How Big Will Johnson & Johnson’s Legal Bill Grow?

More than 10,000 lawsuits are pending against Johnson & Johnson (NYSE:JNJ), each claiming that the New Jersey-based healthcare company inappropriately marketed and sold an artificial hip that the company recalled in 2010.

So far, two cases have gone to trial, but they resulted in exact opposite rulings. A jury in Chicago rejected plaintiffs claims on Tuesday, while a Los Angeles jury awarded $8.3 million in damages in March, which was the first case involving the all-metal device — known as the Articular Surface Replacement — to go to trial.

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Johnson & Johnsons DePuy Orthopaedics unit said in a statement seen by The New York Times that all its actions related to the sale, marketing, and recall of the A.S.R. device had been appropriate. But, according to the publication, internal documents released at the trials indicated that company officials were aware that the design of the hip replacement was flawed long before the recall was issued. They even considered resigning the implant, but that information was never shared with doctors and patients, the documents showed.

That evidence makes it difficult to determine why the two juries returned such differing verdicts…

When Johnson & Johnson recalled 93,000 all-metal hips worldwide — including 37,000 devices in the United States — in 2010, the company cited the devices high failure rate, which amounted to 12 percent of all hips in the first five years of use. Patients who sued over the malfunctions alleged the device caused pain, joint dislocations, infections, and bone fractures, according to Bloomberg. Plaintiffs even claimed that metal fragments from the hips caused tissue death around the joints.

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Several lawyers and industry analysts have calculated that these lawsuits will eventually cost Johnson & Johnson billions of dollars to resolve, reported the Times. Already, more than thousands of individual cases have been consolidated into a single proceeding in a Federal District Court in Ohio, and how the jury rules could set a precedent and provide a framework for the other cases, especially in terms of settlements.

The A.S.R. device was first sold by DePuy outside the United States in 2003 for use in an alternative hip replacement procedure called resurfacing. After two years, the unit began selling another version for use in the United States in standard hip replacements. The hip device belonged to a class of once widely used hip replacements.

Back in January, John M. Fitzpatrick, a lawyer at the firm Wheeler Trigg ODonnell, who is not involved in the case, postulated that the company cant afford to defend these lawsuits case by case, according to Bloomberg. J&J needs to shut this down The only way they can do that is through a global settlement, he added. Sources told the publication at the time that potential settlements could total $2 billion, noting that settlement talks would likely not occur until after several cases had gone to trial.

Now, the legal dispute has reached that point in its timeline.

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