United States District Court, D. Minnesota
ASEA/AFSCME Local 52 Health Benefits Trust, individually and on behalf of a class of similarly situated third party payors, Plaintiff,
St. Jude Medical, LLC, a Delaware corporation, and Abbott Laboratories, an Illinois corporation, Defendants.
L. Cambronne, Esq., Bryan L. Bleichner, Esq., Jeffrey D.
Bores and Chestnut Cambronne, PA, Robert K. Shelquist, Esq.
and Lockridge Grindal Nauen, PLLP, Adam J. Levitt, Esq. and
Dicello Levitt & Casey LLC, Jason T. Dennett, Esq. and
Tousley Brain Stephens PLLC, counsel for plaintiff.
Fields, Esq. and Kirkland & Ellis, LLP, Thomas F. Nelson,
Esq. and Stinson Leonard Street, LLP, counsel for defendants.
S. Doty, Judge
matter is before the court upon the motion to dismiss by
defendants St. Jude Medical, LLC and Abbott Laboratories.
Based on a review of the file, record, and proceedings
herein, and for the following reasons, the court grants the
putative class action arises out of the Food and Drug
Administration's (FDA) October 2016 recall of certain
models of St. Jude's cardiac defibrillators
due to a battery defect which can cause the device's
lithium batteries to deplete suddenly and
prematurely. Compl. ¶ 25. The devices are designed
to “provide pacing therapy to support slow heart
rhythms, and electrical shock or pacing therapy to treat fast
heart rhythms.” Id. ¶ 23. If the defect
occurs, the affected defibrillator could malfunction and
cause serious health complications, including death.
Id. ¶ 27. St. Jude received FDA approval to
market the devices in 2004. See id. ¶ 52.
Jude is a medical device manufacturer based in Minnesota.
Id. ¶ 2. Abbott Laboratories, an Illinois
company, acquired St. Jude on January 4, 2017. Id.
St. Jude is now a wholly owned subsidiary of Abbott.
Id. ¶ 7.
ASEA/AFSCME Local 52 Health Benefits Trust provides
healthcare benefits to employees of the State of Alaska and
their eligible family members under a collective bargaining
agreement. Id. ¶ 1. Plaintiff is what is
referred to as a “third-party payor” (TPP) of
medical expenses. Id. ¶ 22. Specifically
relevant here, plaintiff, on behalf of its beneficiaries,
paid for the cost of implanting the recalled devices and may
be required to pay costs incurred in removing and replacing
the devices. Id. ¶¶ 1, 33.
to the complaint, St. Jude became aware of the battery defect
as early as 2011, but failed to report or further investigate
the problem. Id. ¶¶ 28, 83-89. Plaintiff
alleges that in 2014, St. Jude knew that at least one patient
had died following premature battery depletion in an ICD.
Id. ¶¶ 28, 88. Plaintiff further alleges
that St. Jude actively concealed information about the defect
from its management boards, the FDA, and the public.
Id. ¶¶ 29-31, 89-91. The defect came to
light in the spring of 2016 during Abbott's due diligence
review as part of the planned merger with St. Jude, which
prompted St. Jude to finally investigate the cause of the
battery defect. Id. ¶ 32, 97-100. In August
2016, St. Jude decided to recall the defective devices and
worked with the FDA to do so. Id. ¶¶
101-02. On October 10, 2016, the FDA issued a Class I recall
of 251, 346 St. Jude devices sold in the United States and
manufactured before May 2015. Id. ¶ 103. St. Jude
has offered to reimburse patients for expenses not covered by
insurance relating to device removal and replacement.
Id. ¶ 113.
September 2017, plaintiff commenced proposed nationwide and
Alaska class actions in the Northern District of Illinois
against St. Jude and Abbott alleging breach of express
warranty, breach of implied warranty, negligence, failure to
warn, product liability -manufacturing defect, strict
liability - manufacturing defect, violation of the Minnesota
Prevention of Consumer Fraud Act, misrepresentation by
omission, unjust enrichment, and violation of the Alaska
Consumer Protection Act. The court dismissed the case,
concluding that it lacked jurisdiction over St. Jude and that
venue was improper because the central events in the case
occurred outside of Illinois. ASEA/AFSCME Local 52 Health
Benefits Trust v. Abbott Labs., No. 17-6704, 2018 WL
3022670 (N.D. Ill. June 18, 2018).
24, 2018, plaintiff re-filed the case here asserting the same
claims raised in the Illinois action except for the strict
liability claim. Plaintiff alleges that by not timely
disclosing the battery defect, St. Jude caused it and other
proposed class members to needlessly pay hundreds of millions
of dollars for the defective devices and their replacement
costs. Compl. ¶¶ 35-37. Plaintiff seeks
certification of nationwide and Alaska classes,
declaratory relief, actual and statutory
damages, costs of medical monitoring, pre- and post-judgment
interest, and attorneys' fees and costs. Defendants now
move to dismiss on various grounds.
first argue that this action should be dismissed because
plaintiff, as a TPP, lacks standing to recover for its plan
participants' injuries. Article III of the United States
Constitution limits the jurisdiction of federal courts to
justiciable cases and controversies. U.S. Const. art. III,
§ 2; Lujan v. Defenders of Wildlife, 504 U.S.
555, 559-60 (1992). Standing is an “essential and
unchanging part of the case-or-controversy requirement of
Article III.” Lujan, 504 U.S. at 560. To
satisfy Article III standing requirements, a plaintiff must
(1) it has suffered an injury in fact that is (a) concrete
and particularized and (b) actual or imminent, not
conjectural or hypothetical; (2) the injury is fairly
traceable to the challenged action of the defendant; and (3)
it is likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.
(TOC), Inc., 528 U.S. 167, 180-81 (2000). Whether the
plaintiff has established the three elements of standing is
an “inescapable threshold question.”
Advantage Media, L.L.C. v. City of Eden Prairie, 456
F.3d 793, 799 (8th Cir. 2006). If a plaintiff lacks standing,
“the district court has no subject-matter
jurisdiction” and must dismiss the case. Faibisch
v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir. 2002);
argue that plaintiff lacks standing because plaintiff's
alleged injury is not fairly traceable to defendants'
conduct. Defendants assert that the causal chain is too
attenuated because there is a multi-step
“winding” sequence of intervening events.
Specifically, defendants argue that plaintiff's causal
chain hinges on the following hypothetical events: (1) St.
Jude disclosed the defect right away, (2) physicians and the
public would have learned about the defect, (3) the FDA would
have investigated the defect and issued a recall, (4)
physicians would have stopped ...