The cases filed in federal court have been consolidated and assigned to one federal judge under a Multidistrict Litigation process. According to Medtronic, there are currently approximately "240 federal cases," most of which have been consolidated in the MDL and the company expects that all federal cases will be transferred to the MDL.
There are also approximately 30 state court cases that are not part of the MDL, and five putative class actions filed in Canada, according to filings with the SEC.
Medtronic attorneys note that separate master complaints were filed in the MDL for the personal injury and third party payor claims and that the third party payor complaint contains class allegations and lawyers for the plaintiffs have informed Medtronic that they will request permission to amend the personal injury complaint to add class allegations which were omitted.
In attempt to get rid of many of the lawsuits, Medtronic has filed a summary judgment motion to dismiss the personal injury claims, based upon in part, the legal theory of federal preemption.
Medtronic argues that FDA regulations for medical devices preempt lawsuits in state courts and claims the FDA has special authority over lifesaving or life-sustaining devices, such as defibrillators. "Any warning has to be regulated by the FDA," said Medtronic attorney, Michael Brown.
But attorneys for the plaintiffs claim Medtronic "glossed over" the problem in an October 2003, filing with the FDA that sought approval of a new defibrillator model, according to a July 11, 2006, article by the Associated Press.
The motion was heard on July 10, 2006 and a decision by the court is expected this fall.
There is also a pending a motion to dismiss the third party payor cases that was filed by Medtronic in March 2006.
On an interesting note, according to its SEC filing, Medtronic has not recorded an expense related to damages in connection with the various Marquis related lawsuits because potential losses are not currently probable or reasonably estimable.
At this point, Medtronic has provided patients with new devices for free and agreed to give them up to $2,500 for out-of-pocket expenses related to replacement surgery. But the company does not pick up the hospital and doctor bills and therefore, public health care plans like Medicare and Medicaid, and private insurers are stuck with the tab.
Medtronic told the New York Times on February 18, 2006, that the medical costs of a replacement surgery were effectively offset by its provision of a free device and the out-of-pocket payments.
The total cost of the operations is unknown but experts say the amount could run as high as hundreds of millions of dollars.
On February 18, 2006, the New York Times, reported that the cases filed appear to mark the first time that plaintiffs' lawyers have filed so-called private attorney general actions against device makers to recoup expenses paid by Medicare on behalf of its beneficiaries.
CMS officials told the Times, "that they were aware of only three settlements over the last two decades in which the agency had recovered more than $1 million from manufacturers, the largest being $30 million from makers of silicone breast implants."
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