Medical Device Lawsuit Watch - Aug./Sept./Oct. 2006
This summary of key lawsuits affecting medical devices is provided by the Health Care Law Group of Crowell & Moring LLP, in collaboration with the firm’s Torts, Antitrust and Intellectual Property Law Groups.
Cases in this issue:
- Advocacy Group Petitions FDA and Requests a National Coverage Determination from CMS to Deny Coverage for Depression Treatment Device
- Medical Device Industry Requests Guidance from OIG on Physician Investments
- Cueva v. Sulzer Orthopedics, Inc.
- United States v. General Electric Co.
- United States of America, ex rel. Robert A. Fry v. Guidant Corp.
- Cook v. Medtronic Sofamor Danek, USA, Inc.
- Tingey v. Radionics
- Melton v. Medtronic
- United States v. Medtronic, Inc. (Under Seal) and United States ex rel. Jacqueline Kay Poteet v. Zdeblick
- Abbott Diabetes Care, Inc. v. DexCom, Inc.
- Suter v. General Accident Ins. Co. of America
- Adesina v. Aladan Corp.
- McFarland v. Tissue Science Laboratories, Inc.
- Moses, et al. v. Zimmer Holdings Inc., et al.
- Creazzo v. Medtronic Inc.
- Moore v. Medtronic, Inc.
- Lennon v. Dacromed Corp.
- Hurley v. The Heart Physicians, P.C.
Advocacy Group Petitions FDA and Requests a National Coverage Determination from CMS to Deny Coverage for Depression Treatment Device
Petition to the FDA and the letter to CMS (9/6/06)
Public Citizen Health Research Group, the public interest watchdog-organization, has asked the Food and Drug Administration (FDA) to withdraw its approval of Cyberonics Vagus Nerve Stimulation (VNS) device, and in an unusual move, has also asked the Centers for Medicare and Medicaid Services (CMS) to refuse to pay for the device. The VNS device was previously approved for treating epilepsy, but was later approved in July of 2005 for use in treatment-resistant depression (TRD).
In its letter to the FDA, Public Citizen argues that Cyberonics has not demonstrated a reasonable assurance that the device is safe and effective for the management of TRD. Public Citizen states that a lack of data supporting the device’s use for TRD, combined with certain irregularities in the device approval process, make it appropriate for the FDA to reverse its grant of approval.
Public Citizen makes similar arguments in its letter to CMS.. Public Citizen points out that Cyberonics employed an unusual route for obtaining approval for the VNS device, by first applying for several local coverage determinations instead of initially applying for a national coverage determination. Public Citizen states that 10 separate contractors have already declined to issue local coverage determinations approving the VNS device, many finding that available evidence does not support its use for TRD. Public Citizen also references a recent Senate Finance Committee investigation into FDA’s approval of the device, and evidence that journal articles lauding use of the device were either written or published by physicians who had ties to Cyberonics.
Medical Device Industry Requests Guidance from OIG on Physician Investments
The Advanced Medical Technology Association (AdvaMed) has requested the Department of Health and Human Services Office of the Inspector General for advice relating to physician investments in medical device companies. In the letter, AdvaMed noted that medical device companies with substantial physician investment are becoming more common, and that clarifications from the OIG would make it easier for medical device companies to comply with federal fraud and abuse statutes.
Specifically, AdvaMed asked the OIG to address whether OIG’s 1989 Special Fraud Alert (59 Fed. Reg. 65373) applies to medical device manufacturers and distributors. The Alert stated that physician joint ventures may be suspect when the physicians are investors in the joint venture and in a position to refer business to the venture. According to AdvaMed’s letter, OIG has never specifically stated whether this guidance on physician joint ventures would apply to physician investments in medical device companies, but it would be helpful for OIG to do so. The letter also requested specific guidance on whether a company that had more than 40% of its revenues generated by physician investors would be scrutinized by the OIG.
Finally, AdvaMed requested that OIG publish any other fact patterns or indicators that OIG would view as “potentially unlawful activity” in the medical device industry with regard to physician investments.
A plaintiff may not use a substantial amount of evidence related to a recall in her products liability case against hip prosthesis manufacturer Sulzer Orthopedics, Inc., after a California appeals court upheld a lower court’s determination that the evidence was not probative of whether plaintiff’s own device was defective.
