(City and County of San Francisco Super. Ct. No. CGC-04-432370). Hon. Ronald Evans Quidachay.
The opinion of the court was delivered by: Reardon, J.
CERTIFIED FOR PUBLICATION
This is an appeal from an order decertifying a class of dentists as to their causes of action under the unfair competition law (UCL)*fn1 and for breach of express warranty against the manufacturer of the Cavitron ultrasonic scaler (Cavitron). What prompted the decertification? An appellate court decision interpreting the Proposition 64*fn2 amendments to the UCL as requiring that all class members-not just the representatives-show an injury in fact. Although our Supreme Court granted review in that decision, the trial court nonetheless stood by its decertification order and denied the dentists' request for reconsideration. Recently, the state's high court issued its decision in In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II). Tobacco II rejects the legal premises underpinning the decertification order as to the UCL claim and mandates reversal.
We must also reverse the order decertifying the class as to the breach of express warranty claims. Procedurally, the order was improper because it was rendered in the absence of new law or evidence. Substantively, the order was contrary to law because it improperly grafted an element of prior reliance onto the express warranty claims; this error infected the entire ruling as to those claims.
A. The Device; Regulatory Framework
Respondent Dentsply International, Inc. (Dentsply) manufactures the Cavitron, a device which dentists have used for more than four decades.*fn3 As a class II medical device, the Cavitron comes under the purview of the Food and Drug Administration, with its sale restricted to dental professionals. The original iterations of the Cavitron predate the Medical Device Amendments of 1976 (MDA)*fn4 to the federal Food, Drug and Cosmetic Act.*fn5 Because the subsequent, post-MDA versions are substantially equivalent to the pre-existing technology, the newer versions have been cleared for marketing by the Food and Drug Administration through a premarket notification process rather than the full premarket approval process. (See 21 U.S.C. § 360(k); 21 C.F.R. § 807.92(a)(3) (2009).)
The Cavitron works by expelling a pulsating water stream from the tiny hollow tip of a handpiece attached to the device by a flexible tube. The output stream helps dislodge plaque and calculus from teeth, thereby reducing the amount of scraping or scaling by the dental practitioner. Cavitrons commonly are used to clean teeth, but can also be used for root planing and debridement in treating periodontal disease.
Under the Food, Drug and Cosmetic Act, a medical device is deemed misbranded unless its labeling bears "adequate directions for use." (21 U.S.C. § 352(f)(1).) "Adequate directions for use means directions under which the layman can use a device safely and for the purposes for which it is intended." (21 C.F.R. § 801.5 (2009).) By definition, "adequate directions for use" cannot be prepared for prescription devices such as the Cavitron, because these devices must be used under the supervision of a licensed practitioner. However, such devices will escape the deemed designation of being "misbranded" where, among other conditions, "[l]abeling on or within the package from which the device is to be dispensed bears information for use, including indications, effects, routes, methods, and frequency and duration of administration, and any relevant hazards, contraindications, side effects, and precautions under which practitioners licensed by law to administer the device can use the device safely and for the purpose for which it is intended, including all purposes for which it is advertised or represented . . . ." (Id., § 801.109(c).) Dentsply accomplishes this directive by providing "Directions For Use" (Directions), which it expects the dentist to read and follow in using the Cavitron.
In 1993, Dentsply revised the Directions to indicate the Cavitron's use for "root planing during surgery." The Directions for these models were in effect until their production ceased. Around 1997, new Cavitron models were introduced in which the indications were stated in broader language to encompass "[a]ll general supra and subgingival scaling applications" and "[p]eriodontal debridement for all types of periodontal diseases."
In 2003, the federal Centers for Disease Control and Prevention (CDC) issued guidelines recommending that sterile solutions be used in all oral surgical procedures. Since 1996, California dental regulations have required practitioners to use "[s]terile coolants/irrigants" for "surgical procedures involving soft tissue or bone." (Cal. Code Regs., tit. 16, § 1005, subd. (c)(15); Register 96, No. 28.) The current provision also provides that "[s]terile coolants/irrigants must be delivered using a sterile delivery system." (Cal. Code Regs., tit. 16, § 1005, subd. (c)(15).)
