Vaughan Estate of Vaughan v. Olympus Am., Inc.
Vaughan Estate of Vaughan v. Olympus Am., Inc.
Opinion
*69 Decedent Janice Vaughan underwent medical procedures at Carolinas Medical Center in Charlotte, North Carolina, during which physicians used an Olympus TJF-Q180V duodenoscope (scope). The scope is designed for reuse on multiple patients and must be disinfected - or "reprocessed" - after each use. Allegedly, the scope used on Mrs. Vaughan was contaminated, and she developed a multi-drug-resistant infection and in May 2015, passed away.
Her widower, Freeman Maurice Vaughan, Jr., as administrator of her estate, instituted this suit in Philadelphia. Olympus Medical System Corp. (OMSC) filed preliminary objections seeking dismissal for lack of personal jurisdiction, which the trial court sustained. Because OMSC had contacts with Pennsylvania that were sufficiently related to the causes of action on which Vaughn is suing OMSC, it is subject to Pennsylvania's specific jurisdiction. We therefore reverse the order sustaining the preliminary objection to personal jurisdiction over OMSC.
Other defendants - Olympus America, Inc. (OAI), Olympus Corporation of the Americas (OCA), and Custom Ultrasonics, Inc. (Custom) - sought dismissal based on the doctrine of
forum non conveniens
.
See
42 Pa.C.S. § 5322(e). In our view, the lower court abused its discretion when it found "weighty reasons" to disturb Vaughan's choice of forum.
See
Bochetto v. Dimeling, Schreiber, & Park
,
I. Factual and procedural background
According to the Complaint, OMSC redesigned the scope several years before Decedent's procedures but did not update the reprocessing procedures and instructions, known as the "reprocessing protocol."
See
Complaint, ¶¶ 1, 3, 22, 23.
1
As a result, end users were allegedly unable to sanitize the redesigned scope effectively.
The Complaint names three defendants: OMSC, OAI, and OCA. OMSC allegedly designed and manufactured the subject scope.
*70 OCA and OAI are New York corporations, and each maintains its principal place of business in Center Valley, Pennsylvania. OMSC's Preliminary Objections, ¶ 6. 2 It is undisputed that for FDA purposes, OCA is OMSC's agent. See OMSC's Memorandum of Law in Support of Preliminary Objections, at 12; Exhibit I to OMSC's Preliminary Objections, Affidavit of Laura Storms, ¶ 7. In addition, OCA and OAI are allegedly involved in the marketing, distribution, and post-marketing safety surveillance of the scope. Complaint, ¶ 9, 10.
Vaughan alleges that the FDA granted clearance for marketing the scope pursuant to a procedure known as "section 510(k)
[
3
]
premarket notification."
See
Complaint, ¶ 17. Under this procedure, certain classes of medical devices may be marketed if "the FDA concludes on the basis of the [section] 510(k) notification that the device is 'substantially equivalent' to a pre-existing device ...."
Medtronic, Inc. v. Lohr
,
The Complaint also alleges certain of the regulatory duties of a medical device manufacturer such as OMSC.
OMSC allegedly had a duty to ensure that an effective and validated reprocessing protocol is disseminated to medical facilities and professionals. Complaint, ¶¶ 2, 26. Nonetheless, and despite its redesign of the scope, OMSC allegedly took no action to update the reprocessing protocol, and thus failed to provide end users of the redesigned scope an effective and validated protocol.
Vaughan asserts four causes of action, all four against OMSC, OCA, and OAI. The causes of action center on the claim that the reprocessing protocol was inadequate. Vaughan claims negligence for (among other things) the alleged failure to provide an "effective and validated" reprocessing protocol.
OCA and OAI answered the Complaint and joined Custom as an additional defendant. 4 Custom is a Pennsylvania company headquartered in Ivyland, Pennsylvania. Using OMSC's reprocessing protocol, Custom designed, manufactured, and tested an automated endoscope reprocessor (AER) to clean and disinfect the scope. Custom does not sell or service the AER, relying instead on third-party contractors.
