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Quashie v. Olympus America, Inc.

United States District Court, N.D. Georgia, Atlanta Division

June 19, 2018

Caryl Quashie, Plaintiff,
v.
Olympus America, Inc., et al., Defendants.

          ORDER

          MICHAEL L. BROWN UNITED STATES DISTRICT JUDGE

         Before the Court are Defendant Olympus Corporation's and Defendant Olympus Medical Systems Corporation's Motions to Dismiss for Lack of Personal Jurisdiction (Dkts. 27, 28) and all Defendants' Motions to Dismiss for Failure to State a Claim.[1] (Dkts. 29, 30, 31, 32).

         I. Background

         Plaintiff Caryl Quashie is a resident of the State of Georgia. Dkt. 21 at ¶ 10. She alleges that she suffered a serious bacterial infection because of a defective medical instrument known as a duodenoscope that was used on her during a procedure at Emory Johns Creek Hospital in Johns Creek, Georgia. Id. at ¶¶ 11-12. Plaintiff filed her complaint against Olympus America Inc., Olympus Corporation of the Americas, Olympus Medical Systems Corporation, and Olympus Corporation claiming that each was responsible for the design, testing, manufacturing, marketing, sale, and distribution of the defective duodenoscope. See id. at ¶¶ 8-43. Defendants Olympus Medical Systems Corporation and Olympus Corporation - both incorporated and headquartered in Japan - move to dismiss for lack of personal jurisdiction. (Dkts. 27, 28). All Defendants move to dismiss the Amended Complaint for failure to state a claim. (Dkts. 29, 30, 31, 32).

         The medical device at issue is the Olympus TJF-Q180V Duodenoscope, an endoscope equipped with a camera and light that a doctor can feed through a patient's mouth, throat, and stomach into the duodenum to view the patient's liver, gallbladder, pancreas, and bile ducts. Dkt. 21 at ¶¶ 1, 46-49. Duodenoscopes are reusable from patient to patient, but must be adequately cleaned to avoid infection. Id. at ¶¶ 49-50. Earlier versions of the Olympus duodenoscopes were designed with an open channel into which the doctor inserted a guidewire and catheter. Id. at ¶¶ 51-52. Olympus enclosed this channel on the Q180V by using an O-ring that allegedly prevents the leakage of tissue and fluids into the channel.[2] Id. at ¶¶ 52-57. Plaintiff contends that Olympus used this design change to market, advertise, and promote the Q180V as safer, with a lower risk of microbial infection. See id. at ¶¶ 55-56.

         Plaintiff alleges that the closed-channel design was defective in several ways. She claims, for example, that the O-ring allowed contaminants to leak into the channel. Id. at ¶ 57. She further claims that the design of the Q180V has crevices that are too small to clean or sanitize, but large enough to trap microbial contaminants. Id. at ¶ 59. Finally, Plaintiff claims that Defendants created a reprocessing protocol intended to clean the Q180V between uses that did not, in fact, clean the instrument to prevent the spread of infection from patient to patient. Id. at ¶¶ 61-63. Plaintiff alleges that, because of these defects, the Q180V put patients at an unreasonable increased risk of infection. See, e.g., id. at ¶ 64.

         Plaintiff alleges that, by at least May 2012, Olympus knew the Q180V was defective and increased a patient's risk of infection. Id. at ¶ 67. And, by late 2012, Defendants knew that the Q180V was linked to outbreaks of antibiotic-resistant infections in the United States and Europe. Id. at ¶ 68. According to Plaintiff, the FDA eventually became aware of the risks posed by the Q180V and required Defendants to fix the defects and modify the reprocessing protocol. Id. at ¶ 70. Defendants did so. Id.

