Sadler et al v. Advanced Bionics, LLC

Filing 182

MEMORANDUM OPINION AND ORDER by Judge John G. Heyburn, II on 3/26/12; 115 Defendants Motion in Limine Number 4 is SUSTAINED in part and DENIED in part; 93 Plaintiffs Motion to Deem Documents Admissible is SUSTAINED in part, DENIED in part; 109 Defendants Motion in Limine Number 3 is SUSTAINED. cc:counsel (DAK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
CIVIL ACTION NO. 3:11-CV-00450-H

BRIAN AND MICHELLE SADLER
Individually and on behalf of their
Minor child, B.S.

PLAINTIFFS

V.
ADVANCED BIONICS, INC.

DEFENDANT

MEMORANDUM OPINION AND ORDER
This is a medical negligence and products liability case arising out of Plaintiffs’ injuries that
resulted from the malfunctioning of a cochlear implant manufactured by Defendant, Advanced
Bionics. In previous Orders, the Court dismissed some causes of action on preemption grounds and
ruled on some motions in limine filed by both parties. The Court now addresses three important
motions in limine relating to the admissibility of certain documents. Specifically, the Court will rule
on part of Plaintiffs’ Motion to Deem Documents Admissible (DN 93); Defendant’s Motion in
Limine Number 4: to exclude evidence of FDA Form 483s, Warning Letter and related
communications (DN 115) (“Motion Number 4”); and Defendant’s Motion in Limine Number 3: to
exclude reference to FDA civil monetary penalty action (“CMP”) and related documents (DN
109)(“Motion Number 3”). For the reasons stated herein, the Court will sustain in part and deny in
part Plaintiffs’ Motion to Deem Documents Admissible, reserving part of that motion for later
consideration. Further, the Court will sustain in part and deny in part Motion Number 4, and will
sustain Motion Number 3.

I.

The first two motions are the easiest to resolve. Plaintiffs moved to deem some thirty
documents admissible for trial (DN 93).1 Advanced Bionics moved to deem some of the same
documents inadmissible in a separate motion (DN 115). The Court will address the admissibility
of those documents that are the subject of both motions.
In 2001, the federal Food and Drug Administration (“FDA”) issued a Form 483 Report
finding deficiencies in Advanced Bionics’ supplemental reports relating to prior generations of
Advanced Bionics cochlear implant (“2001 Form 483”). In September 2004, following an FDA
inspection of Advanced Bionics facilities, the FDA issued a Form 483 listing 23 observations mostly
relating to moisture issues (“2004 Form 483”). The 2004 Form 483 pertained to the HiRes 90k, but
mis-diagnosed the cause of the moisture problems, claiming that moisture was being sealed into the
device during its manufacture. In 2005, the FDA issued a Warning Letter to Advanced Bionics
identifying 15 alleged deviations from FDA regulatory requirements supposedly in response to
Advanced Bionics’ failure to respond adequately to the 2004 Form 483 (“2005 Warning Letter”).
In February 2007, the FDA issued another Form 483 to Advanced Bionics (“2007 Form 483”)
arising out of Advanced Bionics’ 2006 recall of its HiRes 90k devices with AstroSeal feedthrus
(“Vendor B HiRes 90k”). In the 2007 Form 483, the FDA correctly cites a leak in the device’s
feedthru as the cause of the excess moisture. The Court finds the 2004 Form 483, 2005 Warning
Letter and 2007 Form 483 admissible, while the 2001 Form 483 is inadmissible.

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In Response to Plaintiffs’ Motion, Advanced Bionics conceded to the admissibility of certain documents. Accordingly,
the Court sustains Plaintiffs’ motion as to those documents, assuming Plaintiffs provide proper foundation for the
evidence. These documents are the July 2003 FDA Conditions of Approval for the Hi Res 90k, the 2004 Pernicka report
for Device No. 200064, the 2004 Pernicka Report for Device No. 201084, the 2004 Trip Report to Pernicka Lab in
Colorado, and the Failure Analysis Report for Device No. 308051.

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Advanced Bionics argues that these four documents are irrelevant under Fed. R. Evid. 401.
The Court agrees that the 2001 Form 483 is irrelevant, because the FDA issued the report eighteen
months before Advanced Bionics received FDA approval for the HiRes 90k. The report concerned
earlier generations of the cochlear implant, which are not at issue in this case. Moreover, the 2001
Form 483 noted deficiencies in Advanced Bionics’ supplementation obligations, but the Court has
already determined that the Federal Food Drug and Cosmetic Act, and particularly the Medical
Device Amendment to that legislation, preempts claims based upon Advanced Bionics’ failure to
obtain a PMA Supplement for the Vendor B HiRes 90k and other supplementation requirements.
Therefore, the contents of the 2001 Form 483 are not relevant to any issue presently before the
Court.
However, the Court finds that the 2004 Form 483, 2005 Warning Letter, and 2007 Form 483
are relevant. The forms and letter are a product of FDA investigations of Advanced Bionics’
facilities and products, relate to the HiRes 90k, and reveal issues in Advanced Bionics’
manufacturing practices that caused excessive moisture levels in these cochlear implants. That the
FDA based the 2004 Form 483 and 2005 Warning Letter upon a mis-diagnosis of the hermeticity
issue is important and a fact that Advanced Bionics is free to emphasize at trial, but the information
contained within these documents show evidence of Advanced Bionics’ notice of moisture problems
with the HiRes 90k. Therefore, the documents are relevant.
Advanced Bionics argues that these documents are inadmissible hearsay. These documents
are hearsay, but admissible under the public records exception to the hearsay rule located in Fed. R.
Evid. 803(8). This rule provides that records of a public office that set out “a matter observed while
under a legal duty to report” or “factual findings from a legally authorized investigation” are

