Court Says No Dice To Medtronic's Motion For Summary Judgment

On February 16, the U.S. District Court for the Central District of California denied Medtronic's motion for summary judgment in United States ex rel. The Dan Abrams Company LLC v. Medtronic Inc., No. 2:15-cv-01212-JAK-AS (C.D. Cal. Feb. 16, 2024) — a case with a procedural history dating back almost a decade, with several amended complaints and a remand along the way.

In the case, the relator claimed that Medtronic misled the FDA when it applied for clearance to sell two spinal implant devices. In particular, the relator alleged that Medtronic falsely represented that the devices were to be used in the thoracolumbar spine — thereby leveraging a less stringent standard of FDA review applicable to such devices — when, in fact, the devices were designed and intended to be used in the cervical spine. The relator further alleged that Medtronic falsely represented to hospitals and surgeons that the devices were approved by the FDA, rather than representing that the devices had received the narrower FDA clearance, resulting in the submission of false claims to the government for the purportedly misbranded devices.

Medtronic mounted several arguments at summary judgment — all of which were rejected.

First, Medtronic argued that its application to the FDA did not contain false statements because the devices can be used in a non-contraindicated manner. In support of that argument, Medtronic presented testimony from three surgeons that the devices had in fact been used successfully in the thoracolumbar region in a non-contraindicated matter. The court, however, held that the doctors' testimony was not dispositive on the issue and that genuine issues of material fact remained about whether the uses by these physicians were contraindicated.

Second, Medtronic argued that the relator did not satisfy the FCA's "materiality" element because Medtronic's "applications did not make any misstatements about a material characteristic" of the devices and that the FDA "had sufficient information to make an independent determination that the devices were safe and effective for their intended use." In its briefing, Medtronic had argued that: (1) its submissions to the FDA "contained accurate and detailed information about the relevant characteristics of the Subject Devices," including all the details about the devices that relator claimed rendered them incapable of use in the thoracolumbar spine; (2) the FDA carefully reviewed the submission and asked for additional information regarding the devices, which Medtronic supplied; and (3) only after that process did the FDA independently conclude that the devices were safe and effective for use in the thoracolumbar spine.¹ Medtronic also argued that the FDA had taken no action in the almost eight years since the relator lodged its allegations, demonstrating immateriality. But the court was unpersuaded, holding that the misrepresentations Medtronic allegedly made to the FDA that resulted in application of a less stringent standard of review "went to the very essence of the bargain" and would, therefore, be "material" under the FCA.

Finally, Medtronic argued that the relator had failed to produce evidence of an actual claim submitted to government payors for a procedure in which the devices were used in a contraindicated manner. The court rejected that argument as well, finding that the relator had offered evidence of Medtronic's direct sales to government hospitals, "from which it can reasonably be inferred that there were payments for the devices from government funds."

A trial date has yet to be set, but we will continue to monitor this case and update our Qui Notes readers on any developments.

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