Plaintiff received a Sulzer hip prosthesis in 1998, but complications required the device to be replaced in 2001. Plaintiff then filed suit, arguing that defects in the manufacturing process caused her device to fail, and alleging strict liability for manufacturing defect, breach of warranty, negligence, strict liability for failure to warn. As part of her case, Plaintiff intended to introduce evidence of a recall of similar Sulzer hip protheses and subsequent class action litigation. The trial court granted Sulzer’s motions to exclude the evidence. When Plaintiff’s attorney confessed an inability to proceed without the evidence, the trial court granted Sulzer’s motion for nonsuit.
On appeal, the California Fourth District Court of Appeal held that the trial court did not err in excluding the evidence. It held that the lower court’s ruling did not constitute “an objection to all evidence,” as Plaintiff claimed, because Plaintiff was still entitled to introduce evidence of contamination in the recalled prostheses and evidence regarding the results of Sulzer’s internal investigation. The ruling merely prohibited Plaintiff from introducing evidence of the recall itself and following class action lawsuits, which the court found were not probative of a defect in Plaintiff’s own hip implant.
The United States District Court for the Western District of Texas upheld a jury verdict in favor of Blue Sky Medical Group against claims of patent infringement by Plaintiff Kinetic Concepts Inc. At issue was whether Blue Sky was marketing a wound-healing device that infringed Kinetic Concepts’ patents for its Vacuum Assisted Closure (VAC) system wound-healing device.
Kinetic Concepts’ VAC device was developed by two Wake Forest University physicians, and uses negative pressure to treat wounds. Blue Sky’s Versatile 1 system uses dressing kits and portable suction pumps to treat wounds. In the lawsuit, Kinetic Concepts argued infringement, while Blue Sky countered that Kinetic Concepts’ patents were invalid and unenforceable. The jury found that Blue Sky did not infringe Kinetic Concepts’ patents, but that the patents are valid and enforceable.
The district court judge upheld the verdict in a summary order. Both sides have filed motions for new trials.
United States of America, ex rel. Robert A. Fry v. Guidant Corp.
No. 03-842 (M.D. Tenn.7/28/2006)
On July 28, 2006 the United States notified the United States District Court for the Middle District of Tennessee that it is reconsidering whether to participate in this qui tam case and anticipates notifying the Court of its decision within the next 60 days. The case is a whistle-blower case involving rebates for defective Guidant heart devices. The whistle-blower, Robert A. Fry, was a former Guidant sales representative. Fry alleges that Guidant trained its sales force not to inform hospitals of available rebates for the early replacement of implanted heart devices. This omission of information allegedly led the hospitals to bill health insurers, including Medicare, for the full cost of the replacements.
On May 24, 2006, Guidant moved to dismiss plaintiff’s Second Amended Complaint for failure to include certain details about any hospitals’ applications for and receipt of funds from governmental agencies for the full cost of the replacements of the implanted heart devices. In its July 28 notice, the United States stated that while it “takes the position that the detail in the Second Amended Complaint is sufficiently pled, it stands ready to cooperate to provide information confirming the dates of submission, requests for payment, amounts paid by governmental agencies to care providers, as well as other information the Court may deem necessary.”
Prior to filing its notice, the United States had declined to participate in the case. Guidant had cited the government’s refusal to intervene and referred to this case as “a ‘relator only’ action without the support of any government entity.” In its Notice, the government specifically stated that “[a]lthough the United States takes the position that any failure to intervene or otherwise participate in the case would not be probative of the sufficiency of the complaint, it files this Notice to the extent that the Court agrees with Guidant that the participation or non-participation of the United States is relevant to its consideration of the pending Motion to Dismiss.”
On July 31, 2006 the United States District Court for the District of South Carolina granted plaintiff’s motion to remand his products liability case back to the South Carolina state court. Plaintiff Benjamin Cook originally filed suit in state court against Medtronic Sofamor Danek, USA, Inc. (“Medtronic”) following his spinal surgery in 2004, during which he received bone tissue that had been improperly harvested and which was recalled by Medtronic. The complaint alleged negligence, breach of warranty, strict liability, and violations of the South Carolina Unfair Trade Practices Act.
