Walter Shuker v. Smith & Nephew PLC

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 16-3785

_______________

WALTER SHUKER; VIVIAN SHUKER,

Appellants

v.

SMITH & NEPHEW, PLC; SMITH & NEPHEW, INC.

_______________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(E.D. Pa. No. 5-13-cv-06158)

Honorable Juan R. Sánchez

_______________

Argued: June 16, 2017

Before: JORDAN, GREENAWAY, JR., and KRAUSE,

Circuit Judges

(Opinion Filed: March 1, 2018)

Robert Astrachan [Argued]

Eric G. Zajac

Zajac & Arias

1835 Market Street, Suite 2626

Philadelphia, PA 19103

Counsel for Appellants

Sara J. Gourley [Argued]

Eugene A. Schoon

Jana D. Wozniak

Sidley Austin

One South Dearborn Street

Chicago, IL 60603

Counsel Appellee Smith & Nephew PLC

Edward W. Gerecke

Joseph H. Lang, Jr. [Argued]

David J. Walz

Carlton Fields Jorden Burt

4221 West Boy Scout Boulevard, Suite 1000

Tampa, FL 33607

David W. O’Quinn

Irwin Fritchie Urquhart & Moore

400 Poydras Street

Texaco Center, Suite 2700

New Orleans, LA 70130

Counsel for Appellee Smith & Nephew, Inc.

2

Lindsay Powell

United States Department of Justice

Appellate Section

950 Pennsylvania Avenue, N.W., Room 7259

Washington, DC 20530

Counsel for Amicus Curiae United States Food and

Drug Administration

_______________

OPINION OF THE COURT

_______________

KRAUSE, Circuit Judge.

With the Medical Device Amendments of 1976,

Congress added comprehensive medical device approval

processes to the Federal Food, Drug, and Cosmetic Act,

prescribing tiers of federal requirements for certain devices

corresponding to the device’s inherent risk level. In exchange

for compliance with the strictest federal mandates, Congress

afforded manufacturers express preemption from state laws

imposing different or additional “safety or effectiveness”

requirements for those devices. 21 U.S.C. § 360k(a)(2). This

case presents an issue of first impression among the Courts of

Appeals: how courts should apply that express preemption

provision to state law tort claims challenging the design and

manufacture of a medical device comprised of multiple

components, some of which are from “Class III” medical

devices subject to federal requirements, Riegel v. Medtronic,

Inc., 552 U.S. 312, 322-23 (2008), and some of which are

from medical devices that carry a different class designation

3

and are not subject to those requirements, see Medtronic, Inc.

v. Lohr, 518 U.S. 470, 475-78, 494-95 (1996).

Because the plaintiffs’ negligence, strict liability, and

breach of implied warranty claims in their Second Amended

Complaint are expressly preempted, we will affirm the

District Court’s ruling in that respect. But because the

plaintiffs adequately pleaded other, non-preempted claims,

and because jurisdictional discovery is warranted with respect

to personal jurisdiction over one of the defendants, we will

reverse the District Court’s dismissal of some of the

plaintiffs’ claims in their Third Amended Complaint, vacate

the District Court’s personal jurisdiction ruling, and remand

for proceedings consistent with this opinion.

I. Background

After Walter Shuker underwent a hip replacement

surgery that resulted in unexpected complications, he and his

wife, Vivian Shuker, brought tort claims against Smith &

Nephew, Inc. (“Smith & Nephew”), the manufacturer of his

hip replacement system, and Smith & Nephew, PLC (“PLC”),

the manufacturer’s parent company. Before turning to the

details of Mr. and Mrs. Shuker’s dispute with Smith &

Nephew and with PLC, we review the relevant statutory and

regulatory scheme for context.

A. Statutory and Regulatory Context

For purposes of federal statutes governing medical

devices, the term “device” is a broad one, encompassing

instruments, machines, implants, and “other similar or

related” articles, and “including any component, part, or

4

accessory” of those articles. 21 U.S.C. § 321(h). “Device”

refers not just to “replacement heart valves, implanted

cerebella stimulators, and pacemaker pulse generators,” but

also to “such devices as elastic bandages and examination

gloves,” as well as to the constituent parts of those items.

Riegel, 552 U.S. at 316-17.

The Federal Food, Drug, and Cosmetic Act did not

originally authorize federal regulation in connection with the

introduction of new medical devices, but, over time,

consumers and the U.S. Food and Drug Administration

(“FDA”) began voicing “mounting . . . concern” about the

unexamined health risks of devices being introduced to the

public. Lohr, 518 U.S. at 475-76. Several states responded to

those concerns by adopting regulatory measures, but

Congress “stepped in” by enacting the Medical Device

Amendments of 1976, “which swept back some state

obligations and imposed a regime of detailed federal

oversight.” Riegel, 552 U.S. at 315-16. As explained in more

detail below, Congress’s approach here, as in other regulatory

contexts,1 was twofold: first, it established a system of federal

regulation over the introduction of new devices, instituting

tiered federal requirements calibrated to each device’s risk

level, and, second, it enacted a provision stating that federal

1

See, e.g., Federal Environmental Pesticide Control

Act of 1972, Pub. L. No. 92-516, sec. 2, §§ 3-13, 24, 86 Stat.

973, 979-92, 997 (codified as amended at 7 U.S.C. §§ 136a-

136k, 136v); Federal Cigarette Labeling and Advertising Act,

Pub. L. No. 89-92, §§ 4-5, 79 Stat. 282, 283 (1965) (codified

as amended at 15 U.S.C. §§ 1333-1334).

5

medical device requirements supersede any different or

additional state safety or effectiveness requirements. See

Medical Device Amendments of 1976, Pub. L. No. 94-295,

sec. 2, §§ 513-516, 521, 90 Stat. 539, 540-60, 562 (codified

as amended at 21 U.S.C. §§ 360c-360f, 360k).

1. Medical Device Approval Procedures

Approval procedures for new medical devices under

the Medical Device Amendments vary depending on a

device’s class designation. The statute divides devices into

three classes “based on the risk that they pose to the public”

and applies more rigorous prerequisites to devices that pose

greater risks. Lohr, 518 U.S. at 476-77; see 21 U.S.C.

§§ 360c(a)(1), 360d, 360e. Because Class I devices pose the

least risks, Class II devices are “more harmful,” and Class III

devices pose the greatest risks, Lohr, 518 U.S. at 477; see 21

U.S.C. § 360c(a)(1), Class III devices receive “the most

federal oversight,” and Class I and II devices receive much

less, Riegel, 552 U.S. at 316-17. We describe the FDA’s

comprehensive approval procedures for Class III devices

before summarizing the more lenient approval procedures for

Class I and Class II devices.

a. Class III Devices: Premarket Approval

Before becoming available to the public, a Class III

device must receive “premarket approval” through a process

by which the device’s manufacturer “provide[s] reasonable

assurance of [the device’s] safety and effectiveness.” 21

U.S.C. § 360c(a)(1)(C). The premarket approval process “is a

rigorous one,” requiring manufacturers to “submit detailed

information regarding the safety and efficacy of their devices,

6

which the FDA then reviews, spending an average of 1,200

hours on each submission.” Lohr, 518 U.S. at 477.

Submissions are typically “multivolume

application[s],” and thus the time devoted by the FDA to

reviewing manufacturers’ premarket approval submissions is,

unsurprisingly, substantial. Riegel, 552 U.S. at 317-18.

Pursuant to the Medical Device Amendments, premarket

approval applications must include, among other things, “a

full statement of the device’s components, ingredients, and

properties,” id. at 318 (internal quotation marks omitted); see

21 U.S.C. § 360e(c)(1)(B), which the FDA may choose to

subject to “performance standards,” 21 U.S.C. § 360d(a)(1),

(a)(2)(B)(i). And they likewise must provide “a specimen of

the proposed labeling,” which shall specify “conditions of

use” under which the FDA will evaluate the device’s safety

and effectiveness. Riegel, 552 U.S. at 318; see 21 U.S.C.