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excepted from the hearsay prohibition if these documents are sufficiently trustworthy. Fed. R. Evid.
803(8).

These documents report factual findings2 and matters observed under the FDA’s

investigatory authority. While courts are divided on the admissibility of evaluative reports under
this exception, the Advisory Committee notes to this rule encourage courts to admit this evidence
unless “sufficient negative factors are present.” Fed. R. Evid. 408 advisory committee’s notes.
These negative factors are (1) the timeliness of the investigation, (2) the special skill or experience
of the official, (3) whether a hearing was held, and (4) possible motivational problems. Id. The
Court finds that only one of these factors–holding a hearing–weighs against the trustworthiness of
these documents. However, when balanced with the other three factors, the trustworthiness
indicators are sufficient to support admissibility of the evidence. FDA officials conducted the
investigation themselves as a neutral party with motivations to protect public health and safety.
Therefore, the Court finds these documents sufficiently reliable to be excepted from the hearsay rule.
The Court concludes that 2004 Form 483, 2005 Warning Letter, and 2007 Form 483 contain
the reliable observations of the federal agency in charge of regulating medical device manufacturing,
so the jury should afford the documents a certain weight. Though undue prejudice is possible,
Advanced Bionics will have ample opportunity to show that the statements in the documents are
mere observations. Moreover, the Court will issue a cautionary instruction at trial that can temper
any undue weight as to opinions contained in the Form 483s.

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Advanced Bionics makes a strong argument for inadmissibility under the principle that legal conclusions are not
permitted under Fed. R. Evid. 803(8). After a review of the relevant evidence, the Court finds that most of the content
of these documents comes in the form of observations and factual findings. However, if Advanced Bionics maintains
that specific sections of these documents go beyond mere observations into the realm of legal conclusions, the Court will
entertain an objection to those specific sections. At this time, however, the Court makes no comment as to whether legal
conclusions are admissible under Fed. R. Evid. 803(8).

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Advanced Bionics’ character evidence argument, while creative, is not persuasive.
Accordingly, the Court finds the 2001 Form 483 inadmissible as irrelevant, and the 2004 Form 483,
2005 Warning Letter, and 2007 Form 483 admissible.3
II.
Turning to Defendant’s Motion Number 3, on November 6, 2011, the FDA filed a complaint
against Advanced Bionics and its two co-CEOs, Jeffrey Greiner and Al Mann, for shipping 74 HiRes
90k devices without first submitting a PMA Supplement for those devices or receiving FDA
approval for the device with AstroSeal feedthrus.

On March 17, 2008, the FDA amended the

complaint to release Al Mann as a defendant and add allegations that Advanced Bionics failed to
sufficiently evaluate and select AstroSeal as a component manufacturer and adequately validate and
test devices with AstroSeal feedthrus. Later, the FDA submitted a second amended complaint in
which it dropped the claims added in the first amended complaint. In 2008, the parties settled the
case. Advanced Bionics paid $1.1million and Jeffrey Greiner paid $75,000 in the settlement, but
made no admission of liability. In Motion Number 3, Advanced Bionics seeks to exclude all
evidence of or reference to the CMP, including the original and two amended complaints, answers,
settlement agreement, and press releases.
The Court sustains Defendant’s motion for several reasons. First, the Court finds the original
and first amended complaints inadmissible, because they do not represent the FDA’s final
determination as to Advanced Bionics’ alleged liability in the CMP. That there is a second amended
complaint shows that the FDA’s two preliminary complaints were abandoned for purposes of the

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Advanced Bionics’ motion also sought to exclude “related communications”. However, Advanced Bionics failed to
identify the related communications. Therefore, Advanced Bionics should submit any specific arguments as to the
admissibility of related communications for further consideration.