On July 11, 2006 Medtronic removed the case to federal court. Medtronic based federal jurisdiction upon diversity jurisdiction, which requires that the case involve citizens of different states and the amount in controversy exceed $75,000. Cook filed a motion to remand the case back to state court, arguing that the amount in controversy did not exceed $75,000. Notably, Cook specifically pled in the complaint that he sought damages “in an amount that does not exceed $75,000”, had filed a stipulation that the amount in controversy did not exceed $75,000, and stated that he would not attempt to collect on any judgment rendered against Medtronic in excess of $75,000 in the event that such a verdict was rendered.
While this issue had not been specifically addressed by the Fourth Circuit Court of Appeals, the Court stated that it “tends to lean toward the belief that when presented with the issues in the case at bar, a case where the complaint specifically limits recoverable damages to below the jurisdictional minimum, the appropriate procedure would be to conclude that the action was removed improvidently and the court is without jurisdiction since, on the basis of the plaintiff’s claims as originally pleaded, the requisite jurisdictional amount was lacking.” The Court noted that Medtronic had not shown that the plaintiff’s limitation on damages in the complaint or in the stipulation was made in bad faith.
The Court also felt “obligated to warn” Medtronic that “if a defendant removes a case [to federal court], despite the plaintiff’s allegations in the complaint that damages are less than the federal jurisdictional amount, and the federal court accepts jurisdiction, the court may be required to grant a new trial if the jury awarded less than the jurisdictional amount, because of the defendant’s own averment that the damages actually exceeded the jurisdictional amount.”
On August 8, the Tenth Circuit reversed summary judgment for Radionics, the manufacturer of a radiofrequency lesion generator, in a case involving a woman who underwent a nerve ablation procedure to destroy nerves causing her back pain. During Plaintiff’s procedure, a trained nurse allegedly threw a toggle switch that resulted in a sudden increase in voltage to her spine. Plaintiff claimed that as a result of this incident, she developed permanent urinary incontinence. She sued Radionics under theories of strict products liability, negligence, and failure to warn. The district court granted summary judgment for Radionics.
Reversing the district court, the Tenth Circuit held that Radionics’ device did not warrant a rebuttable presumption that it was free from defect under Utah’s Products Liability Act because, although the FDA had approved the device, such approval does not incorporate a safety rationale. Therefore, compliance with the FDA standard does not meet the Restatement Section 285 test, which is a benchmark of the Utah Act. The court also concluded that Radionics failed to produce evidence that the nurse was aware that the device’s toggle switch lacked a fail-safe protection to guard against sudden voltage spikes. The Tenth Circuit also found that Ms. Tingey presented evidence that a safer and practicable device design existed, and that Plaintiff had produced evidence of causation. In addition, the court found that although Radionics had instructed the nurse to set the voltage to zero before engaging the toggle switch, it did not inform the nurse of the consequences of failing to do so. Thus, it held that Plaintiff had established genuine issues of material fact regarding all of Radionic’s grounds for summary judgment, making summary judgment improper.
On July 25, the federal district court in South Carolina remanded a case involving a Medtronic implantable cardiodefibrillator (“ICD”) to state court, after finding that the cause of action accrued before the date on which the state’s new tort reform law took effect. Thus two non-“diverse” (i.e., resident in the particular state) defendants had not been improperly joined, meaning the case should stay in state court..
Plaintiff was implanted in 2002 with a Medtronic ICD device. In early 2005, Mr. Melton’s doctor allegedly told him that he should use a magnetic device to check the ICD’s battery, but that using the device would increase the risk of the ICD failing without warning. In April, Mr. Melton allegedly received a letter that the battery could deplete prematurely and he contacted his doctor about replacing the device. The device was not replaced at that time. Finally, Mr. Melton alleged that in June the device began to shock his heart violently and he thereafter had the device replaced in August.
Mr. Melton’s complaint, alleging breach of warranty, negligence, outrage, and other tort claims, named Medtronic, his doctor, and the clinic as defendants. Metronic removed the case to the South Carolina federal district court. In response to a motion to remand filed by Mr. Melton, Medtronic argued that Mr. Melton failed to comply with the South Carolina Tort Reform Act by filing a notice of intent to sue and an expert witness affidavit. It claimed that the doctor and the clinic were sham defendants added simply to defeat diversity jurisdiction.
