Justia Drugs & Biotech Opinion Summaries

A medical device company that manufactures spinal devices was indicted, along with its CEO and CFO, for allegedly paying bribes to surgeons through a sham consulting program in violation of the Anti-Kickback Statute. The indictment claimed the surgeons did not provide bona fide consulting services, but were paid to use and order the company’s devices in surgeries covered by federal health care programs. The company’s CFO, who is not a shareholder but is one of only two officers, allegedly calculated these payments based on the volume and value of surgeries performed with the company’s devices. During the development of the consulting program, the company retained outside counsel to provide legal opinions on the agreements’ compliance with health care law, and those opinions were distributed to the surgeons.After the grand jury returned the indictment, the United States District Court for the District of Massachusetts addressed whether the CFO’s plan to argue at trial that the involvement of outside counsel negated his criminal intent would effect an implied waiver of the company’s attorney-client privilege. The district court initially found that if the CFO or CEO invoked an “involvement-of-counsel” defense, it would waive the corporation’s privilege over communications with counsel. Following dismissal of charges against the company, the district court focused on whether the officers collectively could waive the privilege, concluded they could, and ruled that the CFO’s planned defense would constitute an implied waiver, allowing disclosure of certain privileged communications to the government. The district court stayed its order pending appeal.The United States Court of Appeals for the First Circuit vacated the district court’s waiver order and remanded. The Court of Appeals held that (1) the record was insufficient to determine whether the CFO alone had authority to waive the company’s privilege, and (2) not every involvement-of-counsel defense necessitates a waiver. The appellate court directed the district court to reassess the issue in light of changed circumstances and to consider less intrusive remedies before finding an implied waiver. View "United States v. SpineFrontier, Inc." on Justia Law

Cottingham sought compensation under the National Vaccine Injury Compensation Program, 42 U.S.C. 300aa-10, alleging that a Gardasil® vaccination received by her minor daughter, K.C., in 2012, for the prevention of HPV, caused K.C. injuries. The claim was filed immediately before the limitations period ran out.The government stated argued that a "reasonable basis for bringing the case may not be present.” Cottingham’s counsel was granted additional time but was unable to submit an expert opinion supporting her claim. The Special Master denied compensation. Cottingham sought attorneys’ fees and litigation costs ($11,468.77), 42 U.S.C. 300aa-15(e)(1). The Master found no evidence to support the "vaguely asserted claims" that the vaccination caused K.C.’s headaches, fainting, or menstrual problems." While remand was pending the Federal Circuit held (Simmons) that although a looming statute of limitations deadline may impact the question of whether good faith existed to bring a claim, that deadline does not provide a reasonable basis for asserting a claim. The Master decided that Simmons did not impact his analysis, applied a “totality of the circumstances” standard, and awarded attorneys’ fees. The Claims Court vacated and affirmed the Special Master’s third decision, finding no reasonable basis for Cottingham’s claim.The Federal Circuit vacated, noting that there is no dispute that Cottingham filed her claim in good faith. Simmons did not abrogate the “totality of the circumstances inquiry.” K.C.’s medical records paired with the Gardasil® package insert constitute circumstantial, objective evidence supporting causation. View "Cottingham v. Secretary of Health and Human Services" on Justia Law

The Supreme Court's opinion in CRST Van Expedited Inc. v. E.E.O.C., 136 S. Ct. 1642, 1646 (2016), effectively overruled Branson v Nott's holding that when a defendant wins because the action is dismissed for lack of subject matter jurisdiction he is never a prevailing party. In this case, Amphastar filed a qui tam action against Aventis under the False Claims Act (FCA), 31 U.S.C 3730, alleging that Aventis obtained an illegal monopoly over the drug enoxaparin and then knowingly overcharged the United States. The district court dismissed the suit based on lack of subject matter jurisdiction. The Ninth Circuit held that Amphastar's allegations were based on publicly disclosed information, and it lacked the direct and independent knowledge needed to be an original source. Therefore, the panel upheld the district court's judgment on the merits. However, the panel held that the district court erroneously concluded that it could not award attorneys' fees, because the FCA's fee-shifting provision contained an independent grant of subject matter jurisdiction and because a party who wins a lawsuit on a non-merits issue is a "prevailing party." The panel remanded for resolution of the attorneys' fees issue. View "Amphastar Pharmaceuticals v. Aventis Pharma" on Justia Law

Defendants, two of three lawyers who represented several hundred Kentucky clients in a mass-tort action against the manufacturer of the defective diet drug "fen-phen," settled the case for $200 million, which entitled them under their retainer agreements to approximately $22 million each in attorney fees. By visiting clients and obtaining their signatures on "confidential settlements," for lesser amounts, the two actually disbursed slightly more than $45 million, less than 23 percent of the total settlement. The lawyers kept the remainder for themselves and associated counsel, transferring much of it from the escrow account to various other accounts, including out-of-state accounts. The scheme was discovered; the lawyers were disbarred and convicted of conspiracy to commit wire fraud, 18 U.S.C. 1343, 1349. One was sentenced to 240 months, the other to 300 months. They were ordered to pay more than $127 million in restitution. The Sixth Circuit affirmed, rejecting a variety of challenges to the sufficiency of the evidence and trial procedures. View "United States v. Cunningham" on Justia Law