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Davis v. Shiley6/17/1998
CERTIFIED FOR PUBLICATION
(Super. Ct. Nos. 772792 & 733224)
Appeal from judgments of the Superior Court of Orange County, William F. Rylaarsdam, Judge. Dismissed in part, reversed in part and remanded.
Introduction
This case involves the infamous artificial Convexo-Concave artificial heart valve developed, tested, manufactured and promoted by Shiley Incorporated in Irvine, California. After the Food and Drug Administration (FDA) granted Shiley approval to distribute the valves worldwide in 1979, medical providers soon discovered some of the valves contained a weak outlet strut mechanism which fractured in approximately one percent of its recipients, causing death or serious injury. (Michael v. Shiley, Inc.
(3d Cir. 1995) 46 F.3d 1316, 1319.) In 1986, Shiley recalled all its valves from the market and ceased production. Recipients were left to make the appalling choice of undergoing life-threatening heart valve replacement surgery or waiting to see whether their valve would withstand the test of time. Not surprisingly, a flood of litigation resulted.
In one such matter, we held a cause of action "does not presently exist under any theory premised on the risk the valve may malfunction in the future." (Kahn v. Shiley Inc. (1990) 217 Cal.App.3d 848, 857, original italics [this includes claims of strict liability, negligence, breach of warranty and failure to warn].) But we determined a plaintiff could properly bring a fraud action. (Ibid.)
Here, we review the fraud claims of one Shiley valve recipient, Douglas Davis. The court granted Shiley's summary judgment motion, ruling Davis's lawsuit was time-barred by the applicable Oregon statute of repose. Finding the trial court improperly applied out-of-state law, we reverse and remand.
Summary of Facts
In 1983, Douglas Davis underwent valve implant surgery in Oregon, where he and his wife resided. Five years later, he filed a federal product liability and fraud lawsuit in Oregon against Shiley. His case ended in a summary judgment which was affirmed on appeal.
In 1994, Davis underwent open-heart surgery to explant the valve and replace it with a newer model. The surgery was performed in Oregon. One month later, he filed the underlying action in California. Davis alleged Shiley knowingly disseminated material misrepresentations to him, his physicians, and the general public about the valve's safety and propensity to fail. Specifically, he asserted, " [Shiley] misrepresented the safety and efficacy of the valve in labeling, advertising, and promotional materials; Knowing that its pre-marketing testing of the valve was inadequate, [Shiley] promoted and sold the valve but failed to provide adequate warnings to plaintiffs and the general public which fairly reflected the risks known to [Shiley]; . . . [Shiley] made understatements in reports of the valve strut fracture and failure rate when [Shiley] knew the predictable and reasonable probable rate was significantly higher; [Shiley] disseminated false and misleading information in connection with recalls of the valve, which information was calculated to deceive the medical community, governmental agencies, plaintiffs and the general public about the true facts concerning the recall; [Shiley] omitted material facts showing that the valve had a history of strut failure . . . ; [Shiley] made false and misleading statements that there were modifications in the valve manufacturing process which allegedly eliminated the defects in the valve, when in fact, [Shiley] knew or reasonably should have known that valves manufactured under the new process contained the same
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