Medical Device Lawsuit Watch - November 2008

This summary of key lawsuits affecting medical device companies is provided by the Health Care Law Group of Crowell & Moring LLP, in collaboration with the firm’s Torts, Antitrust, Commercial Litigation, and Intellectual Property Groups.

Cases in this issue:

• Aebischer v. Stryker
• Cordis Corp. v. O’Shea
• Proveris Scientific Corporation v. InnovaSystems, Inc.
• Ratliff v. Mentor Corporation
• Purcel v. Advanced Bionics Corp., et al.
• Advanced Cardiovascular Sys., Inc. v. Medtronic Vascular, Inc., et al.
• Cordis Corp. v. Medtronic Vascular, Inc., et al.
• Peter v. Stryker Orthopaedics, Inc., et al.
• Parker v. Stryker Corp., et al.

Aebischer v. Stryker Slip Opinion No. 07-1954 (7th Cir. Aug. 1, 2008)

The Seventh Circuit Court of Appeals reversed the district court’s grant of summary judgment on statute of limitations grounds. The court found that the question of when the clock had begun to run must be submitted to the jury, because a genuine issue of material fact existed as to when the plaintiff was on “inquiry notice” that her injury may have been caused by the defendant’s wrongdoing.

In Aebischer v. Stryker, the plaintiff brought a defective product suit against the defendant, claiming that her hip prosthesis was defective. The case was filed on April 14, 2005. However, the plaintiff had learned in January of 2002 that her hip would need to be replaced again because particles of plastic from the implant had become lodged between the implant and the plaintiff’s bone, wearing away the bone and causing the hip to loosen. Based on this fact, the district court granted summary judgment, finding that the suit was barred by Illinois’ two year statute of limitations for personal injury claims.

The Seventh Circuit Court of Appeals reversed. Under Illinois law, the clock did not begin to run until the victim had “sufficient information concerning [the] injury and its cause to put a reasonable person on inquiry to determine whether actionable conduct is involved.” The court found that although the plaintiff knew of her need for additional surgery more than two years before filing suit, a reasonable jury could rely upon other facts in the record to find that the plaintiff was not on “inquiry notice” of potential wrongdoing by the defendant until June of 2003, when the plaintiff underwent her second hip replacement surgery.

The court noted that the plaintiff’s doctor had originally told her that because of her youth and level of physical activity, her hip could wear more quickly, so it was conceivable that the plaintiff may have attributed her need for additional surgery to her unique physical situation, rather than a product defect. The court also noted that the record appeared to indicate it was not until the plaintiff’s second surgery that the full extent of her injury became known. At this point, the plaintiff’s doctor told her that “her first prosthetic device had exhibited ‘advanced or catastrophic failure.’”

The Seventh Circuit emphasized, however, that a jury need not necessarily conclude that the plaintiff’s failure to suspect actionable conduct when she first learned of her need for a second hip replacement was reasonable. A jury could also reasonably rely on the plaintiff’s knowledge of her need for further surgery and the fact that her implant had failed after less than five years, when it had been estimated to last a minimum of fifteen years, and find that the plaintiff was on inquiry notice of the defendant’s wrongdoing in January of 2002.

Cordis Corp. v. O’Shea Slip Opinion No. 4D07-4701 (Fla. Dist. Ct. App. Aug. 6, 2008)

The Fourth District Court of Appeal of the State of Florida quashed the order of the trial court judge allowing discovery to be shared with attorneys having no relation to the case because the plaintiffs failed to show that their interest in sharing such information outweighed the defendant’s need to keep the information confidential.

In Cordis Corp. v. O’Shea, the plaintiff brought a medical products liability lawsuit against Cordis Corp. and Johnson & Johnson, claiming that he was injured by a defective drug-eluting CYPHER® stent that had been implanted in him. In the course of discovery, the plaintiff requested copies of contracts to manufacture and market the stent, documents relating to the testing of the stent and the education and training of its sales force, sales projections and forecasts for the product, and documents relating to any adverse events involving the stent both in and outside of the country.

The plaintiff’s attorneys filed a motion with the trial court asking the court to allow the plaintiff to disclose the defendants’ confidential documents obtained in discovery to other attorneys, regardless of whether those attorneys were already involved in related litigation. The plaintiff argued that if he was not allowed to share discovery materials with attorneys at other law firms, the courts would become congested with unnecessary litigation, because these attorneys would have to file suit to obtain the documents. The defendants argued that the dissemination of these documents would endanger their ability to protect their confidential and proprietary information. The trial court entered an order allowing the plaintiff to share the documents.

