DePuy ASR Litigation Update

by Searcy Denney Scarola Barnhart & Shipley

In late 2013, a $4 billion settlement program was announced by Johnson & Johnson. This settlement covers more than 8,000 plaintiffs with lawsuits or unfiled claims who have undergone revision surgery due to a defective DePuy ASR metal-on-metal hip implant. DePuy recalled the ASR in August of 2010 due to an excessive failure rate and patient injuries due to metallosis, pseudotumor formation, elevated levels of cobalt and chromium in their bloodstream, bone and tissue necrosis, and the need for revision surgery.

The first major deadline for the DePuy Settlement Program was on April 1, 2014. By that date, claimants were required to submit claim forms and supporting medical documentation for their claim for a base payment under the settlement program. The base payments range from $150,000 to $250,000 depending on the age of the plaintiff, weight, smoking history, and length of time that the DePuy ASR hip implant was in place.

On May 15, 2014, DePuy announced its decision to proceed with the U.S. Settlement Program and not exercise its “walk away” rights since minimum thresholds for participation in the program had been met. On May 19, 2014, Brown Greer, the Claims Administrator for the DePuy ASR U.S. Settlement Program, posted a notice on the claims portal that the review and processing of claims will begin.

Attorneys who represent eligible claimants will review Program Notices once Brown Greer has completed its review of submitted claims for base payments through the online portal. It is anticipated that base payments could be made to participating plaintiffs in September or October of 2014.

DePuy has agreed to satisfy collateral source obligations for participating plaintiffs directly. These subrogation liens of private and governmental health insurers are estimated at an average of $40,000 per claimant, based upon the costs incurred by clients of Searcy Denney who have undergone revision surgery and suffered other implant-related complications.

In most personal injury settlements, these health insurer liens are satisfied out of the plaintiffs’ net settlement proceeds, and resolution of liens can often delay payments to settling plaintiffs by many months. DePuy’s agreement to satisfy the liens directly represents a substantial savings in settlement costs for the device manufacturer, while also providing a benefit to plaintiffs who will not experience a delay in receiving their settlement proceeds later this year.

The next major deadline with regard to the settlement program is the August 1, 2014, deadline for submission of Extraordinary Injury Fund (EIF) claims. This separate settlement fund is only available to those who have suffered truly exceptional or catastrophic injuries associated with the revision surgery, including dislocations, post-operative infections, heart attacks, strokes, blood clots, etc. Extraordinary injury claims are not expected to be reviewed and paid until 2015.

The DePuy U.S. Settlement Program will not fully resolve DePuy’s liability over its recalled ASR hip implants. It is estimated that there are at least another 6,000 lawsuits or claims pending against DePuy. Judge Katz, who oversees the federal MDL proceedings based in Toledo, as well as other judges who are assigned to lawsuits filed by plaintiffs injured by defective DePuy ASR hip implants are working to plan the next phase of the national litigation efforts, which may include the scheduling of additional bellwether trials as well as a second phase of negotiations.

This group of unsettled cases includes a number of plaintiffs who underwent revision surgery after August of 2013 (the cut-off date in the pending settlement program) as well as plaintiffs who are medically-unable to undergo revision surgery or who have not yet been recommended for revision surgery but have nevertheless been injured due to metallosis, pseudotumor formation, elevated levels of cobalt and chromium, and possible systemic toxicity. This group of unsettled claims also includes patients who had the misfortune of being implanted with not one, but two, recalled DePuy ASR hip implants. For this group of claimants with bilateral implants, they are able to qualify for the settlement program with regard to the hip that was revised prior to September 1, 2013, while being able to retain their claim (and continue the prosecution of their pending lawsuit) for the recalled ASR hip implant that was not revised prior to the settlement cut-off date for revision surgeries.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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