On June 24, 2019, a class action was certified against a San Diego stem cell clinic, StemGenex, Inc., its owners and related entities.  The lawsuit claims fraud, false advertising and violations of consumer law relating to stem cell treatments aggressively marketed to people with a variety of diseases and medical conditions. Moorer v. StemGenex Medical Group Inc., et al., United States District Court for the Southern District of California, Case No.: 16-cv-2816-AJB-NLS, Hon. Anthony J. Battaglia.

The case centers around patient satisfaction ratings that were published by the company on its website and in marketing materials showing 100% of prior patients were “satisfied” with the treatments.  The lawsuit claims that prospective patients purchased the treatments in reliance upon those figures, which were false.

StemGenex argued that their ads were simply an accurate reflection of next-day tallies of how people felt about the service and the company after they had just had the treatment.  But it was revealed during the lawsuit that the clinic had in fact received complaints from unsatisfied patients, for whom the stem cell treatments had little or no effect.  Often, patients were told that the best remedy would be to return for a second, expensive treatment.

The class is comprised of hundreds of customers throughout the United States, all of whom had the same type of treatment, a stem cell process which used each person’s own belly fat, and all of whom paid Defendants the same amount – $14,900 per treatment.   The Court ultimately agreed with the patients that their claims were suited for a class action, stating, “The questions asserted are common questions of fact and, as Plaintiffs acknowledge, the answers can apply to all class members in one swoop.”

In recent years, for-profit stem cell clinics have sprung up all around the country.  They often utilize sales forces and promote crowdfunding as a means of marketing types of stem cells which are not approved by the FDA for use in the United States.  In the absence of government oversight of private sector stem cell clinics, patients and consumers need to look to civil actions to protect their interests.

Plaintiff’s counsel, Mulligan, Banham & Findley, and Berger, Williams & Reynolds, in San Diego, continue on to the next phase of discovery and then to trial in the case.

 

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While you are doing your final holiday shopping, of course remember the admonition Caveat Emptor – buyer beware.  But, even the most careful shopper can be fooled by hidden costs, false product claims, false pricing, misrepresentations, and deceptive come-ons.  And, the customer can get dragged into a momentum to purchase — which is often the point of the retailer’s strategy.   The law may now protect the buyer, even if the retailer throws some fine print under the buyer’s nose moments before the sale or, once she is “hooked” to buy, reveals something new about the product or service that is not as portrayed in ads.

In a new California case, Veera v. Banana Republic, LLC, out of the Second District California Appellate Court, Dec. 15, 2016, the court acknowledges in the context of consumer class actions that deceptive luring of customers through misleading ads by retailers can cause reliance and damage, and may be the basis for a consumer fraud case, even when the falsity of the ads is revealed to the customer before money changes hands.   In this case, clothing retailer Banana Republic advertised on store window signs that items in the store were 40% off.   Class members were drawn inside, tried on items, waited in sometimes long lines, and, when at the cash register, were told the items were not on sale.

The court noted the danger that consumers rely on deceptive advertising to decide to buy merchandise.  Then, when the deception is revealed, the consumer has now invested in the decision to buy and is swept up in the “momentum of events.”  In this case, they had spent time and energy and made purchases against their better judgment sometimes due to embarrassment caused by the lines behind them, or the desire to avoid a complete waste of effort.

In a change of course from other earlier cases where the purchaser was not allowed to recover when the truth of the false ad was revealed before he or she consummated the purchase, the Veera case recognized that a result like that could be at odds with the intent of the law.  California consumer legislation was meant to combat “bait and switch” and misrepresentations that deceived consumers.  The Veera court acknowledged that the pressure of events can be brought to bear on plaintiffs’ judgment, and plays a substantial role in leading them to purchase items, even though they may learn certain facts do not apply before they pay.  The court held there was a at least a triable issue of whether their reliance on the misleading ad was a cause, though not the only cause, of the consumers’ harm.

So, thanks to consumer protection laws:   Caveat Venditor – let the seller beware.   Happy Shopping.

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In 2012,  national news outlets broke a story about a malicious scam concerning counterfeit, implant hardware being used for spinal fusion surgeries in California hospitals. Pacific Hospital and Tri-City Hospital, both in the Long Beach area, were at the center of the allegations.

As of October 2014, lawsuits have reportedly been filed by over 30 former patients. Attorneys say thousands more patients may have been affected.

The allegations include an elaborate scheme involving bribes to doctors in exchange for referrals to these hospitals, and the manufacturing and use of non-FDA approved, counterfeit implant screws in the subsequent surgeries. Michael Drobot, the former owner of Pacific Hospital, is accused of personal involvement in the scheme.

The lawsuits maintain that the hospitals charged full price for the counterfeit screws, which were made at a fraction of the cost of FDA-approved hardware. The use of the allegedly inferior materials may have put the well-being of thousands of patients, in these southern California hospitals and elsewhere, at risk.

According to the state discharge data, there were 550 spinal fusions at Pacific and Tri-City alone in the last decade.

Click below to read more.

Wall Street Journal article:
http://online.wsj.com/articles/SB10001424052970204319004577088712149447348

Outpatient Surgery article:
http://www.outpatientsurgery.net/outpatient-surgery-news-and-trends/general-surgical-news-and-reports/california-hospitals-docs-accused-of-lucrative-spine-surgery-scam–10-21-14?utm_source=news&utm_medium=email&utm_campaign=tji

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This firm strongly supports the Pack Patient Safety Act, which will be on the November 2014 General Election Ballot.

