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Full Opinion
On August 29, 2001, this Court provisionally certified a class and granted preliminary approval to the partiesâ settlement agreement. This memorandum sets forth the Courtâs reasoning.
I. Background.
Sulzer Orthopedics, Inc. (âSulzer Orthopedicsâ) is a designer, manufacturer and distributor of orthopedic implants for hips, knees, shoulders, and elbows. One of its products is known as the âInter-Op acetabu-lar shell,â which is one component of a system used for complete hip replacements. Specifically, the Inter-Op shell is a socket-like device inserted into the acetabulum, which is a part of the pelvis; the shell is designed to receive a separate, ball-like device, which is inserted into the femur, or thigh bone. The two components thereby replace the articulating ball-and-socket structure of the hip joint. The Inter-Op shell is regulated by the federal Food and Drug Administration (âFDAâ).
Proper surgical attachment of these replacement components in the body is critical. Orthopedic implants are often cemented or screwed into position. Some implants are also designed to allow the bone to grow into and around them, holding them securely in place. The Inter-Op acetabular shell was designed to bond with the natural bone.
Unfortunately, a manufacturing defect apparently prevented some of Sulzer Orthopedicsâ Inter-Op shells from bonding with the acetabulum. In early December of 2000, Sul-zer Orthopedics announced a voluntary recall of certain manufacturing lots of its Inter-Op shells. Most of the recalled products were manufactured during or after October of 1999, but a limited number were produced as early as June of 1997. The recall stated that Sulzer Orthopedics had âreceived reports of post-operative looseningâ of some of the Inter-Op shells, apparently ârelated to a reaction of the body to a slight residue of lubricant used in the manufacturing process.â Sulzer Orthopedics recalled approximately 40,000 units of its Inter-Op shell, of which about 26,000 had already been implanted in patients.
One of the documents issued by Sulzer Orthopedics in connection with the voluntary recall included the following explanation:
Sulzer Orthopedics is the manufacturer of a hip implant that you received during hip replacement surgery. We sincerely regret to inform you that we have recently learned that a small number of the many implant parts that we manufactured may have a trace of lubricant residue on the surface that was not completely removed during the manufacturing process.
â sÂĄ: * * # *
The hip implant part is the acetabular âshellâ which was implanted into the upper part of your hip called the acetabulum. Normally, the bone would form an integrated bond with the shell; however, it appears that bone does not always bond with shells when the lubricant residue is present. Reported symptoms include severe groin pain and inability to bear weight on your leg. These symptoms are caused by the shell being loose from the bone. Only a small number of patients who received the shell during their total hip replacement have experienced loosening of the shell.
In fact, to date, about 2,400 of the patients who received implants of the Inter-Op shells have undergone ârevision surgeryâ â removal of the defective
Shortly after Sulzer Orthopedics issued its voluntary recall in December of 2000, a number of plaintiffs around the country filed lawsuits, in both state and federal courts. To date, there are pending about 1,300 civil suits nationwide, about 200 of which are in federal court. These cases involve about 2,000 named plaintiffs, primarily including implant recipients and their spouses. Over 90% of the state court actions have been filed in California, Texas, Florida, or New York. About 19 of the state court cases are styled as class actions, as are about 34 of the federal court cases. The defendants named in these lawsuits include not only Sulzer Orthopedics, but also: (1) Sulzer Medica USA Holding Company (âSulzer Medica USAâ), a holding company that owns Sulzer Orthopedics; (2) Sulzer Medica Ltd., a Swiss holding company that owns Sulzer Medica USA;
Pursuant to 28 U.S.C. § 1407, three different federal plaintiffs filed motions with the Federal Judicial Panel on Multi-District Litigation (âMDL Panelâ), seeking to consolidate and centralize 30 of the federal lawsuits.
