Michael v. Shiley, Inc.

• Court: Court of Appeals for the Third Circuit
• Decided: February 7, 1995
• Docket: 94-1496
• Status: Unknown

Opinion

Opinions of the United 1995 Decisions States Court of Appeals for the Third Circuit

2-7-1995

Michael v Shiley, Inc. Precedential or Non-Precedential:

Docket 94-1496

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1995

Recommended Citation "Michael v Shiley, Inc." (1995). 1995 Decisions. Paper 35. http://digitalcommons.law.villanova.edu/thirdcircuit_1995/35

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No. 94-1496

NINA MICHAEL,

Appellant

v.

SHILEY, INC.; HOSPITAL PRODUCTS GROUP, INC., (FORMERLY HOWMEDICA, INC.); PFIZER, INC.

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 93-1729)

Argued Monday, October 24, 1994

BEFORE: STAPLETON, HUTCHINSON and GARTH, Circuit Judges

(Opinion filed February 7, l995)

Gary Green (Argued) Sidkoff, Pincus & Green 530 Walnut Street Philadelphia, Pennsylvania 19106

Morton B. Wapner David Kuritz Wapner, Newman & Wigrizer 115 South 21st Street Philadelphia, Pennsylvania 19103 Attorneys for Appellant David Klingsberg (Argued) Maris Veidemanis Kaye, Scholer, Fierman, Hays & Handler 425 Park Avenue New York, New York 10022

John W. Frazier, IV James A. Willhite, Jr. Montgomery, McCracken, Walker & Rhoads Three Parkway, 20th Floor Philadelphia, Pennsylvania 19102

Attorneys for Appellees

OPINION OF THE COURT

GARTH, Circuit Judge:

This appeal requires that we determine how the Medical

Devices Amendments of 1976 which amended the Food, Drug and

Cosmetics Act of 1938, 21 U.S.C. § 360-360rr, allocates authority

between the states and the Food and Drug Administration. To be

precise, we must decide whether 21 U.S.C. § 360k pre-empts Nina

Michael's state law causes of action for negligent manufacture

and design, strict product liability, breach of the implied

warranty of merchantability, breach of an express warranty, and

common law fraud against Shiley Inc., the manufacturer of the

Bjork-Shiley Heart Valve.

Applying the express pre-emption analysis defined by

Cipollone v. Liggett Group Inc., 112 S. Ct. 2608 (1992), we

conclude that § 360k pre-empts Michael's cause of action for

negligence (both manufacturing and design), strict product liability, and breach of the implied warranty of merchantability.

We also hold that Michael's complaint to the extent that it

relies on fraud perpetrated by Shiley on the FDA is pre-empted.

Finally, we hold that § 360k does not preclude Michael from

pursuing common law causes of action for express warranty and for

fraud to the extent that the fraud arises from Shiley's efforts

to promote its product through letters to doctors and

advertisements in medical journals.

Accordingly, while we will affirm the district court's pre-

emption rulings as to Michael's negligence, strict product

liability, and implied warranty claims, we will reverse the

district court's summary judgment to the extent that it entered

judgment against Michael on her express warranty and fraud

claims.

I

A.

Nina Michael's claims arise from the discovery in the past

fifteen years that the outlet strut of the Bjork-Shiley 60 Degree

Convexo-Concave Disc Heart Valve ("Shiley valve"), which was

designed and manufactured by Shiley Inc., fractures in

approximately one percent of the patients who received a Shiley

implant. App. 200. These failures result from a weak strut

mechanism and from poor manufacturing standards at Shiley's

facilities. A strut failure leads inevitably to death or serious

injury. B.

The Shiley valve was one of the first medical devices to be

approved under the 1976 Medical Device Amendments to the Food

Drug and Cosmetics Act of 1938 (the "MDA"), a comprehensive

extension of the FDA's authority beyond medical drug

manufacturers to medical device manufacturers. Pub. L. No. 94-

295, 90 Stat. 539 (1976). Congress passed the Amendments in

response to the harm caused by the Dalkon Shield, an unregulated

medical device which resulted in serious injury to a large number

of women.1 Sen. Rep. No. 33, 94th Cong., 1st Sess. 2 reprinted

in 1976 U.S. Code Cong. & Admin. News 1070, 1071. Through the

MDA, Congress hoped "to assure the reasonable safety and

effectiveness of medical devices intended for human use." H.

Conf. Rep. No. 1090, 94th Cong., 1st Sess. 51 reprinted in 1976

U.S. Code Cong. & Admin. News 1103, 1103. To do so, it granted

the FDA new broad powers to regulate medical devices, which

powers are based on three statutory classifications.

Class I devices, such as tongue depressors, are devices

which generally pose little or no threat to public health and are

subject only to general controls on manufacturing. See 21 U.S.C. § 360c(a)(1)(A). Class II devices, such as oxygen masks, pose a

slightly greater risk of injury to patients, and accordingly, the

MDA subjects them to performance standards, post market

1 . For a history of the harm which resulted from the Dalkon Shield, see In re A.H. Robins Co., 880 F.2d 709, 710-12 (4th Cir.), cert. denied sub nom, Anderson v. Aetna Casualty and Surety Co., 493 U.S. 959 (1989). surveillance, guidelines for use and other appropriate controls.

See id § 360c(a)(1)(B). Class III devices, such as the Shiley

valve, include all devices which are to be implanted into people,

which are used to sustain life, or which pose a potentially

unreasonable risk of injury. See id. § 360c(a)(1)(C).

Class III devices may not be marketed or sold until the

sponsoring company obtains Premarket Approval (PMA) from the FDA.

Id. § 360e. To obtain a PMA, the sponsor must submit "all

information, published or known to or which should reasonably be

known to the applicant, concerning investigations which have been

made to show whether or not such device is safe and effective,"

id. § 360e(c)(1)(A), a statement of the intended use of the

product, a description of the expected manufacturing processes

for the device, and any other information requested by the FDA.

Id. § 360e(c)(1)(B)-(G). After review by a panel of medical

experts, the FDA may approve the PMA.

The FDA retains continuing oversight over approved Class III

devices. It requires manufacturers to report any deaths or

serious injuries which result from the use of the product. See

21 C.F.R. § 803.24(c). It may require warning or instructions on

the labels which accompany the product. 21 C.F.R. § 814.82.

Finally, the FDA regulates the manufacture of the devices through

the imposition of good manufacturing processes. 21 C.F.R.

§ 820.100-820.101. The only remedial power granted to the FDA is

the power to require the sponsor of the product to notify the

public of a newly discovered danger posed by the product, order

the company to replace the device, or order the company to refund the purchase price to the patient. The FDA can take these

actions only if it determines that the device presents an

unreasonable risk of substantial harm to the public. 21 U.S.C.

§ 360h(a). The act does not permit the FDA to require companies

to compensate victims for their medical expenses or for the pain

and suffering resulting from a device failure.

C.

Shortly after the passage of the MDA, Shiley applied for

Premarket Approval (PMA) to market the Shiley valve. At the

time, the FDA's procedures for PMA applications had not been

finalized, see 51 Fed. Reg. 26364 (July 22, 1986) (defining PMA

procedures), and thus the Shiley application did not receive the

same organized and comprehensive evaluation that might be

expected today. Sen. Comm. on Energy & Commerce, 101st Cong., 2d

Sess., The Bjork-Shiley Valve: Earn as You Learn 20-22 (Comm.

Print 1990) [hereinafter Energy & Commerce Report]. For example,

evidence of the first strut fracture was belatedly brought to the

FDA's attention and explained as an "isolated incident" even

though it was unexplained at the time of the application. Id. at 21. Further, Shiley made claims, based on unsubstantiated data,

that reduced heart complications would result from Shiley valve

implants.2 Id. at 22-24. Despite these deficiencies, the FDA

2 . Specifically, Shiley claimed a reduction in the rate of thromboembolism, the development of potentially dangerous blood clots at the valve's location. The FDA later determined that there was no improvement in the rates of thromboembolism with the new valve and that this information, if known at the time the PMA approved the PMA on April 27, 1979, without a recorded vote. Id.

at 22.

