They fought the law and...
Dateline: Salt Lake City
David drops Goliath
Here's the court decision: View attachment US vs Utah Medical decision.pdf
Here's articles from the local papers:
Here's a link to the company press release: http://www.utahmed.com/pr/pr102405.htm
I bet they will. They've called the FDA terrorists in previous press releases.
Just the facts for now, I haven't read everything yet, so I'll add some comments later.
Dateline: Salt Lake City
David drops Goliath
Here's the court decision: View attachment US vs Utah Medical decision.pdf
Here's articles from the local papers:
The Salt Lake Tribune said:
'It's a slam dunk'
Judge rules in favor of Utah Medical on every point and against the FDA
http://www.sltrib.com/search/ci_3140645
(pasted below - link will be dead in a week)
By Bob Mims
The Salt Lake Tribune
A federal judge handed Utah Medical Products Inc. a resounding victory Friday, rejecting the U.S. Food and Drug Administration's bid to shutter the company's Midvale plant.
U.S. Senior District Judge Bruce Jenkins, who chided the agency for its August 2004 filing of "an extended and in some instances nitpicking case," found for the Utah gynecological/neonatal and electrosurgical device-maker on every point.
"As this case progressed, the court wondered how it had evolved into litigation with hundreds of exhibits, endless depositions and high cost 'experts,'" Jenkins wrote. "Product safety is not an issue in this case."
Utah Medical CEO Kevin Cornwell acknowledged being emotional after reading the 15-page memorandum opinion. "It's a slam dunk," he whispered.
"After a long ordeal, we believe the court has vindicated Utah Medical's robust quality system," he added. "Now we hope to move on and repair our relationship with the government while we continue to serve our customers' needs."
Fifteen months ago the FDA sued to close Utah Medical's 160-employee plant, claiming its inspectors had uncovered several regulatory violations related to such things as validation protocols for computer software, review procedures for data analysis and other technical shortfalls.
The agency alleged similar violations in inspections conducted in 2001, 2002 and 2003 - problems Utah Medical insisted had been addressed. The company also said it sought to use mediation to settle differences in interpretation on remaining issues, but the FDA sued instead.
The impact was immediate: In the three days after the Aug. 9, 2004 filing, Utah Medical's stock plunged from $26.75 to $17.50, or 35 percent. Then came rumors, possibly planted by competitors, of an impending shutdown and that the company itself was near collapse. The company countered with strategic stock repurchases to buoy its share prices, and offered loyal customers financial incentives to renew contracts, but the legal costs took a big toll on the bottom line, company officials said.
While Jenkins suggested both sides could have done a better job communicating with each other, he blasted FDA regulations cited in the case as having both "the virtue of generality and the vice of imprecision."
Calls to FDA headquarters seeking comment went unreturned. However, the Justice Department - which tried the case for the agency - issued a terse reaction.
"We are disappointed with the court's decision and we have made no determination as to what our next step will be," said spokesman Charles Miller.
Richard Nelson, president and CEO of the Utah Information Technology Association, said the ruling was "great news for Utah's high-tech community. "It's a solid decision, one that shows the FDA was overreaching in this case," he said.
News of the decision, which Jenkins had taken under advisement on Oct. 4 following a seven-day bench trial, was just breaking as markets closed Friday. Still, Utah Medical's stock was up to $26.28 per share in after-hours trading - an 83-cent, or 3 percent jump from Thursday.
[email protected]
Judge rules in favor of Utah Medical on every point and against the FDA
http://www.sltrib.com/search/ci_3140645
(pasted below - link will be dead in a week)
By Bob Mims
The Salt Lake Tribune
A federal judge handed Utah Medical Products Inc. a resounding victory Friday, rejecting the U.S. Food and Drug Administration's bid to shutter the company's Midvale plant.
U.S. Senior District Judge Bruce Jenkins, who chided the agency for its August 2004 filing of "an extended and in some instances nitpicking case," found for the Utah gynecological/neonatal and electrosurgical device-maker on every point.
"As this case progressed, the court wondered how it had evolved into litigation with hundreds of exhibits, endless depositions and high cost 'experts,'" Jenkins wrote. "Product safety is not an issue in this case."
Utah Medical CEO Kevin Cornwell acknowledged being emotional after reading the 15-page memorandum opinion. "It's a slam dunk," he whispered.
"After a long ordeal, we believe the court has vindicated Utah Medical's robust quality system," he added. "Now we hope to move on and repair our relationship with the government while we continue to serve our customers' needs."
