Adella & Richard Matthew rdmatthew@shaw.ca

Dan Browning and Janet Moore, Star Tribune

August 15, 2005 PLAINTIFFS0815

Since Guidant Corp. began alerting doctors in May about problems with some of its defibrillators and pacemakers, at least 38 federal and state lawsuits have been filed against the medical technology company.

The Monroe, Wis., resident was implanted with a defibrillator four years ago to treat a chronic heart condition. If his heart stopped beating, the stopwatch-sized device would shock him back to life.

Or so he thought. But after learning that his Guidant device might malfunction, Flynn called a lawyer.

Many of these lawsuits were filed by patients like Flynn who believe the Indianapolis-based company hid important safety information about the devices. Others were filed on behalf of investors who saw the value of their shares decline as the bad news continued to dribble out early this summer.

Twenty-five of the lawsuits were filed as class-action cases, meaning they might cover tens of thousands of plaintiffs. They pose a legal and financial headache for Guidant and perhaps its buyer, New Jersey-based health care giant Johnson & Johnson. They probably will take years to sort out and might require special handling by the federal courts.

"Anytime you voluntarily state you have problems with a product that could cause injury in the marketplace, there's a good chance you'll get sued," said David Prince, a professor at William Mitchell College of Law in St. Paul. "Because, in effect, you've said it could be hurting people."

Law books are thick with product liability cases involving medical devices, including the Bjork-Shiley heart valve, the Dalkon Shield contraceptive device, silicone breast implants and pedicle screw implants for spinal fusion.

Guidant isn't the only device company on the firing line. Fridley-based Medtronic Inc. faces at least 14 lawsuits filed in federal court since it recalled 87,000 defibrillators and cardiac resynchronization therapy devices in February. Twelve of them seek approval as class actions.

For Guidant, the barrage of lawsuits began shortly after the company alerted doctors in May about a potential short-circuiting problem in some of its implantable cardioverter defibrillators, or ICDs.

Some lawyers began advertising for clients almost immediately afterward on television and in newspapers. A Texas firm even placed ads seeking former Guidant employees with what it hopes is damaging evidence.

"I'm picking up a Guidant case, at least one or two a day now," said David Groner, a plaintiff's attorney from New Iberia, La. He has filed two federal lawsuits against Guidant: "No doubt we'll be doing a lot more."

So far, none of the plaintiffs named in Guidant's ICD lawsuits in federal court appears to be from Minnesota. But six cases were filed in U.S. District Court here because Guidant's Cardiac Rhythm Management division is based in Arden Hills.

Regardless, Minnesotans who invested in Guidant, worked at the company or received one of its potentially flawed devices could end up benefiting from the litigation.

That's because at least 25 of the cases filed in federal court are seeking judicial approval as class-action lawsuits. Of those, 20 involve product liability claims, four involve Guidant securities, and one charges the company with failing in its fiduciary duty to employees whose retirement savings include company stock.

For the suits to gain class-action status, judges must decide if a large number of plaintiffs have similar claims against the company.

The product liability claims generally allege that Guidant deliberately and fraudulently concealed flaws in some ICD models until late May, when it was forced to disclose them by a forthcoming article in the New York Times. The suits seek patient monitoring, funds to pay for device replacement or repair costs, and compensation for anxiety created by the potentially flawed devices.

John Brennan, 74, appears to have been the first to hit the courts when he filed suit in Indianapolis on June 1. The retired Pennsylvania bricklayer relies on a Ventak Prizm DR model 1861 ICD, the same device that short-circuited in Joshua Oukrop, a 21-year-old Minnesota college student who died unexpectedly in May while mountain biking. Oukrop's death was cited in the New York Times article.

Knowing his ICD could short-circuit at any time is "like having a grenade with the pin pulled in his chest," Brennan's lawsuit says.

Though the product liability lawsuits resemble one another, some differences exist. Some cite only the ICD models that Guidant has recalled this year. Others, like the Brennan case, include additional models beyond the Ventak Prizm DR 1861, which they claim have similar defects.

One case, filed July 22 in Indianapolis, divides the allegations into three subclasses, each of which affects "tens of thousands" of device recipients.

It describes a class of models that can short-circuit and fail to function; a memory-error class, models that can limit therapy to patients; and a component failure class, where a switch can stick shut unless it is fixed. (The Food and Drug Administration [FDA] recently approved a software fix for this problem.)

Zimmerman Reed, a Minneapolis law firm, took a unique approach in a class-action case filed July 25.

