Coleman v. Danek Medical, Inc.

• Decision Date: 30 April 1998
• Docket Number: No. CIV.A. 3:96CV776LN.,CIV.A. 3:96CV776LN.
• Parties: Mary COLEMAN, Plaintiff, v. DANEK MEDICAL, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

Page 629

43 F.Supp.2d 629

Mary COLEMAN, Plaintiff, v. DANEK MEDICAL, INC., et al., Defendants.

No. CIV.A. 3:96CV776LN.

United States District Court, S.D. Mississippi, Jackson Division.

April 30, 1998.

Stanton E. Shuler, Jr., Leake & Anderson, L.L.P., New Orleans, LA, for Plaintiff.

Neville H. Boschert, John Chase Bryan, Watkins, Ludlam, Winter & Stennis, P.A., Jackson, MS, Fred Krutz, III, Daniel J. Mulholland, Foreman, Perry, Watkins, Krutz & Tardy, Jackson, MS, Kambiz Thomas Shahriari, Mitchell A. Stearn, Porter, Wright, Morris & Arthur, Washington, DC, Janet L. MacDonell, William Lee Kohler, Joseph Lee McReynolds Douglas R. Elliott. Deutsch, Kerrigan & Stiles, New Orleans, LA, for Defendants.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, Chief Judge.

This case is one of more than two thousand separate products liability actions filed in this country by more than five thousand plaintiffs claiming that defective "pedicle screw fixation devices" which have been surgically attached to the pedicles of their spines have caused them to suffer physical injuries. Pursuant to 28 U.S.C. § 1407, the Judicial Panel on Multidistrict Litigation transferred these cases to the United States District Court for the Eastern District of Pennsylvania for consolidated pretrial proceedings, following which two separate groups of plaintiffs filed consolidated "Omni Actions." Generally speaking, the plaintiffs in the first of these two groups, including Mary Coleman, the plaintiff herein, sued not only the manufacturers, designers and distributors of the devices on products liability theories of recovery, but they sued, as well, a number of medical associations, charging that these defendants had unlawfully conspired with the device manufacturers to promote, market and sell pedicle screw fixation devices to medical providers.¹ The MDL court, through Judge Louis C. Bechtle, managed the litigation through extensive procedural matters, including dismissal of the original complaints, the filing of amended omni complaints, discovery, and the resolution of numerous motions, including two motions to dismiss, and that court has recently remanded Coleman's case to this court for final disposition. Her case is now before the court on a motion by defendants the American Academy of Orthopaedic Surgeons, the North American Spine Society, and the Scoliosis Research Society (collectively, the Medical Associations) for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff has responded in opposition to the motion and the court, having considered the memoranda of authorities submitted by the parties, concludes that the Medical Associations' motion is well taken and should be granted.

In April 1997, Judge Bechtle issued a thorough opinion in In re Orthopedic Bone Screw Products Liability Litigation, No. MDL 1014, 1997 WL 186325 (E.D.Pa. April 16, 1997), detailing the plaintiffs' allegations in the consolidated omni actions, describing the pertinent regulatory framework of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., and its Medical Device Amendments, 21 U.S.C. § 360(a) et seq., and ultimately dismissing all but one of plaintiffs' theories of liability against the Medical Associations. In that opinion, the court explained that plaintiffs had alleged "two distinct but overlapping conspiracies," as follows:

The vertical conspiracy, titled the "Danek Conspiracy," comprises Danek and affiliated spine surgeons and engineers (the "Danek Conspirators"). The horizontal conspiracy, titled the "Intercompany/Association Conspiracy," comprises Danek, other manufacturers, and associations of spine doctors (the "Intercompany/Association Conspirators"). The conspiracies share the same three objectives: (1) causing certain spinal fixation devices to be placed in interstate commerce even though such devices had not received the proper FDA approvals; (2) promoting and marketing such devices for pedicle screw fixation and representing that they were safe and effective for pedicle screw fixation even though the devices were "investigational devices" when intended for such use and even though pedicle screw fixation was an "investigational use" only; and (3) promoting and marketing such devices through deceptive and misleading conduct.