Between 1979 and 1983, the struts which hold the mechanical

valves in place in 73 Shiley valves fractured, id at 28, leading

to the death of most of the implanted individuals. These

fractures were the result of both the valve's design and poor

manufacturing processes. In particular, the valves suffered from

poor welding and poor quality control. See id. at 5-14; App.

461, 615-16, 623-25. During this period, Shiley sent a set of

letters to doctors and to the FDA reassuring them that these

incidents did not compromise the integrity, safety, or

effectiveness of the device. Energy & Commerce Report at 14-17.

Despite a redesign of the manufacturing process, continuing strut

fractures forced Shiley to recall those valves which had not been

implanted in 1980, 1982, and 1983. Because of continuing

problems with valve failures, Shiley recalled its larger size

valves and ceased production of those sizes in October 1985.

Finally, on November 24, 1986, Shiley withdrew all its remaining

valves from the market and ceased production of any heart valves.

On March 21, 1990, Shiley asked the FDA to withdraw its Premarket

Approval. To date, approximately 501 Shiley valves have

fractured, resulting in 347 deaths. App. 691.

D.

(..continued) was filed, would likely have prevented FDA approval. App. 766- 68. These events first affected Nina Michael in 1981. In that

year, Michael was diagnosed with a congenital defect with her

mitral heart valve, which controls of the flow of blood between

the left atrium and the left ventricle. Because the defect was

potentially fatal, Michael underwent surgery to have her natural

heart valve replaced with the Shiley valve on November 24, 1982.

The surgery was successful and the valve functioned

properly. The valve implanted in Michael came with the following

disclosure under the heading "Disclaimer of Warranties":

Shiley warrants that reasonable care has been used in

the manufacture of this device. This warranty is

exclusive and in lieu of all other warranties, whether

express, implied, written or oral.

App. 680.

In the late 1980s and early 1990s, Michael became aware of

the strut fracture problem through media sources and her doctor.

Research disclosed that her class of valves was among the Shiley

valves with the highest rate of failure. It was estimated that

there was a two percent chance per year that a catastrophic valve

failure would occur in the Shiley valve implanted in Michael.

These disclosures caused Michael significant anxiety, which

resulted in sleeplessness and other emotional and physical

symptoms.

After consultations with her physicians, Michael had the

Shiley valve surgically removed and replaced with a different

valve in June 1992. The surgeon visually examined her explanted valve and found no visible defects. The valve was later

discarded.

In March 1993, Michael filed a complaint in the Philadelphia

Court of Common Pleas, alleging state law claims of negligence,

strict product liability, breach of implied warranties, breach of

express warranties, and fraud. App. 10-29. Her complaint named

Shiley Inc., the maker of the Shiley valve; Pfizer Inc., Shiley's

corporate parent; and Hospital Products Group Inc., another

corporate owner of Shiley. Shiley removed the case to the

Eastern District of Pennsylvania on the basis of diversity

jurisdiction. App. 31. On August 16, 1993, Shiley filed two

summary judgment motions. One motion alleged that all claims

except the express warranty claim were pre-empted. The second

motion alleged that Michael had failed to raise a genuine issue

of material fact to support her claims.

Through orders dated February 25, 1994, March 31, 1994, and

April 7, 1994, the district court granted judgment on all the

claims against Michael and in favor of Shiley. It granted

judgment on the negligence, strict product liability, and implied

warranty claims on both pre-emption and traditional Rule 56

grounds. See Fed. R. Civ. P. 56(c). It granted judgment on the

express warranty claim for failure to raise a genuine issue of

material fact. Finally, it granted judgment on the fraud claim

solely because it was pre-empted.

Michael filed a timely notice of appeal.

II. We exercise plenary review of the district court's grant of

summary judgment and apply the same test that the district court

should have applied initially. Goodman v. Mead Johnson & Co.,

534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038

(1977). Thus, we will affirm only if Michael has failed to raise

a genuine issue of material fact and Shiley is entitled to a

judgment as a matter of law. Id. In examining the record, we

give the nonmoving party the benefit of all reasonable inferences

from the record. Gray v. York Newspapers, Inc., 957 F.2d 1070,

1078 (3d Cir. 1992). We exercise plenary review over the

district court's pre-emption determination, as it is a question

of law. Travitz v. Northeast Dep't ILGWU Health & Welfare Fund,

13 F.3d 704, 708 (3d Cir.), cert. denied, 114 S. Ct. 2165 (1994).

We also exercise plenary review over the district court's

application of state law. Salve Regina College v. Russell, 499

U.S. 225, 231 (1991).

III

The parties' core dispute is whether, or to what extent, the

MDA pre-empts Michael's state common law causes of action.

Article VI of the Constitution provides that the laws of the

United States "shall be the supreme Law of the Land; . . . any

Thing in the Constitution or Laws of any State to the Contrary

notwithstanding." U.S. Const. art. VI, cl. 2. By virtue of this

grant of federal power, Congress can through a sufficiently clear

expression of its intent displace state law. Cipollone v. Liggett Group, Inc., 112 S. Ct. 2608, 2617 (1992);3 CSX Transp.

Inc. v. Easterwood, 113 S. Ct. 1732, 1737 (1993) ("[P]re-emption

will not lie unless it is `the clear and manifest purpose of

Congress.'") (quoting Rice v. Sante Fe Elevator Corp., 331 U.S.

218, 230 (1947)). "In the interest of avoiding unintended

encroachment on the authority of the States, however, a court

interpreting a federal statute pertaining to a subject

traditionally governed by state law will be reluctant to find

pre-emption." CSX Transp. Inc., 113 S. Ct. at 1737.

Pre-emption may arise explicitly from the statute's language

or implicitly from the statute's structure and purpose. Morales

v. Trans World Airlines, Inc., 112 S. Ct. 2031, 2036 (1992).

Nonetheless, "[w]hen Congress has considered the issue of pre-

emption and has included in the enacted legislation a provision

explicitly addressing that issue, and when that provision

provides a reliable indicium of congressional intent with respect

to state authority, there is no need to infer congressional

intent to pre-empt state laws from the substantive provisions of

legislation." Cipollone, 112 S. Ct. at 2618 (quotations and

citations omitted).

3 . We recognize that Cipollone was decided by a plurality of the Supreme Court. We are satisfied that the pre-emption discussion and holding represents the Court's current pre-emption analysis. See, e.g., American Airlines, Inc. v. Wolens, 1995 WL 15047 (U.S. 1995); Gile v. Optical Radiation Corp., 22 F.3d 540, 542 (3d Cir. 1994); Weber v. Heaney, 995 F.2d 872, 875 (8th Cir. 1993); Cleveland v. Piper Aircraft Corp., 985 F.2d 1438, 1443 (10th Cir.), cert. denied, 114 S. Ct. 291 (1993). Because Shiley relies upon the express pre-emptive scope of

21 U.S.C. § 360k, our task is primarily one of statutory

construction. Id. at 2621. We must give the language of § 360k

"a fair but narrow reading" which will give effect to Congress'

purpose without undermining "the strong presumption against pre-

emption." Id.

Cipollone illustrates the manner in which we are to apply

these doctrines. In Cipollone, the Supreme Court considered

whether the Cigarette Labeling and Advertising Act of 1965 or the

Public Health Cigarette Smoking Act of 1969 pre-empted Rose

Cipollone's state common law causes of action for failure to

warn, breach of express warranty, fraudulent misrepresentation,

and conspiracy claims. The Court concluded that the limited

language of the 1965 act did not prevent a state claimant from

recovering damages in a state common law cause of action not

otherwise pre-empted. 112 S. Ct. at 2619.

The Court turned to the broader pre-emption provision of the

1965 Act which stated "[n]o requirement or prohibition based on

smoking and health shall be imposed under State law with respect

to the advertising or promotion of cigarettes . . . ." Id. at

2617. Applying a "fair but narrow" reading of this provision,

the Court held that Cipollone could not maintain a failure to

warn claim because the statute prevented states from requiring

any warning beyond the federally mandated statement "CAUTION:

CIGARETTE SMOKING IS DANGEROUS TO YOUR HEALTH." Id. at 2621-22.

