Stephen W. Robertson, Commissioner, Indiana Department of Insurance, as Administrator of the Indiana Patient's Compensation Fund, Appellant/Intervenor,
Anonymous Clinic , (Defendant Below) and Terri J. Rethlake, et al. (Plaintiffs below), Appellees. Stephen W. Robertson, Commissioner, Indiana Department of Insurance, as Administrator of the Indiana Patient's Compensation Fund, Appellant/Intervenor,
Orthopedic and Sports Medicine Center of Northern Indiana; ASC Surgical Ventures, LLC;OSMC; John Doe Company; Medical Protective Corporation; Medical Insurance Services, Inc. (Defendants Below) and Joe and Linda Alcozar, et al. (Plaintiffs below), Appellees.
Appeal from the St. Joseph Superior Court Cause Nos.
71D06-1405-CT-136, 71D06-1406-CT-181, 71D06-1406-CT-211,
71D06-1406-CT-257, 71D06-1406-CT-320, 71D06-1406-CT-300 The
Honorable David C. Chapleau, Judge
from the Elkhart Superior Court Cause No. 20D01-1410-CT-216
The Honorable Evan S. Roberts, Judge
Attorneys for Appellant Anne L. Cowgur Geoffrey Slaughter
Taft Stettinius & Hollister LLP Indianapolis, Indiana
Attorneys for Appellee Anonymous Clinic David C. Jensen David
J. Beach Louis W. Voelker Eichhorn & Eichhorn, LLP
Attorney for Appellee Orthopedic and Sports Medicine Center
of Northern Indiana Lyle R. Hardman Hunt Suedhoff Kalamaros
LLP South Bend, Indiana
Attorneys for Appellees Terri J. Rethrake, et al.
James A. Piatt Joseph N. Williams William N. Riley Riley
Williams & Piatt, LLC Indianapolis, Indiana Douglas D.
Small Foley & Small South Bend, Indiana
Attorneys for Amici Curiae St. Mary's Health Services,
Inc., and St. Mary's Medical Center of Evansville, Inc.
Patrick A. Shoulders Steven K. Hahn Ziemer Stayman Weitzel
Shoulders LLP Evansville, Indiana
Beginning in 2012, patients around the country began
suffering meningitis after being injected with
preservative-free methylprednisolone acetate
("MPA"), a steroid purchased from New England
Compounding Pharmacy, Inc., a/k/a the New England Compounding
Center ("NECC"). It was soon discovered that some
lots of MPA had become contaminated with fungus. This
consolidated appeal concerns claims brought by injured
patients (or those suing on their behalf) (collectively,
"the Plaintiffs") against Anonymous Clinic in St.
Joseph County and Orthopedic and Sports Medicine Center of
Northern Indiana ("OSMC") and affiliated entities
in Elkhart County (collectively, "the Defendants").
Plaintiffs contend that the Defendants were negligent in
choosing to administer preservative-free MPA and in failing
to properly evaluate NECC before using it as a supplier. Some
of the Plaintiffs brought suit without using the procedures
laid out in the Indiana Medical Malpractice Act ("the
MMA"), and Defendants moved either for dismissal or
summary judgment on the basis that Plaintiffs' claims
were claims of medical malpractice.
Stephen W. Robertson, acting in his capacity as Commissioner
of Indiana Department of Insurance, which administers the
Indiana Patient's Compensation Fund ("the PCF")
intervened, arguing that Plaintiffs' claims were of
general negligence and therefore not subject to the
provisions of the MMA. The trial courts ultimately agreed
with Defendants and Plaintiffs (who had reversed their
initial position) that Plaintiffs' claims were governed
by the MMA. In this consolidated appeal, the PCF contends
that the trial courts erred in concluding that
Plaintiffs' claims are claims of medical malpractice.
Plaintiffs, Defendants, and Amici Curiae
(health-care providers facing similar claims in other cases),
contend that Plaintiffs' claims are subject to the MMA as
they involve actions informed by the exercise of professional
medical judgment. Because we conclude that Plaintiffs'
claims are subject to the MMA, we affirm the judgments of the
trial courts and remand for further proceedings consistent
with this opinion.
and Procedural History
Joseph County Litigation
The St. Joseph Superior Court set forth the facts underlying
the claims filed in St. Joseph County in its order dismissing
PRELIMINARY DETERMINATIONS OF FACT
1. This proceeding arises as a result of an outbreak of
fungal meningitis, fungal infections and other related
complications that affected individuals in at least twenty
states and caused, at a minimum, 64 deaths. The outbreak
resulted in deaths and injuries to Hoosiers and Michigan
residents who received treatment in Indiana. Indiana and
Michigan were hit particularly hard. The [Centers for Disease
Control] identified 93 cases of Hoosiers diagnosed with
fungal infections linked to contaminated epidural injections,
with 11 of those resulting in death. Michigan was the hardest
hit state, with a case count of 264, and 11 of those
resulting in death. There are many more individuals who
received a contaminated injection who suffered injury from
the injection, but who have not been identified as a
"case" by the CDC.
2. Plaintiffs are individuals or their representatives who
suffered injury or death as a direct result of being
administered one or more contaminated epidural injections.
Plaintiffs also include the spouses of certain individuals
who received such contaminated injections. Those plaintiffs
who received services from [Anonymous Clinic] sought
treatment of back pain and related spinal conditions. Such
services included physical therapy, epidural injections, pain
medications and surgery. Each of the patient-plaintiffs was a
"patient", as defined by the MMA, of [Defendants]
when they received their epidural steroid injections.
