Source: https://h2o.law.harvard.edu/collages/9930
Timestamp: 2019-04-19 18:23:58+00:00

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Plaintiff is injured by a defective pacemaker that had been implanted at defendant’s hospital. The plaintiff’s physician had performed the implantation. The defendant had ordered the pacemaker and delivered it to the surgery room; however, the model and type of pacemaker was specified by the plaintiff’s physician.
Should a hospital be liable for defects in the medical products it furnishes in connection with a patient’s care and treatment?
CEDARS-SINAI MEDICAL CENTER, Defendant and Respondent.
4Civ. B012677. 5Court of Appeal, Second District, Division 1, California. 6April 29, 1986.
[180 Cal.App.3d 498] Royce & Seaman, Royce & Inferrera, George R. Royce, John M. Inferrera and William J. Moon, for plaintiff and appellant.
Veatch, Carlson, Grogan & Nelson, James C. Galloway, Jr., Michael E. Wasserman, Greines, Martin, Stein & Richland, Kent L. Richland and Regina Covitt, for defendant and respondent.
Plaintiff Frances J. Hector appeals from an order dismissing her second and third causes of action against defendant following the granting of defendant's motion for partial summary judgment.
Plaintiff filed a complaint against Cedars-Sinai Medical Center (Cedars-Sinai) and American Technology, Inc., alleging personal injury resulting from the implantation of a defective pacemaker. The pacemaker was manufactured by American Technology, Inc. and implanted at Cedars-Sinai by plaintiff's physician, Dr. Eugene Kompaniez.
The complaint contained three causes of action: negligence, strict liability and breach of warranty. Cedars-Sinai moved for partial summary judgment on plaintiff's second and third causes of action, strict liability and breach [180 Cal.App.3d 499] of warranty, alleging as a matter of law there were no triable issues of fact. The trial court granted the motion. Plaintiff subsequently requested and received dismissal of the first cause of action, negligence, against Cedars-Sinai. The trial court then issued [225 Cal.Rptr. 596] its order dismissing the second and third causes of action.
Plaintiff contends the trial court erred in finding Cedars-Sinai was exempt from the application of the strict products liability doctrine. For the reasons set forth below, we disagree.
The trial court granted defendant's motion for partial summary judgment on the basis of Silverhart v. Mount Zion Hospital (1971) 20 Cal.App.3d 1022, 98 Cal.Rptr. 187. In Silverhart, plaintiff was undergoing surgery at defendant hospital when a surgical needle broke; the needle remained permanently imbedded in plaintiff's body. The trial court refused to instruct the jury as to the theory of strict liability.
Turning to the facts in the instant case, Howard Allen, M.D., Director of the Cedars-Sinai Cardiac Noninvasive Laboratory states in his declaration that the specific model and type of pacemaker to be implanted in a patient is specified by the surgeon. The surgeon ordinarily contacts the manufacturer's representative to provide for delivery of the pacemaker to the operating room when it is to be implanted. The pacemaker may be sterilized and ready for implantation when it is delivered to the hospital; the manufacturer's representative or the surgeon may pretest the pacemaker, but the hospital employees do not.
[225 Cal.Rptr. 599] Dr. Allen indicated Cedars-Sinai does not routinely stock pacemakers, nor is it in the business of recommending, selling, distributing or testing pacemakers. The treatment provided by Cedars-Sinai in relation to implantation of pacemakers includes pre- and post-operative care, nursing care, a surgical operating room and technicians.
[180 Cal.App.3d 504] Melanie Archibald, Cedars-Sinai Finance Manager for Operating Room Services, stated in her declaration the pacemaker implanted in plaintiff was delivered to Dr. Kompaniez in the operating room on the day of surgery by Jack Albrighton. Dr. Kompaniez had ordered the pacemaker directly from American Technology, Inc.; Cedars-Sinai received the packing slip and invoice slip from the manufacturer. The hospital was billed $2,295.00 for the pacemaker and $250.00 for a bipolar endocardial lead; the hospital added a routine surcharge of 85 percent to the patient's bill for the implanted pacemaker.