On July 7, 2001, this Court issued an Order setting out the âpractices and proceduresâ it would follow during its administration of the MDL proceedings. Among other things, this Order: (1) temporarily appointed liaison and co-lead counsel for plaintiffs; (2) set an initial case management conference for August 17, 2001; and (3) directed counsel to submit an agenda for this conference, to include a discovery plan and also proposed deadlines for amendment of pleadings, expert
Given the quickly changing nature of the litigation, the Court used the initial case management conference to question the parties in open court regarding their motions for class certification and class settlement. The Court directed its questions to plaintiffsâ liaison and co-lead counsel, and also defendantsâ counsel. Given the wide publication of the pending motions, about 125 attorneys from around the country, representing plaintiffs and groups of plaintiffs, also attended the hearing. The Court permitted any attorney present to address the Court. The Court heard from those proposing preliminary Certification and approval, and also heard from a number of counsel, including counsel representing the interests of various state court plaintiffs who are not parties to the MDL proceedings but whose interests could be affected by class treatment of the Sulzer-relat-ed claims. Some spoke strongly in favor of the proposed certification and settlement, while others strongly opposed it.
During the course of the hearing, it became apparent that the proposed settlement agreement, as drafted, contained provisions that did not accurately reflect the understanding of the parties. Accordingly, the Court directed the parties to submit an amended proposed class settlement agreement by August 24, 2001. The Court then indicated it would allow any person (including persons not parties to any federal proceeding) wishing to offer additional objections to the proposed class and amended proposed class settlement agreement to submit their positions in writing by August 24, 2001. The Court received about 41 such comments, all of which it has reviewed in detail.
Finally, on August 28, 2001, the Court held an additional hearing on the pending motions for class certification and preliminary approval of class action settlement. Having now received extensive argument regarding the facts of this case and the applicable legal standards, the Court sets out its analysis below.
II. The Nature and Context of the Issues Presented.
Neither the Courtâs analysis nor the effect of its rulings can be understood without consideration of the context in which both occurred. The parties have jointly approached the Court, seeking only conditional certification of this matter as a class action and preliminary approval of their proposed settlement. As the parties understand, their motion, if granted, is only the first step in an extensive and searching judicial process, which may or may not result in final approval of a settlement in this matter.
As the Manual on Complex Litigation indicates, this threshold inquiry often involves no more than an informal presentation of the partiesâ proposals to the Court. Manual for Complex Litigation, § 30.41, at 236 (3rd
Thus, while it is certainly not the role of this Court to simply ârubber-stampâ a motion for conditional certification or preliminary approval (or, for that matter, any motion), the Court also must be mindful of the substantial judicial processes that remain to test the assumptions and representations upon which the partiesâ motions are premised.
It is true that, to date, this case has been somewhat unusual. Partly because of wide publicity within the plaintiffsâ bar and the general public, the Court has allowed the breadth and extent of the inquiry already conducted with respect to the pending motions to far exceed what it might normally employ. Indeed, the objections raised by some of the class members and their counsel, together with the Courtâs own probing, have already resulted in substantial revisions to the proposed settlement agreement. The process employed to date, however, as searching as it has been, is clearly preliminary and is no substitute for that which can be, and now in this case will be, accomplished through a full fairness inquiry.
For these reasons, the Court must, to a large extent, premise its determinations at this stage of the proceedings upon certain of the representations and assumptions made by the movants, at least to the extent those representations and assumptions have been supported by sworn declarations or statements of counsel and are not, on their face, suspect. The Court reserves for another time the right and obligation to test all of the premises behind the partiesâ motions and the Courtâs ruling, through the most probing of inquiries.
III. Class Certification.
The Court first examines the propriety of conditional certification of the proposed class. On August 15, 2001, plaintiffsâ co-lead counsel filed an amended complaint in this case, stating claims under the following legal theories: (1) strict liability, (2) negligence, (3) breach of implied warranty, (4) breach of express warranty, (5) âfear of future product failureâ (infliction of emotional distress), (6) misrepresentation, (7) equitable relief via medical monitoring, and (8) punitive damages.
