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

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?

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

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

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

(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

(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

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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