Kurin, Inc. v. Magnolia Medical Technologies, Inc., No. 3:2018cv01060 - Document 85 (S.D. Cal. 2020)

Court Description: ORDER granting in part and denying in part 50 Kurin's Motion for Partial Summary Judgment and granting 56 Magnolia's Motion for Summary Judgment. Signed by Judge M. James Lorenz on 7/20/2020. (jpp)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 KURIN, INC., Plaintiff, 12 13 v. 14 MAGNOLIA MEDICAL TECHNOLOGIES, INC., 15 Case No.: 3:18-cv-1060-L-LL ORDER GRANTING IN PART AND DENYING IN PART KURIN’S MOTION FOR PARTIAL SUMMARY JUDGMENT, AND GRANTING MAGNOLIA’S MOTION FOR SUMMARY JUDGMENT Defendant. 16 17 18 Pending before the Court are Plaintiff Kurin Inc.’s (“Kurin”) Motion for Partial 19 20 Summary Judgment (doc. no. 50) and Defendant Magnolia Medical Technologies, Inc.’s 21 (“Magnolia”) Motion for Summary Judgment and to Exclude Kurin’s Unreliable Expert 22 Opinions (doc. no. 56). Both motions are fully briefed.1 The Court determines these 23 24 25 26 27 28 1 The parties filed more than 150 pages of briefs and more than 800 pages of exhibits. They did not follow the Court’s Standing Order for Civil Cases in that they failed to coordinate and consolidate their briefing so as to avoid duplication. They also did not file affidavits explaining why they could not comply. Instead, the same issues were covered by the same party twice, once in connection with Kurin’s motion and again in connection with Magnolia’s cross-motion. Several exhibits were filed more than once, 1 3:18-cv-1060-L-LL 1 motions without oral argument pursuant to Civil Local Rule 7.1.d.1. For the reasons that 2 follow, Kurin’s motion for partial summary judgment of its claims against Magnolia is 3 granted only insofar as Kurin has established literal falsity of Magnolia’s representation 4 that the 93% average reduction in blood culture contamination is based on “multiple 5 publications and peer-reviewed studies.” Summary adjudication of Kurin’s related 6 request for permanent injunctive relief is denied. Kurin’s motion for summary judgment 7 on Magnolia’s counterclaims is denied. Magnolia’s motion for summary judgment on 8 Kurin’s claims is granted. Its related request to exclude the expert opinions of Jeffrey K. 9 Shapiro and Patrick F. Kennedy is granted in part. 10 I. 11 BACKGROUND As part of normal testing procedures, medical professionals draw blood from 12 patients to test for the presence of blood-borne infection such as sepsis. (Doc. no. 12 13 (Am. Answer and Countercl. (“Countercl.”) at 9-10.)2 If blood culture indicates a 14 positive result, it influences clinical decision-making, including an antibiotic regimen and 15 additional testing. (Id. at 10.) However, in many cases, a positive result is caused by a 16 17 18 19 20 21 22 23 24 25 26 sometimes by the same party. (Cf., e.g., doc. nos. 64-8 & 66-2, 56-17 & 64-3, and 65-14 & 64-10.) Many of the exhibits were filed under seal, yet the parties did not provide coherent courtesy copies, which necessitated searching through parallel sets of publiclyfiled and sealed exhibits. See Electronic Case Filing Administrative Policies and Procedures Manual §2.e. (requiring courtesy copies). The relevant parts of many exhibits were barely legible. (See, e.g., doc. nos. 56-17, 56-34, 64-6, 64-22.) Kurin’s citations to Mr. Stuckert’s deposition transcript were to non-existent page numbers. Several of the deposition excerpts and expert reports were not searchable. (See, e.g., doc. nos. 65-5, 5623, 65-6.) Some exhibits could not be opened on the docket. (See, e.g., doc. no. 64-21.) Finally, all four sets of exhibits, one set each for the motion and cross-motion and one set each for the oppositions, all started with exhibit no. 1. None of the foregoing facilitated an efficient review of this matter. Any further failure to comply with this District’s Civil Local Rules and this Court’s Standing Order for Civil Cases may result in sanctions. See Civ. Loc. R. 83.1. 27 2 28 Unless otherwise stated, all page citations are to page numbers generated by the CM/ECF System. 2 3:18-cv-1060-L-LL 1 contaminant on the patient’s skin rather than in the blood stream. (Id.) Preventing false 2 positive results is important to reduce the expense and health risk from unnecessary 3 antibiotic treatment and testing. (Id.; see also doc. no. 1 (“Compl.”) at 2.) 4 Kurin and Magnolia are competing medical device companies marketing blood 5 sample collection devices to health care providers. (Doc. no. 75 (Joint Statement of 6 Undisputed Facts (“Joint Statement”)) at 2.) Each markets its own device designed to 7 minimize false positive results. (Countercl. at 11; Compl. at 2.) Magnolia’s Steripath device employs a proprietary specimen diversion mechanism 8 9 which diverts the initial portion of blood draw into a separate chamber to sequester skin 10 and other contaminants. (Countercl. at 10.) A new, second sterile blood flow path is then 11 opened as the blood sample collected for testing. (Id.) Magnolia began distributing 12 Steripath in June 2014 and started selling it commercially about a year later. Steripath is 13 registered and listed with the United States Food and Drug Administration (“FDA”). 14 (Doc. no. 75 (Joint Statement of Undisputed Facts (“Joint Statement”)) at 2.) 15 The Kurin Lock device operates on a similar principle. (See Comp. at 2.) Kurin 16 received its FDA 510(k) clearance to market the Kurin Lock on December 23, 2016 and 17 launched its product around January 2017. 18 On May 29, 2018, Kurin filed a complaint claiming Magnolia makes false and 19 misleading representations in its marketing of Steripath. It alleged claims for false 20 advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a) (“Lanham Act”), and 21 California Business and Professions Code § 17500 et seq. (“FAL”), as well as unfair 22 competition under California Business and Professions Code § 17200 et seq. (“UCL”). 23 Kurin seeks injunctive relief and damages. Magnolia filed counterclaims alleging 24 Lanham Act and FAL violations, seeking the same relief against Kurin based on Kurin’s 25 marketing of Kurin Lock. 26 In its pending motion, Kurin requests summary adjudication of some of its claims 27 for injunctive relief, and summary judgment on Magnolia’s counterclaims. In its cross- 28 ///// 3 3:18-cv-1060-L-LL 1 motion, Magnolia seeks summary judgment on each of Kurin’s claims and exclusion of 2 expert opinions offered by Jeffrey K. Shapiro and Patrick F. Kennedy. 3 II. 4 DISCUSSION Federal Rule of Civil Procedure 56 empowers the Court to enter summary 5 judgment on factually unsupported claims or defenses. Summary judgment or 6 adjudication of issues is appropriate if depositions, answers to interrogatories, and 7 admissions on file, together with the affidavits, if any, show there is no genuine dispute 8 as to any material fact and the moving party is entitled to judgment as a matter of law. 9 Fed. R. Civ. P. 56(a), (c)(1). 10 11 The burden on the party moving for summary judgment depends on whether it bears the burden of proof at trial. 12 When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case. 13 14 15 16 See C.A.R. Transp. Brokerage Co., Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 17 (9th Cir. 2000).3 18 On the other hand, if the moving party would not bear the burden at trial, it can 19 meet its burden on summary judgment by “either of two methods.” Nissan Fire & 20 Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 210 F.3d 1099, 1106 (9th Cir. 2000). It 21 may 22 produce affirmative evidence . . . negating an essential element of the nonmoving party's case, or, after suitable discovery, the moving party may . . . meet its initial burden of production “by ‘showing’—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case.” 23 24 25 26 27 28 3 Unless otherwise noted, internal quotation marks, ellipses, brackets, citations, and footnotes are omitted from all quotations. 4 3:18-cv-1060-L-LL 1 Id. at 1105-06 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).4 “A moving 2 party may not require the nonmoving party to produce evidence supporting its claim or 3 defense simply by saying that the nonmoving party has no such evidence.” Nissan Fire 4 & Marine Ins., 210 F.3d at 1105. 5 If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything, even if the nonmoving party would have the ultimate burden of persuasion at trial. In such a case, the nonmoving party may defeat the motion for summary judgment without producing anything. 6 7 8 9 Id. at 1102-03; see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 160 (1970). “If, however, a moving party carries its burden of production, the nonmoving party 10 11 must produce evidence to support its claim or defense.” Nissan Fire & Marine Ins., 210 12 F.3d at 1103. In this regard, the nonmoving party must “go beyond the pleadings and by 13 [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on 14 file, designate specific facts showing that there is a genuine issue for trial.” Celotex, 477 15 U.S. at 324. The nonmoving party 16 must do more than simply show that there is some metaphysical doubt as to the material facts[, but] must come forward with specific facts showing that there is a genuine dispute for trial. Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial. 17 18 19 20 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). 21 22 23 24 25 26 27 28 4 As an example of the latter method, in Celotex it was sufficient for Celotex to direct the district court's attention to Catrett’s answer to interrogatories admitting that she had no witnesses who could testify that her husband had been exposed during the statutory period to asbestos manufactured by Celotex, and to the absence of any other evidence of exposure in the materials compiled during discovery. Nissan Fire & Marine Ins. Co., 210 F.3d at 1105. 5 3:18-cv-1060-L-LL 1 2 3 Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . .. The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor. 4 5 6 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). “[I]f the nonmoving party produces enough evidence to create a genuine issue of 7 material fact, the nonmoving party defeats the motion.” Nissan Fire & Marine Ins., 210 8 F.3d at 1103. If it does not produce enough evidence, then the moving party wins the 9 motion for summary judgment. Id. 10 “The district court may limit its review to the documents submitted for the purpose 11 of summary judgment and those parts of the record specifically referenced therein.” 12 Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir. 2001). The 13 Court is not obligated “to scour the record in search of a genuine issue of triable fact.” 14 Keenan v. Allen, 91 F.3d 1275, 1279 (9th Cir. 1996). 15 The filing of cross-motions for summary judgment "does not necessarily mean 16 there are no disputed issues of material fact and does not necessarily permit the judge to 17 render judgment in favor of one side or the other." Starsky v. Williams, 512 F.2d 109, 18 112 (9th Cir. 1975). Furthermore, "each motion must be considered on its own merits," 19 and the court must consider evidence submitted in support of and in opposition to both 20 motions before ruling on each one. Fair Hous. Council of Riverside County, Inc. v. 21 Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). 