Fifteen months ago the FDA sued to close Utah Medical's 160-employee plant, claiming its inspectors had uncovered several regulatory violations related to such things as validation protocols for computer software, review procedures for data analysis and other technical shortfalls.
The agency alleged similar violations in inspections conducted in 2001, 2002 and 2003 - problems Utah Medical insisted had been addressed. The company also said it sought to use mediation to settle differences in interpretation on remaining issues, but the FDA sued instead.
The impact was immediate: In the three days after the Aug. 9, 2004 filing, Utah Medical's stock plunged from $26.75 to $17.50, or 35 percent. Then came rumors, possibly planted by competitors, of an impending shutdown and that the company itself was near collapse. The company countered with strategic stock repurchases to buoy its share prices, and offered loyal customers financial incentives to renew contracts, but the legal costs took a big toll on the bottom line, company officials said.
While Jenkins suggested both sides could have done a better job communicating with each other, he blasted FDA regulations cited in the case as having both "the virtue of generality and the vice of imprecision."
Calls to FDA headquarters seeking comment went unreturned. However, the Justice Department - which tried the case for the agency - issued a terse reaction.
"We are disappointed with the court's decision and we have made no determination as to what our next step will be," said spokesman Charles Miller.
Richard Nelson, president and CEO of the Utah Information Technology Association, said the ruling was "great news for Utah's high-tech community. "It's a solid decision, one that shows the FDA was overreaching in this case," he said.
News of the decision, which Jenkins had taken under advisement on Oct. 4 following a seven-day bench trial, was just breaking as markets closed Friday. Still, Utah Medical's stock was up to $26.28 per share in after-hours trading - an 83-cent, or 3 percent jump from Thursday.
[email protected]
The Deseret Morning News said:
FDA's Utah Medical lawsuit is dismissed
Judge calls action against the Midvale company nitpicking
http://deseretnews.com/dn/view/0,1249,635155336,00.html
(pasted below - link will be dead in a week)
By Dave Anderton
Deseret Morning News
A federal judge has thrown out a lawsuit filed by the U.S. Food and Drug Administration against a Midvale-based medical manufacturer, calling the lawsuit a "nitpicking" case — the result of a communication failure between the two parties.
In August 2004, the FDA filed for a permanent injunction against Utah Medical Products Inc., seeking to shut down operations because of what the agency said were problems with plastic parts manufactured by the company through an injection molding machine.
Those parts can be found in a variety of the company's products, which include medical devices used in labor and delivery, neonatal intensive care, gynecology and blood pressure monitoring.
In his decision, U.S. District Judge Bruce S. Jenkins found that Utah Medical adequately validated its manufacturing process, including the company's injection-molding systems.
Jenkins also found that Utah Medical had properly installed its machinery, validated its software and handled customer complaints properly.
"The question here is whether the processes and procedures used by Utah Medical to currently produce product comply with the applicable regulations," Jenkins said in his order. "The answer is yes, they do."
While the FDA could appeal the judgment, calls to the agency seeking comment were not immediately returned.
Kevin Cornwell, Utah Medical's chief executive officer, said he was pleased by the judge's decision.
"I have to say I'm not pleased with the ordeal that the FDA put us through and the waste of resources on both sides," Cornwell said. "We bent over backwards in a very respectful and diligent way to communicate, but they shunned all of our attempts to constructively resolve our disagreement."
Cornwell said the case has never been about unsafe or recalled defective products. Instead, he said, the issue centers on a 2001 disagreement in which the FDA demanded that the company hire an outside consultant to validate its quality-control systems.
"They don't really have the right to do that," Cornwell said. "In a nutshell, no one had ever refused their demand to hire a consultant. And so I suppose we insulted them, and their response was, 'OK, if you're not going to do what we tell you to do, we're going to shut you down.' "
The judge said the two sides "often talked past each other."
The general nature of the FDA regulations, he continued, had "the virtue of generality and the vice of imprecision.
"This endemic problem is perhaps augmented by decision-makers who themselves rely too much on inspectors' reports," Jenkins said, "without taking a fresh look themselves at ongoing changes made by Utah Medical in response to questions raised."
Jenkins chided the FDA for what he saw as a case evolving into a "litigation of hundreds of exhibits, endless depositions and high-cost 'experts.'"
Cornwell said his company has spent more than $3 million in legal fees fighting the FDA's allegations.
"My guess is the government has spent at least that much themselves," Cornwell said, "and there have been literally hundreds of FDA people involved in this over a four-year period of time."
