US v. Laerdal Mfg. Corp.

• Decision Date: 26 May 1994
• Docket Number: Civ. No. 93-1141-FR.
• Citation: 853 F. Supp. 1219
• Parties: UNITED STATES of America, Plaintiff, v. LAERDAL MANUFACTURING CORPORATION, a corporation, and John L. Karpowicz, an individual, Defendants.
• Court: U.S. District Court — District of Oregon

853 F. Supp. 1219

UNITED STATES of America, Plaintiff, v. LAERDAL MANUFACTURING CORPORATION, a corporation, and John L. Karpowicz, an individual, Defendants.

Civ. No. 93-1141-FR.

United States District Court, D. Oregon.

May 26, 1994.

COPYRIGHT MATERIAL OMITTED

Frank W. Hunger, Asst. Atty. Gen., Kristine Olson Rogers, U.S. Atty., Craig J. Casey, Asst. U.S. Atty., Portland, OR, Elizabeth Stein, Gerald C. Kell, U.S. Dept. of Justice, Washington, DC, for plaintiff.

James F. Dulcich, Jeffrey D. Austin, Miller, Nash, Wiener, Hager & Carlsen, Portland, OR, Larry R. Pilot, Daniel E. Johnson, Daniel G. Jarcho, Mark D. Shonkwiler, McKenna & Cuneo, Washington, DC, for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

FRYE, District Judge:

The matters before the court are (1) the motion of the plaintiff for preliminary injunction (# 45) filed December 1, 1993; (2) the motion of the defendants for partial summary judgment (# 64) filed January 13, 1994; and (3) the resolution of this case on the merits.

The plaintiff, the United States of America, filed this action against the defendants, Laerdal Manufacturing Corporation (Laerdal Manufacturing) and John L. Karpowicz, the president of Laerdal Manufacturing, pursuant to section 302(a) of the Federal Food, Drug, and Cosmetic Act (the Act), 21 U.S.C. § 332(a). The United States contends that Laerdal Manufacturing and Karpowicz have violated the Act and the regulations implementing the Act. The Act and the regulations implementing the Act are administered by the Food and Drug Administration (the FDA), acting on behalf of the United States. The United States seeks to enjoin preliminarily and permanently Laerdal Manufacturing and Karpowicz from violating section 301 of the Act, 21 U.S.C. § 331.

Laerdal Manufacturing and Karpowicz deny that they have violated any of the statutory and regulatory mandates and, in turn, have alleged three counterclaims as follows: (1) the United States breached the settlement agreement reached on October 20, 1993; (2) the regulations at issue are unconstitutionally vague as applied to the facts of this case; and (3) the United States has violated the Administrative Procedure Act by attempting to enforce procedural requirements that have never been promulgated for notice and comment, and thus are not requirements under the Act.

This court has jurisdiction over the claims of the United States and the counterclaims of Laerdal Manufacturing pursuant to 28 U.S.C. §§ 1331, 1337 and 1345; 21 U.S.C. § 332(a); 5 U.S.C. §§ 702 et seq.; and 28 U.S.C. § 2201.

On February 15, 1994, trial to the court commenced on the motion of the United States for a preliminary injunction, as well as the resolution of the case on the merits. The trial concluded on March 4, 1994. Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, the court makes the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

Laerdal Manufacturing is incorporated in the State of New York and conducts its business at 9440 Southwest Tualatin-Sherwood Road, Tualatin, Oregon.

John Karpowicz is the president of Laerdal Manufacturing and performs his duties at 9440 Southwest Tualatin-Sherwood Road, Tualatin, Oregon. Karpowicz is responsible for the operations of Laerdal Manufacturing.

Laerdal Manufacturing has been and is now engaged in the business of manufacturing and distributing automatic and semiautomatic external defibrillators and of distributing accessories for these medical devices. Laerdal Manufacturing manufactures two lines of automated external defibrillators: the Heartstart 1000 line, which includes the HS1000 and the HS1000s; and the Heartstart 3000 line, which includes the HS3000, the HS3000ATS, and the HS3000QR.

These automated external defibrillators are used in the assessment and treatment of ventricular fibrillation and ventricular tachycardia. Automated external defibrillators are medical devices subject to governmental regulations administered by the FDA. Laerdal Manufacturing is required to comply with the Act and with the regulations implementing the Act, which include the Good Manufacturing Practices (GMP) regulations, 21 C.F.R. §§ 820.1-820.198 (1993), and the Medical Device Reporting (MDR) regulations, 21 C.F.R. §§ 803.1-803.36 (1993).

From January 19, 1993 through February 25, 1993, investigators from the Seattle District Office of the FDA conducted a regulatory inspection of the Laerdal Manufacturing plant in Tualatin, Oregon. At the end of the inspection, the FDA investigators issued a Notice of Inspectional Observations on a form known as "FDA Form 483" and thereafter met with representatives of Laerdal Manufacturing.