§ 360e(c)(1)(F). The FDA must also determine that the

labeling is not false or misleading before granting premarket

approval to the device. Riegel, 552 U.S. at 318; see 21 U.S.C.

§ 360e(d)(1)(A).

After reviewing an application, the FDA grants

premarket approval only if, based on a weighing of “any

probable benefit to health from the use of the device against

any probable risk of injury or illness from such use,” it finds

“there is a ‘reasonable assurance’ of the device’s ‘safety and

effectiveness.’” Riegel, 552 U.S. at 318 (quoting 21 U.S.C.

§§ 360c(a)(2)(C), 360e(d)). Once approved, the device may

be manufactured, advertised, and distributed to the public, but

those marketing activities may not be done in a manner

“inconsistent with . . . the [premarket] approval order for the

device.” 21 C.F.R. § 814.80. To that end, a manufacturer

7

wishing to make “incremental change[s]” that affect the

device’s safety and effectiveness must submit a supplemental

premarket approval application. 21 U.S.C. § 360e(d)(5);

accord Riegel, 552 U.S. at 319.

Notwithstanding the strictures imposed on

manufacturers, the Act allows more leeway to health care

providers. Even after the FDA grants premarket approval to a

medical device or to any supplements, it does not “limit or

interfere with the authority of a health care practitioner to

prescribe or administer any legally marketed device to a

patient . . . .” 21 U.S.C. § 396. And physicians’ ability to

prescribe legally marketed devices as they see fit means that

“‘off-label’ usage,” or use “for some other purpose than that

for which [a device] has been approved by the FDA,” is “an

accepted and necessary corollary of the FDA’s mission to

regulate . . . without directly interfering with the practice of

medicine.” Buckman Co. v. Plaintiffs’ Legal Comm., 531

U.S. 341, 350 (2001). Although the statute thus expressly

contemplates the possibility that physicians may use a Class

III device for unapproved purposes, a manufacturer may not

vary the design or manufacture of the pre-approved device,

even in anticipation of such uses. See 21 U.S.C. § 396.

b. Class I and Class II Devices: § 510(k)

Approval

In contrast to the rigorous premarket approval process

for Class III devices, Class I and Class II devices are subject

to “a limited form of review” set forth at 21 U.S.C. § 360(k)

and known as the “§ 510(k) process” (reflecting the number

of the relevant section in the Federal Food, Drug, and

Cosmetic Act). Lohr, 518 U.S. at 478. Compared to a

8

premarket approval application, compliance with the § 510(k)

process requires a far less exhaustive submission. See 21

U.S.C. § 360(k); 21 C.F.R. § 807.87. In many cases, § 510(k)

approval rests not on proof of the device’s safety, but merely

on a finding that a device is “substantially equivalent” to a

preexisting approved medical device. Lohr, 518 U.S. at 478.

A § 510(k) approval thus provides comparatively “little

protection to the public.” Id. at 493.

2. Express Preemption Provision

The Medical Device Amendments’ comprehensive and

tiered approval procedures for medical devices leave only

limited room for additional state regulation, especially

considering the statute contains a broad express preemption

provision. This provision proclaims that “no State . . . may

establish or continue in effect with respect to a device . . . any

requirement” that “is different from, or in addition to,” any

federal requirement and that relates either “to the safety or

effectiveness of the device” or “to any other matter” included

in a federal requirement applicable to the device. 21 U.S.C.

§ 360k(a).2 The statute thus preempts any state requirement

that has “the effect of establishing a substantive requirement

for [the] specific device” in question that relates to safety,

2

The express preemption provision includes an

exception for state requirements that the Secretary of Health

and Human Services has exempted from preemption by

regulation, see 21 U.S.C. § 360k(b), but because the Shukers’

common law tort claims are not included within the

Secretary’s regulatory exemptions, see 21 C.F.R. §§ 808.53

to .101, that exception is not pertinent here.

9

effectiveness, or “any other matter” that forms a federal

requirement, so long as the state requirement is “different

from, or in addition to,” the federal mandate. Lohr, 518 U.S.

at 499-500 (quoting 21 U.S.C. § 360k(a); 21 C.F.R.

§ 808.1(d)(6)(ii)). The “overarching concern” behind this

provision is “that pre-emption occur only where a particular

state requirement threatens to interfere with a specific federal

interest.” Id. at 500.

Application of the express preemption provision tracks

the Medical Device Amendments’ tiered statutory scheme for

medical device approvals. Because manufacturers of Class I

and Class II devices receive only § 510(k) approval and

emerge from the approval process with no safety review

specific to those devices, manufacturers do not receive the

benefit of express preemption, see Lohr, 518 U.S. at 492-94.

In contrast, because a manufacturer of a Class III device must

receive premarket approval, clear “federal safety review” that

“is specific to [the] individual device[],” and thereby satisfy

federal requirements applicable to the device, the

manufacturer of that Class III device receives express

preemption protections from state requirements that are

“different from, or in addition to,” the federal requirements

imposed on the device through the premarket approval

process. Riegel, 552 U.S. at 322-23 (quoting 21 U.S.C.

§ 360k(a)(1)). This protection inures to manufacturers

regardless of how a device is used by third parties. See

21 U.S.C. § 396 (contemplating off-label uses of devices by

physicians); see also Caplinger v. Medtronic, Inc., 784 F.3d

1335, 1343-45 (10th Cir. 2015) (holding that the fact that a

claim alleges off-label use does not “insulate” it from express

preemption).

10

But state laws are not shut out entirely. Even for Class

III devices, the Medical Device Amendments’ express

preemption provision does not reach “parallel” claims, i.e.,

claims premised on state requirements that merely incorporate

applicable federal requirements and therefore are not

“different from, or in addition to,” federal requirements.

Lohr, 518 U.S. at 494-95 (citing 21 U.S.C. § 360k(a)(1));

accord Riegel, 552 U.S. at 330.

The question of first impression we confront today3

arises at the intersection of these different classes of devices

with their different approval schemes: How do we apply the

Medical Device Amendments’ express preemption provision

to a “hybrid system,” i.e., a system that is itself a “device” but

that is comprised of Class II components in addition to one or

more Class III components?4 We recount the facts of the

parties’ dispute before turning to our answer.

3

Cf. Mink v. Smith & Nephew, Inc., 860 F.3d 1319,

1323, 1327-33 (11th Cir. 2017) (addressing preemption as

applied to a device comprised of only Class III components,

not as applied to a device comprised of a Class III component

and Class II components); Spellman v. Smith & Nephew, Inc.,

No. 16-8080, 2016 WL 5364206, at *1, *3-4 (D. Ariz. Sept.

26, 2016) (same), appeal docketed, No. 17-15351 (9th Cir.

Feb. 28, 2017).

4

Here, and when not quoting another source, we use

the term “component” to mean, collectively, “component,

part, or accessory,” 21 U.S.C. § 321(h), to the extent there are

any differences between the three. By “system” we mean, in

Mr. Shuker’s case, the entire hip replacement “device”

11

B. Factual and Procedural History5

Mr. Shuker underwent total hip replacement surgery in

2009. The hip replacement system “implant[ed]” was

regulated as a “device” under the Federal Food, Drug, and

Cosmetic Act, 21 U.S.C. § 321(h), but was comprised of

multiple components, all manufactured by Smith & Nephew.

Some components replaced the top of Mr. Shuker’s thighbone

(or femur) with a metal head, metal sleeve, and a stem

connecting the metal head to the thighbone, while another

component rested on his hip socket (or acetabulum). These

components were all Class II devices approved through the

relatively lenient § 510(k) process. A final component, the

“R3 metal liner,” mediated the connection between his hip

socket and his thighbone and was seated atop the hip socket

component, App. 42; unlike the other components, the liner

underwent the rigorous premarket approval process as a

supplemental component for a separate Smith & Nephew

implanted in his hip, including all of its constituent

components. Id.

