Verticor, Ltd. v. Michael Wood

509 S.W.3d 488, 2015 Tex. App. LEXIS 11722, 2015 WL 7166024
Court of Appeals of Texas·Decided November 13, 2015·No. NO. 03-14-00277-CV·Published·Cited by 2 cases

Opinion

*490 OPINION

Bob Pemberton, Justice

The pivotal issue in this appeal—one of first impression for this Court—is whether personal-injury claims asserted against the manufacturer of a medical device are “health care liability claims” within the meaning of the Texas Medical Liability Act (TMLA). At least on this record, we hold they are not.

BACKGROUND

The underlying dispute arises from surgery performed on appellee Michael Wood by James Hansen, M.D., to treat a herniated disc in Wood’s lumbar region. As part of the procedure, Dr. Hansen inserted into Wood’s spine a device known as the “Eclipse Sphere” that was manufactured by Verticor, Ltd., the appellant here. Complications subsequently developed, and Wood eventually sued both Dr. Hansen and Verticor for money damages.

Wood’s liability theories center primarily on a contention that Dr. Hansen used the Eclipse Sphere in a “motion-sparing, non-fusion” surgical procedure even though the federal Food and Drug Administration had cleared the device solely for use in “lumbar intervertebral fusion procedures” and required that a warning be placed on all product packaging and surgical manuals stating that “the safety and effectiveness of this device for use in motion-sparing non-fusion procedures has not been established.” 1 Wood alleges in part that Dr. Hansen acted with professional negligence and gross negligence in performing this “off-label” and “experimental” procedure and in failing to obtain Wood’s informed consent to it. Wood further complains that Verticor solicited Dr. Hansen’s “off-label” use of the Eclipse Sphere and failed to disclose the FDA warning adequately, seeking recovery based on theories of strict product liability for “marketing defect,” negligent marketing of the device, and breach of the implied warranty of merchantability. Wood additionally claims that both defendants engaged in a “fraudulent” scheme whereby Verticor made “secret payments” or “kickbacks” to Dr. Hansen to induce his “off-label” uses of the device.

The merits of Wood’s allegations are not yet before us—instead, we are called upon only to consider the extent to which his claims implicate the requirements and limitations of the TMLA. The TMLA imposes several substantive and procedural constraints on the prosecution of “health care liability claims” (HCLCs), including damage caps 2 and the now-familiar (and often-litigated) requirement that a plaintiff must serve one or more “expert reports” as to “each physician or health care provider against whom a liability claim is asserted” early in the suit or else face dismissal of that claim, with fee shifting, upon motion of that defendant. 3 The *491 TMLA defines a “health care liability claim” as:

a cause of action against a health care provider or physician for treatment, lack of treatment, or other claimed departure from accepted standards of medical care, or health care, or safety or professional or administrative services directly related to health care, which proximately results in injury or death of a claimant, whether the claimant’s claim or cause of action sounds in tort or contract. 4

One implication of this definition, important for this case, is that “only claims brought against physicians and health care providers may qualify as health care liability claims.” 5

Wood has acknowledged that he asserted one or more HCLCs against Dr. Hansen, a physician, and has, accordingly, served what is intended to be a TMLA-compliant “expert report” regarding that defendant. As to Verticor, however, Wood has insisted that his claims each fall outside the TMLA’s definition of an HCLC and, in turn, are not subject to the Act’s procedures and limitations. That issue was initially raised by Verticor in its answer, in which it pleaded, as an affirmative defense, that “Verticor is a healthcare provider as defined by statute and case law” and that “[Wood’s] claims are, in reality, healthcare liability claims as that term is defined by [the TMLA].” Verticor’s pleading prompted Wood to move for partial summary judgment that Verticor is not a “health care provider” as defined by the TMLA (a conclusion that, again, would also mean that his claims against Verticor could not be HCLCs). 6

In his summary-judgment motion, Wood asserted no-evidence grounds challenging whether Verticor could present evidence that it met any component of the TMLA’s definition of “health care provider.” That definition states as follows:

(A) “Health care provider” means any person, partnership, professional association, corporation, facility, or institution duly licensed, certified, registered, or chartered by the State of Texas to provide health care, including:
(i) a registered nurse;
(ii) a dentist;
(iii) a podiatrist;
(iv) a pharmacist;
(v) a chiropractor;
(vi) an optometrist;
(vii) a health care institution; or
*492 (viii) a health care collaborative certified under Chapter 848, Insurance Code.
(B) The term includes:
(i) an officer, director, shareholder, member, partner, manager, owner, or affiliate of a health care provider or physician; and
(ii) an employee, independent contractor, or agent of a health care provider or physician acting in the course and scope of the employment or contractual relationship. 7

Wood also asserted “traditional” grounds seeking to negate certain of the definition’s components with evidence that consisted of Verticor’s responses to requests for admissions. In them, Verticor had admitted that, inter alia, none of its principals or employees is a registered nurse, dentist, podiatrist, pharmacist, chiropractor, or optometrist; 8 that neither “Verticor nor any of its employees performed any act or furnished any treatment to [Wood];” and that “Verticor is not licensed to perform healthcare.”

In response to Wood’s no-evidence grounds, Verticor joined issue only with respect to the portion of the definition’s paragraph (A) that refers generally to a “person, partnership, professional association, corporation, facility, or institution duly licensed, certified, registered, or chartered by the State of Texas to provide health care.” As evidence that it met that requirement, Verticor relied solely on proof that it had operated at relevant times under a “device manufacturer” license issued by the Texas Department of State Health Services. 9

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Verticor, Ltd. v. Michael Wood, 509 S.W.3d 488, 2015 Tex. App. LEXIS 11722, 2015 WL 7166024 (Tex. Ct. App. 2015).

509 S.W.3d 488 (Verticor, Ltd. v. Michael Wood) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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