                                                                                    FILED
                              NOT FOR PUBLICATION
                                                                                        FEB 19 2016

                       UNITED STATES COURT OF APPEALS                            MOLLY C. DWYER, CL
                                                                                   U.S. COURT OF APPEA


                              FOR THE NINTH CIRCUIT


    UNITED STATES ex rel. MICHAEL                 No. 13-56789
    RUHE, VICENTE CATALA and
    KRISTINE SERWITZ,                             D.C. No. 2:10-cv-08169-CJC-VBK

          Plaintiffs - Appellants,
                                                  MEMORANDUM*
     v.

    MASIMO CORPORATION,

          Defendant - Appellee.
*


                      Appeal from the United States District Court
                          for the Central District of California
                       Cormac J. Carney, District Judge, Presiding

                         Argued and Submitted February 1, 2016
                                  Pasadena, California

Before: PREGERSON, WARDLAW, and HURWITZ, Circuit Judges.

          Michael Ruhe, Vincente Catala, and Kristine Serwitz (collectively,

“Relators”), are former sales representatives for Masimo Corporation (“Masimo”),

which manufactures pulse oximeters. Relators appeal the district court’s grant of

summary judgment to Masimo in this qui tam action under the False Claims Act



*



             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
(“FCA”), 31 U.S.C. §§ 3729-33. We have jurisdiction under 28 U.S.C. § 1291,

and we affirm.

      1. Relators contend that Masimo violated the FCA by failing to inform the

Food and Drug Administration (“FDA”) that clinical use of its Pronto devices

demonstrated less accuracy than the specifications cleared by the agency. But, the

information Masimo submitted to the FDA correctly stated the accuracy ranges at

which the devices had been validated in laboratory testing conducted pursuant the

International Organization of Standardization (“ISO”) 9919, which has been

approved by the FDA for validating pulse oximeter devices. Relators have pointed

to no evidence undermining either the studies or test results underpinning these

accuracy specifications.

      2. Relators also contend that the Pronto devices were so inaccurate that

every claim submitted to Medicare by doctors who used the devices is a “false or

fraudulent claim” in violation of the FCA. 31 U.S.C. § 3729(a)(1). The district

court correctly noted that “[i]solated complaints and anecdotal feedback about the

accuracy of the Pronto Devices do not support an inference that Masimo

committed knowing fraud by continuing to sell the devices with a stated FDA-

clearance accuracy specification.”    Relators presented no evidence of false

statements made by Masimo either to its customers or the FDA.

3. Masimo did not knowingly present false information to the FDA by using other

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than “fully characterized devices,” see ISO 9919, 14155-1-8.2(f), in its clinical

testing; all material elements of the products used in testing were final production

elements, and Masimo disclosed to the FDA its validation study method, including

its “two phase” testing process for calculating the final calibration curve.

4. Masimo did not knowingly mislead the FDA by resubmitting its Pronto-7

device for 510(k) approval, see 21 C.F.R. § 807.92(a)(3), with an added oxygen

saturation sensor. The FDA told Masimo it could file another 510(k) submission

with that sensor added.

5. Masimo did not knowingly provide false information to the American Medical

Association (“AMA”) in requesting its billing codes. Masimo provided the AMA

with copies of its 510(k) clearance materials and FDA-cleared product manuals.

6. Masimo is not liable under the “worthless services” doctrine, see United States

ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d 1048, 1053 (9th Cir. 2001),

because Masimo provided unrebutted testimony that the Pronto devices have

clinical utility even with accuracy deviations beyond those cleared by the FDA.

      7. Even assuming Masimo made a false statement regarding the devices’

accuracy, Relators have not submitted evidence establishing the requisite scienter.

See 31 U.S.C. § 3729(b)(1) (defining terms “knowing” and “knowingly”); United

States ex rel. Anderson v. N. Telecom, Inc., 52 F.3d 810, 815-16 (9th Cir. 1995)

(“The statutory phrase ‘known to be false’ does not mean scientifically untrue; it

                                           3
means a lie.” (internal quotation marks omitted)). The FCA is not violated simply

if a product fails to perform well; a knowingly false statement is required for

liability.

       AFFIRMED.




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