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Johnson & Johnson Considering Settling Hip Litigation

According to a recent article by Bloomberg, Johnson & Johnson has discussed paying more than $3 billion to settle lawsuits over its recalled hip implants. J&J seeks to resolve as many as 11,500 lawsuits in the U.S. and has considered paying more than $300,000 per case, according to some people close to the litigation. Michael Kelly, attorney for plaintiff Loren A $3 billion settlement would dwarf a 2001 accord Sulzer (SUN) agreement reached with patients who claimed that company's hip and knee implants were defective. Any settlement would be affected by the outcome of seven product-liability trials between September and January, according to the people, who aren't authorized to make the negotiations public.

The company is pushing to resolve U.S. cases by early next year, according to the people. J&J's DePuy unit recalled 93,000 implants in 2010, including 37,000 in the U.S., after more than 12 percent failed within five years. That rate is climbing, along with suits by patients blaming the chromium and cobalt devices for pain, metal debris and replacement surgeries.

"With the trials rapidly approaching, and our continuing efforts to obtain more information and data about the patients, it's easy to speculate about settlement," Skikos said in an e-mail. "However, any comment relating to settlement that does not come from the plaintiff's leadership, the court, or from the company itself remains premature, uninformed and a dangerous guess."

J&J lost an $8.3 million verdict in the first trial over the ASR device and won the second. In the first case, a California jury in March awarded damages to a retired Montana prison guard. The panel also ruled the device was defectively designed, that DePuy properly warned of the risks, and that the company didn't owe punitive damages. DePuy is appealing. A Chicago jury ruled six weeks later for DePuy in rejecting a defective design claim by an Illinois nurse.

Seven other trials of lawsuits by plaintiffs blaming the ASR hips for injuries will help lawyers for both sides frame questions over liability and damages. The first is scheduled to begin Sept. 9 in federal court in Cleveland. U.S. District Judge David Katz is overseeing that lawsuit by Ann McCracken, 58, a resident of Rochester, New York, who needed two replacement surgeries known as revisions after her ASR implant.

Katz is overseeing about 8,000 federal cases consolidated before him for the pre-trial collection of evidence. About 2,000 cases are pending in the California Judicial Council Coordinated Proceeding before Judge Richard Kramer in San Francisco. Trials also are scheduled in state courts in San Francisco in October; in Hackensack, New Jersey, in October and January; in West Palm Beach, Florida, in November; in Chicago in December; and in Los Angeles in January. "DePuy believes the evidence to be presented at trial will show the company acted appropriately and responsibly," Gawreluk said. "The ASR hip system was properly designed, physicians were properly informed of the product's risks, and DePuy's actions concerning the product were appropriate."

Lawyers for hip recipients are still reviewing more than 50 million pages of J&J documents and conducting pre-trial interviews of company officials and experts to prepare for those cases, Skikos said. While settlement talks continue, J&J and lawyers for hip claimants have agreed on the broad outline of a so-called "global settlement" covering all U.S. cases, the people said. In January, five people familiar with the talks had said J&J officials were willing to pay about $2 billion to resolve the cases. Lawyers for plaintiffs rejected that amount as too little, the people said.

"J&J's strategy will be to find a way to negotiate a grid to settle each of the claims based on five or six variables that could be plugged in and changed up or down to determine the value of any claim," said Cranner, a lawyer with the New Orleans-based law firm of Frilot LLC. He is past chairman of the Medical Liability and Health Care Law Committee of DRI, an organization of lawyers who represent corporations and insurers.

Several obstacles to a final settlement still must be overcome, the people said. One includes the number of years that J&J may potentially have to pay future claims. Another is whether the settlement would include reimbursing Medicare for claims paid. A third is the amount of compensation for extreme medical cases, which include dual hip surgeries or cases where infection prompted long hospital stays, the people added.

"There are a significant subset of clients who got very badly hurt by the device, and their injuries are much more than a simple revision," said Matthew Davis, a lawyer at Walkup Melodia Kelly & Schoenberger in San Francisco whose firm represents 270 ASR clients. "If those cases went to trial and there was a finding of liability, a jury would award them general damages in the seven figures," said Davis, who isn't involved in the negotiations.

If you or someone you know have been injured by a defective product or medical device, contact the attorneys at Abraham, Watkins, Nichols, Sorrels, Agosto & Friend by calling 713-222-7211 or 1-800-870-9584.

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