S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
In Re: Breast Implant Product Liability Litigation
IN THE ORIGINAL JURISDICTION
Opinion No. 24793
Heard February 2, 1998 - Filed June 1, 1998
REVERSED
Terry E. Richardson, Jr., and A. Hoyt Rowell, III,
both of Ness, Motley, Loadholt, Richardson & Poole,
of Charleston; D. Michael Parham, of Parham &
Smith, of Greenville; Kenneth M. Suggs, of Suggs &
Kelly, of Columbia; Joseph G. Wright, of Wright Law
Offices, of Anderson; all as Liaison Counsel for
Plaintiffs.
Ernest J. Nauful, Jr.; William L. Pope, of Pope &
Rodgers; and Andrew F. Lindemann, of Ellis,
Lawhorne, Davidson & Sims, all of Columbia, as
Liaison Counsel for Healthcare Defendants.
William M. Grant, Jr., of Grant & Leatherwood, P.A.,
of Greenville, Liaison Counsel for Manufacturer
Defendants.
Heyward E. McDonald, of McDonald, McKenzie,
Rubin, Miller & Lybrand, of Columbia, for Amicus
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South Carolina Dental Association.
Alexia Pittas-Giroux, of Cordray Law Firm, of
Charleston, for South Carolina Trial Lawyers.
William A. Prince, of West Columbia, for Amicus
South Carolina Hospital Association.
Stephen P. Williams, of Columbia, for Amici South
Carolina Medical Association & American Medical
Association.
TOAL, A.C.J.: We granted a writ of certiorari to review certain
questions pertaining to the liability of health care providers ("Healthcare
Defendants") for use of medical devices, such as breast implants.
FACTUAL/PROCEDURAL BACKGROUND
In August 1993, Chief Justice David W. Harwell assigned Judge Henry
F. Floyd to dispose of all pre-trial motions and other matters arising out of
the breast implant litigation then pending, and to be subsequently filed, in
this state's court system. In April 1995, Chief Justice Ernest A. Finney, Jr.
issued an order granting permission to Judge Floyd to promulgate a Case
Management Order regulating pre-trial proceedings in the breast implant
cases.
In November 1996, Judge Floyd issued an order addressing the
defendants' motion to dismiss the master complaint. The circuit court
dismissed certain of the causes of action in the master complaint. Among the
causes of action not dismissed were those for strict liability, breach of implied
warranties, and breach of express warranty.1 After Plaintiffs proposed an
amended master complaint, adding a cause of action for the common law
warranty of soundness and quality, the defendants again moved to dismiss
the complaint. Judge Floyd denied the motion. The circuit court then, sua
1Other causes of action not dismissed were those for fraud and deceit,
negligent misrepresentation, and fraudulent concealment. Causes of action
for negligence, negligent undertaking (Restatement (Second) of Torts § 324),
and medical negligence were dismissed only as to select defendants.
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sponte, moved to certify to this Court two questions related to the
applicability of S.C. Code Ann. § 15-73-10 (1976) and Restatement (Second)
of Torts § 402A to Healthcare Defendants.
In addition, Healthcare Defendants petitioned this Court for a writ of
certiorari to review Judge Floyd's orders regarding the applicability of strict
liability and warranty causes of action to Healthcare Defendants. In March
1997, we issued an order granting Healthcare Defendants'petition. We found
that there is no provision, under Rule 228(a), SCACR, for this Court to
answer questions certified by a state circuit judge; however, we agreed with
Judge Floyd that very important questions of law need to be answered at this
time. Accordingly, the request for certification was denied, but the petition
for a writ of certiorari was granted.2
Accordingly, the following questions are before us:
1. May a health care provider be held strictly liable under S.C. Code
Ann. § 15-73-10 for a medical device or instrument used in the course of
treating a patient?
2. May a health care provider be held liable for the breach of implied
warranties under Article 11 of the Uniform Commercial Code with regard to
a medical device or instrument used in the course of treating a patient?
