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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`
`JANE SABESAN AND MARTIN SABESAN,
`
`Plaintiffs,
`
`v.
`
`EXACTECH, INC.;
`EXACTECH, U.S., INC.; TPG, INC.;
`OSTEON HOLDINGS, INC.;
`OSTEON MERGER SUB, INC.;
`OSTEON INTERMEDIATE HOLDINGS II,
`INC.
`
`Defendants.
`
`To the above named Defendant(s):
`
`Index No.:
`Date Index No. Purchased:
`
`Plaintiff designates as the place of trial:
`NEW YORK COUNTY
`
`The basis of venue is:
`A substantial part of the events giving rise to the
`claim occurred in this county
`
`Summons
`
`You are hereby summoned to answer the Complaint in this action and to serve a copy
`of your Answer, or, if the Complaint is not served with this Summons, to serve a Notice of
`Appearance, on the Plaintiff’s Attorney(s) within twenty (20) days after the service of this
`Summons, exclusive of the day of service (or within 30 days after the service is complete if
`this Summons is not personally delivered to you within the State of New York); and in case
`of your failure to Appear or Answer, Judgment will be taken against you by default for the
`relief demanded in the Complaint.
`
`Dated:
`
`New York, New York
`August 4, 2023
`
`_/s/Ellen Relkin____________________
`WEITZ & LUXENBERG P.C.
`ELLEN RELKIN (1977438)
`700 Broadway
`New York, New York 10003
`Telephone: (212) 558-5500
`E-mail: erelkin@weitzlux.com
`Attorney for Plaintiffs
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`TO:
`
`EXACTECH, INC.;
`2320 NW 66th Court, Gainesville, Florida 32653
`
`EXACTECH, U.S., INC.;
`2320 NW 66th Court, Gainesville, Florida 32653
`
`TPG, INC.;
`301 Commerce Street, Suite 3300, Fort Worth, TX 76102
`
`OSTEON HOLDINGS, INC.
`Registered Agent
`The Corporation Trust Company
`1209 N. Orange, Wilmington, DE 19801
`
`OSTEON MERGER SUB, INC.
`Registered Agent
`Corporate Creations Network, Inc.
`11380 Prosperity Farms Road 221E
`Palm Beach Gardens
`
`OSTEON INTERMEDIATE HOLDINGS II, INC.
`2320 NW 66th Court, Gainesville, FL 32653
`
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`
`JANE SABESAN AND MARTIN SABESAN,
`
`Index No.
`
`Plaintiffs,
`
`v.
`
`EXACTECH, INC.;
`EXACTECH, U.S., INC.; TPG, INC.;
`OSTEON HOLDINGS, INC.;
`OSTEON MERGER SUB, INC.;
`OSTEON INTERMEDIATE HOLDINGS II, INC.
`
`Defendants.
`
`VERIFIED COMPLAINT
`
`JURY TRIAL DEMANDED
`
`NOW COMES Plaintiffs JANE SABESAN AND MARTIN SABESAN (hereafter
`
`collectively referred to as “Plaintiffs”), by and through the undersigned attorneys, and bring this
`
`action against EXACTECH, INC. (“EXACTECH”), EXACTECH U.S., INC. (“EXACTECH
`
`US”), TPG, INC., OSTEON HOLDINGS, INC., OSTEON MERGER SUB, INC., and OSTEON
`
`INTERMEDIATE HOLDINGS II, INC. (hereinafter collectively as “Defendants”), for personal
`
`injuries suffered as a proximate result of the implantation of the Optetrak Comprehensive Total
`
`Knee System (hereinafter referred to as the “Device” or “Devices”) and allege as follows:
`
`NATURE OF THE ACTION
`This is an action for damages relating to Defendants’ developing, designing,
`
`1.
`
`testing, assembling, manufacturing, packaging, monitoring, labeling, preparing, distributing,
`
`marketing, supplying, storing, and/or selling of the Optetrak Device. The Optetrak Devices as
`
`referred to in this Complaint includes the Optetrak Logic Polyethylene Tibial Insert.
`
`2.