22 23 24 25 26 27 Issues in both summary judgment motions involve false advertising under the Lanham Act. To prevail, a party must prove the following elements: (1) a false statement of fact by the defendant in a commercial advertisement about its own or another’s product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false 28 6 3:18-cv-1060-L-LL 1 2 statement, either by direct diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products. 3 Southland Sod Farms v. Stover Seed Co., 108 F. 3d 1134, 1139 (9th Cir. 1997). State law 4 UCL and FAL claims are substantially congruent to claims made under the Lanham Act. 5 Cleary v. News Corp., 30 F.3d 1255, 1262-63 (9th Cir. 1994); see also Appliance 6 Recycling Ctrs. of Am. v. JACO Environmental, Inc., 378 Fed. Appx. 652, 656 (9th Cir. 7 2010). Kurin’s Motion for Summary Adjudication of Its Own Claims 8 A. 9 Kurin moves for summary adjudication of its injunctive relief claims against 10 Magnolia based on statements regarding Steripath’s efficacy and representations that 11 Steripath eliminates or virtually eliminates false positive results. For the reasons stated 12 below, the motion is granted only insofar as Magnolia represented that the 93% average 13 reduction in culture contamination is based on “multiple publications and peer-reviewed 14 published studies.” The related request for summary adjudication of injunctive relief is 15 denied. 16 17 1. Steripath Efficacy Claims Kurin argues that a number of advertising claims relating to Steripath’s efficacy 18 are literally false. It attacks statements that Steripath reduced blood culture 19 contamination and false positive results by an average of 92 or 93% across, variously, 20 30,000 or 100,000 blood cultures. Kurin claims the statements are literally false in three 21 respects: (1) the percentage of reduction; (2) that the percentage is an average; and (3) 22 that the average is based on 30,000 or 100,000 cultures. Magnolia counters that the 23 statements are true because they are based on customer data and controlled clinical 24 studies. 25 Magnolia sponsored two Steripath efficacy studies. The first was a peer-reviewed 26 study conducted at the University of Nebraska Medical Center (“UNMC”) by Rupp et al., 27 titled Reduction in Blood Culture Contamination Through Use of Initial Specimen 28 Diversion Device (“Rupp Study”). It was published in the journal Clinical Infectious 7 3:18-cv-1060-L-LL 1 Diseases in May 2017. (Magnolia Ex. 11 (Expert Report of Mark Roberts (“Roberts 2 Rept.”)) App’x C; Magnolia Ex. 12 (“Rupp Article”).)5 The second sponsored peer- 3 reviewed study was conducted at the Hebrew University-Hadassag Medical School, 4 Shaare Zedek Medical Center by Zimmerman et al., titled Reducing Blood Culture 5 Contamination Using an Initial Specimen Diversion Device. It was published in the 6 American Journal of Infection Control in July 2019. (Roberts Rept. App’x C.) 7 Another peer-reviewed efficacy study, not sponsored by Magnolia, was jointly 8 conducted at four hospitals in Florida by Bell et al., titled Effectiveness of a Novel 9 Specimen Collection System on Reducing Blood Culture Contamination Rates. It was 10 published in April 2018 in the Journal of Emergency Nursing. (Roberts Rept. App’x C.) 11 Two additional peer-reviewed studies of the clinical and economic effect of Steripath use 12 were published in the Journal of Clinical Microbiology and Journal of Hospital Infection 13 in January and March 2019, respectively. (Id.) 14 In addition to peer-reviewed medical journal articles, Steripath efficacy was the 15 subject of at least seven clinical studies between the summer of 2016 and June 2018, 16 conducted at the San Antonio Military Medical Center, VA North Texas Health Care 17 System, Rush University Medical Center, and others. Their results were included in 18 poster presentations at meetings such as American Society of Microbiology, and 19 Emergency Nurses Association.6 (Roberts Rept. App’x C.) 20 21 Magnolia’s exhibits are found in doc. nos. 56-4, 56-13 through 15, 56-17, 56-19, 56-23, 56-34, 56-38, 56-39, 65-1 through 29, and 67-1 through 67-3. 5 22 23 “Poster presentations” are “a common format for the communication of early research results in the academic and public health fields.” (Roberts Rept. at 11.) Compared to publication in a peer-reviewed medical journal, the peer-review process for poster presentations “is very simplified and abbreviated.” (Id. at 11.) “The peer-review of poster presentations is dependent on the forum where the poster topic is presented, such as an internal employer poster session or a poster session at a large annual meeting of a professional society.” (Id.) Once accepted for presentation, posters are usually presented by the author, who explains the study to the attendees at the conference or 6 24 25 26 27 28 8 3:18-cv-1060-L-LL The results of Steripath’s clinical studies are incorporated into Magnolia’s 1 2 advertising. (See Gerberich Dep. at 36-37; see also id. at 33-35.)7 Magnolia’s marketing 3 emphasizes the Rupp Study, a “prospective, controlled trial” at the UNMC Emergency 4 Department. (Rupp Article at 2.) The study tested Steripath’s efficacy “against standard 5 phlebotomy procedures in patients requiring blood cultures due to clinical suspicion of 6 serious infection.” (Id.) One aspect of the standard practice to avoid false positive 7 results is to draw two blood samples from the same patient, one from each arm. (See id. 8 at 6.) During the study one of those samples was drawn using Steripath and the other 9 without it. (Id. at 3.) The study was conducted over a 12-month period on 904 10 nonduplicative patients, yielding 1,808 blood cultures for comparison. (Id. at 2.) The 11 cultures drawn without Steripath showed a 1.78% contamination rate, while those drawn 12 using Steripath showed a 0.22% rate. (Id. at 3.) The difference is an 87.6% reduction in 13 contamination rate using Steripath (id. at 7 (graphic, rounding to 88%)), thus increasing 14 the probability that a positive result was a true positive, i.e., reducing the likelihood of a 15 false positive (id. at 3 (97% probability of true positive with Steripath vs. 81% without 16 it)). 17 A post hoc analysis of blood cultures obtained in the same emergency department 18 was performed after the conclusion of the controlled study comparing the 0.2% 19 contamination rate achieved with Steripath during the study with the contamination rates 20 during the six-month periods before and after the study, when Steripath was not used. 21 (Rupp Article at 3.) The contamination rates for the six-month periods before and after 22 the study were 2.6 % and 2.8%, respectively. (Id. at 5 & Table 2.) When these rates are 23 compared to the contamination rate of 0.2% for blood cultures obtained using Steripath, 24 25 26 meeting. This provides an opportunity to “review the data and challenge the content of the poster.” (Id. at 12.) 27 7 28 Excerpts are found in docs. no. 65-9 and 66-10. Page references to all deposition transcripts are to the page numbers in the transcript. 9 3:18-cv-1060-L-LL 1 the results show that Steripath reduced the contamination rate by 92% when compared to 2 the six-month period before the study and by 93% when compared to the six-month 3 period after the study. (Id. at 7 (graphic); see also Roberts Rept. at 19-20.) In addition to 4 the Rupp Study, Magnolia’s advertising references other studies published in peer- 5 reviewed medical journals, presented as posters at medical conferences, and unpublished 6 clinical data collected by customers using Steripath. 7 8 9 10 11 12 13 14 15 16 Kurin argues that Magnolia’s marketing claims regarding Steripath’s efficacy are literally false. To prove that an advertisement claim based on product testing is literally false, a plaintiff must do more than show that the tests supporting the challenged claim are unpersuasive. Rather, the plaintiff must demonstrate that such tests are not sufficiently reliable to permit one to conclude with reasonable certainty that they established the claim made. A plaintiff may meet this burden either by attacking the validity of the defendant's tests directly or by showing that the defendant's tests are contradicted or unsupported by other scientific tests. Moreover, if the plaintiff can show that the tests, even if reliable, do not establish the proposition asserted by the defendant, the plaintiff has obviously met its burden of demonstrating literal falsity. 17 Southland Sod, 108 F.3d at 1139. Kurin attacks reliability of the controlled clinical 18 studies cited in Magnolia’s advertising and contends they do not establish Magnolia’s 19 efficacy claims. 20 “When evaluating whether an advertising claim is literally false, the claim must 21 always be analyzed in its full context.” Southland Sod, 108 F.3d at 1139. This includes 22 reviewing “the face of the statement in its entirety,” id., and in light of its intended 23 audience, Core-Vent Corp. v. Nobel Indus. Sweden A.B., 163 F.3d 605 (9th Cir. 1998) 24 (considering that the statement was made to a professional conference or a scientific 25 journal). 26 Magnolia’s advertising was directed at a sophisticated audience. “Magnolia and 27 Kurin market their devices to healthcare providers seeking to reduce the number of false- 28 positive blood cultures.” (Joint Statement at 2.) Kurin concedes that Magnolia’s 10 3:18-cv-1060-L-LL 1 statements were made in the course of marketing Steripath directly to hospitals, medical 2 distribution channels and medical professionals such as purchasing managers for 3 hospitals. (Doc. no. 64 (“Kurin Mot.”) at 14 n.3 (citing Countercl. ¶90).) Kurin also 4 adopts Magnolia’s expert’s conclusion that published clinical data is an important 5 resource in hospitals’ consideration whether to purchase a medical device such as 6 Steripath. (Kurin Mot. at 14 n.3 (citing Roberts Rept.).) Health care professionals 7 involved in the purchasing decision often ask for peer-reviewed studies to review before 8 meeting with a sales representative. (See Roberts Rept. at 16.) Accordingly, purchasing 9 decisions are not based solely on advertising. 10 a. Reliability of Controlled Clinical Studies Kurin argues that Magnolia’s use of controlled clinical study results, including the 11 12 Rupp Study results, in its advertising is literally false because they do not reflect “real 13 world” results. Such studies “are only for those patients on which SteriPath was used,” 14 while in real life the medical personnel might not use Steripath 100% of the time. (Kurin 15 Mot. at 13 n.2; doc. no. 66 (“Kurin Opp’n”) at 16-17.) This argument confuses the 16 difference between controlled clinical research and day-to-day medical practice. (See 17 Roberts Dep. at 57-59.)8 The Rupp Study, a controlled clinical research study, tested Steripath’s efficacy by 18 19 comparing results when Steripath was used and when it was not used. (Rupp Article at 20 3.) This is how a controlled clinical study measures performance of a particular device. 21 (Roberts Rept.at 7-8; see also Heindel Dep. at 119-20.)9 The contamination rate achieved 22 when only the relevant device is used establishes its efficacy. (Heindel Dep. at 123.) 