Stryker Expands $1 Billion Defective Hip Settlement to Hundreds of New Claimants

Stryker Rejuvenate Hip-Replacement-5Expanding a $1 billion settlement struck two years ago, Stryker Corp. and Howmedica Osteonics Corp. have agreed to compensate hundreds of additional claimants who had defective metal hips implanted and removed from Nov. 2014 to Dec. 19, 2016.

  • Stryker now faces 1,794 product liability cases consolidated into MDL 2441 before US District Judge Donovan W. Frank concerning its Rejuvenate and ABG II Hip Implant Products.
  • Also, a second wave of plaintiffs for hip implant cases is emerging for injuries related to the LVIT v40 Femoral Head component recall. Stryker issued  an urgent medical device recall on August 29, 2016 related to the Stryker LFIT Anatomic CoCr V40 Femoral Head commonly used with the Stryker Accolade Hip replacement system as well as other models and brands of hip replacement products.

$300,000 base settlement

Eligible claimants will receive a base award of $300,000 for each revised hip. Unrepresented claimants are eligible for 71% of the base award, or $213,000. Reductions will be made for obesity, smoking and age, according to the settlement. Settlements may be increased up to $550,000 under an enhanced benefit program, for re-revision surgery, related additional surgery,  dislocation of the femoral head of the hip, infections, inability to lift the front part of the foot, and pulmonary embolism or deep vein thrombosis during hospitalization,

The MDL Plaintiffs’ committee, chaired by Peter J. Flowers of Meyers & Flowers of Chicago, reached a new settlement agreement in ongoing litigation against Stryker and Howmedica over the defective Stryker Modular Rejuvenate and ABG II Femoral Hip Implants. This new settlement encompasses patients who had the hip replacement system implanted and then removed after November 2014.

About 20,000 people were implanted in the US with the Rejuvenate and ABG II hip replacement. The settlement, much like the historic, unlimited compensation fund of more than $1 billion in restitution established in late 2014, is once again an unlimited fund for this new set of plaintiffs injured by these metal-on-metal hip replacement devices.

The global settlement includes plaintiffs from across the U.S. who underwent painful revision surgeries since the fall of 2014 to remove the defective devices regardless of if they filed a case in state or federal court. Settlement payments are expected to be distributed starting in 2017.

“This settlement is the latest chapter in the ongoing litigation against Stryker and Howmedica for the extensive, at-times crippling injuries of our clients, many of whom have experienced life-altering pain and disabilities due to these hip devices,” said Flowers. “Our continuing and tireless negotiations bring a degree of relief to these clients as well as hope to future victims of defective devices.”

Victims step forward in 2010

Flowers has spent decades litigating cases against Stryker and similar device manufacturers for their defective medical products. In 2010, he began to hear from victims of hip replacement injuries that echoed past metal-on-metal friction cases he dealt with in the Depuy Orthopedics of Johnson & Johnson recall lawsuits.

Stryker issued recalls for its Modular Rejuvenate and ABG II Femoral Hip Implants in July 2012 when he was already representing many clients who had been injured by these devices, even while the company continued to sell them.

The Stryker hip replacement devices had four components: the femoral stem, modular neck, ball and an acetabular cup. Once implanted, the metal components began to wear causing friction and metal shards to release toxins into the bloodstream.

During a hip replacement, the device stem is implanted in the femur bone. When the device fails or needs to be removed, the femur bone often has to be fractured, resulting in mobility issues that can last for six to eight months as well as painful side effects and extensive periods of rehabilitation.

“The ripple effect that has been seen year after year from these defective hip replacement devices is truly outrageous,” said Flowers. “When medical device makers put profit before patient safety, we all suffer. There are devastating consequences to the victim, their family, and community as well as the overall economy and the government, which is why protecting these injured parties is so essential.”