The Act adjusts, for the first time in 39 years, the cap on damages in medical negligence cases. That cap, placed at the time of the initial legislation in 1975, was $250,000.00. It has stayed the same, without any adjustment for inflation, for nearly four decades. The cap is worth only $58,000.00 in today’s dollars.

The lack of any inflationary adjustment has had the impact of preventing people with very valid claims from pursuing justice.

The Act also requires, among other things, that doctors prescribing narcotics to a patient for the first time check a database to ensure that the patient is not doctor shopping.

You can read more about the Act here: https://www.facebook.com/38IsTooLate/timeline

Please join us in supporting patient safety and this very worthy legislation.

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Patients considering robotic surgery are not getting the full picture of its risks, according to a new investigative report from Bloomberg (“Unreported Robot Surgery Injuries Open Questions for FDA“).  Many “adverse events” — when something goes wrong — are never reported to the FDA, due to a deeply flawed reporting system.

“While a U.S. database lists reports of deaths and injuries sent to the Food and Drug Administration, the agency has no authority to force doctors to contribute. And while hospitals are supposed to report, they often don’t, critics say.”

“Every link in the chain has a reason not to report,” according to a source.

But surely, the FDA requires robots made to perform surgery to pass some test of safety and efficacy at some time, right?  Wrong.  Many medical devices, including many surgical robots, are not required to pass FDA “pre-market approval” testing prior to being used on patients.  Instead, they are “grandfathered” into the market through a loophole in the pre-market approval process.  A loophole which purportedly exists because the FDA lacks the resources to conduct testing or review data on every new product.

When clinical data on safety and efficacy is not required before the marketing of a new device, and adverse events are under-reported afterward, how can the FDA, hospitals or doctors make an informed decision on whether to use them — much less patients?

Bloomberg cites a plan announced by the FDA in September 2012 to improve its monitoring of medical devices, including working toward automated reporting of adverse events.  But the reforms are not coming quick enough for many critics.

“[The ultimate goal] is years away and still won’t address the training and marketing issues that have been spotlighted by the Intuitive [da Vinci surgical robot]. The FDA doesn’t regulate doctor training on devices or most hospital device marketing.”

We’ve blogged about the importance of doctor training on surgical robots before (“CUTTING EDGE MEDICINE AT ITS FINEST – THE 2012 UCSD PATIENT SAFETY CONFERENCE“). Experienced surgeons continue to put down their scalpels for joysticks.  Thankfully, some hospitals recognize the need for thorough training. But don’t think that the FDA requires it, approves it, or monitors it.

The robotic revolution is a sea change in surgical medicine that holds a lot of promise, a lot of risk, and deserves our full attention.  Unfortunately, we are looking at an incomplete picture, painted by those with an incentive to keep it rosy.

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The New York Times recently reported on a link between an increase in liver injuries over the past decade and the largely unregulated world of over-the-counter dietary supplements. According to this article, a shocking 70 percent of dietary supplement companies are not following basic quality control standards, in addition to other serious concerns.

Use caution when selecting and taking supplements. Herbal supplements in particular may appear more “natural” but can contain a highly concentrated amount of their active ingredient, at a level not found in nature. “[L]iver injuries attributed to herbal supplements are more likely to be severe and to result in liver transplants,” according to new research from the National Institutes of Health.

Seek guidance from your doctor on whether and what to take, and know your legal rights and limitations if something goes wrong.

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The New York Times released a video report today on the famous lawsuit brought by a woman over burns she suffered from a spilled cup of McDonald’s coffee. The often misreported and misunderstood case of Liebeck v. McDonalds became a lightning rod for “tort reform” advocates in the 1990s.

http://www.nytimes.com/video/us/100000002507537/scalded-by-coffee-then-news-media.html

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Over the last five budget years, California has seen nearly $1 billion in cumulative budget cuts to the courts of California.  The courts are now severely crippled.  The San Diego Superior Court is dealing with $33 million in budget cuts enacted by the State Legislature.  Those cuts have resulted in the reductions of more than 170 court positions and the closing of 20 courtrooms.

Deep reduction of funding all across the state has resulted in courthouse closures, reduced numbers of courtrooms, drastically cut hours and services, large numbers of lay-offs of staff, long lines and higher fees.

Reduction in court personnel is causing a dramatic shift of caseloads onto already overburdened judges and clerks.  Civil departments are sharing calendar clerks, and civil judges are handling unthinkable numbers of cases, often into the high hundreds to over a thousand, without adequate support.  Judges and staff are soldiering forward, but things have been really tough for them.   Family law and probate courts are also severely impacted.

As of November 5, 2012, the San Diego Superior Court has not been supplying court reporters for civil matters.  Parties are responsible for hiring and paying for their own reporters for all proceedings, including trials.  If they do not do so, there is no record of the proceedings.

Hearing dates are becoming more difficult to obtain.  We are also now seeing delays in processing of paperwork, and on one occasion, the total loss of court-filed papers which were eventually found, with great apologies from the court.  The case involved an elderly disabled man who could ill afford a delay in compensation in his matter, which had already settled and was merely waiting approval.

The implications these cuts have on litigants is quite serious.  We are working hard to press our matters forward to trial despite the constraints.  If you have any questions about the impact of the budget crisis on your pending matter with us, please give us a call.

If you would like to learn more, here are three recent articles from the Los Angeles Times, the Orange County Register, and the San Diego Union Tribune:

http://www.latimes.com/news/local/la-me-court-cutbacks-20130410,0,3144605.story

http://www.ocregister.com/articles/court-388184-courts-budget.html

http://www.utsandiego.com/news/2013/Mar/11/chief-justice-urges-reinvestment-in-calif-courts/all/

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