23 Kurin’s Vice President of Business Development agrees that the Rupp study is “good 24 25 26 8 Excerpts are found in doc. no. 67-1. 9 Excerpts are found in doc. no. 65-20. 27 28 11 3:18-cv-1060-L-LL 1 data in verifying the efficacy of the device.” (Id. at 121; see also id. at 119 (“I 2 compliment Steripath on their data,” referencing the Rupp Study).) 3 Kurin takes the view that it is more important for customers to know if the device 4 will work in “the real world,” when, realistically, a 100% compliance cannot be 5 achieved.10 (Heindel Dep. at 67, 121-22, 296.) It advocates for the use of a “blended 6 rate,” which “blends together all results experienced at a facility for a given time period” 7 regardless of the blood sample collection device used. (Kurin Opp’n at 17 n.6; see also 8 Heindel Dep. at 120-21.) In essence, the blended rate results are the opposite of 9 controlled study results, because the study does not control for the use of the relevant 10 device. 11 The fact that a non-controlled study will result in a different contamination rate 12 than a controlled study does not render controlled study results unreliable. Controlled 13 clinical studies such as the Rupp Study follow “recognized scientific methods and 14 customary study designs” which are familiar to medical professionals. (Roberts Rept. at 15 18.) Kurin has provided no evidence to show that Magnolia’s citation to controlled 16 clinical study results renders its advertising literally false. 17 //// 18 19 20 21 22 23 24 25 26 27 28 In addition, Kurin criticizes the Rupp Study results as flawed based on “selection bias” because they do not reflect all emergency department blood cultures drawn during the 12-month period, but only a subset of those cultures. (See Heindel Dep. at 296.) The results reported for the 12-month period of the study are based on the blood cultures drawn from 904 patients. (Rupp Article at 2.) The number of participating patients was a function of the UNMC Institutional Review Board’s requirement of informed consent before participating. (Id. at 6; see also Roberts Rept. at 19.) The limitations of the study, including the selection of participating patients, are disclosed and evaluated in the study. (Rupp Article at 6.) The requirement of informed consent “exclud[ed] incompetent patients and those requiring immediate attention.” (Id.) In addition, the phlebotomists avoided using Steripath on “uncooperative patients or those with poor vascular access.” (Id.) 10 12 3:18-cv-1060-L-LL 1 b. 2 Claims of 92% and 93% Reduction Alternatively, Kurin contends it was literally false to state that any study reported a 3 93% reduction in contamination rates or false positives,11 and that only one study 4 reported a 92% reduction. (Kurin Mot. at 12-13.)12 However, both rates are supported by 5 clinical studies. Kurin argues that the Rupp Study does not support Magnolia’s claims because it 6 7 reported only an 87.6% reduction in the contamination rate, rather than the 92% or 93% 8 reduction as claimed by Magnolia. (Doc. no. 82 (“Kurin Reply”) at 6 n.3.) This 9 contention is negated by the study itself. 10 The 87.6% reduction was reported for the 12-month controlled study period which 11 compared contamination rates of samples drawn from the same patient with Steripath and 12 without it. (Rupp Article at 7.) When the rate achieved with Steripath is compared to the 13 contamination rates during the six-month periods before and after the study, when 14 Steripath was not used, the difference was 92% and 93%, respectively. (Id.) This 15 analysis is explained in the Rupp Article. It was not literally false for Magnolia to cite to 16 the Rupp Study in support of its claims of 92% or 93% reduction in contamination rate. 17 A 92% reduction was also achieved in the clinical study performed at the San 18 Antonio Military Medical Center in 2016. (See Roberts Rept. App’x C.) Out of 672 19 cultures collected using the standard method, 52 showed false positive results. (Kurin 20 21 22 23 11 24 25 26 27 28 This claim is not alleged in the complaint. 12 Kurin confuses the references to 93% and 92%, which derive from separate sets of data. (See doc. no. 67 (“Magnolia Opp’n”) at 9-10.) The testimony of Magnolia’s Vice President of Sales is consistent with this distinction. When asked about a 93% reduction in false positives, he stated the percentage he uses is 92% rather than 93%. (Doc. no. 6419 (“Stuckert Dep.”) at 130-32.) Excerpts are found in docs. no. 64-19, 65-24 and 67-2. 13 3:18-cv-1060-L-LL 1 Ex. 24.)13 Out of 784 cultures collected with Steripath during the same period, only five 2 showed false positive results. (Id.) The resulting contamination rate reduction is 92%. 3 (Kurin Ex. 2.) 4 Kurin has presented no evidence tending to show that no efficacy studies show a 5 93% reduction in contamination rates and that only one study showed a 92% reduction. 6 Kurin’s motion is denied to the extent it is based on literal falsity of Magnolia’s claims of 7 92% or 93% reduction. 8 c. 9 10 References to Average Next, Kurin argues it is literally false for Magnolia to refer to the 92% and 93% reduction as averages.14 The argument is rejected for the reasons stated below. 11 Based on its Exhibits 20 and 21, Kurin argues it was literally false for Magnolia to 12 represent its single best study result as an average of 92%. (Kurin Mot. at 13; see also 13 Kurin Opp’n at 14.) The exhibits, however, list 83.8% as the average, and not 92%. Exhibit 20, a screenshot of Magnolia’s website taken November 13, 2019, 14 15 references eight independent clinical studies, only one of which reported a 92% reduction 16 in the contamination rate, while the others reported lower reductions. The studies are 17 individually listed with links to more information about each. The summary on the 18 website states, “These institutions reduced their blood culture contamination rates by an 19 average of 83.8% when using Steripath vs. standard practice [baseline].” (Kurin Ex. 20 20 (emphasis added).) Magnolia’s Vice President of Sales testified about Kurin’s Exhibit 21 21, a screenshot of Magnolia’s website taken May 31, 2019, which is in all relevant 22 respects the same as Exhibit 20. (Stuckert Dep. at 210, 227-28 (Kurin Ex. 21 is Ex. 18 to 23 ///// 24 25 Kurin’s exhibits are found in docs. no. 50-13, 50-22, 50-21, 59-14, 64-2 through 64-23, 66-10 and 66-11. 13 26 27 14 28 The complaint does not allege any false advertising claims based on an average reduction of 92% or 93%. 14 3:18-cv-1060-L-LL 1 the deposition transcript).) The testimony confirms that Exhibit 21 displays the average 2 of 83.8% rather than 92%. 3 Kurin also relies on its Exhibits 2, 9 and 11 to argue that the representation of 92% 4 average is literally false. (Kurin Mot. at 13.) However, none of the exhibits refers to 5 92% as an average. Exhibit 9 is Magnolia’s email template to contact prospective customers. It reads 6 7 in pertinent part: 8 In eight (8) peer-reviewed published clinical trials and clinical trial poster presentations at major medical conferences, Steripath has demonstrated: 9 • • • • 10 11 12 13 92% reduction in false positive culture results 12-month sustained blood culture contamination rate of 0.2% (P=0.001) Reduction in Vancomycin DOT of 37% (P=0.007) Average cost savings of $103,000 per month or $1,236,000 annually [¶] I am attaching Steripath technical and clinical information and providing the below links for your reference. 14 15 • [Rupp Study] (See attached). • View a video of Dr. Mark Rupp . . . discussing the clinical trial results. [hyperlink to a YouTube video] • An animation video on how and why Steripath works. [hyperlink to a YouTube video] • Additional information can be found on our website at [hyperlink to the website] 16 17 18 19 20 21 Neither the introductory sentence nor the bullet-point reference to a 92% reduction states 22 that the percentage is an average. (Kurin Ex. 9.) Nothing about the bullet points suggests 23 that each of them is based on all eight studies. Furthermore, the email attaches the Rupp 24 Study and includes a link to Dr. Rupp’s video discussing the results. The Rupp Study 25 supports the 92% reduction and contamination rate of 0.2%. When emails based on this 26 template were sent to Magnolia’s prospective customers, they included the Rupp Article 27 and Dr. Rupp’s video. (See Magnolia Exs. 22-26.) 28 //// 15 3:18-cv-1060-L-LL Kurin’s Exhibit 11, a September 13, 2017, screenshot of Magnolia’s website, states 1 2 in pertinent part, “Used by reputable hospitals around the country—and proven in 3 countless clinical trials—Steripath has been clinically proven to sustain a blood culture 4 rate of 0.2% and a reduction in false positives by 92%.” The statement includes a link to 5 “view evidence.” (Kurin Ex. 11).15 Again, contrary to Kurin’s contention, Magnolia’s 6 statement does not refer to 92% as an average. The same is true of Kurin’s Exhibit 2. As 7 discussed in section b., above, the 92% reduction claim is not literally false because it is 8 supported by two clinical studies. (See also Kurin Ex. 2 (Rupp Study and San Antonio 9 Military Medical Center study).) 10 Some of Magnolia’s advertising includes the claim of 93% average reduction. 11 Kurin argues this is literally false (Kurin Mot. at 13-14). Magnolia counters it is not 12 because “the 93% average is supported by both published and unpublished clinical data.” 13 (Magnolia Opp’n at 12.) In many instances, the sources in support of Magnolia’s claim are cited in its 14 15 advertising. For example, Kurin’s Exhibit 1 states that Steripath’s efficacy was studied 16 “within multiple healthcare systems” and in “large scale clinical trials and commercial 17 customer deployment.” Exhibit 2 states, “Average of 93% lower contamination rate with 18 SteriPath” under the heading “20+ Gov. & Private Hospital Systems, Clinical Results.” 19 Exhibit 4, one of Magnolia’s PowerPoint presentation slides, includes the 93% average 20 under the heading “Reduction In Blood Culture Contamination Validated In Clinical 21 Practice” above a chart summarizing thirteen clinical studies. 22 To the extent Kurin argues that Magnolia failed to provide sufficient evidence to 23 negate literal falsity because it has not produced the cited study results in its opposition 24 (see Kurin Reply at 5, 6 n.4), the argument is unavailing. Kurin is moving for summary 25 adjudication of its own claims as to which it would bear the burden of proof at trial. It 26 27 28 15 Kurin did not provide a screenshot of the linked page. 16 3:18-cv-1060-L-LL 1 therefore “must come forward with evidence which would entitle it to a directed verdict if 2 the evidence went uncontroverted at trial.” C.A.R. Transp. Brokerage Co., 213 F.3d at 3 480. Kurin had the burden to produce evidence supporting its literal falsity claim. It has 4 not met this burden. 5 However, Kurin cites two advertisements claiming that the 93% average is based 6 on “multiple publications and peer-reviewed published studies.” (Kurin Exs. 5, 7.) 