On March 28, 1993, Kenneth Herland was hired by Laerdal Manufacturing as the Director of Quality Assurance and Regulatory Affairs. Herland's first task was to review the quality assurance system used by Laerdal Manufacturing. As a result of this review, Laerdal Manufacturing made changes in its quality assurance system, addressing certain observations noted in FDA Form 483 issued following the regulatory inspection conducted from January 19, 1993 through February 25, 1993.

On April 2, 1993, representatives from Laerdal Manufacturing and officials from the Seattle District Office of the FDA met to discuss the inspectional observations noted on FDA Form 483 following the regulatory inspection conducted from January 19, 1993 through February 25, 1993 and the preliminary written responses that Laerdal Manufacturing had made to FDA Form 483. After this meeting, Laerdal Manufacturing submitted a more detailed written response to the observations noted on FDA Form 483.

From May 24, 1993 to June 4, 1993, FDA investigators conducted a limited inspection of the Laerdal Manufacturing plant. At the conclusion of this inspection, the FDA investigators issued another FDA Form 483 and again met with representatives of Laerdal Manufacturing.

On June 25, 1993, Laerdal Manufacturing sent to the FDA a written response to the issues raised in the inspection conducted by FDA investigators from May 24, 1993 to June 4, 1993.

On July 30, 1993, legal counsel for the United States contacted legal counsel for Laerdal Manufacturing to advise Laerdal Manufacturing of the intent of the United States to seek injunctive relief against Laerdal Manufacturing.

During the months of August and September, 1993, there were discussions between representatives of the FDA and representatives of Laerdal Manufacturing. During this time, Laerdal Manufacturing submitted to the FDA a "GMP review plan" indicating the tasks that Laerdal Manufacturing had undertaken and would undertake in the future to address the issues raised in FDA Form 483. The GMP review plan addressed the scope of the review and the extent of the revision of procedures, as well as the time frames within which Laerdal Manufacturing planned to complete these tasks.

On September 15, 1993, the United States filed a complaint in this court against Laerdal Manufacturing and Karpowicz seeking preliminary and permanent injunctive relief for Laerdal Manufacturing's alleged violations of the regulations relating to good manufacturing practices and medical device reporting.

On October 12, 1993, Laerdal Manufacturing and Karpowicz filed an answer to the complaint filed on September 15, 1993 in which they deny all of the allegations made by the United States of violations of the Act and its regulations.

On October 18, 1993, this court held a hearing on the motion for a preliminary injunction filed by the United States.

On October 19, 1993, at the request of the court, representatives of the parties and counsel for the parties attended a settlement conference before the Honorable Owen M. Panner, United States District Court Judge, who had agreed to act as a settlement judge. During the settlement conference, Judge Panner directed the parties to meet again that day to attempt to reach a settlement and to report back to him the next day to advise him whether a settlement had been reached. The parties and their counsel met that day.

On October 20, 1993, counsel for the United States, counsel for Laerdal Manufacturing and Karpowicz, and Thomas J. Burns, the chairman of the Board of Laerdal Manufacturing, reported back to Judge Panner.

Following the conference with Judge Panner, the parties signed a stipulation agreeing, in part, as follows:

1. Plaintiff (the "FDA") will begin an inspection of Laerdal Manufacturing Corporation's Tualatin, Oregon, facility on or after October 25, 1993.

2. Defendants will cooperate fully with the inspection and make all of its nonprivileged and non-work product documents available to the FDA upon request.

3. The FDA will submit by November 17, 1993, to defendants and to Judge Owen M. Panner a report of the results of the FDA's inspection.

4. Defendants will submit by November 24, 1993, to the FDA and to Judge Panner a response to the FDA's report.

5. Judge Panner has scheduled a further settlement conference for December 2, 1993, at 8:00 a.m. The parties will present personnel and/or expert witnesses at that conference to assist Judge Panner, as necessary.

6. Judge Helen J. Frye has scheduled a trial on the merits in this action to begin December 14, 1993, at 9:00 a.m. The focus of the trial shall be any issues from the above inspection which the parties have not resolved.

Exhibit 1 to Defendants' Motion for Partial Summary Judgment, Tab B.

Pursuant to the agreement of the parties, from October 25, 1993 through November 12, 1993, the FDA conducted an inspection of Laerdal Manufacturing's facility in Tualatin, Oregon.

Pursuant to the agreement of the parties, on November 17, 1993, the FDA provided to Laerdal Manufacturing and Karpowicz in FDA Form 483 a report of the results of the FDA's inspection.

Pursuant to the agreement of the parties, on November 24, 1993, Laerdal Manufacturing and Karpowicz provided a response to the report of the results of the FDA's...