In contrast, the Court concluded that Cipollone's express

warranty and fraud claims could proceed. The contract claim was not "imposed under State law" and the fraud claim did not impose

a requirement "with respect to the advertising or promotion of

cigarettes." Id. at 2622-24.

B.

Statutory interpretation begins with an analysis of the

statute's language. Section 360k(a) provides: Except as provided in subsection (b) of this section, no State or political subdivision of a State may establish or continue in effect with respect to a device intended for human use any requirement --

(1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and

(2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter.

This section pre-empts only state imposed requirements. Further,

it pre-empts those requirements only when they differ from or add

to a previously established FDA requirement and relate to the

safety or efficacy of the regulated device. When a state law

differs from or adds to a FDA requirement and when a state law

relates to the safety or effectiveness of a device approved by

the FDA, the state law is pre-empted. Conversely, when a state

law neither imposes requirements nor differs from or adds to a

FDA requirement nor relates to the safety or effectiveness of the

device or to any other matter included in a FDA requirement, the

state law is not pre-empted by § 360k. C.

We first consider Michael's two threshold arguments: (1)

that state common law does not impose "requirements" and (2) that

the FDA imposed no "requirements" on Shiley. Either would

prevent the MDA from pre-empting any of her claims.

An extended discussion of whether the state common law

imposes requirements under the MDA is unnecessary.4 We have

already determined that the term "requirements" as used in § 360k

encompasses state common law claims. Gile v. Optical Radiation

Corp., 22 F.3d 540, 541-42 (3d Cir.), cert denied, 115 S. Ct. 429

(1994). In Gile, we followed the Supreme Court in its

interpretation of the term "requirement" as used in § 5(b) of the

Public Health Cigarette Smoking Act of 1969. There the Court

"reject[ed Cipollone's] argument that the phrase `requirement or

4 . Michael points in particular to the FDA regulations which interpret § 360k. See 21 C.F.R. § 808.1. 21 C.F.R. § 808.1(d)(1) states:

[Section 360k(a)] does not preempt State or local requirements of general applicability where the purpose of the requirement relates either to other products in addition to devices (e.g. requirements such as general electrical codes, and the Uniform Commercial Code (warranty of fitness)), or to unfair trade practices in which the requirements are not limited to devices.

Despite the reference in 21 C.F.R. § 808.1(d)(1) to laws of general applicability, we hold that the statutory language of § 360k preempts Michael's claims for breach of the implied warranties of merchantability and fitness as explained in section IV. A. infra.

We express no view on the validity of § 808.1(d)(1) because Shiley disclaimed all implied warranties as it was entitled to do under the Code. prohibition' limits the 1969 Act's pre-emptive scope to positive

enactments by legislatures and agencies." Cipollone, 112 S. Ct.

at 2620.

Michael next argues that, while we could normally conclude

that the FDA had imposed requirements on a manufacturer, the

unique facts of this case preclude such a determination.

Michael's argument is based on failings in the Premarket Approval

and oversight process which arose because Shiley's heart valve

was among the first mechanical devices approved under the MDA.

According to Michael, these failings kept the FDA from imposing

any requirements on Shiley.

Michael claims that the lack of FDA requirements is proved

by the absence of any specific regulations which govern heart

valves as compared with the other medical devices. Cf. 21 C.F.R.

§ 813.1 - 813.170 (regulating the testing and manufacture of

intraocular lenses); 21 C.F.R. § 870.1025 - 870.5925 (classifying

and imposing requirements on various cardiovascular devices). To

support this claim, Michael points to the FDA's statement that

the MDA pre-empts state requirements only when the FDA "has

established specific counterpart regulations or there are other

specific requirements applicable to a particular device under the

act . . . ." 21 C.F.R. § 808.1(d).

The absence of regulations relating specifically to heart

valves is not dispositive as long as the Shiley valve was subject

to "any requirement applicable under [the MDA] to the device." 21 U.S.C. § 360k(a)(1). While Shiley's premarket application may

indeed have been flawed, there is ample evidence that the Shiley

valve was subject to requirements under the MDA. First, it is

clear that Shiley had to and did obtain a PMA prior to marketing

the device. See 21 U.S.C. § 360e. After Premarket Approval was

obtained, Shiley was subject to the labeling requirements of 21

C.F.R. § 801.1 - 801.16, which became effective February 13,

1976, and of 21 C.F.R. § 820.1 - 820.198, which defined the

general "good manufacturing practices" ("GMP") required of

medical device manufacturers after July 21, 1978. See 41 Fed.

Reg. 6896 (1976); 43 Fed. Reg. 31508 (1978). The FDA had the

power to force notification of a previously unknown risk under 21

U.S.C. § 360h(a)5 and at least once threatened to use this power. 5 . 21 U.S.C. § 360h(a) reads in relevant part as follows:

(a) Notification

If the Secretary determines that--

(1) a device intended for human use which is introduced or delivered for introduction into interstate commerce for commercial distribution presents an unreasonable risk of substantial harm to the public health, and

(2) notification under this subsection is necessary to eliminate the unreasonable risk of such harm and no more practicable means is available under the provisions of this chapter (other than this section) to eliminate such risk,

the Secretary may issue such order as may be necessary to assure that adequate notification is provided in an appropriate form, by the persons and means best suited under the circumstances involved, to all health professionals who prescribe or use the device and to any other person (including manufacturer, importers, distributors, retailers, and device users) who should See app. 766-69. Even though these generally applicable

regulations do not rise to the level of specificity present in

the case of some other devices regulated by the FDA, we conclude

that they present "specific requirements applicable to a

particular device under the act." 21 C.F.R. § 808.1(d). They

therefore constitute proper bases for pre-emption under § 360k.

IV

Having disposed of Michael's general allegations, we

consider whether § 360k pre-empts the separate theories of

recovery that Michael alleges. See Cipollone, 112 S. Ct. at 2621

(considering each of Cipollone's theories of recovery to

determine if they are pre-empted). Because Gile has already

determined that state law negligence and strict product liability

claims are pre-empted under § 360k on account of the potential

conflict with FDA labeling, design, and manufacturing

requirements, we will not discuss those claims further than to

restate that they are pre-empted. See Gile, 22 F.3d at 543-44.

(..continued) properly receive such notification in order to eliminate such risk. A.

Breach of Implied Warranties -- Pre-empted

Michael brings a claim for breach of the implied warranties

of merchantability and fitness for a particular purpose. 13

Penn. Con. Stat. Ann. §§ 2314, 2315. These Uniform Commercial

Code causes of action meet the first requirement of pre-emption

under § 360k; they are state imposed. They "arise by operation

of law" in any transaction in goods in Pennsylvania. Altronics

of Bethlehem, Inc. v. Repco, Inc., 957 F.2d 1102, 1105 (3d Cir.

1992). The requirements imposed by §§ 2314 and 2315 also

potentially differ from or exceed the FDA's requirements. To

decide Michael's implied warranty claims, the jury would have to

decide whether the Shiley valve was defective. Id.; see also 13

Penn. Cons. Stat. Ann. § 2314 (Goods must be "fit for the

ordinary purpose for which such goods are used."). In Michael's

case, this determination would require a finding that the heart

valve's design was flawed, unreasonably dangerous, or poorly

manufactured. Id.

This conclusion by necessity depends upon the accepted

standards for the design and manufacture of products in the state

of Pennsylvania. These standards may deviate from the FDA's

determinations in the PMA process or from the FDA's "good

manufacturing practices," which represent the agency's expert

evaluation regarding the design and production of the Shiley

valve. Section 360k does not permit this conflict. Accord King v. Collagen Corp., 983 F.2d 1130, 1135 (1st Cir.), cert. denied,

114 S. Ct. 84 (1993). B.

Express Warranty Based on Shiley's Label -- Not Pre-empted

Michael also brought an express warranty claim based on

Shiley's statement on its packaging that it "warrants that

reasonable care has been used in the manufacture of this device."

Before we address this issue, we must consider, as a

threshold issue, whether the district court ruled that this claim

was pre-empted. The district court's February 25, 1994 order

granted Shiley's motion for partial summary judgment based on

pre-emption. Shiley's motion had sought the entry of summary

judgment on Michael's claims of negligence, strict product

liability, breach of implied warranties, and fraud claims, but

not on Michael's breach of express warranty claim. App. 48.

