(BSNS WIRE) Whistleblower Lawsuit Against Hewlett-Packard for Medical Product
Fraud Allowed to Proceed -- State Court of Appeals R
Whistleblower Lawsuit Against Hewlett-Packard for Medical Products Fraud Allowed
to Proceed -- State Court of Appeals Reverses Superior Court Dismissal, Announce
Law Firm
Business Editors / Legal Editors
SAN FRANCISCO--(BUSINESS WIRE)----
In a significant ruling, the California Court of Appeal has
revived a whistleblower lawsuit against Hewlett-Packard Company
(NYSE:HPQ) and a spin-off entity, Agilent Technologies, for knowingly
selling defective, life threatening medical devices used by many
California hospitals. Brought by a former Hewlett-Packard employee
named Robert Hindin on behalf of the State of California and himself,
the complaint cites the company's "scheme to defraud its customers by
knowingly selling defective and potentially dangerous medical devices"
in violation of the California False Claims Act. According to Hindin's
legal counsel, O'Donnell & Associates, the lawsuit--which has the
potential damages to be one of the largest false claims actions in
California history--seeks treble damages estimated in the hundreds of
millions of dollars.
On July 13, 2007, the California Court of Appeal, First Appellate
District, unanimously reversed an earlier San Francisco Superior Court
decision that found the legal action was barred by a three-year
statute of limitations. In its decision, the appellate court held that
the three-year deadline for filing did not apply to a private
individual but rather to public officials whose knowledge was the
trigger for the running of the three-year filing period. "The plain
and commonsense reading of the statutory language contains no
ambiguity, and it must govern the case," the Court's decision stated.
The plaintiff's brief was supported by the California Attorney
General's Office and Taxpayers Against Fraud, a Washington, D.C.-based
public interest group.
The "whistleblower" bringing the qui tam action is Robert Hindin,
who worked for Hewlett-Packard (HP) as production manager and
manufacturing engineer for eight years before being wrongfully
terminated in 1997. Hindin first uncovered HP's improper practices and
repeated life-threatening failures of HP products in 1996 and
attempted to persuade HP management to respond to the problems, even
going so far as to write to HP's president. After being met with
"nothing but hostility and threats," Hindin reported HP's conduct to
the Food and Drug Administration, after which he was fired by the
company.
Hindin initially filed a federal lawsuit in 1997 on behalf of
himself and the U.S. government under the Federal False Claims Act,
charging HP fraudulently induced the federal government (including the
Department of Defense and Veterans Administration) to buy its
defective products through both misstatements and material omissions.
Like the U.S. government, California was a large customer of HP,
acquiring thousands of medical devices for its hospitals and
reimbursing private hospitals for the purchase and use of these
defective devices through the MediCal program.
"Each of us has the right to expect any medical equipment used for
our medical care to be safe and effective, but we are all placed at
great risk when medical equipment companies violate our trust and
knowingly sell equipment that is defective," said Hindin.
"Hewlett-Packard, in my estimation, sold hundreds of millions, if not
billons, of dollars worth of adulterated medical equipment, a
substantial portion of which went to the State of California. My
objective in pursuing this is to prevent such reprehensible--in fact,
life threatening--behavior from ever happening again, and to seek
reimbursement for the citizens of California."
The lawsuit alleges that HP falsely certified to the government
that it had complied with FDA requirements regarding the products,
including reporting each product failure, investigating these
failures, and addressing the problems. The medical devices cited in
the suit include Cardiac Defibrillators; Anesthesia Gas Monitors,
which are utilized in surgery to deliver anesthetic agents and to
monitor anesthesia and respiratory gases; Pulse Oximeters, which are
used in operating rooms, intensive care units, and patients' bedsides
to measure and monitor an individual's arterial oxygen saturation
level; and Ultrasound Imaging Transducers used to produce images of
structures, organs and blood flow inside the body.
Pierce O'Donnell, lead plaintiff's counsel with O'Donnell &
Associates in Los Angeles, stated: "Sadly, the evidence shows HP's
callous disregard for the fact that these defective products--which
they consciously sold after notice of defects--could mean life or
death for unsuspecting patients. This case is not just about recouping
money for California taxpayers--it is an indictment of a company that
placed a higher premium on profits than public health and safety."
Hindin's fraud charges were validated by a settlement in July
2002, in which HP/Agilent agreed to pay $7 million to the federal
government which had taken over prosecution of Hindin's Federal False
Claims Act suit. The company also settled Hindin's wrongful
termination claim. Announcing the settlement, the U.S. Attorney in
Boston, Michael J. Sullivan, stated publicly: "These medical products
were critical to the care of the hospital patients, including armed
services personnel and veterans, and failed to perform at an
acceptable level. The fact that the defective nature of these products
was not disclosed is unconscionable."
During the government investigation, Hindin filed a parallel
lawsuit in California, under seal as required by law, that became
public in 2005. It was the dismissal of this state lawsuit in 2006
which was reversed by the Court of Appeal last Friday.
The legal action charges, among other things, that HP performed
sham quality tests and "willfully concealed the existence, frequency
and severity of the products' defects," with "grossly inadequate
testing procedures" that violated government-prescribed standards. It
also charges that the defendants caused private health care providers
participating in the MediCal program to pass on a portion of the
costs, both for the purchase, as well as services rendered from use,
of the substandard medical equipment to the State of California. Over
a six year-period from 1991 to 1997, it is estimated that HP
distributed-and allowed to remain in use-thousands of such inferior
medical devices.
These products were manufactured and distributed by HP prior to
November 1999, when it spun off these and other divisions to create
Agilent Technologies Inc. Agilent's Healthcare Solutions group alone
reported revenues the following year of $1.4 billion. That group was
acquired by Royal Philips Electronics NV in 2001 and was subsequently
integrated into Philips Medical Systems North America.
O'Donnell added: "The U.S. government's condemnation underscores
the egregious behavior of HP, but it left unanswered and unresolved
key issues--namely, how many of these defective products are still
being used to treat patients in hospitals, and how many injuries can
we ascribe to their continued use?"
The filing cites examples of the abusive treatment that Hindin had
to endure as a whistleblower. Once a quality control audit by the FDA
confirmed Hindin's compliance complaints, he was harassed and wrongly
accused of insubordination and incompetence at HP. He was also
ostracized and marginalized by HP management. "HP even went so far as
to install a hidden camera above Hindin's desk," the filing states.
Hewlett-Packard Company is a major manufacturer of computers,
printers, software and related products based in Palo Alto,
California.
For a copy of the Court of Appeals ruling, please go to the Court
website at appellatecases.courtinfo.ca.gov (Case #A114629) or
O'Donnell & Associates' website, oslaw.com.
KEYWORD: NORTH AMERICA CALIFORNIA UNITED STATES
INDUSTRY KEYWORD: GOVERNMENT FEDERAL GOVERNMENT AGENCIES STATE/LOCAL HEALTH MEDI
AL DEVICES MANUFACTURING PROFESSIONAL SERVICES LEGAL LAWSUIT
SOURCE: O'Donnell & Associates
CONTACT INFORMATION:
for O'Donnell & Associates
Craig A. Parsons, 310-472-7632 or 310-200-4310
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