The district court disagreed. It held that the South Carolina Tort Reform Act did not apply in this case because the Act was effective beginning July 1, 2005 and Mr. Melton’s claims arose several months before in the spring of 2005, when he learned of potential problems with the defibrillator. The court concluded that because it could not be said that there is no possibility that the plaintiff would be able to establish a cause of action against the doctor and the clinic in state court, these non-diverse defendants were not fraudulently joined.
United States v. Medtronic, Inc. (Under Seal) and United States ex rel. Jacqueline Kay Poteet v. Zdeblick
No. 02-2709 (W.D. Tenn. 7/18/2006)
No. 03-2979 (W.D. Tenn. 7/18/2006)
On July 18, 2006 the Department of Justice announced that Medtronic Sofamor Danek USA, Inc. and Medtronic, Inc. (collectively “Medtronic”) agreed to pay the United States $40 million to settle civil allegations that Medtronic Sofamor Danek (“MSD”) had paid kickbacks to doctors, hospitals and clinics in violation the Anti-Kickback Statute and the False Claims Act. The alleged kickbacks were in the form of “sham consulting agreements, sham royalty agreements and lavish trips to desirable locations” between 1998 and 2003. In settling the claims, Medtronic has denied any wrongdoing.
As part of the Settlement Agreement, Medtronic entered into a five year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General, that requires Medtronic to implement employee training programs to promote compliance with all U.S. Federal health care program requirements, including Medicare and Medicaid. In addition, the CIA requires Medtronic’s spinal products division to maintain a database of all non-sales related transactions with customers. The database must be monitored by Medtronic senior management, its chief compliance officer and an independent review organization.
The government’s investigation into Medtronic’s activities was triggered by the filing of a whistleblower (qui tam) action in the United States District Court of the Western District of Tennessee. As part of the Settlement Agreement, the government must seek dismissal of two qui tam suits filed in the Western District of Tennessee in 2002 and 2003. The government intervened in the first of these actions, which remains under seal ,and the whistleblower in that case has not been identified. The second case was filed by Jacqueline Kay Poteet, a former senior manager of travel services for MSD. The U.S. Department of Justice declined to intervene in the Poteet suit. Ms. Poteet is opposing the dismissal of her case and challenging the settlement.
On August 16, 2006 the Delaware District Court ruled on two motions to dismiss presented by DexCom in a patent infringement suit brought by Abbott Diabetes Care, Inc. (“Abbott”). The patents-in-suit are directed to methods, systems, and devices for continuously monitoring glucose levels in humans using a small implanted glucose sensor that provides monitoring signals over the life of the sensor. Abbott alleged that DexCom intends to market its STS™ Continuous Monitoring System, which will infringe one or more claims of the patents-in-suit.
The court granted DexCom’s motion to dismiss Abbott’s declaratory judgment claim of patent infringement because there is no controversy of sufficient immediacy. In order to exercise jurisdiction over a declaratory judgment action, a court must determine whether there is an “actual controversy between the parties.” In this case, the Court found that Abbott did not demonstrate that DexCom produced, or has prepared to produce a product that would be subject to an infringement charge. At the time the complaint was filed, the FDA had not yet approved DexCom’s product and Abbot could not allege with any certainty that the device eventually approved would be the same device that began clinical trials since product changes during testing are contemplated by the FDA regulations. The Court also noted that Abbot did not allege that DexCom had distributed sales literature, prepared to solicit orders, or engaged in any sales or marketing activity with regard to the alleged glucose monitoring product.
The court denied DexCom’s motion to dismiss Abbot’s claim of patent infringement based on DexCom’s attendance at two “trade shows” where it allegedly publicized and displayed its glucose monitoring product for the purpose of showcasing the product rather than for gathering information for submission to the FDA. DexCom argued that its display of the products at two scientific conferences is exempt under 35 U.S.C. §271(e)(1) which exempts potentially infringing activities if performed solely for uses reasonably related to the development of information for FDA approval. The Court found that Abbott’s allegations, viewed in the light most favorable to Abbott, were sufficient to withstand a motion to dismiss under Fed.R.Civ.P. 12(b)(6). The Court was unwilling to conclude at this stage that no relief could be granted under any set of facts that Abbott could prove consistent with these patent infringement allegations.
