Judge Sarah Evans Barker dismissed the case late last month, saying the investors didn't produce enough evidence to show the executives deceived them.
The investors claimed they bought stock at inflated prices as a result of Guidant's not disclosing the problems.
Five suits were consolidated in the U.S. District Court of the Southern District of Indiana in March 2006,. Investors bringing the case in Indianapolis bought Guidant stock between Dec. 1, 2004, and Oct. 18, 2005.
Guidant was headquartered in Indianapolis until it was acquired in 2005 by Boston Scientific Corp., another medical device company based in the Boston area.
Boston Scientific paid $27 billion to win a bidding war against Johnson & Johnson. Johnson & Johnson began acquisition talks with Guidant in spring 2004.
The plaintiffs claimed Guidant continued issuing positive news about the company's growth prospects even as problems with the defibrillators and pacemakers began to emerge.
The first of several deaths caused by faulty defibrillators occurred in March 2005. Guidant eventually recalled tens of thousands of certain models of defibrillators, which deliver electronic shocks to correct heartbeats.