`
`Thousands of patients, like Plaintiff JANE SABESAN, have been, and/or will be,
`
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`required to undergo extensive revision surgery to remove and replace defective Devices due to a
`
`recent recall of these devices which first revealed to patients and surgeons that the polyethylene
`
`components within the prosthesis prematurely degrades over time causing an inflammatory response
`
`resulting in bone necrosis (death) also known as osteolysis. The recall notice admits that the recall
`
`and problems arose from failure to properly package the polyethylene insert component of the
`
`Optetrak Devices.
`
`3.
`
`As a result of Defendants’ failure to properly package the Devices prior to
`
`distribution, the polyethylene liner prematurely degraded and Plaintiff required revision surgery due
`
`to severe pain, swelling, and instability in the knee and leg. These injuries were caused by early and
`
`preventable wear of the polyethylene insert and resulting component loosening and/or other failures
`
`causing serious complications including tissue damage, osteolysis, permanent bone loss and other
`
`injuries.
`
`4.
`
`Recipients of the Device, like the Plaintiff, have been required to undergo revision
`
`surgeries well before the estimated life expectancy of a knee implant and at a much higher rate
`
`than should reasonably be expected for devices of this kind and have suffered pain and disability
`
`leading up to and after the revision surgery.
`
`5.
`
`Despite knowledge that the Device was defective and resulted in premature failures
`
`and accompanying complications, Defendants only first issued a nationwide recall on February 7,
`
`2022, advising the public that “most of our inserts since 2004 were packaged in out-of-
`
`specification . . . vacuum bags that are oxygen resistant but do not contain a secondary barrier layer
`
`containing ethylene vinyl alcohol (EVOH) that further augments oxygen resistance.”
`
`6.
`
`As a direct and proximate result of the defective nature of Defendants’ Devices
`
`surgically implanted in Plaintiff which necessitated premature removal, Plaintiff JANE SABESAN
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`suffered and will continue to suffer serious personal injuries, including pain, impaired mobility,
`
`rehabilitation, medical care, loss of enjoyment of life, and other medical and non-medical sequalae.
`
`7.
`
`Plaintiffs bring this action for personal injuries suffered as a proximate result of
`
`failure of the Device. Plaintiffs accordingly seek compensatory and punitive damages, and all other
`
`available remedies provided to Plaintiffs under the law because of injuries JANE SABESAN
`
`sustained due to the Defendants’ negligent, reckless, and wrongful conduct.
`
`JURISDICTION & VENUE
`This Court has jurisdiction over this action pursuant to CPLR §301 because
`
`8.
`
`Defendants conduct business in the State of New York. Alternatively, this Court has jurisdiction
`
`pursuant to CPLR §302 because the tortious acts alleged herein took place within the State of New
`
`York in New York County.
`
`9.
`
`Venue is proper in this Court under CPLR §503 (a) in that a substantial part of the
`
`events and omissions giving rise to this claim occurred at the Hospital for Special Surgery (“HSS”)
`
`located at 535 East 70th Street, New York, New York 10021 within New York County.
`
`THE PARTIES
`Plaintiffs JANE SABESAN AND MARTIN SABESAN are residents and citizens
`
`10.
`
`of Boynton Beach, Floridas.
`
`11.
`
`Defendant EXACTECH, INC. is a domestic, Florida corporation with its principal
`
`place of business located at 2320 NW 66th Court, Gainesville, Florida 32653.
`
`12.
`
`Defendant EXACTECH,
`
`INC. develops, manufactures, packages,
`
`stores,
`
`distributes, markets, and sells orthopedic implant devices, including Optetrak Devices and related
`
`surgical instrumentation throughout the United States, including in and throughout the State of
`
`New York.
`
`13.
`
`Defendant EXACTECH, INC. manufactured the Devices implanted in Plaintiff
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`JANE SABESAN.
`
`14.
`
`At all times relevant to this action, Defendant EXACTECH, INC. tested, studied,
`
`researched, designed,
`
`formulated, manufactured,
`
`inspected,
`
`labeled, packaged, promoted,
`
`advertised, marketed, distributed, and/or sold the Device in interstate commerce and throughout
`
`the State of New York and generated substantial revenue as a result.
