J&J Reportedly Considering $3B Defective Hip Settlement

Lawyers preparing for trial in product liability cases, such as Searcy Denney, can never comment on settlement talks – but that has not stopped Bloomberg News from speculating that Johnson & Johnson may be close to offering more than $3 billion to settle its recalled him implant cases in the U.S.

That money would be directed to at least 11,500 lawsuits bringing each claimant at least $300,000 and is about 50 percent more than had been previously discussed.

But speculators need to realize that the healthcare giant has seven defective product trials to conduct between September and January, and the outcome of those proceedings will determine which way the settlement wind blows. If Johnson & Johnson wins those cases, or the plaintiffs do not prove the product was defective, then the settlement talks could be just that. Meanwhile good plaintiffs’ attorneys never stop preparing for trial.

The company must take into consideration the risk benefit ratio of continuing with the trials. So far, the first ASR trial conducted in Los Angeles resulted in an $8.3 million verdict for the plaintiff. What was equally important to establish was the jury decided the ASR hip prosthesis was defectively designed. The jury decided there were adequate warnings to the end user, that is the physician and that punitive damages are off the table. J&J won the second trial rejecting the defective design claim of an injured nurse who had been implanted with an ASR hip.

According to J&J any talks about settlement are premature, which is what a company says when it is determining whether it can reasonably forego a settlement and instead try each case individually on its merits. With thousands of cases waiting, that option is usually less likely.

The bottom line is unless any talk of a settlement comes from the lead trial attorneys preparing these cases is just a guess and speculation.

The hip implants in question are the DePuy ASR which was recalled in August 2010 affecting about 93,000 units worldwide. J&J said the ASR XL Acetabular System had a 13 percent failure rate with a 12 percent belong to the ASR Hip Resurfacing System. Of that number, approximately 37,000 had been implanted in U.S. patients. Those patients are wondering if they will be among the high percentage that fail within five years due to high levels of chromium and cobalt shedding from the metal-on-metal implant. So far the ASR devices have cost J&J about $993 million on testing and reimbursement costs and on educating patients and surgeons about the recall, according to Bloomberg. The company must alert stockholders and set aside a certain amount to settle product liability lawsuits.

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September 9th all eyes will be on federal court in Cleveland as Ann McCracken’s ASR case becomes the focus of both sides. She had two revision surgeries after receiving the DePuy ASR metal-on-metal hip. Each revision becomes more and more difficult as the revision removal also removes once viable muscle, tissue and bone. Infections can go unresolved indefinitely and necrotic (dead) tissue, pseudotumors may never be resolved.

Internal J&J documents shown at the Los Angeles trial showed company executives estimated about 40 percent of those receiving the ASR will need to have it removed (revised) and replaced within five years.

It is the extremely injured patients who have the most to lose and ultimately the most to gain under and compensatory damages award, but ultimately, there is no amount of money that is ever enough to make that person ‘whole” again, that is really compensate them for their lost health.