NuVasive denied stay in class action kickback suit

NuVasive Inc. (NSDQ:NUVA) was denied a stay of action last week as it looks to pause a class action case which alleges that the company lost share value after it hid a kickback scheme.

NuVasive was requesting the stay while it appeals a case that was certified in March. The motion appointed Brad Mass and Daniel Popov as class representatives.

Judge Jeffrey Miller of the US District Court of the Southern District of California denied the request for a stay last Thursday, according to court documents.

“Here, Defendants’ motion to stay is not well-founded because they fail to establish a serious legal question or that they would be irreparably harmed if a stay is not granted,” Judge Miller wrote in court documents.

Judge Miller wrote that public interests “caution against granting a stay of this action,” according to the documents. “This case is nearly four-years old and the public has an interest in the efficient prosecution of securities laws and seeking to hold alleged corporate wrongdoers accountable. This factor does not favor a stay.”

Plaintiffs in the suit allege that NuVasive submitted false claims to Medicare and Medicaid in violation of state laws and regulations, and that the company made illegal kickbacks to doctors and engaged in off-label promotion of its products and services, according to court documents.

NuVasive paid approximately $13.5 million in fines and penalties related to the alleged actions, according to the plaintiffs, while shareholders “suffered significant losses and damages,” according to court documents.

The payment dates back to 2015, when the company finalized a previously announced deal with the Justice Dept. NuVasive said in July 2013 that the U.S. Health & Human Services Dept.’s inspector general issued a subpoena “in connection with an investigation into possible false or otherwise improper claims submitted to Medicare and Medicaid” for documents from January 2007 through April 2013. In April the company said it agreed to pay $13.8 million to settle the probe.

On July 29, 2015 NuVasive said the deal called for it to pay $13.5 million, plus fees and accrued interest, but admitted no wrongdoing in the case.

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