Guidant Corporation - Securities Class Action

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Copyright (c) 2001
Stanford Law School

Guidant Corporation Conclusion: According to an article dated February 29, 2008, Guidant Corp. has won dismissal of a purported securities class action that alleged the medical device company glossed over problems with its defibrillators and their impact on Guidant's potential merger with Johnson & Johnson, leading investors to suffer billions of dollars in losses. Judge Sarah Evans Barker of the U.S. District Court for the Southern District of Indiana granted Guidant’s motion to toss the case Wednesday, saying that the putative class complaint did not go far enough to show how the company allegedly misled investors. Boris Feldman, an attorney representing Guidant, said Judge Barker's decision on Wednesday closes the case, and the plaintiffs’ only recourse is to appeal the decision.

On April 5, 2006, the Court entered the Order signed by U.S. District Judge Sarah Evans Barker consolidating all related actions, appointing lead plaintiffs, and approving selection of plaintiffs’ lead counsel. On June 2, 2006, the plaintiffs filed a Consolidated Complaint, and a Corrected Consolidated Complaint on June 8, 2006. The defendants filed their motion to dismiss the Plaintiffs' Consolidated Complaint on August 15, 2006. The motion is currently pending before the Court.

The original complaint alleges that Guidant and certain of its officers and directors violated provisions of the Securities Exchange Act of 1934, causing the Company's stock price to become artificially inflated. On December 15, 2004, Guidant entered into a $24.5 billion merger deal with Johnson & Johnson . According to the complaint, while the Company pointed to its defibrillator business as a key component of that deal, it concealed from investors significant unaddressed product defect and liability issues of the Company's implantable defibrillator product lines.

On June 17, 2005, the FDA issued a nationwide recall notification impacting Guidant's implantable defibrillators and cardiac resynchronization therapy defibrillators. Within that notification, the FDA advised the public that the malfunction of Guidant's devices could lead to a serious, life- threatening event for a patient. On July 18, 2005, the FDA published a "Recall - Firm Press Release" on its website, that now revealed the Company's knowledge of pacemaker-related defects. In the recall publication, Guidant warned physicians and patients to seek replacement of at least nine different cardiac pacemaker models and product lines.

The complaint further alleges that Johnson & Johnson representatives subsequently revealed to the investment community that, as of October 18, 2005, it was seeking alternatives to the merger deal in earnest, as a direct result of the "developments" at Guidant. On November 2, 2005, Johnson & Johnson warned that it might withdraw from the merger deal due to broad product recalls and a regulatory agency investigation. Finally, on November 3, 2005, the Attorney General of the State of New York filed a complaint, alleging "repeated and persistent fraud" by the Company in connection with its defibrillator sales. As investors learned the truth about the allegations of fraud made by the State of New York, the Company's shares tumbled from $60.40 on November 2, 2005, to as low as $57.05 per share in heavy trading.

INDUSTRY CLASSIFICATION:
SIC Code: 3841
Sector: Healthcare
Industry: Medical Equipment & Supplies

COMPANY/ISSUER NAME:	Guidant Corporation
COMPANY/ISSUER TICKER:	GDT
COMPANY WEBSITE:	http://www.guidant.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

John J. Sisk, et al. v. Guidant Corporation, et al.

COURT: S.D. Indiana	DOCKET NUMBER: 05-CV-01658
JUDGE NAME: Hon. Sarah Evans Barker
DATE FILED: 11/03/2005	SOURCE: Notice of Filing
CLASS PERIOD START: 12/15/2004	CLASS PERIOD END: 11/03/2005
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Berman DeValerio Pease Tabacco Burt & Pucillo (MA) One Liberty Square, Boston, MA, 02109 (voice) 617.542.8300, (fax) , Brodsky & Smith, LLC 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004 (voice) 610.668.7987., (fax) 610.660.0450, esmith@Brodsky-Smith.com Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego) 655 West Broadway, Suite 1900, San Diego, CA, 92101 (voice) 619.231.1058, (fax) 619.231.7423, Provost & Umphrey Law Firm, LLP 3232 McKinney Avenue, Suite 700, Dallas , TX, 75204 (voice) 214.744.3000, (fax) 214.744.3015, info@provostumphrey.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Scott & Scott LLC P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415 (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.com Stull, Stull & Brody (New York) 6 East 45th Street, New York, NY, 10017 (voice) 310.209.2468, (fax) 310.209.2087, SSBNY@aol.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 8

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violations of Federal Securities Laws
Type: Complaint		Date on the document: 11/04/2005

REFERENCE COMPLAINT

In Re: Guidant Corporation Securities Litigation

COURT: S.D. Indiana	DOCKET NUMBER: 05-CV-01658
JUDGE NAME: Hon. William T. Lawrence
DATE FILED: 06/08/2006	SOURCE: Docket
CLASS PERIOD START: 12/01/2004	CLASS PERIOD END: 10/18/2005
TYPE OF COMPLAINT: Consolidated and/or Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Cohen & Malad, LLP 136 North Delaware - Suite 300, Indianapolis, IN, 46204 (voice) 317.636.6481, (fax) 317.636.2593, Provost & Umphrey Law Firm, LLP 3232 McKinney Avenue, Suite 700, Dallas , TX, 75204 (voice) 214.744.3000, (fax) 214.744.3015, info@provostumphrey.com Scott & Scott LLC P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415 (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Complaint for Violation of the Federal Securities Laws with Corrections
Type: Complaint		Date on the document: 06/08/2006
Order Granting Defendants' Motion To Dismiss And Denying Plaintiffs' Motion To Strike
Type: Order		Date on the document: 02/27/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 02/28/2008

OTHER DOCUMENTS
Class Action Complaint - Jury Trial Demanded
Case Name and/or Number: David Palan, et al. v. Guidant Corporation, et al.
Type: Complaint		Date on the document: 11/08/2005
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Yakov Blyakhman, et al. v. Guidant Corporation, et al.
Type: Complaint		Date on the document: 11/18/2005
Class Action Complaint for Violation of the Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Iron Workers Of Western Pennsylvania Pension Plan, et al. v. Guidant Corporation, et al.
Type: Complaint		Date on the document: 11/29/2005

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