A federal appeals court revived two doctors’ False Claims Act lawsuit against a medical device manufacturer on Wednesday accused of making faulty hip implants.
The U.S. Court of Appeals for the First Circuit remanded the case to the U.S. District Court for the District of Massachusetts on the allegations that DePuy Orthopaedics, owned by Johnson & Johnson, sold defective hip implants to doctors who then sought government reimbursement through Medicaid and other programs.
It’s one of the latest developments in the flurry of litigation over DePuy’s hip replacement products, which include multidistrict litigation in Texas. The doctors who brought the action in the First Circuit are also expert witnesses in the ongoing multidistrict litigation.
U.S. District Judge F. Dennis Saylor IV dismissed the case on the grounds that the whistleblower complaint did not satisfy Rule 9(b), the rule of federal civil procedure that requires a party to state its claim with “particularity,” or identify a specific instance of fraud.
“In this context, where the complaint essentially alleges facts showing that it is statistically certain that DePuy caused third parties to submit many false claims to the government, we see little reason for Rule 9(b) to require relators to plead false claims with more particularity than they have done here,” First Circuit Judge William Kayatta Jr. wrote in the decision.
While the court did not allow the case to go forward on allegations that DePuy lied to the Food and Drug Administration, Sanford Heisler Sharp partner Ross Brooks, part of the team that represented the whistleblowers, said it’s still a win.
“One way in which the case is favorable for relators in future cases is that the court found that, notwithstanding that a device was approved by the FDA… the court nevertheless allowed the claim to go forward alleging that sales of a defective version of the device could give rise to a False Claims Act violation.”
Brooks said the whistleblowers were able to show, via statistical analysis, DePuy was manufacturing portions of the hip replacements that did not meet FDA-required specifications more than 50 percent of the time. That left no doubt that, at some point, it was certain the government reimbursed a doctor for a defective product.
“The court looked at the case in the way that it might look at a procurement case — a case outside of the FDA or medical device context. It applied reasoning that you often find in cases involving sales of products to the Defense Department, whereby there is a nonconforming part that does not match the specifications — the original specifications — that were agreed to by the parties. [DePuy was] selling really a different device, a nonconforming device.”
The lead attorney for DePuy, Mark Seltzer of Nixon Peabody, declined to comment. Johnson and Johnson did not immediately reply to a request for comment.