A Medical Device Daily

MannKind (Valencia, California) reported today that it has reached a final resolution in the civil litigation filed by its former chief medical officer, Dr. Wayman Wendell Cheatham.

The company said Cheatham filed a complaint in May 2005, alleging causes of action for wrongful termination in violation of public policy and breach of contract, following the termination of his employment on May 2, 2005. A trial on these matters began on April 30 and concluded June 5.

"The complaint and allegations have been dismissed. I have confidence in MannKind Corporation and its Technosphere Insulin product," Cheatham said in a statement.

MannKind develops therapeutic products for patients with diseases such as diabetes and cancer. Its lead product, the Technosphere Insulin System, is currently in Phase III clinical trials in the U.S., Europe and Latin America to study its safety and efficacy in the treatment of diabetes.

In other legalities, a federal appeals court has affirmed a $2.1 million award to American Laser Vision (Houston) stemming from a contract dispute with The Laser Vision Institute (LVI; Lake Worth, Florida), a national chain of laser vision centers. The appeals court ruled that there was no basis to second-guess the arbitrator's initial ruling.

"We have felt all along that the arbitrator's ruling on this case was correct," said Randy McClanahan, a partner at the firm of McClanahan & Clearman (Houston) representing American Laser Vision. "Arbitration was intended to allow for a quick resolution of commercial disputes. Instead of the 60 days that the parties agreed to resolve their dispute by arbitration, this case has taken over four years and included an appeal to the United States Court of Appeals for the Fifth Circuit."

In August 2004 American Laser reported that an arbitrator from the American Arbitration Association (New York) handed down the $2.1 million award Aug. 20, 2004. LVI was ordered to pay to American Laser damages of $1,842,220 and attorneys' fees of $148,940, plus pre-judgment interest (Medical Device Daily, Aug. 25, 2004).

A federal district court later upheld the award and the Fifth Circuit affirmed the decision, American Laser said.

In February 2002, American Laser entered into agreements with LVI for board-certified ophthalmologists to perform laser surgeries - and to be solely responsible for those services - and LVI would manage the centers' non-medical operations. In October 2003, American Laser sought arbitration, claiming that LVI interfered with the surgeons' medical procedures and professional judgment. Specifically, it contended that LVI employees understated the chance that a patient would need follow-up surgery and used non-refundable deposits in an effort to coerce patients into buying the laser surgery.

American Laser also claimed that LVI interfered with surgical protocol by changing surgical supplies without notifying the doctors, changed prescriptions without notification, altered post-operative care and interfered with sterile surgical techniques.

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