The Court of Appeals quashed the order. The court stated that a “party seeking confidential information must show a need for that information which outweighs the opposing party’s need to keep the information confidential.” The court held that in this case the plaintiff failed to make that showing.

In so holding, the court relied on several grounds. First, allowing such broad sharing of confidential information could allow attorneys in states with narrower discovery rules than the federal rules to circumvent their states’ discovery limitations by obtaining confidential documents from Florida attorneys and courts. The court stated that “federal discovery may not be used merely to subvert further limitations on discovery in another proceeding.” Additionally, the court found that allowing such sharing would lead to a strain on Florida’s judicial resources, as discovery disputes from other states would be litigated in Florida. The court refused to “make the presiding trial judge a lightning rod for enforcement disputes with parties from all over the country.”

Finally, the court rejected the plaintiff’s argument that he possessed a First Amendment right to share discovery with any attorney who requested it. The court found that the First Amendment does not provide a “right of access to pretrial discovery of confidential information.” The court distinguished the case from cases in which the media was seeking access to the information, or the plaintiffs were seeking to share discovery information to facilitate another attorney’s preparation of a case and avoid duplicative discovery.

Proveris Scientific Corporation v. InnovaSystems, Inc. Case No. 2007-1428 (Fed. Cir. Aug. 5, 2008)

On February 5, 2008, the Court of Appeals for the Federal Circuit ruled that the safe harbor provision of the Hatch-Waxman Act, 35 U.S.C. § 271(e)(1), does not apply to medical devices that are not subject to Food and Drug Administration (“FDA”) approval.

In Proveris Scientific Corp. v. InnovaSystems, Inc., the Federal Circuit affirmed the district court’s ruling that InnovaSystem’s optical spray analyzer device, which measures the physical parameters of aerosol sprays used in nasal drug delivery devices, infringed a Proveris patent.

The Federal Circuit’s analysis focused on the underlying policy considerations that lead to the enactment of the Hatch-Waxman Act. The Court noted that 35 U.S.C. § 156, the patent term extension provision, and 35 U.S.C. § 271(e)(1), the safe harbor provision, were enacted to eliminate two unintended distortions to the effective patent term resulting from pre-market approval required of certain products pursuant to the Federal Drug and Cosmetic Act. The first distortion was the reduction of effective patent life of an innovative product caused by the FDA’s pre-market approval process (“PMA”). The second distortion was the de facto extension of effective patent life at the end of the patent term, also caused by the FDA’s PMA process but affecting generic products.

The Court determined that where a product is not subject to FDA approval and thus not affected by the first distortion and not entitled to a patent term extension under 35 U.S.C. § 156(f), it is similarly not entitled to the benefit of the safe harbor provision of 35 U.S.C. § 271(e)(1).

Ratliff v. Mentor Corporation No.08-3198-CV-S-RED (W.D. Miss. Aug. 5, 2008)

The U.S. District Court for the Western District of Missouri granted a medical device manufacturer’s motion to dismiss a plaintiff’s medical monitoring claim by ruling that Missouri Law recognizes such a claim only in the toxic tort context.

The plaintiff agreed to have Mentor Corporation’s medical device, the ObTape®, implanted in her pelvis area to treat her urinary stress continence. The plaintiff alleged that the ObTape causes vaginal mesh extrusions, infections and abscesses, among other injuries. She filed a lawsuit against Mentor on behalf of herself and others similarly situated based on several theories of liability, including a medical monitoring claim. Mentor moved to dismiss the petition, arguing that the relief requested, which was premised on a medical monitoring claim, is not recognized in Missouri except in the toxic torts context.

To make it easier to secure class certification, the plaintiff excluded “claims for personal injury or wrongful death” and instead intended to establish proof of injury by proving that Mentor must provide a mechanism for detecting and treating latent injuries resulting from the ObTape. Such a claim is referred to as a “medical monitoring claim.”

Relying on the single Missouri Supreme Court case that dealt with a medical monitoring claim, the district court granted Mentor’s motion to dismiss. The Missouri Supreme Court case involved children exposed to lead and held that the children were entitled to recover damages under a medical monitoring claim. The court defined a medical monitoring claim as a claim that “seeks to recover the costs of future reasonably necessary diagnostic resting to detect latent injuries or diseases which may develop as a result of exposure to toxic substances.” The district court interpreted this to mean that a medical monitoring claim applies only to toxic tort cases and refused to extend that decision to apply to the plaintiff’s product liability claim.

