Quashie v. Olympus Am., Inc.
Quashie v. Olympus Am., Inc.
Opinion of the Court
Before the Court are Defendant Olympus Corporation's and Defendant Olympus Medical Systems Corporation's Motions to Dismiss for Lack of Personal Jurisdiction (Dkts. 27, 28) and all Defendants' Motions to Dismiss for Failure to State a Claim.
I. Background
Plaintiff Caryl Quashie is a resident of the State of Georgia. Dkt. 21 at ¶ 10. She alleges that she suffered a serious bacterial infection because of a defective medical instrument known as a duodenoscope that was used on her during a procedure at Emory Johns Creek Hospital in Johns Creek, Georgia. Id. at ¶¶ 11-12. Plaintiff filed her complaint against Olympus America Inc., Olympus Corporation of the Americas, Olympus Medical Systems Corporation, and Olympus Corporation claiming that each was responsible for the design, testing, manufacturing, marketing, sale, and distribution of the defective duodenoscope. See id. at ¶¶ 8-43. Defendants Olympus Medical Systems Corporation and Olympus Corporation-both incorporated and headquartered in Japan-move to dismiss for lack of personal jurisdiction. (Dkts. 27, 28). All Defendants move to dismiss the Amended Complaint for failure to state a claim. (Dkts. 29, 30, 31, 32).
The medical device at issue is the Olympus TJF-Q180V Duodenoscope, an endoscope equipped with a camera and light that a doctor can feed through a patient's *1333mouth, throat, and stomach into the duodenum to view the patient's liver, gallbladder, pancreas, and bile ducts. Dkt. 21 at ¶¶ 1, 46-49. Duodenoscopes are reusable from patient to patient, but must be adequately cleaned to avoid infection. Id. at ¶¶ 49-50. Earlier versions of the Olympus duodenoscopes were designed with an open channel into which the doctor inserted a guidewire and catheter. Id. at ¶¶ 51-52. Olympus enclosed this channel on the Q180V by using an O-ring that allegedly prevents the leakage of tissue and fluids into the channel.
Plaintiff alleges that the closed-channel design was defective in several ways. She claims, for example, that the O-ring allowed contaminants to leak into the channel. Id. at ¶ 57. She further claims that the design of the Q180V has crevices that are too small to clean or sanitize, but large enough to trap microbial contaminants. Id. at ¶ 59. Finally, Plaintiff claims that Defendants created a reprocessing protocol intended to clean the Q180V between uses that did not, in fact, clean the instrument to prevent the spread of infection from patient to patient. Id. at ¶¶ 61-63. Plaintiff alleges that, because of these defects, the Q180V put patients at an unreasonable increased risk of infection. See, e.g., id. at ¶ 64.
Plaintiff alleges that, by at least May 2012, Olympus knew the Q180V was defective and increased a patient's risk of infection. Id. at ¶ 67. And, by late 2012, Defendants knew that the Q180V was linked to outbreaks of antibiotic-resistant infections in the United States and Europe. Id. at ¶ 68. According to Plaintiff, the FDA eventually became aware of the risks posed by the Q180V and required Defendants to fix the defects and modify the reprocessing protocol. Id. at ¶ 70. Defendants did so. Id.
Plaintiff underwent a medical procedure at the Johns Creek hospital on August 7, 2015, during which the doctor allegedly used a Q180V scope. Id. at ¶ 12. Seventeen days later, Plaintiff was hospitalized. She was hospitalized again just three days later, this time diagnosed with an antibiotic-resistant infection. Id. at ¶ 13. Plaintiff claims she got the life-threatening infection from the Q180V that was used during her procedure. Id. Plaintiff asserts claims of (1) negligence (id. at ¶¶ 74-87); (2) strict products liability (id. at ¶¶ 88-120); (3) failure to warn (id. at ¶¶ 121-136); (4) fraudulent misrepresentation (id. at ¶¶ 137-153); (5) fraudulent concealment (id. at ¶¶ 154-169); (6) negligent misrepresentation (id. at ¶¶ 170-181); and (7) fraud and deceit (id. at ¶¶ 182-214).