`
`15.
`
`Defendant EXACTECH U.S., INC., a wholly owned subsidiary of Defendant
`
`EXACTECH, INC., is a domestic Florida corporation with its principal place of business located
`
`at 2320 NW 66th Court, Gainesville, Florida 32653.
`
`16.
`
`According to public filings, Defendant EXACTECH U.S.,
`
`INC., conducts
`
`Defendants’ U.S. sales and distribution activities.
`
`17.
`
`EXACTECH U.S., INC. is engaged in the business of designing, developing,
`
`testing, assembling, selecting, manufacturing, packaging,
`
`labeling, preparing, distributing,
`
`marketing, supplying, warranting, selling, and introducing Defendants’ products,
`
`including
`
`Optetrak Devices, into commerce throughout the United States and the State of New York.
`
`18.
`
`Upon information and belief,
`
`the Devices manufactured by Defendant
`
`EXACTECH, INC. were distributed by Defendant EXACTECH U.S., INC. throughout the United
`
`States, including to the Hospital for Special Surgery (HSS) in New York, New York, where
`
`Plaintiff JANE SABESAN received her implants.
`
`19.
`
`At all times relevant to this action, Defendant EXACTECH U.S., INC. tested,
`
`studied, researched, designed, formulated, manufactured, inspected, labeled, packaged, stored,
`
`promoted, advertised, marketed, distributed, and/or sold the Device in interstate commerce and
`
`throughout the State of New York and generated substantial revenue as a result.
`
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`20.
`
`Defendant TPG, Inc. is a Delaware corporation that has its principal place of
`
`business at 301 Commerce Street, Suite 3300, Fort Worth, TX 76102. TPG, Inc. is a citizen of
`
`Delaware and Texas. TPG, Inc. was formerly known as both TPG Capital, LP and TPG Partners,
`
`LLC (hereinafter collectively referred to as “TPG”).
`
`21.
`
`Upon information and belief, TPG Capital, LP converted to TPG, Inc. in or around
`
`December 2021.
`
`22.
`
`23.
`
`TPG Partners, LLC converted to TPG, Inc. in or around December 2021.
`
`TPG, Inc. is a publicly traded company on the Nasdaq Stock Exchange with a
`
`business model based on privatizing companies.
`
`24.
`
`TPG, Inc. is an alternative asset manager that works with companies in many
`
`sectors, including the medical device sector.
`
`25.
`
`26.
`
`The healthcare sector is one of TPG, Inc.'s most active sectors.
`
`As set forth in further detail below, in February 2018, TPG, Inc.’s predecessor
`
`entity - TPG Capital, LP - paid over $737 million to merge with Exactech ("2018 Merger").
`
`27.
`
`TPG, Inc. is not a passive investor. It touts its ability to "create products and
`
`services [that have] delivered breakthrough innovation" in the healthcare industry, as well as its
`
`"unique approach" to "building great companies."
`
`28.
`
`Defendant Osteon Holdings, Inc. is a Delaware corporation that has its principal
`
`place of business in Delaware, and is an indirect wholly owned subsidiary or indirect beneficially
`
`owned affiliate of TPG, Inc. Osteon Holdings, Inc. is a citizen of Delaware. Osteon Holdings, Inc.
`
`was formerly known as Osteon Holdings, LP.
`
`29.
`
`Osteon Holdings, LP converted to Osteon Holdings, Inc. in or around February
`
`2018.
`
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`30.
`
`Defendant Osteon Merger Sub, Inc. is a Texas corporation that has its principal
`
`place of business in Florida and is a wholly owned subsidiary of Osteon Holdings, Inc. Osteon
`
`Merger Sub, Inc. is a citizen of Florida and Texas.
`
`31.
`
`Defendant Osteon Intermediate Holdings II, Inc., is a Delaware corporation that has
`
`its principal place of business in Delaware and has been identified in public court filings as the
`
`Parent corporation of Exactech, Inc. Osteon Intermediate Holdings II, Inc. is a citizen of Delaware.
