United States District Court, N.D. California, San Jose Division
For Spencer Abrams, Individually and on Behalf of All Others Similarly Situated, Plaintiff: Arthur Charles Leahy, LEAD ATTORNEY, Robbins Geller Rudman & dowd LLP, San Diego, CA; Mary K. Blasy, LEAD ATTORNEY, Robbins Geller Rudman & Dowd LLP, Melville, NY; Shawn A. Williams, LEAD ATTORNEY, Robbins Geller Rudman & Dowd LLP, San Francisco, CA; Danielle Suzanne Myers, Robbins Geller Rudman & Dowd LLP, San Diego, CA.
For Greater Pennsylvania Carpenters' Pension Fund, Plaintiff: Serena Hallowell, LEAD ATTORNEY, Labaton Sucharow LLP, New York, NY; Susannah Ruth Conn, Danielle Suzanne Myers, Robbins Geller Rudman and Dowd LLP, San Diego, CA.
For Public School Teachers' Pension and Retirement Fund of Chicago, Plaintiff: Jennifer Rae Crutchfield, Cotchett Pitre and McCarthy LLP, Burlingame, CA.
For Intuitive Surgical, Inc., Lonnie Smith, Gary Guthart, Salvatore J. Brogna, Augusto V. Castello, Jerome McNamara, Mark J. Meltzer, Marshall L. Mohr, Colin Morales, David Rosa, Defendants: Michael D. Celio, LEAD ATTORNEY, Cody Shawn Harris, Philip James Tassin, Keker and Van Nest LLP, San Francisco, CA; Jo W. Golub, Keker & Van Nest LLP, SAN FRANCISCO, CA; Reid Patrick Mullen, Keker and Van Nest LLP, SF, CA.
For Employees' Retirement System of the State of Hawaii, Movant Eric J. Belfi, LEAD ATTORNEY, Labaton Sucharow & Rudoff LLP, New York, NY; Jonathan Gardner, Jonathan M. Plasse, LEAD ATTORNEY, Goodkind Labation Rudoff & Sucharow LLP, New York, NY; Serena Hallowell, LEAD ATTORNEYS, PRO HAC VICE, Labaton Sucharow LLP, New York, NY; Danielle Suzanne Myers, Robbins Geller Rudman & Dowd LLP, San Diego, CA; Shawn A. Williams, Robbins Geller Rudman & Dowd LLP, Post Montgomery Center, San Francisco, CA; Susannah Ruth Conn, Robbins Geller Rudman and Dowd LLP, San Diego, CA.
For Darian Adel, Movant: Jeremy A Lieberman, LEAD ATTORNEY, PRO HAC VICE, Pomerantz LLP, New York, NY; Michael M. Goldberg, LEAD ATTORNEY, Glancy Binkow & Goldberg LLP, Los Angeles, CA.
ORDER DENYING DEFENDANTS' MOTION FOR RECONSIDERATION [Re: Dkt. No. 93]
EDWARD J. DAVILA, United States District Judge.
Presently before the court is Defendants Intuitive Surgical, Inc. (" Intuitive"), Lonnie M. Smith (" Defendant Smith"), Gary S. Guthart (" Defendant Guthart"), and Marshall L. Mohr's (" Defendant Mohr") (collectively, " Defendants") Motion for Reconsideration of the court's Order Granting in Part and Denying in Part Defendants' Motion to Dismiss. For the reasons stated below, Defendants' motion is DENIED.
The factual and procedural backgrounds were discussed extensively in this court's Order Granting in Part and Denying in Part Defendants' Motion to Dismiss. See Dkt. No. 83, Order. Briefly, Intuitive is a biomedical corporation that designs, manufactures, and sells da Vinci Surgical Systems (" da Vinci"), its sole product and primary source of revenue. See Dkt. No. 48, Am. Compl. at ¶ ¶ 29, 40. The da Vinci is a robotic surgical system that uses three-dimensional computer technology to allow surgeons to remotely operate a suite of tiny computer-assisted tools through a small tube inside a patient. Id. at ¶ 41. Plaintiff purchased or otherwise acquired Intuitive stock during the period between February 6, 2012 and July 18, 2013 (the " Class Period"). Id. at ¶ 25. Intuitive enjoyed a rapid growth during the Class Period because da Vinci is the only robotic surgical system in the United States approved by the Food and Drug Administration (" FDA") for soft tissue procedures. Id. at ¶ ¶ 38-39. As a result of Intuitive's financial success, stock prices began to rise. Id. at ¶ 10.
Plaintiff alleges that one of da Vinci's most commonly used tools had a defect that Intuitive became aware of through medical device reports (" MDRs"). Id. at ¶ ¶ 44-46. Pursuant to FDA regulations, if an adverse event (death or serious injury) occurs at a hospital, and the hospital receives or otherwise becomes aware of information that reasonably suggests that a medical device may have caused or contributed to that event, the hospital must report that information to the manufacturer through an MDR. Id. at ¶ 62. If the hospital's report reasonably suggests that the device may have contributed to a serious injury or death, or malfunctioned in such a way that it could have caused serious injury or death, then the manufacturer must also report the MDR to the FDA.
Id. at ¶ 63. Plaintiff alleges that, instead of reporting the MDRs to the FDA, Intuitive responded by issuing " secret recalls." Id. at ¶ ¶ 51-54. Plaintiff further alleges that Defendants misclassified and/or failed to report the MDRs that it received. Id. at ¶ 5. As a result of a meeting with the FDA, Intuitive changed its reporting policies, which led to an increased number of " serious injury" MDRs reported by Intuitive. Id. at ¶ ¶ 73, 209. Due to this increase, the FDA began a safety probe of Intuitive. Id. at ¶ 84. When news of this probe and a link to at least 70 deaths attributed to da Vinci became public, Intuitive's stock price dropped. Id. ¶ ¶ 84, 175-77.
Plaintiff alleges that during the Class Period, Defendants made numerous materially false and misleading statements and omissions regarding the safety of the da Vinci system and Intuitive's compliance with FDA regulations. Id. at ¶ ¶ 182-269. Defendants alleged statements spanned fourteen months and arose within Intuitive's public filings with the SEC, press releases, and quarterly earnings call with investors. Id.
In December 2013, Defendants' filed a Motion to Dismiss the Amended Class Action Complaint. See Dkt. No. 53. Plaintiff filed an opposition brief, and Defendants filed a reply brief. See Dkt. Nos. 58, 62. The matter was taken into submission by this court without oral argument. See Dkt. No. 77. In August 2014, this court issued an Order Granting in Part and Denying in Part Defendants' Motion to Dismiss (" Order"). See Dkt. No. 83. In October 2014, Defendants filed a Motion for Leave to File a Motion for Reconsideration of the court's Order. See Dkt. No. 88. Defendants argued that several weeks after the Order was issued, the Ninth Circuit issued two decisions that reach the opposite result of the Order: Police Retirement System of St. Louis v. Intuitive Surgical, Inc., 759 F.3d 1051 (9th Cir. 2014) (" PRS"), and In re NVIDIA Corp. Securities Litigation, 768 F.3d 1046 (9th Cir. 2014) (" In re NVIDIA").
See id. at 1. The court granted ...