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From Products Liability Law Daily, November 4, 2014

Howmedica/Stryker agree to settle MDL action involving defective hip implants to tune of $1 billion

By Pamela C. Maloney, J.D.

A global settlement agreement valued at over $1 billion has been reached between the New Jersey Multi-County Litigation Plaintiffs’ Steering Committee and Howmedica Osteonics Corp. to resolve claims that certain Stryker Rejuvenate Modular and ABGII Modular Hip Stem devices were defective and caused complications affecting more than 3,000 patients. The Settlement Agreement follows “a successful early mediation program initiated by New Jersey Superior Court Judge Brian R. Martinotti and efforts by the chief mediator, former United States Magistrate Judge Diane M. Welsh.” Patients wishing to participate in the settlement program must register their claims by December 14, 2014 (In re: Stryker Rejuvenate and ABGII Hip Implant Products Liability Litigation, November 3, 2014).

Background. In July 2012, Stryker Orthopaedics recalled its ABG II and Rejuvenate modular-neck stems in light of potential risks associated with fretting and corrosion at the modular neck junction. These modular-neck stems used ceramic components and were intended to be alternatives to the metal-on-metal hip replacement systems. Stryker marketed the devices to younger patients as a modular hip replacement, meaning the components were custom-made to fit patients better, which was supposed to result in longer-lasting hip replacement devices that offered a better range of motion. However, these hip replacement systems have been linked to high early failure rate, resulting in some patients having early revision surgery to replace their hip replacement device. The hip replacement devices may also be linked to an increased risk of metallosis. Metallosis occurs when metallic fragments build up in the soft tissues that surround an artificial hip increasing the cobalt-chromium metal toxicity in the patients' blood, tissue, and organs. Patients have reported experiencing the following complications: fretting (wear) and/or corrosion at the modular-neck junction possibly leading to osteolysis (bone dissolution); joint loosening/dislocation; excessive metal debris leading to metal ion generation; inflammation of tissues leading to metallosis, necrosis (death of tissues) and/or pain; hypersensitivity/allergic response; broken devices; and Adverse Local Tissue Reaction (ALTR). These complications required patients to undergo revision surgeries that, in turn, caused serious injuries and often led to permanent damage to patients’ hips and femurs.

Since the voluntary recall, patients who were implanted with one or more of these products have filed lawsuits throughout the county seeking damages for these complications. The settlement agreement provides a means to resolve those claims in a fair, timely, and efficient manner.

Settlement program amount. The total settlement amount was based on the information that Stryker Corporation recorded charges to earnings totaling $1.425 billion representing the actuarially determined low end of the range of probable loss to resolve these matters. No additional charge to earnings is being recorded in connection with the settlement agreement.

Eligibility requirements. In order to be eligible for the settlement program, claimants must be U.S. citizens and residents who fall into one of two separate patient groups: (1) those who had an ABG II Modular or Rejuvenate Modular hip implanted in the United States or at a U.S. military hospital and who subsequently underwent surgery to remove the modular hip stem, and (2) those patients who had an ABG II Modular or Rejuvenate Modular hip stem implanted in the United States (or at a U.S. military hospital) but are unable to have the necessary surgery to remove the product prior to November 3, 2014, because they had been deemed to be physically unable to undergo the procedure as indicated by their surgeon (unrevised infirm claimants).

Claimants must register their claims with the program by December 14, 2014, to be eligible for participation. They must also complete the enrollment process between January 16, 2015, and March 2, 2015. Failure to complete these two steps will disqualify otherwise eligible participants.

Base awards. Each qualified claimant who underwent revision surgery is entitled to a base award of $300,000 for each revision. The base award is subject to specific adjustments and limitations, including a 29-percent reduction in awards to claimants not represented by counsel and a 30-percent reduction for claimants who died from unrelated causes prior to November 3, 2014. A set reduction rate also applies based upon the age of a claimant at the time the implant surgery was done. Finally, the settlement agreement specified that the base award for any claimant who received one of these devices during a revision surgery was to be reduced by 15 percent.

The base award for unrevised infirm claimants who were physically unable to undergo the procedure was set at $75,000 for each unrevised hip implant. Furthermore, if any of these claimants undergo a subsequent revision surgery, they will not be entitled to any additional awards. The base award for these claimants is not subject to any reductions or enhancements. Spouses for both groups of patients could receive an award of $1,500.

Enhanced Benefits Program. In addition to setting base awards and reductions or limitations, the settlement agreement set forth an Enhanced Benefits Program which set a $450,000 cap on the total award a patient could receive for each revision surgery. However, this amount would increase to $550,000 in the case of a claimant who qualifies for an enhancement for infection. Eligibility for enhanced benefits will be determined based on (1) the complications the claimant experienced, (2) the severity of those complications, and (3) certain other objective factors. Some complications for which enhanced benefits are available include re-revision and other surgeries, pulmonary embolisms or deep vein thrombosis, myocardial infarctions, stroke, infections, lost wages, and death. The Settlement Agreement includes an award schedule for all enhanced benefits available to eligible claimants.

Claims Administrator and Special Masters. In a separate order, Judge Donovan W. Frank appointed both the Claims Administrator and Special Masters to administer and implement the terms of the settlement. Retired U. S. Magistrate Judge Diane Welsh of JAMS in Philadelphia, who oversaw the four-month negotiation process leading to the settlement, has been appointed the Claims Administrator. The Special Masters are Retired U.S. Chief Magistrate Arthur J. Boylan (Minnesota); the Honorable David D. Furman of the Superior Court of New Jersey (Retired); and Edgar C. Gentle, III, of Gentle, Runer, Sexton, Debrosse & Harbsion (Alabama). Judge Frank also stayed discovery in the litigation until September 1, 2015, unless otherwise ordered or agreed.

Settlement program website. Additional information, including Frequently Asked Questions and registration and enrollment information and applications, can be found at the official settlement program website: www.StrykerModularHipSettlement.com.

The case is MDL No. 13-2441 (DWF/FLN).

Attorneys: Ellen Relkin (Weitz & Luxenburg), Thomas R. Anapol (Anapol Schwartz), David R. Buchanan (Seeger Weiss LLP), Tobais L. Milrood (Pogust Braslow & Millrood, LLC), Tara Sutton (Robins Kaplan Miller & Ciresi LLP), C. Calvin Warriner, III (Searcy Denney Scarola Barnhart & Shipley), Peter J. Flowers (Meyers & Flowers), Annesley H. DeGaris (Cory Watson Crowder & DeGaris), Wendy R. Fleischman (Lieff Cabraiser Heimann & Bernstein, LLP), Ben W. Gordon, Jr. (Levin Papantonio Thomas Mitchell Rafferty & Proctor, P.A), R. Eric Kennedy (Weisman, Kennedy & Berris Co., L.P.A.), Genevieve M. Zimmerman (Meshbesher & Spence), and Charles S. Zimmerman (Zimmerman Reed, PLLP) for Plaintiffs’ Settlement Committee.

Companies: Howmedica Osteonics Corp.; Stryker Orthopaedics.

MainStory: TopStory SettlementAgreementsNews ClassActLitigationNews DamagesNews MedicalDevicesNews MinnesotaNews

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