulating medical devices. The Medical Device Amendments of 1976 ("MDA"), 21 U.S.C. §§ 360c-360k, 379-379a, establishes the framework for federal regulation of medical devices. As amended, the MDA requires the FDA to place a device into one of three classes reflecting different levels of regulation.

         Class I covers devices for which the MDA's "general controls" that apply to all medical devices "are sufficient to provide reasonable assurance of the safety and effectiveness of the device." 21 U.S.C. § 360c(a)(1)(A)(i). These general controls include measures like the MDA's prohibition on misbranding a device. The FDA typically places low risk devices like bandages and tongue depressors in Class I.

         The FDA places a device in Class II when the MDA's "general controls by themselves are insufficient to provide reasonable assurance of ... safety and effectiveness" but enough information exists "to establish special controls to provide such assurance." Id. § 360c(a)(1)(B). "Special controls" are regulations tailored to the device such as performance standards and postmarket surveillance. See id. Most medical devices fall into Class II.

         Finally, a Class III device is one for which "insufficient information exists to determine" that either general or special controls "would provide reasonable assurance of ... safety and effectiveness." Id. § 360c(a)(1)(C)(i). These devices "present[] a potential unreasonable risk of illness or injury" or are "purported or represented to be for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health." Id. § 360c(a)(1)(C)(ii). Before marketing, a Class III device undergoes "a rigorous regime of premarket approval." Riegel v. Medtronic, Inc., 552 U.S. 312, 317 (2008).

         The particulars of the premarket approval process aren't important here; it's enough to note that it requires extensive submissions by the device manufacturer and a thorough review by the FDA. See generally 21 U.S.C. §§ 360c, 360e. The FDA has broad discretion to withhold approval throughout the process. See 21 C.F.R. § 861.1(b) (permitting the FDA to set performance standards for Class II and III devices); see also Nicholas R. Parrillo, Federal Agency Guidance and the Power to Bind: An Empirical Study of Agencies and Industries, 36 Yale J. on Reg. 165, 186-87 (2019).

         The MDA automatically places a new medical device in Class III. 21 U.S.C. § 360c(f)(1). But three broad exceptions largely overshadow this rule. To start, medical devices on the market before the MDA's enactment in 1976 are subject only to the MDA's general controls until the FDA promulgates device-specific regulations to classify and regulate them. Id. § 360e(b).

         Post-1976 devices can escape rigorous premarket review through the MDA's "premarket notification" process. Almost every manufacturer of a new device must submit a notification to the FDA at least 90 days before marketing the device. See 21 C.F.R. § 807.81(a); see also id. § 807.81(a)(3) (requiring a manufacturer to file a premarket notification when it alters an existing device if the alteration "could significantly affect the safety or effectiveness of the device" or if it creates a "major change or modification in the intended use of the device"). The FDA may clear a device for sale without premarket approval based on this notification if it is satisfied the device falls into one of the two other exceptions.

         First, the MDA exempts from premarket review any device that receives what's known as a "§ 510(k) clearance" from the FDA. To get this clearance, a device must be "substantially equivalent" to either a pre-1976 device that the FDA hasn't yet classified or a Class I or II device already on the market. § 360c(f)(1). Most medical devices enter the market through this exception. See 2 James T. O'Reilly & Katharine A. Van Tassel, Food and Drug Administration § 18.22, at 464 (4th ed. 2019).

         Second, if a device isn't substantially equivalent to an unclassified pre-1976 device or a Class I or II device, it can still avoid premarket review through "de novo" § 510(k) clearance. See 21 U.S.C. § 360c(f)(2)(A). Specifically, a manufacturer may petition the FDA that a device meets the criteria for Class I or II. If the FDA agrees, the device is exempted from premarket review. Id.; O'Reilly & Van Tassel, supra, §18.26, at 470-71.