7 According to Magnolia, it “has . . . never represented that the 93% average reduction is 8 derived from only published clinical trials.” (Magnolia Opp’n at 12; see also doc. no. 83 9 (“Magnolia Reply”) at 3 (“Magnolia has never represented that the 93% reduction 10 statistic was based exclusively on published studies.”) (emph. in orig,).) Based on this 11 admission, the Court finds that Magnolia’s claim of 93% average is literally false insofar 12 as its advertising states the average is based on “multiple publications and peer-reviewed 13 published studies.” 14 Kurin further argues that “[b]ased simply on the literal falsity of Magnolia’s 15 statements[, it] is entitled to injunctive relief.” (Kurin Mot. at 15.) It requests to “enjoin 16 Magnolia from repeating its false and misleading statements . . . and require Magnolia to 17 make corrective statements.” (Kurin Reply at 11.) 18 A showing of literal falsity alone is insufficient to warrant permanent injunctive 19 relief for two reasons. First, the Lanham Act requires proof of likelihood of future injury. 20 Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 135 (2014). 21 Second, 22 a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. 23 24 25 26 27 28 ///// 17 3:18-cv-1060-L-LL 1 eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). Kurin has provided no 2 evidence of either.16 3 For the foregoing reasons, to the extent Kurin moves for summary adjudication of 4 literal falsity of Magnolia’s claims that Steripath reduces blood culture contamination by 5 an average of 92% or 93%, the motion is granted only insofar as Magnolia represented 6 that the 93% average is based on “multiple publications and peer-reviewed published 7 studies.” The related request for summary adjudication of injunctive relief is denied. 8 d. References to 30,000 and 100,000 Blood Cultures Last, Kurin argues that “[n]either a 93% nor 92% reduction was observed across 9 10 30,000 blood cultures or across 100,000 blood cultures collected with SteriPath.”17 11 (Kurin Mot. at 13.) This argument is based on the premise that the 92% and 93% 12 reduction claims are based solely on the Rupp Study, which involved 1,808 blood 13 cultures collected from 904 patients during the 12-month controlled study period. (Id. 14 (citing Kurin Ex. 22 (discussing Rupp Study)).) 15 As discussed above in section c., the 93% average is based on data collected from 16 published and unpublished clinical studies as well as from Magnolia’s customers. (See, 17 e.g., Kurin Ex. 1 (“large scale clinical trials and commercial customer deployment 18 comprised of over 30,000 blood cultures”), Kurin Ex. 2 (“Over 100,000 cultures collected 19 with Steripath” under the heading “20+ Gov. & Private Hospital Systems, Clinical 20 Results”), Kurin Ex. 4 (“more than 100,000 blood cultures collected with Steripath” next 21 to a chart summarizing thirteen studies).) 22 23 24 16 27 See Kurin Reply at 10-11, providing argument but no evidence. Furthermore, Kurin addresses the elements of injunctive relief for the first time in its reply brief. It is inappropriate to raise new arguments in the reply, because it deprives the opposing party of an opportunity to respond. See Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) ("The district court need not consider arguments raised for the first time in a reply brief.") 28 17 25 26 This claim is not alleged in the complaint. 18 3:18-cv-1060-L-LL 1 Kurin has cited no evidence to show that Magnolia’s references to 30,000 and 2 100,000 blood cultures are literally false. To the extent it moves for summary 3 adjudication of this claim, Kurin’s motion is denied. 4 5 2. Claims That Steripath (Virtually) Eliminates Contamination Kurin also claims that Magnolia’s statements that Steripath “eliminates” or 6 “virtually eliminates” blood culture contamination are literally false. For the reasons 7 discussed below, this contention is rejected. 8 9 Kurin argues the statements that Steripath “eliminates” contamination are literally false because none of Steripath’s clinical trials show that Steripath eliminated 100% of 10 contamination, and Magnolia’s Vice President of Sales admitted as much. (Stuckert Dep. 11 at 73-74.) The argument is rejected because, when viewed in context, none of the cited 12 statements represent that Steripath eliminates 100% of contamination. Alternatively, to 13 the extent any of the cited statements could reasonably be viewed as Kurin suggests, they 14 were nonactionable puffery. 15 Kurin points to four exhibits. Kurin’s Exhibit 12 is one slide out of Magnolia’s 16 PowerPoint presentation which contains only a topic heading “ELIMINATE BLOOD 17 CULTURE CONTAMINATION” next to an image of Steripath. (Emphasis in original.) 18 It is apparent that the statement is intended to introduce a topic rather than represent that 19 Steripath eliminates all contamination. Kurin’s Exhibit 13 is another isolated slide from a 20 PowerPoint presentation with the heading “Eliminating Blood Culture Contamination,” 21 image of Steripath, and notation that it introduces an animation video. Kurin’s Exhibits 22 12 and 13 are included in Magnolia’s Exhibit 14, which includes additional slides from 23 the same presentation and provides context. For example, the slide after Kurin’s Exhibit 24 12 explains: “Only technology CLINICALLY PROVEN to virtually ELIMINATE the 25 PREVENTABLE ERROR of blood culture contamination and false positive results.” 26 (Magnolia Ex. 14 at 3 (emphases in original).) The slide then summarizes the clinical 27 results, including “SUSTAINED contamination rate of 0.2%.” (Id. (emphases in 28 original).) Kurin’s Exhibit 13 is included four slides later to introduce a video. (Id. at 7.) 19 3:18-cv-1060-L-LL Kurin’s Exhibit 17 is another presentation slide with the heading “Eliminating 1 2 False Positive Blood Cultures in Adult Emergency Department, Steripath GEN2 Initial 3 60-Day Pilot Results.” The rest of the slide puts into context the reference to 4 “eliminating” by showing that Steripath use during the pilot trial reduced the 5 contamination rate to 0.19%. (Id.) The location and authors of the pilot trial are 6 identified in the slide. (Id.) Kurin’s Exhibit 16 is a PowerPoint slide with a discussion of how the presence of 7 8 some of the skin-residing organisms may be clinically relevant which ends with the 9 statement: “When we eliminate blood culture contamination, we eliminate unnecessary 10 PCR tests.” When read in the context, the statement identifies a goal. (See, e.g., Stuckert 11 Dep. at 73 (“[E]liminate blood culture contamination” is “an aspirational statement to 12 connect with what everybody is trying to accomplish.”); Gerberich Dep. at 52 13 (“aspirational statement for what the technology is designed to do”).) The slide does not 14 state that Steripath eliminates all blood culture contamination. To show that one potential customer understood Steripath to “eliminate” 15 16 contamination, Kurin points to its Exhibit 24 (Kurin Opp’n at 11-12), a poster 17 presentation of a study performed at the San Antonio Military Medical Center. Contrary 18 to Kurin’s contention, the study concluded that “[d]ata indicates use of Steripath 19 significantly reduces contamination rates.” Kurin points to the summary of “Steripath 20 Methods,” which includes a bullet point stating that Steripath “[e]liminates fragments 21 from skin or contaminates introduced during initial intravenous access.” (Id.) The bullet 22 point does not speak to the relevant issue, much less raise a reasonable inference that San 23 Antonio Military Medical Center was misled by Magnolia’s advertising. 24 Alternatively, Magnolia argues the statement that Steripath eliminates blood 25 culture contamination is nonactionable puffery. “Puffing is exaggerated advertising, 26 blustering, and boasting” which is not actionable under the Lanham Act. Southland Sod, 27 108 F.3d at 1145. 28 ///// 20 3:18-cv-1060-L-LL 1 2 A statement is considered puffery if the claim is extremely unlikely to induce consumer reliance. Ultimately, the difference between a statement of fact and mere puffery rests in the specificity or generality of the claim. 3 4 Newcal Indus., Inc. v. Ikon Office Solutions, 513 F.3d 1038, 1053 (9th Cir. 2008). 5 “[W]hether an alleged misrepresentation is a statement of fact or is instead mere puffery 6 is a legal question.” Id. 7 The statement that Steripath “eliminates” blood culture contamination is puffery. 8 It is an exaggerated general statement on which medical professionals are unlikely to rely 9 particularly when presented in the context of summarizing clinical study results. 10 Kurin next attacks as literally false the statements that Steripath “virtually 11 eliminates” blood culture contamination. It argues the statement is literally false because 12 Steripath eliminates blood culture contamination only by an average of 83.8%. (See 13 Kurin Mot. at 16.) 14 The 83.8% is the average reduction in blood contamination rate based on eight 15 clinical studies. (See Kurin Exs. 20, 21.) In the studies, the blood contamination rates 16 without Steripath ranged between 2.6 and 7.7%, while the rates with Steripath ranged 17 between 0.2% and 0.9%. The difference between the two ranges averaged 83.8%. With 18 Steripath, the blood culture contamination rate was reduced in all instances to below 1%. 19 Accordingly, the 83.8% average reduction is not the relevant reference point to evaluate 20 the statements that Steripath virtually eliminates blood culture contamination. 21 In support of its argument Kurin also cites two examples. Exhibit 10, a 22 PowerPoint slide, includes the statement that “Steripath can help you virtually eliminate 23 false positive culture results.” The statement is made at the bottom of the slide, following 24 the representation that “Steripath has demonstrated: . . . 12-month sustained blood culture 25 contamination rate of 0.2%.” Exhibit 15, another slide, states next to a photo of 26 Steripath, that it is “Only technology CLINICALLY PROVEN to virtually 27 ELIMINATE the PREVENTABLE ERROR of blood culture contamination and false 28 positive results for Sepsis.” This is followed by the statement, “SUSTAINED 21 3:18-cv-1060-L-LL 1 contamination rate of 0.2%.” (Emphases in original.) When read in context, both 2 statements explain that “virtually eliminate” means to reduce contamination to 0.2%. 3 This representation is supported by clinical studies as discussed in section 1. above. 4 Based on these examples, Kurin argues that “’virtually eliminates false positives’ 5 means ‘almost completely removes or gets rid of false positives.’” (Kurin Mot. at 16.) 6 Kurin’s evidence shows that Steripath removed all but 0.9% of false positives. (See 7 Kurin Exs. 20, 21.) Kurin has presented no evidence to suggest that eliminating all but 8 less than 1% of false positives anything other than “virtually eliminating” them. 9 10 3. Conclusion Kurin’s motion for summary adjudication of its own claims against Magnolia is 11 granted insofar as Kurin has established literal falsity of Magnolia’s claim that the 12 average 93% reduction in blood culture contamination is based on “multiple publications 13 and peer-reviewed published studies.” In all other respects, including the related request 14 for summary adjudication of injunctive relief, the motion is denied. Magnolia’s Motion for Summary Judgment on Kurin’s Claims 15 B. 16 Magnolia moves for summary judgment on all of Kurin’s claims, including claims 17 18 19 for damages and injunctive relief. For the reasons stated below, the motion is granted. 