However, in ruling on Shiley' motion, the district court stated,

"[w]e have held that the MDA has wholly pre-empted plaintiff's

state law claims against defendants." App. 1362. On appeal,

Shiley has argued that we can reach the question of pre-emption

because the district court granted summary judgment on Michael's

express warranty claim for failure to raise a genuine issue of

material fact and we can affirm on any appropriate ground.

Shiley's Br. at 28. Because "[t]he prevailing party may, of

course, assert in a reviewing court any ground in support of his

judgment, whether or not that ground was relied upon or even

considered by the trial court," we will address that issue.

Dandridge v. Williams, 397 U.S. 471, 475 n.6 (1970). Section 360k only pre-empts requirements which the state

"establish[es]" or "continue[s] in force." The focus of § 360k

is on preventing the States from imposing on medical device

manufacturers normative policy choices which conflict with FDA

requirements. See Gile, 22 F.3d at 546. This focus is

consistent with the limited purpose for which Congress displaced

the states' coordinate regulatory role -- to permit efficient and

effective FDA regulation of medical devices. The FDA itself has

recognized the MDA's limited focus by interpreting § 360k to pre-

empt only state requirements "having the force and effect of

law," a term normally reserved for binding standards of conduct

that operate irrespective of private agreement. 21 C.F.R.

§ 808.1(d).

1.

Express warranties arise from the representations of the

parties which are made the basis of the bargain and do not result

from the independent operation of state law. See 13 Penn. Cons.

Stat. Ann. § 2313. Implied warranties, on the other hand, "arise

by operation of [state] law." Altronics of Bethlehem v. Repco, Inc., 957 F.2d 1102, 1105 (3d Cir. 1992). The parties to a

contract, not the state, define the substantive obligations of

the contract and hence any express warranties. While the state

provides for the enforcement of the parties' bargain, it does not

define each party's duties.6

6 . The conceptual difficulty with determining whether, to what extent, and for what purposes contractual obligations arise by The underlying foundation of contract law is the objectively

manifested intentions of the parties. E. Allan Farnsworth,

Contracts §§ 1.1 - 1.3 (2d ed. 1990). Shiley, in the

representation which appears on the Shiley valve label, clearly

manifested an intent to be bound by its one unequivocal promise

and to disclaim any other implied warranties. Shiley

represented:

2.

The Supreme Court has twice recognized this same distinction

between state-imposed and state-enforced common law remedies. In

American Airlines, Inc. v. Wolens, 1995 WL 15047 (U.S. 1995), the

(..continued) virtue of state action, on the one hand, or the autonomous actions of the parties, on the other, has been addressed time and again in the literature on the common law. See, e.g., Jay M Feinman & Peter Gabel, Contract Law as Ideology in The Politics of Law 373, 378 (David Kairys ed. 1990); Charles Fried, Contract as Promise 7-27 (1981). Ultimately, contractual obligations result from the confluence of state authority and private actions. While the "binding force" of a properly executed contract derives from state authority, the content of the commitment is determined (absent mandatory or impermissible terms) by the parties themselves. In this way, contractual obligations differ fundamentally from state imposed regulatory requirements, such as the FDA requirement that medical devices meet certain design parameters. Both the content and the effect of these regulations flow from governmental authority. Court held that the Airline Deregulation Act of 1978, 49 U.S.C.

§ 1305(a)(1), did not preempt Wolen's common law contract claims,

writing: We do not read the ADA's preemption clause, however, to shelter airlines from suits alleging no violation of state-imposed obligations, but seeking recovery solely for the airline's alleged breach of its own, self- imposed undertakings. As persuasively argued by the United States, terms and conditions airlines offer and passengers accept are privately ordered obligations "and thus do not amount to a state's enact[ment] or enforce[ment] [of] any law rule, regulation, standard, or other provision having the force and effect of law' within the meaning of § 1305(a)(1)." Brief for the United States as Amicus Curiae 9. . . . A remedy confined to a contract's terms simply holds the parties to their agreements -- in this instance to business judgments an airline made public about its rates and services.

1995 WL 15047 at *6.

Previously, in Cipollone, the Court concluded that § 5(b) of

the Public Health Cigarette Smoking Act of 1969 did not pre-empt

state contract law claims. A manufacturer's liability for breach of an express warranty derives from, and is measured by, the terms of that warranty. Accordingly, the "requirements" imposed by an express warranty claim are not "imposed under State law," but rather imposed by the warrantor. . . . In short, a common law remedy for a contractual commitment voluntarily undertaken should not be regarded as a "requirement . . . imposed under State law" within the meaning of § 5(b).

Cipollone, 112 S. Ct. at 2622 (emphasis in original).

Moreover, our conclusion complies with the Supreme Court's

admonition that courts should be "reluctant" to find pre-emption

when "interpreting a federal statute pertaining to a subject

traditionally governed by state law." CSX Trans. Inc. v. Easterwood, 113 S. Ct. 1732, 1737 (1993). This is especially

true here where Congress remained silent as to whether the MDA

pre-empted common law contract claims. The elimination of those

claims might result in the elimination of all legal remedies to

the purchaser. "It is difficult to believe that Congress would,

without comment, remove all means of judicial recourse for those

injured by illegal conduct." Silkwood v. Kerr-McGee Corp., 464

U.S. 238, 251 (1984).

In this case, Congress has not only remained silent as to

whether it intended to prevent states from enforcing the

contractual representations of medical device manufacturers, it

gave indications in 21 U.S.C. § 360h that at least some common

law remedies would remain in conjunction with FDA regulation.

Section 360h(d) defines the effect that a manufacturer's

compliance with an FDA notification, reimbursement, or recall

order should have: Compliance with an order issued under this section shall not relieve any person of liability under Federal or State law. In awarding damages for economic loss in an action brought for the enforcement of any such liability, the value to the plaintiff in such action of any remedy provided him under such order shall be taken into account.

While this provision does not delineate the scope of the state

law remedies that remain after the MDA's passage, it contemplates

that injured persons will be able to pursue a category of claims

for economic loss under some circumstances. We conclude that

express warranty claims are included in that category. 3.

Shiley points to previous cases that have concluded that the

same or similar federal regulatory schemes do pre-empt contract

claims because the contract claims conflict with the FDA's

supervision over medical device labeling. Worm v. American

Cyanamid Co., 5 F.3d 744, 747 (4th Cir. 1993)7; King v. Collagen

Corp., 983 F.2d 1130 (1st Cir.), cert. denied, 114 S. Ct. 84

(1993)8; Kemp v. Pfizer, Inc., 851 F. Supp. 269 (E.D. Mich.

1994).9 These courts have held that pre-emption was appropriate

because the state law causes of action arose from representations

made by manufacturers on labels approved by the FDA or EPA. The

courts reasoned that because these labels were approved by the

relevant regulatory authority, they could not give rise to

voluntary obligations undertaken by agreement and so would

conflict with federal regulation. 7 . In Worm v. Cyanamid Co, the Fourth Circuit decided that the pre-emption provision of the Federal Insecticide Fungicide and Rodenticide Act (FIFRA), 7 U.S.C. § 136v(b), pre-empted the plaintiff's contract claims because the claims were based on instructions for use found on the product label which were required and approved by EPA regulations. 5 F.3d at 749. Because the Fourth Circuit found that these instructions were mandated by the Environmental Protection Agency, the court concluded that the express warranty claims were pre-empted. Id. 8 . In King v. Collagen Corp., the First Circuit concluded that § 360k pre-empted King's express warranty claims because those claims arose from the language on the packaging approved by the FDA. 983 F.2d at 1135. "Allowing appellant's express warranty claims effectively would impose additional or different requirements on Zyderm's labeling and packaging." Id. 9 . In Kemp v. Pfizer, Inc., the district court followed the reasoning of King and Worm to hold that § 360k pre-empted a contract claim against Pfizer, Hospital Products Group, and Shiley, the defendants in this case. If for no other reason, Worm is distinguishable from this

case because it deals with a separate statutory scheme. Worm

dealt with Federal Insecticide Fungicide and Rodenticide Act

(FIFRA), not the MDA. Second, the plaintiff in Worm complained

that Cyanamid had provided improper instructions for the use of

the insecticide on its label, giving rise to a contract claim. 5

F.3d at 748-49. Michael is not challenging the instructions for

the use or the implantation of the Shiley valve. Rather she

seeks to enforce the company's explicit warranty which guarantees

the product.