         The § 510(k) clearance process is central to several issues raised in this appeal. If the FDA is satisfied that a new device is substantially equivalent to a device that is already in Class I or II or meets the standards for these classes through "de novo" § 510(k) review, then it will clear the device for marketing without stringent premarket review. To be substantially equivalent, the device must have "the same intended use as the predicate device" and either (1) have "the same technological characteristics" as the predicate device or (2) be "as safe and effective" as the predicate and "not raise different questions of safety and effectiveness." 21 U.S.C. § 360c(i)(1)(A).

         The relevance to safety of the § 510(k) clearance process varies based on context. That's due in part to the MDA's three-tiered system for classifying medical devices. If the FDA places a device in Class I after a de novo § 510(k) review, we know the agency has concluded that the MDA's minimal general controls are enough to "provide reasonable assurance of ... safety." § 360c(a)(1)(A). Likewise, when the FDA places a device in Class III following full premarket review, we know that the agency lacks a reasonable assurance of the device's safety. But the FDA's decision to place a device in Class II tells us only that it had enough information about the device to design special controls to provide reasonable assurance of safety. It's hard to draw inferences about a device's safety without knowing what concerns triggered its Class II designation and what special controls the FDA thought were necessary.

         A device cleared for market through the § 510(k) "substantial equivalence" process raises additional complications. To start, two of the three ways for a new device to be substantially equivalent to a predicate device have nothing to do with product safety. First, a device can receive clearance if it is substantially equivalent to a pre-1976 device that the FDA hasn't yet classified "regardless of how unsafe or ineffective the grandfathered device happens to be." Eghnayem v. Bos. Sci. Corp., 873 F.3d 1304, 1318 (11th Cir. 2017) (quotation marks omitted). Second -and more pertinent to Prolift-the FDA can clear a device if it has "the same technological characteristics as [a] predicate device." § 360c(i)(1)(A)(i). This comparison does not consider safety. The MDA defines "different technological characteristics" as "a significant change in the materials, design, energy source, or other features of the device from those of the predicate device." 21 U.S.C. § 360c(i)(1)(B). Underscoring the distinction between safety and similarity of technological characteristics, the FDA does not generally require safety information in a § 510(k) substantial-equivalence premarket notification. See 21 C.F.R. § 807.92(a).

         Finally, the MDA's authorization of "piggybacking" - clearing a device based on its substantial equivalence to a predicate device that itself received clearance through substantial equivalence-increases the gulf between § 510(k) clearance and comprehensive safety review. Through piggybacking, a medical device moves incrementally further and further away from the "original" predicate device that the FDA actually classified.

         In light of these features of the system, it's no surprise that the FDA has promulgated a disclaimer that § 510(k) clearance "does not in any way denote official approval of the device." Id. § 807.97. In fact, it's unlawful for a device manufacturer to make such a representation. See id. ("Any representation that creates an impression of official approval of a device because of complying with the premarket notification regulations is misleading and constitutes misbranding."); see also O'Reilly & Van Tassel, supra, § 18.22, at 464 ("It is important to note that in the § 510(k) process, the device is not officially approved by the FDA as being safe and effective.").

         C. Prolift

         Prolift did not weather the full premarket review process. Quite the contrary: Ethicon started marketing Prolift in 2005 without submitting any premarket notification to the FDA, reasoning that the device didn't depart materially from a transvaginal mesh product that the agency had previously cleared. In fact, Ethicon did not submit a § 510(k) premarket notification for Prolift until 2007 when the FDA demanded one.

         Its 2007 submission asserted that Prolift was substantially equivalent to three devices: the Gynecare Gynamesh PS Prolene Soft Mesh, the AMS Apogee Vault Suspension System, and the AMS Perigee System.[1] According to Ethicon, Prolift had the same technological characteristics as these predicates.