1. Steripath Is Registered and Listed With the FDA It is undisputed that Steripath is FDA registered and listed. (Joint Statement at 2.) 20 Nevertheless, Kurin contends Magnolia’s claim that Steripath is FDA registered and 21 listed is false and misleading. (Compl. at 3.) Magnolia counters that “there is no record 22 evidence that [it] even made statements about its FDA registration and listing in 23 commercial advertisements” (Magnolia Mot. at 17) and that Kurin cannot show that the 24 statement is false or misleading (id. at 15-16). 25 Kurin has not identified any promotional materials referencing FDA registration 26 and listing, but points to two other documents. First, the Rupp Article notes in passing 27 that Steripath is FDA registered and listed. (Rupp Article at 6.) Magnolia referenced the 28 Rupp Study in its marketing materials to support not Steripath’s FDA registration and 22 3:18-cv-1060-L-LL 1 listing, but its efficacy. However, Magnolia’s customers may have seen the reference to 2 FDA registration and listing when they reviewed the Rupp Article. 3 4 Second, a slide from Magnolia’s New Hire Training presentation states in pertinent part: 5 12 The Kurin Lock is FDA cleared, Steripath is not [Steripath ] is classified as a convenience kit and contains a patent-protected proprietary Class I exempt medical device that does not require a 510(k) clearance. • Steripath is registered and listed with the FDA indicating compliance with all relevant QSR and GMP regulations. This registration is publically [sic] available via the FDA website. We are happy to provide copies. [¶] The Kurin Lock product was designed to incorporate its own venipuncture needle which is a Class II non-exempt device requiring FDA 510(k) clearance.[18] 13 (Magnolia Ex. 8 at Bates no. MMT-0000227 (bold emphasis in original, italicized 14 emphasis added).) Kurin objects to the italicized portion of the slide. Although Kurin 15 has presented no evidence that the italicized statement was actually made to any 16 prospective customer, the slide is sufficient to support a reasonable inference that it was. 17 Kurin contends (1) the statement is misleading because it created a false impression 6 7 8 9 10 11 18 19 20 21 22 23 24 25 26 27 28 18 FDA regulates medical devices using a risk-based classification system. 21 U.S.C. § 360c. Class I, the lowest risk group, contains products that most often do not require FDA review before marketing and are exempt from premarket clearance. Registration and listing does not entail any premarket review, clearance, or approval of the device by the FDA; however, it is one of the necessary steps to legally market a medical device. (Shapiro Dep. at 132 (excerpts are found in doc. no. 65-5).) Class II devices present a higher level of risk than Class I devices. Unless exempt by regulation, 510(k) clearance is required before commercial distribution of the device. Class II devices are cleared for marketing by the FDA if they are substantially equivalent to one or more legally marketed products. Clearance does not entail an FDA approval. Class III devices present the highest level of risk and require FDA premarket approval. (See generally Magnolia Ex. 5 (Expert Report of Jeffrey K. Shapiro (“Shapiro Rept.”)) at 7; (Magnolia Ex. 9 (Expert Report of David. W. Feigal, Jr. (“Feigal Rept.”)) at 11-13.) 23 3:18-cv-1060-L-LL 1 regarding Steripath’s regulatory status, and (2) it was false to represent that registration 2 and listing denotes compliance with QSR and GMP regulations. (Kurin Opp’n at 19, 22.) 3 a. 4 False Impression Regarding Regulatory Status Kurin claims the statement that Steripath is FDA registered and listed misled, or 5 was likely to mislead, Magnolia’s customers because they would not know that a 6 registration and listing alone does not include FDA clearance or approval. In support of 7 this contention, Kurin relies on three documents and the opinion of its expert Jeffrey 8 Shapiro. First, Kurin points to its Opposition Exhibit 13,19 a poster presentation summary of 9 10 a clinical study conducted at the Central Texas Veterans Health Care Systems (“Arenas 11 Presentation”), which incorrectly states that the authors studied “two different types of 12 FDA 510(k)-approved devices.” (Kurin Opp’n Ex. 13.) The error is two-fold. First, 13 neither registration and listing nor 510(k) certification entails FDA approval of a medical 14 device. (Shapiro Rept. at 12; Magnolia Ex. 38 (Rebuttal Expert Report of David W. 15 Feigal, Jr. (“Feigal Rebuttal”)) at 7.) Second, Steripath was not 510(k)-cleared. 16 However, the latter error is corrected in a footnote, “Correction: as of September 18, the 17 Steripath device had not received 510(k) clearance.” (Kurin Opp’n Ex. 13.) 18 Viewing the Arenas Presentation in the light most favorable to Kurin, it does not 19 support a reasonable inference that the study authors’ error was due to their confusion 20 about the significance of FDA registration and listing, although they may have been 21 confused about the significance of 510(k) clearance. Further, Kurin has presented no 22 evidence that Magnolia disseminated this document or referenced it any of its 23 advertising, or that the error was based on Magnolia’s representation of any kind. Second, Magnolia’s Vice President of Sales testified that a customer purchased 24 25 Steripath and later returned it (Kurin Opp’n at 20): 26 27 Kurin’s Opposition Exhibits can be found at doc. nos. 59-1, 59-14, and 66-2 through 66-11. 19 28 24 3:18-cv-1060-L-LL 1 2 3 4 5 6 7 8 9 10 11 12 Q . . . Is Crouse currently purchasing Steripath devices? A No. They purchased the Kurin devices. . . . They made one initial purchase. It was returned[ b]ecause they had a question about the 510(k) clearance status. [¶ The purchasing agent] communicated to me that a question had been raised by their current vendor, Kurin about our 510(k) clearance status, and it has gone to their risk management for discussion. And they had concluded that only 510(k) cleared devices would be used in the hospital and that it was risky for them to bring in Steripath, so they were not going to move forward. Q . . . Did you have any understanding as to why they thought it was risky? A She had made a statement that only 510(k) cleared devices are used within their hospital . . .. 13 (Stuckert Dep. at 112-13.) The testimony shows the customer wanted to purchase a 14 510(k)-cleared product. Reading the testimony in the light most favorable to Kurin, it 15 does not suggest the customer was confused about the significance of FDA registration 16 and listing as opposed to 510(k) clearance. 17 Third, Kurin cites to the Rupp Article. In the context of discussing the UNMC 18 Institutional Review Board’s requirement of informed consent to participate in the study, 19 the article states, “It could be argued that in a nonsignificant risk study, informed consent 20 should not be required to employ an FDA-registered and listed device.” (Rupp Article at 21 6 (including link to Steripath’s registration and listing).) Kurin argues this statement 22 “impl[ies] that such registration and listing indicated a lack of risk to the patient” and that 23 the authors concluded the study involved “nonsignificant risk” because Steripath was 24 FDA registered and listed. (Kurin Opp’n at 21.) The link to Steripath’s registration and 25 listing in the article enables the reader to review what is entailed by the registration and 26 listing. To support Kurin’s argument, the jury would have to find that the authors 27 misunderstood FDA registration and listing to include an assurance of medical device 28 safety, and that they based their statement about nonsignificant risk on this erroneous 25 3:18-cv-1060-L-LL 1 understanding. Viewed in the light most favorable to Kurin, the Rupp Article does not 2 support these inferences. 3 Kurin also relies on Mr. Shapiro’s expert opinion that Magnolia’s statement of 4 Steripath’s FDA registration and listing was misleading because the average Steripath 5 purchaser, although generally familiar with FDA regulation of devices, would not be 6 familiar with the limited significance of registration and listing, and would therefore 7 likely have understood the statement to mean that the FDA evaluated and accepted 8 Magnolia’s significant claims regarding Steripath’s performance. (Shapiro Rept. at 4-5, 9 12, 16.) Mr. Shapiro’s opinion is not based on a customer survey, which is how 10 “[r]eactions of the public are typically tested” in Lanham Act cases, see Southland Sod 11 Farms, 108 F.3d at 1140, but on his experience as an attorney representing medical 12 device manufacturers before the FDA. (Shapiro Dep. at 122-23, 137-38, 140, 162-65.) 13 Magnolia moves to strike Mr. Shapiro’s opinion as unreliable and unsupported 14 pursuant to Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharm., Inc., 509 15 U.S. 579 (1993). Kurin, as the proponent of expert testimony, bears the burden to 16 establish its admissibility. United States v. 87.98 Acres, 530 F.3d 899, 904 (9th Cir. 17 2008). 18 19 20 21 22 23 24 25 Rule 702 provides the following requirements for admissibility of opinion testimony: A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: (a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and 26 27 (d) the expert has reliably applied the principles and methods to the facts of the case. 28 26 3:18-cv-1060-L-LL 1 “An expert may base an opinion on facts or data in the case that the expert has been made 2 aware of or personally observed.” Fed. R. of Evid. 703. “Federal Rules 702 and 703 3 grant expert witnesses testimonial latitude unavailable to other witnesses on the 4 ‘assumption that the expert’s opinion will have a reliable basis in the knowledge and 5 experience of his discipline.’” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 148 6 (1999) (quoting Daubert, 509 U.S. at 592). 7 Daubert held that Rule 702 “imposes a special obligation upon a trial judge to 8 ‘ensure that any and all scientific testimony . . . is not only relevant, but reliable.’” 9 Kumho Tire, 526 U.S. at 147 (quoting Daubert, 509 U.S. at 589). This inquiry “must be 10 ‘tied to the facts’ of a particular ‘case.’” Kumho Tire, 526 U.S. at 150 (quoting Daubert, 11 509 U.S. at 591). 12 13 14 15 Daubert articulated four factors to evaluate the reasoning or methodology underlying scientific testimony: -- Whether a theory or technique can be (and has been) tested; -- Whether it has been subjected to peer review and publication; -- Whether, in respect to a particular technique, there is a high known or potential rate of error and whether there are standards controlling the technique's operation; and -- Whether the theory or technique enjoys general acceptance within a relevant scientific community. 16 17 18 19 20 21 22 Kumho Tire, 526 U.S. at 149-50. This inquiry is flexible, and the list of factors was not 23 intended to be exhaustive. Daubert, 509 U.S. at 593, 594-95; Kumho Tire, 526 U.S. at 24 151. “[T]he factors identified in Daubert may or may not be pertinent in assessing 25 reliability, depending on the nature of the issue, the expert’s particular expertise, and the 26 subject of his testimony. Kumho Tire, 526 U.S. at 150. Nevertheless, “Daubert’s general 27 principles” apply to all expert testimony, including experience-based testimony. Id. at 28 149, 151. 