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CMP. In light of the fact that the FDA only pursued the CMP on the second amended complaint,
the two preceding complaints are irrelevant to the CMP itself and do not “possess[] sufficient
probative value to justify receiving it in evidence.” Fed. R. Evid. 401 advisory committee’s note.
Second, the fact of settlement, the nature of the settlement, and the settlement agreement
itself are inadmissible under Fed. R. Evid. 408 for purposes of proving liability or validity of the
claims. Rule 408 prohibits evidence of “furnishing, promising, or offering–or accepting, promising
to accept, or offering to accept–a valuable consideration in compromising or attempting to
compromise the claim” and “conduct or a statement made during compromise negotiations about
the claim” for purposes of proving or disproving “the validity or amount of a disputed claim or to
impeach by a prior inconsistent statement.” Fed. R. Evid. 408(a). The committee notes make clear
that the rule applies to completed compromises, and that the term validity is intended to encompass
liability. Fed. R. Evid. 408 advisory committee’s notes. The settlement evidence is inadmissible
to prove Advanced Bionics’ liability.
Plaintiffs contend that they will introduce this evidence for other purposes, which Fed. R.
Evid. 408(b) permits. Specifically, Plaintiffs seek to introduce this evidence for three purposes: to
prove witness bias, to negate a contention of undue delay, and to show notice that Advanced
Bionics’ conduct was wrongful, that Advanced Bionics acted in bad fath, and of Advanced Bionics’
intent. Plaintiffs present no definitive situation in which the evidence concerning the settlement can
prove witness bias, and neither party has argued undue delay. Moreover, the FDA filed its
complaint for the CMP in 2007, two years after Advanced Bionics manufactured Plaintiffs’ HiRes
90k and one year after surgeons implanted Plaintiff B.S. with her HiRes 90k. Therefore, this
evidence could not give notice of anything relevant to this suit. Accordingly, this evidence is

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inadmissible, except to the extent that Plaintiffs use this evidence for permissible purposes of
proving witness bias or negating allegations of undue delay.
Finally, evidence of the CMP and documents submitted therein, are inadmissible under Fed.
R. Evid. 402 and 403, because this evidence is irrelevant to the present case and would be unduly
prejudicial. Evidence is relevant where “it has any tendency to make a fact more or less probable
than it would be without the evidence.” Fed. R. Evid. 401(a). The evidence contained in the second
amended complaint and the answers filed in the CMP do not satisfy this standard. Plaintiffs claim
that this evidence is relevant for four reasons. First, Plaintiffs allege that this evidence shows that
Advanced Bionics had notice of problems and flaws in the company’s compliance with the FDA
regulations. However, notice is an inapposite argument here, because the CMP post-dated the
manufacture and implantation of Plaintiffs’ cochlear implant. Second, Plaintiffs contend that the
CMP shows the extent and nature of Advanced Bionics’ conduct. However, the statements made
in civil complaints are mere allegations, and have not been validated by any authority, including the
FDA itself. The second amended complaint and answers also pertain to those claims this Court
already preempted, and therefore, the relevance of any reliable substance in this evidence is marginal
at best to any surviving claims.
This evidence could be deemed admissible in certain circumstances where Advanced Bionics
opens the door to introduction of the CMP. However, the two situations Plaintiffs proffer to support
the relevance of this evidence do not justify a judicial determination that Advanced Bionics opened
the door. Plaintiffs assert that where Advanced Bionics argues that the FDA offered an incorrect
opinion as to the source of the excessive moisture accumulation and where Advanced Bionics
pursues the learned intermediary doctrine, Advanced Bionics opens the door to the admissibility of

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the CMP evidence. Essentially, Plaintiffs argue that if Advanced Bionics offers one FDA opinion,
this opens the door to all FDA opinions, and if Advanced Bionics presents evidence about what
hazards doctors knew at the time of B.S.’s surgery, this opens the door to what the United States
government knew around this time. Plaintiffs are attempting to apply a narrow evidentiary principle
too broadly. Moreover, these arguments do not support the relevancy argument. As such, the
evidence does not tend to make any material fact more or less likely.
If the Court admitted this evidence, however, the jury may accord undue weight to the
evidence. Because the FDA, a federal government agency, wrote the complaint, the jury may weigh
the allegations as something more definitive than mere assertions. Advanced Bionics would then
be forced to devote time to explaining the actual meaning and effect of allegations in complaints,
explanations that are of no real consequence to the present case.
In sum, the Court finds that any evidence pertaining to the CMP irrelevant and in violation
of Fed. R. Evid 401, 402, 403, and 408. Accordingly, this evidence is inadmissible.
Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Defendant’s Motion in Limine Number 4 is SUSTAINED
in part and DENIED in part. Accordingly, the 2004 Form 483, 2005 Warning Letter, and 2007 Form
483 are admissible, and the 2001 Form 483 is inadmissible.
IT IS FURTHER ORDERED that Plaintiffs’ Motion to Deem Documents Admissible is
SUSTAINED in part, DENIED in part, and the remaining sections reserved for further
consideration, consistent with this Opinion.
IT IS FURTHER ORDERED that Defendant’s Motion in Limine Number 3 is SUSTAINED
and reference to and evidence of the Civil Monetary Penalty action, including the original and

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amended complaints, answers, and settlement agreement, are inadmissible as described in this
Opinion.

March 26, 2013

cc:

Counsel of Record

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