Plaintiff filed her Complaint on August 15, 2017 and an Amended Complaint on September 19, 2017. (Dkts. 1, 21). Defendant Olympus Corporation and Olympus Medical Systems Corporation (hereinafter "Olympus Corp." and "OMSC," respectively) filed motions to dismiss under Federal Rule of Civil Procedure 12(b)(2), arguing that they are not subject to personal jurisdiction in this Court. (Dkts. 27, 28). These Defendants-as well as the other two Olympus defendants-also filed motions to dismiss under Fed. R. Civ. P. 12(b)(6). (Dkts. 29, 30, 31, 32). Briefing is now complete and, following oral argument, the Court finds the matter is ripe for resolution.
*1334II. Analysis
A. Motions to Dismiss for Lack of Jurisdiction
This is a diversity case. Before a federal court sitting in such a case can exercise personal jurisdiction over a non-resident defendant, the Court must determine that it has jurisdiction under (1) the long-arm statute of the state in which it sits and (2) the Due Process Clause of the United States Constitution. Future Tech. Today, Inc. v. OSF Healthcare Sys. ,
i. Jurisdiction Under Georgia's Long Arm Statute
Georgia's long-arm statute provides, in relevant part:
A court of this state may exercise personal jurisdiction over any nonresident or his or her executor or administrator, as to a cause of action arising from any of the acts, omissions, ownership, use, or possession enumerated in this Code section, in the same manner as if he or she were a resident of this state, if in person or through an agent, he or she:
(1) Transacts any business within this state;
(2) Commits a tortious act or omission within this state, except as to a cause of action for defamation of character arising from the act;
(3) Commits a injury in this state caused by an act or omission outside this state if the tortfeasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered within this state ...
O.C.G.A. § 9-10-91. Georgia law governs the breadth and application of its long-arm statute. Diamond Crystal Brands, Inc. ,
Here, Plaintiff has alleged that the Japanese Defendants-Olympus Corp. and OMSC-have "transacted and conducted business in the State of Georgia" and have "derived substantial revenue from goods and products used in the State of Georgia." Dkt. 21 at ¶¶ 32, 33, 39, 40. Plaintiff also alleges that these two defendants are in the "business of creating, designing, researching, testing, manufacturing, labeling, advertising, marketing, promoting, selling and distributing medical equipment, including but not limited to duodenoscopes and the subject Q180V Scopes, into the stream of commerce for use by the public, including the Plaintiff." Id. at ¶¶ 31, 38. Finally, Plaintiff alleges that Olympus Corp and OMSC "expected or should have *1335expected [their] acts to have consequences within the State of Georgia and derive[ ] substantial revenue from interstate commerce within the United States of America, and the State of Georgia, more particularly." Id. at ¶¶ 34, 41.
As a threshold matter, the Court notes that Plaintiff's Amended Complaint does not contain allegations tailored to each defendant or that set forth each defendant's individual actions that allegedly give rise to personal jurisdiction.
In Brazil v. Janssen Research & Dev. LLC ,
In this case, Plaintiff has included jurisdictional allegations against each defendant-they are verbatim, but they allege specific conduct by each defendant. See, e.g. , Dkt. 21 at ¶¶ 18-41. And neither Olympus Corp. nor OMSC submitted an affidavit challenging Plaintiff's jurisdictional allegations. Thus, the Court must accept Plaintiff's allegations, including the allegation that both Olympus Corp. and OMSC engaged in the same scope of conduct.
Plaintiff's allegations in the Amended Complaint establish jurisdiction under the third section of Georgia's long-arm statute.