Despite a split in authority on whether and to what extent medical monitoring claims are permitted outside of the toxic tort context, the district court stated that it must apply the rule it believes the Missouri Supreme Court would follow. Based on the Missouri Supreme Court’s holding in the toxic tort medical monitoring case, the district court opined that the Missouri Supreme Court would dismiss the plaintiff’s medical monitoring claim because it was not a toxic tort case. As a result, the district court granted Mentor’s motion to dismiss.

Purcel v. Advanced Bionics Corp., et al. No. 07-1777 (N.D. Tex. Aug. 13, 2008)

The District Court for the Northern District of Texas denied Advanced Bionics Corporation’s (“Advanced Bionics”) motion for judgment on the pleadings, permitting the plaintiffs’ strict liability and implied warranty claims to advance.

The plaintiffs’ complaint alleged that Advanced Bionics was strictly liable for the plaintiffs’ injuries because Advanced Bionics’ cochlear ear device was defective. The plaintiffs further alleged that Advanced Bionics breached its implied warranty of merchantability because the device was unfit for its ordinary purpose.

On the strict liability claim, the plaintiffs asserted that the cochlear ear device was defective because it is an adulterated product under federal law. On the implied warranty claim, the plaintiffs similarly contended that the device was unfit for its ordinary purpose because it is an adulterated product under federal law. In its motion for judgment on the pleadings, Advanced Bionics argued that the Medical Device Amendments (“MDA”) to the Food, Drug, and Cosmetic Act preempted the plaintiffs’ strict liability and implied warranty claims because the MDA preempts state law requirements that are “different from, or in addition to” federal law requirements pertaining to the efficacy or safety of a medical device.

The district court disagreed with Advanced Bionics and found that the MDA did not preempt the plaintiffs’ strict liability and implied warranty claims. The court found that because the plaintiffs based their claims on the theory that under federal law, Advanced Bionics’ device was an adulterated product, the claims were predicated solely on violations of federal law. The court then held that the MDA does not preempt state law claims solely predicated on violations of federal law, citing the Supreme Court’s decisions in Medtronic, Inc. v. Lohr and Riegel v. Medtronic, Inc.

In addition, the court noted that under Lohr, where state and federal requirements relating to the effectiveness and safety of medical devices differ, but such differences do not interfere with the federal regulatory scheme, preemption of a state law claim is unwarranted. Regarding the plaintiffs’ implied warranty claim in particular, the court stated that even if the state law requirements differed from their federal counterparts, permitting the implied warranty claim would not interfere with the federal regulatory scheme for medical devices. According to the court, this was because Advanced Bionics’ compliance with the federal law requirements would effectively exonerate Advanced Bionics of state law liability. Accordingly, the court held that preemption of the implied warranty claim was not warranted.

Advanced Cardiovascular Sys., Inc. v. Medtronic Vascular, Inc., et al. No. 98-80-SLR (D. Del. Sept. 29, 2008)

The U.S. District Court for the District of Delaware refused to enjoin Medtronic Vascular, Inc. (“Medtronic”) from selling its Endeavor® stent, which had been held to infringe a patent held by Advanced Cardiovascular Systems, Inc (“ACS”). The court found that there was no justification for a permanent injunction against Medtronic because there was no irreparable injury, there were other remedies available and an injunction would not be in the best interests of the public.

The district court considered a demand for a permanent injunction by ACS against Medtronic for the use of its Endeavor drug-eluting stent (“DES”). ACS claimed that Medtronic’s Endeavor stent infringed ACS’ patents, known as the Lau patents.

The court cited the standard set forth by the Supreme Court for issuing permanent injunctions and held that a permanent injunction may only be issued in cases where (1) the plaintiff has suffered irreparable injury, (2) other remedies, such as monetary relief, are inadequate to compensate for the injury, (3) an equitable remedy is warranted and (4) the public interest would not be disserved by the granting of a permanent injunction.