3. May a health care provider be held liable for the breach of an
express warranty under Article II of the Uniform Commercial Code with
regard to a medical device or instrument used in the course of treating a
patient?
2 Although we will not generally accept matters on a writ of certiorari
that can be entertained in the trial court or on appeal, a writ of certiorari
may be issued when exceptional circumstances exist. This matter presents
such a case. Novel questions of law concerning issues of significant public
interest that are contained in numerous state and federal actions are involved
in this matter. A decision by this Court would serve the interests of judicial
economy by eliminating numerous inevitable appeals raising these issues.
We reiterate that this Court will not issue a writ of certiorari merely
to relieve a circuit court's burden of deciding difficult issues in high profile
cases. However, as Judge Floyd very appropriately notes, this is not only an
exceptional case of great public interest, but is also one presenting novel
questions of law, which, to best serve the interests of judicial economy, should
be answered at this time.
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4. May a health care provider be held liable for the breach of a common
law warranty of soundness and quality with regard to a medical device or
instrument used in the course of treating a patient?
LAW/ANALYSIS
A. STRICT PRODUCTS LIABILITY
In his November 1996 order, Judge Floyd ruled that a health care
provider may be held strictly liable under the Defective Products Act, S.C.
Code Ann. § 15-73-10 to -30 (1976). Before this Court' Healthcare Defendants
argue that a health care provider cannot be held strictly liable under S.C.
Code Ann. § 15-73-10 for a medical device or instrument used in the course
of treating a patient. We agree.
1. SOUTH CAROLINA AUTHORITY
Section 15-73-10 provides:
(1) One who sells any product in a defective condition
unreasonably dangerous to the user or consumer or to his
property is subject to liability for physical harm caused to the
ultimate user or consumer, or to his property, if
(a) The seller is engaged in the business of selling
such a product, and
(b) It is expected to and does reach the user or
consumer without substantial change in the condition
in which it is sold.
(2) The rule stated in subsection (1) shall apply although
(a) The seller has exercised all possible care in the
preparation and sale of his product, and
(b) The user or consumer has not bought the product
from or entered into any contractual relation with the
seller.
S.C. Code Ann. § 15-73-10. This provision, which was adopted by the
General Assembly in 1974, codified, nearly verbatim, Restatement (Second)
of Torts § 402A.
The determinative issue in this case is whether a health care provider,
such as a hospital or physician, is a "seller" within the meaning of section 15-
73-10. Plaintiffs argue that section 15-73-10 does not provide an exemption
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for health care providers; therefore, the statute is binding upon all "sellers,"
including health care providers. They assert that unlike S.C. Code Ann. § 44-
43-10 (1985),3 which specifically exempts providers of items such as blood
products from implied warranties of merchantability and fitness,4 no such
exemption has been set forth in section 15-73-10. 'Phis is a reasonable
argument based on rules of statutory construction; however, it fails to take
into account case precedent that has specifically addressed this issue.
South Carolina cases, as well as persuasive authority from other
jurisdictions, dictate that health care providers are not "sellers" under
Restatement § 402A. DeLoach v. Whitney, 275 S.C. 543, 273 S.E.2d 768
(1981) provides the analytic starting point for answering the question before
us. In DeLoach, the plaintiff had won four of defendant's tires in a raffle.
The defendant installed these tires on plaintiff s car. During the installation,
a deteriorated valve stem, not a part of the tire, was left on the wheel. Some
time later, the valve stem ruptured while the car was being driven, causing
the car to go off the road, thereby injuring plaintiff. The plaintiff brought an
action against the defendant under strict tort liability. The defendant moved
for a directed verdict on the issue of strict liability, arguing there had been
no sale to bring the transaction within section 15-73-10. The trial court
denied the motion, finding services to be included within the scope of section
15-73-10. We disagreed. Thus, DeLoach held that services are not included
within the scope of section 15-73-10.
