Analyst Alert: Multi-Million Dollar Punitive Damage Award Won by Bonagofsky & Weiss, Dickson Geesman Against Masimo Corporation
Arbitrator says Company CEO and executives aware of risk to patients, “unrepentant”
SACRAMENTO, Calif.--(BUSINESS WIRE)--Attorneys with Bonagofsky & Weiss and Dickson Geesman today announced one of the largest California arbitration awards of its kind against a global, billiondollar medical technology company.
“in the face of knowledge that the devices, at least in certain settings, could seriously endanger patients”
Southern California-based Masimo Corporation (NASDAQ: MASI), was ordered to pay the former sales representatives, claimants Michael Ruhe and Vicente Catala, compensatory and punitive damages in excess of $5 million because it “constructively terminated their employment by creating an intolerable working environment in which sales personnel were required to sell devices that Masimo knew to be unreliable and inaccurate,” according to the official Final Award document authored by arbitrator Justice Richard C. Neal (ret.).
“We are delighted that our clients’ concerns about patient safety were vindicated by the arbitrator, who found by clear and convincing evidence that Masimo ordered its sales representatives to mislead doctors about the safety of their noninvasive hemoglobin devices,” said Scott Bonagofsky, Bonagofsky & Weiss, co-counsel for Ruhe and Catala.
At the end of the threeyear binding arbitration process, which Masimo insisted upon, the Arbitrator concluded that “exhaustive evidence” provided by the claimants demonstrated that the two company devices at issue in the case (Pronto and Pronto-7), which non-invasively measure hemoglobin in the blood, were unreliable and inaccurate, did not meet the specifications the company claimed for the devices, and put patients at risk.
“We further applaud our clients for their courage to question Masimo’s management as to the safety of its products so that patients who rely on these medical devices and those who treat them would not be misled into serious medical outcomes,” said Kathryn Dickson, Dickson Geesman, cocounsel for Ruhe and Catala.
In his 41-page award, the Arbitrator, the Honorable Richard C. Neal (retired Justice of the California Court of Appeal), noted that the highest ranking Masimo executives, including its Chairman and CEO, Joe Kiani, knew about the failures of their Pronto and Pronto 7; forced their sales staff to sell the devices “in the face of knowledge that the devices, at least in certain settings, could seriously endanger patients”; and were “unrepentant in the arbitration” in the face of a wealth of evidence of wrongdoing.
In fact, the Award notes that Masimo executives, some of whom referred to the devices as “pieces of crap,” insisted that Ruhe and Catala and other sales reps continue to sell the devices “no matter what,” “even if they catch on fire.”
“After more than three years of litigation, a two-week hearing with more than 26 witnesses and 1,000 exhibits, hundreds of pages of briefing, and a three-hour oral argument, we are gratified that the Arbitrator declared that Masimo executives were guilty of ‘malice, fraud and oppression by clear and convincing evidence,’ and that a punitive damages award of $5,000,000 was needed to get the company’s attention,” said Kathryn Dickson.
A copy of the Final Award can be found here.