St. Jude faces fresh crop of Riata suits

St. Jude Medical is facing another set of lawsuits over the Riata ICD leads.--Courtesy of St. Jude Medical

St. Jude Medical ($STJ) is staring down another pair of lawsuits from patients claiming injury by the now-recalled Riata ICD leads, and the outcome could affect how devicemakers shield themselves from liability suits in the future.

As The Wall Street Journal reports, two plaintiffs claim their Riata leads were faultily designed and manufactured, leading to inappropriate shocks and device failure. However, the suits stand out because they accuse St. Jude of skirting both FDA requirements and state product-liability laws, an effort to get around a 2008 Supreme Court ruling that has hamstrung patients trying to litigate against device manufacturers.

The Court has upheld that FDA regulations supersede disparate state laws on product quality, making it very difficult to successfully sue a company that has complied with the agency's PMA process and gotten its device on the market, even if its product was later found to be defective.

As the WSJ notes, thousands of medical device suits have been thrown out in the name of that ruling, but the latest Riata litigation could broaden the application, possibly opening up an avenue for would-be plaintiffs across the industry.

For St. Jude, more Riata suits just add to the heap of concerns over its cardiac rhythm management business. Last quarter, the company reported $27 million in litigation charges for the unit, and it's also facing a shareholder suit claiming it willfully withheld information about an FDA warning letter related to Durata, the recalled lead's replacement.

The company is shaking off suggestions that Durata could suffer the same fate and get yanked off the market this year, affirming its faith in the device's safety and projecting net income growth of up to 35% for 2013.

- read the WSJ story (sub. req.)

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