OMSC filed preliminary objections in December 2016, asserting,
inter alia
, a lack of personal jurisdiction. It included as an exhibit the affidavit of Laura Storms, OCA's Vice President of Regulatory and Clinical Affairs and Quality Assurance. Exhibit I to OMSC's Preliminary Objections, Affidavit of Laura Storms, ¶ 2. She is responsible at OCA for compliance with FDA regulations, including premarket applications and post market complaints.
The trial court sustained the preliminary objection regarding personal jurisdiction in February 2016 and granted dismissal as to OMSC. Subsequently, OCA, OAI, and Custom filed a joint motion to dismiss based on forum non conveniens . Following additional discovery and supplemental briefing, the trial court dismissed Vaughan's claims without prejudice to re-institute litigation in North Carolina. Vaughan timely appealed and filed a court-ordered Pa.R.A.P. 1925(b) statement. The trial court issued a responsive opinion.
Vaughan raises the following issues:
1. Did the court err in ruling that Pennsylvania does not have personal jurisdiction over OMSC when that entity regularly sent employee liaisons to live in Pennsylvania and to work with its sister corporations, which are located in Pennsylvania, and when all regulatory, sales, marketing, and quality assurance functions necessary to make its medical device available in the U.S. were carried out in, or controlled from, Pennsylvania[?]
2. Did the court abuse its discretion in granting OAI, OCA and Custom's motion to dismiss for forum non conveniens when all those entities are headquartered in Pennsylvania, all or nearly all of their facilities are located in Pennsylvania, all or nearly all of their employees are located in Pennsylvania, and all or nearly all of their conduct giving rise to this action took place in Pennsylvania?
Vaughan's Br. at 4.
II. Discussion
A. Specific Jurisdiction Is Proper in Pennsylvania.
In his first issue, Vaughan contends the trial court erred in ruling that
*72
Pennsylvania may not exercise personal jurisdiction over OMSC.
We reverse an order sustaining preliminary objections if there has been an error of law or an abuse of discretion.
N.T. ex rel. K.R.T. v. F.F.
,
When considering a preliminary objection to personal jurisdiction, the moving party bears the burden of initially supporting its objection. If the movant carries that burden, the burden then shifts to the party claiming personal jurisdiction is proper to prove that such is the case.
N.T.
,
There are two theories of personal jurisdiction: general, or all-purpose jurisdiction, and specific, or case-linked jurisdiction.
Goodyear Dunlop Tires Operations, S.A. v. Brown
,
Whether a state may exercise
in personam
jurisdiction over a non-resident defendant is tested against both the state's long-arm statute and the Due Process Clause of the Fourteenth Amendment.
Kubik v. Letteri
,
The extent to which jurisdiction is proscribed by the Due Process Clause is dependent upon the nature and quality of the defendant's contacts with the forum state. Where a defendant has established no meaningful contacts, ties or relations with the forum, the Due Process Clause prohibits the exercise of personal jurisdiction. However, where a defendant has purposefully directed his activities at the residents of the forum, he is presumed to have fair warning that he may be called to suit there.
Mendel
,
"Due process is satisfied when the defendant has (1) purposefully established minimum contacts with the forum state, (2) such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."
Schiavone v. Aveta
,
The propriety of the exercise of specific jurisdiction "depends on an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation."
Goodyear
,
The Supreme Court's decision in
Bristol Myers Squibb
gives useful guidance here. In that case, a group of plaintiffs, including many who did not reside in California, sued Bristol-Myers in California state court alleging injuries from a drug.
The United States Supreme Court rejected that theory as contrary to "settled principles." Id. at 1781. Relevant here, the Court concluded that California lacked specific jurisdiction because there was no adequate connection between California and the non-residents' claims. Id. at 1781. The Court pointed out that the nonresidents were not prescribed and did not purchase or ingest the drug in California, and did not sustain injury from the drug in California. Id. The Court also rejected the nonresidents' contention that "the bare fact" that Bristol-Myers had contracted with a California company, along with many other companies nationally, to distribute the drug was sufficient to establish personal jurisdiction in California over Bristol Myers. The Court pointed out there was no evidence that the nonresidents had taken pills distributed through the California company. Id. at 1783. Further, the Court pointed out that Bristol-Myers did not develop a marketing strategy for the drug in California nor did it "work on the regulatory approval of the product in California." Id. at 1778.