On July 14, 2006, the federal district court for the district of New Jersey held that General Accident Ins. Co. of America, as reinsurer, had no duty to contribute toward a Pfizer heart valve settlement in which the plaintiffs’ claims were not covered under the excess-insurer’s policies. The case arose out of a 1992 settlement Pfizer agreed to in order to resolve a large class action involving its Shiley heart valves (“Pfizer Settlement”), in which the basis of plaintiffs’ claims was fear of malfunction.
After Pfizer settled the class action, it turned to its excess insurer, Integrity Insurance Co., for coverage. Integrity paid the limits of its policy, and sought coverage from General Accident Ins. Co. (“General Accident”), Integrity’s reinsurer, under the doctrine of “follow the settlements”. General Accident refused to pay, arguing that Integrity did not act reasonably when it allowed Pfizer’s claims for coverage, and had covered claims for anxiety and fear of malfunction outside of the policy periods.
The court agreed with General Accident, and found that Integrity had paid claims beyond the scope of its policies. The judge held that under applicable precedent the date of implant is not a valid “occurrence” in cases where the plaintiff alleges fear of malfunction of a working heart valve, and therefore does not trigger the duty to indemnify. According to the judge, there was no evidence that the Pfizer Settlement plaintiffs’ valves were defective, or that there was any physical impairment or injury to the Pfizer Settlement plaintiffs during the policy periods. Additionally, the judge found that Integrity’s senior claims examiner had failed to conduct an investigation into Pfizer’s claims, and had simply adopted Pfizer’s position that the date of implant triggered coverage. For these reasons, the judge found that General Accident had no obligation to pay toward the settlement.
On July 7, 2006, the federal court for the Southern District of New York denied summary judgment for defendant latex glove manufacturer, holding that the Food and Drug Administration’s latex glove manual is not a federal regulation, but rather an educational information manual on which preemption of state law may be based. Plaintiff filed suit against several latex glove manufacturers in New York state court, alleging that she developed Type I latex allergy and Type IV contact dermatitis as a result of using the defendants’ natural latex gloves. Plaintiff’s claims included negligence, gross negligence, strict liability, failure to warn, misrepresentation, and breach of express and implied warranty.
Defendant Aladan moved for summary judgment, arguing that the FDA’s 1993 manual entitled “Regulatory Requirements for Medical Gloves: A Workshop Manual” constituted federal requirements that preempted Plaintiff’s claims insofar as they encompassed a failure to warn claim. Aladan also argued that the pre-market notification process required by Section 360(k) of the Food, Drug and Cosmetic Act also had preemptive effect on state tort law claims. Aladan also argued that because Plaintiff’s expert used a non-FDA-approved test to establish Plaintiff’s latex allergy, the expert testimony was inadmissible under Daubert v. Merrell Dow Pharmaceuticals, Inc. (113 S. Ct. 2786 (1983)).
The district court denied all of Aladan’s bases for summary judgment. The court first held that the FDA glove manual did not constitute a binding federal regulation, relying upon the Supreme Court opinion of Medtronic, Inc. v. Lohr (116 S. Ct. 2240 (1996)) and the Southern District of New York’s own opinion in Richman v. W.L. Gore & Associates (988 F. Supp. 753 (S.D.N.Y. 1997)). The court also held that the significantly less demanding pre-market notification process required by Section 360(k), as compared to a traditional Class III medical device regulated by the FDA’s rigorous 1200-hour pre-market approval process, did not preempt state tort law claims. Finally, the court rejected Aladan’s argument that the test used by Plaintiff’s expert should be excluded under Daubert, holding that approval by the FDA is not dispositive of the issue of reliability, but rather goes to the weight of the evidence.
The United States District Court for the Northern District of Georgia recently held that it does not have jurisdiction to hear a products liability case against Tissue Science Laboratories, Inc. that merely references, but is not based on, federal regulations. The court remanded the case to state court.
Plaintiff Barbara McFarland filed suit against Tissue Science, alleging personal injuries caused by Tissue Science’s Permacol product. Permacol is a surgical reconstruction device made from pig collagen. According to the complaint, Tissue Sciences markets Permacol for use in open wounds, in the presence of infection, or in operations where there is an elevated risk of infection. Also according to the complaint, the FDA has not approved Permacol for these uses.