King and Kemp are less easily distinguished. The court in

King did not indicate the type of language or warning upon which

the plaintiff relied in the case before it and so we cannot know

if it is distinguishable from Michael's claims. Kemp dealt with

the same product and the same warranty as is at issue in the

present case.

Neither King nor Kemp are binding on this court and we

conclude that the concern expressed in those cases, that warranty

obligations would arise from and therefore be in conflict with

statements that are required on a regulated label, does not make

pre-emption appropriate. First, the fact that third parties

dictate or define the terms of a contract does not undermine the

doctrine that contractual duties arise from the mutual assent of

parties to agreed upon language. For example, organizations that

receive government grants to operate social programs frequently

agree to include specified language in agreements with

contractors and beneficiaries. See, e.g., 24 C.F.R. § 85.36(i) (1994) (mandating the inclusion of specified terms in contracts

between Housing and Urban Development grant recipients and local

parties); Ayers v. Philadelphia Housing Authority, 908 F.2d 1184

(3d Cir. 1990) (discussing HUD mandates for contracts between the

local housing authority and the local authority's

tenants/purchasers). Government contractors must agree to

specified compensation and wage terms in their contracts with

employees who work on the government projects. See, e.g., 40

U.S.C. §§ 328-29, 323; 41 U.S.C. § 351; 29 C.F.R. §§ 4.1 to 4.51;

29 C.F.R § 5.5. Courts do not thereby conclude that these

requirements cause the immediate parties' contractual

relationships to arise from the federal mandate. Regardless of

the economic and legal pressures that dictate the final terms,

the contract still results from the parties' mutual agreement to

those terms.

Further, King and Kemp did not adequately consider the

extent to which Shiley's label was ultimately a product of its

voluntary actions. The FDA does not devise a label of its own

making. Rather, Shiley submitted its proposed label to the FDA,

which label was then reviewed with the company. Shiley itself

drafted the initial language of the label. If Shiley disagreed

with FDA recommendations, it could have engaged in negotiation

over what statement was proper or, if it did not wish to be bound

by the required statement, it could have chosen not to market its

device. Despite indications in King and Kemp to the contrary, we believe that Shiley participated actively and meaningfully in the FDA regulatory process that resulted in the label which we review

here.

4.

Even if this were not the case, the enforcement of an

express warranty that arises from approved packaging does not

establish a requirement that "is different from, or in addition

to, . . . any requirement applicable under this chapter to the

device." 21 U.S.C. § 360k. Through her express warranty claim,

Michael seeks to enforce the very language which the FDA approved

on the Shiley valve label. Given the clarity with which that

language speaks of warranties, neither the FDA, Shiley, nor

Michael could have mistaken this language as creating anything

other than an explicit contractual obligation. Thus, it is the

FDA's own requirement that Michael would have the state enforce.

If any person, other than Shiley, "established" the

warranty, it was the FDA, not the state. Because the obligations

imposed arise directly from the FDA's own approved language, the

resulting liability does not differ from or add to FDA

regulation. Rather it supports the FDA's approval regulation by

giving it effect.

Michael's contract claim is not a product of state action;

hence, it is not state imposed -- the sine qua non of pre-emption

under § 360k. Michael's express warranty claim is not pre-empted

and can be prosecuted.

V Michael also brought fraud claims relying on two theories of

recovery. First, she alleges that Shiley fraudulently misled the

FDA to her eventual, but foreseeable, detriment. Second, she

alleges that Shiley's unregulated promotional and advertising

materials fraudulently misrepresented that the Shiley valve was

safe and would produce fewer complications than other valves when

the company knew that these claims were not supportable. We

consider whether § 360k pre-empts each of these claims.

Fraud on the FDA -- Pre-empted

Michael produced substantial evidence that Shiley misled the

FDA with false or misleading information when it applied for

Premarket Approval. She claims that these fraudulent submissions

led to the FDA's approval of the Shiley valve and thus led

eventually to the necessity of removing the heart valve implanted

in her. Alternatively, she argues that these fraudulent

submissions estop Shiley from claiming that the MDA pre-empts its

common law claims. Because of the conflict with the FDA's own

efforts to monitor and control its PMA application process, we

conclude that Michael's claims for Shiley's knowing

misrepresentation to the FDA, even if provable, are pre-empted.

A state law cause of action for fraud is a state imposed

requirement. By means of its recognized cause of action in

fraud, the Commonwealth of Pennsylvania imposes a duty on anyone

who sells products. That duty requires the seller to avoid any material misrepresentation that could induce purchasers to buy

its product. See Moser v. DeSetta, 589 A.2d 679, 682 (Pa. 1991)

Michael seeks to use this general prohibition on deception

to encourage the district court to review the PMA application

Shiley submitted to the FDA. This inquiry could ultimately

require that a court determine whether the information Shiley

submitted was truthful, whether it was complete, whether FDA

procedures sufficed to avoid a material misrepresentation, and

whether the FDA should have or would have approved the device

despite the misrepresentations. In sum, this claim requires a

court, applying state law, to perform the same functions

initially entrusted to the FDA.

Section 360k does not permit such a searching state inquiry

into the inner workings of FDA procedures. Congress allocated

the FDA responsibility to design and manage a process which would

result in approval of the safest and most effective medical

devices possible. See 21 U.S.C. § 360e (creating the PMA

requirement). Congress also assigned the FDA the responsibility

to approve or disapprove of applications to market medical

devices. Under § 360k, states may not impose different

requirements and thereby reach a different conclusion than the

FDA. "[W]here the FDA was authorized to render the expert

decision . . ., it, and not some jury or judge, is best suited to

determine the factual issues and what their effect could have

been on its original conclusions." King, 983 F.2d at 1140 (Aldrich & Campbell, J.J. concurring). Under the MDA, states

have no authority to police Shiley's compliance with the FDA's procedures. If Shiley knowingly misled the FDA in its PMA

application, it is for the FDA to remedy that situation using the

authority Congress gave it in the MDA.

Further, permitting a fraud claim based on false

representations to the FDA would conflict with our precedent that

plaintiffs may not bring implied causes of action for violations

of the Food, Drug and Cosmetic Act. Gile v. Optical Radiation

Corp., 22 F.3d 540, 544 (3d Cir.), cert. denied, 115 S. Ct. 429

(1994). Plaintiffs cannot circumvent this bar by characterizing

their cause as a claim for state law fraud.

Nor can Michael revive the pre-empted fraud claim by

characterizing it as a defense to pre-emption. Michael argues

that, though her fraud claim might be pre-empted, her allegations

of Shiley's fraud in obtaining its PMA, if proven, should deprive

Shiley of the defense of pre-emption. In essence, Michael argues

that we should not permit Shiley to invoke the cloak of federal

pre-emption when it obtained that cloak through the fraudulent

manipulation of the regulatory process.

While we do not condone misconduct by medical device

manufacturers, we cannot agree with Michael's theory. If a

medical device manufacturer's claim that the MDA pre-empts a

plaintiff's cause of action depends in the first instance upon

proof that its Premarket Approval was not fraudulently obtained,

courts would have to engage in the intrusive inquiry, which we

have just demonstrated is forbidden. Only the timing, and not

the inquiry itself, would differ from a claim for fraud on the

FDA. This argument thus presents not less, but greater interference with the FDA's decisions. An attempt to reexamine

the FDA's approval under state law standards, however pleaded, is

pre-empted by § 360k.

Fraud Based on Shiley's Advertisements -- Not Pre-empted

Michael's second fraud claim differs from the first in that

it does not rely on conduct which was directly regulated by the

FDA. Michael alleges that Shiley sent cardiac surgeons and

cardiologists a series of letters and other promotional materials

which knowingly misrepresented the extent of the valve fracture

problem and knowingly overstated the reduction in serious side

effects achieved by the Shiley valve. See FDA and the Medical

Device Industry, Hearing Before the House Committee on Energy and

Commerce, 101st Cong., 2d Sess. 15-21 (1990) (providing samples

of these letters); App. 393-95. Michael alleges that the

company's misinformation resulted in the eventual harm she

suffered when her valve was explanted.