The court found that ACS and Medtronic directly compete in both the bare-metal and DES markets. Nevertheless, the court also found that there were other significant participants in the stent market, and that “ACS ha[d] not identified any specific customers it has lost, or stands to lose, directly as a result of Medtronic’s continued sales of infringing stents.” For this reason, the court found that ACS did not prove it was suffering irreparable injury. Moreover, the court pointed out that ACS was willing to forego its patent rights for compensation, which supported the court’s finding that a permanent injunction was not appropriate because monetary relief was acceptable to ACS. Finally, the court was persuaded by the fact that “the record contain[ed] evidence of physician preference for Medtronic stents.” Medtronic had declarations by cardiologists who expressed concern “for the success of their surgeries should Medtronic’s products be removed from the market.” Therefore, the court found that it was not in the public interest to permanently enjoin Medtronic from selling its Endeavor stent.

Cordis Corp. v. Medtronic Vascular, Inc., et al. No. 97-550-SLR (D. Del. Sept. 30, 2008)

Following over a decade of litigation, the U.S. District Court for the District of Delaware granted Cordis Corporation’s (“Cordis”) motion for entry of final judgment while denying a motion for a new trial by Boston Scientific Corporation (“Boston Scientific”) as well as a motion by Medtronic Vascular, Inc. (“Medtronic”) for judgment as a matter of law (“JMOL”) on lost profit damages.

In 2000, Cordis won a favorable jury verdict against Medtronic and Boston Scientific Corporation for infringement of Cordis’ patents relating to coronary stent technology. Following a series of rulings and appeals, the cases were retried before separate juries in 2005, with Cordis prevailing again.

In February 2008, the Court of Appeals for the Federal Circuit upheld the 2005 jury verdicts that found Medtronic and Boston Scientific infringed Cordis’ stent patents. The Federal Circuit reversed the holding of claim construction for certain claims at issue. The Federal Circuit remanded the case to the district court to resolve the issue of whether or not Boston Scientific was entitled to a new trial based on the change in claim construction, and whether or not a new trial was required on the issue of damages.

In its order dated September 15, 2008, the court entered final judgment on the jury verdicts, awarding over $1.2 billion to Cordis. The judgment against Medtronic included approximately $271 million in damages, as well as about $250 million in pre-judgment interest. The judgment against Boston Scientific included approximately $400 million in damages, with about $296 million in pre-judgment interest.

On whether the change in claim construction merited a new trial, the court held that the proof of nonobviousness offered at trial by Cordis was sufficiently substantial so as not to be affected by the change in claim construction. The court further noted that Boston Scientific had twice waived an invalidity claim based on co-inventorship by failing to offer evidence at an earlier trial, and the waiver was also unaffected by the change in claim construction. 

Regarding damages, the court held that damages awarded should include interest calculated at the prime rate, compounded quarterly.  The court denied Boston Scientific’s motion for a new trial on damages, declining to allow Boston Scientific out of an earlier agreement in which Boston Scientific had stipulated that Medtronic’s stents were not non-infringing substitutes.  Finally, the court considered Medtronic’s motion for JMOL on damages based on the argument that Cordis had failed to carry its burden to prove entitlement to lost profits.  The court denied the JMOL motion, concluding that there was substantial evidence to support the jury verdict.

Peter v. Stryker Orthopaedics, Inc., et al. No. 07-13298 (E.D. Mich. Oct. 6, 2008)

In a case involving allegations that the Howmedica Duracon® Total Knee system was defective, the District Court for the Eastern District of Michigan dismissed the plaintiff’s Michigan Consumer Protection Act (“MCPA”) claim as preempted by federal law, but allowed the plaintiff’s statutory products liability claim to go forward, finding that it was not time-barred.

The plaintiff underwent knee replacement surgery in 2000 and began experiencing pain and swelling in October of 2001. The plaintiff then underwent revision surgery on July 5, 2004. After the surgery, the plaintiff discovered that the tibial base plate component of the prosthesis had been fractured, damaging the surface of the bone and requiring that the bone be shaved before a new prosthesis could be fitted. The plaintiff sued Stryker Orthopaedics, Inc. and affiliates (“Stryker”) on July 3, 2007.

The court granted Stryker’s motion for summary judgment on the plaintiff’s MCPA claim. The court noted that a Michigan statute explicitly stated that the MCPA did not apply to transactions or conduct “specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States.” Citing Michigan Supreme Court precedent, the court found that the question was “whether the general transaction is specifically authorized by law, regardless of whether the specific misconduct alleged is prohibited.” The court held that the general transaction at issue, the sale of a prosthetic knee, was heavily regulated by the Food and Drug Administration, which had authorized Stryker to market the prosthetic knee at issue. Therefore, the MCPA did not apply.

