A Manhattan federal judge on Wednesday awarded $1.5 million in attorney fees to a former executive of Avalign Technologies Inc., who blew the whistle on the medical devices manufacturer in 2014 for selling products that were not cleared by federal regulators.

The lawsuit, filed by Mary Bixler Wood, Avalign's former vice president of quality and regulatory affairs, led to a $9.5 million settlement last year with Manhattan federal prosecutors, who intervened in the case in August.

According to the lawsuit, Avalign had submitted reimbursement claims for products it claimed qualified for an exception to the Medical Device Regulations Act, which waives approval by the Food and Drug Administration for devices that were sold prior to 1976. Avalign and a subsidiary later admitted as part of the settlement that its product did not qualify for the exemption.

Wood received a 21% share of that settlement, as well as an earlier agreement with a purchaser of Avalign's medical devices. Both settlements were limited to Wood's "pre-amendment" claims, and Avalign continues to contest other allegations that were not subject to the settlements.

Fees were awarded in favor of the whistleblower and attorneys from Harter Secrest & Emery in Albany.

Last November they asked U.S. District Judge Edgardo Ramos of the Southern District of New York to approve $2.2 million in attorney fees, plus another $4.2 million in costs related to the settled claims.

Ramos, however, approved $1.5 million in fees after finding that that Wood's request appeared to include fees not just for work related to both the successful claim but also claims that are still being litigated.

"Given the imprecise nature of numerous time entries, as well as some block billing, it is impossible for the Court to determine whether such work did, indeed, advance the settlements," he said. "Nor has Relator adequately explained how work done advancing other claims necessarily contributed to the settlements."

Still, Ramos took issue with Avalign's request to slash attorney hours by up to 90% and held that just a 30% reduction in the requested hours was sufficient to "do rough justice" in the case. The analysis applied the Second Circuit's so-called "forum rule," which can allow in-district rates for work done by out-of-town firms.

In addition to the $1.5 million in attorney fees, Ramos awarded Wood nearly $2,800 in other costs associated with litigating her claims.

Attorneys from both sides were not immediately available to comment.

Wood was represented by Brian M. Feldman of Harter Secrest & Emery. Avalign is represented by Suchira Ghosh, Rachael Hunt, Michael Shumsky and Anne Walsh of Hyman, Phelps & McNamara in Washington, D.C.

The case was captioned U.S. v. Avalign Technologies.

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