However, DeLoach also contains language which rejects the argument
that strict liability includes the negligent installation of a non-defective
product. Thus, the opinion is not entirely clear whether it was deciding that
3 S.C. Code A-nn. § 44-43-10 provides:
The implied warranties of merchantability and fitness shall not
be applicable to a contract for the sale, procurement, processing,
distribution or use of human tissues such as corneas, bones or
organs, whole blood, plasma, blood products or blood derivatives.
Such human tissues, whole blood, plasma, blood products or blood
derivatives shall not be considered commodities subject to sale or
barter and the transplanting, injection, transfusion or other
transfer of such substances into the human body shall be
considered a medical service.
4 See Samson v. Greenville Hosp. Sys., 295 S.C. 359, 368 S.E.2d 665
(1988).
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services generally were excluded from the scope of section 15-73-10, or
whether just negligent services provided in connection with non-defective
products were excluded from section 15-73-10.
This question was clarified by Samson v. Greenville Hospital System,
297 S.C. 409, 377 S.E.2d 311 (1989), wherein we explicitly stated that section
15-73-10 did not apply to services. Citing DeLoach, we declared:
South Carolina Code Ann. § 15-73-10 (1976), which is based on
Section 402A of the Restatement (Second) of Torts, imposes strict
liability in tort upon the suppliers of defective products. This
section applies only to products and not to services.
Samson, 297 S.C. at 410, 377 S.E.2d at 311 (emphasis added). The issue in
Samson was whether blood was a product or service under section 15-73-10.
We found that the Legislature did not intend for blood to be classified as a
product.
Thus, when analyzed together, DeLoach and Samson teach that
providers of services may not be held liable under section 15-73-10. The
pivotal question then, in this case, is whether health care providers, including
those who perform breast implant procedures, offer services or products. In
analyzing this question, we must consider whether the essence of the
transaction is the provision of a service or a product. We hold that health
care providers who perform breast implant procedures are, in essence,
providing a service. Although the breast implant procedure requires the use
of a product, the implant, the health care provider is fundamentally and
predominantly offering a service. The provider must have medical knowledge
and skill to conduct the procedure. He must advise the patient of the
medical consequences and must recommend to the patient the preferable type
of procedure. The product may not be purchased independently of the
service. One does not "buy" a breast implant procedure in the same way as
one would buy a product, such as a lawn-mower. At its heart, the breast
implant procedure is a service and not a product.
Case law from other jurisdictions supports the product/service
distinction delineated in South Carolina cases: "In general, the courts have
refused to apply the concept of strict liability in tort to a person rendering
professional or nonprofessional services, where injury occurs through a
defective product used by the person rendering such services, or as a result
of allegedly defective services themselves." American Law of Products
Liability § 1:77, at 84 (T. Travers ed., 3d ed. 1987). Some jurisdictions have
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specifically addressed the issue of whether health care providers may be held
strictly liable under products liability law. An overwhelming majority of
courts have responded in the negative.
A number of courts have set forth thoughtful analyses of the view that
health care professionals and institutions are providers of services, rather
than sellers of products, for purposes of strict liability in tort. The following
is a sample of leading cases that have discussed the applicability of products
liability standards to the health care industry:
In Hector v. Cedars-Sinai Medical Center, 225 Cal. Rptr. 595 (Cal. Ct.
App. 1986), it was held that a hospital was not strictly liable for implantation
of a defective pacemaker. The California Court of Appeals wrote:
The essence of the relationship between hospital and patient is
the provision of professional medical services necessary to effect
the implantation of the pacemaker -- the patient does not enter
the hospital merely to purchase a pacemaker but to obtain a
course of treatment which includes implantation of a pacemaker.
. . .As a provider of services rather than a seller of a product,
the hospital is not subject to strict liability for a defective product
provided to the patient during the course of his or her treatment.
Hector, 225 Cal. Rptr. at 599-600.