`
`32.
`
`At all relevant times, Defendant Osteon Holdings, Inc. (formerly known as Osteon
`
`Holdings, LP), Defendant Osteon Merger Sub, Inc., and Defendant Osteon Intermediate Holdings
`
`II, Inc. (hereinafter collectively known as “Osteon”) have been controlled by TPG, Inc. or its
`
`predecessor entities.
`
`33.
`
`Defendants TPG, Inc., Osteon Holdings, Inc., Osteon Merger Sub, Inc., and Osteon
`
`Intermediate Holdings II, Inc. are hereinafter collectively referred to as “TPG Defendants.”
`
`34.
`
`The following chart demonstrates the relationships between these entities, as
`
`described in further detail below:
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`35.
`
`The TPG Defendants, through and in concert with related entities TPG Partners
`
`VII, LP, TPG Genpar VII, LP, TPG Genpar VII Advisors, LLC (collectively TPG Fund Entities),
`
`exercised control over the merger with Exactech and subsequent operations of Exactech for their
`
`direct benefit and they used Exactech to engage in improper conduct as outlined herein and caused
`
`harm to Plaintiffs through such improper conduct.
`
`36.
`
`The TPG Defendants used Exactech as an agent, alter ego, and mere instrumentality
`
`such that the TPG Defendants maintained control over Exactech. Moreover, Exactech and the TPG
`
`Defendants should be held jointly and severally liable.
`
`LIST OF NON-PARTY INDIVIDUALS RELEVANT TO EXACTECH’S
`HISTORY, MERGER WITH TPG DEFENDANTS, AND PLAINTIFFS’ CLAIMS
`
`37.
`
`The following list provides information and background regarding non-party
`
`individuals referenced throughout this Complaint that are important to Exactech’s history, merger
`
`with TPG Defendants, and Plaintiffs’ claims against Defendants.
`
`38.
`
`Dr. William “Bill” Petty is an orthopedic surgeon and was an original founder of
`
`Exactech. Dr. Petty served as Exactech’s CEO from 1985 until 2014, after which he served as the
`
`Executive Chairman and Chairman of the Board of Exactech, Inc. prior to the 2018 merger.
`
`Following the 2018 Merger, Dr. William Petty held the same position and later became the Vice
`
`Chairman and a Director.
`
`39.
`
`Betty Petty is the wife of Dr. William Petty and is an original founder of Exactech.
`
`She served in the dual capacities of Human Resources Coordinator and Director of Marketing
`
`Communications from the founding of Exactech until 2001. She was Vice President, Human
`
`Resources from February 2000 until May 2010. Ms. Petty also served as the Vice President,
`
`Administration and Secretary of Exactech, Inc prior to the 2018 Merger. Following the 2018
`
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`Merger, Betty Petty served as Secretary for one year and then Vice President, Administration for
`
`one year.
`
`40.
`
`Gary J. Miller, Ph.D. is an original founder of Exactech. Dr. Miller is a biochemical
`
`engineer and served as an “innovation leader” since Exactech’s inception. Dr. Miller served as
`
`Exactech’s Executive Vice President, Research and Development prior to the 2018 Merger.
`
`Following the 2018 Merger, Mr. Miller served in numerous capacities, and currently serves as the
`
`Executive Vice President of Research and Development Emeritus.
`
`41. Mr. David W. Petty is the son of Dr. William Petty and Betty Petty. David Petty
`
`became Exactech’s first employee in 1988. David Petty served as Exactech’s Vice President of
`
`Operations from April 1991 until April 1993, Vice President of Marketing from 1993 until 2000,
`
`the Executive Vice President of Sales and Marketing from February 2000 until December 2007,
`
`President from 2007 until 2014, and the CEO from 2014 until January 2020, leading Exactech
`
`through the Merger with TPG Defendants. David Petty has been quoted as stating “[t]he secret
`
`sauce for Exactech has been the strong patient and people focused culture. . . .”1
`
`42.
