Whistleblowers in a False Claims Act lawsuit filed against Masimo (NSDQ:MASI) want a federal judge to sanction the patient monitoring company for allegedly concealing evidence and interfering with subpoenas.
The whistleblowers, former sales reps for Irvine, Calif.-based Masimo, sued the company in October 2010, accusing the company of promoting off-label uses of its Pronto and Pronto-7 devices and improperly billing government insurance programs for the off-label uses, according to court documents.
"Masimo made and continues to make claims that these devices can accurately measure hemoglobin and SpO2, despite the knowledge that the devices cannot measure hemoglobin or SpO2 to the accuracy claimed by Masimo. Further, Masimo has published misleading, inaccurate data that was selected without any validated basis concerning the accuracy of these devices," the lawsuit alleges.
Now the plaintiffs, former sales reps Michael Ruhe, Kristine Serwitz and Vicente Catala, are accusing Masimo of withholding sales records and interfering with subpoenas issued to federal insurance programs seeking those documents, according to the filings. They’re asking Judge Cormac Carney of the U.S. District Court for Central California to sanction Masimo for the alleged violations, seeking to quash or delay Masimo’s bid for summary judgment "because defendant’s misconduct prevented plaintiffs from being able to fully present facts essential to justify their opposition to the motion," according to the documents. They’re also seeking legal costs associated with "Masimo’s misconduct in withholding evidence," fines, corrections to the lawsuit’s record and want the trial jury informed of the alleged misconduct, according to court filings.
"Defendant’s internal memos, analyses, reports, and sales-related communications provide specific sales data to government entities. Relators are now further aware that there are records showing a direct link between specific representations, including face-to-face meetings, and specific payments," according to the filings. "The documents relators have obtained, and continue to obtain on an almost daily basis, through 3rd-party subpoenas and [Freedom of Information Act] requests of state [Special Supplemental Nutrition Program for Women, Infants & Children] agencies, show defendant has improperly refused to produce evidence of its marketing and sales of the SpHb devices to federally funded agencies.
"Defendant had communications, via email, and in person, including with presentations, to various state agencies using federal money to cover claims for defendant’s products. Nevertheless, defendant knowingly withheld this information," according to the filings. "E-mails and contracts produced by WIC agencies identify evidence relators requested in discovery and that defendant is withholding concerning its representations about its devices and that defendant is withholding concerning its representations about its devices to government agencies that induced their purchases."
Masimo also sought to interfere with the plaintiffs’ attempts to secure the documents through subpoenas and FOIA requests, the documents allege.