Ms. McFarland’s suit alleged eleven different causes of action; only one, negligence per se, made reference to the federal Food, Drug, and Cosmetics Act. Tissue Science Laboratories removed the case to federal court, claiming that plaintiff’s complaint “revolves around numerous federal claims alleged under [the Food, Drug, and Cosmetics Act and regulations thereunder].”
The court took the opportunity to undertake the “‘independent obligation’ to examine its own jurisdiction,” and held that the complaint did not raise federal question jurisdiction. Quoting the Supreme Court’s decision in Merrell Dow Pharm. Inc. v. Thompson, the court held that mere reference to a federal regulation or statute as an element of a state cause of action is not sufficient to create federal question jurisdiction.
On June 29, a federal judge remanded a case involving a hip prosthesis, finding that an in-state medical device distributor could be found liable under the Texas Products Liability Act. The complaint was filed by Mr. James Moses in state court after his hip implant failed and was replaced four times.
The defendants, including Zimmer Holdings, Inc. and Zimmer Nagel Ltd., removed the case to federal court; Mr. Moses moved to remand. Opposing the remand, defendants argued that Zimmer Nagel Ltd. had been fraudulently joined to defeat diversity of citizenship. They claimed that Zimmer Nagel could not be held liable because it is not a “seller” under the Texas Products Liability Act, but is simply a service provider.
The federal court disagreed. Because defendants conceded that Zimmer Nagel may have delivered the artificial hip replacement product to the hospital at which Mr. Moses’ surgery occurred, the court held that Zimmer Nagel is not a “mere service provider.” Under Texas law, a seller includes anyone who places a product in the stream of commerce. Furthermore, plaintiffs produced evidence that Zimmer Nagel provided the artificial hip replacement product used in at least one of Mr. Moses’ revision surgeries.
Finally, the federal court rejected defendants’ argument that Zimmer Nagel was an “innocent seller” under the Products Liability Act because it did not engage in conduct that resulted in injury. According to the court, plaintiffs produced some evidence that Zimmer Nagel knew of alleged defects before at least one of Mr. Moses’ revision surgeries. Thus, defendants could not carry their “heavy burden” of showing improper joinder, and remand to state court was proper.
On June 27, a Pennsylvania appeals court affirmed summary judgment for defendant Medtronic in a case involving a Model 7425 Intrel 3 Implantable Neurological Electrical Pulse Generator that malfunctioned while implanted in the spinal cord of Mr. Joseph Creazzo. Mr. Creazzo filed his complaint for product defect, failure to warn, and strictly liability before the device was removed.
When the complaint was filed, Medtronic asked that the device be preserved and proposed a stipulation for its examination to avoid spoliation of the evidence. Mr. Creazzo declined the stipulation, requesting instead that Thomas Jefferson Hospital in Philadelphia retain the device once explanted. The Hospital lost the device nearly two years later. The Court of Common Pleas entered summary judgment for Medtronic on the basis of spoliation of evidence and the learned intermediary doctrine.
On appeal, the panel affirmed the lower court’s application of comment k of the Restatement (Second) of Torts Section 402a, which discusses the inapplicability of strict liability principles to certain products that, by their very nature, cannot be made safe for their intended and ordinary use. The comment mentions only prescription drugs and vaccines, not medical devices, by way of example. The court found, however, that there is “no reason why the same rationale applicable to prescription drugs should not be applied to medical devices.” Applying comment k, the court held that the neurostimulator device was an “unavoidably unsafe product” and that Mr. Creazzo’s strict liability claims were barred.
The appeals court also agreed that Mr. Creazzo bore responsibility for preservation of the device. It found that because this case alleged a manufacturing defect, not simply a design defect, inspection of the actual device at issue was critical and Medtronic was highly prejudiced on being denied that opportunity. Finally, the court rejected Mr. Creazzo’s claim that application of the learned intermediary doctrine was inappropriate.
On June 26, 2006, a Nevada federal district court remanded back to state court a case involving a Medtronic Inc. catheter which had slipped into the Plaintiff’s spinal cord just five hours after the implantation procedure, causing her to suffer paralysis in one leg. Plaintiff brought suit in state court against Medtronic, Medtronic’s medical director in Clark County, Nevada, and the Medtronic sales representative from whose “truck stock” the implanted catheter had been taken, alleging negligence, breach of warranties, strict liability, and joint and several liability. The defendants removed the action to federal court, alleging that the Medtronic sales representative had been fraudulently joined to destroy diversity of citizenship and prevent removal.
