A fight has erupted in the Pinnacle hip implant litigation over how much settlement money should be held back for the leadership committee, with some attorneys saying the leadership’s request threatens to derail thousands of settlements, and the leadership replying that the objectors’ “true motivation” is “enhancing their fees.”
The dispute came to a head after U.S. District Judge Ed Kinkeade of the Northern District of Texas agreed last month to increase the percent that needed to be held back from settlement awards.
Kinkeade had previously imposed a 10 percent holdback on awards, but, with about a third of the litigations’ 10,000-case inventory recently settling, Kinkeade agreed to increase the holdback to 25 percent. In his order issued issued Dec. 9, Kinkeade said he would agree to the higher percentage ”in an exercise of prudence,” since he did not yet know the estimated settlement amounts.
Since then, dozens of law firms, some representing the 3,000 plaintiffs who agreed to settle, others representing plaintiffs whose cases are still being litigated, have objected to the court’s preliminary setback.
Law firms representing the plaintiff’s executive committee, however, are fighting back against the objectors.
In a strongly worded brief filed last month that called out the performance of several objectors who are also on the plaintiffs’ steering committee, the executive committee said the reason the holdback should be increased is because the expected settlement figures appear to be low.
“There is an inverse relationship between a holdback percentage and settlement amount: holdback percentages increase as the settlement amount decreases and vice versa,” attorney W. Mark Lanier of The Lanier Law Firm in Houston said in a 28-page filing on behalf of the plaintiffs’ executive committee. “It is the objectors who have agreed to the lower figure, and now drolly complain that this has resulted in an inevitable holdback increase.”
Two attorneys leading a contingent of 29 firms representing settling plaintiffs have since asked the court to strike the executive committee’s response, calling it “misplaced and a waste of the court’s time.”
“It is an attempt to shift focus from the reasonableness of the common benefit holdback to a veiled suggestion of underlying ethical abuse; allegations which are baseless, irrelevant and not germane to the issue before this court,” Douglas Kreis of Aylstock, Witkin, Kreis & Overholtz said in the Dec. 28 filing.
The leadership committee hit back on Monday, saying, among other things, that “if anything should be struck, it is the [settling plaintiffs counsel's] motion with its many obvious inaccuracies.”
The litigation involving the allegedly defective hip implant has been a blockbuster for plaintiffs when it comes to trials. With Lanier acting as lead trial lawyer, juries have so far awarded plaintiffs more than $1.75 billion.
The litigation has also been very contentious, with Lanier and his team complaining of improper conduct and frivolous objections, and lawyers for the hip implant maker, Johnson & Johnson’s DePuy Orthopaedics Inc., accusing plaintiffs attorneys of misleading the jurors and springing new evidence on them in a “trial by ambush.” The U.S. Court of Appeals for the Fifth Circuit also tossed out a more than $500 million verdict and said Lanier had engaged in “unequivocally deceptive” conduct.
Regarding the holdback issue, DePuy has also objected to the executive committee’s 25 percent holdback request.
Echoing sentiments from several other firms that filed objections, DePuy contended that the holdback has brought “to a screeching halt” settlement efforts by more than 100 attorneys, representing more than 3,000 plaintiffs.
“The irony here is that … any such fund will be far smaller, by discouraging settlements, and that the plaintiffs’ executive committee’s fees and costs will be far higher, by dragging this litigation out farther,” Stephen Harburg of Skadden, Arps, Slate, Meagher & Flom said in DePuy’s objection.
The dispute involving holdbacks mirrors, in some ways, another recent dispute that has reared up recently in the pelvic mesh MDL. In that MDL, which involved more than 100,000 cases at its peak, attorneys have also contested that the leadership committee has sought to hold back too much money from the awards. However, objecting attorneys in that litigation have argued that the leadership is not entitled to a significant holdback, because those cases are allegedly settling for very little.
A spokeswoman for J&J declined to comment about the holdback dispute in the hip implant cases. Lanier, Harburg and Kreis also each did not return a call seeking comment.