A federal judge rejected a $296 million plea agreement between the U.S. Justice Department and Boston Scientific Corp. subsidiary Guidant Corp. over faulty implantable defibrillators Tuesday.

The company pleaded guilty to two misdemeanors for failing to properly notify the U.S. Food and Drug Administration about potentially "catastrophic" short-circuiting problems in its defibrillators last month.

Charles Zimmerman, the lead counsel for the plaintiffs, told DOTmed News that this rejection is a victory for his clients.

"The court is saying that the agreement they came up with isn't sufficient," he said. "It doesn't meet the needs of justice."

Specifically, the misdemeanors refer to making a materially false statement about Guidant's Ventak Prizm 2DR implantable defibrillator and failing to notify the agency of a correction to its Contak Renewal defibrillators, according to a Mass Device report.

As a result of the implantable defibrillator flaws, which Guidant knew about and tried to fix without contacting the FDA, several patients died, according to court documents. But this case only looks at the company's failure to notify the FDA about the devices' flaws.

Judge Donovan Frank of the U.S. District Court for Minnesota rejected the plea deal because he said it would not address the issue of Guidant hiding problems with the devices.

"The court concludes that two provisions of the plea agreement ... are not in the best interests of justice and do not serve the public's interests because they do not adequately address Guidant's history and the criminal conduct at issue," Frank wrote, according to Mass Device.

Instead, the court believes a period of probation will benefit both the company's public image and the public interest.

"For instance, as a condition of probation, Guidant, through Boston Scientific, could be ordered to perform community service designed to repair the harm caused by its offenses, namely to help build the public's confidence in the FDA regulation process, the medical device manufacturers' quality control efforts and the cardiac health care industry in general," Frank wrote.

Boston Scientific, which bought Guidant in 2006 for $26 billion - prior to the time the incident surfaced - reportedly settled for $240 million in a confidential settlement among the 8,550 plaintiffs about two years ago.

"We've already entered into a settlement with Guidant," Zimmerman told DOTmed News last month. "They paid a very large sum of money, but it didn't make all the victims whole."

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