More recently, in Cafazzo v. Central Medical Health Services, Inc., 668
A.2d 521 (Pa. 1995), the Pennsylvania Supreme Court, in a case of first
impression, decided that hospitals and physicians cannot be held subject to
strict liability under the Restatement § 402A for- defects in a product
incidental to the provision of medical services. The court wrote that the
provision of medical services is to be regarded as qualitatively different from
the sale of products. The case posited that the thrust of the inquiry is not
whether a separate consideration is charged for the products used in the
exercise of medical skill, but what service is performed to restore or maintain
the patient's health.
In Ayyash v. Henry Ford Health Systems, 533 N.W.2d 353 (Mich. Ct.
App. 1995), appeal denied, 549 N.W.2d 561 (Mich. 1996), the Michigan Court
of Appeals declined to impose strict products liability on health care providers
for temporomandibular joint implants. The court stated that because the
primary function of physicians and hospitals is to provide care, not to
manufacture or distribute products, those economic theories that underlie the
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imposition of strict liability upon makers and sellers of products (e.g.
spreading the risk, redistribution of wealth, and problems of proof and
deterrence) do not justify the extension of strict liability to medical service
providers.
Porter v. Rosenberg, 650 So.2d 79 (Fla. Ct. App. 4th Dist.), rev. denied,
661 So.2d 825 (Fla. 1995) addressed the situation where the medical product
was a breast implant. The Florida court affirmed the dismissal of plaintiffs
strict liability claim against a physician for an allegedly defective breast
implant. The court found that strict liability was not applicable to an action
against a physician who supplies a product to a patient where the medical
services could not have been rendered without using the product and where
the predominant purpose of the transaction was the provision of medical
services. Porter stated:
Physicians, like hospitals, are providers of medical services. The
physician's expertise lies in the diagnosis, treatment and cure of
illness, not in the research or development of prosthetics or
devices used to aid medical diagnosis or treatment. A physician
is not in the business of selling products, but rather is in the
profession of providing medical services. Products such as the
prosthetic device in this case are supplied and utilized only as
needed to deliver the professional medical service. They are
incidental, or integral, to a physician's service, but they are not
the focus of the physician's delivery of health care.
Porter, 650 So.2d at 81-82 (quoting Cafazzo v. Central Med. Health Servs.
Inc., 635 A.2d 151, 154 (Pa. Super. Ct. 1993)). The court further stated that
"even with a product, such as a breast implant, a physician is exercising his
or her professional judgment in determining what medical procedure to
perform and then in selecting the appropriate product to utilize in connection
with the procedure. The provision of the product is integrally related to the
professional services and skill offered by the medical care provider." Id. at
82.
Weissman v. Dow Coming Corporation, 892 F. Supp. 510 (S.D.N.Y.
1995) also addressed breast implant procedures. Weissman, which involved
a claim against a physician, among others, for injuries caused by a silicone
breast implant procedure, declared that there is not a difference between
"health" care and elective, cosmetic procedures. The fact that the plaintiff
was or was not intended to be "healed" by the medical service had little, if
any, legal significance. Moreover, the type of medical services provided does
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not transform what is primarily a service into the sale of a product.
Weissman, 892 F. Supp. at 517.
A significant number of other jurisdictions have also reached the
conclusion that strict liability should not be impose'd upon health care
providers. See Hoff v. Zimmer, Inc., 746 F. Supp. 872 (W.D. Wis.
1990)(under Wisconsin law, hospital could not be held strictly liable for
patient's injuries suffered as a result of a defective hip prosthesis); NME
Hospitals, Inc. v. Azzariti, 573 So.2d 173 (Fla. Ct. App. 2d Dist.
1991)(hospital that utilizes an allegedly defective product only in the course
of its primary function of providing medical services is not subject to an
action in strict liability where the professional services could not have been
rendered without using the product); North Miami General Hosp., Inc. v.