Ms. Archibald also indicated Cedars-Sinai does not stock, recommend, distribute or sell any pacemakers. She characterized the hospital's role as facilitating the processing of the implantation by performing the management practice of completing a purchase requisition and completing a charge ticket which is forwarded to patient billing offices.
Cedars-Sinai Director of Finance, Edward Pruchunas, stated in his declaration that Cedars-Sinai is a non-profit California corporation receiving the majority of its funding from payment for services rendered to its patients. Charges for services are billed to the patients in two forms: room and ancillary. The room charge includes the room, meals and routine nursing services. Other items and services are considered ancillary and separate charges are made for their use.
Mr. Pruchunas explained the rates for the services are set so that the cumulative charges for the services will pay for all projected expenditures. The markup for individual services and supplies is set at different levels for different items. Rate increases are applied across-the-board on a department-by-department basis, not on an individual procedure basis, and rates historically are set once a year. Prior to adjusting the rates, a survey is done of room and major high volume services to determine general comparability with rates at other facilities; modifications are proposed where individual charges appear to be incomparable.
The foregoing declarations indicate Cedars-Sinai is not "engaged in the business of distributing [pacemakers] to the public" (Vandermark v. Ford Motor Co., supra, 61 Cal.2d at p. 262, 37 Cal.Rptr. 896, 391 P.2d 168) and does not play "an integral and vital part in the overall production or marketing" of pacemakers (Silverhart v. Mount Zion Hospital, supra, 20 Cal.App.3d at p. 1026, 98 Cal.Rptr. 187; Vandermark, supra, 61 Cal.2d at p. 262, 37 Cal.Rptr. 896, 391 P.2d 168). The hospital does not order pacemakers for itself, but may fill out the purchase requisitions for surgeons who order the devices. The hospital does not stock or recommend pacemakers or provide them to the general public, dealing with pacemakers only in the context of the courses of treatment for particular patients. Even then, it is the surgeon who [180 Cal.App.3d 505] chooses or recommends the particular device to be implanted; the hospital merely provides administrative services in connection with the order and support services in connection with the implantation.
Plaintiff argues Cedars-Sinai should not be exempt from the application of strict liability, in that its actions do not fall within any of the three previously recognized categories of exemption: blood and blood products, tools of the trade, and essential conduits. However, this argument presupposes Cedars-Sinai is in fact engaged in the business of selling pacemakers, thus otherwise subject to strict liability for selling a defective product; if the hospital is a provider of services, it is not subject to strict liability and it is unnecessary to find an exemption to protect it from the application of the doctrine.
Plaintiff's "tools of the trade" exemption is based on Silverhart. Yet, the decision in Silverhart does not depend upon the characterization of the defective needle as a tool of the trade, but upon the definition of a hospital as a provider of services. The opinion merely mentions the hospital itself was a user of the defective needle, since the needle was part of the surgical equipment routinely used by surgeons in the course of the provision of [180 Cal.App.3d 506] medical services. (20 Cal.App.3d at pp. 1027-1028, 98 Cal.Rptr. 187.) The opinion does not turn on the hospital's status as a user.
Plaintiff's third exemption is the "essential conduit or necessary intermediary" "for something like an ethical drug or similar product." However, once again, plaintiff's exemption applies to one who, in plaintiff's own words, "is essentially furnishing services as a healer of illnesses." As previously discussed, one who provides services rather than selling a product is not subject to strict liability.
Rather than focusing on the three "exemptions," the better approach is to view plaintiff's argument as: (1) Cedars-Sinai should be considered a seller of a product, rather than a provider of services, in that it did not rely on its skill and judgment in providing the pacemaker to plaintiff but was a mere conduit in the chain of distribtution from manufacturer to consumer, or (2) even if Cedars-Sinai was providing services, they were not of the type which should be immune from the imposition of strict liability.
