Ever since Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), held that state-law claims alleging fraud on the FDA are preempted, plaintiffs have been attempting to find some other way of bringing claims that attribute FDA actions to a defendant’s false pretenses.  Since preemption is based on the Supremacy Clause, and the constitutional relationship between the federal and state legal systems, the doctrine doesn’t apply where recovery is sought under a federal statute.  Since the False Claims Act (“FCA”) is a federal statute, sporadic attempts have been made to bring private fraud-on-the FDA-claims under that statute.  Bexis, who invented what became the Buckman fraud-on-the-FDA/implied-preemption defense in the Bone Screw litigation, even worked on an amicus brief in one such case, United States ex rel. Gilligan v. Medtronic, Inc., 403 F.3d 386 (6th Cir. 2005), that was ultimately decided (favorably to the defense) on other grounds.

A little less than a year ago we reported on an excellent FCA result in United States ex rel. D’Agostino v. EV3, Inc., 153 F. Supp.3d 519 (D. Mass. 2015).  Ever since we’ve been holding our breath, because the First Circuit has been known for pro-plaintiff rulings in cases against our drug and medical device clients.  Indeed, the First Circuit once led our list the worst drug/medical device cases of the year for two years running – in 2012 and 2013.  Whether something’s changed since then in the First Circuit, we can’t say.  But we can report that the district court’s dismissal of fraud-on-the-FDA-based FCA claims in D’Agostino has just been affirmed with an excellently reasoned decision.  See D’Agostino v. EV3, Inc., ___ F.3d ___, 2016 WL 7422943 (1st Cir. Dec. 23, 2016).

The facts in D’Agostino were thoroughly explained in our prior post.  Briefly, the relator (a fired sales rep) alleged that the defendants pulled fast ones on the FDA with respect to the approvals/supplemental approvals of two medical devices, one called “Onyx” and the other “Axium” (these defendants evidently like “x” as much as did the former Standard Oil of New Jersey).  The relator-plaintiff claimed that the defendants:  (1) sought approval of Onyx for a narrow indication, but intended to promote it more broadly off-label (exactly the claim in Buckman); (2) failed to live up to promises made to the FDA concerning extensive surgeon training in using Onyx (also a form of fraud on the FDA); (3) concealed the failure of Onyx’s active ingredient in a different device (ditto); and (4) failed to recall earlier versions of Axium after obtaining FDA approval (not fraud on the FDA, but a theory that could dangerously penalize innovation).  See D’Agostino, 2016 WL 7422943, at ??? (for some reason WL has omitted star paging, so we’ll also cite to the slip opinion), slip op. at 4-8.  Critically, although the FDA was informed of all of these claims, the Agency never instituted any enforcement action, nor did the government elect to join the D’Agostino FCA action.  Id. at 9, 15.  As discussed in the prior post, the district court dismissed all of these claims with prejudice as futile.

Continue Reading Fraud on the FDA Doesn’t Fly Under the FCA Either

People send us things to consider discussing in our posts. Usually, those things are court decisions in drug and device cases.  Sometimes, they are so far afield from our comfort zone that we do not give them much consideration.  This week, we received a motion from a False Claims Act case that we thought was interesting enough to enlist a colleague to add some subject matter expertise while we fretted about the election, work, the election, and some other stuff (i.e., the election).  Much of the credit for this post goes to Andy Bernasconi, a fine lawyer for a crazy Red Sox and Patriots fan.

While we do dabble in the FCA on this blog, we lean on Andy for a quick primer on the FCA’s provisions.  Congress originally passed the FCA in 1863 as a way to deter and punish government contractors’ fraud against the U.S. and Union troops during the Civil War.  The statute (as amended) generally creates liability for any person who knowingly submits a materially false claim demanding payment from the United States. See 31 U.S.C. § 3729(a)(1). An FCA violation is punishable by treble damages, civil penalties of up to $21,563 for each false claim, and an award of attorneys’ fees. Id. §§ 3729(a)(1) &(3); id. § 3730(d)(1); 81 Fed. Reg. 42491 (June 30, 2016).