Defendants Olympus Corp. and OMSC argue that these bare-bones allegations are nevertheless insufficient to support jurisdiction and that Plaintiff must provide more factual details. Dkts. 27-1 at 9-13; 28-1 at 9-13. That is not correct. There is no requirement that a plaintiff plead more than the bare minimum required by the long-arm statute. For example, in Betancourt v. Endo Pharmaceuticals, Inc. , Case No. 1:11-cv-3805,
ii. Personal Jurisdiction Under the Due Process Clause
Having determined that personal jurisdiction exists under Georgia law, the Court must now consider whether Plaintiff's jurisdictional allegations satisfy due process requirements for personal jurisdiction. "The Due Process Clause protects an individual's liberty interest in not being subject to binding judgments imposed by foreign sovereigns." Diamond Crystal Brands, Inc. ,
Courts have recognized two types of jurisdiction under the Due Process Clause: "general or all-purpose jurisdiction, and specific or case-linked jurisdiction." Goodyear Dunlop Tires Operations, S.A. v. Brown ,
The allegations in the Amended Complaint do not come anywhere close to establishing general jurisdiction over Olympus Corp. or OMSC. Plaintiff's allegations that Olympus Corp. and OMSC placed products into the stream of commerce that brought them to Georgia "may bolster an affiliation germane to specific jurisdiction [but] ... do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant." Daimler AG v. Bauman ,
To remain in court, therefore, Plaintiff must establish specific jurisdiction. "Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this 'fair warning' requirement is satisfied if the defendant has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities." Burger King Corp. v. Rudzewicz ,
Plaintiff claims her allegations that Defendants transacted business in Georgia, derived revenue from that business, and committed a tortious act that affected a Georgia resident and caused injury in Georgia are sufficient to support specific jurisdiction. See Dkt. 41 at 19. At most, these allegations establish some contacts with Georgia. They are, however, insufficient to show "a sufficient nexus between those contacts and the litigation." Diamond Crystal Brands, Inc. ,
To remedy this defect in the Amended Complaint, Plaintiff alleges in response to Defendants' motions to dismiss that "Defendants purposefully availed themselves of this forum when they marketed, distributed and sold medical equipment to hospitals in Georgia, including the hospital where the Q180V scope was used." Dkt. 41 at 19. Plaintiff argues that this allegation establishes specific jurisdiction.
*1338But Plaintiff's allegations are insufficient to establish specific personal jurisdiction under a stream-of-commerce theory. In World-Wide Volkswagen Corp. v. Woodson ,
Since World-Wide Volkswagen , pluralities of the Supreme Court have articulated more demanding steam-of-commerce theories. In Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty. ,
Most recently, in J. McIntyre Machinery Ltd. v. Nicastro ,
[t]he defendant's transmission of goods permits the exercise of jurisdiction only where the defendant can be said to have targeted the forum; as a general rule, it is not enough that the defendant might have predicted that its goods will reach the forum State.
The Court need not parse these different tests, however, because Plaintiff does not satisfy even the most permissive stream-of-commerce test articulated in *1339World-Wide Volkswagen. That is, Plaintiff fails to allege facts sufficient to show that Defendants Olympus Corp. or OMSC expected their products to be purchased by consumers in Georgia such that they "manifest[ed] an intention to submit to the power of a sovereign." Hanson v. Denckla ,
For the reasons set forth above, the exercise of personal jurisdiction over Olympus Corp. or OMSC would violate the Due Process Clause. Id. at 881,
B. Motions to Dismiss for Failure to State a Claim
All four Defendants moved to dismiss Plaintiff's claims pursuant to Rule 12(b)(6) for failure to state a claim. (Dkts. 29, 30, 31, 32). Because the Court grants Olympus Corp. and OMSC's motions to dismiss for lack of personal jurisdiction (Dkts. 27, 28), their motions to dismiss for failure to state a claim are moot.
i. Statute of Limitations
Plaintiff underwent surgery with the allegedly defective scope on August 7, 2015. Dkt. 21 at ¶ 12. Seventeen days after the surgery, on August 24, 2015, she was hospitalized. Id. at ¶ 13. She was hospitalized again three days later, at which time she was diagnosed with an antibiotic-resistant infection. Id. Plaintiff filed this action on August 15, 2017. (Dkt. 1). Defendants argue that Plaintiff's claims are time-barred because her claims accrued on August 7, 2015, the date of her surgery, thus requiring any claims to have been filed by August 7, 2017. Defendants, therefore, move to dismiss the Amended Complaint as barred by the two-year statute of limitations.
