Judge dismisses suits against Medtronic

Defibrillators are stop-watch sized devices that monitor a heart's rhythm and deliver a shock to an errant heart beat through wires called leads. In October 2007, Medtronic pulled its Sprint Fidelis leads from the market. Studies were showing that the leads were fracturing and jolting patients, leading to at least five deaths.

Still, patients sued. About 1200 cases were consolidated before U.S. District Judge Richard Kyle in St. Paul, according to a Medtronic spokesman.

Judge Kyle dismissed the combined suits saying it's not possible for his court to preempt federal protection afforded to medical device makers. That protection comes under the Food, Drug, and Cosmetic Act, and it says that device makers that go through rigorous federal reviews for their products cannot easily be subject to state lawsuits.

Kyle did point out that the court was sympathetic to the plaintiffs plight and recognizes that "at least some Plaintiffs have suffered injuries" from these leads.

However, the Plaintiffs would have to take up their case with Congress instead of his court, Kyle said. Some members of Congress want to change the law that shields medical device makers; that law was upheld by a U.S. Supreme Court ruling last year.

A Medtronic spokesman declined to comment on Judge Kyle's ruling. However the company released a statement.

"This decision supports the principle that the the U.S. Food and Drug Administration is the appropriate body to determine the safety and efficacy of innovative technologies," the statement quoted the company's chairman and chief executive, Bill Hawkins.

Investors had been watching to see how the suit against Medtronic would play out, but the legal precedent seemed to work in Medtronic's favor, according to Aaron Vaughn, an analyst who covers Medtronic for the firm Edward Jones.

"It would've been a surprise to the investment community had the decision gone the other direction," he said.

And that's why Medtronic's stock price didn't shoot up as a result of the news, Vaughn says.

But even if the judge had ruled differently, the suits would not have sunk Medtronic, according to Vaughn.

"While it's a terrible situation for the patients who have had to deal with this, from a financial impact, Medtronic's such a large company and they have such a solid balance sheet that the economic impact would be minimal for the company."

Hunter Shkolnik, a lawyer representing plaintiffs in the consolidated cases, reacted sharply to the verdict.

"This is unbelievable. And these people have no recourse against this company," he said.

He's concerned about additional failures of the leads and says further legal action is possible.

"The next steps right now are number one, a motion to go back to the judge, asking him to reconsider his decision; number two, a request to ask to re-plead and maybe change some of the allegations and then go through another round of motions to dismiss."

Another option, Schkolnick says, is to appeal the ruling to the 8th Circuit Federal Appeals Court.

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