One of the most notable aspects of the FCA is that it contains unique qui tam provisions that permit a private whistleblower, also known as a “relator,” to file FCA claims on behalf of the federal government. Id. § 3730(b)(1). In doing so, the relator files the case under seal, at which point the Justice Department investigates the allegations and decides whether the government will intervene and take over the case to litigate for itself. Id. §§ 3730(b)(2), (4).  If the government declines to intervene in the case, the relator may litigate the case in the name of, and on behalf of, the government. Id. § 3730(c)(3).

Continue Reading Putting the False in False Claims Act Cases

Today’s case is a partially published decision about a partial reversal of a plaintiff verdict in California. So, we are only going to discuss select parts of the decision. It’s a long one and there are large sections about plaintiff’s counsel’s misconduct during trial and excessive damage awards. It is also a joint medical malpractice and product liability case. So, when you strip away the rest, we get down to a handful of legal rulings that we are truly interested in.

The case is Bigler-Engler v. Breg, Inc., 2016 Ca. App. LEXIS 921 (Cal. App. Oct. 28, 2016) and involves the use of a cold therapy medical device, available only upon prescription. Plaintiff underwent arthroscopic knee surgery, following which her surgeon prescribed use of the device to aid in recovery. Id. at *5-6. Plaintiff rented the device from her surgeon’s medical practice. Id. at *7. Upon discharge after surgery, plaintiff was advised to use the device at a certain temperature “as much as possible.” Id. at *8. Plaintiff’s use of the device and the instructions she received from her surgeon are explained in more detail in the opinion, but ultimately, plaintiff developed severe skin damage that required multiple plastic surgeries and scar reduction surgeries. Id. at *9-13.

Plaintiff file suit against her surgeon, the medical practice, and the device manufacturer. The jury found against the manufacturer on plaintiff’s claims for design defect, failure to warn, and intentional concealment. Id. at *19. The jury also awarded punitive damages against the manufacturer on the intentional concealment claim. Id. On appeal, the court overturned the intentional concealment verdict, which also meant reversing the punitive damages verdict. But, the court upheld the trial court’s decision not to instruct the jury on the learned intermediary doctrine finding it did not apply to a medical device intended to be operated directly by the patient.

Continue Reading A Fraudulent Concealment Win Coupled with an Unfavorable Learned Intermediary Ruling

This post is from the non-Reed Smith side of the blog.

If you’re even remotely interested in the topic of preemption in Pre-Market Approved (PMA) medical devices that were used in an off-label manner, simply search this blog for our Infuse cases. There are dozens and almost all are complete victories for the defense. What occasionally survives are fraud or misrepresentation claims, although they have a tough time meeting the heightened pleading standard of Rule 9(b), or failure to warn claims where a court recognizes failure to submit adverse events to the FDA as parallel to a state law duty to warn physicians. As you’ll easily see from our prior writings, we don’t understand that parallelism at all.

The most recent Infuse victory strikes a blow at each and every attempt by plaintiffs to circumvent, dodge, sidestep, and elude preemption and pleadings standards. And with each by-pass blocked, plaintiffs’ claims had nowhere to go.

As a quick refresher, Infuse is a medical device used to stimulate bone growth in spinal fusion surgeries. It is a multi-component device that received FDA PMA approval for use in single-level, anterior, lumbar surgeries. Aaron v. Medtronic, Inc., — F. Supp.3d –, 2016 WL 5242957, *1-2 (W.D. Ohio Sep. 22, 2016). Aaron is actually a consolidation of the claims of several hundred plaintiffs who alleged they were injured by their surgeon’s use of the Infuse device in an off-label manner. Specifically, they allege the device was either implanted without all of its component parts, implanted posteriorly, implanted at multiple levels, or implanted in their cervical or thoracic spines. Id. at *2. Plaintiffs’ causes of action are fraud/misrepresentation, strict liability failure to warn, strict liability design defect, negligence, and breach of express and implied warranties. Id. Defendants moved to dismiss all claims on several grounds, including most predominantly preemption.

