Biomet Reports Show Rising Litigation Liabilities for Metal Hips
JANUARY 17, 2020 (Sarasota, FL) — Zimmer Biomet Holdings’ (ZBH) most recent quarterly financial report puts the litigation liability for the M2a-Magnum hip at $65.7-million. Since May 2018, the expected cost of litigation from the M2a-Magnum metal on metal hip keeps going up quarter after quarter, based on the company’s financial reports.
Litigation liability is an estimate or prediction of how much money a company expects to lose or spend due to current and future litigation. Typically, litigation liability costs should go down over time as individual lawsuits and settlements wind down and fewer cases are left to litigate.
However, the Biomet M2a-Magnum litigation liability amount has not gone down over time, as one would expect. Instead, the predicted costs of litigation have increased over time, sometimes greatly. In the fall of 2018 alone there was a $20 million spike and estimates since then continue to rise steadily.
RECENT ZIMMER BIOMET LITIGATION LIABILITY AMOUNTS BY QUARTERLY REPORT RELEASE DATE
|QUARTERLY REPORT DATE||LIABILITY AMOUNT|
|MAY 2018||$32.5 million|
|AUGUST 2018||$41.4 million|
|NOVEMBER 2018||$62.1 million|
|MAY 2019||$62.1 million|
|AUGUST 2019||$64.3 million|
|NOVEMBER 2019||$65.7 million|
It is not surprising that litigation costs would increase so dramatically for ZBH in late 2018. That’s when the multi-district litigation (MDL) that consolidated all metal-on-metal hip lawsuits into one lawsuit in South Bend, Indiana shut down. This sent thousands of plaintiffs back to their local federal courts to try their lawsuits, individually. Suddenly, Zimmer Biomet faced lawsuits in separate locations around the country instead of only in the Indiana MDL.
Underestimating the Future Financial Risk
The litigation liability figure of $65.7 million appears extremely low, given recent jury verdicts in similar metal-on-metal hip lawsuits. For example, juries returned verdicts of roughly $500 million, $1 billion, and $240 million in three consecutive multi-plaintiff trials over a similar metal-on-metal hip manufactured by Johnson & Johnson.
It is highly possible that Zimmer Biomet’s estimate of $65.7 million to set aside for this litigation may not be enough to cover even a single jury verdict. Of note, mctlaw alone has 19 jury trials scheduled over the next year and a half.
Mctlaw is leading the U.S. litigation against metal-on-metal hip replacements with clients across the country. The Firm filed the first metal-on-metal (MoM) hip replacement lawsuit in the United States in 2008 and has been continuously litigating these cases ever since.
Contact: Altom Maglio, Managing Partner, mctlaw