27 3:18-cv-1060-L-LL 1 Kurin argues that Mr. Shapiro’s opinion need not be based on scientific knowledge 2 to be admissible because an expert’s opinion can be properly based on relevant 3 experience. See Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgt, Inc., 618 4 F.3d 1025, 1043 (9th Cir. 2010). According to Kurin, Mr. Shapiro’s opinion is 5 admissible because he “has 25 years of experience regarding FDA compliance.” (Kurin 6 Opp’n at 34.) As a result, he has “become expert in FDA’s medical device regulations as 7 applied to the device industry and device users, as well as FDA’s administrative practice 8 and industry custom with regard to such regulations.” (Shapiro Rept. at 3.) However, 9 “compliance with FDA requirements is not at issue in this litigation.” (Magnolia Ex. 7 10 11 (Expert Rebuttal Report of Jeffrey K. Shapiro (“Shapiro Rebuttal”)) at 7.) Mr. Shapiro is “offered to opine on the impact of [Magnolia’s] statements.” (Kurin 12 Opp’n at 34.) He has no experience or expertise in market research or marketing and did 13 not review any market surveys to form his opinion. (Shapiro Dep. at 137-38, 140, 164- 14 65.) His experience and exposure to the relevant market comes from his work as an 15 “attorney in private practice . . . focused on representing medical device manufacturers 16 before the [FDA].” (Shapiro Rept. at 3.) His opinion is about the perception and reaction 17 of Magnolia’s customers and “average purchaser[s] of Steripath.” (See Shapiro Rept. at 18 12, 16.) However, Mr. Shapiro only infrequently interacts with purchasers of medical 19 devices. (Shapiro Dep. at 164; see also id. at 47.) His opinion about Steripath 20 purchasers’ perception therefore cannot reliably be based on his experience. 21 Kurin further argues that an expert’s opinion does not have to be based on 22 personally-conducted surveys to be admissible but can be based on review of “incident 23 reports and the literature on a particular topic.” (Kurin Opp’n at 36 (citing Metabolife 24 Int’l, Inc. v. Wornick, 264 F.3d 832, 841 n.13 (9th Cir. 2001).) Mr. Shapiro has not 25 reviewed any literature on the topic of medical device purchasers’ perception of 26 statements about FDA regulatory status, or any “incident reports.” His report does not 27 identify any examples of Magnolia’s advertising regarding Steripath’s FDA registration 28 and listing. (Shapiro Dep. at 107.) His opinion is based on review of the references to 28 3:18-cv-1060-L-LL 1 Steripath’s regulatory status in the Rupp Article and the Arenas Presentation, which are 2 discussed above. (Shapiro Rept. at 11-12.) From these documents, Mr. Shapiro 3 concluded that “even experts in blood culture contamination field do not understand that 4 the Steripath has not been reviewed or evaluated by the FDA.” (Shapiro Rept. at 12.) He 5 did not know whether Drs. Rupp or Arenas would be involved in purchasing a device like 6 Steripath. (Shapiro Dep. at 137-38.) He reasoned, “based on human nature, my 7 knowledge of the industry, . . . what was said in the articles,” that “if they are confused, I 8 would imagine that there are many, many others who would be confused, as well.” 9 (Shapiro Dep. at 138-39.) As discussed above, neither article suggests that the authors 10 were confused about the limited significance of FDA registration and listing. 11 Accordingly, Mr. Shapiro’s opinion that Steripath purchasers were confused is not based 12 on sufficient facts or experience. 13 For the foregoing reasons, Mr. Shapiro’s opinion is not admissible. Magnolia’s 14 motion to exclude it is granted. Kurin has not presented sufficient evidence to raise a 15 genuine issue of material fact on its contention that Magnolia’s representation of 16 Steripath’s FDA registration and listing is misleading because it creates a false 17 impression regarding Steripath’s regulatory status 18 19 b. False Impression Regarding Compliance with QSR and GMP Regulations 20 While not a part of his report or rebuttal report (see also Shapiro Dep. at 142), Mr. 21 Shapiro opined at his deposition that the statement in one of the slides in Magnolia’s new 22 hire training presentation, that Steripath’s FDA registration and listing “indicat[es] 23 compliance with all relevant QSR and GMP regulations” (Magnolia Ex. 8 at Bates no. 24 MMT-0000227), is false and misleading. “While it is possible that a registered and listed 25 product is manufactured in a QSR/GMP compliant manner” (Kurin Opp’n at 22), 26 registration and listing does not necessarily mean that the device is compliant. (Shapiro 27 Dep. at 292-93.) Magnolia counters that the registration and listing indicates compliance 28 with the regulations because it means that “the manufacturer has accepted the 29 3:18-cv-1060-L-LL 1 responsibility to comply.” (Magnolia Mot. at 18.) It further argues that in this case, 2 Steripath was in fact compliant because it passed FDA inspection. 3 It is undisputed that, unless exempted by the FDA, marketed medical devices, 4 regardless of their classification as Class I, II or III, must comply with FDA’s General 5 Controls. (Feigal Rept. at 11-12, 14.) General Controls require, among other things, 6 registering the company and listing the product, as well as compliance with the 7 manufacturing quality system regulations (“QSR”), including Good Manufacturing 8 Practices requirements (“QSR” and “GMP,” respectively). (Id. at 12, 14; see also 21 9 C.F.R. § 820.1 (GMP requirements included in the QSR).) Medical device 10 manufacturers must develop procedures that address the various elements of these 11 requirements for their specific devices and facilities. (Feigal Rept. at 14-15; Shapiro 12 Dep. at 131 (medical device manufacturers responsible for full compliance).) 13 At most, in the abstract, the statement that registration and listing “indicat[es]” 14 compliance (Magnolia Ex. 8 at Bates no. MMT-0000227) is ambiguous in the regulatory 15 context where compliance is required. However, it is undisputed that the FDA inspected 16 Magnolia for compliance. Manufacturing facilities are periodically inspected by the 17 FDA. (Feigal Rept. at 22.) The inspections are one way the FDA ensures compliance 18 with the QSR. (Shapiro Dep. at 130.) Magnolia was subject to two inspections focused 19 on procedures for compliance with FDA’s [QSRs],” including a comprehensive 20 inspection in 2017. (Shapiro Rebuttal at 5-6.) Mr. Shapiro opined that this does not 21 mean that the FDA “closely evaluated Magnolia’s compliance,” but only that “they 22 looked at compliance with some applicable regulations” and that, in any event, the FDA’s 23 “position” is that “if we don’t find something objectionable, that doesn’t mean you’re in 24 compliance.” (Shapiro Dep. at 130-31.) 25 Mr. Shapiro is not offered to testify about Magnolia’s compliance with FDA 26 requirements (see Kurin Opp’n at 34), and he offered no opinion on that point in his 27 report, rebuttal or testimony (see, e.g., Shapiro Rebuttal at 7). To successfully oppose 28 Magnolia’s motion on the issue whether the statement in the training materials was false 30 3:18-cv-1060-L-LL 1 or misleading in the context of the facts of this case, Kurin must come forward with 2 evidence to raise a genuine issue of material fact regarding Magnolia’s noncompliance. 3 Mr. Shapiro’s opinion that a comprehensive inspection with no finding of violations does 4 not necessarily mean compliance does not meet this burden. Magnolia’s motion is 5 therefore granted with respect to this issue. 6 c. 7 Misbranding Under FDA Regulations Finally, Kurin points to 21 C.F.R. § 807.39 in support of its argument that the 8 statements in the Rupp Article, Arenas Presentation and the new hire training slide are 9 misleading. The regulation provides: 10 Registration of a device establishment or assignment of a registration number does not in any way denote approval of the establishment or its products. Any representation that creates an impression of official approval because of registration or possession of a registration number is misleading and constitutes misbranding. 11 12 13 14 As discussed above, none of the three statements Kurin relies upon create an impression 15 of FDA approval. Accordingly, Kurin has not raised a genuine issue of material fact. 16 d. Magnolia’s motion is granted as to Kurin’s claims of false advertising based on 17 18 Conclusion statements that Steripath was registered and listed with the FDA. 19 2. Reliability of Controlled Clinical Study Results Kurin alleges that Magnolia’s use of controlled clinical study results, including the 20 21 Rupp Study results, in its advertising is false because controlled clinical studies do not 22 reflect “real-world conditions.” (See, e.g., Compl. at 6.) For the reasons discussed in 23 section A.1.a. above, Kurin has not presented sufficient evidence to raise a genuine issue 24 of fact regarding its claim that referencing controlled clinical study results is literally 25 false or misleading. Kurin agrees that Magnolia’s controlled clinical study results are 26 “good data in verifying the efficacy of the device.” (See Heindel Dep. at 119-23.) 27 Accordingly, Kurin cannot proceed with its false advertising claims on this theory. 28 ///// 31 3:18-cv-1060-L-LL 1 3. 92% Reduction in Blood Culture Contamination Kurin’s allegation of falsity of Magnolia’s claims that Steripath has been clinically 2 3 proven to decrease false positives by 92% with a sustained contamination rate of 0.2% 4 are based on the fact that some of Steripath efficacy studies report less favorable results. 5 (Compl. at 5-6.) As discussed in section A.1.b. above, the statement is supported by 6 clinical studies and Magnolia does not claim that all of its clinical studies achieved these 7 results. Kurin has presented no evidence to the contrary in support of its own motion or 8 in opposition to Magnolia’s motion. It has therefore not raised a genuine issue regarding 9 literal falsity of this claim. 10 Kurin argues alternatively that if not literally false, the claim is misleading because 11 it reasonably could be misunderstood as representative of the results of other studies. 12 (See Kurin Opp’n at 16.) “Even if an advertisement is not literally false, relief is 13 available under Lanham Act §43(a) if it can be shown that the advertisement has misled, 14 confused, or deceived the consuming public” Southland Sod, 108 F.3d at 1140. Kurin 15 has presented no evidence that its customers were, or were likely to be, misled by 16 Magnolia’s claim of 92% reduction. This is particularly unlikely given the customers’ 17 sophistication and access to clinical studies themselves. (See discussion in section 1., 18 supra.) Accordingly, Kurin has not raised a genuine issue of material fact with respect to 19 this claim. 20 4. Average Reduction of 93% Kurin attacks Magnolia’s claims of 93% average reduction in blood culture 21 22 contamination,20 and argues such claims are literally false.21 (Kurin Opp’n at 9.) As 23 discussed in section A.1.c. above, Kurin presented sufficient evidence to establish literal 24 25 26 27 20 This claim is not alleged in the complaint. Although Kurin begins its opposition with a heading that the statement is “Literally False and Misleading,” it only argues literal falsity. (See Kurin Opp’n at 9-10.) 