         Plaintiff underwent a medical procedure at the Johns Creek hospital on August 7, 2015, during which the doctor allegedly used a Q180V scope. Id. at ¶ 12. Seventeen days later, Plaintiff was hospitalized. She was hospitalized again just three days later, this time diagnosed with an antibiotic-resistant infection. Id. at ¶ 13. Plaintiff claims she got the life-threatening infection from the Q180V that was used during her procedure. Id. Plaintiff asserts claims of (1) negligence (id. at ¶¶ 74-87); (2) strict products liability (id. at ¶¶ 88-120); (3) failure to warn (id. at ¶¶ 121-136); (4) fraudulent misrepresentation (id. at ¶¶ 137-153); (5) fraudulent concealment (id. at ¶¶ 154-169); (6) negligent misrepresentation (id. at ¶¶ 170-181); and (7) fraud and deceit (id. at ¶¶ 182-214).

         Plaintiff filed her Complaint on August 15, 2017 and an Amended Complaint on September 19, 2017. (Dkts. 1, 21). Defendant Olympus Corporation and Olympus Medical Systems Corporation (hereinafter “Olympus Corp.” and “OMSC, ” respectively) filed motions to dismiss under Federal Rule of Civil Procedure 12(b)(2), arguing that they are not subject to personal jurisdiction in this Court. (Dkts. 27, 28). These Defendants - as well as the other two Olympus defendants - also filed motions to dismiss under Fed.R.Civ.P. 12(b)(6). (Dkts. 29, 30, 31, 32). Briefing is now complete and, following oral argument, the Court finds the matter is ripe for resolution.

         II. Analysis

         A. Motions to Dismiss for Lack of Jurisdiction

         This is a diversity case. Before a federal court sitting in such a case can exercise personal jurisdiction over a non-resident defendant, the Court must determine that it has jurisdiction under (1) the long-arm statute of the state in which it sits and (2) the Due Process Clause of the United States Constitution. Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir. 2000). “A plaintiff seeking the exercise of personal jurisdiction over a nonresident defendant bears the initial burden of alleging in the complaint sufficient facts to make out a prima facie case of jurisdiction.” Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1257 (11th Cir. 2010) (quoting United Techs. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009)). If a defendant does not challenge the complaint's jurisdictional allegations through affidavit evidence, the Court “accepts the allegations in the complaint as true for purposes of resolving the jurisdictional issue.” Posner v. Essex Ins. Co., 178 F.3d 1209, 1215 (11th Cir. 1999). In assessing jurisdiction, the Court must draw all reasonable inferences in the plaintiff's favor. Consol. Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir. 2000).

         i. Jurisdiction Under Georgia's Long Arm Statute

         Georgia's long-arm statute provides, in relevant part:

A court of this state may exercise personal jurisdiction over any nonresident or his or her executor or administrator, as to a cause of action arising from any of the acts, omissions, ownership, use, or possession enumerated in this Code section, in the same manner as if he or she were a resident of this state, if in person or through an agent, he or she:
(1) Transacts any business within this state;
(2) Commits a tortious act or omission within this state, except as to a cause of action for defamation of character arising from the act;
(3) Commits a injury in this state caused by an act or omission outside this state if the tortfeasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered within this state . . .

O.C.G.A. § 9-10-91. Georgia law governs the breadth and application of its long-arm statute. Diamond Crystal Brands, Inc., 593 F.3d at 1258. As a result, when applying the Georgia long-arm statute, this Court must construe it as the Georgia Supreme Court would. Id. Jurisdiction under the Georgia long-arm statute is not “coextensive with procedural due process.” Id. Instead, the state statute “imposes independent obligations that a plaintiff must establish for the exercise of personal jurisdiction that are distinct from the demands of due process.” Id. at 1259.

         Here, Plaintiff has alleged that the Japanese Defendants - Olympus Corp. and OMSC - have “transacted and conducted business in the State of Georgia” and have “derived substantial revenue from goods and products used in the State of Georgia.” Dkt. 21 at ¶¶ 32, 33, 39, 40. Plaintiff also alleges that these two defendants are in the “business of creating, designing, researching, testing, manufacturing, labeling, advertising, marketing, promoting, selling and distributing medical equipment, including but not limited to duodenoscopes and the subject Q180V Scopes, into the stream of commerce for use by the public, including the Plaintiff.” Id. at ¶¶ 31, 38. Finally, Plaintiff alleges that Olympus Corp and OMSC “expected or should have expected [their] acts to have ...


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