Before getting to the substantive analysis, the court had to consider what pleadings standard to apply. Wait. Isn’t it TwIqbal? What’s the issue? The answer is the Seventh Circuit decision in Bausch v. Stryker. The Aaron plaintiffs alleged that they did not need to plead the specific federal law or regulations that defendant allegedly violated because medical device products liability cases should have a “more permissive” review standard. Id. at *3. Plaintiffs got that idea from Bausch which held that particularity in pleading the specific FDA regulations violated was not necessary due to much of the “critical information” being kept confidential. Id. at *3-4. Many courts disagree with Bausch, including the Sixth Circuit which held in a non-medical device case that a “natural imbalance of information” does not warrant lowering Rule 8’s pleading standards. Id. at *4. The discovery process cannot be used to find sufficient factual support for plaintiffs’ pleadings after the fact. So, Aaron applies TwIqbal, not some watered down version (although the court does state that some of plaintiffs’ claims might not have withstood application of that lesser standard).

Continue Reading Another Slam Dunk Infuse Win – Preemption and More

When we think of prescription medical devices, we usually think of the sorts of devices that are implanted during surgery and tend to end up in litigation—artificial joints, pacemakers, surgical meshes, and bone cements, to name a few.  Devices according to the FDCA also include “in vitro reagent[s] . . . intended for use in the diagnosis of disease or other conditions.”  There are a whole slew of diagnostic devices that are used to test blood, tissue, or other stuff from the body to provide useful health information.  Some of them get used directly by health care professionals, some can be purchased over-the-counter, and some need a prescription for the patient to use it at home.  We know that plaintiffs sue over just about every kind of device under a range of theories, but we do not recall seeing consumer fraud claims over prescription diagnostic devices.  That is what we have in Andren v. Alere, Inc., No. 16cv1255-GPC(NLS), 2016 U.S. Dist. LEXIS 124252 (S.D. Cal. Sept. 13, 2016), and we thought the issues were interesting enough to spend a little time sharing them with devoted readers.

Andren is a decision on a motion to dismiss a purported class action complaint brought by two plaintiffs, each of whom claimed to have suffered thrombotic events from inadequate anticoagulation as a consequence of inaccurate readings on a defendant’s test kit, which checks blood clotting times for people on anticoagulation therapy.  We have some guesses about why they did not just pursue product liability claims for personal injury and some of the hurdles that they would stumble over on the way to class certification.  None of that really mattered yet, because they tried to assert claims sounding in fraud and Fed. R. Civ. P. 9(b) requires heightened pleading for such claims.  Some background on the device is in order first.  Unlike the court, which had a discussion of what beyond the complaint it could consider—which we will omit here—we can say that the defendant recently elected to discontinue and withdraw the device that plaintiffs claim to have used, which followed the earlier recall of lots of the product made since 2008 because of issues with accuracy in certain patient populations or settings.  Plaintiffs’ allegations were not limited to the particular device they used and were predictably broad.  They alleged that the defendant and its predecessors received thousands of complaints of “malfunctions,” including some number that results with their devices differed significantly from what independent laboratories found on the same samples. Id. at **3-4.  They alleged that FDA issued warning letters about adverse event reporting and other issues after 2005 and 2006 inspections of defendant’s predecessor in 2005 and 2006—well before the device at issue was cleared or sold. Id. at **4-5.  In April 2014, the test strips portion of the test kit were recalled.  In December 2014, the monitor portion and other products in the line were recalled.  The recalls were because readings with the kits were sometimes significantly lower than they would have been if tested by laboratories. Id. at **5-6.