That lawsuit seeks approval to act as a "private attorney general" to recover twice the money that Medicare has paid to replace the faulty ICDs. (Guidant has offered to pay for replacement devices and some medical costs, but not other costs, such as hospitalization.) The suit says the recalls have bloated health care expenses for an already overburdened Medicare system.

Medicare coverage for ICDs was dramatically expanded in January, based largely on a major clinical trial funded in part by Medtronic. Guidant lobbied aggressively for the change "while simultaneously concealing information" regarding the safety of its devices, the suit states.

Four of the class-action cases involve those owning Guidant securities.

The plaintiffs in these cases allege that the company artificially inflated the value of its stock by concealing negative reports about its heart devices from the public while it negotiated a $25.4 billion acquisition by Johnson & Johnson.

One suit alleges that insiders were attempting to secure $560 million in unearned bonuses, options accelerations and severance payments. The lawsuits also allege that Guidant officers or directors sold stock at artificially inflated prices, raising between $39 million and $65.7 million, depending on who was named in the lawsuits.

On June 17, the FDA announced a nationwide recall that said some Guidant devices could lead to a serious, life-threatening event for patients. The company's shares lost 4.5 percent of their value over the next two days in heavy trading. "As a result, Guidant investors lost over $1.09 billion in the value of their shares," according to one complaint.

A similar case filed on behalf of Guidant employees claims that the company failed to protect retirement investments, which include shares in the company.

Besides the class-action and the Medicare cases, at least 11 lawsuits were filed in federal courts on behalf of individual patients, their family members or the patients' estates. And an unspecified number have been filed in state courts.

Some of those might end up in federal court, which has occurred in several cases. One case went the other way when it was dismissed from federal court on jurisdictional grounds, then refiled in a New Jersey court.

That lawsuit claims Francis Occhiuzzo, 57, of Burlington, N.J., was "brutally tortured to death" by his ICD, a Ventak Prizm 2 VR/DR Model 1851.

Occhiuzzo was gravely ill with a chronic heart condition when his family gathered at his home on June 19, 2003, as he "prepared to die." Early that morning, his ICD began to repeatedly shock him as his family watched "in horror," the suit states.

The shocks were so severe they knocked Occhiuzzo to the floor of his bathroom, pinning him between the vanity and toilet as his head "bounced" between the two, the suit claims.

Frantic, the family called a Guidant representative who reportedly told them to wave a large magnet over his chest to disengage the device. But the only magnet the family could find was a decorative refrigerator magnet, and that didn't work, the suit says.

"It's easily one of the worst things I've ever heard in my life," said Patrick Whalen, an attorney representing the Occhiuzzo family. "He got shocked at least 50, probably 50 to 120 times" before dying.

Lawyers in some of the federal product liability cases have asked a special court called the Judicial Panel on Multi-District Litigation (MDL) to combine similar cases and assign them to a single judge for pretrial matters. The MDL panel will hear arguments Sept. 29 in Asheville, N.C.

Guidant's lawyers argue in pleadings that each case is distinct and should be handled separately.

Sometimes defense lawyers will try to keep the cases divided to force the plaintiffs' attorneys to incur the effort and expense of the litigation individually, said Jim Reese, the lead attorney for Zelle Hoffmann, a Minneapolis law firm representing an ICD patient from Massachusetts.

Guidant's law firm, Shook, Hardy & Bacon of Kansas City, referred all questions to a company spokeswoman, who said the company does not comment on pending litigation. Johnson & Johnson declined to comment, as well.

Federal Judge John Tunheim in the District of Minnesota oversees an MDL case involving the Silzone heart valve, which was recalled in 2000 by Little Canada-based St. Jude Medical Inc. after a small number were found to leak. He said judges try to get most cases resolved within three years. Some are dismissed but most are settled. If a case goes to trial, it is sent back to the original district.

"It is a lot of work for the judge who gets it, but I think there's a great benefit for the system," Tunheim said.

Few cases -- particularly those involving product liability -- make it to trial. "The judges push for [settlement], they can't try all these cases," said Prince, of William Mitchell. So there's plenty of motivation to get cases to settle." The motivation for defendants includes sealing damaging documents, minimizing litigation expenses and avoiding negative publicity.

Judicial maneuvering aside, Flynn, the Wisconsin ICD patient, wants Guidant to be held accountable "because they knew about it for that long and didn't say anything."

Flynn received a replacement device at the Mayo Clinic last month. But several 10-hour round-trips to Rochester, not to mention the surgery, made a dent in his summer job schedule -- and his college savings.

This semester, Flynn will attend Winona State University as a political science major. Longer term, he's thinking about becoming a lawyer.

The writers are at dbrowning@startribune.com and jmmoore@startribune.com

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