The settlement stems from a multiyear-long legal saga. A criminal investigation against the company was initiated in 2010 and concluded in 2019 with no charges filed against Reliance. A 2014 government civil lawsuit alleged that Reliance Medical paid physician investors to use its products based on the volume of units sold.
Reliance argued the civil lawsuit should be dismissed since Congress delegated lawmaking power by relying on an Office of Inspector General advisory about the legality of physician-owned distributorships in the suit. However, the devicemaker lost its bid in August 2021.
Reliance Medical went to trial May 4, and the parties reached a settlement, including the $1 million payment, on May 5, Mr. Hooper, of Hooper, Lundy & Bookman, said in a May 10 email. Additionally, Reliance obtained a release from all past conduct and assurance the OIG won’t initiate any exclusion proceedings against the devicemaker.
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