Under Georgia law, "[a]ctions for injury to the person shall be brought two years after the right of action accrues." O.C.G.A. § 9-3-33. And "on a tort claim for personal injury the statute of limitation generally begins to run at the time damage caused by the tortious act occurs, at which time the tort is complete." Everhart v. Rich's Inc. ,
Plaintiff's claims are not time-barred. Her claims accrued-not on the day of her surgery-but rather on August 24, 2015, when she became ill and was hospitalized. Before that time, Plaintiff neither suffered any injury nor knew that she had suffered any injury. It would be impossible for plaintiff to have "maintained [her] action to a successful result" on the day of her surgery before she suffered any infection or knew that she had suffered such an infection. See Crook-Petite-El v. Bumble Bee Foods L.L.C. , Case No. 1:17-cv-00677,
ii. Fraud Claims
Defendants also move to dismiss Plaintiff's fraud-related claims, arguing that Plaintiff failed to plead these claims with the particularity required by Fed. R. Civ. P. 9(b). Rule 9(b) requires that a party alleging fraud or mistake "state with particularity the circumstances constituting fraud or mistake." Four of Plaintiff's claims are subject to Rule 9(b)'s heightened pleading standard: (1) fraudulent misrepresentation; (2) fraudulent concealment; (3) negligent misrepresentation; and (4) fraud and deceit.
To plead a fraud claim with sufficient particularity, a party must "plead facts as to time, place, place, substance of the defendant's allegedly fraudulent acts, when they occurred, and who engaged in them." Brazil ,
Here, Plaintiff has failed to satisfy Rule 9(b) because her claims both lack sufficient particularity and fail to distinguish between the individual defendants. In her fraudulent misrepresentation claim, for example, Plaintiff repeatedly alleges that "each and Defendant falsely and fraudulently represented to the medical and healthcare community" various aspects of the Q180V scope. See, e.g. , Dkt. 21 at ¶¶ 138-44. She claims that these misrepresentations were made "by means of media advertisements, internet advertisements, press releases, sales literature, advertising campaigns, print ads, magazine ads, and/or commercial media ..." Id. at ¶ 142. Plaintiff does not identify a single statement with specificity-that is, by identifying the time and date of the statement, the specific place of the statement, the defendant who made the statement, or the precise details of the statement. Simply referring to the Defendants' advertisements *1341over an undefined period does not provide the who, what, when, where, and how required by Rule 9(b). In addition, Plaintiff's fraudulent misrepresentation claims do not distinguish in any way between the four defendants, instead lumping them all together in a collective allegation.
The same is true of Plaintiff's other fraud-based claims. Her fraudulent concealment claim amounts to a generalized allegation that "each and every Defendant fraudulently concealed and intentionally omitted" information about the dangers of the scope. See, e.g. , Dkt. 21 at ¶¶ 157-62. Again, she alleges that the Defendants failed to make the necessary disclosures in "media advertisements, internet advertisements, press releases, sales literature, advertising campaigns, print ads, magazine ads, and or commercial media ..." Id. at ¶ 157. She does not identify any specific statement as to the alleged speaker, the time, the location, or the details of the statement. In addition, Plaintiff makes no attempt to distinguish between the individual defendants. Her negligent misrepresentation and fraud and deceit claims contain the same general allegations of conduct by "each and every Defendant" in unidentified press releases, advertising campaigns, print ads, and other media. See, e.g. , id. at ¶¶ 171-77; 183-94.
