Biomedical Systems v. GE Marquette Medical ( 2002 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 01-3076
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Biomedical Systems Corporation, *
*
Appellee, * Appeal from the United States
* District Court for the Eastern
v. * District of Missouri.
*
GE Marquette Medical Systems, Inc., * [PUBLISHED]
*
Appellant. *
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Submitted: April 16, 2002
Filed: April 23, 2002
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Before HANSEN, Chief Judge, McMILLIAN and FAGG, Circuit Judges.
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PER CURIAM.
GE Marquette Medical Systems, Inc. (GE) appeals from an adverse jury verdict
in this diversity action. Having carefully reviewed the briefs, record, and arguments
of counsel, we are satisfied the district court* correctly applied state law, and the
challenged rulings do not require reversal. Because the parties’ submissions show
*
The Honorable Charles A. Shaw, United States District Judge for the Eastern
District of Missouri.
they are thoroughly familiar with the issues before this court, we conclude that an
extended opinion in this diversity case would serve no useful purpose.
Before GE acquired Corometrics, Inc. (Corometrics), Corometrics contracted
to produce a new home uterine activity monitor (HUAM) based on technology
developed by Biomedical Systems Corporation (Biomedical). (Because Corometrics
is now part of GE, we refer to Corometrics as GE.) HUAMs are medical devices
regulated by the Food and Drug Administration (FDA). The GE-Biomedical contract
required GE to obtain “510(k)” premarket notification clearance from the FDA. See
Food, Drug, and Cosmetic Act, ch. 675 § 510(k), 76 Stat. 794 (1962) (codified as
amended at 21 U.S.C. § 360(k) (1994)). To receive 510(k) clearance, a manufacturer
must give the FDA 90 days’ notice that the manufacturer intends to market a medical
device (1) which is substantially equivalent to a device already approved by the FDA,
and (2) which has the same intended use as the approved device. Id. If the FDA
agrees, it issues a clearance letter which authorizes the manufacturer to market the
device as specified by the FDA.
Rather than seeking 510(k) approval, which would be granted or denied within
90 days, GE asked the FDA to reclassify GE’s new HUAM from one class of
regulated devices to another class of regulated devices. The reclassification process
took three and a half years. Two and a half years after signing the contract,
Biomedical sued GE in federal district court alleging fraudulent misrepresentation
and breach of contract, and claiming $135 million in damages. The jury found for
Biomedical on its breach of contract claim and awarded $75 million in damages. On
appeal, GE challenges the district court’s rulings barring its illegality and waiver
defenses.
First, GE argues it was entitled to judgment as a matter of law because the
contract, which GE drafted, required GE illegally to seek 510(k) approval for the new
HUAM. Having reviewed this issue de novo, Fogelbach v. Wal-Mart Stores, Inc.,
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270 F.3d 696, 700 (8th Cir. 2001), we conclude the district court properly denied GE
judgment as a matter of law on its illegality defense. In our view, the contract
unambiguously required GE to apply for 510(k) clearance and did not require GE to
violate federal law. Indeed, after considering the contractual language in light of
extrinsic evidence about the parties’ intent when entering into the contract, the jury
reached the same conclusion.
Second, GE contends the district court improperly excluded evidence that
Biomedical waived GE’s breach of the contract provisions requiring GE to seek
510(k) approval. The GE-authored contract, however, expressly forbids waiver of
this sort. Because the contract is governed by Connecticut law under which the
waiver provision is valid, see Christensen v. Cutaia, 560 A.2d 456, 459 (Conn. 1989),
we conclude the district court correctly barred GE’s waiver defense.
Having satisfied ourselves that the district court correctly rejected GE’s
illegality and waiver defenses, we also reject GE’s remaining arguments. Because the
contract did not require illegal conduct on GE’s part, we do not disturb the jury
damage award. Further, the district court did not abuse its discretion when it
excluded evidence that supported and refused to give requested instructions that
explained the illegality and waiver defenses.
In sum, whether discussed or not, we have considered all of GE’s arguments.
Finding no error that would require reversal, we affirm the judgment of the district
court.
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A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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