J&J Unit Can’t Nix FCA Suit Over Hip Implants Yet

Posted January 17th, 2018.

As It Appeared On
Law360

By Emily Field

Law360, New York (January 17, 2018, 6:48 PM EST) — A Massachusetts federal judge on Wednesday nixed a bid from Johnson & Johnson Services Inc. and its subsidiary DePuy Orthopaedics Inc. to escape a revised version of a suit alleging they indirectly submitted false claims to the government for faulty hip replacement devices.

In a text order, U.S. District Judge Leo T. Sorokin denied without prejudice a request to dismiss allegations that the companies violated the federal and New York false claims acts by misrepresenting the safety of DePuy’s Pinnacle metal-on-metal device used in hip replacements, ultimately causing the government to purchase faulty products. The judge didn’t provide an explanation of his reasoning.

Whistleblowers Antoni Nargol and David Langton filed the most recent complaint in October, several months after the First Circuit partially revived the allegations.

Nargol and Langton alleged in a 2014 second amended complaint that the Pinnacle device had a manufacturing defect, but that the company nonetheless made direct claims for the device to federal and state government agencies and indirectly caused health care providers to submit false claims. A lower court tossed the entire suit last year, but a First Circuit panel in July revived the allegations of indirect false claims.

An Oct. 5 mandate by the First Circuit sent the case back to the lower court, where the whistleblowers filed their trimmed suit, to resolve the allegations of indirect false claims.

The complaint says DePuy misrepresented the specifications, manufacturing process, safety and failure rates of the hip implants. These alleged misrepresentations about the safety of the Pinnacle device have caused the government to pay claims that it otherwise would not have, according to the whistleblowers.

The companies argued for the dismissal of the suit in a Jan. 11 statement regarding an “anticipated” motion to dismiss, saying the revised complaint shows that any purported manufacturing defects weren’t material to the government’s decisions about payment.

Therefore, the complaint doesn’t meet the materiality standard established in the U.S. Supreme Court’s landmark Universal Health Services v. Escobar decision, which held that a FCA whistleblower must show a company’s misrepresentation about its complying with regulatory standards was material to the government’s payment decision.

J&J said the corrected complaint makes clear that the government continued to pay for Pinnacle metal-on-metal devices until 2013, when they were taken off the market, even though it was aware as early as 2011 of the alleged defects.

Nargol and Langton are seeking three times the amount of damages the federal and New York government incurred because of the alleged misconduct. They also seek a civil penalty between $5,500 and $11,000 for each violation of the federal False Claims Act and $12,000 for each violation of the New York False Claims Act.

“We are unsurprised by Judge Sorokin’s order denying defendants’ motion,” the whistleblowers’ counsel Ross B. Brooks of Sanford Heisler Sharp LLP told Law360 on Wednesday. “The First Circuit has already considered and disposed of defendants’ arguments. We look forward to proceeding with discovery in this qui tam action.”

Representatives for DePuy declined comment.

The plaintiffs are represented by Russell L. Kornblith, Ross B. Brooks, Inayat Ali Hemani, David W. Sanford, H. Vincent McKnight and John McKnight Jr. of Sanford Heisler Sharp LLP, Kevin M. Kinne of Cohen Kinne Valicenti & Cook LLP and Grant E. Morris of the Law Offices of Grant Morris.

DePuy and J&J are represented by Mark D. Seltzer and Hannah R. Bornstein of Nixon Peabody LLP.

The case is U.S. et al. vs. DePuy Orthopaedics Inc. et al., case number 1:12-cv-10896, in the U.S. District Court for the District of Massachusetts.

–Additional reporting by Rachel Graf. Editing by Catherine Sum.

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