5

The factual summary below draws from record

evidence that we consider in reviewing the District Court’s

summary judgment ruling regarding preemption, and its

dismissal of PLC for lack of personal jurisdiction. But we

consider only the complaint, its exhibits, “undisputedly

authentic document[s]” upon which the plaintiffs’ claims are

based, and the public record in reviewing the District Court’s

dismissal of the Shukers’ Third Amended Complaint for

failure to state a claim. Pension Ben. Guar. Corp. v. White

Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).

12

Class III device, the Birmingham Hip Resurfacing System.

Shuker v. Smith & Nephew PLC, No. 13-6158, 2015 WL

1475368, at *2-3 (E.D. Pa. Mar. 31, 2015). Together with the

metal head and metal head sleeve replacing the top of

Mr. Shuker’s thighbone, the metal liner created a “metal-on-

metal articulation” at Mr. Shuker’s hip socket. Id. at *3.

As is customary, the FDA’s premarket approval

requirements for the liner extended to the liner’s

accompanying labeling, which was required to state that “the

R3 metal liner [was] intended for use as part of the

[Birmingham Hip Resurfacing System] only” and that “the

R3 metal liner must be replaced with an R3 poly[ethylene]

liner” if the Birmingham Hip Resurfacing System were

abandoned or later revised in favor of a total hip replacement

system. Id. at *2. Thus, as the parties agree, see Appellant’s

Br. 6-7; Appellee Smith & Nephew’s Br. 6, because the R3

metal liner’s labeling reflected that the FDA had not approved

the liner for use outside of the Birmingham Hip Resurfacing

System or in a total hip replacement system, Smith &

Nephew’s promotional materials marketing the R3 metal liner

as an “option for its R3 Acetabular System,” a separate hip

system, App. 14, constituted “off-label promotion,” Shuker,

2015 WL 1475368, at *13, and the liner’s use in Mr. Shuker’s

total hip replacement system constituted an “off-label” use,

Buckman Co., 531 U.S. at 350.

About twenty-one months after his hip replacement

surgery, Mr. Shuker “began developing increasing pain and

discomfort in his buttocks, groin, and thigh, limiting his daily

activities.” Shuker, 2015 WL 1475368, at *3. His surgeon

performed an aspiration procedure that revealed “metallic

debris” within Mr. Shuker’s body, indicating that

13

“Mr. Shuker’s pain was caused by metal sensitivity due to the

degeneration of the metal-on-metal articulation,” which

needed to be replaced to relieve his pain. Id. Mr. Shuker

then underwent revision surgery to replace the R3 metal liner,

followed by additional surgeries to remove and replace his

entire hip replacement system when the first revision surgery

did not relieve his pain.

Seeking to hold Smith & Nephew and its parent

company PLC liable for Mr. Shuker’s hip replacement

complications and for Mrs. Shuker’s loss of consortium, the

Shukers filed suit, bringing various common law claims, and

later adding claims based on violations of federal law.6 PLC

moved for dismissal from the case for lack of personal

jurisdiction, and Smith & Nephew moved for summary

judgment on some of the Shukers’ claims, asserting that the

Medical Device Amendments expressly preempted those

claims.

Without an opinion but with a lengthy explanatory

footnote accompanying its order, the District Court granted

PLC’s motion to dismiss. In a separate order and opinion, the

District Court granted summary judgment in favor of Smith &

Nephew, holding as relevant to this appeal that the

negligence, strict liability, and breach of implied warranty

claims in the Shukers’ Second Amended Complaint were

6

The Shukers originally filed suit in Pennsylvania

state court, but Smith & Nephew and PLC removed the case

to federal court. The District Court had subject-matter

jurisdiction pursuant to 28 U.S.C. § 1332(a).

14

preempted because “the heart of each of [the Shukers’]

claims” challenged the safety and effectiveness of the

R3 metal liner, which had received premarket approval, was

therefore subject to federal requirements, and, hence, gave

Smith & Nephew the benefit of express preemption. Shuker,

2015 WL 1475368, at *6-11, *17. The District Court also

granted the Shukers the opportunity to amend their complaint

against Smith & Nephew as to their non-preempted claims

alleging off-label promotion in violation of federal law, and

the Shukers proceeded to file a Third Amended Complaint.

Ultimately, however, the District Court dismissed that

complaint for failure to state a claim. See Shuker v. Smith &

Nephew PLC, 211 F. Supp. 3d 695, 700-05 (E.D. Pa. 2016).

This appeal followed.7

II. Discussion

We resolve the questions presented by this case in

three parts. First, we consider whether the negligence, strict

liability, and breach of implied warranty claims in the

Shukers’ Second Amended Complaint are expressly

preempted. See Section II.A, infra. Second, we review the

District Court’s decision to dismiss the claims in the Shukers’

Third Amended Complaint with prejudice. See Section II.B,

infra. Finally, we consider personal jurisdiction as to PLC

and whether jurisdictional discovery is warranted. See

Section II.C, infra.

7

We have jurisdiction pursuant to 28 U.S.C. § 1291.

15

A. Preemption

The District Court granted summary judgment to

Smith & Nephew on express preemption grounds with respect

to the negligence, strict liability, and breach of implied

warranty claims in the Shukers’ Second Amended Complaint.

We review that grant de novo, Steele v. Cicchi, 855 F.3d 494,

500 (3d Cir. 2017), and will affirm if Smith & Nephew has

established that “there is no genuine dispute as to any

material fact” and, viewing the facts in the light most

favorable to plaintiffs, Smith & Nephew “is entitled to

judgment as a matter of law,” Fed. R. Civ. P. 56(a); see also

Steele, 855 F.3d at 500.

Here, that decision turns on whether the Medical

Device Amendments expressly preempt the Shukers’

negligence, strict liability, and breach of implied warranty

claims in their Second Amended Complaint—the primary

issue addressed in the parties’ original briefing, as well as

their supplemental briefing and an amicus brief filed by the

FDA at the request of the Court.8 We undertake this analysis

8

While the supplemental briefing and the FDA’s

submission address implied preemption as well as express

preemption, we confine our analysis to express preemption

today. The Medical Device Amendments can preempt state

common law claims against medical device manufacturers

both expressly and impliedly, see Buckman Co., 531 U.S. at

348 & n.2, and the existence of an express preemption

provision like § 360k(a), as the FDA points out, “does not

ordinarily alter the normal operation of implied-preemption

16

by (1) reviewing the two-step framework for determining

whether a claim concerning a “device” is preempted under the

Amendments’ express preemption provision, (2) determining

what constitutes the “device” when a system is comprised of

components with mixed-class designations, and (3) applying

the framework applicable to that “device” to the facts of this

case.

1. Principles Governing Express Preemption

Under the Medical Device Amendments

In products liability actions like this one, the Supreme

Court has specified that “the historic primacy of state

regulation of matters of health and safety” requires us to

apply the “presumption against the pre-emption of state

principles.” FDA Amicus Br. 13. However, because Smith

& Nephew raised only express preemption arguments before

the District Court, we conclude implied preemption

arguments are not properly before us on appeal, see Holk v.

Snapple Beverage Corp., 575 F.3d 329, 335-36 (3d Cir.

2009). Even if they were, because, e.g., Smith & Nephew

preserved its preemption defense and did not “explicitly

disclaim[] the applicability of [implied] preemption,” Holk,

575 F.3d at 336, we would still begin with (and here, would

end with) express preemption, for the statute’s plain wording

“necessarily contains the best evidence of Congress’

preemptive intent,” Chamber of Commerce of the U.S. v.

Whiting, 563 U.S. 582, 594 (2011) (quoting CSX Transp., Inc.

v. Easterwood, 507 U.S. 658, 664 (1993)).

