2013-00139453-CU-MM

Erik Labhard vs. Kaiser Foundation Hospitals

Nature of Proceeding: Motion to Strike

Filed By: Watanabe, Eimi

Defendant Arthrex, Inc.Arthrex California, Inc., and Arthrex California Technology, Inc.’s (“Arthrex”) Motion to Strike claim for punitive damages is denied.

Plaintiffs allege that on January 15, 2010 Dr. Greenfield at Kaiser performed an ACL
reconstruction surgery on Erik Labhard’s right knee. Plaintiffs allege that Arthrex’s
Screw PLLA BioTransfix 5 mm x 50 mm and Screw Bio-Comp Retro 9mm were used.
A later MRI shoed that a femoral screw/pin was fractured. Plaintiffs allege that
defendants knew of the defects and the probability that the product would cause injury
to unsuspecting users, including plaintiff. Defendants allegedly made a conscious
decision to put the screws into commerce for financial gain knowing they would fail,
instead of recalling and replacing the screws. (FAC ¶¶ 37, 38.)

Plaintiffs allege causes of action for negligence, strict products liability, and loss of
consortium.

In order to state a prima facie claim for punitive damages, a complaint must set forth
the elements as stated in the general punitive damage statute, Civil Code section
3294. (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 721) These
statutory elements include allegations that the defendant has been guilty of
oppression, fraud or malice. (Civ. Code, § 3294, subd. (a).) “ ‘Malice’ ” is defined in the
statute as conduct “intended by the defendant to cause injury to the plaintiff or
despicable conduct which is carried on by the defendant with a willful and conscious
disregard of the rights or safety of others.” (Civ. Code, § 3294, subd. (c)(1); see
College Hospital, supra, 8 Cal.4th at p. 725.) “ ‘Oppression’ means despicable conduct
that subjects a person to cruel and unjust hardship in conscious disregard of that
person’s rights.” (Civ. Code, § 3294, subd. (c)(2).) Even so-called nonintentional or
nondeliberate conduct comes within the definition of malicious acts punishable by the
assessment of punitive damages when a party intentionally performs an act from
which he knows, or should know, it is highly probable that harm will result. Nolin v.
National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279, 284-287. The culpable
quality of the conduct necessary to justify punitive damages in products liability actions
is no less than that required for assessment of punitive damages in any setting in
California. (See G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 28-32.)
Whether in a products liability matter or in another setting, if a company intentionally
proceeds with conduct which will expose a person to a serious potential danger known
to the company in order to advance the company’s own pecuniary interest, punitive
damages may be assessed based on a finding that the company has shown a
conscious disregard for the person’s safety.

Arthrex contends that plaintiffs have not alleged facts to support punitive damages.
However, plaintiffs have specifically identified the product defect, the intended use for
the product, knowledge that the product would fail, and intentional decision to keep the
product in commerce rather than recall the product for purposes of financial gain.
Punitive damages are available if a defendant markets a product that is known to be
defective and dangerous to consumers. Karlsson v Ford Motor Co. (2006) 140
Cal.App.4th 1202, 1230. Defendants concede that punitive damages are available
under these circumstances, they just dispute the sufficiency of the allegations.

The Court finds that the allegations are sufficient.

Defendants shall file and serve an Answer on or before October 28, 2013.

The notice of motion does not provide notice of the Court’s tentative ruling system, as
required by Local Rule 1.06(D). Counsel for moving party is directed to contact
counsel for opposing party forthwith and advise counsel of Local Rule 1.06 and the
Court’s tentative ruling procedure. If counsel for moving party is unable to contact
counsel for opposing party prior to hearing, counsel for moving party shall be available
at the hearing, in person or by telephone, in the event opposing party appears without
following the procedures set forth in Local Rule 1.06(B).

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.