Fw: Billion-Dollar Settlement Proposed in Implant Case ~ Appealspanel says it's too one-sided

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Sent: Tuesday, February 05, 2002 8:40 PM

Subject: Billion-Dollar Settlement Proposed in Implant Case ~ Appealspanel

says it's too one-sided

Billion-Dollar Settlement Proposed in Implant Case

Appeals panel says it's too one-sided

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Jahna Berry The Recorder

February 5, 2002

RICHARD ODOM: The layoffs were necessary, Brobeck's chairman said, " to

match our resources with the amount of work that's available in this

economic environment. " Photo: Doiy

Days before an Alameda County judge was scheduled to set trial dates for

gravely ill Californians with defective hip implants, medical device maker

Sulzer Orthopedics announced a proposed $1 billion national settlement.

The deal, which is still being negotiated, could mean up to $200,000 for

each of the estimated 4,000 people who had surgery to replace faulty hip

and knee implants. About 31,000 people are believed to have gotten

defective joints. The announcement comes after a faction of plaintiffs'

firms with cases in state court, including Lieff, Cabraser, Heimann &

Bernstein, rejected an earlier offer that a Sulzer lawyer said was worth

$780 million.

" It will be better than the original one, " said Sulzer lawyer

Seeger of Crosby, Heafey, Roach & May. The Oakland firm was the medical

device company's national counsel for the litigation but now coordinates

state litigation for the company.

Ultimately, Seeger said, plaintiffs' lawyers " will vote with their feet. "

However, the new settlement is supported by " 90 percent " of plaintiffs'

attorneys, he said.

Last year, the company and attorneys working on the coordinated federal

litigation crafted a deal believed to be worth $600 million to $780

million. However, attorneys for plaintiffs in state court blasted the

settlement. They said it was worth too little and had provisions that made

it virtually impossible for plaintiffs to opt out.

" I believe that we negotiated as much as we could get, " said

Heimann of Lieff, Cabraser, who helped negotiate the latest agreement. Many

plaintiffs' lawyers support the deal, but that could change as more details

emerge this month, he said.

Among other things, the new settlement has better opt-out provisions, and

Sulzer's former parent company will now contribute to the settlement fund.

Last month, plaintiffs' attorneys and Sulzer lawyers waited for an

independent report about the company's financial strength. After the

analysis was complete, the settlement fell into place, Seeger said.

A fairness hearing is set for May 14. Plaintiffs' attorneys could still

decide to try their chances with a jury.

If many attorneys choose to proceed with individual suits instead of

agreeing to settle, the company could teeter into bankruptcy, Seeger said.

The settlement " takes care of 3,000 people instead of the first three or

four " who make it to court and win big jury awards, he said.

If the settlement becomes final, it will end much of the litigation

surrounding thousands of defective hip and knee implants. Sulzer recalled

the replacement joints because a manufacturing process left an oily residue

on the devices. The substance prevents hip implants from bonding to tissue.

The implants remain loose and grind painfully in the hip socket. Knee

implants had similar problems.

As of Feb. 1, 2,786 patients have undergone " revision " hip surgery and 461

people have had surgery to replace faulty knee implants, a company

statement said.

Ohio U.S. District Judge Kathleen O'Malley is presiding over the federal

cases. This week, Alameda County Superior Court Judge Sabraw was

scheduled to set trial dates for sick plaintiffs who were to have expedited

trials.