17

police power regulations.”9 Lohr, 518 U.S. at 485 (quoting

Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 518 (1992));

accord Wyeth v. Levine, 555 U.S. 555, 565 & n.3 (2009). We

therefore begin with the principle that “the historic police

powers of the States,” such as their power to regulate “matters

of health and safety,” are “not to be superseded” unless

preemption “was the clear and manifest purpose of

Congress.” Lohr, 518 U.S. at 485 (quoting Rice v. Santa Fe

Elevator Corp., 331 U.S. 218, 230 (1947)). Congress’s intent

is our “ultimate touchstone,” and “we look to the language,

structure, and purpose of the relevant statutory and regulatory

scheme to develop a reasoned understanding of the way in

which Congress intended the statute and its surrounding

9

We disagree with Smith & Nephew’s assertion that

“[a]ny presumption against express preemption no longer

exists.” Appellee Smith & Nephew’s Br. 21. Smith &

Nephew relies on a Supreme Court case that addressed

whether the federal Bankruptcy Code’s express preemption

provision preempts a Puerto Rico statute, see Puerto Rico v.

Franklin Cal. Tax-Free Tr., 136 S. Ct. 1938, 1945-46 (2016)

(discussing 11 U.S.C. § 903(1)), but that case did not address

preemption of claims invoking “historic . . . state regulation

of matters of health and safety,” such as the products liability

claims at issue here, Lohr, 518 U.S. at 485. As that case does

not “directly control[]” here, we “leav[e] to [the Supreme

Court] the prerogative of overruling its own decisions,”

Agostini v. Felton, 521 U.S. 203, 237 (1997), and continue to

apply the presumption against preemption to claims, like

those in this case, that invoke “the historic police powers of

the States,” Lohr, 518 U.S. at 485.

18

regulatory scheme to affect business, consumers, and the

law.” Sikkelee v. Precision Airmotive Corp., 822 F.3d 680,

687 (3d Cir. 2016) (internal quotation marks omitted)

(quoting Wyeth, 555 U.S. at 565; Lohr, 518 U.S. at 486).

The express preemption provision of the Medical

Device Amendments states that “no State or political

subdivision of a State may establish or continue in effect with

respect to a device. . . any requirement” that “is different

from, or in addition to, any requirement applicable under [the

Federal Food, Drug, and Cosmetic Act]” and that relates

either “to the safety or effectiveness of the device” or “to any

other matter included in a requirement applicable to the

device under [the Act].” 21 U.S.C. § 360k(a). Based on this

statutory language, the Supreme Court, in Riegel v.

Medtronic, Inc., prescribed a two-step framework for

determining whether a state law cause of action is preempted.

552 U.S. at 321-22. First, we ask “whether the Federal

Government has established requirements applicable” to the

specific “device” at issue. Id. at 321. If it has, then, second,

we ask “whether the [plaintiffs’] claims are based upon [state]

requirements with respect to the device that are ‘different

from, or in addition to,’ the federal ones, and that relate to

safety and effectiveness.” Id. at 321-22 (quoting 21 U.S.C.

§ 360k(a)). If we answer both questions in the affirmative,

then the plaintiffs’ claims are expressly preempted. See id. at

321-30. If, instead, the answer to the second question is no,

then the “state duties in such a case ‘parallel,’ rather than add

to, federal requirements,” and the claims are not preempted.

Id. at 330 (quoting Lohr, 518 U.S. at 495).

The first step of Riegel’s two-step framework,

however, presumes agreement as to the “device” to which it

19

applies. 21 U.S.C. § 360k(a). Therefore, before a court can

apply the test, it must address a threshold question: What

device is the subject of the “federal requirements”? Riegel,

552 U.S. at 321. This question, while ancillary when each

component of a system receives the same review by the FDA,

is central when evaluating hybrid systems, like the one

implanted in Mr. Shuker’s hip that contain both Class II and

Class III components. In that situation, neither the statute nor

the relevant guidance from the Supreme Court, see Riegel,

552 U.S. at 321, specifies how we should apply the Riegel

test. Do we analyze express preemption at the level of the

system or the component? That is the problem we confront

today.

2. Determining the Device at Issue

The Shukers urge on appeal that the “device” at issue

is the entire hybrid system itself. Any other determination,

they argue, would produce unfairness and incongruity by

according preemption even when a component is used off-

label in a manner “that was never studied or approved by the

FDA,” Appellant’s Br. 23 (capitalization omitted), merely

because that component part was pre-approved for use with

another system. Appellees, seconded by the FDA, counter

that analysis at the component level is the only way to

harmonize various provisions of the statute. We agree with

Appellees for three reasons.

First, analysis at the component level finds support in

the text of the statute and regulations. The Federal Food,

Drug, and Cosmetic Act defines “device” to mean not simply

a finished “instrument, apparatus, implement, machine,

contrivance, implant, in vitro reagent, or other similar or

20

related article,” but also “any component, part, or accessory”

of that article. 21 U.S.C. § 321(h). Codified in 1938 with the

original Act, this definition has always provided that the term

“device” includes “components, parts, and accessories,”

mirroring the definition for “drug” immediately preceding it,

which was and is defined to include “articles intended for use

as a component” of a drug. Federal Food, Drug, and

Cosmetic Act, Pub. L. No. 75-717, § 201(g), (h), 52 Stat.

1040, 1041 (1938) (codified as amended at 21 U.S.C.

§ 321(g), (h)). The implementing regulations, at least for

quality control purposes, also describe “[c]omponent” to

include “any raw material, substance, piece, part, software,

firmware, labeling, or assembly which is intended to be

included as part of the finished, packaged, and labeled

device.” 21 C.F.R. § 820.3(c).10

10

We note that neither the definition of “device,” nor

the express preemption provision, makes any exception for

instances where components that received premarket approval

are used with components that did not receive such approval.

See 21 U.S.C. §§ 321(h), 360k(a). That is, no exception

applies where components that confer express preemption

protections (by virtue of being subject to federal requirements

imposed through the premarket approval process) are used

with components that do not. And we cannot ourselves imply

such an exception, for “[w]here Congress explicitly

enumerates certain exceptions to a general prohibition,”

United States v. Smith, 499 U.S. 160, 167 (1991), as it has

done here in the statutory section containing the Medical

Device Amendments’ express preemption provision, see 21

U.S.C. § 360k(b); note 2, supra, then “additional exceptions

21

Second, the Act’s provision for off-label use supports a

component-level analysis. While the premarket approval

process requires strict manufacturer compliance with respect

to a device’s labeling and advertising, see 21 U.S.C.

§§ 352(q)-(r), 360e(d)(1)(A), the statutory scheme

contemplates that physicians will prescribe or administer

components outside of a system with which the FDA

approved their use. As noted, off-label uses of devices (and

components) are “an accepted and necessary corollary of the

FDA’s mission to regulate in this area without directly

interfering with the practice of medicine.” Buckman Co., 531

U.S. at 350. Put differently, the regulatory landscape

contemplates that devices may be broken down into

component parts and individual components used separately

by third parties. Even then, however, premarket approval

requirements “apply equally” to the components, as

manufacturers “generally may not deviate from the

requirements imposed through premarket approval regardless

of how [a component] is used.” FDA Amicus Br. 8; see also

21 U.S.C. § 396. Congress thereby has evinced an intent not

to “discourage[]” device manufacturers “from seeking . . .

approval of devices with potentially beneficial off-label uses

for fear that such use might expose the manufacturer . . . to

unpredictable civil liability,” Buckman Co., 531 U.S. at 350,

and instead to “protect[] manufacturers that have complied

are not to be implied, in the absence of evidence of a contrary

legislative intent,” Smith, 499 U.S. at 167.

22

with detailed federal requirements from being subject[] to

liability under state law for doing what federal law required.”

FDA Amicus Br. 9. It is not surprising, then, that several

courts have held that when a single component of a Class III

device is used on its own, rather than in the premarket-

approved system, express preemption adheres to the

individual premarket-approved component. See, e.g., Arvizu

v. Medtronic Inc., 41 F. Supp. 3d 783, 790 (D. Ariz. 2014);

Martin v. Medtronic, Inc., 32 F. Supp. 3d 1026, 1036 (D.

Ariz. 2014); Beavers-Gabriel v. Medtronic, Inc., 15 F. Supp.

3d 1021, 1035 (D. Haw. 2014); Houston v. Medtronic, Inc.,

No. 13-1679, 2014 WL 1364455, at *4 (C.D. Cal. Apr. 2,

2014).

Third, the FDA, “the federal agency to which

Congress has delegated its authority to implement provisions

of the Act,” Lohr, 518 U.S. at 496, also takes the position that

because “the definition of ‘device’ encompasses . . .

premarket-approved . . . system[s], and each of the

‘component[s], part[s], [and] accessor[ies]’ of these devices,”

the relevant device for preemption purposes must be

evaluated at the component level. FDA Amicus Br. 7 (all but

first alteration in original) (quoting 21 U.S.C. § 321(h)).11

11

We “do not defer to an agency’s view” concerning

preemption, but such views as presented in an amicus brief

are “‘entitled to respect’ . . . to the extent [they] ha[ve] the

‘power to persuade.’” Sikkelee, 822 F.3d at 693-94

(alterations in original) (quoting Gonzalez v. Oregon, 546

U.S. 243, 255-56 (2006)). See also Skidmore v. Swift & Co.,

323 U.S. 134, 140 (1944)).

23

And, contrary to the Shukers’ argument that “[t]he FDA

reviews . . . systems, not individual . . . components,”

Appellant’s Br. 17, the Medical Device Amendments direct

the FDA, “where necessary to provide reasonable assurance

of . . . safe and effective performance,” to establish

performance standards for device components, 21 U.S.C.

§ 360d(a)(2)(B)(i), while the FDA’s regulations require

manufacturers of finished devices, if “deviations from device

specifications could occur as a result of the manufacturing

process,” to monitor and control “component . . .

characteristics during production.” 21 C.F.R. § 820.70(a)(2).

What’s more, just like manufacturers of finished devices,

manufacturers of “components or accessories” are subject to

device registration and reporting requirements. Id.

§§ 803.3(l)(3), 806.2(h)(3), 807.20(a)(6); see id. §§ 803.50,

806.10. See generally 21 U.S.C. §§ 360(b), (j), 360i(a)(1),

(g)(1).

Taken together, the statutory definition of “device,”

the treatment of off-label uses, and the guidance of the FDA

all counsel in favor of scrutinizing hybrid systems at the

component-level. In that circumstance, § 360k(a) preempts

any state law “with respect to” a Class III component that is

“different from, or in addition to” a federal requirement and

that relates either “to the safety or effectiveness of the device”

or “to any other matter included in a requirement applicable

to the device under [the Act].” 21 U.S.C. § 360k(a). And the

Riegel test is properly framed at Step One as “whether the

Federal Government has established requirements applicable”

to a component of the hybrid system, and at Step Two,

“whether the [plaintiffs’] claims are based upon [state]

requirements with respect to [that component] that are

‘different from, or in addition to,’ the federal ones, and that

24

relate to safety and effectiveness.” Riegel, 552 U.S. at 321-22

(quoting 21 U.S.C. § 360k(a)). This formulation of Riegel’s

test for hybrid systems comports with the “‘most basic’

interpretive rule that a statute is to be construed so that effect

is given to all its provisions.” Doe v. Mercy Catholic Med.

Ctr., 850 F.3d 545, 555 (3d Cir. 2017) (quoting Corley v.

United States, 556 U.S. 303, 314 (2009)).12

3. Application to the Shukers’ Claims

We turn next to the application of this test to the

Shukers’ claims and conclude that both prongs of Riegel are

satisfied. At Step One, the R3 metal liner is a Class III

component that received premarket approval as part of the

Birmingham Hip Resurfacing System; and that premarket

approval “imposed requirements on the liner with respect to

its composition, dimensions, and labeling, among other

specifications.” FDA Amicus Br. 7. See also App. 470-473;

Shuker, 2015 WL 1475368, at *2-3.

12

Our decision accords with those of the district courts

that have grappled with the Act’s definition of “device” while

addressing how the Medical Device Amendments’ express

preemption provision should apply to devices with

components of mixed-class designations. See, e.g., Nagel v.

Smith & Nephew, Inc., No. 15-0927, 2016 WL 4098715, at

*4-5 (D. Conn. July 28, 2016); Hafer v. Medtronic, Inc., 99 F.

Supp. 3d 844, 858 (W.D. Tenn. 2015); Bertini v. Smith &

Nephew, Inc., 8 F. Supp. 3d 246, 255 (E.D.N.Y. 2014); Simon

v. Smith & Nephew, Inc., 990 F. Supp. 2d 395, 405-406

(S.D.N.Y. 2013).

25

Riegel Step Two is also met, given the different

requirements that would follow from imposing liability for

the tort claims at issue; that is, the negligence, strict liability,

and breach of implied warranty claims of the Second

Amended Complaint.13 The express preemption provision

forecloses claims based on “violations of common-law

duties” to the extent that they impose more than “parallel

federal requirements,” Lohr, 518 U.S. at 495. The Shukers’

claims, however, would impose requirements “with respect

to” the R3 metal liner that are “different from, or in addition

to,” federal ones, 21 U.S.C. § 360k(a)), because, as the

District Court correctly observed, “the heart of each of [the

Shukers’] claims” challenged the safety and effectiveness of

the R3 metal liner, Shuker, 2015 WL 1475368, at *11.

Neither in the District Court nor on appeal have the

Shukers identified any freestanding defect with the Class II

device or the R3 Acetabular System per se. To the contrary,

despite conclusory allegations that the R3 System was

defective with and without the R3 metal liner that would

foreseeably be used with it, the Shukers’ negligence, strict

liability and breach of implied warranty claims rest on the

13

Although the Shukers separately asserted ostensibly

parallel claims based on violations of federal law in their

Second Amended Complaint, they do not attempt to revive

those claims on appeal, resting instead on the amended claims

alleging off-label promotion and asserted in their Third

Amended Complaint, which we address later in this opinion,

see infra Part II.B.

26

premise that the R3 System was defective only because it was

used with the R3 metal liner. See Tr. of Oral Arg. 79:13-18

(identifying that the defects arose when “all of the

components” are used “in tandem”); id. at 7:19-22

(explaining “[y]ou can’t have the debris coming out without

the conjunction of the Class 2 and Class 3 components

coming together. It’s that friction that causes it. So it would

be irresponsible to say . . . [that] only the liner caused the

metal debris or only the cup caused the metal debris.”).14

14

Some district courts, in evaluating complaints that

allege “injuries stemming from the combination of [premarket

and non-premarket] component parts,” have declined to apply

express preemption to claims arising from the interaction of

these mixed class components because “the combination of

component[s]” itself was not subject to premarket approval.

Lafountain v. Smith & Nephew, No. 14-1598, 2016 WL

3919796, at *5-6 (D. Conn. 2015); see also Huskey v.

Ethicon, 29 F. Supp. 3d 736, 751 (S.D. W. Va. 2014). These

courts “decline[d] to separate the device into its component

parts to create express preemption.” Lafountain, 2016 WL

3919796 at *6. But for the reasons we have explained, see

Section II.A.2, supra, we think the better reading of the

statute is to separate a device into its component parts. See 21

U.S.C. § 321(h). Express preemption therefore applies to a

so-called “combination” claim, like any other, so long as the

claims are based on state requirements “with respect to” a

device that are “different from, or in addition to” federal

requirements. 21 U.S.C. § 360k(a).

27

Even the failure-to-warn allegations embedded in the

Shukers’ negligence claim would impose different

requirements on the R3 metal liner, as the Shukers seek to

impose liability because defendants did not accompany their

product with proper warnings regarding the risks associated

with a premarket-approved device, the R3 metal liner. But

the FDA already imposed device-specific labeling

requirements on the liner, and thus, as the FDA itself points

out in its amicus submission, “a state warning requirement

that applie[s] specifically to the use of the R3 system’s

components with the R3 metal liner in particular” is

preempted. FDA Amicus Br. 11 n. 3.15

In sum, the negligence, strict liability, and breach of

implied warranty claims asserted in the Second Amended

15

This is not to say that all failure-to-warn allegations

as to hybrid systems would be preempted. On the contrary, as

the FDA notes, a claim premised on a state requirement that

the R3 System carry a warning against “use with metal

liners,” or that it only be used with polyethylene liners, for

example, “would not implicate § 360k(a)” because “the FDA

did not impose device-specific labeling requirements on the

R3 system components.” FDA Amicus Br. 11. But such a

claim is not before us, and to the extent the Shukers take issue

with the off-label use of the R3 liner as opposed to the

promotion of that use, their recourse is in a malpractice claim

against the physician that prescribed the off-label use, not in a

products liability claim against the Appellees. See generally,

e.g., Pa. R. Civ. P. 1042.1 (discussing professional liability

actions in Pennsylvania); Thierfelder v. Wolfert, 52 A.3d

1251, 1253-54, 1261, 1264 (Pa. 2012) (same).

28

Complaint, would impose non-parallel state law requirements

and are therefore expressly preempted. We will affirm the

District Court’s order in that respect.

B. Claims in the Third Amended Complaint

We turn next to the Shukers’ contention that the

District Court erred in holding that their off-label promotion

claims in the Third Amended Complaint failed to state a

claim. We exercise plenary review over the District Court’s

dismissal of those claims, see Santiago v. Warminster Twp.,

629 F.3d 121, 128 (3d Cir. 2010), and thus we will affirm

only if the Shukers did not plead “factual content that allows

the court to draw the reasonable inference that [Smith &

Nephew] is liable for the misconduct alleged,” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009).

The Shukers’ Third Amended Complaint included

three state law tort claims based on Smith & Nephew’s

alleged off-label promotion in violation of federal law:

negligence, loss of consortium, and fraud. We assess each

claim in turn, first acknowledging “the elements [the Shukers]

must plead to state a claim,” then accepting “all of the

complaint’s well-pleaded facts as true” while disregarding

“any legal conclusions,” and finally determining whether the

well-pleaded factual allegations “plausibly give rise to an

entitlement to relief.” Santiago, 629 F.3d at 129-31 (brackets

and internal quotation marks omitted). We view the factual

allegations in the light most favorable to the Shukers and

construe all reasonable inferences in their favor. See United

States ex rel. Customs Fraud Investigations, LLC v. Victaulic

Co., 839 F.3d 242, 257 (3d Cir. 2016); Connelly v. Lane

Constr. Corp., 809 F.3d 780, 790, 793 (3d Cir. 2016). If the

Shukers have specified “the means through which” Smith &

29

Nephew acted unlawfully, included “details” confirming

those means, and alleged facts connecting those means to

their own injuries, then we must conclude that they have

plausibly stated a claim for relief. Schuchardt v. President of

the U.S., 839 F.3d 336, 349-50 (3d Cir. 2016).

Applying these principles, we hold that the Shukers

have met their pleading burden with respect to their

negligence and loss of consortium claims. Although they did

not adequately plead their fraud claim, which they were

required to plead with particularity, see Fed. R. Civ. P. 9(b),

we will nonetheless vacate the District Court’s dismissal of

that claim to the extent that it was with prejudice. We discuss

each of the Shukers’ three claims from their Third Amended

Complaint below.

1. Negligence Based on Off-Label Promotion

The elements of negligence under Pennsylvania law

are: (1) “a legally recognized duty or obligation of the

defendant,” (2) “the breach thereof,” and (3) a “causal

connection” between the breach and the plaintiffs’ damages.

Green v. Pa. Hosp., 123 A.3d 310, 315-16 (Pa. 2015).16 We

16

We assume that Pennsylvania law applies without

undertaking a choice of law analysis, because both Smith &

Nephew and the District Court assumed that Pennsylvania

law applied to the claims in the Third Amended Complaint,

and because the Shukers have waived any objection to that

choice of law by failing to make it, see Williams v. BASF

Catalysts LLC, 765 F.3d 306, 316 (3d Cir. 2014) (“[P]arties

may waive choice-of-law issues.”).

30

modify these elements somewhat because, for the negligence

claim alleged here to escape express preemption as a parallel

claim, the “duty” element must arise from federal

requirements applicable to a medical device. Id. at 316; see

Riegel, 552 U.S. at 330; Lohr, 518 U.S. at 495. To state a

parallel negligence claim, then, the Shukers were required to

plead (1) a duty arising from federal requirements applicable

to a medical device, (2) a breach of that duty, and (3) a causal

connection between the breach and the Shukers’ injuries.

Construing all reasonable inferences in the Shukers’

favor, see Victaulic Co., 839 F.3d at 257, the Shukers’ Third

Amended Complaint plausibly alleges each of these three

required elements. First, as to duty, the complaint alleges that

the R3 metal liner received premarket approval as part of the

Birmingham Hip Resurfacing System and was approved

“only . . for use with [that] . . . [s]ystem,” App. 473, leading

to the reasonable inference that the R3 metal liner was a

“restricted device” under the Medical Device Amendments,

21 U.S.C. § 360j(e), and that federal law therefore imposed a

duty on Smith & Nephew to refrain from publishing “false or

misleading” advertising with respect to the R3 metal liner,

21 U.S.C. §§ 331(b), 352(q), even if such advertising was for

the purpose of marketing a separate device, 21 C.F.R.

§ 801.6.

Second, as to breach, the complaint asserts that, even

though the FDA did not approve the R3 metal liner for use

with any hip system other than the Birmingham Hip

Resurfacing System, Smith & Nephew “actively marketed the

[R3] metal liner as ‘optional’ for the [separate] R3 Acetabular

System,” App. 479. The complaint also cites to Smith &

Nephew’s February 2009 press release, which explicitly

31

announces “the introduction of a metal liner option for [Smith

& Nephew’s] R3 Acetabular System.” App. 14.17 These

factual allegations give rise to the reasonable inference that

Smith & Nephew’s marketing was “misleading” regarding the

FDA-approved uses of the R3 metal liner, 21 U.S.C. § 352(q),

and that Smith & Nephew breached its duty under federal law

not to advertise its medical device in that misleading

manner.18

Finally, as to causation, the Shukers’ Third Amended

Complaint alleges that Mr. Shuker’s surgeon “either read” or

“was aware” of the information in Smith & Nephew’s press

release, that the surgeon proceeded to find the R3 metal liner

“appropriate” for Mr. Shuker, “given his body habitus and his

17

Because we may consider a “document integral to or

explicitly relied upon in the complaint” in considering a Rule

12(b)(6) motion to dismiss, In re Rockefeller Ctr. Props., Inc.

Sec. Litig., 184 F.3d 280, 292 (3d Cir. 1999), our analysis

relies on the text of the entire Smith & Nephew press release

from February 2009, which is reproduced only in part in the

Shukers’ Third Amended Complaint but is part of the District

Court record.

18

To the extent Smith & Nephew contends that a

dispute of fact exists as to whether Smith & Nephew’s

promotional materials were false or misleading, the Shukers

are entitled to discovery to explore this issue for, if discovery

produces “conflicting evidence,” a factual dispute like this

one can ripen into a question for a jury to decide. In re

Fosamax (Alendronate Sodium) Prods. Liab. Litig., 852 F.3d

268, 290 (3d Cir. 2017).

32

activity level,” and that Mr. Shuker endured pain “caused by

metal sensitivity due to the degeneration of the metal on

metal articulation” in his hip replacement system. App. 480,

483. Together these factual allegations lead to the reasonable

inference that Smith & Nephew’s marketing materials caused

Mr. Shuker’s surgeon to recommend the R3 metal liner and to

install it within Mr. Shuker’s hip replacement system, a

course of action which in turn caused Mr. Shuker’s

subsequent injuries.

