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May 3, 2005.

VIRTUA HEALTH, INC. et al., Defendants.

The opinion of the court was delivered by: ROBERT KUGLER, Magistrate Judge


Presently before the Court in this personal injury diversity suit by Nancy Perlman are two motions for summary judgment filed by Sparta Surgical Corporation ("Sparta Surgical") and Sparta Olsen Electrosurgical, Inc. and one motion for summary judgment filed by Sparta Surgical, individually. Because the motions center on the same core facts, the Court will address all three motions in this one Opinion. To avoid confusion, the Court, when discussing Sparta Olsen and Sparta Surgical together, will refer to the two companies as "the Sparta Group." Otherwise, the Court will refer to the companies individually as Sparta Olsen and Sparta Surgical, as appropriate. In sum, the Court will deny each motion for summary judgment. I. INTRODUCTION

Recognizing that many of the following facts are in dispute, the Court nonetheless understands the case as follows. Perlman injured her hand while performing surgery on a patient at Virtua Memorial Hospital Burlington County ("Virtua"). Specifically, the electrosurgical device she was using somehow malfunctioned and electrocuted and burned Perlman's hand. Though she completed the surgery with other equipment, the condition of her hand grew progressively worse and it became apparent that she would suffer permanent injury. One possible cause of the malfunction is that the insulation on the cord attached to the surgical device itself — the 6-B Olsen cord, manufactured by Olsen Electrosurgical, which later became Sparta Olsen — was so deteriorated that it left Perlman exposed to a live current of electricity. Hence, Perlman has brought product liability claims against Sparta Olsen and its parent, Sparta Surgical.

  The motions by Sparta Surgical and Sparta Olsen pertain mostly to the warnings, if any, that accompanied the 6-B cord. The Sparta Group claims it included two warnings with the 6-B cord. In support, the Sparta Group points to the testimony of Susan Dubois, who worked at Olsen and then Sparta Olsen. Dubois deposed that she included two warnings with every 6-B cord that she packaged. One warning read as follows:
TAKE ALL PROPER PRECAUTIONS AS ELECTROSURGERY MAY BE DANGEROUS — Inspect all electrosurgical instruments and accessories prior to their use in order to assure the integrity of the insulation. Double-checking each device can prevent avoidable patient/surgeon "burns".
— Inspect any plugs and wire connections for any cuts, breaks, shorts or loose wires.
— Do not use a device if you observe any chips, cuts or holes in the insulation material
— Avoid unnecessary or prolonged activation. Activate only when touching or immediately next to the point of contact.
— Protect against avoidable injury by establishing a protocol for device examination and maintenance.
  The other warning testified to by Dubois was in the form of a rectangular package label that read "OEI. Olsen Electrosurgical Inc. Reusable/Non-Sterile/Autoclaveable. Up to 20 Uses. 6-B." Contrary to the testimony of Dubois are the testimonies of Glee Baker and Donna Forrest. Both were employees of Virtua at the time of Perlman's injury and both had responsibilities for ordering and tracking surgical equipment such as the 6-B cord. Baker, who received the 6-B cord in its bag but out of the shipping box, deposed that the label on the bag itself did not have any care or sterilization information on it. Baker further deposed that there were not any inserts with the 6-B cord when she received the bag. Forrest, who generally received the 6-B cord in her department before sending it on to Baker, testified that although Virtua followed the sterilization procedures suggested by Sparta Olsen or Olsen, she never saw the warnings Sparta claims were included and never saw any information regarding the maximum number of uses for each cord. Forrest was not with Virtua at the time the 6-B cord that malfunctioned was delivered to Virtua. Rather, Forrest started for Virtua in the year 2000 and was familiar with the care necessary for the operating equipment that Virtua ordered.

  When presented with a warning at her deposition that referred to a minimum number of uses for the 6-B cord, Forrest explained that had she seen such a warning she would have tracked the use of the cord and also would have called Olsen to get clarification. Specifically, Forrest explained that a maximum, not a minimum, is the most important number and that she would need clarification of such a warning so that she could understand how to safely track the cord.*fn1 Forrest did testify, however, that she was aware of the importance of inspecting and sterilizing cables such as the 6-B cord.

