Citation. 708 F Supp. 2d 903 (D. Minn. 2010)
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two models of implantable defibrillators, manufactured by Guidant LLC (D), for people suffering from fast heart rhythms were defective and could result in sudden cardiac arrest.
Synopsis of Rule of Law.
to serve public interest and to ensure accountability by the corporation by forcing it to implement internal compliance and ethics programs, a term of probation for a corporation may be appropriate.
Facts.
two of the models of implantable defibrillators which Guidant LLC (D) manufactured for people suffering from fast heart rhythms, had defects which could result in sudden cardiac arrest. Guidant (D) however failed to notify the Food and Drug Administration (FDA) after it had discovered these defects. This made Guidant (D) to plead guilty to two misdemeanor counts of making material false statement on reports to the FDA and not notifying the FDA immediately about the defects. A criminal plea agreement of $253,962,251 and a separate criminal forfeiture of $42,079,685 were agreed upon by the Government (P) and Guidant (D). Not included however in the agreement was a term of probation. The agreement was considered by the federal trial court which eventually issued this decision.
Issue.
to serve the public interest and to ensure accountability by the corporation by forcing it to implement internal compliance and ethic programs is a term of probation appropriate?
Held.
(Frank , J.) Yes. To serve public interest and to ensure accountability by the corporation by forcing it to implement internal compliance and ethics programs, a term of probation for the corporation may be appropriate. Guidant (D) could be mandated to perform community service in order to boost goodwill and restore public’s confidence in the FDA approval process and in the medical device industry’s quality control process. This is achieved through a probation order. A requirement which Guidant (D) would also be requested to adhere to is the establishment of internal compliance and ethics programs which could appoint employees to work directly with the FDA in reporting such progress. The plea agreement was however declined by the court.
Discussion.
trying and preventing the corporation from committing the offense again is the goal which the court seeks to achieve by recommending a term of probation. Fines alone do not serve as a deterrent for committing the offense again. Moreover, the fines are being paid for by the innocent shareholders of the company.