None of these claims satisfy Rule 9(b)'s particularity requirement. The Court dismisses Plaintiff's claims for fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation, and fraud and deceit without prejudice and with leave to amend.
iii. Negligence, Strict Liability and Failure to Warn Claims
Finally, Defendants move to dismiss Plaintiff's negligence, strict-liability, and failure to warn claims. Defendants contend that Plaintiff has failed to plausibly plead these claims under Georgia law. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim that is plausible on its face.' " Ashcroft v. Iqbal ,
Plaintiff's negligence, failure to warn, and strict liability claims suffer from the same a lack of specificity as to each Defendant that dooms her fraud claims. Brazil ,
Under Georgia law, the role a defendant plays in the production, sale, or distribution of a product affects the applicable legal standard. Different duties, for example, apply to manufacturers, distributors, and sellers when proceeding under a negligent failure-to-warn theory. Askew v. DC Medical, LLC , Case No. 1:11-cv-1245,
Plaintiff's lack of specificity with respect to the acts of each Defendant "fails to provide proper notice of her claims to any one Defendant." Brazil ,
III. Conclusion
For the reasons set forth above, the Court GRANTS Defendant Olympus Corporation and Defendant Olympus Medical Systems Corporation's Motions to Dismiss for Lack of Personal Jurisdiction (Dkts. 27, 28) and DISMISSES WITHOUT PREJUDICE Defendant Olympus Corporation and Defendant Olympus Medical Systems Corporation. The Court further GRANTS the remaining Defendants' Motions to Dismiss for Failure to State a Claim. (Dkts. 31, 32). Defendant Olympus Corporation and Defendant Olympus Medical Systems Corporation's Motions to Dismiss for Failure to State a Claim (Dkts. 29, 30) are DENIED AS MOOT. The Court further ORDERS Plaintiff to file an Amended Complaint, if any, WITHIN TWENTY-ONE (21) DAYS OF THE DATE OF THIS ORDER.
IT IS SO ORDERED.
Defendants filed materially similar motions to dismiss the original complaint on the same grounds. See Dkts. 11, 12, 14, 16, 18, 19. The subsequent filing of the Amended Complaint rendered these motions moot. (Dkt. 21).
As stated herein, the Amended Complaint does not adequately establish each Defendant's involvement in the design, manufacturing, marketing, and sale of the Q180V. Instead, Plaintiff includes the same general allegation against each Defendant. The Court refers to the Defendants collectively as "Olympus" for background purposes only.
Plaintiff alleges that "[a]t all times mentioned, each Defendant was the representative, agent, employee, joint venture, or alter ego of each of the other Defendants and in doing all things alleged herein was acting within the scope of its authority as such." Dkt. 21 at ¶ 42. This conclusory allegation is insufficient to attribute conduct of Olympus America Inc. or Olympus Corporation of the Americas to Olympus Corp. or OMSC so as to establish personal jurisdiction. Parker v. Brush Wellman, Inc. ,
Plaintiff alleges that Olympus Corp. and OMSC have "transacted and conducted business in the State of Georgia," which at first blush seems to satisfy section one of Georgia's long-arm statute. Dkt. 21 at ¶¶ 32, 29. But in Diamond Crystal , the Eleventh Circuit noted that the cause of action must "arise out of" the business transacted or conducted in Georgia. Diamond Crystal Brands, Inc. ,
Courts have noted the difficulty in discerning a holding from the Nicastro plurality opinions. See Johnson v. Chrysler Canada Inc. ,
Defendant Olympus Corp. and OMSC's filing of separate Rule 12(b)(1) and Rule 12(b)(6) motions may be inappropriate under Rule 12(g)(2). Because the Rule 12(b)(6) motions are moot, however, the Court need not reach this question.
Rule 9(b)'s heightened pleading requirement applies to claims for negligent misrepresentation. Intellicig USA LLC v. CN Creative Ltd. , Case No. 1:15-cv-01832,
Defendants cite three cases in support of their argument that Plaintiff has not sufficiently plead causation: Barnes v. AstraZeneca Pharmaceuticals LP ,
Reference
- Full Case Name
- Caryl QUASHIE v. OLYMPUS AMERICA, INC.
- Cited By
- 10 cases
- Status
- Published