United States ex rel. Nargol v. Depuy Orthopaedics, Inc.

1

THE UNITED STATES OF AMERICA and THE STATE OF NEW YORK ex rel. DR. ANTONI NARGOL &DR. DAVID LANGTON, Relators, v. DEPUY ORTHOPAEDICS, INC., DEPUY, INC., and JOHNSON &JOHNSON SERVICES, INC., Defendants.

Civil Action No. 12-10896-MPK ^[1]

United States District Court, D. Massachusetts

November 10, 2021

MEMORANDUM AND ORDER ON DEPUY'S MOTION FOR RECONSIDERATION (#545).

PAGE KELLEY, CHIEF UNITED STATES MAGISTRATE JUDGE

I. Introduction.

In May 2012, Dr. Antoni Nargol and Dr. David Langton brought this qui tam action against DePuy Orthopaedics, Inc., DePuy, Inc. and Johnson & Johnson Services, Inc. (collectively, DePuy) under the False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq., and the New York state false claims act. (##1; 219.)^[2]At issue is the metal-on-metal (MoM) hip replacement device DePuy manufactured under its “Pinnacle” product line (the Pinnacle or the Pinnacle device). (#219 ¶ 6.) Relators allege that over a five-year period, DePuy illegally promoted and sold a significant number of Pinnacle devices that fell outside FDA-approved manufacturing specifications, causing false claims to be submitted to Medicare and Medicaid. See id. 88, 104, 179-181, 349.

A key issue in this action is that relators previously served as experts and consultants in multi-district litigation (MDL) involving the Pinnacle device and another MoM hip replacement device manufactured by DePuy, called “ASR.” In those roles, relators had access to confidential information subject to protective orders. (##103 at 18; 522-21.) Relators have been warned by multiple courts that they are required to comply with the protective and court orders that govern their use of that confidential information. See, e.g., ##101; 103 at 18; 249; 414. In addition, they have been chastised repeatedly for failing to comply with those orders. See, e.g., ##104 at 22, 27; 103 at 18; 414. DePuy moved to strike allegations and to dismiss the case, (#519), citing relators' use of confidential information in their second amended complaint as a basis for dismissal. The court denied the motion (#542); DePuy moved for reconsideration (#545). For the reasons discussed below, DePuy's motion (#545) is ALLOWED.

II. Factual Background.

A. Relators' Claims.

DePuy is in the business of designing, manufacturing, and distributing MoM hip replacement devices used to treat medical conditions such as late-stage degenerative hip disease, hip joint damage, and osteoarthritis. (#219 ¶ 73.) Relators describe themselves as “two of the most prominent experts in MoM surgical technique and engineering technology.” Id. ¶ 23. Throughout the 2000s, relators used DePuy MoM devices such as the Pinnacle and ASR to treat hip conditions in many patients. Id. ¶ 24. These devices included a metal head, cup, and liner, which together mimic the cup and ball of a hip joint. Id. 6, 148, 154.

As Relator Langton began noticing problems with the Pinnacle, he gathered data on explanted devices. (#219 ¶ 70.)^[3] He examined over 250 explanted and unused Pinnacle devices and collected measurements of the explants in a database. Id. Relators hired QA Consulting (QA) to perform a statistical analysis of the explant data. Id. 344, 346. They allege that, “[b]ased upon QA's statistical analysis, DePuy's manufacturing process fails to produce implant heads within specification 14.93% of the time and implant liners 50.41% of the time.” Id. ¶ 349. Relying in large part on QA's analysis, relators' claims are premised on the allegation “that DePuy falsely palmed off devices that, due to latent manufacturing defects, materially deviated from the design specification of the FDA-approved Pinnacle MoM device.” (#204 at 6); see also U.S. ex rel. Nargol v. DePuy Orthopaedics, Inc., 865 F.3d 29, 32 (1st Cir. 2017).

B. Relators' Confidentiality Obligations.

1. ASRMDL.

In 2010, in response to high failure rates for the ASR device, DePuy announced a recall. (# 219 ¶ 55 & n.4.) At the same time, the company faced a rash of product liability lawsuits regarding the ASR device that were consolidated into an MDL. Id. 56-57; see In re: DePuy Orthopaedics, Inc., ASR Hip Implant Prods. Liab. Litig., No. 10-md-2197 (N.D. Ohio). Prior to bringing this lawsuit, relators served as testifying experts or fact witnesses, or otherwise provided expert assistance, in many product liability and personal injury cases against DePuy, including the ASR MDL. Id. 68, 72. Beginning around May 2012, plaintiffs' counsel in the ASR MDL provided relators with confidential DePuy documents to assist them in preparing for their expert testimony there. (#103 at 12.) These documents were subject to a protective order which bound both relators to certain confidentiality obligations. Id.