Utah Medical Products has filed an abuse of process administrative claim with the FDA. The FDA is expected to respond to that by January. Depending on that decision, the company could file a lawsuit of its own, Cornwell said, suing the FDA for abuse of process.
"The real damage to the company is that we had historically been an innovative company, bringing out products that have unique features," Cornwell said. "Our new product development has essentially been shut down for three years because of this. As far as our senior management goes, we've easily spent a third of our time over the last four years on this."
Utah Medical Products stock, which fell 32.8 percent to $17.99 per share the day the FDA's suit was filed in August 2004, has since rebounded. The company's stock rose 41 cents, or 1.6 percent, to close at $25.86 per share Friday on Nasdaq. In the past year, the price has ranged from $17.50 to $26.05.
E-mail: [email protected]
Judge calls action against the Midvale company nitpicking
http://deseretnews.com/dn/view/0,1249,635155336,00.html
(pasted below - link will be dead in a week)
By Dave Anderton
Deseret Morning News
A federal judge has thrown out a lawsuit filed by the U.S. Food and Drug Administration against a Midvale-based medical manufacturer, calling the lawsuit a "nitpicking" case — the result of a communication failure between the two parties.
In August 2004, the FDA filed for a permanent injunction against Utah Medical Products Inc., seeking to shut down operations because of what the agency said were problems with plastic parts manufactured by the company through an injection molding machine.
Those parts can be found in a variety of the company's products, which include medical devices used in labor and delivery, neonatal intensive care, gynecology and blood pressure monitoring.
In his decision, U.S. District Judge Bruce S. Jenkins found that Utah Medical adequately validated its manufacturing process, including the company's injection-molding systems.
Jenkins also found that Utah Medical had properly installed its machinery, validated its software and handled customer complaints properly.
"The question here is whether the processes and procedures used by Utah Medical to currently produce product comply with the applicable regulations," Jenkins said in his order. "The answer is yes, they do."
While the FDA could appeal the judgment, calls to the agency seeking comment were not immediately returned.
Kevin Cornwell, Utah Medical's chief executive officer, said he was pleased by the judge's decision.
"I have to say I'm not pleased with the ordeal that the FDA put us through and the waste of resources on both sides," Cornwell said. "We bent over backwards in a very respectful and diligent way to communicate, but they shunned all of our attempts to constructively resolve our disagreement."
Cornwell said the case has never been about unsafe or recalled defective products. Instead, he said, the issue centers on a 2001 disagreement in which the FDA demanded that the company hire an outside consultant to validate its quality-control systems.
"They don't really have the right to do that," Cornwell said. "In a nutshell, no one had ever refused their demand to hire a consultant. And so I suppose we insulted them, and their response was, 'OK, if you're not going to do what we tell you to do, we're going to shut you down.' "
The judge said the two sides "often talked past each other."
The general nature of the FDA regulations, he continued, had "the virtue of generality and the vice of imprecision.
"This endemic problem is perhaps augmented by decision-makers who themselves rely too much on inspectors' reports," Jenkins said, "without taking a fresh look themselves at ongoing changes made by Utah Medical in response to questions raised."
Jenkins chided the FDA for what he saw as a case evolving into a "litigation of hundreds of exhibits, endless depositions and high-cost 'experts.'"
Cornwell said his company has spent more than $3 million in legal fees fighting the FDA's allegations.
"My guess is the government has spent at least that much themselves," Cornwell said, "and there have been literally hundreds of FDA people involved in this over a four-year period of time."
Utah Medical Products has filed an abuse of process administrative claim with the FDA. The FDA is expected to respond to that by January. Depending on that decision, the company could file a lawsuit of its own, Cornwell said, suing the FDA for abuse of process.
"The real damage to the company is that we had historically been an innovative company, bringing out products that have unique features," Cornwell said. "Our new product development has essentially been shut down for three years because of this. As far as our senior management goes, we've easily spent a third of our time over the last four years on this."
Utah Medical Products stock, which fell 32.8 percent to $17.99 per share the day the FDA's suit was filed in August 2004, has since rebounded. The company's stock rose 41 cents, or 1.6 percent, to close at $25.86 per share Friday on Nasdaq. In the past year, the price has ranged from $17.50 to $26.05.
E-mail: [email protected]
Utah Medical Products aka David said:
UTMD will follow-up this announcement with additional comments.
Just the facts for now, I haven't read everything yet, so I'll add some comments later.