They way that these readings (of the International Normalized Ratio or “INR”) work is numbers that are lower than the expected range for someone on anticoagulation therapy (with the range depending on the underlying condition and other factors) should result in increased anticoagulation therapy.  Having too much anticoagulation therapy can put a patient at risk for undesired bleeding.  Each plaintiff claimed that their readings from the defendant’s test kits were incorrectly high, so they either failed to take a dose of anticoagulation on a certain day or reduced his regular dosage of anticoagulation over time—with each plaintiff apparently taking these actions without consulting health care providers. Id. at **7-9.  So, the alleged product issues here were the opposite of the reason for the recalls.  And then the plaintiffs claimed to have suffered a stroke (not specified as ischemic or hemorrhagic, but the former is about seven times more common and this one was apparently followed by transient ischemic attacks) or a transient ischemic attacks. Id. Based on the recounting of the medical allegations, then, the plaintiffs claimed the sort of injuries that were also the opposite of the risk implicit in the recall.

Continue Reading Consumer Fraud Allegations For A Prescription Medical Device Do Not Pass The Test

You wouldn’t be the first to notice that some of our posts say more about television programs – and certainly with more gusto – than about the law.  We could make the case that pop culture and the law are related, and that familiarity with the former can make one a better advocate when engaged in the latter.  We could even cite an article on the value of pop culture that was written by an in-house lawyer who might be the smartest person we know.  But let’s not perpetrate a fraud.  Truth be told, it’s flat-out easier to tackle tv than preemption.  Would you rather binge watch Orange is the New Black or the latest judicial jibberings on the parallel violation exception?  Especially in these lingering dog days of Summer, not much in the law seems dramatic or even mildly entertaining.  To be sure, not so long ago the Summer was also a wasteland for television.  The good stuff concluded in the Spring.  Summer was strictly for repeats.  Under the old model, after fine offerings such as Game of Thrones and The Americans wrapped up before Memorial Day, there would be nothing worth watching until the Fall season, when a couple of decent shows might temporarily distract you from the decline of the West (by which we mean the American League West, the AFC West, and the overall culture of the Enlightenment).  But things have changed when it comes to programming.  Television comes through whilst the law remains in its mid-year torpor.  Of a sudden, Summer tv offers a bounty for couch potatoes seeking an escape from the inferno.  So hang up that seersucker suit, pour out a Pimm’s, and feast your eyes on these tv treasures:

Stranger Things (Netflix) – We love the 80s.  That was when we entered law school and, more importantly, exited law school.  A decade that starts with the eruption of Mt. St. Helens and ends with the collapse of the Berlin Wall, and that introduced Seinfeld and The Simpsons in-between, is special.  Stranger Things is a love letter to the 80s.  It is a Spielbergian, Stephen King-ian mash up of horror, sci-fi, government conspiracy, and teen-agers coming of age. Stranger Things also supplies a great role for Winona Ryder, who first grabbed our eyes in Heathers (1988). You know how at the end of a Netflix episode a clock starts counting down in the corner, and you have to decide either to exit or let the next episode start?  With Stranger Things, we always let the next episode take over the screen, and let all the next episodes take over our day.  Could.  Not.  Stop.  Watching.

Mr. Robot (USA) – Maybe this bold show is undergoing something of a sophomore slump, but the episode that mimics 90s sitcoms (e.g., Full House, Family Matters) may have been the best hour of tv since Cersei burned down the town and the Khaleesi set sail with a dragon escort.  If you watch this show, you might actually have something substantive to say to the techno-geeks who patrol your office.  And they might have something to say to you besides, “Have you tried rebooting?”