21 28 32 3:18-cv-1060-L-LL 1 falsity insofar as Magnolia advertised that the 93% average was based on “multiple 2 publications and peer-reviewed published studies.” Magnolia argues for summary 3 judgment in its favor because Kurin cannot raise a genuine issue of material fact with 4 regard to every element of this claim, including causation. 5 To prevail on a false advertising claim under the Lanham Act, a plaintiff must 6 prove proximate cause, i.e., injury “flowing directly from the deception wrought by the 7 defendant’s advertising.” Lexmark., 572 U.S. at 133; see also id. at 140. This “occurs 8 when deception of consumers causes them to withhold trade from the plaintiff.” Id. at 9 133. Unlike “actual cause or cause in fact,” proximate cause denotes a cause with “some 10 direct relation between the injury asserted and the injurious conduct alleged.” Paroline v. 11 United States, 572 U.S. 434, 445 (2014). It must flow directly from the advertisements 12 which are shown to be false. See Lindy Pen Co., Inc. v. Bic Pen Corp., 982 F.2d 1400, 13 1407 (9th Cir. 1993), abrogated on other grounds by SunEarth, Inc. v. Sun Earth Solar 14 Power Co., 839 F.3d 1179 (2016); Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 15 197, 210 (9th Cir. 1989), William H. Morris Co. v. Group W, Inc., 67 F.3d 310 (9th Cir. 16 1995) (unpub. disp.). 17 Kurin argues a deceptive effect is presumed when a statement is literally false. 18 (Kurin Opp’n at 27 n.11.) A presumption applies when a defendant intentionally 19 misleads consumers. William H. Morris, 66 F.3d at 258; Harper House, 889 F.2d at 209. 20 Kurin has presented no evidence or argument relating to Magnolia’s intent. 21 Alternatively, Kurin argues a presumption may apply if the parties are direct competitors. 22 (Kurin Opp’n at 27.) Such presumption applies in “false comparative advertising cases, 23 where it is reasonable to presume that every dollar defendant makes has come directly out 24 of plaintiff’s pocket.” TrafficSchool.com, Inc. v. Edriver, Inc., 653 F.3d 820, 831 (9th 25 Cir. 2011) (emphasis in orig.). The presumption does not apply “when advertising does 26 not directly compare defendant’s and plaintiff’s products.” Id. None of Kurin’s evidence 27 involving Magnolia’s claim of average 93% reduction makes the claim in a comparative 28 advertising context. (See Kurin Exs. 1-7.) Accordingly, neither presumption applies. 33 3:18-cv-1060-L-LL 1 Kurin also relies on the testimony of its CEO Bob Rogers and its damages expert 2 Patrick Kennedy.22 (Kurin Opp’n at 28.) Mr. Rogers testified generally that Magnolia’s 3 marketing harmed Kurin’s sales. (Rogers Dep. at 107.)23 He did not state a basis for his 4 implied opinion that Magnolia’s marketing caused any lost sales and did not establish a 5 causal connection between Magnolia’s representation of 93% average reduction and lost 6 sales. It is therefore insufficient to raise a genuine issue of fact regarding causation. 7 Mr. Kennedy, an economist, was offered on the issue of Kurin’s lost profits and 8 corrective advertising. (Magnolia Ex. 4 (“Kennedy Rept.”) at 14; Kurin Opp’n at 28.) 9 He offered no opinions regarding the causal link between Magnolia’s advertising and 10 Kurin’s claimed damage, but instead relied on Kurin’s assertions in this regard. (Id. at 11 14-18.) For example, Mr. Kennedy prefaced his opinion about lost profits with, “Kurin 12 13 asserts that the impact of Magnolia’s false advertising is demonstrated in Kurin’s 14 inability to achieve its sales projections.” (Id. at 15.) His lost profits opinion is premised 15 on Kurin’s representation that Kurin “felt it was unable to obtain [certain sales] because 16 of Magnolia’s false advertising,” and that “its ability to obtain [certain] customers was 17 impaired, and it suffered a delay in obtaining customers due to the alleged false 18 advertising.” (Id. at 16-17 (emph. added).) Mr. Kennedy’s corrective advertising 19 opinions appear to be based on the same representations, as he offers no other basis for 20 causation. (See id. at 17-18 (implying that “market perceptions about Magnolia’s testing 21 and FDA status [were] caused by alleged false advertising”).) Kurin has presented no 22 evidence to support the assertions Mr. Kennedy relied upon in his report. Mr. Kennedy 23 did not rely on any consumer surveys or speak to any Kurin or Magnolia customers to 24 25 26 27 Although Kurin also references Mr. Shapiro (Kurin Opp’n at 29), no citation to evidence or discussion of Mr. Shapiro’s opinions is provided. 28 23 22 Excerpts are found in docs. no. 65-23 and 66-11. 34 3:18-cv-1060-L-LL 1 establish a nexus between Kurin’s claimed lost sales and Magnolia’s advertising. 2 (Kennedy Dep. at 50-53.)24 Mr. Kennedy also did not form an opinion whether Magnolia’s representations 3 4 regarding reduction in contamination or false positives increased Steripath sales. 5 (Kennedy Dep. at 137-38.) Further, he was unable to evaluate if any of Kurin’s potential 6 customers who declined to purchase Kurin Lock did so, not in favor of Magnolia, but 7 because they decided not to change their existing practice (Kennedy Dep. at 61-64), or if 8 they declined before Magnolia circulated any false advertising or after Magnolia ceased 9 (id. at 79-81). Although he acknowledged that Magnolia’s advertising claims changed 10 over time, Dr. Kennedy’s opinions do not attribute Kurin’s claimed lost sales or 11 corrective advertising to any particular claim, but to all alleged false claims combined. 12 (Kennedy Dep. at 77-84; see also id. at 82-83 (did not isolate specific misrepresentations 13 or “determine[] the period of time during which they were utilized by Magnolia”), 84 (“I 14 haven’t made an apportionment to carve out any of those misrepresentations,” “that’s a 15 deeper factual inquiry”).) At most, Mr. Kennedy offers to make a temporal correlation between Kurin’s sales 16 17 and Magnolia’s advertising. In this regard, he stated, for example, that “in 2018, when 18 Magnolia was most widely asserting the disputed rates of reduction in false positives, 19 Kurin fell materially below its sales projections,” and “I understand that since Magnolia 20 changed some of its advertising, Kurin has been able to . . . gain sales.” (Kennedy Rept. 21 at 15-16; see also Kennedy Dep. at 77-79.) He could make lost profits calculations based 22 on the temporal connection provided he had Magnolia’s financial records. (Kennedy 23 Rept. at 16; Kennedy Dep. at 79-80 (he had not been able to do it).) However, a temporal 24 relationship alone is insufficient to establish proximate cause. Rexall Drug Co. v. Nihill, 25 ///// 26 27 28 24 Excerpts are found in doc nos. 65-29 and 67-3. 35 3:18-cv-1060-L-LL 1 276 F.2d 637, 643-44 (9th Cir. 1960); see also Verisgn Inc. v. XYZ.COM LLC, 848 F.3d 2 292, 300-01 (4th Cir. 2017). 3 Kurin maintains causation is established because its actual sales approximated 4 sales projections in 2017, but significantly diverged in 2018 after Magnolia’s inception of 5 its allegedly misleading advertising. (Kurin Opp’n at 29, citing Kennedy Rept. at 15-16.) 6 However, Kurin’s Chief Financial Officer conceded that financial projections, 7 particularly for a start-up company like Kurin, “change all the time. The minute you put 8 them down on paper, they are wrong.” (Covington Dep. at 78-80.)25 The relationship 9 between the admittedly unreliable projections and actual sales therefore does not provide 10 a sufficient basis for causation to raise a genuine issue of fact. 11 Because Mr. Kennedy has not provided any opinions regarding causation, and 12 Kurin’s other evidence is insufficient to raise a genuine issue of material fact regarding 13 causation, the Court need not address Magnolia’s request to partially exclude Mr. 14 Kennedy’s opinions pursuant to Federal Rule of Evidence 702 and Daubert. (See 15 Magnolia Mot. at 37.) 16 Finally, Kurin maintains that even if it cannot raise a genuine issue of fact 17 regarding causation necessary for monetary relief, it is nevertheless entitled to injunctive 18 relief. For the reasons discussed in section A.1.c., above, Kurin has not presented 19 sufficient evidence to raise a genuine issue of fact regarding its entitlement to injunctive 20 relief. 21 Kurin has failed to raise a genuine issue of material fact with respect to proximate 22 cause or injunctive relief. Magnolia’s motion for summary adjudication is therefore 23 granted with regard to the false advertising claim arising from the claim that Steripath 24 reduced the contamination rate by an average of 93%. 25 ///// 26 27 28 25 Excerpts are found in doc. no. 65-27. 36 3:18-cv-1060-L-LL 1 5. Steripath (Virtually) Eliminates Contamination 2 Kurin contends Magnolia’s claims that Steripath eliminates or virtually eliminates 3 false positive results are literally false.26 (Kurin Opp’n at 11-12.) For the reasons stated 4 in section A.2. above, the statement that Steripath “eliminates” false positives or blood 5 culture contamination is nonactionable puffery. In addition, Kurin has presented no 6 evidence either in support of its own motion or in opposition to Magnolia’s motion to 7 contradict the evidence of studies showing that Steripath reduces blood culture 8 contamination rate below 1% or tending to show that representing these results as 9 “virtually eliminating” contamination is literally false. Accordingly, Kurin has failed to 10 raise a genuine issue of material fact on this issue. 11 6. 12 Statements About Kurin Lock Kurin argues that in its employee training materials Magnolia made literally false 13 statements about Kurin Lock’s effectiveness.27 (Kurin Opp’n at 13.) Kurin does not 14 argue the statements were misleading and has presented no evidence of actual deception 15 or likelihood of deception. (See id. at 12-13.) 16 It is undisputed that Kurin Lock diverts 0.15mL and Steripath diverts 1.5–2.0 mL 17 of blood into a separate chamber before a second, sterile blood flow path is opened as the 18 blood sample collected for testing. In its employee training materials, Magnolia states: 19 Effective Diversion Volume • Steripath: Diverts initial 1.5-2.0 mL of blood, which is known to commonly contain contaminants. This diversion volume has been clinically proven in peer-reviewed published studies to virtually eliminate blood culture contamination. All peerreviewed published data on the use of Initial Specimen Diversion for reducing blood culture contamination supports a 20 21 22 23 24 25 27 In its complaint, Kurin claims that the statements are “false and misleading” (Compl. at 6-7); however, the theory that the statements were misleading is not argued in opposition to summary judgment. 28 27 26 26 This claim is not alleged in Kurin’s complaint. 37 3:18-cv-1060-L-LL 1 required diversion volume of 1.5-2.0 mL, as with Steripath. 2 Kurin Lock: Redirecting such a minute volume (0.15 mL) of blood is not clinically proven effective. 