Having already concluded that state law fraud claims create

state-imposed requirements and, when combined with other § 360k

elements, are thus pre-empted, see section V. A. supra, we need only consider the other elements of pre-emption under § 360k.10

10 . The Supreme Court recently held that the Airline Deregulation Act of 1978 ("ADA") pre-empted the enforcement of a state consumer fraud statute, the Illinois Consumer Fraud Act, 815 Ill. Comp. Stat. § 505/2. American Airlines, Inc. v. Wolens, The FDA had not imposed specific requirements related to

advertising and promotion of the Shiley valve. Accordingly, we

find that, as applied to Michael's circumstances, a state law

fraud claim based on Shiley's advertising and promotional

activities does not impose a requirement that "is different from,

or in addition to" a FDA requirement and "which relates to the

safety or effectiveness of the device or to any matter included

in a requirement applicable to the device under this chapter."

21 U.S.C. § 360k.

Unlike Michael's strict liability claims which are based on

a duty to produce safe products, Michael's fraud claims are based

"on a more general obligation -- the duty not to deceive."

Cipollone, 112 S. Ct. at 2624. Thus, Michael's fraud claim does

not relate to the safety or effectiveness of the Shiley valve.

Michael argues that because this duty to avoid deceit does not

"relate to the safety or effectiveness of the [Shiley valve],"

her claims are not pre-empted.

She relies on Cipollone for this argument. In Cipollone,

the Supreme Court concluded that the Cipollone's fraud claims

against cigarette manufacturers were only pre-empted to the (..continued) 1995 WL 15047 *5-*6 (U.S. 1995). In Wolens, the Supreme Court held that state consumer fraud statute was a state imposed law. Id. The Court then found that the Illinois state statute met the other element of pre-emption under the ADA, that is, the statute "relate[d] to [airline] rates, routes, or services." 49 U.S.C. § 1305(a)(1). Here, of course, the other requirements which dictate pre-emption under § 360k of the MDA differ from the requirements which dictate pre-emption under § 1305(a)(2) of the ADA. As stated in text, we conclude that Michael's common law fraud claim is not pre-empted by § 360k. extent they sought to impose additional warnings on the cigarette

packages. The Court permitted Cipollone's fraud claims for

"claims based on allegedly false statements of material fact made

in advertisements." Id. at 2623-24. The Court made this

distinction because Cipollone's second claim based on "the duty

not to deceive" did not conflict with federal requirements of § 5

of the Public Health Cigarette Smoking Act of 1969 which only

pre-empts state law claims "based on smoking and health." Id. at

2624.

If § 360k also limited its pre-emptive scope to state

requirements "which relate[] to the safety or effectiveness of

the device," Michael's argument might be compelling, but § 360k

is not so limited. It extends as well to state requirements

"which relate[] . . . to any matter included in a requirement

applicable to the device under this chapter." Thus, we must

determine not only whether Michael's fraud claim relates to

"safety and effectiveness" -- which we hold it does not -- but

also whether it relates to any other FDA requirement.

This latter inquiry turns on whether the FDA imposed any

requirements on Shiley's efforts to promote its heart valve. The

record reflects that it did not. Shiley prepared and sent the

letters which tout the valve's reliability and superiority as

compared to competitors' valves to doctors without the FDA's

approval. App. 393-94. The FDA, at that time, was not

supervising medical device manufacturers' efforts to promote their devices outside of a limited category of "restricted

devices" defined by the MDA and not relevant to this appeal.

Only in the last few years has the FDA actively sought to control

the promotional representations which device makers make to the

medical community. Sandra J.P. Dennis, Promotion of Devices: An

Extension of FDA Drug Regulation or a New Frontier, 48 Food &

Drug L.J. 87 (1993). We note, however, that this on-going

extension of the FDA's authority has been criticized as exceeding

the FDA's statutory mandate. See id; Jeffrey N. Gibbs, Medical

Device Promotional Activities and Private Litigation, 47 Food &

Drug L.J. 295 (1992).

To be sure, the FDA did regulate the information Shiley

placed on its labels. As required by the MDA, Shiley submitted

its labels to the FDA and the FDA approved them. (See section

IV. B. supra). A deviation from the content of the label

approved by the FDA violates the MDA. 21 C.F.R. § 814.39(a)(2).

Nonetheless, there is a substantial difference between

supervising label content and supervising advertising.

Mindful that the Supreme Court has observed in a slightly

different context that "Congress offered no sign that it wished

to insulate . . . manufacturers from longstanding rules governing

fraud," Cipollone, 112 S. Ct. at 2624, we conclude that Michael's second theory of fraud is not precluded by § 360k and is thus not

pre-empted.

Our conclusion does not conflict with First Circuit's

determination in King that § 360k pre-empted King's fraud claim. 983 F.2d at 1136. King's fraud claim arose from the absence of warnings on the label of the medical device. Id. Because the

FDA regulates the labeling of medical devices, King's claims were

pre-empted. Michael's theory does not depend upon Shiley's

representations on its labeling. Unlike in King where the court

determined that the plaintiff's fraud claim was, "at bottom, a

failure to warn claim," id., and thus pre-empted by the MDA,

Michael's fraud claim is, at bottom, a fraudulent promotion

claim. As such, it is not pre-empted.

VI

Summary Judgment -- Sufficient Evidence

Although the district court granted summary judgment on the

majority of Michael's claims because it believed they were pre-

empted, it also analyzed the claims using the traditional

standard for summary judgment. We have concluded that Michael's

express warranty claim and her fraud claim are not pre-empted.

However, our holding in this regard does not address the district

court's ruling that Michael had failed to present sufficient

evidence to proceed to trial. We address that issue here and

hold that, on this record, it was error to grant summary judgment

for Shiley.

Our consideration of Michael's contract claims originates

with an examination of the contract. The label attached to the

heart valve, which was implanted in Michael, included the

statement "Shiley warrants that reasonable care has been used in the manufacture of this device." App. 680. This language

clearly created an express warranty with regard to the manner in

which Shiley manufactured its heart valves. Shiley does not deny

that the sale created a valid contract with an express warranty.

See 13 Pa. C.S.A. § 2313. Rather Shiley contends that it never

breached the warranty because there is no proof that the valve

implanted in Michael was defective.

We agree that there is no evidence in the record that

Michael's valve was defective. That does not, however, defeat

Michael's cause of action. Shiley's warranty does not simply

warrant that the valve which was implanted in Michael was defect-

free. The language is less specific, warranting instead that

"reasonable care has been taken in the manufacture of this

device." App. 680.

We are satisfied that the representation made by the

language on this label reaches beyond the valve explanted from

Michael to encompass the manufacture of Shiley valves generally.

While most consumers of most products have little reason to seek

assurances in a contract that any device, other than the product

purchased by them, is safe and effective, heart valve purchasers,

as perhaps other purchasers of implanted devices, have salient

and compelling reasons to seek such assurances.

Shiley's customers rely on Shiley's mechanical heart valves

in a manner that differs entirely from the normal buyer's

reliance on a consumer product. The Shiley valve sustains

customer's lives. Malfunction will result in serious harm, or

most likely, death. In this context, the purchaser has reason to demand a very high degree of assurance that the implanted product

presents no substantial risk that it will fail. The existence of

a significant risk that the device will fail makes the product

unsuitable for its purpose. Therefore, a patient-purchaser has

every reason to seek, and Shiley has every reason to give,

assurances that reasonable care has been taken in the production

of such life sustaining devices generally. It is only such a

warranty that can alleviate concerns that an implanted medical

device will fail without warning.

Shiley's warranty afforded its patient-purchasers those

assurances. Michael proceeded with her implant operation with a

justifiable belief that the valve implanted in her heart would

not fracture or fail due to deficiencies in the manufacturing

process. Because any latent defect in an implanted device may be

undetectable after it has entered medical supply channels, the

representations made by the manufacturer, which here form the

basis of Shiley's warranty, requires an examination, not just of

the specific heart valve implanted in Michael, but rather of

Shiley's valve production generally.

