Opinion ID: 4110875
Heading Depth: 2
Heading Rank: 3

Heading: Axium Manufacturing Defect Claims

Text: D'Agostino describes various alleged defects in the manufacture of Axium. Instead of identifying specific false claims to CMS involving Axium, the proposed complaint seeks to rely on what D'Agostino calls a complete falsity theory. This theory applies, he argues, when every device is defective, rendering each claim for reimbursement involving the product false, and thereby logically obviat[ing] the need for identification of specific false claims, because their submission is a virtual certainty. This case presents no need to decide whether such a theory is tenable. The proposed complaint simply does not allege facts making it plausible that all Axium devices--or even most-- were defective. It alleges only that certain lots of Axium contained manufacturing defects that caused the device to malfunction when the surgeon tried to use it. The proposed complaint does not give the number or percentage of Axium devices that suffered these manufacturing defects. It does identify by hospital, surgeon, date, and (sometimes) Axium generation and lot number a dozen or so surgeries during which the surgeon encountered difficulty or failure in trying to deploy the Axium coil. Only - 24 - certain of those instances are said to involve defectively manufactured devices, and none are alleged to have resulted in any particular false claims paid by the government. See, e.g., Hagerty ex rel. United States v. Cyberonics, Inc., No. 16-1304, 2016 WL 7321224, at –5 (1st Cir. Dec. 16, 2016) (holding that identifying doctors and hospitals whose patients had device replacement surgeries does not establish that any medical provider actually submitted claims for government reimbursement). Importantly, there is no claim here of a latent manufacturing defect that manifested itself only after the surgery was completed and the claim for reimbursement submitted. To the contrary, the allegation is that the defect caused the device to fail as the surgeons tried to use it, and thus before any claim for reimbursement might have been submitted. We are therefore left with a proposed complaint that neither alleges any specific false claims involving Axium devices with manufacturing defects nor demonstrates beyond possibility that claims of the type said to be false were actually submitted.