  Regarding actual failure of the 6-B cord, Sparta Olsen was aware of at least one occurrence. In particular, an FDA, "Adverse Event Report" described an incident that occurred about November 4, 1999 as follows: "Insulation on the cautery cord split and the drape on the left side of the [patient] caught on fire. Assist surgeon patted down flames. Water was also poured on site. Doctor burned both hands." There is no evidence that Sparta Olsen changed its warnings or product instructions after this report. The only other documented incident of cord failure is, of course, the one at issue in this case. II. SUMMARY JUDGMENT STANDARD

  Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). In deciding whether there is a disputed issue of material fact, a court must view the facts and all reasonable inferences in a light most favorable to the nonmoving party. Id. at 250; Anderson v. Consol. Rail Corp., 297 F.3d 242, 247 (3d Cir. 2002).

  The moving party always "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the `pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving party bears the burden of persuasion at trial, however, "the burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Id. at 325. The non-moving party "may not rest upon the mere allegations or denials of" its pleadings and must present more than just "bare assertions, conclusory allegations or suspicions" to establish the existence of a genuine issue of material of fact. FED. R. CIV. P. 56(e); Jalil v. Avdel Corp., 873 F.2d 701, 707 (3d Cir. 1989) (citation omitted). "A party's failure to make a showing that is `sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial' mandates the entry of summary judgment." Watson v. Eastman Kodak Co., 235 F.3d 851, 857 (3d Cir. 2000) (quoting Celotex, 477 U.S. at 322).


  The Court will deny each of the three motions for summary judgment filed by Sparta Surgical and Sparta Olsen. The Court's reasoning will be set forth as follows. First, the Court will discuss the Sparta Group's argument that its warnings were adequate as a matter of law. Simply put, such issues are normally for the trier of fact to decide and this case does not prevent an opportunity for exception. Second, the Court will address the arguments the Sparta Group has put forward in support of its position that any failure to warn on its part was not the proximate cause of Perlman's injury. The overarching reason for the Court's rejecting them is that whether a particular act, omission, or circumstance was the proximate cause of an injury is a question for the jury. Additionally, the arguments set forth by the Sparta Group are unsupported by New Jersey law.

  Third, the Court will discuss the Sparta Group's two arguments that it had no duty to warn of the dangers associated with the 6-B cord. The Court is not persuaded by either of Sparta Group's arguments on this point. Fourth, the Court will discuss the Sparta Group's contention that the record cannot support an award of punitive damages. Whether punitive damages are appropriate is typically a jury question and a jury could find, based on the present record, that punitive damages are appropriate. Finally, the Court will dispense with two related arguments from Sparta Surgical: (1) that it is not liable for the acts of its subsidiary, Sparta Olsen, and is thus entitled to summary judgment on all claims against it, and (2) that the Complaint does not allege a product liability claim against it. Sparta Surgical has failed to meet its initial burden on summary judgment with respect to the first argument and the allegations set forth in the Complaint clearly allege product liability claims against Sparta Surgical.

  As it pertains to the current motions, Perlman's case against the Sparta Group is that it failed to adequately warn of the dangers associated with the 6-B cord. Perlman's product claims are brought pursuant to New Jersey's Product Liability Act, N.J. Stat. Ann. § 2A:58C-2 ("PLA"). Her burden of proof is not significantly different than any other tort plaintiff. The PLA imposes liability on a manufacturer or a seller for failing to provide adequate warning or instructions with a product that caused a plaintiff's harm. Id.. A failure to provide adequate warnings is often likened to a defect in a product's design. See Butler v. PPG Indus., Inc., 493 A.2d 619, 621 n. 2 (N.J. Super. App. Div. 1985) (citing Feldman v. Lederle Labs., 479 A.2d 374, 385 (N.J. 1984)). To prevail on a claim for failing to adequately warn, a plaintiff must establish that (1) the product did not contain an adequate warning; (2) the inadequacy in the warning existed when the product left the defendant's control; (3) the inadequate warning caused injury to the plaintiff; and (4) the plaintiff was a reasonably foreseeable user of the product. Cf. Zaza v. Marquess & Nell, Inc., 675 A.2d 620, 629 (N.J. 1996).

  A. Adequacy of the Warnings with the 6-B Cord

  The Sparta Group argues that it is entitled to summary judgment on Perlman's failure to warn claim because the warnings accompanying the 6-B cord were adequate as a matter of law. The Court rejects this argument because it is disputed whether there was a warning that reached Virtua in the first place and whether the warning was adequate. The standard by which the adequacy of a warning is to be assessed is governed by the PLA as follows:
An adequate product warning or instruction is one that a reasonably prudent person in the same or similar circumstances would have provided with respect to the danger and that communicates adequate information on the dangers and safe use of the product, taking ...

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