The evidence in the record suggests that Shiley did not

exercise due care in the fabrication of the Bjork-Shiley valve.

A number of Shiley valves failed as a result of welding cracks

that were not prevented or eliminated at Shiley's factories.

Michael also submitted to the court the findings of a House

Committee report on the manufacture of Shiley's valves. That

report stated that Shiley trained welders inadequately, repaired

valves which had previously been deemed not repairable by inspectors, and masked cracked welds to pass quality inspections.

She also produced a letter to Shiley from a medical researcher,

stating that "[y]our statement re. strut fracture that I just

received only tells me that your manufacturing procedure is not

acceptable." App. 461. Former welders stated in affidavits that

Shiley trained welders poorly and told welders to force badly

welded valves past quality control personnel. App 615-16, App.

623-25. This record could amply support a jury determination

that Shiley did not exercise reasonable care in the manufacture

of its heart valves.

Michael has also shown that Shiley's alleged manufacturing

breaches caused her damage. Shiley's failure to manufacture its

heart valves using proper care resulted in a risk that any of its

heart valves could fail. Indeed, the weak or improper strut

construction has resulted in over 500 documented strut failures.

Nor, as we have pointed out, could it be determined without

explantation whether the valve implanted in Michael suffered from

any of the same defects that affected other valves. Accordingly,

Michael's doctors concluded that it was reasonable to explant her

Shiley valve and replace it surgically. App. 499-501, 526-29;

see also app. 471 (Shiley document sent to doctors noting an

investigative article which recommended replacement of heart

valves in young patients). Michael understandably took the

advice of her medical advisors. The cost, inconvenience, risk,

and pain of the surgery to explant and replace the valve occurred

because of Shiley's alleged general manufacturing deficiencies which led to Shiley's alleged breach of its warranty of

reasonable care.

Contrary to Shiley's arguments, our conclusion does not

conflict with our recent decision in Angus v. Shiley, Inc., 989

F.2d 142 (3d Cir. 1993).11 In Angus, we concluded that a

recipient of a Shiley valve could not recover for intentional

infliction of emotional distress and a failure to warn claim

where the implanted valve had neither failed nor been explanted.

Id. at 147 & n.5. Angus had failed to allege that the valve

implanted in Angus was defective. Id. In the absence of a valve

failure or explantation surgery, she could not maintain a product

liability action. Id. In footnote 5, we explicitly held open

the question of whether relief would be appropriate following

surgery to explant the valve. Id. at 147 n.5.

Unlike the plaintiff in Angus, Michael has suffered a

tangible injury on account of the risks, pain, and emotional

trauma associated with explantation of the Shiley valve.

Michael's case presents the issue left open in Angus -- what

relief may be accorded for physical and emotional trauma

occasioned by the need for actual explantation surgery. We

conclude that, under the terms of Shiley's express warranty,

11 . Shiley claims we had earlier determined that a plaintiff whose valve had not failed could not recover for emotional distress on any product liability theory in Brinkman v. Shiley, Inc., 732 F. Supp. 33 (M.D. Pa.), aff'd without opinion, 902 F.2d 1558 (3d Cir. 1989); see Shiley Brief at 41. We, of course, are not bound by an unpublished disposition of our court. See Third Circuit Internal Operating Procedures § 5.8. Moreover, the plaintiff in Brinkman, unlike the plaintiff here, had not undergone explantation surgery. sufficient evidence has been shown by Michael to withstand entry

of summary judgment for Shiley. Our conclusion is consistent

with Pennsylvania's rule that emotional harm may be recovered

when it accompanies a physical injury. Houston v. Texaco, Inc.,

538 A.2d 502, 504 (Pa. Super. 1988).

Finally, we consider whether Michael produced sufficient

evidence to proceed to trial on her fraud claim.12 In

Pennsylvania, the elements of fraud are: (1) a material

misrepresentation of fact, (2) which is false and (3) made with

knowledge of its falsity, (4) which is intended to induce the

receiver to act, and (5) upon which a party justifiably relies.

Mellon Bank Corp. v. First Union Real Estate, 951 F.2d 1399, 1409

(3d Cir. 1991). It is well established that fraud consists of anything calculated to deceive, whether by single act or combination, or by suppression of truth, or suggestion of what is false, whether it be by direct falsehood or by innuendo, by speech or silence, word of mouth, or look or gesture. We have held that "fraud is composed of a misrepresentation fraudulently uttered with the intent to induce the action undertaken in reliance upon

12 . The somewhat confusing nature of the district court's orders makes it uncertain that the district court determined that Michael did not raise a genuine issue of material fact on her fraud claim. While the court granted a judgment on her fraud claim on the belief that it was pre-empted, a conclusion which we now reverse, the court granted Shiley's motion for summary judgment for failure to produce sufficient evidence on all claims "except plaintiff's fraud claim." Nonetheless, because we exercise the same review as the district court did in the first instance, we will consider the merits of Shiley's motion, particularly since the two district court orders appear on their face to conflict with one another. it, to the damage of its victim." The concealment of a material fact can amount to a culpable misrepresentation no less than does an intentional false statement.

Moser v. DeSetta, 589 A.2d 679, 682 (Pa. 1991) (quoting Thomas v. Seman, 304 A.2d 134, 137 (Pa. 1973)) (other citations omitted).

In support of her claim, Michael points to two sources of

fraudulent information: (1) letters written by Shiley to doctors

between 1978 and 1983 which attempt to minimize the significance

of the prior valve fractures and (2) advertisements and other

promotional materials which emphasize a reduction in

complications with the Shiley valve that never materialized.

Michael claims that Shiley's representations to doctors in

letters, which accompanied its recalls and which Shiley otherwise

disseminated to boost the Shiley valve's image following the

disclosure of the outlet strut fractures, misrepresented the

extent of the strut fracture problem. These letters state that

some fractures had occurred but purportedly withheld information

on the actual number of strut fractures known to Shiley.

Further, the letters asserted that the Shiley valve's original

design and the then current manufacturing practices confirm the

structural integrity of the Shiley valve.

In contrast to Shiley's reports, the record discloses that

Shiley had ample reasons to believe both the heart valve's design

and the manufacturing process rendered the heart valve unsafe.

Just a month prior to Shiley's distribution of a set of letters

to doctors in May 1982, Dr. Bjork, one of the original designers

of the Shiley valve, wrote Shiley, "You're circling around with other solutions is probably a waste of time. At this stage,

welding will not be acceptable any more [sic]. . . . Your

statement re. strut fractures that I just received only tells me

that your manufacturing procedure is not acceptable. You have

provided me with absolutely no facts and truthworthy [sic] data

for the future." App. 461.

In a prior letter to Dr. Bjork, Shiley had written, "We

would prefer that you did not publish the data relative to strut

fractures. We expect a few more and until the problem has been

corrected, we do not feel comfortable." App. 548. This

disclosure contrasts with Shiley's assurances in the letters to

doctors that new fractures were very unlikely to occur.

Moreover, Michael has produced affidavits and deposition

testimony from employees who worked for Shiley in the late 1970s

and early 1980s that state that Shiley supervisors and management

ordered them to reweld valves which could not pass inspection, to

polish or cover defects in outlet strut welds, and to rework

previously scrapped valves in an attempt to hide any defects in

the outlet strut welds. App. 555-57, 613-17, 625-29, 635-36.

These manufacturing practices likely undermined the structural

integrity of the valves and thereby rendered Shiley's

representations false.

Michael has also produced samples of advertisements, which

Shiley placed in medical journals that circulate to cardiac

surgeons, claiming a fifty percent reduction in complications

with the Shiley valve over prior valves. App. 678. In prior

testimony, Dr. Bjork disagreed that this claim fully represented the scientific findings. App. 812. By 1984, the FDA, through

independent investigation, concluded that scientific tests could

not confirm these reductions. App. 766. In fact, the FDA

determined that the Shiley valve's design "d[id] not result in

meaningful differences in thromboembolic complications in

clinical experience . . . . After nearly eight years of clinical

use, there is no statistically significant difference between

[the Shiley valve and its predecessor] when thromboembolic

complication rates are compared." Id.