`
`In January 2020, Exactech announced that Dr. William Petty and his wife, Betty
`
`Petty would retire from the company. David Petty was transitioned from his role as Chief
`
`Executive Officer to Vice Chairman of the Exactech Board of Directors.
`
`43.
`
`Joel C. Phillips has worked at Exactech since at least 1996 and served as Exactech’s
`
`Executive Vice President, Chief Financial Officer, and Treasurer prior to 2018. Following the 2018
`
`Merger, Mr. Phillips served for a certain number of years as Exactech’s Chief Financial Officer
`
`and Treasurer.
`
`1 Press Release, Exactech, Exactech Announces Leadership Transition (Jan. 6, 2020),
`https://www.exac.com/exactech-announces-leadership-transition (last visited Jan. 9, 2023).
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`44.
`
`Bruce Thompson has been at Exactech since 2004 and served as Exactech’s Senior
`
`Vice President, Strategic Initiatives prior to the 2018 Merger. Following the 2018 Merger, Mr.
`
`Thompson served from 2019 to 2022 as the Senior Vice President, Strategic Initiatives and
`
`currently serves as the Senior Vice President, International Sales.
`
`45.
`
`Donna Edwards has been at Exactech since 2001 and served as Exactech’s Vice
`
`President, Legal and General Counsel prior to the 2018 Merger. Following the 2018 Merger, Ms.
`
`Edwards served in several roles. In 2019, she served as the Vice President, Legal and from 2020
`
`to 2022, Ms. Edwards served as the Senior Vice President, Legal, Officer. Currently, Ms. Edwards
`
`serves as General Counsel and Senior Vice President, Legal.
`
`46.
`
`Christopher Roche was the Director of Engineering for Exactech, Inc., prior to the
`
`2018 Merger. Currently, Mr. Roche serves as Senior Vice President of Extremities at Exactech,
`
`Inc.
`
`47.
`
`Steven Szabo was the Vice President of Marketing for Exactech, Inc., prior to the
`
`2018 Merger.
`
`48. Michael LaGatta was a full-time employee of TPG and many of its subsidiaries and
`
`affiliates from approximately 2011 until 2022. For example, Mr. LaGatta has signed agreements
`
`on behalf of a number of TPG’s subsidiaries and affiliates, including, but not limited to:
`
`a.
`b.
`c.
`d.
`e.
`f.
`
`TPG Global, LLC - Vice President
`TPG Holdings, LP - Vice President
`TPG Partner Holdings, LP - Vice President
`TPG Group Advisors (Cayman), Inc. - Vice President
`Osteon Holdings, LP ("Parent") - Vice President
`Osteon Merger Sub, Inc. - Vice President
`
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`49.
`
`Jeffrey R. Binder is currently the Chairman and Chief Executive Officer of
`
`Exactech, Inc. Since 2015, he has served as a Senior Advisor to TPG.
`
`50.
`
`Daniel P. Hann has served as Exactech’s Senior Vice President, Business
`
`Development since 2019. Mr. Hann has also served as a Senior Advisor to TPG since at least
`
`2017.
`
`51.
`
`Kerem Bolukbasi served as Exactech’s Chief Financial Officer and Treasurer from
`
`2020 through August 2022, at which time he was relieved of his duties upon the advice and consent
`
`of TPG Board Members. Prior to assuming his role as Chief Financial Officer and Treasurer of
`
`Exactech, Inc., Mr. Bolukbasi worked for TPG as a private equity operations executive, providing
`
`interim executive leadership and operational support of the management teams and board of
`
`directors for TPG portfolio companies. Mr. Bolukbasi also served as a TPG Advisor to Exactech.
`
`52.
`
`Kendall Garrison serves on the nine-member Board of Directors of Exactech, Inc.
`
`and is employed by TPG. He joined TPG in 2008 and currently serves as Principal of TPG.
`
`53.
`
`John Schilling serves on the nine-member Board of Directors of Exactech, Inc. and
`
`is employed by TPG. He joined TPG in 2011 and currently serves as Partner, Head of Operations
`
`of TPG.
`
`54.