Goldberg, 520 So.2d 650 (Fla. Ct. App. 3d Dist. 1988)(no strict liability claim
lies against a hospital where patient sustained burns on her body from
electro-surgical grounding pad used during surgery); Magrine v. Krasnica, 227
A.2d 539 (N.J. County Ct. 1967)(dentist not strictly liable for injuries caused
by the breaking, in plaintiffs jaw, of a hypodermic needle used during an
injection procedure), aff'd, 250 A.2d 129 (N.J. 1969); Parker v. St. Vincent
Hospital, 919 P.2d 1104 (N.M. Ct. App. 1996)(rejecting, on the basis of policy
grounds, the imposition of strict liability on hospitals for defectively designed
medical products); Probst v. Albert Einstein Medical Center, 440 N.Y.S.2d 2
(N.Y. App. Div. 1981)(hospital not strictly liable for defective spinal rod
broken after surgical implantation); Nevauex v. Park Place Hosp., Inc., 656
S.W.2d 923 (Tex. Ct. App. 1983)(hospital not liable under strict liability
because radiation supplied was a service, not a product, and strict liability
applies to defective products, not services).
There is very little authority to support finding health care providers
strictly liable under products liability law. In Bell v. Poplar Bluff Physicians
Group, Inc., 879 S.W.2d 618 (Mo. Ct. App. 1994), the Missouri Court of
Appeals declared that the sale of a product is not required to bring an action
for strict liability. Liability is imposed on those placing a product in the
stream of commerce, and the product need not be sold if it has been placed
in the stream of commerce by other means. Thus, it was held that a hospital
could be lield strictly liable under products liability law for a defective
temporomandibular implant.5
5 There has been temporomandibular joint ("TMJ") implant litigation
across the country, much like breast implant litigation. Contrary to Bell,
other cases have followed the general proposition that health care providers
should not be held strictly liable for TMJ implants.
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Plaintiffs point to four other cases in support of their position. These
cases, however, are either unpersuasive or no longer good law. The plaintiffs
cite Cunningham v. MacNeal Memorial Hospital, 266 N.E.2d 897 (Ill. 1970),
which held that a hospital supplying contaminated blood was strictly liable
because it engaged in the business of selling blood for transfusion into
patients. This decision has been superseded by statute. See Advincula v.
United Blood Services, 654 N.E.2d 644 (111. Ct. App. 1995). Further,
reference is made to Porter v. Rosenberg, 650 So.2d 79 (Fla. Ct. App. 4th
Dist. 1995). Although this case contains some language favoring Plaintiffs,
it clearly reached, as discussed earlier, the opposite conclusion, namely, that
a physician may not be held strictly liable for a defective breast implant.
Also, Branch v. Willis-Knighton Medical Center, 636 So.2d 211 (La. 1994),
which allowed to go forward an action for strict products liability for
contaminated blood, was principally concerned with procedural issues, such
as the statute of limitation, and did not clearly address the merits. Finally,
Plaintiffs cite Karibjanian v. Thomas Jefferson University Hospital, 717 F.
Supp. 1081 (E.D. Pa. 1989). Applying Pennsylvania law, the federal district
court held that a hospital could be held strictly liable under Restatement §
402A for the use of contrast media (chemical injection). However, in light of
the Pennsylvania Supreme Court's rejection of strict liability claims in
Cafazzo, 668 A.2d 521 (Pa. 1995), Karibjanian would appear to be essentially
overruled.
Thus, we hold that health care providers may not be held strictly liable,
under S.C. Code Ann. § 15-73-10, for products used in the course of providing
medical treatment.
B. WARRANTIES
Healthcare Defendants argue the lower court erred in finding that
health care providers may be held liable under the Uniform Commercial
Code's express warranty,6 implied warranty of merchantability,7 and implied
6 See S.C. Code Ann. § 36-2-313 (1976):
(1) Express warranties by the seller are created as follows:
(a) Any affirmation of fact or promise, including
those on containers or labels, made by the seller to
the buyer, whether directly or indirectly, which
relates to the goods and becomes part of the basis of
the bargain creates an express warranty that the
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warranty of fitness for a particular purpose.8
goods conform to the affirmation or promise.