In plain English, the plaintiffs propose that the class be made up of all Americans in whom were implanted a recalled Inter-Op acetabular shell, together with their loved ones. This class would then be divided into two sub-classes: those who have already had revision surgery, and those who have not had (but yet may have) revision surgery. The plaintiffs ask the Court to certify this class under Fed.R.Civ.P. 23(b)(3). The plaintiffs also ask the Court to certify the class under Fed.R.Civ.P. 23(b)(2), for the limited purpose of obtaining injunctive relief in the form of medical monitoring.
A Rule 23(a).
The plaintiffs have submitted their motion to certify a class in the context, and for the primary purpose, of consummating a settlement of this case. Although there is certainly ânothing inherently wrong with this practice,â this Court âmust pay âundiluted, even heightened, attentionâ to class certification requirements in a settlement context.â Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir.1998) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)). âStrict adherence to Rule 23 in products liability cases involving drug or medical products which require FDA approval is especially important.â In re American Medical Systems, Inc., 75 F.3d 1069, 1089 (6th Cir.1996) (emphasis in original) (hereinafter, âAMS â).
Rule 23(a) âstates four threshold requirements applicable to all class actions,â including actions involving proposed certifications of a âsettlement-onlyâ class. Amchem, 521 U.S. at 613, 117 S.Ct. 2231. These threshold requirements are:
(1) numerosity (a âclass [so large] that joinder of all members is impracticableâ); (2) commonality (âquestions of law or fact common to the classâ); (3) typicality (named partiesâ claims or defenses âare typical ... of the classâ); and (4) adequacy of representation (representatives âwill fairly and adequately protect the interests of the classâ).
Id. (quoting Fed.R.Civ.P. 23(a)(l-4)). âSubsection (a) of Rule 23 contains four prerequisites which must all be met before a class can be certified. Once those conditions are satisfied, the party seeking certification must also demonstrate that it falls within at least one of the subcategories of Rule 23(b).â AMS, 75 F.3d at 1079.
1. Numerosity.
In this case, it is clear that the proposed class is so numerous that joinder of all the proposed class members is impracticable. âThere is no strict' numerical test for determining impracticability of joinder.â AMS, 75 F.3d at 1079. Rather, â[t]he numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations.â General Tel. Co. v. EEOC, 446 U.S. 318, 330, 100 S.Ct. 1698, 64 L.Ed.2d 319(1980). âWhen class size reaches substantial proportions, however, the impracticability requirement is usually satisfied by the numbers alone.â AMS, 75 F.3d at 1079. The Sixth Circuit Court of Appeals has affirmed the certification of a class made up of less than 100 individuals. See Haytcher v. ABS Industries, Inc., 1991 WL 278981 at *1-2 (6th Cir. Dec.27, 1991) (âapproximately 61 individualsâ). The numerosity requirement is also satisfied more easily upon a showing that there is wide âgeographical diversity of class members,â which makes joinder of all the class members more impracticable. Council of and for the Blind of Delaware County Valley, Inc. v. Regan, 709 F.2d 1521, 1529 (D.C.Cir.1983).
2. Commonality.
The commonality requirement states that there must be âquestions of law or fact common to the class.â The commonality test âis qualitative rather than quantitative, that is, there need be only a single issue common to all members of the class.â AMS, 75 F.3d at 1080 (quoting 1 Herbert B. Newberg & Alba Conte, Newberg on Class Actions, § 3.10, at 3-47 (3rd ed.1992)). On the other hand, the reason behind the commonality requirement is that âthe class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion under Rule 23.â Califano v. Yamasaki, 442 U.S. 682, 701, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). Thus, if questions of law or fact common to all of the class members are far outweighed by differences, then class certification is inappropriate.