`
`Todd Sisitsky serves on the nine-member Board of Directors of Exactech, Inc. and
`
`is employed by TPG. He joined TPG in 2003 and currently serves as President and Co-Managing
`
`Partner of TPG.
`
`55.
`
`56.
`
`Karen Golz is a member of the Exactech Board of Directors.
`
`Darin Johnson joined Exactech and served as the Vice President of Marketing,
`
`Extremities from 2002 to 2016. In this role, he led Exactech’s global teams of orthopedic surgeons,
`
`product managers, engineers, and sales professionals. In January 2020, Mr. Johnson became
`
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`Exactech’s President and Chief Executive Officer. While he continues to serve as Exactech’s
`
`President, in March 2022, following the recalls discussed herein, Mr. Johnson was replaced as
`
`Chief Executive Officer by Jeffrey Binder.
`
`FACTUAL BACKGROUND
`Upon information and belief, the first Optetrak total knee system was available for
`
`57.
`
`implantation in 1994, building upon technology licensed from HSS.
`
`58.
`
`At all times material hereto, Defendants designed, developed, tested, assembled,
`
`selected, manufactured, packaged, labeled, prepared, distributed, marketed, supplied, warranted,
`
`and/or sold the Optetrak Comprehensive Total Knee System to hospitals in many states, including
`
`to the Hospital for Special Surgery in New York, New York.
`
`59.
`
`Between 1994 and 2015, Defendants obtained 510(k) clearance from the Food and
`
`Drug Administration (“FDA”) for various Optetrak total knee system devices and components,
`
`including the OPTETRAK LOGIC® knee system and Optetrak Logic PSC Tibial Insert.
`
`60.
`
`The Optetrak Total Knee System is classified as a knee joint patellofemorotibial
`
`polymer/metal/polymer semi-constrained cemented prosthesis. It features a mix of polyethylene
`
`and metal-based components.
`
`61.
`
`According to Defendants, the Optetrak Device introduced “novel implants and
`
`instruments to make the total knee procedure easier, faster, and more consistent, improving patient
`
`satisfaction for a more diverse population requiring total knee replacements.
`
`62.
`
`510(k) clearance is distinct from the FDA’s pre-market approval (“PMA”) process
`
`in that clearance does not require clinical confirmation of safety and effectiveness and as such the
`
`manufacturer retains all liability for the assertions of safety and effectiveness.
`
`63.
`
`510(k) clearance only requires the manufacturer to notify the FDA under Section
`
`510(k) of the Medical Device Amendments of 1976 to the Food Device Cosmetic Act (MDA) of
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`its intent to market a device at least ninety days prior to the device’s introduction on the market,
`
`and to explain the device’s substantial equivalence to a pre-MDA predicate device. The FDA may
`
`then “clear” the new device for sale in the United States.
`
`64.
`
`All the component parts comprising Plaintiff’s Device were cleared for marketing
`
`by the FDA pursuant to 510(k) process or were marketed without receiving either 510(k) clearance
`
`or PMA approval by the FDA.
`
`65.
`
`The Device is comprised of the following parts: a patellar cap, femoral cap, tibial
`
`insert and tibial tray, as shown below:
`
`The patellar cap and tibial insert are made of polyethylene.
`
`Defendants touted the Optetrak Device as being first-in-class in their product
`
`66.
`
`67.
`
`brochures.
`
`69.
`
`In their marketing materials, the Defendants promised that the Device had excellent
`
`long-term clinical outcomes and that “surgeons and patients can have every confidence in the
`
`performance and longevity of the Optetrak knee system.”
`
`70.
`
`Defendants promoted their Optetrak Devices as a system with nearly three decades
`
`of clinical success and proven outcomes for patients around the world because of an improved
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`articular design resulting in low polyethylene stresses.
`
`71.
`
`However, Optetrak Devices have performed poorly when compared to their
`
`competitors. For example, the Australian Orthopaedic Association, a preeminent, internationally
`
`recognized orthopedic implant registry, has identified the Optetrak as an implant with a higher-
`
`than-expected rate of revision.
`
`72.