Plaintiff sought remand, which the district court granted because the defendants were not able to prove that there was absolutely no possibility that Plaintiff could establish a cause of action against the sales representative. The court found Plaintiff’s claim of strict products liability against the representative to be “colorable” because, under Nevada law, sellers of defective products can be held strictly liable for products sold. The court recognized that although Nevada case law has yet to address the issue of whether a sales representative of a manufacture constitutes a “seller” for purposes of strict products liability, other jurisdictions are split on the issue. Therefore, remand was required and proper.
On June 23, 2006, in a case involving a Dacromed Dura-II brand semirigid penile prosthesis that had trouble remaining in a concealed position, the Rhode Island Supreme Court dismissed a judgment against the prosthesis manufacturer on the grounds of res judicata, but gave the Plaintiff 20 days to accept a remitted verdict of $400,000 against the manufacturer’s insurance company.
Having struggled with significant pain during intercourse as well as difficulties with keeping the prosthesis in the down position, Plaintiff first filed suit in federal court against Urohealth Systems, Inc., the parent company of Dacromed, alleging negligence, breach of warranty, strict liability, failure to warn, and res ipsa loquitur (Lennon I). While the federal case was pending, Plaintiff filed another action (Lennon II) alleging the same claims in the Superior Court of Rhode Island against both Urohealth and Dacromed, as well as their insurance company, National Union Fire Insurance Company. Plaintiff and Urohealth ultimately stipulated to the voluntarily dismissal with prejudice of Lennon I. Thereafter, the defendants in Lennon II moved for summary judgment, arguing that Plaintiff’s claims in Lennon II were barred by res judicata and collateral estoppel as a result of the dismissal of Lennon I. After Plaintiff refused to accept a remittitur of a $750,000 jury award, the trial court ordered a new trial. Both sides appealed.
The Rhode Island Supreme Court first remanded the case back to the trial court with respect to National Union because, although the Court refused to set aside the grant of a remittitur on the grounds that it was supported by the trial court’s careful consideration of all the evidence, the Court also felt that Mr. Lennon should be afforded a reasonable opportunity to accept the reduced judgment. Therefore, the Court granted Plaintiff a twenty-day period within which he may accept or reject the remittitur on remand.
Next the Rhode Island Supreme Court dismissed the judgment as to Dacromed, holding that the requirements for the application of the doctrine of res judicata were satisfied with respect to prosthesis manufacturer. Both the trial court and the Supreme Court found that there existed a sufficient commonality of interest between Dacomed and Urohealth so as to warrant finding the companies to be in privity for purposes of res judicata. The Supreme Court also found the cases to have a sufficient identity of issues, because Plaintiff’s product liability claims against Urohealth in Lennon I were the same as those alleged against Dacomed in Lennon II, and they arose from the same series of transactions, i.e., “the manufacturing and implantation of an allegedly defective and unreasonably dangerous product that caused harm to plaintiff.” Finally, under Rhode Island law, a dismissal with prejudice constitutes a valid, final judgment on the merits for res judicata purposes.
On May 23, the Connecticut Supreme Court reversed summary judgment for defendants in a case involving a Medtronic pacemaker that was re-adjusted at the recommendation of a company representative. It held that whether or not the Medtronic representative’s recommendations were consistent with the device’s FDA-approved manual is not a question of law, but one of fact.
The case involves a young woman who was implanted with a pacemaker a week after birth due to a congenital complete heart block. At the age of 14, her doctor approved an adjustment of her pacemaker from 60 paces per minute to 40 paces per minute on the advice of a Medtronic representative. As a result, the young woman allegedly suffered a cardiac event and incurred permanent brain damage.
The trial court granted summary judgment to defendants on the basis of the learned intermediary defense, but the Connecticut Supreme Court reversed. It concluded that there was a material question of fact as to whether the Medtronic representative’s communications to the doctor and the doctor’s physical adjustment of the pacemaker actually contradicted the device’s manual, thereby vitiating the device manual’s warnings and rendering the pacemaker essentially ineffective. The court also reversed summary judgment for defendants under the Connecticut Unfair Trade Practices Act, holding that the exclusivity provision of the Connecticut Product Liability Act barred the plaintiffs’ CUTPA claim.
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