This record reveals a sufficient pattern of affirmative

statements that are contrary to the true information known to

Shiley, which, when combined with the withholding of material

information as to the integrity and properties of the Shiley

valve, is more than sufficient to permit a jury to conclude that

Shiley intentionally misrepresented the Shiley valve's

performance and the importance of the strut fractures.

Having adduced evidence of the first three elements of a

cause of action sounding in fraud, we turn to a consideration of

the remaining two elements: inducement and justifiable reliance.

We conclude that Shiley had ample reason to expect that its

advertisements and letters, although directed to physicians,

would induce action by heart patients to accept Shiley's implants

on the basis of their physicians' recommendations. We also

conclude that the patients' reliance on these recommendations was

justifiable.

Pennsylvania has held that "the persons or class of persons

whom [a fraudulent declarant] intends or has reason to expect to act or refrain from action in reliance upon the

misrepresentation" may sue in fraud for the damage which results

from the declarant's fraudulent statement. Woodward v. Dietrich,

548 A.2d 301, 309, 315 (Pa. Super. 1988) (quoting Restatement

(Second) of Torts § 531 (1976)).

In Woodward, the Pennsylvania Superior Court held that a

subsequent transferee of a home could sue the prior owner's

plumbing contractor, when the plumber had fraudulently

misrepresented to the prior owner that his work met the relevant

municipal codes. The plumber fraudulently concealed an improper

link to the city's sewer system after being hired by the

Dietrichs, the former owners of the house, to bring the house up

to code. After the Dietrichs sold the home to the Woodwards, the

sewer line backed up into the house's basement. The Woodwards

brought a cause of action sounding in fraud against the plumber.

The Pennsylvania Superior Court adopted the rule of the

Restatement (Second) of Torts § 531 (1976), which reads: One who makes a fraudulent misrepresentation is subject to liability to the persons or class of persons whom he intends or has reason to expect to act or refrain from action in reliance upon the misrepresentation, for pecuniary loss suffered by them through their justifiable reliance in the type of transaction in which he intends or has reason to expect their conduct to be influenced.

This provision extends liability beyond those to whom the

declarant directs his fraudulent misrepresentation to those whom

the declarant has special reason to anticipate will be induced to

act. Woodward, 548 F.2d at 313, 315. As comment "e" of the

Restatement makes clear, the declarant need not know the identity of the eventual plaintiff if the plaintiff is a member of a class

of persons whom the declarant has reason to expect will act in

reliance upon his fraud. Restatement (Second) of Torts § 531

comment e (1976) ("The maker may have reason to expect that his

misrepresentation will reach any of a class of persons, although

he does not know the identity of the person whom it will reach or

indeed of any individual in the class."); Woodward, 548 F.2d at

309 n.9.

After adopting this standard, the court found that the

plumber had reason to expect that any subsequent purchaser, such

as the Woodwards, would rely on his fraudulent statement that the

sewer connection was acceptable, and thus, the court permitted

the Woodwards to proceed with their fraud action.13

The Superior Court's decision mirrors § 533 of the

Restatement (Second) of Torts. Section 533 makes a declarant

liable when the declarant "has reason to expect that [the

13 . More recently, the Pennsylvania Superior Court relied upon its opinion in Woodward to decide that plaintiffs need not have been in privity with a product manufacturer to bring a claim under Pennsylvania's consumer fraud statute, the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Con. Stat. Ann. § 209-9.2(a). Valley Forge Towers South Condominium v. Ron-IKE Foam Insulators, Inc., 574 A.2d 641, 646-47 (Pa. Super. 1990), aff'd without opinion, 605 A.2d 798 (Pa. 1992). As a result, a condominium association could sue their roofing contractor's supplier for the supplier's unlawful business practices despite the fact that the association never purchased materials from the supplier. Rather it had only received a warranty from the supplier. "[A]s the materials were intended to become part of a fixture to realty, [the supplier] knew or should have known that its warranty would be relied upon by [the condominium association] covered by the roof it warranted." Id. at 646. misrepresentation's] terms will be repeated or its substance

communicated to the other, and that [the misrepresentation] will

influence his conduct in the transaction or type of transaction

involved." See Ostano Commerzanstalt v. Telewide Systems, Inc.,

794 F.2d 763, 766 (2d Cir. 1986) (holding licensor liable to

sublicensee for representations made to licensee with reason to

expect that they would influence sublicensee's behavior). As

with § 531, the comments to § 533 make it clear that the

declarant (here, Shiley) need not be able to identify the party

(here, Michael) who eventually relies if the party (here,

Michael) who relies is a member of a class of people that the

declarant (here, Shiley) would expect to rely on the

representation. Restatement (Second) of Torts § 533 comment g

(1976).

Michael fits within the rule of Woodward and Restatement

§ 533. Shiley had ample reason to expect that the patients and

eventual recipients of the Shiley valve implants would be

affected by the information it published and distributed to

doctors. Indeed, that was Shiley's intent. Shiley had to

anticipate that its letters and advertisements would lead doctors

to recommend, and the physician's patients to choose, the Shiley

valve. As § 533 makes clear, the fact that Shiley initially made

its representations to Michael's doctors, rather than directly to

Michael, does not undermine Michael's claim.

By the same token, Michael's doctors were justified in

relying on the medical claims Shiley provided in its promotional

materials to determine the proper course of treatment for Michael.14 Shiley held a tremendous advantage over the doctors

in its knowledge of the facts surrounding the strut fractures and

the scientific literature on thromboembolism. The doctors were

justified in relying on Shiley to restate honestly the facts and

findings pertaining to the valves which Shiley produced. See

Aaron Ferer & Sons, Ltd v. Chase Manhattan Bank, 731 F.2d 112,

123 (2d Cir. 1984) (where "one party possesses superior

knowledge, not readily available to the other, and knows that the

other is acting on the basis of the mistaken information," the

second party can justifiably rely on the first party's

representations); Daughtrey v. Ashe, 413 S.E.2d 336, 338 (Va.

1992) ("[I]f one who has superior knowledge makes a statement

about the goods sold and does not qualify the statement as his

opinion, the statement will be treated as a statement of fact.");

Restatement (Second) of Torts § 542(a) & comment f (1976).

The information provided by Shiley was intended to affect a

doctor's choice of a heart valve for Michael. Shiley distributed

its literature containing heart valve information for that very

purpose -- to encourage doctors to continue implanting the Shiley

valve. The record, read in the light most favorable to Michael,

14 . Both her doctors testified that they received letters from Shiley regarding the Shiley valve. App. 495, 524. While they did not retain those letters, it is reasonable to assume, given Shiley's nationwide distribution of the letters, that these letters include the communications discussed above. Both doctors stated that they read standard cardiac journals in which Shiley's advertisements and claims appeared in order to stay current with developments in the field of cardiology and cardiac surgery. App. 500, 535. suggests that the doctors, who advised Michael, relied on

Shiley's disclosures. Accordingly, Shiley's letters and

promotional materials likely affected the choice to implant the

Shiley valve in Michael.

We conclude that Michael has produced sufficient evidence to

raise a genuine issue of fact on her claim of fraud and we will

reverse the district court's February 25, 1994 orders of summary

judgment on that claim. VII

Having considered the record and the arguments of the

parties, we will affirm the district court's grant of summary

judgment on Michael's claims of negligence (both manufacturing

and design), strict product liability, and breach of implied

warranties -- all of which we hold are pre-empted by 21 U.S.C.

§ 360k. (See section IV. A. supra). We also hold that Michael's

complaint to the extent it relies on fraud perpetrated by Shiley

on the FDA is pre-empted. (See section V. A. supra).

We will reverse the district court's February 25, 1994 order

granting summary judgment to Shiley on Michael's breach of

express warranty claim (see section IV. B. & VI. A. supra) and

her fraud claim insofar as she proceeds on the basis of Shiley's

representations in its advertising and promotional materials.

(See section V. B. & VI. B. supra).

We will remand the case to the district court for further

proceedings consistent with the foregoing opinion.