Khan v. Shiley Inc.
1990 Cal. App. LEXIS 188, 266 Cal. Rptr. 106, 217 Cal.App.3d 848 (1990)
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Rule of Law:
In a products liability action based on theories of strict liability, negligence, or breach of warranty, a plaintiff must prove the product has malfunctioned and caused an injury. However, a cause of action for fraud may exist against a manufacturer for concealing material product defects, even if the plaintiff's specific product has not yet malfunctioned.
Facts:
- On July 29, 1983, Judy Khan had a Bjork-Shiley mechanical heart valve implanted to replace a diseased mitral valve.
- Khan was informed of general surgical risks but was not told that the valve itself carried a risk of mechanical fracture.
- In November 1985, Khan's surgeon informed her that the manufacturer, Shiley, had recalled her model of valve due to a propensity to fracture, which could lead to sudden death.
- The surgeon, relaying information from Shiley, advised that the risk of a second open-heart surgery to replace the valve was higher than the risk of it fracturing.
- Since learning of the recall, Khan has suffered severe emotional distress, anxiety, and related physical symptoms, requiring treatment from multiple mental health professionals.
- Khan's specific heart valve has continued to function and has not yet malfunctioned or fractured.
- Khan alleged that had she and her physician known of the fracture risk, they would have selected one of the at least six other available valves.
Procedural Posture:
- In October 1986, Judy Khan and her husband filed a lawsuit in a state trial court against Shiley Incorporated and its parent company, Pfizer, Inc.
- On May 10, 1988, the Khans filed a second amended complaint alleging multiple causes of action, including strict liability, negligence, breach of warranty, and fraud.
- The defendants moved for summary judgment, arguing the lawsuit was premature because Khan's heart valve had not malfunctioned.
- The trial court granted the defendants' motion for summary judgment, ruling that the Khans' claims were premature as no injury had yet occurred.
- The Khans, as appellants, appealed the trial court's judgment to the California Court of Appeal.
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Issue:
Does a cause of action for damages arise against the manufacturer of a medical device when the device is known to have a propensity to fail but has not yet malfunctioned in the plaintiff, causing the plaintiff severe emotional distress due to the fear of future failure?
Opinions:
Majority - Sonenshine, J.
Yes, but only for the cause of action for fraud. While claims based on products liability theories like strict liability, negligence, and breach of warranty are premature without a product malfunction, a claim for fraud based on intentional concealment of known dangers can proceed. For products liability claims, proof that a product has malfunctioned is essential to establish causation; the plaintiff's injury must be caused by a defect, not merely by the knowledge that a defect might cause future injury. Here, Khan's valve has not malfunctioned, so her emotional distress was not caused by a defect in the valve's performance. However, the cause of action for fraud is distinct because it impugns the defendant's conduct, not the product's performance. The plaintiffs sufficiently alleged the elements of fraud: that Shiley intentionally concealed the valve's known fracture risk to induce reliance by Khan and her doctor, that they justifiably relied on this lack of information, and that Khan suffered resulting damage in the form of emotional distress. This claim can proceed even though the valve has not yet failed.
Analysis:
This case establishes a critical distinction between products liability claims and fraud claims for latently defective products. It upholds the traditional requirement that a product must actually fail and cause harm for strict liability or negligence actions, preventing claims based solely on the fear of future injury. However, the decision carves out a significant exception for fraud, allowing a cause of action for the emotional distress caused by a manufacturer's intentional concealment of a known defect. This ruling creates a path for recovery for plaintiffs who suffer real emotional harm from learning they were deceived into using a dangerous product, even before that product causes physical injury, thereby holding manufacturers accountable for their representations and disclosures about product safety.
