J&J Persuades Appeals Court to Toss $151 Million Hip Verdict

(Bloomberg) -- Johnson & Johnson persuaded an appeals court to throw out a $151 million award against the company over its Pinnacle artificial hips in a ruling that will affect thousands of lawsuits over the devices.

A judge’s error in allowing hip recipients’ lawyers to use “highly prejudicial” evidence about bribes paid by officials of J&J units in their 2016 case mandated the jury verdict’s reversal, the New Orleans-based appeals court concluded Wednesday.

The five hip patients can seek a new trial of their combined claims, the court said in the 57-page ruling. Mark Lanier, the plaintiffs’ lawyer, said Wednesday he’s ready to retry the case immediately. “I think we’ll get more money the next time around,” he said.

The three-judge panel found the original trial was “rife with errors that made it impossible for the defendants to get a fair trial,” John Beisner, a lawyer for J&J and its DePuy unit, said in an emailed statement. “We look forward to the opportunity to retry plaintiffs’ claims on a level playing field.” DePuy makes the hips.

The appellate ruling provides a road map for the future trials of more than 10,000 patient suits blaming J&J and its DePuy unit for selling defective metal-on-metal hips. J&J has won only one of the four Pinnacle cases that have gone to trial since 2014.

Dallas Juries

Juries in federal court in Dallas have ordered the company to pay a total of more than $1.7 billion in damages over the hips, but several awards were later cut by U.S. District Judge Ed Kinkeade, who is overseeing a consolidation of suits over the devices. One verdict was for more than $1 billion.

Jurors originally awarded the five patients at issue in the case a total of $502 million in compensatory and punitive damages in March 2016. Kinkeade slashed that award to $151 million four months later.

In their appellate briefs, J&J’s lawyers targeted Kinkeade’s decision to let Lanier “inflame the jury’s passions’’ by referring to settlements J&J agreed to in 2011, amid claims that overseas officials bribed European doctors to implant the company’s hips and knees.

The U.S. Fifth Circuit Court of Appeals panel agreed, finding the judge erroneously allowed Lanier to “taint the result by inviting the jury to infer guilt based on no more than prior bad acts.” Kinkeade also mistakenly allowed Lanier to tell jurors J&J paid kickbacks to “henchmen’’ of former Iraqi dictator Saddam Hussein under a United Nations program, the panel ruled.

Bribes Settlement

J&J agreed to pay $70 million in 2011 to resolve a government investigation into bribes paid in Europe and Iraq to win contracts and sell drugs and medical devices, such as the hips. As part of that settlement, the drugmaker admitted it paid kickbacks to the former government of Iraq in exchange for contracts to provide supplies under the UN Oil-For-Food Program.

Lanier should not have been allowed to reference the Iraqi kickbacks because they didn’t involve DePuy or its products, the panel said. They were “wafted before the jury to trigger its punitive instinct,” the judges noted.

The case is Christopher v. DePuy Orthopedics, No. 16-11051, U.S. Fifth Circuit Court of Appeals (New Orleans).

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