Moreover, the Court in Bristol Myers Squibb identified additional circumstances, not present in that case, that it suggested would provide specific jurisdiction. The Court emphasized, "it is not alleged that [Bristol-Myers] engaged in relevant acts together with [the California company]." Id. The Court added, "Nor is it alleged that [Bristol-Myers] is derivatively liable for [the California company's] conduct in California." Id.
*74
This case involves the additional circumstances to which the Court adverted in
Bristol-Myers Squibb
. Here, OMSC engaged in relevant acts together with OCA, an in-state company, and it is liable for OCA's FDA-related conduct in Pennsylvania. OCA's Vice President, Laura Storms, admitted in her affidavit that OCA is OMSC's agent for purposes of OMSC's statutory reporting requirements with the FDA.
See
Affidavit of Laura Storms, ¶ 4. She also conceded that the agency relationship extends to OMSC's section 510(k) premarket notifications.
Id.
, ¶ 6. Section 510(k) premarket notifications entail submission of proposed directions for use.
Buckman
,
Daimler AG v. Bauman
,
The Ninth Circuit found jurisdiction proper, applying its so-called "agency" test for personal jurisdiction. The court explained that under that test, an in-state subsidiary acts as an agent for an out-of-state parent if the subsidiary performs services sufficiently important to the parent that, if the subsidiary ceased to exist, the foreign parent "would undertake to perform the services itself if it had no representative at all to perform them."
Bauman v. DaimlerChrysler Corp.
,
The Supreme Court reversed. The Court declined to address whether an "agency theory" is applicable to a general jurisdiction analysis because the Ninth Circuit's reasoning could not be sustained in any event.
Id.
at 135,
Daimler
does not impede our decision here for several reasons. To begin, it is a general jurisdiction case and here we consider specific jurisdiction. Perhaps more to the point, the Court did not purport to declare agency permanently out of bounds in the personal jurisdiction analysis. To the
*75
contrary, it refused to "pass judgment on invocation of an agency theory in the context of general jurisdiction," and then carefully cabined its discussion to the flaws it found in the Ninth Circuit's "agency" test.
Id.
at 135,
Here, we have such allegations, and they are supported by evidence, including Storms' concessions that OCA acted as OMSC's agent for FDA purposes. Therefore, we conclude that the activity regarding the scope that occurred in Pennsylvania was sufficient to establish the minimum contacts needed, under a due process analysis, to establish specific jurisdiction in Pennsylvania.
See
Schiavone
,
Likewise, Pennsylvania's assertion of specific jurisdiction over OMSC is fair and reasonable and does "not offend tradition[al] notions of fair play and substantial justice" as required under the second prong of a due process analysis.
B. The Trial Court Abused Its Discretion in Granting a Forum Non Conveniens Dismissal.
In his second issue, Vaughan contends that Philadelphia, Pennsylvania is the most appropriate forum for this case. Vaughan's Br. at 30. Vaughan notes that, under Pennsylvania law, a plaintiff is entitled to choose the forum in which to pursue his claims and that this choice should not be disturbed except for "weighty reasons."
Motions to transfer venue out of state pursuant to the doctrine of forum non conveniens are governed by 42 Pa.C.S.A. § 5322, which provides in relevant part:
Inconvenient forum.-- When a tribunal finds that in the interest of substantial justice the matter should be heard in another forum, the tribunal may stay or dismiss the matter in whole or in part on any conditions that may be just.
42 Pa.C.S.A. § 5322(e) ;
Pisieczko v. Children's Hosp. of Phila.
,
*76
Before a court may grant dismissal under subsection 5322(e), Pennsylvania jurisprudence requires the consideration of two factors: "(1) a plaintiff's choice of the place of the suit will not be disturbed except for weighty reasons, and (2) no action will be dismissed unless an alternative forum is available to the plaintiff."
Wright
,
In order to evaluate whether "weighty reasons" exist to disturb a plaintiff's choice of forum, the trial court must examine private and public interest factors relevant to the case. The private factors include:
[T]he relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. There may also be questions as to the enforceability of a judgment if one is obtained. The court will weigh relative advantages and obstacles to fair trial.
...
With respect to public factors, the Supreme Court advised:
Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation.... There is an appropriateness, too, in having the trial ... in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.
