In each of three products liability actions brought against Medtronic, Inc. in the Circuit Court of Jefferson, Kentucky (Hannas v Medtronic, Inc., Lathan v. Medtronic, Inc., and Hazelwood v. Medtronic, Inc.), spinal surgery patients claimed injury after undergoing fusion of multiple vertebrae levels between L3 and S1, during which they were implanted with Infuse, a bone graft device manufactured by Medtronic. In addition to products liability claims against Medtronic, the three plaintiffs asserted claims against the same hospital and their respective surgeons for negligence. Medtronic and the other defendants removed all three actions to the U.S. District Court for the Western District of Kentucky claiming that the surgeons and hospital were fraudulently joined to defeat diversity of citizenship and thereby prevent federal jurisdiction. After reviewing the fraudulent joinder claim, however, the district court remanded the three actions to the Jefferson Circuit Court.
What is Infuse?
Medtronic’s Infuse Bone Graft is an FDA approved medical device indicated for the fusion of the lumbar spine at one level from L2-S1. According to Medtronic, Infuse Bone Graft consists of a protein that is found in everyone’s body, plus a natural carrier for delivery. The protein ingredient in Infuse Bone Graft is rhBMP-2 [recombinant (engineered) human bone morphogenetic protein-2], a genetically engineered version of a protein everyone’s body produces naturally in small amounts to regulate bone growth and healing. The natural carrier is a sponge manufactured from bovine (cow) Type 1 collagen. It releases the protein over time where it is placed, provides a scaffold (framework) for new bone to grow into, and is absorbed and replaced by bone. Using Infuse Bone Graft, according to Medtronic, eliminates the need for a second surgery to harvest, or remove surgically, bone from your body (“autogenous” bone) for placement at the surgery site.
The plaintiffs all alleged that they were not informed prior to surgery that Infuse would be used in an off-label manner or that there were risks specific to the use of Infuse in the lumbar spine. Specifically, they alleged that Infuse is only approved for anterior single level fusion and not for the multi-level posterior or left-sided transforaminal approach performed on each of them.
Defendant’s Removal Allegations
The defendants removed all three actions from the Jefferson Circuit Court to the U.S. District Court for the Western District of Kentucky on the theory that the surgeons and the hospital were fraudulently joined in an effort to defeat federal court jurisdiction. To prove fraudulent joinder the burden is on the defendants to show sufficient evidence that the plaintiffs could not establish a cause of action against non-diverse defendants (the surgeons and hospitals) under state law.
To support their theory of fraudulent joinder, the defendants claimed that (1) the plaintiffs’ “utterly conclusory and boilerplate references” to the surgeons and hospital in their complaints “provide no basis for recovery…” and (2) plaintiffs’ claims against the surgeons and hospital are barred by the one-year Kentucky statute of limitations.
Colorable Claims Found
The district court found that the plaintiffs’ complaints stated colorable claims for negligence against the surgeons and hospital. With regard to the defendants’ specific contentions that the claims against the non-diverse defendants are inconsistent with the claims against Medtronic and, as a result, demonstrate fraudulent joinder, the court noted that Kentucky law allows plaintiffs to tender alternative or inconsistent pleadings.
Statute of Limitations Argument
With regard to Medtronic’s statute of limitations argument, Kentucky law states that an “action against a physician, surgeon, dentist, or hospital” for “negligence or malpractice” must be “commenced within one year after the cause of action accrued.” “The cause of action shall be deemed to accrue at the time the injury is first discovered or in the exercise of reasonable care should have been discovered.” The plaintiff must have a “basis for a claim before the statute of limitation begins to run.”
Medtronic claims that the FDA’s Online Public Health Notification of July 1, 2008 should have put the plaintiffs on notice of their injuries. The FDA Notification warned of 38 reports of potentially “life-threatening complications associated with recombinant human bone morphogenetic protein in cervical spine fusion.” The warning did not mention lumbar complications but, according to Medtronic, the attendant media coverage in 2008 concerning an alleged inappropriate relationship between Medtronic and physicians and hospitals regarding the off-label use of Infuse should have put the plaintiffs on notice.
The court found, however, that while the defendants may have raised potentially valid statute of limitations defenses, questions of fact remained for juries to decide as to when each plaintiff discovered or should have discovered their cause of action against their respective surgeon and the hospital.
As such, the court found that Medtronic did not establish that the surgeons and hospital were fraudulently joined. The cases were thereby remanded to the Jefferson Circuit Court.
It should be noted that in response to the FDA’s Notification and additional allegations of inappropriate promotion of the off-label use of Infuse, U.S. Senate Finance Committee Chairman Max Baucus (D-Mont.) and senior member Charles Grassely (R-Iowa) launched a 16-month investigation of Medtronic. Medtronic fully cooperated with the committee’s inquiry and produced more than 5,000 documents pertaining to 13 different studies of Infuse for the investigation.
On October 25, 2012, the Senate Finance Committee issued its report. The report indicates the existence of “questionable ties between the medical technology company and the physician consultants tasked with testing and reviewing Medtronic products.” “Without public disclosure of their roles, Medtronic employees collaborated with physician authors to edit – and in some cases, write – segments of published studies on its bone-growth product Infuse.” According to the report, Medtronic, “also maintained significant, previously-undisclosed financial ties with physicians who authored studies about Infuse, making $210 million in payments to physicians over a 15-year period.”
Sunshine Coming to Physician/Manufacturer Relationships
According to Senator Grassley, the findings in the Senate report, “emphasize the value of the Grassley-Kohl Physician Payments Sunshine Act, which will result in public disclosure of industry payments to physicians starting next year. The findings also should prompt medical journals to take a very proactive approach to accounting for the content of the articles along with the authorship of the articles and studies they feature.”
The Physician Payments Sunshine Act has been in the works since 2007 and was ultimately included in section 6002 of the Patient Protection and Affordable Care Act. It requires, effective March 31, 2013, transparency reports and reporting of physician ownership or investment interests. On December 19, 2011, CMS issued a proposed rule with implementing regulations. The final rule was to be published by January 1, 2013, but will likely be delayed as it only began clearance at the Office of Information and Regulatory Affairs on November 27, 2012, according to RAPS Regulatory Focus News.