Foley Hoag Achieves Dismissal of Government Fraud Case that Alleged Distributors Provided Doctors Kickbacks for Use of Medtronic Products

April 3, 2009

Foley Hoag lawyers successfully represented 16 medical device distributors in obtaining the dismissal of whistleblower claims brought under the False Claims Act before the U.S. District Court in Massachusetts. 

In 2007, plaintiff Jacqueline Kay Poteet sued 120 spine surgeons and the medical device distributors, claiming that the defendants had defrauded the U.S. federal government. Ms. Poteet, a former manager of travel services for Medtronic Sofamor Danek, a subsidiary of Medtronic Inc., claimed that the distributors gave and the surgeons accepted kickbacks in exchange for promoting and using Medtronic products. The complaint alleged that in 2006, the doctors were paid “sham ‘consulting fees’” totaling more than $8 million to promote off-label, non-FDA- approved uses of Infuse, a Medtronic product used in spinal fusion operations.  In June 2007, the federal government declined to intervene in the case, and the plaintiff decided to continue to pursue the case as a private action.

The distributors’ defense, led by Foley Hoag partner Nicholas C. Theodorou and associate Ara B. Gershengorn, moved to dismiss the case, arguing that the plaintiff's claims failed to meet the jurisdictional hurdles in the False Claims Act, namely its public disclosure and first-to-file rules. Foley Hoag’s defense also argued that the plaintiff's fraud claims – which did not identify individual false claims submitted for payment – were not pleaded with specificity as required by Federal Rules of Civil Procedure.

In March 2009, the district court granted all of the defendants' motions and ruled in favor of the defendants. Judge Richard G. Stearns dismissed the lawsuit and denied the plaintiff’s request to amend their complaint.

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