Dani Kass

Intuitive Can Be Sued For Stolen Da Vinci Robot Payments

Law360, New York (November 29, 2016, 5:32 PM EST) — Intuitive Surgical Inc. can’t dodge a Bolivian doctor’s lawsuit attempting to hold it responsible for a South American company that allegedly stole $2 million from him while he was purchasing Intuitive’s surgeon-controlled robot, a California federal judge said Monday.

Urologist and surgeon Rene Heredia claims he has paid more than $2 million for the da Vinci Surgical System to companies Intuitive insisted he use, but that he hasn’t received the robot or refunds. Intuitive has argued it can’t be held responsible for a third party, but U.S. District Judge Edward J. Davila disagreed, finding that Heredia has sufficiently alleged that Intuitive was acting as another company’s agent.

An Intuitive sales manager and two sales representatives told Heredia to go through the company’s agent and exclusive distributor for Bolivia, DeLeC Científica Argentina SA to purchase the robot. DeLeC’s president then told him to pay Trimedical Bolivia, it’s sub-distributor, the suit claims.

In July 2012, Heredia agreed to pay $2.7 million for the device and began making payments to Trimedical. As of May 2013, he’d paid just over $2 million. That year, DeLeC’s president told Heredia that he’d only received $850,000.

Heredia sued Trimedical in Bolivia, and that company is making installment payments to him, but DeLeC has refused to return the $850,000, according to the suit.

When Heredia first sued Intuitive in June 2015, the court dismissed the complaint, saying he didn’t sufficiently plead that Intuitive could be held vicariously responsible for DeLeC’s conduct. He filed an amended complaint in December, which Judge Davila said is stronger.

In the amended complaint, Heredia allegations include that Intuitive used DeLeC employees at tradeshows to represent it, and that an Intuitive sales manager told him that DeLeC and Trimedical would work in concert for the purchase.

“These circumstantial factual allegations, when taken as a whole, are enough to imply to plaintiff that Intuitive was transacting business in Bolivia solely through DeLeC, that Intuitive knew DeLeC was publicly representing it had been bestowed certain authority, and that Intuitive itself was making public statements concerning its relationship with DeLeC,” Judge Davila said.

While the judge upheld conversion and fraudulent misrepresentative claims, he dismissed with prejudice claims of fraudulent concealment, fraudulent misrepresentation and negligent misrepresentation.

Those claims center on ideas that an Intuitive employee knew of customer complaints about DeLeC, but proceeded to refer Heredia to them anyway. But Judge Davila said customer complaints aren’t enough, nor can it be known which representatives of the company knew of those complaints.

Heredia’s attorney, John S. Worden of Schiff Hardin LLP said, “Judge Davila blessed our most important claims. We intend to move forward accordingly.”

Counsel for Intuitive declined to comment.

Intuitive is currently embattled in class action litigation from investors alleging it made several misleading statements and failed to warn shareholders about a defect in the da Vinci systems that caused patients undergoing surgery to be electrocuted. Those defects led to a U.S. Food and Drug Administration safety probe in January 2013.

According to that suit, the system uses scissors to cut and cauterize tissue with electricity via an electrode. The defective devices were prone to tiny cracks, allowing electricity to enter into the patient’s body and thus damaging tissue and internal organs.

Heredia is represented by John S. Worden and Jean-Paul P. Cart of Schiff Hardin LLP.

Intuitive is represented by Adam Cashman, Renée B. Bea and Doug Tilley of Singer / Bea LLP.

The case is Heredia v. Intuitive Surgical, Inc., case number 5:15-cv-02662, in the U.S. District Court for the Northern District of California.

–Additional reporting by Martin O’Sullivan. Editing by Kelly Duncan.