United States ex rel. Ruhe v. Masimo Corp.

977 F. Supp. 2d 981, 2013 WL 5630947, 2013 U.S. Dist. LEXIS 149814
CourtDistrict Court, C.D. California
DecidedOctober 2, 2013
DocketCase No. CV 10-08169-CJC(VBKx)
StatusPublished
Cited by3 cases

This text of 977 F. Supp. 2d 981 (United States ex rel. Ruhe v. Masimo Corp.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. Ruhe v. Masimo Corp., 977 F. Supp. 2d 981, 2013 WL 5630947, 2013 U.S. Dist. LEXIS 149814 (C.D. Cal. 2013).

Opinion

ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

CORMAC J. CARNEY, District Judge.

I. INTRODUCTION

Plaintiff-Relators Michael Ruhe, Vicente Catala, and Kristine Serwitz (collectively, “Relators”) bring this qui tarn action individually and in the name of the United States against Defendant Masimo Corporation (“Masimo”) under the federal False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq. Relators allege that Masimo knowingly made false statements in connection with its “Pronto” line of medical devices and that those statements were material to claims for reimbursement submitted to federal payer programs such as Medicare. Before the Court is Masimo’s motion for summary judgment. (Dkt. No. 117.) After considering all the evidence presented by the parties and the arguments of their counsel, the Court GRANTS Masimo’s motion. To be liable under the False Claims Act, a defendant must do more than simply be enthusiastic about its products and resilient to criticism about them. The defendant must be knowingly misleading about the products. Here, however, Relators’ evidence does not demonstrate any knowingly misleading statements or conduct by Masimo in connection with its medical devices. At most, Relators have shown that Masimo was aware of isolated complaints and anecdotal feedback from physicians regarding the performance of the devices. Such evidence falls far short of demonstrating the knowing fraud required for liability under the False Claims Act.

II. BACKGROUND

Relators are former sales representatives who left Masimo in 2010. Masimo manufactures and develops medical devices, known as pulse oximeters, that measure characteristics of the blood “noninvasively,” that is, without the need to draw a blood sample. (Dkt. No. 145, Def.’s Mem. of P. & A. in Supp. of Mot. Summ. J. [“Def.’s Mem.”] at 2.) The first pulse oximeters were developed in the 1980s to noninvasively measure oxygen saturation in the blood (“Sp02”). (Dkt. No. 128 [“Dr. Goodman Decl.”] ¶¶26, 43.) Before the [985]*985advent of pulse oximeters, every time a physician wanted to measure a patient’s blood oxygen levels a blood sample had to be drawn and sent to a laboratory for analysis. (Dr. Goodman Decl. ¶ 26.) Pulse oximeters take these measurements by analyzing wavelengths of light through a sensor clipped to the patient’s finger. (Dr. Goodman Decl. ¶ 26.) Masimo’s founders developed advancements in sensor technology for pulse oximeters that give the devices the ability to accurately measure Sp02 even when the patient is moving or has low blood flow. (Def.’s Mem. at 2.) Masimo calls this proprietary sensor technology Signal Extraction Technology (“SET”). (Dkt. No. 165 [“Kiani Decl.”] ¶ 4.) Masimo’s latest devices, which are the subject of this action, non-invasively measure an additional blood constituent known as total hemoglobin (“SpHb” or “hemoglobin”). These devices are marketed under the names Radical-7, Pronto, and Pronto-7 (collectively, the “Pronto Devices”). (Kiani Decl. ¶ 5.)

A. 510(k) Clearance Process

Under Food & Drug Administration (“FDA”) regulations, there are two avenues through which a manufacturer can get a new medical device approved for marketing in the United States. The two methods are the premarket approval (“PMA”) process and the “510(k)” clearance process. (Dkt. No. 168 [“Graham Decl.”] at 8-9.) The more onerous PMA process requires, among other things, a full report of all information known to the applicant regarding investigations demonstrating whether the device is safe and effective. See 21 U.S.C. § 360e(c)(l)(A). In contrast, under the 510(k) process the applicant is required to demonstrate only that the device is substantially equivalent in terms of safety and effectiveness to an existing FDA-approved device. 21 C.F.R. § 807.92(a)(3). The FDA recommends various testing and performance standards to evaluate the safety and efficacy of medical devices, including standards devised by the International Organization of Standardization (“ISO”). Although the FDA does not require conformance with such standards, demonstrating conformance is one way that a manufacturer can establish substantial equivalence for 510(k) clearance. (Graham Decl. at 13.) The FDA’s guidance document regarding 510(k) submissions for pulse oximeter devices recommends that manufacturers comply with ISO 80601:2011 in conducting performance testing.1 See FDA, Pulse Oximeters— Premarket Notification Submissions [510(k)s]: Guidance for Industry and Food and Drug Administration Staff, Mar. 4, 2013 [“Pulse Oximeter Guidance”]. To demonstrate accuracy of a pulse oximeter device, the manufacturer commissions one or more controlled clinical studies. A study investigator or technician uses the device to take a series of measurements on healthy volunteers. These measurements are then compared to measurements from laboratory analysis of blood samples taken at the same time. (Pulse Oximeter Guidance at 5.) Each of these comparisons is a “data point.” The difference between the device measurement and the blood sample measurement is compared for each data point and the average of all the discrepancies is taken and expressed as an Average Root Mean Square (“ARMs”) value. (Graham Decl. at 11-12.) These study results and other voluminous data are submitted to the FDA, which employs experts and statisticians to review the data and inde[986]*986pendently determine, based on the totality of the information regarding the device, whether it is substantially equivalent to a predicate device in terms of safety and effectiveness. (Graham Decl. at 13-14.)

B. The Pronto Devices’ 510(k) Submissions

From 2008 to 2011, Masimo submitted five 510(k) submissions for the Pronto Devices that were reviewed and cleared by the FDA. The first 510(k) at issue concerned three devices, the Radical-7, Rad 87, and Rad 57t. (Graham Decl. Exh. C.) These devices all used Masimo’s SET and Rainbow MX-1 circuit board technology from its pulse oximeter devices. (Graham Decl. Exh. C at 228.) Masimo sought clearance to market the devices with indications for use for the continuous noninvasive monitoring of Sp02, pulse rate, and SpHb. (Graham Decl. Exh. C at 228.) With the 510(k) application, Masimo submitted performance testing data along with a detailed explanation of the data collection methods, subject population, and study methodology. (Graham Decl. Exh. D.) This validation study data consisted of 492 data points collected on 59 different volunteers. The data showed an SpHb ARMs accuracy value of +/-0.96 grams per deciliter (“g/dL”) at one standard deviation, which Masimo rounded up to +/-1 g/dL in its proposed accuracy specification. (Graham Decl. Exh. D.) On May 12, 2008, the FDA notified Masimo that it found the devices substantially equivalent to their predicate devices and cleared them for marketing with the requested indications for continuous monitoring of Sp02, pulse rate, and SpHb, and with an SpHb accuracy specification of +/-1 g/dL. (Graham Decl. Exh. E.)

Masimo’s second 510(k) submission was for a device it ultimately marketed as the Pronto.

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977 F. Supp. 2d 981, 2013 WL 5630947, 2013 U.S. Dist. LEXIS 149814, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-ruhe-v-masimo-corp-cacd-2013.