In attempting to characterize Cedars-Sinai as engaged in the business of selling a product rather than providing services, plaintiff places heavy emphasis on the 85 percent surcharge on the pacemaker. But the determinative question is not how much the hospital charges for what it does, but what the hospital does. According to the declarations of hospital personnel, the 85 percent surcharge is not designed to provide the hospital with a profit from the sale of the pacemaker but is part of an overall scheme to provide that the cost to patients of services and supplies covers the hospital's projected expenditures and is comparable to the cost for the same items at other facilities. The 85 percent surcharge in and of itself does not place the hospital in the business of selling pacemakers.
There also have been attempts made to distinguish between different types of services provided by a hospital. In Johnson v. Sears, Roebuck & Co. (E.D.Wis.1973) 355 F.Supp. 1065, the court divided the services provided by hospitals into two types: professional medical services and mechanical and administrative services, which support the former. (At p. 1066.) The court concluded the latter should not necessarily be exempt from strict liability. (Id., at p. 1067.) This distinction is not necessarily clear or easy to apply. (See Hoven v. Kelble (1977) 79 Wis.2d 444, 256 N.W.2d 379, 390, fn. 13.) The one case applying strict liability on the basis of Johnson is Grubb v. Albert Einstein Medical Center (1978) 255 Pa.Super. 381, 387 A.2d 480, in which the hospital supplied a defective tool to a surgeon who used the tool on plaintiff in surgery, injuring her. Yet, under California law, this constitutes the provision of medical services for which the hospital could not be held strictly liable. As discussed above, the hospital's conduct in the instant case falls within these parameters; hence, it cannot be held strictly liable.
Plaintiff asserts the imposition of strict liability will result in lower costs for health care, since the hospital no longer will be able to charge high fees [180 Cal.App.3d 508] for processing the paperwork for pacemakers ordered by physicians for their patients. But because the overall charges to the patients must equal the overall expenditures by the hospital, any decrease in the charge on pacemakers necessarily would mean an increase in another charge, and there would be no overall decrease in the cost to the consumer of health care. Moreover, if a hospital is to be considered a seller who places a product [225 Cal.Rptr. 602] on the market and who must bear the cost of injuries resulting from defective products, it will have to insure itself and distribute the risk of injury among the public as a cost of doing business. This necessarily will result in higher costs for health care.
In the instant case, the hospital does not select the pacemaker for the patient, but the selection is made by the treating physician. Thus, the hospital is in a poor position to protect itself by inquiring about or testing the devices, pressuring the manufacturer to promote product safety or selling a different pacemaker which is not defective. The imposition of strict liability would force the hospital to become involved in the selection process. This might provide added protection to the patient; it might also increase the cost of hospital services. But once the hospital began using its medical knowledge to aid in the selection of a pacemaker, it would be in the position of providing professional medical services, for which it could not be held strictly liable. Thus, there would be no ultimate advantage to putting the hospital in the position of having to take part in the selection process.
For the foregoing reasons, we conclude Cedars-Sinai is not "engaged in the business of selling" pacemakers, but is a provider of medical services which included the provision of the pacemaker implanted in plaintiff. Inasmuch as the hospital is not a seller, it cannot be held strictly liable for injuries to plaintiff caused by defects in the pacemaker. Accordingly, the trial court did not err in granting the motion for partial summary judgment.
LUCAS and DEVICH, JJ., concur.
 While a trial court's grant of partial summary judgment and dismissal of one or more causes of action generally is reviewable only on appeal from the final judgment rendered in the case, an exception to this rule is made where the case involves multiple parties and the court's disposition leaves no issue to be determined between the parties to the appeal. (Etienne v. DKM Enterprises, Inc. (1982) 136 Cal.App.3d 487, 489, 186 Cal.Rptr. 321, see Justus v. Atchison (1977) 19 Cal.3d 564, 568, 139 Cal.Rptr. 97, 565 P.2d 122.) The effect of plaintiff's dismissal of the first cause of action as to Cedars-Sinai was that the trial court's order of dismissal determined all issues remaining between the parties. Therefore, the order is reviewable on appeal.
Original Item: "Hector v. Cedars-Sinai Medical Center"

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