Royer v. Catholic Medical Center
144 N.H. 330, 741 A.2d 74 (1999)
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Rule of Law:
A healthcare provider that supplies a medical device as an integral part of rendering professional medical services is not considered a 'seller' engaged in the business of selling that product for the purposes of strict products liability.
Facts:
- In September 1991, Ira A. Royer underwent total knee replacement surgery at Catholic Medical Center (CMC).
- As part of the procedure, CMC provided the prosthetic knee that was surgically implanted in Royer.
- By April 1993, Royer began complaining to his doctor that the pain in his knee was worse than before the surgery.
- Doctors subsequently determined that the prosthesis provided by CMC was defective.
- In June 1993, Royer was required to undergo a second operation to remove the defective prosthesis and insert a new one.
Procedural Posture:
- Ira and Rachel Royer first sued the manufacturers of the allegedly defective prosthesis.
- After the lead manufacturer, Dow Corning, filed for bankruptcy, the Royers filed a new writ against Catholic Medical Center (CMC) in the New Hampshire Superior Court (trial court).
- CMC filed a motion to dismiss the claims, arguing it was not a 'seller of goods' under strict liability law.
- The trial court granted CMC's motion to dismiss, finding that as a matter of law, CMC was not in the business of selling prosthetics.
- The Royers, as appellants, appealed the trial court's dismissal to the New Hampshire Supreme Court.
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Issue:
Does a hospital that provides a defective prosthetic knee to a patient during a surgical procedure qualify as a seller 'engaged in the business of selling' that product, making it subject to strict products liability?
Opinions:
Majority - Brock, C.J.
No. A health care provider that supplies a prosthetic device in the course of delivering health care services is not a 'seller' of prosthetic devices for the purposes of strict products liability. The court reasoned that the 'essence of the transaction' between a hospital and a patient is the provision of professional medical services, not the sale of a product. The patient seeks a course of treatment to restore health, and the provision of a device like a prosthesis is merely incidental to that overarching service, even if billed for separately. The court further reasoned that the policy justifications for strict liability—such as the difficulty of proving negligence against a distant manufacturer—do not apply to a healthcare provider in this context. Imposing strict liability on hospitals would also have negative policy consequences, including higher healthcare costs, an unrealistic burden on providers to test thousands of products, and a chilling effect on medical innovation.
Analysis:
This decision aligns New Hampshire with the majority of jurisdictions by adopting the sales-service hybrid distinction for healthcare providers in strict liability cases. It solidifies the principle that strict products liability is narrowly applied to commercial sellers in the chain of distribution, not to professionals who use products while rendering a service. The ruling effectively shields hospitals and other medical providers from strict liability for defective medical devices, compelling plaintiffs to pursue claims against the actual manufacturers or, alternatively, to prove negligence on the part of the provider.
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