February 18, 2021 - This Week at the Ninth

This Week at the Ninth: Biomaterials and Unclean Hands

This week, we take a look at the Ninth Circuit’s decisions construing the Biomaterials Access Assurance Act’s immunity for “biomaterials suppliers” and addressing the standard of review when a district court grants summary judgment based on a plaintiff’s unclean hands. 

CONNELL v. LIMA CORPORATE
The Court holds that a supplier of a medical device that cannot be implanted without other accompanying parts is a “biomaterials supplier” immune from liability under the Biomaterials Access Assurance Act (“BAAA”).

Panel: Judges Rawlinson, Murguia and R. Nelson, with Judge R. Nelson writing the opinion.

Key Highlight: “The Connells concede that the statute immunizes a supplier who supplies a component part, such as a screw or stem. That is the case here. The level of processing, testing, advertising, and assembly needed to produce Lima’s component part is irrelevant. Lima supplied a component part—the Hip Stem—and did not supply the other required shell, liner, and femoral head component parts. It matters not that Lima’s component part itself comprised three divisible pieces (the femoral neck, stem, and attachment screw). Whether Lima provided one or three component parts, Lima’s Hip Stem could not function alone and was not intended to be implanted alone. It was not an entire hip implant.”

Background: DJO Surgical buys orthopedic medical devices from suppliers to sell in the U.S.  Lima, an Italian company, supplied DJO with a modular revision hip stem.  The hip stem features a femoral stem, which a surgeon inserts into a patient’s femoral canal, an angled neck, and a set screw, which holds the stem and neck together.  DJO’s “instructions for use” noted the hip stem should not be inserted without a compatible femoral head, a separate piece that was not manufactured or supplied by Lima. 

Jeffrey Connell had hip revision surgery in 2011.  A surgeon implanted a DJO hip stem along with a femoral head and other components.  Three years later, the implant’s femoral stem broke and the device was removed.  Connell and his wife filed suit against DJO and Lima for product liability, negligence, breach of warranties, and negligent infliction of emotional distress.  After discovery, the Connells and DJO settled and the district court dismissed the claims against DJO with prejudice.  The court then granted summary judgment for Lima as a “biomaterials supplier” entitled to immunity under the BAAA.  The Connells asked for reconsideration and sought to implead Lima under 21 U.S.C. § 1606(a)(2), which provides that under specific circumstances a claimant may implead a dismissed biomaterials supplier.  The district court denied both motions.

Result: The Ninth Circuit affirmed.  The court explained that the BAAA preempts liability for a “biomaterials supplier” in “any civil action …  for harm allegedly caused, directly or indirectly, by an implant.” 21 U.S.C. §§ 1603-1604. The statute defines “biomaterials supplier” as “an entity that directly or indirectly supplies a component part or raw material for use in the manufacture of an implant.” Id. § 1602(1)(A).  Congress’s goal was to “assure the continued supply of materials for lifesaving medical devices” by shielding suppliers who did “not design, produce, or test a final medical device.” 21 U.S.C. § 1601.  Of particular concern was that “suppliers . . . in foreign nations [would] refus[e] to sell raw materials or component parts” in the United States if they were exposed to liability. Id

The Court first addressed whether the hip stem constituted a “component part” under the BAAA.  “Component part” means “a manufactured piece of an implant.” Id. § 1602(3)(A).  Lima’s hip stem was a “component part,” the Court said, because it fit the plain meaning of the word “manufactured,” and was plainly a “piece” of an implant.  It rejected the argument that the hip stem could not be a component part because it was itself an “implant,” explaining that the latter term has a specialized meaning under the BAAA, limited to devices that are intended to be placed inside the body.  Because the “complete hip implant (not the Hip Stem) was the only medical device intended to be implanted by DJO … the Hip Stem was only a component part comprising ‘a manufactured piece’ of the complete hip implant,” and not an “implant” itself. 

Next, the Court determined that Lima had supplied the hip stem “for use in the manufacture” of an implant. 21 U.S.C. § 1602(1).  Under the plain meaning of those terms, Lima had “supplied the Hip Stem, a prepared material, to be applied in a new form, quality, or combination to produce a complete hip implant.”  Because Lima met the definition for “biomaterials supplier,” liability was preempted.

Finally, the Court also held that the Connells could not implead Lima.  Under the BAAA, a plaintiff may implead a dismissed biomaterials supplier “within 90 days after entry of a final judgment in an action by the claimant against a manufacturer,” if the court finds that “the negligence or intentionally tortious conduct of the dismissed supplier was an actual and proximate cause of the harm to the claimant,” and “the claimant is unlikely to be able to recover the full amount of its damages from the remaining defendants.”  21 U.S.C. § 1606(a).  The Court read that provision to “require a defendant—other than the biomaterials supplier—to remain in the litigation after the biomaterials supplier is dismissed.”  Because no defendants remained after Lima’s dismissal, the Court concluded impleader was unavailable.   

METAL JEANS, INC. v. METAL SPORT, INC.
The Court holds that an abuse-of-discretion standard applies when reviewing a district court’s grant of summary judgment premised on the affirmative defense of unclean hands.

Panel:  Judges Wardlaw, VanDyke, and Hillman (D. Mass.), with Judge VanDyke writing the opinion.

Key Highlight: “[T]he appropriate standard of review of a district court’s determination to grant summary judgment on the affirmative defense of unclean hands is abuse of discretion. But, even so, we still ‘review certain aspects of the district court’s decision,’ such as ‘whether the district court inappropriately resolved any disputed material facts in reaching its decision,’ under the de novo standard that traditionally governs summary judgment review.”

Background:  Metal Jeans manufactures and sells clothing featuring stylized “METAL” branding, which it has trademarked.  Metal Sport, in turn, sells powerlifting apparel and accessories using its own stylized “METAL” mark.  Metal Jeans sued Metal Sport for trademark infringement.  The district court granted summary judgment to Metal Sport, concluding that it had established as a matter of law the affirmative defense of unclean hands.  The district court highlighted a number of slight inconsistencies in Metal Jeans' account of how it acquired its trademark, its allegedly false “American Made” representations, and a false statement Metal’s Jeans' owner had made to the Patent and Trademark Office.

Result:  The Ninth Circuit reversed.  In a published opinion, the Court addressed whether it should review the district court’s grant of summary judgment de novo, or instead for abuse of discretion.  While summary-judgment decision are generally review de novo, the Court observed that “[t]he doctrine of unclean hands arises in equity, and we generally review a district court’s grant of equitable relief for abuse of discretion.”  The Court deemed it a “modest and obvious step” to extend those cases applying abuse-of-discretion review to this particular summary-judgment context.   But in conducting that abuse of discretion review, the Court emphasized, it would still review de novo whether “the district court inappropriately resolved any disputed material facts in reaching its decision.”

In an accompanying, unpublished memorandum disposition, the Court applied that standard of review and reversed.  Reviewing the record de novo, the Court faulted the district court for construing the evidence in favor of Metal Sport, determining that material disputes of fact existed as to many of the supposed instances of Metal Jeans’ misconduct.