Superior Court of California

County of Los Angeles

North Central District

Department B

jasper rose,

Plaintiff,

raymond g. tatevossian, et al.,

Defendants.

Case No.: 20STCV31521

Hearing Date: December 30, 2022

[TENTATIVE] order RE:

demurrer

BACKGROUND

A. Allegations

Plaintiff Jasper Rose (“Plaintiff”) alleges that in 2017 and sometime prior, he was being treated for back pain by Defendant Raymond G. Tatevossian, M.D., stemming from a degenerative compression of the thorax spinal discs in his back. Plaintiff alleges that Dr. Tatevossian prescribed opioids to lessen the pain and represented that Plaintiff could get off the pain medication if he utilized a neurostimulator, and that the neurostimulator from Defendant Nevro Corporation (“Nevro”) was safe and approved by the FDA. On September 17, 2017, based on the representations of Dr. Tatevossian and Defendant Greg Khouganian, M.D., Plaintiff went forward with surgery to surgically implant into his back the Nevro neurostimulator model NIPG1500 (serial no. 47909). From September 17, 2017 to December 21, 2018, Dr. Tatevossian and Dr. Khouganian stated that the intensity of the device signal had to be adjusted and that the reason the device did not work was because programming of the device had changed. Plaintiff alleges that unbeknownst to him, Defendants had negligently or wrongfully implanted the device in the thorax area of his back instead of the upper buttock and that Nevro was aware that the device was not giving the desired result.

The third amended complaint (“TAC”), filed July 6, 2022, alleges causes of action for: (1) medical malpractice (negligence) against the Doctor Defendants; (2) negligent misrepresentation against Nevro; and (3) failure to obtain informed consent against Dr. Khouganian.

B. Demurrer on Calendar

On November 18, 2022, Nevro filed a demurrer to the TAC.

On December 13, 2022, Plaintiff filed an opposition brief.

On December 22, 2022, Nevro filed a reply brief.

DISCUSSION

To allege a cause of action for negligent misrepresentation, the requisite elements are: (1) a misrepresentation of a past or existing material fact; (2) without reasonable grounds for believing it to be true; (3) with intent to induce another's reliance on the fact misrepresented; (4) ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed; and (5) damages. (B.L.M. v. Sabo & Deitsch (1997) 55 Cal. App. 4th 823, 834.) Negligent misrepresentation, unlike fraud, does not require knowledge of falsity. (Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 243.) This cause of action is a tort of deceit and the facts constituting each element must be alleged with particularity; the claim cannot be saved by referring to the policy favoring liberal construction of pleadings. (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) Since the claim must be pleaded with particularity, the cause of action based on misrepresentations must allege facts showing how, when, where, to whom, and by what means the misrepresentations were tendered. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

Nevro demurs to the 2^nd cause of action alleged in the TAC, which is the only cause of action alleged against it. Nevro argues that the 2^nd cause of action has 5 separate claims—4 of which are negligent misrepresentation claims and 1 negligent failure-to-warn products liability claim.

In the 4^th cause of action, Plaintiff alleges that Nevro owed certain duties under California and Federal Laws to provide adequate warnings about the risks and dangers of the neurostimulator (TAC, ¶¶26-29), report unanticipated adverse device effects to the FDA (id., ¶¶30-31), continue to monitor and submit subsequent reports on the effect on the users to the FDA (id., ¶¶35-37), failure to maintain proper labeling (id., ¶38), etc. (See TAC, ¶¶26-56.) Nevro claims that the 4 misrepresentations that Plaintiff alleges in the TAC are:

· ¶¶46-47 re MRI compatibility: Nevro’s representative Eddie N led Plaintiff to believe he would be able to undergo MRI exams shortly after implantation approval coming in a couple of months. However, no approval was issued, meaning an improperly done MRI could result in death or serious injury. In August 2017, Eddie N represented that he checked with corporate engineers at Nevro and that they stated the device would be deemed MRI-compatible by December 31, 2017. Other misrepresentations included that the device was absolutely safe in summer of 2017 and that it would greatly reduce Plaintiff’s pain (without informing him of any negative consequences).

· ¶48 re battery dimensions: Nevro’s representative never showed Plaintiff the size of the device until after he agreed to have surgery and a couple days before implantation. Plaintiff asked how large the battery was going to be and Nevro’s representative stated it would be about the size of a quarter or half-dollar. However, the true size of the battery was 2-3 inches. Eddie N deliberately hid the truth of the size of the battery and device.

· ¶¶51-52 re future performance of the device: Eddie N spoke to Plaintiff on the phone and in person and told him that the device would work if they could get the algorithm adjusted correctly. Plaintiff verbally and in writing contacted Eddie N and exchanged texts from November 28, 2017 to August 17, 2019, wherein Plaintiff informed Nevro of his pain and Eddie N suggested many settings and adjustments. Plaintiff had to get steroid spinal injections for pain. Nevro knew of deficiencies but took no actions to alleviate the situation and told Plaintiff that with further adjustment, the device would work and alleviate at least 50% of Plaintiff’s pain.

· ¶59 re efficacy advertisement: Nevro advertised that 4 out of 5 people experience meaningful pain relief, but other studies show that there were multiple adverse events including deaths.

