The Top Ten Civil Justice Stories of 2013 (Part 2)

In part two of our second annual countdown of the top 10 civil justice stories of 2013, we continue with the top five, culminating with the biggest civil justice story of the year.  Read part 1 of the top ten civil justice stories of 2013 here.

5. Johnson & Johnson’s Depuy Agrees to $2.5 Billion Settlement for Defective Hip Claims

Why It’s Big

Finally, Johnson & Johnson’s DePuy Othopaedics owns up to the fact that they released a defective product to the American public. After years of denial from J & J about their problematic DePuy hip replacement device, the company entered into a settlement agreement to pay nearly $2.5 billion in compensation to an estimated 8,000 patients who were forced to have the all-metal artificial hip removed and replaced with a non-defective version. Separately, the company agreed to pay all medical costs related to such procedures, which means the total settlement could reach $3 billion.

What Did We Learn?

Many patients suffered terrible, unusual pain after having these defective hip replacement devices implanted. An estimated 8,000 patients were injured by the flawed hip implant called the Articular Surface Replacement made by DePuy Orthopaedics, a division of Johnson & Johnson. Johnson & Johnson denied there was a problem with the implant while patients continued to suffer from crippling injuries caused by metallic debris that was shed by the device’s metal ball and cup.  This is inexcusable, especially since the company was aware of the potential problem in 2011. An internal company document expressly stated that the hip replacement device would fail within five years in 40 percent of the patients who received it.

How could such a reputable company allow such a shocking failure rate to be shoved “under the rug”?  In pursuit of the almighty dollar, we never cease to be amazed by the bad decisions that companies make.

Dig Deeper

“Johnson & Johnson in deal to settle hip implant lawsuits”, Barry Meier, The New York Times

4. NFL Addresses Brain Injuries, Settles Concussion Lawsuit for $765 Million

Why It’s Big

The NFL and former players who filed suit over the brain damage they suffered during their playing careers reached a $765 million settlement. The deal avoided a full blown trial and what was sure to be a lengthy and expensive discovery period, and the settlement secures hundreds of millions for injured players, their families and for continued medical research into the dangers of traumatic brain injuries.

What Did We Learn?

Two things: (1) the NFL is vulnerable to civil litigation over inaction relating to brain injuries involving NFL players; and (2) head trauma associated with playing football is a serious safety issue.  Given the attention garnered by the NFL lawsuit, states across the country have taken action to pass new laws regarding head injuries suffered by kids. The laws require education for students, parents and coaches and many include requirements that injured kids and teenaged players be immediately removed from game play and not be allowed to return until cleared to do so by a doctor.

These steps are important to ensure that young children, a group especially vulnerable to head injuries, do not suffer debilitating harm at an early age. The attention directed to brain injury prevention gained much traction in 2013: the NFL established a “head health” challenge fund with vendor Under Armour and GE to dream up ways to reduce head/brain injuries, and former Microsoft honcho, and current Seahawks owner Paul Allen announced funding for a brain injury research study also.

Dig Deeper

• “NFL and ex-players reach deal in concussion lawsuit,” Stephanie Smith, CNN.com.
• NFL, Under Armour and GE Seek Ideas to Accelerate Concussion Research, Prevention, Diagnosis & Treatment
• Seahawks owner Paul Allen gives $2.4M for brain injury research

3. Big Bank Forced to Pay Big Bucks in Settlement for Making Bad Loans

Why It’s Big

The $13 billion deal between JPMorgan and the U.S. government represents the largest amount ever paid by a single company, more than three times the amount forked over by BP in connection with the 2010 gulf oil spill. Of the $13 billion, nearly half will go to repay investors who lost money due to bad loans made by the bank which, on a broader basis, contributed to the U.S. financial meltdown of 2008. Another $4 billion will be used to relieve struggling consumers whose loans JPMorgan handles, while other funds will go towards restoring neighborhoods blighted by abandoned homes.

What Did We Learn?

The JPMorgan settlement sends the important signal to Wall Street that the government will not sit idly by and allow financial institutions to run over consumers. The government hammered out the massive deal to punish a major corporate wrongdoer, something that many hope will send a loud message to other firms who either have engaged in or are contemplating engaging in similarly risky schemes. Many pundits, perhaps beginning as early as the Occupy Wall Street protests, contended that “not one person went to jail” over the financial meltdown.  Well, JPMorgan didn’t “go to jail” but did pay in dramatic terms. Finally, lest anyone think the settlement is a slap on the wrist, $13 billion should be put into some context (yes, that is a lot of millions). In 2012, JPMorgan saw a total profit of $21 billion, meaning the hit will be definitely be felt.