`
`According to the 2020 Australian National Joint Replacement Registry, the rate of
`
`revision for a total knee replacement utilizing an Optetrak tibial component with a Optetrak-CR
`
`femoral component was 8.5% at ten years and 10.2% at ten years when implanted with a Optetrak-
`
`PS femoral component, which far exceeds international guidelines for accepted revision rates.
`
`73.
`
`Per the recommendations established by the International Benchmarking Working
`
`Group and applied by the Australian Orthopaedic Association, the Optetrak Devices do not qualify
`
`for a “superiority benchmark” or even a “non-inferiority benchmark.”
`
`74.
`
`At all times relevant, Defendants have been aware of a high rate of early failures
`
`associated with the Optetrak Device.
`
`75.
`
`Upon information and belief, by 2012, Defendants had further clinical evidence that
`
`Optetrak Devices were failing at a rate higher than promoted. Reports in the Manufacturer and User
`
`Facility Device Experience (MAUDE) indicate instances of revision due to “loose tibial
`
`component,” “aseptic loosening,” “pain and visible loosening,” “polyethylene deformation,”
`
`“polyethylene worn,” and “pain, limited mobility, knee swelling and sensitivity” due to “loose”
`
`joint.
`
`76.
`
`Upon information and belief, in 2013, complaints continued to be reported. Some
`
`examples include revision for “tibial loosening” just two years postoperatively, “revision due to
`
`tibial loosening,” “during revision, the tibial component was found to be loose and easily
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`removed,” “revision of knee component due to loosening,” and “revision due to pain and
`
`loosening.”
`
`77.
`
`Upon information and belief, the complaints of early onset failures continued in
`
`2014. Some examples include “revision due to tibial loosening,” “tibial loosening,” “revision of
`
`optetrak knee components due to tibial loosening,” “revision due to pain and loosening,” “revision
`
`of optetrak knee components due to aseptic loosening,” several reports described as “revision of
`
`knee components due to tibial loosening,” and “revision of optetrak knee components reportedly
`
`due [to] aseptic loosening.”
`
`78.
`
`The general practice in orthopedic implant surgeries generally, and with Exactech
`
`implants specifically, is for the sale representative of the manufacturer, in this case Exactech’s
`
`authorized representative and agent, hereinafter “the sales rep,” to be present at the time of surgery
`
`to provide implant components to the surgeon, relieving the hospital of the responsibility for having
`
`on stock all potential sizes and components that may be needed in surgeries. This practice includes
`
`the original implant surgery and any revision surgery.
`
`79.
`
`The sales reps of Exactech observed many instances of premature failures of the
`
`Device with plain evidence upon revision of polyethylene debris that needed to get removed, a/k/a
`
`“debrided,” visible bone loss or osteolysis and plainly loose components that were easy to remove
`
`due to lack of fixation. Often these sales reps would take the component from the surgeon to return
`
`to the company for inspection and analysis.
`
`80.
`
`The sales reps of Exactech were under a duty to report these findings to the
`
`engineering and medical departments of Exactech who were under a duty to then do an
`
`investigation, analyze the removed component when available, also known as “retrieval analysis,”
`
`and honestly and thoroughly report such findings to the FDA and the surgeons.
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`81.
`
`Despite Defendants’ knowledge of early onset failures of the Optetrak Device,
`
`Defendants continued to manufacture, promote, and distribute the Device without alerting
`
`surgeons, patients, or the FDA of the potential increased risks of early onset failures of the Optetrak
`
`Device.
`
`82.
`
`Defendants never changed the labeling, marketing materials, or product inserts to
`
`adequately and accurately warn patients or physicians of the associated increased risks of early
`
`failure due to loosening and/or polyethylene wear.
`
`83.
