Articles Tagged with settlements

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Johnson & Johnson has 100,000 pending product lawsuits
Most of us pay our bills on time. If we break a neighbor’s rake, we promptly purchase a replacement. If our child dumps fruit punch on a friend’s carpet, we pay to have it cleaned. In fact, we don’t really think about these unwritten rules often; it’s just the right thing to do, so most of us do it instinctually: if we cause damage, we pay for the damage. But too often companies refuse to pay fair settlements to resolve product failure cases, even in the face of a mountain of evidence that (1) the product clearly failed and (2) the failure physically injured the person. For example, let’s say a sixty-eight year old retired schoolteacher learns her metal-on-metal artificial hip implant has failed; her doctor tells her that, in addition to the pain she feels in her hip and leg, she now suffers from dangerously high cobalt and chromium levels (a condition called “metallosis”). Thousands of other injured people have similar claims, but the manufacturer of the failed hip product simply won’t pay. Why not?

Well, I can’t know all the reasons, but let’s look at a few theories:

Companies Don’t Like to Pay Settlements

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I have written extensively about metal-on-metal (MoM) artificial hips. Specifically, I have covered the painful and sordid history of the Depuy ASR metal-on-metal (MoM) artificial hip. In this post I set out a timeline of important dates in the the journey of the Depuy ASR hip: from (quickly) finding its way into the market, then into thousands of patients, followed by thousands of revision surgeries, and ultimately to a massive multidistrict litigation (MDL) in federal court in Ohio involving thousands of injured people. Let’s take a look at the calendar of events of the Depuy ASR product failure.

1995

Doctor reviewing Depuy ASR hip X-ray
In 1995, Dr. Graham Isaac released a short paper discussing the problems with metal-on-metal (MoM) artificial hips. Dr. Isaac explained how metal wear debris created from MoM hip joints was a serious problem because of poor design and manufacturing of the metal components. Dr. Isaac also stated that even with higher quality manufacturing and engineering techniques, the performance of MoM hip implants were as “unpredictable as ever, working well for a period of time before suffering catastrophic breakdown . . . accompanied by a release of a large volume of debris.” This paper and Depuy’s other internal documents suggest that Depuy Orthopaedics most likely knew of the MoM risk factors in 1995, twenty-two years ago, and ten years before the company began selling the Depuy ASR artificial hip. In fact, one doctor noted that Depuy needed “to be cautious of the legal/litigation issues and lawyers, etc…perception of metal debris and metal-ion release.” I wrote more about what Depuy may have known about the serious risks of the ASR hip here.

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Health Insurance Liens

When a device or drug maker pays money to an injured person for a defective product, several costs must be repaid from these funds. There will likely be medical liens, expenses of litigation, attorney’s fees, and health insurance liens. You can get an overview of these cost repayments in a post I wrote last year. In today’s post I want to take a closer look at health insurance liens (and the related concept of health insurance “subrogation”), mainly because health insurance companies can take a big bite out of your product liability settlement funds. Best to understand this unpleasant news upfront.

How Do Health Insurance Liens Work?

Hernia Mesh SurgeryIf you have health insurance, much of the cost of your medical care will be paid by your health insurance plan. Let’s say you need revision surgery to remove defective hernia mesh. The total cost of the surgery is $36,000.00, but under contracted payment rates between the hospital and your health insurance company, the cost is reduced to $24,000.00. Under your agreement with your insurance company, it pays $20,000.00 for this surgery and you pay a total of $4,000.00 in “co-pays” (that is, the amount you must pay “out of pocket” under your health insurance plan). So far so good.

A week after the surgery, while you recover from the operation (and watch afternoon commercials asking if you have been injured by defective hernia mesh), you receive a letter from your health insurance provider asking specific questions about how you were injured. The health insurance company is trying to figure out if a third-party is ultimately responsible for your injuries and thus for the costs of your revision surgery. The insurance company may want to know if you are pursuing a product liability claim against the manufacturer of the hernia mesh. It is no secret that the health insurance company is looking to be reimbursed for the payments it made for your mesh revision surgery. The moment you file a lawsuit against the product manufacturer, your health insurance company will submit a “lien” identifying its claim to some of the settlement funds. And trust me, these companies will not let this claim go lightly; they will pursue reimbursement aggressively, and you will most likely have a contractual responsibility to pay the health insurance company from your settlement funds. In fact, if possible the insurance company will expect to be repaid 100% of the costs it paid for your health care caused by the negligence of others. Continue reading →