With regard to mass torts, like the defective hip implants at issue in this litigation, there are special considerations. The Sixth Circuit Court of Appeals has explained:
In mass tort accidents, the factual and legal issues of a defendantâs liability do not differ dramatically from one plaintiff to the next. No matter how individualized the issue of damages may be, these issues may be reserved for individual treatment with the question of liability tried as â a class action. Consequently, the mere fact that questions peculiar to each individual member of the class remain after the common questions of the defendantâs liability have been resolved does not dictate the conclusion that a class action is impermissible.
* * * * * >;ÂŤ
In complex, mass, toxic tort accidents, where no one set of operative facts establishes liability, no single proximate cause equally applies to each potential class member and each defendant, and individual issues outnumber common issues, the district court should properly question the appropriateness of a class action for resolving the controversy. However, where the defendantâs liability can be determined on a class-wide basis because the cause of the disaster is a single course of conduct which is identical for each of the plaintiffs, a class action may be the best suited vehicle to resolve such a controversy.
Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1197 (6th Cir.1988).
The Court concludes that, in this case, there do exist questions of law or fact common to all members of the class.
It is true, of course, that there are also substantial differences of fact and law between class members. For example, some class members may suffer no adverse medical affects, while others may suffer (and have suffered) terribly. Some class members may live in states where the law allows them to recover only if they suffer actual physical injury, while the state law applicable to other class members may allow them to recover even absent actual physical injury. And, even under legal theories normally allowed to class members by all states (e.g., negligence or strict liability), the legal formulation of those theories may vary from state to state. See generally In re Northern Dist. of Calif., Dalkon Shield IUD Prods. Liab. Litig., 693 F.2d 847, 854 (9th Cir.1982), cert. denied, 459 U.S. 1171, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983) (on issues of negligence, strict products liability, adequacy of warnings, fraud, and conspiracy, âcommonality begins to be obscured by individual case historiesâ). The Court concludes, however, that the questions of fact and law that are common to the members of the class are substantial, and are not outweighed by questions of fact and law idiosyncratic to each plaintiff. Accordingly, the Court concludes that the plaintiffs have carried their burden of showing that the proposed class meets the requirement of Rule 23(a)(2).
S. Typicality.
The typicality requirement is meant to ensure that the named partiesâ claims are typical of the claims advanced by the entire class. A plaintiffs claim is typical âif it arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if his or her claims are based on the same legal theory.â AMS, 75 F.3d at 1081 (quoting 1 New-berg, supra, § 3-13, at 3-76 (footnote omitted)). The typicality requirement ensures that the representative plaintiffsâ interests are aligned with those of the proposed class, and in pursuing their own claims, the named plaintiffs will also advance the interests of the class members. Id. âSometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiffs claim, and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question.â General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982).
In the plaintiffsâ amended complaint, there are five named representative plaintiffs: Harlan and Brenda Herman, Linda Wells, and George and Mary Jean Yasenchack. Harlan Herman was implanted with a recalled Inter-Op shell, but has not undergone a revision surgery. The same is true of Linda Wells. George Yasenchack was implanted with a recalled Inter-Op shell and, on April 9, 2001, underwent revision surgery to correct problems he was experiencing with the implant.
Based on these allegations, Harlan Herman and Linda Wells appear to have claims common to the proposed âSubclass 2â of plaintiffs â persons who may need, but have not yet undergone, revision surgery to correct problems with the Affected Inter-Op shells. Harlanâs wife, Brenda, appears to have claims common to those plaintiffs in Subclass 2 who have derivative claims, such as loss of consortium.
Similarly, George Yasenchack appears to have claims common to the proposed âSubclass 1â of plaintiffs â persons who have already undergone revision surgery to correct problems with the Affected Inter-Op shells. And Georgeâs wife, Mary Jean, appears to have claims common to those plaintiffs in Subclass 1 who have derivative claims, such as loss of consortium.
It is worth noting that some of the plaintiffs in these other, transferred cases refer to particular models of the Inter-Op shell implants they received. The Courtâs own research allowed it to view a copy of Sulzer Orthopedicsâ original recall notification to the FDA.
