Stryker Must Pay $7.6 Million for Knee Replacement Device Settlement

Under a ruling from the Sixth U.S. Circuit Court of Appeals, Stryker Corporation must pay a $7.6 million product liability settlement for its artificial knee joint the Duracon Unicompartmental Knee (or Uni-Knee).

The ruling put an end to 15 years of litigation in which Stryker tried to get its excess liability insurance carrier, TIG Insurance Company, to pay for 70 product-liability claims dating back to 2000.

Parker Waichman LLP notes that Stryker has also had legal difficulties involving its metal-on-metal hip replacement devices. Stryker currently faces nearly 1,800 product liability cases involving the Rejuvenate and ABG II hip implant devices, with additional cases emerging for injuries related to Stryker’s LFIT v40 Femoral Head component. In August 2016, Stryker recalled the Stryker LFIT Anatomic CoCr V40 Femoral Head commonly used with the Stryker Accolade Hip replacement system as well as other hip replacement products.

Defective Knee Replacements

In the late 1990s, Stryker purchased a subsidiary of Pfizer, Inc. that made the Duracon Unicompartmental Knee. The Duracon knee proved to be defective. The knee devices were sterilized using gamma rays, which caused the ultra-high molecular-weight polyethylene in the artificial knees to degrade. If the knees were implanted past their five-year shelf life, they could potentially fail. Because of an inventory oversight, a number of expired Uni-Knees were sold to hospitals and implanted in patients.

Two insurance policies in effect during the year 2000 are relevant to the legal situation: a commercial umbrella policy, issued by XL, and an excess liability policy, issued by TIG. The umbrella policy covered any “batch” of losses that Stryker became “legally obligated to pay by reason of liability imposed by law or assumed by the [i]nsured . . . because of [b]odily [i]njury.” The TIG excess liability policy kicked in after the umbrella policy was fully exhausted, and extended to Stryker’s “ultimate net loss . . . in excess of all underlying insurance” up to $25 million.

XL covered Stryker’s losses, but did so in non-chronological order. XL paid out the larger Pfizer judgment first, exhausted the limits of its coverage. The individual product-liability claims were not paid.

In 2013, Stryker sued TIG in an effort to recover the remaining $7.6 million paid for direct product-liability claims. TIG disputed its obligation, arguing that the direct Uni-Knee claims did not constitute “ultimate net loss” because Stryker failed to obtain “written consent” at the time the settlements were made. Stryker claimed that the policy, as applied to the particular facts of this case, was latently ambiguous: because XL satisfied the Pfizer judgment first (and exhausted its policy), Stryker was forced to present its direct settlements to TIG years after they were made. Stryker argued that the excess-liability policy did not actually require “consent to the Uni-Knee settlements when they were made.”

The Sixth Circuit disagreed, and wrote, “Because Stryker did not satisfy the consent requirement, its direct settlements cannot constitute ultimate net loss, and there is no coverage under the policy.”

Defective Joint Implants

In 2013, Consumers Union wrote that about 4.4 million Americans are living with knee implants. Knee replacements are performed primarily for individuals with osteoarthritis. Because Americans’ life expectancy is increasing and adults are getting knee replacement done at younger ages, the number of knee replacements is rising.

But Consumers Union notes that the growth in knee replacements has not been coupled with safety assurances to protect consumers. Most manufacturers do not offer warranties for their knee replacement devices and when a knee implant like the Stryker Uni-Knee fails, patients have no guarantee the company will replace the device. Consumers Union believes device makers should provide device warranties and should cover the costs of revision surgery for failed devices. In the decade from 2003 to 2013, FDA data indicated that Stryker and other top knee implant manufacturers recalled 709 devices/components due to flaws.

In 2013, Consumers Union estimated that more than 500,000 knee implant recipients had undergone revision procedures to replace a faulty implant. Revision surgery can be difficult and painful. The patient faces the usual risks of pain, infection and other post-operative complications. When a joint implant fails it can damage the bone, making the revision surgery more difficult. Recovery time can be longer and the results of the revision surgery are often less successful than the original joint replacement procedure.

Legal Help for Those Harmed by a Stryker Uni-Knee Implant

If you or someone you know has needed revision surgery or has suffered other injuries or complications from a Stryker Duracon Unicompartmental Knee (Uni-Knee), you may have important legal rights. For a free, no obligation case evaluation, contact the attorneys at Parker Waichman LLP. To reach the firm, fill out the firm’s online form or call 1-800-YOURLAWYER (1-800-968-7529).





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