Jones v. Ram Medical, Inc.

807 F. Supp. 2d 501, 75 U.C.C. Rep. Serv. 2d (West) 707, 2011 U.S. Dist. LEXIS 87797, 2011 WL 3471554
CourtDistrict Court, D. South Carolina
DecidedAugust 8, 2011
DocketCivil Action No. 4:10-cv-2974-TLW
StatusPublished
Cited by14 cases

This text of 807 F. Supp. 2d 501 (Jones v. Ram Medical, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jones v. Ram Medical, Inc., 807 F. Supp. 2d 501, 75 U.C.C. Rep. Serv. 2d (West) 707, 2011 U.S. Dist. LEXIS 87797, 2011 WL 3471554 (D.S.C. 2011).

Opinion

ORDER

TERRY L. WOOTEN, District Judge.

This matter is now before the Court for consideration of two motions to dismiss filed by Defendant Ram Medical, Inc., (“Ram Medical”), and two motions to dismiss filed by Defendant Medline Industries, Inc., (“Medline”). (Docs. # 17, 23, 31, and 35). On January 6, 2011, Ram Medical filed a motion to dismiss. (Doc. # 17). On January 14, 2011, Medline filed a motion to dismiss. (Doc. # 23). Plaintiffs Heyward and Rosalee Jones1 filed an Amended Complaint on January 24, 2011. (Doc. #26). Ram Medical then filed a motion to dismiss on February 4, 2011, (Doc. # 31), and Medline filed a motion to dismiss on February 7, 2011. (Doc. # 35).2 Plaintiffs filed a response in opposition to Ram Medical’s motion to dismiss and to Medline’s motion to dismiss on February 22, 2011. (Docs. #37 and 39). Medline filed a reply on March 8, 2011. (Doc. # 49). The Court has carefully considered the pleadings, motions, and memoranda of the parties, and this matter is now ripe for disposition.

Standard of Review

Federal Rule of Civil Procedure 8(a)(2) provides that a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” It has been noted that “[a] motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted is a challenge to the legal sufficiency of a complaint, as governed by Rule 8.” Federal Trade Commission v. Innovative Marketing, Inc., 654 F.Supp.2d 378, 384 (D.Md.2009). The Supreme Court has recently held that “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The Supreme Court noted that “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable [507]*507for the misconduct alleged,” and noted that “[determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. See Harman v. Unisys Corp., 356 Fed.Appx. 638, 640-41 (4th Cir.2009). The Court added that “the tenet that a court must accept as true all of the allegations contained in the complaint is inapplicable to legal conclusions” and that, “[tjhreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. The Court further noted that “[wjhen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 1950.

This Court further notes that allegations of fraud pled as the basis of a RICO claim must meet the heightened pleading requirements set forth in Rule 9(b) of the Federal Rules of Civil Procedure. Menasco, Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir.1989) (citing Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1400-01 (9th Cir.1986) (“plaintiff must plead ‘circumstances of the fraudulent acts that form the alleged pattern of racketeering activity with sufficient specificity pursuant to Fed.R.Civ.P. 9(b)’”)). Rule 9(b) states, “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”

Medline has also filed a motion pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. In analyzing a motion under 12(b)(1), “all facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under rule 12(b)(6) consideration.” Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982).

Discussion

Plaintiffs brought this suit against Med-line and Ram Medical, alleging eleven causes of action in the Amended Complaint. The lawsuit stems from allegations that Defendants sold, manufactured, and or marketed counterfeit and otherwise defective surgical mesh. The surgical mesh in question is used to reinforce soft tissues in the body where a weakness exists, such as in the repair of hernias. Plaintiffs contend the United States Food and Drug Administration (“FDA”) has determined that the surgical mesh manufactured or caused to be manufactured and sold by Defendants is counterfeit. (Am. Compl. ¶ 12). Plaintiffs also allege that while certain lots of the mesh were represented to be of the C.R. Bard/Davol brand name and manufactured by C.R. Bard, they were actually counterfeit products manufactured in China. Id.

Plaintiff Heyward Jones underwent a surgical procedure which allegedly involved the implantation of the counterfeit surgical mesh. Heyward alleges that after his surgery he developed a severe abdominal staph infection which required multiple corrective surgical procedures. (Am. Compl. ¶ 20). Heyward now seeks recovery from Defendants on claims of negligence, products liability, breach of warranty, fraud, violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”), and violation of the Federal Racketeer Influenced and Corrupt Organizations Act, (“RICO”). Plaintiff Heyward’s spouse seeks compensation for loss of consortium.

Breach of Warranty Claims

Defendant Ram Medical first contends that all of Plaintiffs’ breach of warranty claims fail because the warranty provisions of South Carolina’s Uniform Commercial Code (“UCC”) do not govern the instant [508]*508transaction. Ram Medical argues Article II of the UCC applies only to transactions in goods, and the instant transaction is a contract for services. Ram Medical notes that South Carolina caselaw makes clear that health care providers offer services, not products. See In re Breast Implant Product Liability Litig., 331 S.C. 540, 503 S.E.2d 445, 452 (1998). Accordingly, Ram Medical contends that a transaction where a physician implants surgical products into a patient is not governed by the UCC because the provision of health care constitutes the sale of services.

This Court finds Ram Medical’s position unpersuasive. Ram Medical has not established that it is a health care provider. The pleadings assert that Ram Medical is a dealer in goods, namely medical products. (Am. Compl. ¶ 3). Moreover, Plaintiffs contend the predominant factor test used to analyze transactions that contain both the sale of goods and services favors a finding that the UCC governs the instant transaction. If the predominant factor is the sale of goods with labor incidentally involved, the UCC applies. See Ranger Constr. Co. v. Dixie Floor Co.,

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807 F. Supp. 2d 501, 75 U.C.C. Rep. Serv. 2d (West) 707, 2011 U.S. Dist. LEXIS 87797, 2011 WL 3471554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jones-v-ram-medical-inc-scd-2011.