Major medical device manufacturer St. Jude’s actions ultimately belied its words. Notwithstanding the company’s persistent assertion that litigation filed against it was groundless and that it would fight back hard against a group of plaintiffs’ contentions, the company ended up settling a fraud-based matter earlier this month.
That matter pertained to a so-called defibrillator lead, a product used in sophisticated heart-implant surgeries.
A brief rundown of St. Jude’s woes necessarily begins with mention of its Riata lead, which was found to be injurious to many heart patients and led to a sizable amount of product liability litigation against the company.
The instant litigation cited above relates to a lead called Durata that St. Jude developed to replace its Riata product. At the core of the lawsuit was the plaintiffs’ allegation that St. Jude’s actively misled consumers by falsely touting Durata’s efficacy while knowing there were problems with it.
Unlike Riata cases, which were personal injury-centric, the Durata class action alleged securities fraud. The bottom line, stated the plaintiffs, is that they were fraudulently induced to buy St. Jude stock by being misled regarding Durata. They subsequently took a financial beating when an FDA manufacturing inspection revealed multiple problems with the product. In fact, company stock fell by 11 percent on the day the federal agency’s findings were made public.
Until the case concluded, it was precipitated by years of hard ball, with the class action being filed in December 2012. The matter summarily ended three weeks ago in a settlement when, on July 7, it was announced that St. Jude agreed to pay the plaintiffs about $39 million.