Because the factual allegations in the Shukers’ Third

Amended Complaint allow us reasonably to infer each of the

three legal elements of the Shukers’ parallel negligence claim,

the complaint contains sufficient facts to “nudg[e]” that claim

“across the line from conceivable to plausible,” Iqbal, 556

U.S. at 683, and hence the District Court’s dismissal of that

claim was in error.

2. Loss of Consortium

Loss of consortium is an injury referring to “the impact

of one spouse’s physical injuries upon the other spouse’s

marital privileges and amenities,” and, while remaining “a . . .

distinct cause of action” for “loss of services, society, and

conjugal affection of one’s spouse,” is a claim “derivative” of

a spouse’s separate claim of injury. Darr Constr. Co. v.

Workmen’s Comp. Appeal Bd., 715 A.2d 1075, 1079-80 (Pa.

1998). Because we hold the Shukers have adequately pleaded

a negligence claim premised on Mr. Shuker’s injuries, they

have also adequately pleaded the derivative claim of loss of

consortium.

33

The Third Amended Complaint alleges that, after

Mr. Shuker’s hip replacement surgery and “due to the

degeneration of the metal on metal articulation,” he

experienced “buttocks, groin and thigh discomfort” that

“caused him pain and extremely limited his daily activities.”

App. 483. Thus, we can reasonably infer that, because of

Smith & Nephew’s misleading marketing in violation of

federal law, the R3 metal liner’s subsequent use in

Mr. Shuker’s hip replacement surgery, and Mr. Shuker’s

ensuing “physical injuries,” Mrs. Shuker suffered a loss of her

husband’s “services, society, and conjugal affection.” Darr

Constr., 715 A.2d at 1080. The Shukers’ loss of consortium

claim therefore states a facially plausible entitlement to relief

arising from state requirements that are “parallel” to federal

ones, Lohr, 518 U.S. at 495; see Iqbal, 556 U.S. at 678, and

the District Court erred in dismissing it.

3. Fraud

In contrast to the Shukers’ pleading of their other

claims, the Shukers’ pleading of their fraud claim is not

adequate because it does not satisfy Rule 9(b)’s requirement

that, though “intent . . . and other conditions of a person’s

mind may be alleged generally,” plaintiffs “must state with

particularity the circumstances constituting fraud.” Fed. R.

Civ. P. 9(b).

To plead fraud under Pennsylvania law, a plaintiff

must allege (1) “a representation” which is (2) “material to

the transaction at hand,” (3) “made falsely, with knowledge of

its falsity or recklessness as to whether it is true or false,” and

(4) made “with the intent of misleading another into relying

on it”; (5) “justifiable reliance on the misrepresentation”; and

34

(6) that “the resulting injury was proximately caused by the

reliance.” Gibbs v. Ernst, 647 A.2d 882, 889 (Pa. 1994). But

in addition, a plaintiff in federal court, to comply with Rule

9(b), must allege “the date, time and place of the alleged

fraud or otherwise inject precision or some measure of

substantiation into a fraud allegation” and must state “the

circumstances of the alleged fraud with sufficient particularity

to place the defendant on notice of the precise misconduct

with which it is charged.” Frederico v. Home Depot, 507

F.3d 188, 200 (3d Cir. 2007) (brackets and internal quotation

marks omitted).

Here, the Shukers’ Third Amended Complaint pleads

many of the elements of a fraud claim: (1) it alleges that

Smith & Nephew made “representation[s]” by including and

incorporating representations Smith & Nephew made

regarding the R3 metal liner; (2) it alleges “material[ity]” by

describing those representations’ importance in influencing

surgeons, such as Mr. Shuker’s surgeon, to use the R3 metal

liner off-label; (3) it alleges “falsity” by stating that, contrary

to Smith & Nephew’s representations, the company received

FDA approval regarding the R3 metal liner’s use within the

Birmingham Hip Resurfacing system only; and (4) it alleges

“intent” by contending that Smith & Nephew represented that

the R3 metal liner was available for use within other hip

systems, even though the company had never sought FDA

approval for use within those systems. Gibbs, 647 A.2d at

889.

Their complaint comes up short, however, because it

does not plead the element of “justifiable reliance” on Smith

& Nephew’s misrepresentation with the particularly required

for Rule 9(b). Id. Specifically, because “[i]t is not enough

35

simply to assert that a statement was ‘fraudulent’ and that

reliance upon it induced some action,” Blumenstock v.

Gibson, 811 A.2d 1029, 1038 (Pa. Super. Ct. 2002), the

complaint had to contain details about “the relationship of the

parties involved and the nature of the transaction,” Drelles v.

Mfrs. Life Ins. Co., 881 A.2d 822, 841 (Pa. Super. Ct. 2005).

Such details are necessary for a reviewing court to determine,

for example, whether a representation’s “obvious” falsity

precludes a finding of justifiable reliance, id. at 840, or, if the

representations at issue were not obviously false, whether the

representation actually provoked reliance by “induc[ing] or

influenc[ing] the plaintiff’s [or his agent’s] course of

conduct,” Commonwealth v. TAP Pharm. Prods., Inc., 36

A.3d 1112, 1144 (Pa. Commw. Ct. 2011), vacated on other

grounds, 94 A.3d 364 (Pa. 2014) (mem.) (per curiam).

The complaint does not meet this standard. In

asserting that Mr. Shuker’s surgeon “read” or “was aware” of

Smith & Nephew’s press release about the R3 metal liner,

App. 480, the complaint does not provide any details about

how the press release “induced or influenced” the surgeon’s

course of conduct, TAP Pharm Prods., 36 A.3d at 1144. The

bald assertion that “[the press release’s] claims (or those of

equal substance) influenced [the surgeon]” does not suffice,

App. 480, because, at least for Rule 9(b) purposes, that

statement is merely a “naked assertion[] devoid of further

factual enhancement,” amounting to “nothing more than a

formulaic recitation of the element[] of a cause of action,”

Iqbal, 556 U.S. at 678. As the Shukers have not stated “the

circumstances of the alleged [influence on Mr. Shuker’s

surgeon] with sufficient particularity to place [Smith &

Nephew] on notice of the precise misconduct with which it is

charged,” Frederico, 507 F.3d at 200 (brackets and internal

36

quotation marks omitted), we conclude that the Shukers’

fraud claim was insufficiently pleaded under Rule 9(b), and

we will therefore affirm the District Court’s dismissal.

We hold, however, that the District Court erred in

dismissing the Shukers’ fraud claim with prejudice. In most

instances where plaintiffs fail to plead fraud with

particularity—and especially in cases where plaintiffs may be

able to supplement their complaints with additional factual

content after discovery—district courts should dismiss the

fraud claim “with leave to amend the deficient pleading.”

5A Charles Alan Wright et al., Federal Practice & Procedure

§ 1300 (3d ed. 2017); accord Warden v. McLelland, 288 F.3d

105, 115 (3d Cir. 2002). Accordingly, given that we will

reverse the District Court’s dismissal of the negligence and

loss of consortium claims and allow those claims to proceed

to discovery, we will vacate the dismissal of the fraud claim

to the extent that it was with prejudice and without leave to

amend.19

C. Personal Jurisdiction

Because two of the Shukers’ claims will proceed to

discovery, we turn now to the Shukers’ challenge to the

19

As we are allowing some of the claims in the Third

Amended Complaint to proceed to discovery, we need not

address the Shukers’ contention that, if we hold they failed to

state a claim in their Third Amended Complaint, then they

were entitled to additional discovery before that complaint

was filed.

37

District Court’s denial of jurisdictional discovery as to Smith

& Nephew’s parent company, PLC, and to the District

Court’s dismissal of PLC for lack of personal jurisdiction.

We review the District Court’s decision to deny jurisdictional

discovery for abuse of discretion, see Toys “R” Us, Inc. v.

Step Two, S.A., 318 F.3d 446, 455 (3d Cir. 2003), and we

exercise plenary review over the District Court’s ultimate

personal jurisdiction determination, see D’Jamoos ex rel.

Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 101

(3d Cir. 2009). As the District Court did not hold an

evidentiary hearing on personal jurisdiction in this case, we

take the Shukers’ allegations as true, resolve all factual

disputes in the Shukers’ favor, and require them merely to

“establish a prima facie case of personal jurisdiction . . . .”

O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d

Cir. 2007) (quoting Miller Yacht Sales, Inc. v. Smith, 384

F.3d 93, 97 (3d Cir. 2004)). We separately consider the

Shukers’ two theories of personal jurisdiction: specific

personal jurisdiction premised on a “stream-of-commerce”

theory, and general personal jurisdiction premised on an

“alter ego” theory. Appellant’s Br. 14.

We perceive no merit in the Shukers’ stream-of-

commerce theory of personal jurisdiction. That theory sounds

in specific personal jurisdiction, which exists when alleged

injuries “arise out of or relate to” activities ‘“purposefully

directed” by a defendant toward residents of the forum state.

Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 334 (3d

Cir. 2009). The stream-of-commerce theory contends,

essentially, that specific personal jurisdiction exists over a

non-resident defendant when that defendant “has injected its

goods into the forum state indirectly via the so-called stream

of commerce,” rendering it foreseeable that one of the

38

defendant’s goods could cause injury in the forum state.

D’Jamoos, 566 F.3d at 104-05.

A plurality of Supreme Court Justices has twice

rejected the stream-of-commerce theory, see J. McIntyre

Mach., Ltd. v. Nicastro, 564 U.S. 873, 877-85 (2011)

(plurality opinion); Asahi Metal Indus. Co. v. Superior Court,

480 U.S. 102, 108-13 (1987) (plurality opinion), stating, in a

manner consistent with our own case law, that plaintiffs must

instead rely on “some act by which the defendant

purposefully avails itself of the privilege of conducting

activities within the forum State, thus invoking the benefits

and protections of its laws,” Asahi, 480 U.S. at 109; see

D’Jamoos, 566 F.3d at 102-03. Indeed, the Supreme Court

has recently held that “[t]he bare fact that [a non-resident

defendant] contracted with a [resident] distributor is not

enough to establish personal jurisdiction in the State.”

Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773,

1783 (2017). We thus have no cause to revisit our Court’s

precedent on this issue, and we decline to adopt the Shukers’

stream-of-commerce theory of specific personal jurisdiction.

See D’Jamoos, 566 F.3d at 102-06.

To the extent the Shukers seek to establish specific

personal jurisdiction over PLC without reference to the

stream-of-commerce theory, their allegations do not meet our

Circuit’s requirement of purposeful availment: “what is

necessary is a deliberate targeting of the forum,” O’Connor,

496 F.3d at 317, so efforts “to exploit a national market” that

“necessarily included Pennsylvania” are insufficient,

D’Jamoos, 566 F.3d at 104. Yet, nationally directed efforts

are all that the Shukers alleged here, for their factual

allegations state only that PLC sold its products through

39

Smith & Nephew in Pennsylvania as part of its efforts to sell

products in the United States generally—not in Pennsylvania

specifically. We therefore agree with the District Court’s

decision to reject the Shukers’ arguments regarding specific

personal jurisdiction over PLC.

We hold, however, that the Shukers are entitled to

limited jurisdictional discovery to explore their alter ego

theory of general personal jurisdiction, i.e., jurisdiction

arising from a defendant’s “‘continuous and systematic’

contacts with the forum, whether or not those contacts are

related to the [plaintiffs’] cause of action.” Metcalfe, 566

F.3d at 334 (quoting Helicopteros Nacionales de Colom., S.A.

v. Hall, 466 U.S. 408, 416 (1984)). Unlike the Shukers’

stream-of-commerce theory, the alter ego theory finds support

in our case law, which instructs that, if a subsidiary is merely

the agent of a parent corporation, see D’Jamoos, 566 F.3d at

108-09; Lucas v. Gulf & W. Indus., Inc., 666 F.2d 800, 805-

06 (3d Cir. 1981), abrogated in part on other grounds by EF

Operating Corp. v. Am. Bldgs., 993 F.2d 1046 (3d Cir. 1993),

or if the parent corporation otherwise “controls” the

subsidiary, Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290, 300

(3d Cir. 2008), then personal jurisdiction exists over the

parent whenever personal jurisdiction (whether general or

specific) exists over the subsidiary.

Under the alter ego theory, the Shukers’ factual

allegations regarding PLC, if viewed in isolation, suffice to

make a prima facie showing of personal jurisdiction, which is

all they must do at this juncture. See D’Jamoos, 566 F.3d at

102. Their allegations paint a plausible picture of control by

PLC over Smith & Nephew: the two companies’

decisionmaking is integrated, PLC has authority over Smith

40

& Nephew’s strategic business decisions, PLC pays for the

development of Smith & Nephew’s products, and executives

from both companies work together to make decisions

regarding Smith & Nephew’s hip systems, as shown in a 2012

Smith & Nephew press release that directed investor and

media inquiries not to Smith & Nephew employees, but to

PLC executives. Given that no party disputes that personal

jurisdiction exists over Smith & Nephew as PLC’s subsidiary

in Pennsylvania, the Shukers’ allegations, taken as true and in

isolation, would suffice to show that PLC controlled Smith &

Nephew, that Smith & Nephew was PLC’s agent, and that

personal jurisdiction must exist over both Smith & Nephew

and PLC in Pennsylvania. See Kehm Oil, 537 F.3d at 300-01.

Our record, though, is not limited to the Shukers’

allegations about personal jurisdiction over PLC; it includes

declarations from PLC and Smith & Nephew executives that

contradict many of the Shukers’ assertions. For instance, the

executives assert that PLC had “no involvement” in the

design, manufacture, or distribution of Smith & Nephew’s R3

Acetabular System for hip replacements in the United States

and, moreover, that PLC had never approved any business

decision regarding that system. App. 320. Because the

executives’ declarations create a factual dispute regarding the

basis for personal jurisdiction over PLC, it is appropriate here

to allow the parties and the District Court to “revisit[]” the

factual issues by means of limited jurisdictional discovery,

which we “ordinarily allow” when a plaintiff’s claim to

personal jurisdiction “is not clearly frivolous.”20 Metcalfe,

20

We note that such jurisdictional discovery “is not a

license for the parties to engage in a fishing expedition” and

41

566 F.3d at 331, 336. Accordingly, the District Court abused

its discretion in denying jurisdictional discovery, and we will

therefore vacate the dismissal of PLC for lack of personal

jurisdiction and remand for the District Court to grant the

Shukers the opportunity to conduct jurisdictional discovery.21

that “the District Court should take care to circumscribe the

scope of discovery . . . to only the factual questions necessary

to determine its jurisdiction.” Schuchardt, 839 F.3d at 353-

54. This principle is all the more true after the 2015

amendments to the Federal Rules of Civil Procedure, which

added a discussion of proportionality to Rule 26(b)(1).

Victaulic Co., 839 F.3d at 258-59. Applying that rule here,

the Shukers may obtain only jurisdictional discovery

“regarding . . . nonprivileged matter that is relevant to

[personal jurisdiction over PLC] and proportional to the needs

of the case,” taking into account “the importance of the

issue[] at stake . . . , the amount in controversy, the parties’

relative access to relevant information, the parties’ resources,

the importance of the discovery in resolving the issue[], and

whether the burden or expense of the proposed discovery

outweighs its likely benefit.” Id. at 259 (quoting Fed. R. Civ.

P. 26(b)(1)).

21

If evidence adduced from such discovery supports

the conclusion that personal jurisdiction is proper as to PLC,

then the Shukers may to seek leave under Federal Rule of

Civil Procedure 15(a)(2) to amend their Third Amended

Complaint to join PLC as a co-defendant.

42

III. Conclusion

For the foregoing reasons, we will affirm in part,

reverse in part, and remand to the District Court for

proceedings consistent with this opinion.

43