The court, however, denied Stryker’s motion for summary judgment on the plaintiff’s statutory products liability claim, rejecting Stryker’s argument that the claim was time-barred. The plaintiff argued that he had filed his lawsuit within three years of discovering that he had a cause of action. The Michigan Supreme Court’s decision in Trentadue v. Gorton, however, issued three weeks after the plaintiff brought his lawsuit, held that a Michigan statute precluded the application of the common law discovery rule to products liability claims.

The court held that Trentadue could not be “retroactively applied to [the] [p]laintiff’s claim without violating due process and the doctrine of equitable tolling.” The plaintiff had relied upon the discovery rule because he discovered his claim before the relevant time period had expired, at a time when Michigan applied the discovery rule to products liability cases. The plaintiff could not have known in October of 2001, when his knee began causing him pain, that the Michigan Supreme Court would invalidate the discovery rule in July of 2004. Due to these “unique circumstances,” the court held that the plaintiff’s claim was not time-barred.

Parker v. Stryker Corp., et al. No. 08-01093 (D. Colo. Oct. 21, 2008)

The U.S. District Court for the District of Colorado dismissed the plaintiff’s state law claims against Stryker Corporation and affiliates (“Stryker”), which were based on the plaintiff’s allegation that Stryker’s Trident® Ceramic Acetabular System, an artificial hip implant device, was a defective product. The court held that the plaintiff failed to plead an adequate factual basis for her claims and her breach of express warranty claim was preempted by the Medical Device Amendments (“MDA”).

The district court’s analysis centered on the U.S. Supreme Court’s recent decision in Reigel v. Medtronic. The Riegel Court held that state law claims imposing requirements on manufacturers that are different from the MDA’s premarket approval process are preempted. The plaintiff argued that her claims were not preempted because they paralleled the MDA’s federal requirements. The district court held that the plaintiff had not properly pled a parallel claim under the U.S. Supreme Court’s decision in Bell Atlantic Corp. v. Twombly. The complaint failed to allege facts describing Stryker’s efforts to participate in the premarket approval process or implement its results. Rather, the court found that the plaintiff’s complaint relied upon “conclusory allegations” that Stryker did not satisfy premarket approval standards and violated the Code of Federal Regulations.

The plaintiff further argued that two Warning Letters the Food and Drug Administration (“FDA”) issued to Stryker describing violations of the Food, Drug and Cosmetic Act (“FDCA”) provided a factual basis for her claims. The court stated that “[s]etting aside potential problems of causation posed by attempting to link letters issued in 2007 with [the] plaintiff’s injury in 2004, [the] plaintiff nevertheless c[ould] not escape preemption by reference to provisions of the FDCA that govern the sale of adulterated and misbranded devices because there is no private right of action under the FDCA.”

The court also held that the plaintiff could not rely upon the Warning Letters to allege that Stryker had failed to comply with federal regulations regarding medical device reporting procedures, recall and notification procedures, and failure analysis and quality assurance procedures. The plaintiff did not allege that failure to comply with these regulations rendered the product defective, but rather claimed only that the product was defective because Stryker failed to comply with premarket approval standards. The court concluded that “the complaint fail[ed] to give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.”

Finally, the court analyzed the plaintiff’s breach of express warranty claim and found that it was preempted by the MDA. The plaintiff’s claim was based on the product’s labeling. Relying on Reigel, the court held that the claim was preempted because the premarket approval process included a review by the FDA of “safety and effectiveness under the conditions of use set forth on the label” and a determination “that the proposed labeling [was] neither false nor misleading.” The court concluded that the “[p]laintiff’s express warranty claim would contradict the FDA’s determination that the representations made on the label were adequate and appropriate and, thus, impose requirements different from or in addition to the federal requirements.”

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This material was prepared by Crowell & Moring LLP attorneys Bernadette Stafford, Chandra Westergaard, Jennifer Burdman, Jessica Hall, Lauren Kim, Patricia Freshwater, Matthew Fornataro, Angela Yu and Deborah Yellin. It is made available on the Crowell & Moring website for information purposes only, and should not be relied upon to resolve specific legal questions. If you have questions or want additional information, please call your regular Crowell & Moring contact or you may contact the editor of Medical Device Lawsuit Watch.