In its most recent annual report to the Securities and Exchange Commission, C.R. Bard, Inc. cited the number of lawsuits pending against it and its Davol, Inc. subsidiary for personal injuries related to the Kugel patch recall.
As of February 25, 2008, approximately 580 federal and 280 state lawsuits involving individual claims by approximately 2,135 plaintiffs, as well as nine putative class actions, have been filed or asserted against the company with respect to its Composix® Kugel® product intended for ventral hernia repair (collectively, the “Composix Claims”).
The company voluntarily recalled certain sizes and lots of the product beginning in December 2005. The actions generally seek damages for personal injury resulting from use of the product and the putative class actions, none of which has been certified, also seek (i) medical monitoring, (ii) compensatory damages, (iii) punitive damages, (iv) a judicial finding of defect and causation and/or (v) attorneys’ fees. On June 22, 2007, the Judicial Panel on Multidistrict Litigation transferred Composix lawsuits pending in federal courts nationwide into one Multidistrict Litigation (“MDL”) for coordinated pre-trial proceedings in the United States District Court for the District of Rhode Island. Approximately 245 of the state lawsuits, involving individual claims by approximately 1,465 plaintiffs, are pending in the Superior Court of the State of Rhode Island, with the remainder in various other jurisdictions.
The Composix Claims are at a preliminary stage. In the vast majority of these cases, we have not yet obtained and reviewed complete information regarding the plaintiffs and their medical conditions, and consequently, we are unable to fully evaluate the claims or determine the time frame in which they may be resolved. As in most litigation of this nature, the Composix Claims present a wide variety of claims, ranging from allegations of serious injury caused by the products to efforts to obtain compensation notwithstanding the absence of any injury. We believe that many settlements and judgments relating to the Composix Claims may be covered in whole or in part under our product liability insurance policies. While the company intends to vigorously defend the Composix Claims, it cannot give any assurances that the Composix Claims will not have a material adverse impact on the company’s result of operations in future periods or the company’s financial position or liquidity.
Federal vs. State Lawsuits
Bard’s report notes that lawsuits have been filed in both state and federal courts. The choice of venue for each suit is entirely at the discretion of the plaintiff and his or her attorney. Depending on the facts of each case, different attorneys can come to different conclusions as to whether it is best to sue in a particular state or federal court. Where the facts of one case may suggest the plaintiff will fare better under state law, another case may look stronger under Federal law.
While the 580 federal lawsuits do not yet involve a certified class action, the court system has transferred all federal suits originally pending in thirteen different districts in eleven states to the U.S. District Court in Rhode Island. Later suits filed in these and additional districts are also being consolidated in the Rhode Island district. Because each suit is against the same defendants and the claims are so similar, the courts concluded that it would be much more efficient to combine the initial proceedings under the supervision of one judge rather than having nearly identical proceedings play out in front of thirteen or more judges across the country.
The Rhode Island District was chosen because Davol, Inc. is headquartered in Rhode Island which should speed the cases along. Depending on the facts of each case uncovered during pre-trial motions, however, the judge can remand a case back to the original district for trial if warranted.
Davol being headquartered in Rhode Island is also the reason that almost 90% of the state-filed lawsuits have been filed in that state’s Superior Court - although for jurisdictional reasons, not for pre-trial efficiency.
For those who’ve researched the Kugel patch recall, the question arises: If there have been less than 100 confirmed reports of injury from broken memory recoil rings, how can there be more than 2000 plaintiffs? There are several answers.
First is that the vast majority of plaintiffs were not injured by broken memory recoil rings. They may have experienced other types of complications from their hernia surgeries where it just so happened that a recalled patch had been used prior to the recall. In some cases, a recalled patch was not involved at all, but the plaintiffs believe the unrecalled Davol patch they received was as faulty as the recalled patches and the cause of their surgical complications.
Other plaintiffs have experienced no physical injury or complication from the recalled patch they were implanted with before the recall. But having a device in their abdomens that could break in the future and cause them serious injury is a source of emotional distress. These plaintiffs are seeking compensation not only for their distress, but also for the expense of ongoing medical monitoring and potential future surgical removal of the patch should it become injurious.
And finally, a case is often filed not only in the name of the individual patient, but also in the name of spouses and possibly dependent children who technically become additional plaintiffs in the case.
In the end, the facts of each individual case will have to be sorted out by the courts, unless, of course, the plaintiffs settle with Bard before trial – whether individually or en masse.