Bochetto
,
Considering these private and public interest factors, the trial court here concluded that North Carolina provided the more appropriate forum and that sufficiently weighty reasons militated against Vaughan's choice to pursue this case in Philadelphia. Trial Ct. Op. at 10-12. We disagree and conclude that the trial court abused its discretion by finding that "weighty" reasons required that Vaughan's choice of forum be disturbed.
The trial court determined that the majority of relevant evidence in this case is located in North Carolina or Japan and not, as Vaughan asserts, in Pennsylvania.
Id.
at 10-11. However, we agree with Vaughan that a plaintiff may establish a close connection with a forum based upon "relevant corporate actions" that take place there.
See
Vaughan's Br. at 54 (citing
Wright
,
Moreover, the trial court's concern that Vaughan's fact witnesses for damages are located in North Carolina is not persuasive. See Trial Ct. Op. at 10. In our view, any difficulty a plaintiff faces in securing evidence necessary to prove a cause of action is not a valid reason to override the plaintiff's forum preference. Thus, we find meritorious Vaughan's criticism of the court's suggestion that "much of the information that [Vaughan] alleges is based in Pennsylvania actually comes from non-parties." Vaughan's Br. at 31 (quoting Trial Ct. Op. at 10). To the contrary, significant evidence may be found in Pennsylvania from parties to this litigation.
Regarding the public interest factors, the court suggested Pennsylvania had comparatively little interest in this case, despite the presence of Pennsylvania defendants, because the injury occurred in North Carolina. Trial Ct. Op. at 11-12. Thus, the court determined, a trial in Philadelphia would unduly burden our courts and jurors. Id.
We disagree. As Vaughan noted, he provided "evidence of public interest factors similar to those described by [this Court] in
Wright
[.]"
Id.
In
Wright
, after noting that the defendant pharmaceutical companies marketed vaccines and immune globulin products in Pennsylvania, this Court concluded that the people of Pennsylvania had an interest in the outcome "particularly since [plaintiffs] aver that several of these companies make
critical ... marketing decisions
in the Commonwealth."
Wright
,
Further, as Vaughan suggests, there is little cause for concern if a Philadelphia judge is called upon to apply the law of another state.
[W]hile it is unresolved whether the law of Pennsylvania or the law of Texas will ultimately apply to this case, a factor not even considered by the trial judge, there is no basis upon which to conclude that the law determined to be applicable is beyond the ken of a Philadelphia trial judge.
Wright
,
In sum, faced with private and public factors that clearly support Vaughan's choice to proceed in Philadelphia, we conclude there were not weighty reasons to disturb Vaughan's choice of forum. Accordingly, we conclude the trial court abused its discretion and we reverse the trial court's order granting dismissal on the basis of forum non conveniens .
*78 Orders reversed; case remanded; jurisdiction relinquished.
See also OMSC's Br. at 56 ("OMSC as the manufacturer is responsible for designing the product and creating or revising its reprocessing instructions.").
See also OCA's Answer to Complaint With New Matter, ¶ 10; OAI's Answer to Complaint With New Matter, ¶ 9.
"Section 510(k)" "refers to the original section of the [Medical Device Amendments of 1976 to the Federal Food, Drug, and Cosmetic Act] describing this review process."
Gross v. Stryker Corp.
,
See Joinder Complaint, 01/10/2017; see also Pa.R.C.P. 2255.
Cf. OCA's Answer to Complaint With New Matter, ¶ 15 ("OCA admits Ms. Storms is its Vice President of Quality Assurance, and that her office is in Center Valley, Pennsylvania.").
See OMSC's Br. at 56 ("But OMSC as the manufacturer is responsible for designing the product and creating or revising its reprocessing instructions.").
Vaughan does not challenge the trial court's finding that an alternative forum is available to him. Thus, we need not address this consideration in detail. The trial court viewed the availability of an alternative forum as a threshold question.
See
Trial Ct. Op. at 9. Noting that all defendants consented to jurisdiction in North Carolina, the court concluded that an alternative forum was available.
We note Vaughan's reference to Custom employees mindful that he asserts no claims against Custom. Nevertheless, testimony from these employees may well prove relevant in this case. In several closely related cases, the plaintiffs have targeted Custom's actions directly. In those cases, such evidence will be essential.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.