A federal judge took the unusual step of urging C.R. Bard Inc. to settle thousands of lawsuits over defective vaginal-mesh implants because juries may award billions of dollars in damages.
“I can’t imagine a corporation facing potentially billions of dollars in verdicts wouldn’t find it advisable to try to achieve a settlement for a much lesser sum,” U.S. District Judge Joseph Goodwin in Charleston, West Virginia, said at a Dec. 9 hearing, according to a transcript. “I base that billions of dollars business on some of the rather large verdicts that we’ve had.”
A spate of multimillion-dollar verdicts against Bard and other makers of the implants, used to bolster sagging organs and treat incontinence in women, should provide an incentive to resolve more than 12,000 cases against the company by next year, the judge said.
Goodwin is taking the almost unprecedented step of warning executives at Bard that they are gambling with the future of their company by not resolving the litigation, said Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia.
“Bard has to take this very seriously because the judge is saying these cases could expose it to the kind of liability that could be the end of the company and result in a bankruptcy filing,” Tobias said. “It’s very rare for a federal judge to warn shareholders about the consequences of management failing to resolve lawsuits.”
Goodman’s comments may pressure Murray Hill, New Jersey- based Bard to pick up the pace of settlement talks with women who contend the implants damaged their organs and left them in constant pain. The judge is overseeing all federal-court litigation involving the implants.
The company agreed in October to settle 500 suits for about $21 million in its first large-scale resolution of vaginal-mesh cases, people familiar with the accord said.
Scott Lowry, a Bard spokesman, didn’t immediately return a call for comment on the judge’s statements.
Bard has acknowledged in filings with the U.S. Securities and Exchange Commission that it faces significant financial exposure over the vaginal-mesh claims. More than 12,400 suits over the inserts have been filed in both state and federal courts, it said in a July regulatory filing.
Endo International Plc, a Dublin-based maker of vaginal- mesh devices, has agreed to pay more than $1.3 billion to resolve most of the more than 30,000 suits over its implants.
The U.S. Food and Drug Administration ordered Bard, Johnson & Johnson, Boston Scientific Corp and other vaginal-mesh makers to study rates of organ damage and complications linked to the devices after thousands of women sued over the implants. The agency also has said implants should be subject to stricter safety requirements.
Doctors inserted more than 70,000 mesh devices in the U.S. in 2010 alone, threading them through incisions in the vagina to fortify pelvic muscles that failed to support internal organs or to treat incontinence, according to court filings.
Women contend some of the devices erode after being implanted, which can cause organ damage, pain and make sexual intercourse painful.
J&J, the world’s biggest maker of health-care products, has pulled four lines of vaginal implants off the global market in the wake of women’s suits. Bard also as pulled its Avaulta line of mesh inserts off the market.
At a hearing on information exchanges for 500 cases being readied for trial, Goodwin said Bard officials should be concerned about recent jury awards against makers of the implants.
“I find it to be a material fact that five different state forums have, on average, returned verdicts of over a million dollars per plaintiff,” the judge said.
Last month, federal juries in Florida and West Virginia ordered Boston Scientific to pay a total of $45.2 million in damages to eight women who alleged the company’s mesh implants injured them.
In September, a state court jury in Dallas ordered the Marlborough, Massachusetts-based device maker to pay $73 million in damages to a woman who claimed its mesh inserts harmed her. That same month, a West Virginia jury ordered J&J to pay $3.27 million to woman who received one of the company’s implants.
In August, a federal-court jury in West Virginia ordered Bard to pay a woman $2 million in damages over her vaginal-mesh injuries.
In some of those cases, juries found the implants were defectively designed, and in others the panels found Bard and other insert makers failed to properly warn women and their doctors about the devices’ risks.
More than 30,000 implant suits against Bard and other manufacturers have been consolidated before Goodwin so he can oversee pretrial information exchanges. Such case consolidations cut down litigation costs.
Goodwin has expressed frustration with the pace of settlement talks involving mesh makers such as Bard and Boston Scientific. J&J has steadfastly refused to consider settling cases against it. The judge noted some of the cases have been pending for five years.
Bard, Boston Scientific and other device makers had settlement talks last year with lawyers representing vaginal- mesh patients, but the discussions didn’t lead to so-called global resolutions of cases.
At this week’s hearing, Goodwin said he was surprised investors hadn’t put more pressure on company officials to resolve the vaginal-mesh cases.
“If I were a stockholder of any of these companies, I would be materially interested in the fact that there have been multiple million-dollar verdicts for individual plaintiffs,” he said.
The Bard consolidated cases are In re C.R. Bard Inc. Pelvic Repair System Products Liability Litigation, 10-md-02187, U.S. District Court for the Southern District of West Virginia (Charleston). The consolidated J&J cases are In re Ethicon Pelvic Repair System Products Liability Litigation, 12-md-2327 U.S. District Court, Southern District of West Virginia.
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