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Texas jury awards damages against Sulzer Medica

It is unclear whether Sulzer Orthopedics will have to pay the damages awarded in Texas Keystone Archive

A jury in Corpus Christi, Texas, has awarded three elderly women more than $15 million (SFr24.84 million) in damages after they had faulty hip implants removed - the implants were made by a United States subsidiary of the Swiss Sulzer Medica company. Sulzer Medica said on Friday it will appeal the decision.

The decision follows preliminary approval by a US federal judge of a settlement agreement put forward by the company in connection with last December’s recall of faulty hip implants.

Medica subsidiary Sulzer Orthopedics, based in Austin, Texas, has proposed a package estimated at $780 million (SFr1.3 billion) to effectively collect all pending lawsuits to meet patients’ claims “quickly and fairly”.

The Winterthur-based Medica wants to settle more than 1,000 lawsuits related to the artificial hip recall, as well as problems with knee implants, both of which have needed to be replaced.

At the Texas hearing, lawyers argued that Sulzer Medica delayed telling the public about the tainted hip implants.

“Whether these damages will be validated is unclear,” lawyers said. “We contend that the federal judge is dealing with a completely different issue,” said Michelle Mears, a plaintiff’s attorney with Watts and Heard.

Separate appeal filed

Separately, another Texas law firm, Fleming and Associates, said it had filed an immediate appeal of the preliminary federal certification of the Sulzer class action case.

“The verdict in the Corpus Christi case highlights the importance of Sulzer Orthopedic’s settlement proposal,” Sulzer Medica chief executive officer Stephan Rieticker said in a statement.

“It would not take many verdicts of this size before the money would run out, possibly forcing the company into bankruptcy and leaving absolutely nothing for the majority of patients with claims against the company,” he added.

Under the terms of the settlement proposal, Sulzer Orthopedics would pay affected patients and their attorneys with a mixture of two-thirds cash and one third equity (Sulzer Medica American Depository Receipts) over a period of several years.

Sulzer Medica would pay patients needing multiple corrective surgeries $97,500 in cash and equity, while those requiring a single operation would receive $57,500. The spouse of the patients would also receive compensation.

Patients who received a hip shell or tibial baseplate and did not require corrective surgery would receive $2,750 in cash and equity and their spouses would also receive compensation.

A motion will now be filed to distribute and publish notice of the settlement, informing patients affected of the proposals. Patients will then have the opportunity to evaluate them and to decide if they accept them or wish to opt out.

The motion will also request the court to arrange a fairness hearing for final approval of the settlement.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR