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First Class Suit Over Ancure Device Filed in Federal Court in California - litigationcenter.bna.com - June 27, 2003

First Class Suit Over Ancure Device Filed in Federal Court in California
By: Nancy J. Moore, Joyce Cutler and Michael Bologna
June 27, 2003

The first of an anticipated wave of class actions over the Ancure Endograft System manufactured by a Guidant Corp. subsidiary was filed June 16 in the U.S. District Court for the Northern District of California (Pengra v. Endovascular Technologies Inc., N.D. Cal., No. 02797, filed 6/16/03).

The complaint, which alleges the company knowingly marketed a defective product and concealed the deadly defects from consumers, was filed by Carol Pengra, whose husband, Robert Louis Pengra, died in July 2000 after receiving the Ancure device. The device, which was developed to repair abdominal aortic aneurysms less invasively, is inserted into patients through a one-inch incision in the groin, and was marketed as a safer and less invasive treatment for the aneurysms, according to the plaintiffs.

Guidant's subsidiary Endovascular Technologies Inc. pled guilty June 12 and agreed to pay civil and criminal fines of $92.4 million to settle charges stemming from their failure to report problems with the device to the Food and Drug Administration. At least 12 deaths have been blamed on the device.

U.S. Attorney for the District of Northern California Kevin Ryan said the fine is the largest ever for failure to report malfunctions of a device to the FDA, and is one of the first times such conduct led to felony convictions.

Pengra is seeking damages for wrongful death, and asserts tort and other claims as representative of her husband's estate. Her complaint also alleges fraudulent concealment and seeks punitive damages. She proposes a class of "All persons and/or their spouses in the United States who have been implanted with the Ancure Device."

Two-Pronged Approach. Pengra's attorney William Audet said the suit is two-pronged--a medical monitoring class claim for those who still have the Ancure device and a personal injury claim for those who have been injured. The medical monitoring seeks to cover patients who currently do not have an injury related to the device, he said.

The company said there is no threat to patients who have the device still implanted because the danger occurred during surgery. "No patient with the Ancure Endograft implant is at risk as a result of this matter, and the implant continues to demonstrate excellent long-term clinical results," the company said.

However, Audet questioned that assurance. "In my view, the credibility of the company is somewhat suspect. They have their own agenda now in trying to minimize their exposure," Audet said June 19.

Attorney Arlene Farolan of the Chicago law firm of Kenneth B. Moll & Associates Ltd., which also plans to file suit, estimates 18,000 patients have received such implants. With a failure rate of approximately one in three, the law firm believes 6,000 of these patients have endured device failure.

Court documents in the enforcement action said 7,632 devices were sold between Sept. 30, 1999, and March 16, 2001, with 2,628 incidents of malfunctioning not reported to the FDA, 172 reported incidents, 12 unreported deaths, and 57 unreported invasive surgeries.

Class Allegations. Pengra's suit asserts that common questions of law and fact predominate, and that a class action is superior both because of the expense of such litigation and the pressures individual suits would put on the judicial system. Common questions listed in Pengra's complaint include:

• Whether the defendants designed, manufactured and/or marketed a dangerously defective product;

• Whether use of the Ancure Device causes injury;

• Whether defendants are strictly liable for sale of a defective product;

• Whether the defendants acted negligently;

• Whether the defendants conducted appropriate testing;

• Whether the defendants failed to make adequate warnings;

• Whether the defendants falsely and fraudulently misrepresented the safety and side effects of the device and concealed the dangers;

• Whether the defendants failed to ensure that patients would not suffer from dangerous drug cross-interdictions with the Ancure device;

• Whether medical monitoring is appropriate; and

• Whether defendants are liable for punitive damages.

In addition to seeking certification under the Federal Rule of Civil Procedure 23(b)(3) predominance standard, the complaint also alleges that a medical monitoring class can be appropriately certified under the injunction provisions of Rule 23(b)(2).

Statutes of Limitations. The complaint alleges that the defendants are estopped from relying on any statute of limitations because they fraudulently concealed the problems. The plaintiffs say the defendants intentionally made misleading representations to the FDA, and that their other fraudulent acts included their failure to disclose and to warn that the device was "unsafe, defective, and dangerous." The plaintiffs assert that the defendants had such a duty to disclose.

The complaint lists 11 causes of action, including strict liability failure to warn, strict product liability for design and manufacturing defect, negligence, breach of express and implied warranty, wrongful death, medical monitoring, fraudulent concealment, loss of consortium, survival action, and punitive damages.

Plea Agreement. In the plea agreement, Endovascular, a Menlo Park, Calif.-based medical device manufacturer, admitted it failed to tell the U.S. Food and Drug Administration about malfunctions of its Ancure Endograft System.

The defendant will pay $32.5 million in criminal fines, forfeit $10.9 million, and pay $49 million in civil fines related to devices sold under Medicare, Medicaid, and Veterans Affairs programs.

The company admitted the device malfunctioned one third of the time it was used during a 19-month period.

Plaintiffs' Attorneys Question Disclosures. "The intakes we're getting aren't 100 percent consistent with the damage assessment that the company's giving vis-a-vis this product," Audet said, adding that it is "very troubling for my clients."

Individuals--like a 53-year-old school teacher--who contacted the firm report not being able to work after receiving the device, he said. The clients represent "a cross section of America" who had no idea about problems the device caused until the plea was announced, Audet said.

"To not disclose that a third of the product malfunctioned, and then to instruct your sales people to go outside the FDA-approved instructions, that's just unheard of," Audet said.

Even with the guilty plea, Audet said there is no bet the company will not continue with a scorched earth litigation. The company contends, in a case pending in the Northern District of California, that because the FDA approved the device, it is immune from lawsuits.

"With our clients, I think they're going to get angrier as time goes on," he said.

Chicago attorney Farolan told BNA the Moll firm is planning to file a class action in the Northern District of California. She said the suit against Endovascular Technologies will contain traditional types of product liability claims, including breach of warranty, strict liability and negligence. Farolan said the suit will seek to represent all individuals implanted with the Ancure device.

In a statement Moll commented, "the primary goals of the lawsuit will be to inform the public of the egregious conduct of this manufacturer and to provide complete compensation to each and every victim of the failed devices."

William Audet of Alexander, Hawes & Audet in San Jose, Calif., represents the plaintiffs in the Pengracase.

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