Confusing Reports about J&J DePuy ASR Hip Settlement

Last week it was reported widely that Johnson & Johnson had “tentatively agreed to a settlement” that could reach up to $4 billion to resolve thousands of lawsuites filed for patients injured by defective DePuy ASR hip implants.  DePuy Orthopaedics is a division of Johnson & Johnson.  Reports by the New York Times, Bloomberg, and others stated that under the proposed settlement, each patient would receive about $350,000 on average in compensation.

On November 15, 2013, the federal district court judge overseeing, MDL 2197, the DePuy ASR multi-district litigation, Hon. David A. Katz, entered an Order stating that “the Court will conduct an Open Court Conference on 11/19/2013 at 04:30 PM in Courtroom 204 before Judge David A. Katz at the James M. Ashley U.S. Courthouse in Toledo, Ohio.”  News leaked that the terms of the proposed settlement would be announced at this hearing.

After the hearing, the New York Times reported that Johnson & Johnson would pay “nearly $2.5 billion in compensation to an estimated 8,000 patients who have been forced to have the all-metal  artificial hip removed.”  The Times reported that the average payment per patient would be about $250,000 before legal fees.  I have spoken with a source who reports that the actual average compensation per patient will be higher than $250,000.  If the NYT’s estimate is in error, it may be because the earlier report of a $4 billion settlement with an estimated compensation amount of $350,000 per patient was based upon an assumption that about 12,000 claimants would be paid.

Under the hip implant settlement announced yesterday, reports indicate that about 4,000 of the 12,000 patients who filed lawsuits would not receive any compensation.  It is estimated that there are about 12,000 claims in the United States, and that about 8,000 of those claims involve patients who underwent operations to have the DePuy ASR device removed or explanted.

The proposed settlement will reportedly not go forward unless and until 94% of eligible claimants  opt-in to the settlment.  As with all opt-in settlements, claimants are free to decide to pursue their individual lawsuits in an attempt to recover more than they would recover under the settlement.  This settlement was negotiated by a relatively small number of attorneys appointed by the court to a plaintiffs steering committee.  Given the 94% opt-in requirement and the conflicting reports circulating about the amount and terms of the settlement, it would be a good idea for these attorneys to release a full explanation of the terms of the settlement asap.

Here are some questions that DePuy ASR claimants will need answered:

1.  What happens to patients who have been implanted with a DePuy ASR device but who have not had a revision surgery?  Under the reported terms of this settlement, such patients would receive no compensation unless they subsequently undergo a revision surgery?

2.  How long will patients who have not yet had revision surgery be eligible to have the surgery and participate in the compensation plan?

3.  What about patients who need revision surgery but cannot have it due to health issues (e.g., heart condition or damaged condition of their hip)?

4.  Are patients who have had revision surgery guaranteed a minimum compenstion of $250,000?  Reports indicate that the answer is “no.”  The average award of $250,000 is just that, an average.  The settlement plan would create two pots of money.  A $2 billion pot would cover basic awards.  The amount of the basic award could be higher or lower than $250,000 based upon a variety of factors.  Patients who smoke, are overweight, or are older may reportedly see their payments reduced.  The date the device was implanted will also affect the basic recovery.  The average payment to a patient who had the device for five to six years would fall to $225,000, and to $200,000 for patients who had the device for six to seven years.

The second pot of money is reportedly $475 million.  This pot will be to cover what have in past hip device settlements been called “extraordinary injuries.”  Patients who sustained more significant injuries related to the device, its removal, or its replacement will qualify to apply for additional payments.

5.  Will the settlement plan specify certain injuries that will qualify for the additional payments mentioned above?

6.  What was the source of the reported $4 billion settlement, and how did we get from $4 billion to $2.47 billion?

7.  Are there any benefits to patients in addition to the basic and possible additional compensation sums?  The answer is a definate “yes.”  According to reports, which I have confirmed, Johnson & Johnson will pay all medical costs and liens related to each patient’s device replacement.  This is a major benefit to the qualifying patients.  Most settlements require the patient to pay all medical balances and liens out of the settlement sum.  Moreover, in past mass tort settlements, disbursement of the net settlement amount to the client has been delayed for many months while health insurance and Medicare liens are negotiated.  Payouts under this proposed settlement will not be similarly delayed.

Related:

• What is Going on with DePuy ASR Hip Replacement Litigation?
• Class I Recall of MicroPort’s ProFemur Hip Implant due to Fracture Rate
• Pinnacle Hip MDL: 5 Things to Know
• Post-Trial Rulings on $497 Million Pinnacle Hip Verdict
• Stryker Hip Recall