 

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Stryker Must Pay $7.6M for Defective Knee Replacements

Unicompartmental knee prosthesis
Unicompartmental knee prosthesis

Stryker Corporation, notorious for its defective hip implants, must also pay a $7.6 million product liability settlement for its artificial knee joint called the Duracon Unicompartmental Knee (or “Uni-Knee”) according to the Sixth US Circuit Court of Appeals.

The ruling ended 15 years of litigation in which Stryker tried to get its excess liability insurance carrier, TIG Insurance Company, to pay for the settlement of 70 product-liability claims dating back to 2000. Stryker v. National Union Fire Insurance Company of Pittsburgh, PA and TIG Insurance Company, Nos. 15-1657/1664 (decided Nov. 18, 2016).

Stryker currently faces 1,772 product liability cases consolidated into MDL 2441 before US District Judge Donovan W. Frank concerning its Rejuvenate and ABG II Hip Implant Products.

Also, a second wave of plaintiffs for hip implant cases is emerging for injuries related to the LVIT v40 Femoral Head component recall. Stryker issued  an urgent medical device recall on August 29, 2016 related to the Stryker LFIT Anatomic CoCr V40 Femoral Head commonly used with the Stryker Accolade Hip replacement system as well as other models and brands of hip replacement products.

Defective knee replacements

There are 719,000 total knee replacements and 332,000 hip replacements performed annually in the U.S. (data from the Centers for Disease Control and Prevention (CDC). This number will grow exponentially with a more active and aging population.)

  • More than 7 million people in the U.S. have had a knee or hip replacement surgery
  • Hip and knee devices account for more than 85% of the joint reconstruction and replacement market
  • Joint registries demonstrate up to a 50% reduction in revision rates after registry initiation and identification of best practices

In the late 1990s, Stryker purchased a subsidiary of Pfizer, Inc. that made and sold the Duracon Unicompartmental Knee, which turned out to be defective. They were sterilized using gamma rays, which caused ultra-high molecular-weight polyethylene in the artificial knees to degrade and, if implanted past their five-year shelf life, potentially fail. Due to an inventory oversight, a number of expired Uni-Knees were sold to hospitals and implanted in patients.

Two policies, effective during the year 2000, were relevant: a “commercial umbrella” policy, issued by XL, and an “excess liability” policy, issued by TIG. The umbrella policy covered any “batch” of losses that Stryker became “legally obligated to pay by reason of liability imposed by law or assumed by the [i]nsured . . . because of [b]odily [i]njury.” That policy was limited to $15 million, after a $2 million self-insured retention.

The TIG excess liability policy kicked in after the umbrella policy was fully “exhausted,” and extended to Stryker’s “ultimate net loss . . . in excess of all underlying insurance” up to $25 million.

XL covered Stryker’s losses, but did so in non-chronological order: XL paid out the larger Pfizer judgment first, exhausted the limits of its coverage, and left Stryker’s individual product-liability claims on the table.

No written consent

Stryker sued TIG in the Western District of Michigan in 2013, seeking to recover the remaining $7.6 million paid to settle its direct product-liability claims. TIG disputed its coverage obligation, raising a defense that was “unique to [its] policy.” Stryker, 681 F.3d at 825 & n.4. In TIG’s view, the direct Uni-Knee claims did not constitute “ultimate net loss” because Stryker failed to obtain “written consent” at the time the settlements were made.

Stryker claimed that the policy, as applied to the idiosyncratic facts of this case, was latently ambiguous: because XL satisfied the Pfizer judgment first (and exhausted its policy), Stryker was forced to present its direct settlements to TIG years after they were made. Relying on the testimony of TIG’s former claims adjusters and underwriters, Stryker argued that the excess-liability policy did not actually require “consent to the Uni-Knee settlements when they were made.”

The Sixth Circuit disagreed, saying “Because Stryker did not satisfy the consent requirement, its direct settlements cannot constitute ultimate net loss, and there is no coverage under the policy.”

 

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