Appellate Law

CA1: ethics and medical devices and conflicts of prejudment interest

By S. COTUS

Jasty v. Wright Medical, Nos. 07-1743, 07-1744.  The plaintiff was a doctor and a ?consultant? to a medical device manufacturer. He makes more than most lay people that prattle on about tort reform makes.  It seems that he was sort of a glorified spokes-doctor for it, and Wright expected Jasty to demonstrate and ?host? surgeons.  Wright thought Jasty wasn?t doing enough and terminated the contract.  Wright sued for the breach and under two state consumer protection statutes.  Summary judgment in favor of the plaintiff was recommended by a magistrate on the breach of contract issue, as well as in favor of the defendant on all the other issues.  Wright filed an objection to the magistrate?s recommendation and submitted lots of new evidence.  The judge adopted the recommendation and struck the new evidence.  A jury awarded Jasty 2.5 million.  The judge, however, found that Tennessee law on prejudgment interest applies rather than Massachusetts law.  The First says that ?Tennessee? had the most contacts with the transaction.  Applying Restatement (Second) of Conflict of Laws, §6(2), the First essentially concludes that ?where one party has contracted for the services of independent contractors based in different states, there is greater certainty and predictability for all parties if those contracts, negotiated at similar times and on similar terms, are all governed by the same state's laws, rather than by the law of the state where an independent contractor happens to live.?

On appeal Wright didn?t identify the excluded evidence.  The First says that a decision by a District Court judge to accept new evidence is reviewed for abuse of discretion.  The First says it wasn?t such an abuse of discretion, but concludes that it isn?t ?vexatious.? 

The most interesting issue is the consumer-protection claims.  Jasty claims under Mass. Gen. Laws ch. 93A and Tenn. Code Ann. § 47-18-01 that Wright was engaged in unfair and deceptive practices by pointing to a letter from Wright?s CEO which says "accept[s] [Jasty's] commitment to use the Advance Knee in the majority of your knee cases (i.e., 120 of 150 or so.).?  Jasty gets a letter from an ?expert? in medical ethics which says that this is unethical and provides a "Special Fraud Alerts" from the Department of Health and Human Services' Office of the Inspector General, 59 Fed. Reg. 65372-01 (Dec. 19, 1994)? which seems to intimate that this is a kickback.   But, the First turns this all around and says ?There is no evidence on the record that Jasty complained of the terms or refused to comply. In view of Jasty's own conduct in the matter, no reasonable factfinder could conclude that Wright violated Jasty's rights under the consumer protection acts through the alleged kickback activity.?

The second most interesting issue is whether an designated expert can be called by the opposing party.  No.  It was an abuse of discretion and harmless, anyway.

On the breach of contract issue (and whether summary judgment is appropriate), the First concludes that there was no ambiguity in the contract, especially when terms were read together. 

Full post as published by Appellate Law and Practice on June 05, 2008 (boomark / email).