3 4 5 (Magnolia Ex. 3 (emphases in original).) The training materials also include a statement 6 that there is “[n]o peer-reviewed published or presented clinical trial data supporting a 7 significant sustained reduction in blood culture contamination” relative to the Kurin 8 Lock. (Id.) 9 Magnolia contends its statements are supported by a study published in 2010 in the 10 Journal of Clinical Microbiology, which demonstrated that between 0.5mL and 2.0 mL 11 “is adequate diversion volume to significantly reduce” blood culture contamination. 12 (Magnolia Ex. 32 (Richard G. Patton et al., Innovation for Reducing Blood Culture 13 Contamination: Initial Specimen Diversion Technique); Roberts Rept. at 14.) 14 Magnolia’s Vice President of Sales testified that at the time the training materials were 15 created he was not aware of any “published peer-reviewed evidence” supporting the 16 effectiveness of 0.15 mL diversion volume. (Stuckert Dep. at 143-44.) 17 Magnolia’s Chief Commercial Officer Robert Gerberich testified to the same 18 effect. (Gerberich Dep. at 139-40, 143-44.) He was aware of a poster study from the 19 June 2018 Association for Professionals in Infection Control and Epidemiology Annual 20 Conference, which was not peer-reviewed and only posted, not presented. (Id. at 140; see 21 also Roberts Rept. Appx C.) It was conducted at Bayfront Health in St. Petersburg, 22 Florida and was not a controlled clinical study. (Gerberich Dep. at 140-41; see also 23 Roberts Rept. Appx C.) There was also a poster study from Crouse Hospital in Syracuse, 24 New York shown at a regional conference in Louisiana, however, poster studies at such 25 meetings are not reviewed before acceptance for presentation. (Id. at 142-43.) 26 To the extent Kurin relies on Mr. Gerberich’s testimony, it does not raise a genuine 27 issue of material fact. It shows, consistent with Magnolia’s statement, that Mr. Gerberich 28 was not aware of any “peer-reviewed published or presented clinical data” or any 38 3:18-cv-1060-L-LL 1 “clinical” studies supporting Kurin Lock’s effectiveness when the training materials were 2 created, because the summer 2018 poster was not presented, and the presentation in 3 Louisiana was not reviewed. 4 In February 2019, a Kurin Lock effectiveness study from Hartford Healthcare in 5 Hartford, Connecticut was published in Connecticut Medicine, a peer-reviewed journal. 6 (Roberts Rept. at 17 & App’x C.) It was published nearly a year after the commencement 7 of this action. Kurin has not presented any evidence to show that the training 8 presentation slide was still in use at that time, or that any of the statements in the slide 9 were made to a potential customer at any time. Accordingly, the article does not raise a 10 11 12 genuine issue of material fact regarding Magnolia’s statements about Kurin Lock. 7. Product Superiority Claims Kurin attacks a number of Magnolia’s product superiority claims as literally false 13 and misleading. (See Compl. at 6-7.) Magnolia argues it is entitled to summary 14 judgment on four of these claims because they are non-actionable puffery. 15 “While product superiority claims that are vague or highly subjective often amount 16 to nonactionable puffery, misdescriptions of specific or absolute characteristics of a 17 product are actionable.” Southland Sod, 108 F.3d at 1145. Kurin argues that Magnolia’s 18 statements are not puffery because they contain misdescriptions of specific product 19 characteristics which are objectively verifiable. (Kurin Opp’n at 18.) 20 First, Kurin alleges falsity of Magnolia’s claim that “the use of Steripath represents 21 simple and effective ‘forced compliance.’ With built-in best practices that require 22 minimal training to implement, Steripath provides quality assurance ‘in-a-box.’” 23 (Magnolia Mot. at 27 (quoting Compl. ¶42(c)).) Magnolia argues this statement is 24 puffery because the reference to “simple and effective” is general and subjective. 25 (Magnolia Mot. at 27-28.) However, Kurin’s claim is directed to another part of the 26 statement. It claims the statement is false because Steripath does not “force compliance.” 27 (Compl. at 6-7.) This appears to be a description of Steripath’s specific characteristic and 28 is therefore not puffery. 39 3:18-cv-1060-L-LL 1 Second, Kurin alleges falsity of advertising that “Steripath will ‘. . . significantly 2 improve specimen integrity and the accuracy, consistency, and predictability of critical 3 laboratory tests.’” (Magnolia Mot. at 27 (quoting Compl. ¶42(d)).) Contrary to Kurin’s 4 contention (see Compl. at 7), the statement does not refer to the accuracy of the lab work, 5 but the integrity of the blood sample and the resulting accuracy of the test results. 6 Magnolia argues the statement is puffery because stating that Steripath will “significantly 7 improve” the accuracy of test results is vague and general. The Court agrees. 8 9 Third, Kurin alleges falsity of the claim that “Steripath’s proprietary vein to bottle system technology is the fastest, most effective, and economical solution that marries 10 technique and technology.” (Magnolia Mot. at 27 (quoting Compl. ¶43(b)).) Kurin 11 argues that the use of a superlative, i.e., that Steripath is “the fastest, most effective, and 12 economical solution” converts the statement from bluster by exaggeration to an absolute 13 description of product characteristics. (Kurin Opp’n at 18 (“the manufacturer cannot 14 advertise that the product is the fastest, unless it actually is”).) This argument is 15 precluded by Cook, Perkiss and Liehe, Inc. v. Northern California Collection Service, 16 Inc., 911 F.2d 242, 246 (9th Cir. 1990) (“the best technology, lower rates, and better 17 customer service” and implied claim of “lower costs and superiority over” competitor 18 held to be puffery). Magnolia’s statement in this instance is a general and exaggerated 19 claim constituting puffery. 20 Finally, Kurin alleges falsity of advertising that “Steripath is the ‘only vein-to- 21 bottle closed blood culture collection system that is proven to virtually eliminate 22 preventable error of blood culture contamination and false-positive results for sepsis.’” 23 (Magnolia Mot. at 27 (quoting Compl. ¶43(c)).) Kurin alleges this statement is false 24 because Steripath is not a “closed system.” (Compl. at 7.) Because the claim is directed 25 to a specific product characteristic, it is not puffery. 26 Magnolia’s motion with respect to the falsity of the product superiority claims is 27 granted as to Paragraphs 42(d) and 43(b) of the complaint because the statements were 28 nonactionable puffery. Although the statements in Paragraphs 42(c) and 43(c) are not 40 3:18-cv-1060-L-LL 1 puffery, the motion is granted because Kurin has failed to raise a genuine issue of 2 material fact regarding proximate cause or injunctive relief. (See discussion in section 4., 3 supra.) 4 8. Conclusion 5 Based on the foregoing, Magnolia’s motion for summary judgment is granted. 6 C. 7 In its counterclaim Magnolia alleges that several categories of Kurin’s advertising Kurin’s Motion for Summary Judgment on Magnolia’s Counterclaims 8 claims violated the Lanham Act and California’s FAL. (See Countercl. at 12-18 (for 9 example, statements that Kurin was first to market, product superiority claims, claims 10 regarding Kurin Lock’s capabilities, clinical data representations).) Kurin moves for 11 summary judgment on all claims. For the reasons stated below, the motion is denied. 12 There is a marked difference in this case between the summary judgment briefing 13 of the claims alleged in the complaint and the counterclaims. Kurin’s motion pivots on 14 the conclusion that none of its advertising claims is literally false. (Kurin Mot. at 18.) 15 The argument is made in one paragraph without citation to any exhibits or quotation of 16 the actual advertising language in context. Southland Sod, 108 F.3d at 1139 (“When 17 evaluating whether an advertising claim is literally false, the claim must always be 18 analyzed in its full context.”). From there, Kurin reasons that all alleged false advertising 19 statements are at best misleading, thus requiring Magnolia to come forward with 20 sufficient evidence to raise a genuine issue of material fact on every element of false 21 advertising as to every advertising claim alleged to be false. (Kurin Mot. at 18.) Kurin 22 concludes it is entitled to summary judgment because Magnolia has no evidence. (Id. at 23 18-23.) 24 In its opposition, Magnolia offers only argument supported by citations to its 25 counterclaims. Under normal circumstances, this is insufficient to oppose a summary 26 judgment motion. See Nissan Fire & Marine Ins., 210 F.3d at 1103 (“If . . . a moving 27 party carries its burden of production, the nonmoving party must produce evidence to 28 support its claim or defense.”); see also Celotex, 477 U.S. at 324 (the nonmoving party 41 3:18-cv-1060-L-LL 1 must “go beyond the pleadings and by [its] own affidavits, or by the depositions, answers 2 to interrogatories, and admissions on file, designate specific facts showing that there is a 3 genuine issue for trial.”). 4 However, Kurin has not carried its burden as the moving party. Its conclusion that 5 none of the alleged false advertising claims are literally false is unsupported. Although at 6 trial Kurin would not bear the burden of proof on the counterclaims, as the moving party 7 on summary judgment it must “produce affirmative evidence . . . negating an essential 8 element of the nonmoving party's case.” Nissan Fire & Marine Ins., 210 F.3d at 1105- 9 06. Kurin has offered none. “If a moving party fails to carry its initial burden of 10 production, the nonmoving party has no obligation to produce anything, even if the 11 nonmoving party would have the ultimate burden of persuasion at trial.” Id. at 1102-03; 12 see also Adickes, 398 U.S. at 160. Accordingly, Magnolia may defeat Kurin’s motion 13 without producing anything in opposition. The rest of Kurin’s motion is based on the assertion that Magnolia has no evidence. 14 15 (Kurin Mot. at 18-23; see also id. at 19.) Although the moving party may meet its initial 16 burden by “pointing out to the district court . . . that there is an absence of evidence to 17 support the nonmoving party's case,” “simply . . . saying that the nonmoving party has no 18 such evidence” is not enough. Nissan Fire & Marine Ins., 210 F.3d at 1106. What is 19 required is evidence that the opposing party has no evidence, for example, attaching the 20 non-moving party’s answer to interrogatories admitting that he or she has no witnesses or 21 other evidence to prove a material issue. See id. at 1105 (discussing Celotex, 477 U.S. at 22 320). Kurin has provided no evidence in support of its summary judgment motion, and 23 therefore cannot force Magnolia to produce evidence in opposition. Nissan Fire & 24 Marine Ins., 210 F.3d at 1102-03. “In such a case, the nonmoving party may defeat the 25 motion for summary judgment without producing anything.” Id. at 1103. 26 ///// 27 28 42 3:18-cv-1060-L-LL 1 2 For the reasons stated above, Kurin’s motion for summary judgment on Magnolia’s counterclaims is denied. 3 4 5 IT IS SO ORDERED. Dated: July 20, 2020 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 43 3:18-cv-1060-L-LL

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