         The FDA cleared Prolift based on this submission, sending a form letter that did not identify which particular predicate device it accepted for the substantial-equivalence determination. But the agency did indicate that Prolift's "original" predicates were a group of surgical meshes the FDA classified in a 1988 rulemaking. See 21 C.F.R. § 878.3300. When it promulgated that rule, the FDA cautioned that the "surgical mesh has not been implanted in a sufficient number of patients by a sufficient number of medical practitioners to provide adequate evidence on the long-term biocompatibility of these devices." General and Plastic Surgery Devices, 53 Fed. Reg. 23856, 23862 (June 24, 1988). Due to "insufficient evidence of safety and effectiveness/' the FDA assigned these surgical meshes to Class II. Id.

         Because the FDA did not specify the predicate device it used for Prolift's § 510(k) clearance, the chain connecting the 1988 surgical meshes to Prolift is not clear. We do know that Prolift used the piggybacking method to achieve clearance; that is, each of Prolift's three proposed predicates received FDA clearance through a substantial-equivalence determination. The manufacturers of those three predicates collectively proposed 17 predicates. And again, the FDA did not indicate which of the 17 predicates it used to clear these three devices. Because the FDA's records for the 17 second-order predicates are incomplete, we cannot make out a clear picture of the next layer. But the available records reveal an additional degree of piggybacking-all received FDA clearance through a substantial-equivalence determination.

         Based on Ethicon's 2007 § 510(k) premarket notification, the FDA cleared Prolift as a Class II device after finding that it was substantially equivalent to existing Class II devices. But in 2011 the FDA ordered Ethicon and other transvaginal mesh manufacturers to submit plans for postmarket studies of the devices. When the FDA rejected Ethicon's plan for Prolift in 2012, Ethicon discontinued the device. In 2016 the FDA reclassified all transvaginal mesh into Class III. See 21 C.F.R. § 884.5980.

         D. Kaiser's Surgery and Lawsuit

         Kaiser suffered from a severe anterior pelvic-organ prolapse. Her doctor referred her to Dr. Gregory Bales, a pelvic-floor surgeon in her home state of Indiana. In January 2009 Dr. Bales surgically implanted Prolift to treat Kaiser's condition. She was then 60 years old. The parties agree that Dr. Bales properly implanted Prolift and otherwise met the appropriate standard of care.

         In September 2011 Kaiser reported pelvic pain to her physician, who attributed the problem to Prolift "bunching." Kaiser's complications gradually worsened. In October 2013 she complained of severe pelvic pain and bladder spasms. After determining that the Prolift was the likely source of these problems, Kaiser's physician recommended surgery to remove the device. In November Dr. Bales performed a corrective procedure by using clamps and scissors to remove the vaginal tissue surrounding the mesh. But he was only able to remove part of the device. He informed Kaiser that her pain was likely permanent.

         Kaiser sued Ethicon in the Southern District of West Virginia, the venue of a 28, 000-case multidistrict litigation ("MDL") against Ethicon. Kaiser and Ethicon agreed that Indiana law applied, and the MDL judge construed two counts in Kaiser's complaint as alleging design-defect and failure-to-warn claims under the Indiana Product Liability Act ("IPLA" or "the Act"). The judge rejected Ethicon's argument that the federal regulatory scheme preempted Indiana law. He then dismissed Kaiser's other claims as non-cognizable under the Act and transferred the case to the Northern District of Indiana.

         Two of Kaiser's posttransfer motions are relevant here. First, the Indiana district judge granted Kaiser's motion to exclude evidence related to the FDA's clearance of Prolift, reasoning that the § 510(k) process was only minimally probative of safety and that introducing evidence about the regulatory process posed a significant risk of jury confusion. Second, the judge ruled that Prolift did not qualify as "state of the art" under Indiana law, which blocked Ethicon from relying on a rebuttable presumption that the device was not defective. See Ind. Code § 34-20-5-1.

         The case proceeded to trial. The jury returned a verdict for Kaiser on both the design-defect and failure-to-warn theories of liability and awarded $10 million in ...

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