Furthermore, the evidence shows that the alleged reason for the failure of each of these implant models is the same â the differences in model configuration are essentially irrelevant to their reason for failure. Thus, the Court is satisfied that the claims asserted by the five named representative plaintiffs are typical, notwithstanding the fact that the implants they received may bear different model numbers than the implants received by other class members. â˘
In sum, the Court concludes that the representative plaintiffsâ interests are aligned with those of the proposed class, and in pursuing their own claims, the named plaintiffs will also advance the interests of the class members. As such, the plaintiffs have carried their burden of showing that the proposed class meets the requirement of Rule 23(a)(3).
k. Adequacy.
The adequacy requirement ensures that the named representative plaintiffs âwill fairly and adequately represent the interests of the class.â Fed.R.Civ.P. 23(a)(4). The Sixth Circuit Court of Appeals has âarticulated two criteria for determining adequacy of representation: 1) the representative must have common interests'with unnamed members of the class, and 2) it must appear that the representatives will vigorously prosecute the interests of the class through qualified counsel.ââ AMS, 75 F.3d at 1083 (quoting Senter v. General Motors Corp., 532 F.2d 511, 525 (6th Cir.1976), cert. denied, 429 U.S. 870, 97 S.Ct. 182, 50 L.Ed.2d 150 (1976)). Essentially, the ade
There does not appear to be any serious question of inadequacy in this case. At the hearing, even those attorneys who expressed some concern regarding the propriety of class certification agreed that proposed class counsel had the ability and experience to prosecute the case as a class action, and had reputations for doing so quite vigorously in other, similar cases. The Court has appointed the following individuals as class co-counsel: (1) John R. Climaco, of Climaco Lefkow-itz Peca Wilcox & Garofoli (Cleveland, Ohio); (2) R. Eric Kennedy, of Weisman, Goldberg & Weisman (Cleveland, Ohio); (3) Donald Barrett, of Barrett Law Office, P.A. (Lexington, Mississippi); (4) Keith M. Fleischman, of Milberg Weiss Bershad Hynes & Lerach, LLP (New York, New York); (5) Richard S. Wayne, of Strauss & Troy (Cincinnati, Ohio); (6) Stanley M. Chesley, of Waite, Schneider, Bayless & Chesley Co. LP (Cincinnati, Ohio); (7) Wendell H. Gauthier, of Gauthier, Downing, LaBarre, Beiser & Dean (Metairie, Louisiana); and (8) Daniel E. Becnel, Jr., of The Law Offices of Daniel E. Becnel, Jr. (Reserve, Louisiana). These individuals and their experience in representing plaintiffs in other national class action lawsuits is known to the Court and appears to be known, to an even greater extent, to those many attorneys who have attended the hearings conducted to date in this matter.
Furthermore, there does not appear to be any antagonism between the interests of the named plaintiffs and other members of the class they seek to represent. As noted, the proposed class is separated into two subclasses â implantees who have not yet had revision surgery, and implantees who have. The five named plaintiffs, themselves, are split between these subclasses. As the Supreme Court has noted, these subclasses might have interests that do not completely align: âfor the currently injured, the critical goal is generous immediate payments,â but â[t]hat goal tugs against the interest of exposure-only plaintiffs in ensuring an ample, inflation-protected fund for the future.â Amchem, 521 U.S. at 626,117 S.Ct. 2231. Thus, âa class divided between holders of present and future claims ... requires division into homogeneous subclasses under Rule 23(c)(4)(B), with separate representation to eliminate conflicting interests of counsel.â Ortiz v. Fibreboard Corp., 527 U.S. 815, 856, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999) (citing Amchem, 521 U.S. at 627, 117 S.Ct. 2231).
