UPDATE 3-Jury orders J&J unit to pay $8.3 mln in metal hip trial

Fri Mar 8, 2013 3:23pm EST

By Deena Beasley

March 8 (Reuters) - A Los Angeles jury ordered Johnson & Johnson's DePuy orthopedic unit to pay more than $8 million in damages in the first trial of nearly 11,000 lawsuits filed over the company's recalled artificial metal hips.

In a mixed verdict, the Los Angeles Superior Court jury on Friday found that the hips were defective, but that DePuy did not act with fraud or malice. DePuy was ordered to pay more than $338,000 in medical costs and $8 million for pain and suffering to plaintiff Loren Kransky. No punitive damages were awarded.

Lawyers for other plaintiffs said the verdict, in a suit filed by a retired Montana prison guard suffering from kidney cancer and other ailments, bodes well for other cases, while DePuy said it would appeal.

Jeff Jonas, an analyst for Gabelli & Co, said that while the litigation will be expensive, the eventual payouts are unlikely to be very onerous for J&J, one of the world's largest healthcare companies with annual revenue of about $70 billion.

He predicted that the J&J unit will eventually offer a national settlement, under which thousands of hip plaintiffs would likely take what is offered rather than face years of litigation and appeals.

DePuy recalled the hips in 2010, prompted by recognition that the devices were failing at higher-than-expected rates. Some 93,000 ASR hips were sold prior to the recall.

"We believe ASR XL was properly designed, and that DePuy's actions concerning the product were appropriate and responsible," DePuy spokeswoman Loire Gawreluk said in a statement.

She said the planned appeal will be based on grounds including the fact that the court did not allow the company to tell the jury that the U.S. Food and Drug Administration had reviewed the device and cleared it for sale.

Kransky attorney Brian Panish said the jury decision "is the first day of reckoning for DePuy and Johnson & Johnson ... We expect to get punitive damages in the next trial."

He had argued that the ASR hip resulted in elevated levels of cobalt and chromium in Kransky, causing him pain that required the hip to be replaced.

J&J lawyers maintained that there is no medical consensus on what levels of the metals may cause harm to patients and said Kransky's other medical problems, including diabetes, heart disease, and kidney cancer, were the source of his pain and suffering.

The verdict "is everything we could hope for, given the limitations of this case," James O'Callahan, a plaintiff's lawyer handling other DePuy hip implant cases, said in an emailed statement.

Kransky's case was expedited under a California law that gives preferential status to plaintiffs who are terminally ill.

Another hip implant trial in Illinois state court starts on Monday. Two cases in federal multi district litigation are set for trial in May and July in Ohio.

"A more representative case should have a stronger recovery (for the plaintiff) because the injury related to the hip is more of a long-term problem they're going to be facing," said Ellen Relkin of Weitz & Luxenberg, co-lead plaintiff's counsel for the federal multi district litigation consolidated in Ohio.

The metal implants were developed to be more durable than traditional implants, which combine a ceramic or metal ball with a plastic socket, but concerns have grown after they were shown to fail more often.

With wear, all-metal implants can shed metal debris where two components connect, potentially damaging bone and soft tissue.

The FDA last month issued a proposal calling on companies that make all-metal hip replacements to provide additional information proving they are safe and effective before being allowed to continue selling them.

J&J has set aside more than $3 billion to cover costs for the ASR hip recall.

Over the past three years, the company has also recalled hundreds of millions of packages of Tylenol, Motrin and other over the counter drugs and consumer products due to quality control problems that are now being resolved. And thousands of U.S. women have sued the company for alleged harm from J&J vaginal mesh products that were used to treat stress incontinence and other problems.

Gabelli's Jonas said J&J's reputation, despite those problems and related costly litigation, remains mostly intact. "They've had a number of missteps, but they have enormous brand equity that they've built up for 100 years," he said.

Kransky's attorneys had asked for punitive damages of between $72 million and $179 million, in addition to $5 million for pain in suffering and $338,000 in medical costs.

As many as 500,000 American are estimated to have received metal-on-metal hip replacements.

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