Just weeks after DePuy Orthopaedics Inc. announced a $2.5 billion settlement to resolve the bulk of the litigation over its recalled hip implants, some lawyers have raised concerns about the thousands of patients excluded from the deal and the process that determines how the plaintiffs will be compensated.
The settlement resolves about 8,000 lawsuits filed nationwide against DePuy, a unit of Johnson & Johnson. DePuy agreed to provide a $2.475 billion cash fund to compensate patients for costs associated with “revision surgeries,” or those designed to remove its implants — the “ASR XL” or “ASR resurfacing devices,” which plaintiffs claimed caused pain, clicking and grinding of the hips, as well as high metal content in blood tests.
The deal, announced at a Nov. 19 hearing in Toledo before U.S. District Senior Judge David Katz, also includes up to $1 billion in reimbursements to health care insurance firms that paid for those surgeries.
But plaintiffs in about 4,000 cases won’t be eligible to participate in the settlement, which is also contingent on at least 94 percent of patients submitting claims. DePuy has the right to walk away if too many opt out.
Some already have raised concerns about the settlement.
“We have many, many clients who are outraged about it,” said Felecia Stern, a partner at New York’s Bernstein Liebhard. Stern said her firm has hundreds of clients, the majority of whom would be eligible to participate in the settlement.
The settlement didn’t come ­quickly. More than 93,000 ASR metal-on-­metal hip implants have been implanted in patients worldwide. DePuy ­voluntarily recalled the devices in 2010 after the United Kingdom’s National Joint Regis­try found that the rate of patients who had to return to surgery after five years — called the revision rate — was 12 to 13 percent, much higher than the industry standard.
But the company nonetheless fought the litigation, most of which was coordinated before Katz in a federal multidistrict litigation proceeding to handle pretrial rulings and motions.
DePuy lost an $8.3 million verdict on March 8 in Los Angeles in a case brought by Loren Kransky, but won a defense verdict on April 16 against a Chicago woman named Carol Strum. The company then began quietly settling bellwether cases that had been scheduled for trials in September and October in state courts in New Jersey and California.
DePuy attorney Susan Sharko, a partner in Drinker Biddle & Reath’s Florham Park, N.J., office, called the litigation “a very long and winding road,” according to a transcript of the settlement hearing before Katz. “It was a very hard fought negotiation over many months. We argued and debated over pretty much every word and every concept.”
Under the deal, each participant could receive a $250,000 base payment, which covers the costs of the surgery and pain and suffering. But payouts could be reduced based on a myriad of factors, such as age or weight. They also could be increased for extraordinary injuries, like whether the patient suffered a heart attack or stroke during surgery. Up to $475 million has been set aside for those extra costs.
But critics contend that the settlement’s compensation system is unclear.
“There are gates people have to go through that can boost them up, that can boost them down,” said W. Mark Lanier, founder of The Lanier Law Firm in Houston. “It’s not, ‘OK, this is what you’re going to get: X number of dollars. Do you want it or not?’ It’s, ‘Hey, here’s the process. Find out later what you’re going to get.’ “
Some of Stern’s clients, for instance, lost their jobs due to problems with their implants, or while recovering from surgery — and the settlement doesn’t clarify whether lost wages are covered, she said.
She also raised concerns about those excluded from the deal. Under its provisions, those who either had surgery after Aug. 31, 2013, or haven’t had surgery at all to remove the implants, aren’t eligible. One of her clients, for instance, had surgery in August to replace an ASR device in one hip, which would be paid for, but the other hip is scheduled for surgery this month — long past the settlement’s deadline. Another client had too much damage from the implant to undergo a revision surgery and is now in a wheelchair, she said.
The settlement also excludes more than 5,000 lawsuits over DePuy’s Pinnacle hip device, which was not recalled. U.S. District Judge Ed Kinkeade in Dallas is preparing bellwether cases in that docket for trial next year.
Lanier, who is co-lead counsel in that litigation, said he would not recommend a similar settlement in the Pinnacle cases. As to his 500 ASR clients, he anticipated that at least 90 percent of them would not be part of the Nov. 19 settlement — though he hesitated to say whether they would officially opt out of the program.
“I’ve got a number of lawyers asking me if they can join forces with me,” he said. “At this point in time, that decision has not been made, but that’s certainly the direction we’re leaning.”
Participation is critical in the settlement. Under the terms of the deal, DePuy has the right to walk away by June 1, 2014, should less than 94 percent of eligible patients make claims. Claims are due on April 1, 2014.
Despite the critics, lawyers behind the deal were optimistic about its outcome and the prospect that those left out might be part of another settlement down the road.
“I would expect that once the dust settles on this settlement, and it’s running, operating, we’ll be talking about the remaining cases,” said Ellen Relkin of Weitz & Luxenberg in New York, co-lead counsel for the plaintiffs’ steering committee.
Contact Amanda Bronstad at email@example.com.