B. Litigation and Discovery
In 2004 appellants, several dentists,*fn6 seeking to represent a class of practitioners who purchased a Cavitron for use during oral surgical procedures on their patients, sued Dentsply, alleging a violation of the UCL and other causes of action. The operative third amended complaint includes a cause of action for breach of express warranty. The crux of the complaint is that the Directions indicate that Cavitrons can be used in oral surgery, but in fact they are unsafe for such use because the device is incapable of delivering a safe water stream during oral surgical procedures. Specifically, the complaint alleged that the inner tubing of the Cavitron "was designed in a manner that was subject to the formation of a progressive biofilm coating of bacteria . . . which could harbor pathogens," and because the inner tubing "was incapable of being sterilized before or during its use," bacteria would be released into the output water stream, which in turn would be transmitted to the patients during oral surgical procedures. Thus, as a result of its inherent design, practitioners could not safely use the Cavitron, or satisfy state regulations or CDC guidelines, during the performance of oral surgical procedures. Further, the complaint states that appellants were not aware of the biofilm health risk when they purchased their Cavitrons, and Dentsply was aware of but concealed and misrepresented the critical facts.
All Cavitrons, except the "Select" model, are designed to be plumbed to an external municipal water source. Appellants presented evidence that to render Cavitrons safe for surgical use, the practitioner should acquire an alternate system designed to avoid waterline contamination, for example a self-contained water system. Even if the input water is sterile, it must flow past and through the Cavitron's inner tubing, which has a very fine diameter of one to two millimeters, is not sterile and cannot be sterilized. Thus, regardless of the input water source, the Cavitron cannot reliably deliver sterile output water for surgical applications. In addition, although the Directions recommend flushing the waterline as a routine maintenance procedure, flushing with water does not remove biofilm.
Indeed, following discovery in this case, in June 2005 Dentsply sent letters to over 20,000 California dentists emphasizing that "conventional ultrasonic scalers do not deliver sterile fluids unless specifically equipped with a sterile water delivery system. Therefore, if in your professional judgment, any dental procedure requires the delivery of sterile fluids, choose a sterile delivery system." And, beginning with the release of the 2006 Cavitron model, the accompanying Directions added a warning advising against the use of the product where asepsis*fn7 is required or deemed appropriate. Further, the Directions for the first time "strongly recommended" that the waterlines be flushed weekly with a sodium hypochlorite (bleach).
The complaint divided the proposed class into two subclasses: Subclass A consisted of members who purchased the Cavitron prior to 1999 for use "in the performance of oral surgical applications as to which Dentsply's accompanying [Directions] specified that it was indicated for use for root planing during oral surgery." Subclass B consisted of those who purchased the device in or after 1997 for use in such procedures, and for which the accompanying Directions stated that the device "was indicated for `periodontal debridement for all types of periodontal diseases.' "
Appellants pursued certification of the proposed class as to each cause of action. Initially, the trial court approved classes for the UCL and express warranty claims.
Shortly thereafter, the Second District Court of Appeal issued its opinion in Pfizer, Inc. v. Superior Court (2006) 141 Cal.App.4th 290, review granted November 1, 2006, S145775, and cause transferred to Court of Appeal, Second Appellate District, Division Three, with directions to vacate its decision and reconsider in light of Tobacco II, supra, 46 Cal.4th 298 (Pfizer). Pfizer addressed the impact of Proposition 64 on class action standing requirements. The court held that all class members must suffer injury in fact and lose money or property as a result of the unfair competition or false advertising. Further, as an inherent aspect of this requirement, in entering the transaction at issue, the plaintiffs necessarily must have relied on the false or misleading representation or advertisement.
Relying principally on Pfizer, Dentsply moved to decertify appellants' UCL claim and further argued that the court's analysis in Pfizer and controlling case law should compel decertification of the breach of warranty claims as well. The trial court agreed, ruling as to the UCL cause of action that each class member would have to prove standing under Proposition 64, a hurdle mandating individual proof of financial damage caused by reliance on the material false representation. Thus, individual issues relating to materiality, reliance and resulting damage would predominate, rendering the UCL claim inappropriate for class treatment. As well, proving causation would entail inquiry into whether each class member saw, read and relied on the alleged misrepresentation in deciding to purchase a Cavitron, yet another individual inquiry.
The trial court proceeded also to decertify the class as to the breach of express warranty claims, notwithstanding that there were no changed circumstances and no newly discovered evidence. Instead, based on existing law that predated the original certification motion, and obviously influenced by the Pfizer decision, the trial court ruled that (1) appellants could not prove reliance on Dentsply's alleged misrepresentations on a classwide basis; although reliance could be presumed under some circumstances, the presumption was rebuttable and use of the class procedure would circumvent Dentsply's right to rebut; and (2) variations in the wording of the Directions for the different Cavitron models created predominantly individual fact issues concerning reliance, so the court could not infer classwide reliance.
Appellants moved for reconsideration of the decertification order in October 2006. While the motion was under review, our Supreme Court granted review in Pfizer and In re Tobacco II Cases (2006) 142 Cal.App.4th 891. The trial court requested briefing on the propriety of staying the matter pending resolution of those cases. However, based on subsequent submissions ...