(b) Any description of the goods which is made part
of the basis of the bargain creates an express
warranty that the goods shall conform to the
description.
(c) Any sample or model which is made part of the
basis of the bargain creates an express warranty that
the whole of the goods shall conform to the sample or
model.
(2) It is not necessary to the creation of an express warranty
that the seller use formal words such as "warrant" or "guarantee"
or that he have a specific intention to make a warranty, but an
affirmation merely of the value of the goods or a statement
purporting to be merely the seller's opinion or commendation of
the goods does not create a warranty.
7 See S.C. Code Ann. § 36-2-314 (1976):
(1) Unless excluded or modified (§ 36-2-316), a warranty that the
goods shall be merchantable is implied in a contract for their sale
if the seller is a merchant with respect to goods of that kind.
Under this section the serving for value of food or drink to be
consumed either on the premises or elsewhere is a sale.
(2) Goods to be merchantable must be at least such as
(a) pass without objection in the trade under the
contract description; and
(b) in the case of fungible goods, are of fair average
quality within the description; and
(c) are fit for the ordinary purposes for which such
goods are used; and
(d) run, within the variations permitted by the
agreement, of even kind, quality and quantity within
each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled
as the agreement may require.
(3) Unless excluded or modified (§ 36-2-316) other implied
warranties may arise from course of dealing or usage of trade.
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Article II of the U.C.C. applies only to transactions in goods. Section
36-2-103 (1976) defines "seller" as "a person who sells or contracts to sell
goods." "The Code warranty provisions do not govern contracts which are
purely for services." 1 James J. White & Robert S. Summers, Uniform
Conunercial Code 479 (4th ed. 1995). The South Carolina Court of Appeals
has recognized that in this state, a sale must occur before an implied
warranty can arise. Priest v. Brown, 302 S.C. 405, 396 S.E.2d 638 (Ct. App.
1990). Further, it has been observed that the U.C.C.'s implied warranty
appears. "inapplicable to services." F. Patrick Hubbard & Robert L. Felix,
South Carolina Law of Torts 262 (2d 1997).
Our conclusion above -- that health care providers offer services, not
products -- determines our holding as to the issues of warranty under Article
II of the U.C.C. Cases from other jurisdictions have similarly disallowed
such claims. See In re: TMJ Implants Products Liability Litigation, 872 F.
Supp. 1019 (D. Minn. 1995)(physician who installed temporomandibular joint
implant could not, under North Carolina law, be liable under U.C.C. breach
of warranty theories); Cook v. Downing, 891 P.2d 611 (Okla. Ct. App.
1994)(dentist was not a "merchant," and "dentures" were not "goods" under
the U.C.C.); Pitler v. Michael Reese Hosp., 415 N.E.2d 1255 (Ill. Ct. App.
1980)(U.C.C. did not apply to radiation treatments).
Finally, Healthcare Defendants argue that the lower court erred in
failing to dismiss Plaintiff's common law warranty of soundness and quality
claim. We agree. Plaintiff's have not identified any South Carolina authority
that has recognized a common law warranty of soundness and quality, within
the medical context; nor are we aware of any. Therefore, this cause of action
should be dismissed.
CONCLUSION
Based on the foregoing, we hold that health care providers are not
strictly liable under S.C. Code Ann. § 15-73-10 for medical devices or
8 See S.C. Code Ann. § 36-2-315 (1976):
Where the seller at the time of contracting has reason to know
any particular purpose for which the goods are required and that
the buyer is relying on the seller's skill or judgment to select or
furnish suitable goods, there is unless excluded or modified under
the next section (§ 36-2-316) an implied warranty that the goods
shall be fit for such purpose.
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instruments used in the course of treatment of patients. Further, we hold
that health care providers may not be found liable under Article II
warranties or a conunon law warranty of soundness and quality. Accordingly,
the order of the circuit court is REVERSED as to these matters.
MOORE, WALLER, BURNETT, A.J., and Acting Associate Justice George
T. Gregory Jr., concur.
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