The Night Of (HBO) – One always has high expectations for any show in the 9 pm Sunday night slot on HBO, and The Night Of does not disappoint. It is based on a British show called Criminal Justice.  One of the writers for the American version is Richard Price, who has penned some fine novels (Lush Life) and some of the best episodes of The Wire.  The first couple chapters of The Night Of were blisteringly suspenseful, reminding us how modern technology spies on us, but how there are still tragedies that manage to evade the cameras and our understanding.  Then the show settled into a Law & Order-type procedural, complete with the requisite interview of someone at their workplace.  (Comedian John Mulaney does a bit about a guy calmly loading crates onto a truck while answering questions about a grisly murder.  “Tony Ramirez?  Yeah, I remember him.  Worked on Tuesdays, I think.”  Keeps lifting crates.  A detective puts a picture under the witness’s nose.  The witness hardly pauses as he flings a crate into the trailer.  “No, I don’t recognize him”  Picks up another crate.)   The workplace interview in The Night Of involved a hearse driver, so the creepiness level was turned up to 11.  The most recent entry of The Night Of featured a cross-examination of a defense expert by the prosecutor.   The expert and prosecutor clearly have been locking horns for many years.  By now, they know each other’s moves.  They even seem to enjoy each other’s company.  The wry back-and-forth reminded us of some mini-battles we have had with certain plaintiff experts we have deposed repeatedly.  Of course, in our case there was no murder — except, you know, for the expert’s occasional murder of the truth.

Watch these shows and you will thank us.

What’s that?  You came to this blog to learn a little something about the law, not television?  Okay, if you insist.  But how about if we split the difference, and discuss a case about television?  To be precise, it is a case about televisions, in the plural.  In Oliver v. Funai Corp., 2015 WL 930541 (D. N.J. Dec. 21, 2015), the plaintiffs claimed that the defendants sold them defective televisions.  The defect consisted in certain allegedly faulty components.  When those components went bad, the televisions would  “stop displaying a picture and sound.”  That does, indeed, seem like a problem.  The plaintiffs alleged that the televisions in question typically failed outside of the stated one-year warranty period and ninety-day warranty period for labor, leaving consumers with little reprieve.  The legal claims included fraudulent concealment and the like.  There were two plaintiffs, one in Massachusetts and one in Arizona.  One of the plaintiffs alleged that he purchased his television in September of 2012, and that the same television failed in January 2014, after only 190 hours of usage.  At this point, and not just because we are a crotchety defense hack, we grew suspicious of that plaintiff.  Four months of tv viewing, totaling only 190 hours?  That’s just a little more than an hour and a half a day.  Who watches so little tv?    Most people would burn through 190 hours just during the NFL playoffs.  Was this person confining their viewing to PBS specials on How Turtles Do Calculus, or the Cleveland Symphony’s production of an opera based on Kafka’s Metamorphosis, “Roach!”  Surely there is an issue in this case of credibility and/or limitation of damages.

What does any of this have to do with drug or device law?  The Oliver case involves one issue we have addressed a lot recently, personal jurisdiction, and one we hardly ever see, which is whether internet postings constitute information that can be attributed to a corporate defendant.

Personal Jurisdiction

The defendants in Oliver were (1) Funai Corp., which is incorporated and has its principal place of business in New Jersey, and (2) its parent, Funai Electric, a company incorporated and headquartered in Japan.   Was there personal jurisdiction over the Japanese parent company?  As most of our readers know by now, personal jurisdiction consist of both general jurisdiction and specific jurisdiction.  With general jurisdiction, a company can be sued for anything.  With specific jurisdiction, a company can be sued only for its conduct specifically in and targeted to that particular jurisdiction.  Under the Supreme Court’s decision in Bauman, general jurisdiction extends only to companies that are essentially “at home” in that jurisdiction, and that at-home-ness applies to place of incorporation, principal place of business, and extremely rare exceptions, such as temporary relocation of a company during war time.  The Oliver court easily decided that the plaintiffs could not show general jurisdiction under the paradigmatic examples laid out in Bauman.  In support of their general jurisdiction argument, the plaintiffs chiefly relied upon the fact that Funai Electric allegedly “funnels its televisions through the State of New Jersey.”  But it is well-settled by the Supreme Court that while “[f]low of a manufacturer’s products into a forum … may bolster an affiliation germane to specific jurisdiction… ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant.”

Continue Reading Television, Personal Jurisdiction, and Whether Corporate Knowledge Can be Imputed from Internet Drivel