The company says it will appeal, but the decision could set a costly precedent
December 5, 2016
Johnson & Johnson has been ordered by a Texas jury to pay over $1 billion in damages because claimantssaid that the company covered up flaws in its Pinnacle artificial hips. The suit claims that the DePuy unit of the company knew about the defects but still chose not to warn doctors and patients about the inherent risks.
The company was ordered to pay$30 million in damages to six plaintiffs and over $1 billion in punitive damages, according to a Chicago Tribune report. Those who had the defective devices installed had to have them surgically removed. The company will likely appeal the decision, but University of Michigan law professor Erik Gordon says that company may want to start making settlement offers to the thousands of potential claimants across the country.
They may think they have good defenses to these claims, but they dont seem to be working with juries. Theres no easy way out of these cases now that they have a billion-dollar verdict against them. They better start thinking of how they can settle these claims before the price goes up any more, he said.
Setting the tone
Early signs indicate that the company will continuedigging in and defending its actions. Company spokesperson Mindy Tinsley released a statement saying that the DePuy unit had designed and tested the hip products appropriately.
Further, the company says it has strong grounds for an appeal, alleging that Texas Judge Ed Kinkeade did not allow a fair presentation to the jury. In a statement, attorney John Beisner said that an appellate court would need to review the case for errors; representatives will be asking Judge Kinkeade to postpone scheduling any more trials until that review is conducted.
Regardless of the outcome, Johnson & Johnson will have long road of litigation ahead of it connected to the hip products. The U.S. Securities and Exchange Commission estimates that there are roughly9,000pending suits connected to Pinnacle hip failures, and a billion dollar settlement would set a grim tone going forward.
The jury is telling J&J that they better settle these cases soon, said John Lanier, who represented the six Texas claimants. All they are doing by trying more of these cases is driving up their costs and driving the companys reputation into the mud.