Dig Deeper:

“Everything you need to know about JPMorgan’s $13 billion settlement,” Neil Irwin, WashingtonPost.com.

2. Supreme Court To Tackle Controversial Obamacare Birth Control Provision

Why It’s Big

The Supreme Court will, once again, be presented with an opportunity to strike down a controversial provision in the Affordable Care Act, commonly called Obamacare. Under the law, private employers with more than 50 employees must provide health insurance that covers a range of birth control and reproductive health screening.  At least 60 lawsuits were pending during 2013 challenging this mandate on religious grounds.

What Did We Learn?

Whenever a split of authority between federal appeals courts arises, the US Supreme Court tends to act to settle the matter.  The federal Third Circuit appeals court majority concluded that the First Amendment right to exercise a religious belief — under the Free Exercise Clause — is a “personal right” that exists for the benefit of human beings, not artificial “persons” like corporations.   Religious belief, it reasoned, develops in the “minds and hearts of individuals.”  In drawing this conclusion, the Court noted the contrary view announced by the Tenth Circuit appeals court, and stated that “we respectfully disagree.”

The 10th Circuit sided with corporations such as Hobby Lobby who oppose the mandate, concluding “that the contraceptive-coverage requirement substantially burdens Hobby Lobby” and that the store should not be subject to fines for failing to comply with providing the contraceptive options.  The U.S. “Supremes” will take up the question of whether a for-profit company can refuse to cover contraception for its employees because of religious objections.

In response to the news the White House stated: “The health care law puts women and families in control of their health care by covering vital preventive care, like cancer screenings and birth control, free of charge. Earlier this year, the Obama Administration asked the Supreme Court to consider a legal challenge to the health care law’s requirement that for-profit corporations include birth control coverage in insurance available to their employees. We believe this requirement is lawful and essential to women’s health and are confident the Supreme Court will agree.”  But will the “Supremes” see it that way?  Stay tuned for a ruling.

Dig Deeper

“Does Hobby Lobby Have a First Amendment Case?  Yes and No.”, Feisal G. Mohamed. The Huffington Post
Finally, the top civil justice story of 2013 is:

1. Corporate Hypocrisy: BP Oil Now Attacks Gulf Oil Disaster Settlement It Wanted

Why It’s Big

The wheels appear to have come off a settlement that was once heralded as an example of how a corporation should own up to, and rectify, a mistake. Almost immediately after the complex, attorney-designed $20 billion settlement agreement was approved, BP and its team of attorneys developed a bad case of buyer’s remorse. The company complained about the formula used by the settlement administrator to pay victims.

But, wait.  Didn’t BP’s attorneys pore over every last detail of the massive settlement before it was approved?  Yes, but…as the costs of the settlement ballooned upward, BP became increasingly aggressive in disputing payouts. Over several months, BP launched a surprising attack against its own carefully drafted agreement, both in newspaper ads, and by appealing the matter all the way to the federal appeals court, asking that it be let out of the major settlement terms that its lawyers previously implored a federal judge to approve.

What Did We Learn?

This sad case reveals just how quickly corporate responsibility can be thrown out the window when it’s time to pay the tab. The reality is that BP failed to fully consider all aspects of the settlement agreement and signed off on a formula that it now wishes it hadn’t.  For example, every gulf business which met the criteria, was entitled to compensation—even an escort service! However, regret is not a legal basis for ripping up a massive, hard negotiated settlement agreement and we believe that BP’s current attempts to “get out of” its own settlement terms will be soundly rejected by the appeals courts.  It is hard to imagine what BP was thinking when it dreamed up the public relations attack on its own settlement.

Dig Deeper

“Oil Spill Judge ‘Deeply Disappointed’ in BP,” Paul Barrett, Businessweek.com.

Richard N. Shapiro has been publishing on The Legal Examiner since 2007. He and co-author Patrick Austin are personal injury attorneys based in Virginia Beach with Shapiro, Lewis, Appleton & Favaloro law firm.