3. [Anonymous Clinic is a] qualified health care provider
under MMA which was and is engaged in the business of
providing health care and selling medical related products.
The plaintiffs' complaints, filed before the St. Joseph
Circuit and Superior Courts, each allege a claim arising out
of the patient-health care provider relationship.
4. The intervening party in this litigation is the
Patient's Compensation Fund (hereafter referred to as
"PCF"). Under the provisions of the Indiana Medical
Malpractice Act (hereafter referred to as "MMA"),
the PCF is responsible for payment of a plaintiffs claim
which is determined by trial or through settlement to be a
recoverable claim and where the health care provider in
question, through its insurer, had paid as required under the
5. Plaintiffs' proposed complaints filed with the IDOI
... pleaded factual allegations about the
patient-health care provider relationship each plaintiff had
with [Anonymous Clinic]. Each proposed complaint alleges that
the plaintiff was "injected with a contaminated epidural
product" when he or she was treated at [Anonymous
6. Plaintiffs allege in 1998, Gregory Conigliaro and Barry
Cadden co-founded the New England Compounding Pharmacy, Inc.,
known as New England Compounding Center ("NECC"),
in Massachusetts. Other members of the Conigliaro and Cadden
families came to be involved with NECC either as owners,
officers or employees. Other related entities to NECC were
established by the Conigliaros and Barry Cadden, including
Medical Sales Management, Inc., Ameridose, LLC and Alaunus
Pharmaceutical, LLC in the State of Massachusetts.
7. Plaintiffs allege NECC operated as a compounding pharmacy.
Plaintiffs assert that compounding pharmacies are prohibited
from mass production of pharmaceutical products but may only
produce products that have a particular demand need, such as
a drug for a patient who is allergic to an ingredient in a
mass produced, FDA regulated product or a pharmaceutical
product that is no longer manufactured.
8. Plaintiffs allege [Anonymous Clinic] purchased
preservative-free methylprednisolone acetate
("MPA") from NECC. MPA is a steroidal product that
can be injected into the area of the lumbar spine to provide
pain relief to individuals who suffer with low back pain and
9. Plaintiffs allege there are particular safety and product
quality risks associated with purchasing pharmaceuticals from
a compounding pharmacy. The risk is heightened for those
pharmaceutical products that are made without preservatives,
due to the increased risk of their being or becoming
10. Plaintiffs allege an outbreak of fungal meningitis,
lumbar fungal infections and related injuries and
complications arose in September, 2012. [CDC] was notified by
the Tennessee Department of Health of a patient who developed
fungal meningitis after receiving an epidural steroidal
injection. Additional patients developing fungal meningitis
were next identified in Massachusetts and the outbreak
continued spreading to 19 states, including Indiana and
Michigan. The outbreak was the result of patients receiving
one or more contaminated injections from three different lots
of MP A compounded by NECC (lot numbers 05212012@68,
06292012@29 and 08102012@51) or from another contaminated
11. Plaintiffs allege The Food and Drug Administration
("FDA") and the Massachusetts Department of Public
Health ("MDPH") began investigating NECC, along
with the involvement of other state and federal agencies. On
September 26, 2012, NECC recalled the three lots of MPA found
to be contaminated. The suspected lots contained 17, 676
dosage vials. Of this number, more than 14, 000 were used for
injections. Only about 3, 000 doses were returned through the
12. Plaintiffs allege the investigation of NECC revealed
black particulate matter in sealed, returned vials of MPA.
Vials also contained a greenish black foreign matter and
others a white filamentous material. Sterility analysis later
confirmed the presence of "viable microbial growth"
in all of the 50 vials tested.
Appellant's App. pp. 93-97 (record citations omitted).
A total of six claims against Anonymous Clinic were
consolidated to address the threshold legal issue of whether
the claims are claims of general negligence or are subject to
the MMA. On May 15, 2015, in the consolidated action
captioned In re Steroid Litigation, Anonymous Clinic
filed a motion to dismiss all of the Plaintiffs' claims
for lack of subject matter jurisdiction on that basis that
MMA requirements had not been met.
On June 26, 2015, the PCF filed a response to the motion to
dismiss, opposing it on the ground that the MMA did not apply
to Plaintiffs' claims. Also on June 26, 2015, Plaintiffs
reversed their earlier position and filed a response urging
the trial court to conclude that their claims were covered by
the MMA. On August 27, 2015, the St. Joseph Superior Court
heard oral argument on Anonymous Clinic's motion to
On October 12, 2015, the St. Joseph Superior Court granted
Anonymous Clinic's motion to dismiss in part, concluding
that Plaintiffs' claims were governed by the MMA. The St.
Joseph Superior Court stayed proceedings until compliance
with MMA procedures could be accomplished. On November 12,
2015, the PCF moved the St. Joseph Superior Court to certify
the case for interlocutory appeal, which motion was granted
on November 16. This court accepted jurisdiction.
The Elkhart Superior Court set forth the facts underlying the
claims filed in Elkhart County in its order entering summary
judgment in favor of OSMC:
FINDINGS OF FACT
1.Plaintiffs are residents of Indiana and Michigan.
2. OSMC operates medical clinics in Indiana.
3.Medical Protective provides medical malpractice insurance
4.Broadly, the medical malpractice insurance coverage policy
requires Medical Protective to defend and indemnify OSMC
"[i]n any claim based upon professional services, "
subject to four exclusions:
a. Criminal acts and willful torts,
b. Claims that fall under OSMC's general liability
c. Punitive damages, or damages above and beyond compensatory