2. Pinnacle MDL.

Since 2011, “more than 5, 000 personal injury actions have been filed by patients who have been injured by the Pinnacle device.” (#219 ¶ 58.) Like the ASR cases, these cases were consolidated into an MDL. Id.; see In re: DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prods. Liab. Litig., No. 11-md-2244 (N.D. Tex.). Langton consulted with plaintiffs' counsel in support of the Pinnacle MDL but was not formally retained as an expert. (#529 at 19 n.25.) Although Langton was not formally retained, he consulted with plaintiffs' counsel and experts, received remuneration for his time and efforts, and had access to materials that would not otherwise have been available to someone who was not associated with the litigation. See, e.g., #522-11 at 2 (email communications between Langton and plaintiffs' counsel, discussing documents he wanted to review and whether he would be billing plaintiffs' counsel for his time). On November 15, 2013, he signed a confidentiality agreement, indicating that he had read the Pinnacle MDL's stipulated protective order, understood its terms, and “agree[d], upon threat of penalty of contempt, to be bound by such terms.” (#522-21 at 7.)

3. Relators' Repeated Violations of Confidentiality Orders.

In July 2014, relators disclosed to this court that they had included in their complaint confidential information subject to protective orders in both MDLs. (##34; 37 at 3-4.) Judge Saylor, who was presiding over the case at that time, granted relators leave to amend the complaint so as to remove the offending material. (#101). The second amended complaint was required to be

accompanied by affidavits from relators sworn to under the pains of perjury that certify that the second amended complaint does not violate any relevant court order, including the protective orders issued in the MDL proceedings in the Northern District of Ohio or the Northern District of Texas or the order issued by the court in Ohio on January 5, 2015.

Id. (emphasis added.) Relators filed their second amended complaint with the required accompanying affidavits on May 4, 2015. (##115-3; 115-4.)^[4]

In 2015, relators asked the presiding judge of the ASR MDL, Judge Katz, to relieve them of their obligations under the protective order in that case. (#103 at 11.) They admitted that in contravention of the protective order, between May 2012 and June 2014, they had given confidential documents and information to the U.S. government and to several states in support of this case. Id. at 12; see #522-3 at 2 (letter from DOJ to counsel for relators, noting that relators had improperly disclosed materials subject to the ASR MDL protective order). Judge Katz refused to modify the protective order, and instead reminded relators that they “are prohibited from sharing or using the information they received in their capacities as experts [in that litigation] in [the present qui tam proceeding]. They are also prohibited from sharing their information with any third-party, including any government entities, foreign or domestic.” (#103 at 18.) He expressed particular concern regarding relators' conduct, noting that

[a]llowing . . . modification of the Confidentiality Order rewards the [relators] for using confidential information they obtained in their roles as experts; information which would not have been available to them absent their special employment.... If the Court agreed with [relators'] request, these retained experts would be free to use the knowledge they obtain during this litigation for their own benefit. This result is unacceptable.

Id. at 15, 17.

In December 2017, the parties entered into a stipulated protective order in this case, which the court approved in January 2018. (##247; 249.) The parties stipulated to the following: “nothing in this Protective Order alters the January 5, 2015 ruling issued by the Honorable David A. Katz in the matter In re DePuy Orthopaedics, Inc., ASR Hip Implant Products, Case No. 1:10-md-2197 (N.D. Ohio).” (#249 ¶ 17.)

In a briefing submitted to the court in March 2020, relators insisted that their recordkeeping demonstrated that “there has been no ‘inadvertent' use of confidential information in order to plead the QA Allegations.” (#386 at 9.) Nearly six months later, however, relators filed a motion to correct that briefing, noting that they had, in fact, provided QA with Pinnacle device history records they had obtained through the Pinnacle MDL. (#468 at 8.) Despite this, they averred that QA had not used the device history data and noted that, “[w]ith respect to the statistical allegations pleaded in the complaint, Relators confirmed with certainty that QA did not rely upon any MDL-derived information in preparing its Pinnacle Explant Analysis.” Id. at 6.

In July 2020, relators asked this court not to hold them to their obligations under the ASR MDL protective order or Judge Katz's 2015 order. (##358, 359). The court denied their request and ordered relators to continue complying with their MDL confidentiality obligations as...