After months of scrambling to salvage its image after its Riata defibrillator lead-wires were found to be the cause of 20 patient deaths, and further questions over its Durata leads, St. Jude Medical is now facing a shareholder lawsuit over the quality of its Durata cardio-defibrillator wires. The lawsuit is directed at CEO Daniel J. Starks, Executive Vice President John C. Heinmiller, and Chief Financial Officer Donald J. Zurbay, who have been accused of lying about the leads specifically to increase share value.

According to the complaint filed Dec. 10 by a Canton, Mass.-based Norfolk County Retirement System, a public employee pension plan, “Defendants made false and misleading statements, and concealed material information relating to the safety, durability, and manufacturing processes” of the Durata leads. “As early as October 19, 2011, defendants made positive statements about the safety and efficacy of Durata Leads despite being aware that they suffered similar design flaws and presented similar risks to Riata.”

The lawsuit was filed in a Minneapolis federal court, and seeks group status for anyone who acquired stock in the St. Paul, Minn.-based company between Oct. 19, 2011 and Nov. 20, 2012. If group status is established, the claim can be filed as a class-action lawsuit.

In a conference call on Oct. 17, Starks told shareholders that the company anticipates a regulatory warning letter from the U.S. Food and Drug Administration (FDA). The announcement caused the company’s shares to drop in value by 6 percent. The warning came just before the FDA inspected St. Jude’s manufacturing facility in Sylmar, Calif. (near Los Angeles) that manufactures defibrillators. Sure enough, on Nov. 21, the FDA publicly criticized the company’s method of testing the Durata wires, and St. Jude’s shares fell $4.34 or 12 percent.

Despite the company’s apparent lack of surprise at the FDA’s findings, St. Jude is maintaining its innocence. The company believes “the lawsuit is without merit” and will fight the allegations, company spokeswoman Amy Jo Meyer told Bloomberg.

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