Plaintiff also alleges in the 4^th cause of action that Nevro had a duty to disclose adverse events to healthcare providers and the public to ensure its labeling and products were not misbranded. (TAC, ¶¶42-44.) He also alleges that Nevro was negligent in record keeping and failing to disclose manufacturing flaws or negative events, which increased the risk of injury to patients. (Id., ¶¶53-55.)

With respect to the MRI compatibility and future performance of the device, Nevro argues that misrepresentations about future events are opinions and are not actionable. “‘It is hornbook law that an actionable misrepresentation must be made about past or existing facts; statements regarding future events are merely deemed opinions. [Citations.]’ (San Francisco Design Center Associates v. Portman Companies (1995) 41 Cal.App.4th 29, 43–44, 50 Cal.Rptr.2d 716; see generally 5 Witkin, Summary of Cal. Law, supra, Torts, § 678, pp. 779–780.)” (Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells (2000) 86 Cal.App.4th 303, 309–310.) Here, the representations are sufficiently grounded in facts that would be known only to Nevro that the Court will not sustain the demurrer on this ground, Nevertheless, Plaintiff has not alleged that Nevro made the representations without reasonable ground for believing the statements regarding MRI compatibility and future performance of the device were true. At most, Plaintiff argues in opposition that Nevro knew or should have known that the MRI incompatibility would greatly increase the chances of pain to Plaintiff (TAC, ¶28); however, this allegation does not allege c facts showing that Nevro made misrepresentations without a reasonable basis. Next, Plaintiff has not alleged what damages he suffered. While he alleges that he almost had an MRI that could have caused him injury or death, he makes no allegations that he actually underwent an MRI and suffered injury as a result. Finally, Nevro argues that the negligent misrepresentation claim based on MRI compatibility is time-barred because Plaintiff claimed he was told that the device would be approved as MRI compatible by December 31, 2017. Nevro argues the MRI compatibility claim is time-barred based on a 2-year statute of limitations period. (See Ventura County Nat. Bank v. Macker (1996) 49 Cal.App.4th 1528, 1531 [“Negligent misrepresentation is born of the union of negligence and fraud. If negligence is the mother and misrepresentation the father, it more closely resembles its mother.”]; see CCP § 335.1 [2-year statute of limitations for negligence claim].) Based on the present pleading, which does not justify reasons for excuse or lack of knowledge, Plaintiff would have known of the alleged falsity of the representation in January 2018, yet he did not file the complaint until August 18, 2020, making the claim for MRI compatibility time-barred. Plaintiff’s complaint alleges many ongoing assurances by Nevro, but does not at this point clearly allege a basis to toll the statute of limitations. Thus, as currently alleged, the claim for negligent misrepresentation based on MRI compatibility and future performance of the device lack sufficient facts to state a claim against Nevro.

With respect to the battery dimensions misrepresentation, Nevro argues that Plaintiff has not alleged facts showing that he relied on the representations, such that he would not have accepted the implantation had he known the battery’s actual dimensions. A review of the 2^nd cause of action confirms this. (See TAC, ¶¶48-50.) As currently alleged, the claim for negligent misrepresentation based on battery dimension lacks sufficient facts. It can be inferred from the present allegations that the Plaintiff saw the dimensions of the battery before it was implanted in late 2017. Without further elucidation of this point, it would seem that such a fact would negate the notion that he relied upon representations of a smaller size device when he proceeded with the surgery.

With respect to the efficacy advertisement misrepresentations, Nevro argues although Plaintiff alleges that Nevro advertised that 4 out of 5 people experience meaningful pain relief, he has not alleged that he actually saw the advertisement, when and how he saw the advertisement, whether he relied on the advertisement, etc. As such, the elements of negligent misrepresentation based on efficacy advertisement has not been sufficiently pled.

Lastly, Nevro argues that to the extent Plaintiff is alleging Nevro’s failure to warn, such claims were already dismissed. On April 23, 2021, the Court sustained with leave to amend Nevro’s demurrer to the complaint as to the strict liability (defective product) and product liability (failure to warn) causes of action, finding that they were expressly preempted by the Medical Device Amendments (MDA) to the Food Drug and Cosmetic Act (21 U.S.C. § 360k(a)). Thereafter, on November 5, 2021, the Court sustained without leave to amend the strict liability (defective product) and product liability (failure to warn) causes of action on the same ground of preemption. In opposition, Plaintiff argues that the Court should allow this claim to go forward and that it should not be preempted to the extent that California and federal law are parallel. However, these arguments were already addressed twice in the Court’s prior orders on the demurrers. As such, the Court declines to readdress Plaintiff’s claims for failure to warn against Nevro as that cause of action was already dismissed. To the extent Plaintiff is alleging a cause of action for failure to warn, the demurrer will be sustained without leave to amend.

Based on the foregoing, the demurrer to the 2^nd cause of action is sustained with leave to amend as to the negligent misrepresentation claim. However, to the extent that Plaintiff is alleging Nevro’s failure to warn within the negligent misrepresentation claim, that cause of action was already dismissed by the Court’s November 5, 2021 order on Nevro’s demurrer to the FAC and will not be revived.

CONCLUSION AND ORDER

Defendant Nevro Corporation’s demurrer to the 2^nd cause of action for negligent misrepresentation in the Third Amended Complaint is sustained with leave to amend. The Fourth Amended Complaint shall be filed by January 8, 2023, which is the due date for the amended pleading following Defendant Greg Khouganian, M.D.’s demurrer to the 3^rd cause of action in the Third Amended Complaint.

Defendant shall provide notice of this order.