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The clock is running down on a federal injunction that essentially froze pending lawsuits filed by patients in Alameda County, Calif. and elsewhere who complained of defective hip and knee implants. The injunction, which expires Feb. 1, was intended to give attorneys in the federal class action breathing room to finalize a proposed settlement for all U.S. plaintiffs. However, local plaintiffs’ attorneys around the country, including California firms like San Francisco’s Lieff Cabraser Heimann & Bernstein, blasted the proposed deal — which, depending which side you ask, was worth anywhere from $600 million to $780 million. Now, attorneys for patients and implant manufacturer Sulzer Orthopedics Inc. are negotiating again — this time with state court attorneys at the table — to hammer out a better deal. Meanwhile, attorneys are preparing to return to an Oakland, Calif., courtroom on Thursday to set trial dates for the first set of California cases, which will be heard by Alameda County Superior Court Judge Ronald Sabraw. “That’s a good thing,” said Oakland-based Crosby, Heafey, Roach & May attorney Kenneth Seeger of the newly configured talks. “This means that the settlement will be more inclusive, and that there will be greater participation” in the settlement from local attorneys, said Seeger. Critics of the initial plan say Austin, Texas-based Sulzer came up with too little money: $600 million, and a third of it company stock. Plus, the company’s assets would be protected by a series of liens which would keep the money out of the reach of plaintiffs who opt out of the settlement. In addition, Sulzer would not be barred from the assets for its business purposes, said Luke Ellis, an Orinda, Calif., attorney who represents one of the plaintiffs. Lawyers now await a financial expert’s report, which will help determine if Sulzer is capable of pitching more money into the settlement, said Lieff Cabraser’s Richard Heimann. Heimann says that the company, which could go bankrupt as a result of the suit, may not have the cash. “We are very much concerned that they will not be able to come up with enough money,” he said. Another complaint by plaintiffs was that the deal tried to force a “cookie cutter” settlement scheme on the plaintiffs with assorted medical problems, said Ellis. He represents several plaintiffs, including an AIDS patient whose health allegedly deteriorated after he got a bad hip implant. The Sulzer hip implants, which were voluntarily recalled by the manufacturer in December 2000, have an oily residue that prevents them from bonding with body tissue. Defective implants grind painfully in the hip socket. Knee implants made the same way were later taken off the market. Under the initial proposed settlement, Ellis explained, patients who had serious medical complications after they underwent “revision” surgery to fix the problem got the same amount of money — $60,000 — as patients who had no medical problems after the procedure. People who had two such surgeries received about $90,000. Seeger, the Sulzer attorney, said, “Did I think that was unfair? No.” However, he added, if the plaintiffs want to discuss other possibilities, “that’s OK too.” He also hinted that some attorneys’ complaints may also have been motivated by their fees. “Plaintiff lawyers fees will be based on how much involvement that they have,” said Seeger, who said “tens of millions of dollars” in fees are at stake. Seeger stressed that many attorneys, such as Heimann of Lieff Cabraser, have “high standards” for the settlement and strong convictions about their clients. However, he said, the initial proposed settlement paid attorneys based on their clients’ injuries. In addition to that, eventually the federal judge will divvy up more attorneys fees based on how much each lawyer participated in the final class action settlement. Since local attorneys were left out of the loop in the initial deal, they would have lost out on a great deal of that fee money, Seeger said. During the Sulzer legal odyssey, judges have struggled with jurisdictional issues. Last year Ohio U.S. District Judge Kathleen O’Malley, who presides over the federal suits, stayed the state courts cases. Later, Sabraw ruled that O’Malley’s order conflicted with the rights of several seriously ill California plaintiffs. Under state law, the litigants can get a speedier trial. This fall, the 6th U.S. Circuit Court of Appeals lifted O’Malley’s injunction, questioning whether the injunction eroded plaintiffs’ due process rights. Then the court reinstated the injunction but agreed to hear oral arguments. But now lawyers on both sides have agreed to allow the injunction to expire at the end of this month. The legal saga also involves notable Bay Area players: Oakland’s Crosby, Heafey, which is the defense counsel for Sulzer; and San Francisco’s Lieff Cabraser, which represents several patients. Now the California cases seem poised to move toward trial, and renewed negotiations — this time with a bigger pool of local plaintiffs’ attorneys — continue. “We all want the settlement to be fair,” Seeger said.

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