1997 WL 186325, at *3 (footnotes and citations omitted).

Plaintiffs alleged that the Danek conspirators agreed to market pedicle screw fixation devices without the necessary FDA approvals, pursuant to a scheme which the court summarized as follows:

Danek and the conspiring surgeons and engineers signed written contracts whereby Danek agreed to provide them with royalties from the sale of devices, Danek stock, and/or options to purchase Danek stock. FN10. In turn, these surgeons and engineers agreed to participate in seminars at which attending spine surgeons would receive instruction in the use of Danek pedicle screw fixation devices.

(FN10: Pursuant to the contracts, Danek paid the surgeons and engineers more than $15 million in cash and gave them options to buy more than 245,000 shares of Danek stock.)

The Danek Conspirators conducted dozens of seminars that falsely made it appear that the surgeons and engineers, as members of the medical profession, were independently educating fellow members of the profession. Consistent with this outward appearance, the surgeons provided instruction to spine surgeons regarding pedicle screw fixation with Danek devices.

The seminars actually were sales events at which the Danek Conspirators attempted to create or expand a market for the sale of Danek products as pedicle screw fixation devices. Danek representatives staffed sales booths and used the interest in pedicle screw fixation to sell Danek devices. After the seminars, they contacted the attending spine surgeons to sell them Danek devices. Danek also provided brochures, technical manuals, tabletop displays, equipment, sample devices, surgical instruments, and other instructional tools so that the Danek surgeons and engineers could demonstrate techniques of pedicle screw fixation with Danek devices.

The conspiring surgeons and engineers promoted and marketed pedicle screw fixation devices in furtherance of the conspiracy....

At the seminars, the surgeons and engineers actively concealed and failed to disclose the financial stake that the spine surgeons and engineers had in the sale of Danek pedicle screw fixation devices, as well as facts concerning the regulatory status and the safety and efficacy of these devices. FN14. By engaging in such deceptive conduct, they acted in conscious disregard of the risk that the acts in furtherance of the conspiracy would result in the distribution of medical devices that were untested and unproven for their intended use and expose Plaintiffs to substantial and serious risks of painful and disabling injuries.

(FN14: Specifically, the surgeons and engineers concealed the facts that (1) the FDA had consistently refused to approve or clear any pedicle screw fixation device because it had determined that existing data did not provide a reasonable assurance that such devices were safe and effective; (2) ongoing clinical IDE trials failed to provide sufficient, reliable evidence to demonstrate that any device was safe and effective when used for pedicle screw fixation; and (3) the incidence of painful and disabling complications associated with the use of pedicle screw fixation generally and with Danek's particular devices was not established by valid scientific evidence.)

Id. at *5-6 (footnotes and citations omitted). The court went on to describe what it termed the "Intercompany/Association Conspiracy" — which is the "conspiracy" charge that is the subject of the present motion — as follows:

The manufacturers provided the professional associations with money to sponsor or conduct seminars that were directed to spine surgeons and that promoted pedicle screw fixation surgery. These seminars were very similar to those described in the Danek Conspiracy as "sales events," with the sellers and manufacturers funding the seminar, recruiting doctors with financial interests in the sales of Danek devices to provide instruction, setting up sales booths, distributing brochures and similar literature, demonstrating how to use the Danek devices, and making follow-up solicitations to purchase Danek devices from surgeons who attended the seminars. The Intercompany/Association Conspirators actively concealed the same facts as the Danek Conspirators. Thus, they acted in reckless disregard for the risk that the conspiracy and the acts taken in furtherance thereof would result in the distribution of investigational, experimental devices, which otherwise would not reach the market and that patients receiving such devices would suffer severe, disabling, and painful complications. The Intercompany/Association Conspirators conducted and participated in numerous seminars at which they caused the marketing, adulteration, and misbranding of the devices through unlawful, deceptive, and misleading means. (FN 15).

(FN15. Specifically, SRS received about $440,000 from manufacturers or distributors of pedicle screw fixation devices, and conducted at least nine seminars. MASS received more than $600,000 from manufacturers and conducted 11 symposia regarding pedicle screw fixation. AAOS received $815,562 in seminar fees from manufacturers and conducted 13 seminars. AANS received more than $80,000 from manufacturers and conducted 20 seminars. In addition, there were at least 30 other seminars that were not sponsored by SRS, NASS, AASS, and AANS that took place in accordance with the Intercompany/Association Conspiracy.)

Id. at *6 (footnotes and citations omitted).

After explaining the plaintiffs' allegations, Judge Bechtle, addressing a defense motion to dismiss for failure to state a claim under Rule 12(b)(6), ruled that the plaintiffs "[could] not state a...