§ 510(k) Safety and Effectiveness – A Changing Landscape for Punitive Damages?

The Central District of California recently issued an opinion that breathes new life into the argument that the § 510(k) substantial equivalence process for Class II medical devices involves an FDA finding of safety and effectiveness. It is part of a trend of recent federal cases giving credence to the § 510(k) process, which could have significant implications for punitive damages claims brought against manufacturers of Class II devices.

New Jersey law precludes punitive damages if a drug or medical device is, inter alia, generally recognized as safe and effective pursuant to conditions established by the FDA. Other states recognize compliance with federal regulatory standards as relevant to the assessment of whether a manufacturer’s actions can be subject to punitive damages. See, e.g., Slowman v. Tambrands, Inc., 841 F. Supp. 699, 703 n.8 (D. Md. 1993) (compliance with FDA regulations precluded punitive damages); Nissan Motor Co., Ltd v. Maddox, 486 S.W.3d 833 (Ky. 2015) (compliance with federal regulatory standards for automobiles precluded a finding of “gross negligence” or “reckless disregard” required to award punitive damages under Kentucky law).

In Otero v. Zeltiq Aesthetics, Inc., 2018 WL 3012942 (C.D. Cal. June 11, 2018), plaintiffs brought consumer fraud claims against the manufacturer of a Class II medical device, the Coolsculpting System, a non-surgical fat reduction treatment for weight loss. Plaintiffs alleged that the manufacturer’s representations that the CoolSculpting device is “FDA-cleared” and “FDA-cleared, safe and effective” are misleading under California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law because they suggest that the device was subject to the premarket approval process for Class III devices rather than the § 510(k) substantial equivalence process. Plaintiffs argued that Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), conclusively establishes that the § 510(k) process for Class II devices does not include a finding of safety and effectiveness by the FDA, and that instead only manufacturers of FDA-approved Class III medical devices can claim they are deemed safe and effective by the FDA.

The court disagreed and granted defendants’ motion to dismiss, holding that “Zeltiq’s representation that CoolSculpting is ‘safe and effective’ is not a claim that can only be made if the procedure was ‘FDA’ approved and not ‘FDA Cleared.’”

In doing so, the California court rejected plaintiffs’ narrow reading of Medtronic. “Although Medtronic observed that obtaining Section 510(k) clearance is not as onerous as the ‘rigorous’ PMA process, the Supreme Court did not find that the former has no bearing on a device’s safety and effectiveness.” Pursuant to FDA regulations, if the FDA determines that a device is substantially equivalent to a predicate device, “then that means the agency concluded that ‘[t]he data submitted . . . contains information, including clinical data if deemed necessary by the Commissioner, that demonstrates that the device is as safe and as effective as a legally marketed device.’” (citing 21 C.F.R. § 807.100(b)(ii)(B)).

The Otero decision is significant for its interpretation that FDA clearance of Class II devices through the § 510(k) process involves a finding of safety and effectiveness by the FDA.  In the context of Class II product liability lawsuits brought under New Jersey law (and other states that preclude punitive damages if a manufacturer has complied with relevant federal regulations), this holding supports the argument that clearance of the product under the § 510(k) process bars punitive damages as a matter of law. In other states where compliance with federal regulations is relevant to the jury’s assessment of whether the manufacturer’s conduct rises to the level of punitive damages, Otero supports admission of the § 510(k) process into evidence.

Otero follows the District of Arizona’s opinion in In re Bard IVC Filters Products Liability Litigation, 289 F. Supp. 3d 1045 (D. Ariz. 2018), which denied plaintiffs’ motion in limine to exclude § 510(k) review evidence. The court recognized that “evidence of Bard’s compliance with the 510(k) process, while certainly not dispositive, is nonetheless relevant to the reasonableness of Bard’s conduct and whether the company defectively designed the G2 filter” and “is also relevant to Plaintiff’s punitive damages claim.” However, the Bard holding is more limited than Otero because the defendants there were not allowed to argue that the § 510(k) clearance constitutes a finding by the FDA that IVC filters are “safe and effective.”

It remains to be seen whether courts will follow Otero and further weaken the misconception that the § 510(k) process does not include an FDA finding of safety and effectiveness. But the current climate appears favorable for such arguments.