In this case, plaintiffs have provided âstructural assurance of fair and adequate representation for the diverse groups and individuals affected,â by dividing the class into homogeneous subclasses and providing each subclass with its own counsel. Amchem, 521 U.S. at 627, 117 S.Ct. 2231. Subclass 1 is separately represented by Mr. Kennedy, and subclass 2 is separately represented by Mr. Wayne. Thus, to the extent there exists any âantagonismâ between the interests of the named plaintiffs amongst each other, and as against other class members, the plaintiffs have cured this conflict by the use of separately represented subclasses.
In light of this structure, the only real âadequacyâ concern asserted by some objectors is that class counsel cannot be deemed adequate, within the meaning of Rule 23(a)(4), because they have not âadequatelyâ protected the interests of those individuals who might choose to opt out of the proposed settlement. This argument makes no sense. While it is true that âopt-out claimantsâ are entitled to certain procedural and even constitutional protections, which this Court must safeguard (a point discussed further below), it is not true that class counsel is charged with negotiating a settlement as beneficial to âopt-out claimantsâ as to claimants who choose to participate in the settlement. If class counsel does their job âadequately,â moreover, the structure of the settlement will contain protections designed
What these objectors fail to recognize is that âopt-outâ claimants not only opt out of the. settlement, but opt out of the class as well. As long as a claimantâs right to opt out remains intact â a point which, again, is discussed further, below â class counsel has no further obligation to protect the interests of that claimant. Indeed, the ⢠objectors would place an impossible and inherently irreconcilable obligation upon class counsel' â to negotiate a class-wide settlement which is fair, adequate, and beneficial to its participants, while leaving completely unaffected the interests of those who would choose not to participate in it. The Court does not believe that Rule 23 imposes any such burden on class counsel and does not believe âadequacy,â within the meaning of that Rule, is to be measured in such a fashion. Tellingly, the objectors provide no case law supporting their interpretation of Rule 23 and class counselâs obligation to opt-out claimants.
Accordingly, the Court concludes that the plaintiffs have carried their burden of showing that the named representative plaintiffs will fairly and adequately represent the interests of the class in this case.
B. Class Definition.
Notably, over the course of the last few weeks, the parties have presented the Court with different class definitions. For example, the first version of the proposed settlement agreement defines the settlement class to include persons having an unsatisfied claim involving: (1) Inter-Op shells âidentified in the Safety Alert dated December 5, 2000;â (2) âNatural Knee Tibial Baseplates identified in a Special Notification dated May 17, 2001;â and (3) âReprocessed Shells.â Proposed agreement at § l.l(d & eee). The most recent version of the proposed settlement agreement does not include in the settlement class persons having unsatisfied claims related to âreprocessed shells,â and the class proposed in the amended complaint does not refer to persons having unsatisfied claims related to knee implants. Thus, the Court addresses here the precise definition of the conditionally certified class.
The Court conditionally certified the following class:
âAll citizens or residents of the United States who have had Affected Inter-Op acetabular shell hip implants placed in their bodies, together with their associated consortium claimants.â16 Further, this class shall be divided into two subclasses, as follows: Subclass 1 shall consist of those class members who undergo revision surgery prior to the Final Judicial Approval Date to correct problems with the Affected Inter-Op shells, and their associated consortium claimants. Subclass 2 shall consist of class members who may need to undergo revision surgery after the Final Judicial Approval Date to correct problems with the Affected Inter-Op shells, and their associated consortium claimants.17
For two primary reasons, this conditional class does not include persons in whom were implanted reprocessed shells. First, the parties explicitly excluded such persons from the settlement class definition used in the most recent version of the proposed settlement agreement. Second, even had the parties not excluded persons asserting claims related to reprocessed shells, the Court had serious concerns whether commonality, typicality, and adequacy existed in connection to these claims. Because it appears that there may exist significant factual and legal differences between (a) persons who received Inter-Op
Turning to knee implant claimants, in the most recent version of the proposed class settlement agreement, the parties did include in the settlement class persons having unsatisfied claims involving certain knee implants. For at least three separate reasons, the Court concludes that the conditionally certified class cannot include these persons (and, therefore, that the parties must submit an am