The first one is probably the most important in the litigation is a motion by the defendant to limit the damages that the plaintiffs shall receive. The verdict in the case and the jury awarded punitive damages. These are damages that are intended to punish the defendant for their conduct. The award was $360 million combined for the five plaintiffs. Unfortunately, Texas has a strict law that limits punitive damages. All of the plaintiffs in this case were from Texas and the Texas cap on punitive damages applies to their case. The formula for capping those punitive damages is a little complicated. It is based on what your economic damages are and the award cannot exceed two times your economic damages, and they cannot exceed general damages, pain and suffering damages. There is a cap of $750,000 on those types of damages. So, you add two times the economic damages plus the $750,000, which applies to most of these cases, and that’s what you end up with. So, the net result of all of this is that the $360 million punitive damage award will likely be reduced to $8.6 million. In the context of Johnson & Johnson, and DePuy, a punitive damage award that low will have no impact at all on their corporate behavior which is the intent of a punitive damage award, to punish a defendant. These companies combined have a net worth of more than $68 billion. So, $8 million is a very small number for them.
On the bright side, we have another round of trials coming up. The next group of trials will be for five plaintiffs and the Judge has asked for five plaintiffs from California. Those cases are currently being worked up and they are in the system. That is the next group of cases that will go to trial. California has no caps on punitive damages. So, these caps that applied in the most recent verdict will not apply in the next case.
The second motion that was filed is the defendants argued that the jury verdict should be overturned on the grounds of the statute of limitations. The statute of limitations (SOL) is the time period in which you have to bring a case. In Texas, it’s 2 years. What is galling about the argument being made by DePuy and Johnson and Johnson here is that in all of these hip litigations that have been pending, the ASR and Pinnacle litigation, they have consistently taken the position on the issue of settlement that they would never settle a case if the person did not have revision surgery. But now they are telling the court that in order for you to bring a claim, you have to bring it within two years of the date that you first started experiencing pain with your hip. So, they’re arguing that the trigger date for the SOL is not the date that you had revision surgery but the date that you first had any symptoms at all that related to your hip failing. The jury in the case found that this was not the start date for the SOL, and that the start date was the date that they had revision surgery.
Now, the law in Texas is very good for us on this issue. In order for a cause of action to accrue, you have to be aware of your injury and you have to be aware of the cause of your injury. There was lots of evidence given in the case that the fact that somebody’s hip hurts doesn’t necessarily mean that the defect with the DePuy Pinnacle hip is what’s causing your hip to hurt. There are all kinds of reasons a prosthetic hip can cause pain that have nothing to do with the shedding of cobalt and chromium. It could have been implanted incorrectly, there could be a leg length discrepancy, the person could have tendonitis; there are a whole bunch of reasons why a hip can hurt that have nothing to do with metallosis. And in most of these cases, a definitive diagnosis of a failed metal hip does not occur until the surgeon actually goes inside and looks to see what the hip is doing. I am not too worried about this second motion.
The other motion the defendants’ filed was they wanted a new trial because the jury was not instructed on a very specific statute that basically gives the defendants a presumption that their product is not defective if the product is approved by the Food and Drug Administration (FDA), and the defendant can show that the FDA was given all of the relevant information about the product before they got it approved.
The opposition to that motion was that, first of all, these hips were never “approved” by the FDA. The word approved has a specific legal meaning. There are some products that are approved by the FDA. The FDA requires clinical testing in a long process called the pre-market approval (PMA) process. The FDA will look at these tests, look at the design, and decide that the product is not defective and allow its release to the public. The Pinnacle metal-on-metal hips were not approved through the PMA process. They were approved through a “fast track” process in which the manufacturer essentially tells the FDA that the product is substantially similar to something else they already approved, and that’s how this product got on the market. In the past, the Judge has indicated in other motions that the fast track process of getting a medical device on the market is not FDA approval. So, the presumption does not apply. I think this is a sound judgement that is well supported by the case law that has specifically looked at this issue.
The last motion they brought was a motion for new trial that had different grounds in it. The first one was that the jury verdict was too high. The argument was that it was a runaway jury; there’s no way that the damages that these plaintiffs suffered support a verdict that is as high as they received. The standard for overturning a jury verdict, or reducing the jury verdict, in Texas is very high. You have to show that the jury was biased, that they were motivated by passion. It has to be a situation that shocks the conscience. I don’t think that the judge is going to reduce the verdicts in this case other than the punitive damage verdicts.
On the second argument that was made in this motion, the defendants were unhappy with the fact that five cases were able to be tried in one trial. They thought it caused jury confusion and that it influenced the jury because there were five people who suffered similar injuries. So, the standard on that issue is also good for the plaintiffs. The Judge has a lot of discretion especially in a case like this where there are thousands of lawsuits pending and involving the same product. The Judge has discretion to implement mechanisms to make the process go faster. He has the discretion to implement processes so that there’s judicial economy. Trying thousands of these cases could clog the courthouses in this country for years and years. So, by trying five cases at a time it saves everybody money; saves the plaintiffs money, saves the defendants money and saves the court system time and money. So, I don’t think that argument is very well taken.
There were numerous pieces of evidence that were admitted during the trial that DePuy thought should not have been admitted and they want a new trial as a result. Specifically, there were references to the deferred prosecution agreement. This was an agreement that DePuy entered because they were paying bribes to doctors. That was admitted into evidence. There was a reference to cobalt and chromium potentially increasing the risk of cancer. That was brought up during trial as a reason why someone would want to have their hip revised, if they had high cobalt or chromium. The argument was that if someone had high cobalt and chromium it would be reasonable for them to want their hip removed because of the fear it could increase your risk of cancer. There are no studies linking cobalt and cancer but that doesn’t mean there is no increased risk of cancer.
There was argument at trial, or evidence presented, concerning the fact that there were thousands of lawsuits that have been filed against DePuy. There was reference to the DePuy ASR hip which is a hip that’s very similar to the Pinnacle that was recalled. So, all of these small evidentiary issues the defendants had a problem with and they asked the Judge for a new trial. The argument they made is that these pieces of evidence being admitted and presented to the jury bias the jury against them. The Judge in prior motions during the middle of the trial has already ruled that none of these pieces of evidence that were admitted were done so improperly and denied the defendants motions already on numerous occasions concerning these items. So, I don’t expect the Judge to change his mind on these issues.
The defendant has filed a motion to stay the overall litigation. So, they’re asking the Judge not to let any more cases go to trial until the appeal of this verdict works its way through the appellate court system. If that motion is granted, it would put thousands of cases on hold for probably three to four years. Nothing would happen, settlement would be very unlikely to occur during that time period. It is highly unlikely the Judge is going to grant that motion because it would put a screeching halt to the litigation. In fact, the signals we are getting from the Judge is that he is moving the other direction. He wants another round of five cases to go to trial.
So, that’s where we are in the cases. When we get orders from the Judge on these motions, we will do another video. We will try to keep you updated on the appellate process and how that’s progressing. But things are moving along. We all wish things would move quicker but the process takes time.