`
`Not until August 30, 2021 did the Defendants take some action and issue a partial
`
`recall of all Optetrak All-polyethylene tibial components,
`
`including the OPTETRAK All-
`
`polyethylene CC Tibial Components; OPTETRAK All-polyethylene CR Tibial Components;
`
`OPTETRAK All-polyethylene CR Tibial Sloped Components; OPTERAK All-polyethylene PS
`
`Tibial Components; OPTETRAK HI-FLEX PS Polyethylene Tibial Components; OPTETRAK
`
`Logic All-polyethylene CR Tibial Components; OPTETRAK Logic All-polyethylene CRC Tibial
`
`Components; OPTETRAK Logic All-polyethylene PSC Tibial Components; OPTETRAK Logic
`
`Modular PS Tibial Components; OPTETRAK Logic RBK PS Tibial Components; TRULIANT
`
`CR Tibial Inserts; TRULIANT CRC Tibial Inserts; TRULIANT PS Tibial Inserts; and
`
`TRULIANT PSC Tibial Inserts.
`
`84.
`
`In issuing the August 2021 partial recall, Defendants stated that inserts were
`
`packaged in vacuum bags that lacked an additional oxygen barrier layer. See Class 2 Device Recall
`
`OPTETRAK
`
`Comprehensive
`
`Knee
`
`System,
`
`FDA
`
`(Oct.
`
`4,
`
`2021),
`
`https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfRes/res.cfm?ID=189266 (last visited
`
`Jan. 21, 2023).
`
`85.
`
`According to the FDA website, “Exactech began notification to distributors and
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`sales representatives on about 08/30/2021 via letter titled "URGENT MEDICAL DEVICE
`
`RECALL." Actions being taken by Exactech included removing all Knee and Ankle UHMWPE
`
`products labeled with an 8-year shelf life and not packaged in EVOH/Nylon bags. This will be
`
`performed in a phased approach over the next 12 months. Phase 1 includes immediately return all
`
`knee and ankle UHMWPE devices labeled with an 8-year shelf life that will be 5 years old or older
`
`by 08/31/2022 not packaged in EVOH/Nylon bags. Phase 2 includes, between 05/31/2022 to
`
`08/31/2022, returning all remaining knee and ankle UHMWPE devices labeled with an 8-year
`
`shelf life not packaged in EVOH/Nylon bags.” Id.
`
`86.
`
`Despite initial communications with distributors and sales representatives,
`
`Defendants did not issue any communications to surgeons who had implanted Device with a
`
`recalled polyethylene component or to patients who had received an Device with a recalled
`
`polyethylene component until months later in February 2022.
`
`87.
`
`On February 7, 2022, Defendants issued an “Urgent Medical Device Correction”
`
`in which it informed health care professionals that:
`
`After extensive testing, we have confirmed that most of our inserts manufactured
`since 2004 were packaged in out-of-specification (referred to hereafter as “non-
`conforming”) vacuum bags that are oxygen resistant but do not contain a secondary
`barrier layer containing ethylene vinyl alcohol (EVOH) that further augments
`oxygen resistance. The use of these non-conforming bags may enable increased
`oxygen diffusion to the UHMWPE (ultra-high molecular weight polyethylene)
`insert, resulting in increased oxidation of the material relative to inserts
`packaged with the specified additional oxygen barrier layer. Over time,
`oxidation can severely degrade the mechanical properties of conventional
`UHMWPE, which, in conjunction with other surgical factors, can lead to both
`accelerated wear debris production and bone loss, and/or component fatigue
`cracking/fracture, all leading to corrective revision surgery.
`
`See Letter from Darin Johnson, President & CEO, Exactech and Sharat Kusuma, Senior
`Vice President & Chief Medical Officer, Exactech, to Exactech Surgeons, Urgent Medical
`Device Correction (Feb. 7, 2022) [hereinafter Exactech Recall Letter], attached hereto as
`Exhibit A.
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`88.
`
`The “Urgent Medical Device Correction” went on to further state that Defendants
`
`were expanding the recall to include all knee arthroplasty polyethylene inserts packed in non-
`
`conforming bags regardless of label or shelf life. The components subject to the recall now
`
`included: OPTETRAK®: All-polyethylene CR Tibial Components, All-polyethylene PS Tibial
`
`Components, CR Tibial Inserts, CR Slope Tibial Inserts, PS Tibial Inserts, HI-FLEX® PS Tibial
`
`Inserts;