My previous post started out as an analysis of Stryker and ended up being about Depuy, but I think it was important in order to put into context.
Here is some additional information needed to continue this discussion. Johnson & Johnson is 10 times the size by market capitalization as Stryker. The global universe of recalled Stryker Rejuvenate is roughly 2/3rds the size of Johnson & Johnson's Depuy ASR.
Johnson & Johnson's market capitalization is roughly $250 billion. They have set aside billions to fund the litigation and pay claims related to the Depuy ASR. Stryker has roughly a $25 billion dollar market capitalization.
So, what strategy does Stryker employ? We already know that Stryker has hired Broadspire, just like Depuy. We also know that Depuy talked settlement to anyone who would listen, but never offered any money. I would argue that Stryker cannot go down that road, for the following reasons:
1. They are too small and to employ a strategy will cause them to hemorrhage money. Lawyers alone are going to cost them a fortune.
2. The lawyers representing plaintiffs have already built up their knowledge base litigating Depuy ASR, Depuy Pinnacle, Wright Conserve, Biomet, etc.
3. Unlike Depuy, where most lawyers opted for the MDL (and got stuck for 3 years), lawyers with Stryker cases are going to employ strategies which may have Stryker defending themselves in state court jurisdictions from California to New Jersey to Florida to Massachusetts.
That takes us back to Stryker's options:
Option 1: Set a value on claims and publicize it. In certain litigation, defendants will basically tell lawyers what they are going to pay for uncomplicated claims---simple revision claims (if there is such a thing). If you want it, come get it, but we will not pay a penny more. This strategy comes with the requirement that a company keep to its word when a lone ranger lawyer or disruptive claimant comes in and wants more just so they can tell everyone else they got more. As for complicated claims, in this case people who cannot be revised but have serious problems, or people who are totally disabled, those are handled on an individual basis.
Option 2: I call this the "find the weak link" option. Find lawyers or claimants who are willing to settle at a value that the majority of lawyers would think was less than the value than the case, settle with those people as quickly as possible, and let the word get out that you are open for business. Not a bad strategy, if you pull it off and get enough people to bite. The downside is that those who want full value will stay in the litigation and continue to fight, and all the while you are still hemorrhaging attorneys fees.
Option 3: I call this the "pick off the big fish strategy" option. Locate respected lawyers or groups of lawyers who have inventories of cases and immediately engage them in settlement discussions. If those lawyers are reasonable (many should at this time in light of the fatigue of Depuy ASR) and start settling claims. Once clients of other lawyers know that claims are being settled, and the values are fair and reasonable, clients of the outlier lawyers will begin to pressure them to settle their claims. Of course, if you don't do this in conjunction with option 1, every lawyer will claim he got more money than every other lawyer or that the settling lawyers are sell out lawyers. However, in the end, a fair and equitable settlement is just that. I would argue this is the best strategy for Stryker.
Option 4: MDL Strategy: This option can incorporate parts of Options 1, 2, or 3. The MDL strategy uses the MDL as a mechanism to either settle cases or delay cases. As we have seen with Depuy, the MDL can be used to delay. It can also be utilized by a defendant to evaluate their liability until they can determine what strategy to deploy. It can also be utilized to try and force all claims to one venue and force a global settlement. The problem with this strategy is that it is not quick. It gets everyone in one place, but once they are there, it is like herding cats---virtually impossible. Also, lawyers in leadership have a vested interest in common benefit work, which is ultimately paid out of any settlement of any case that touches the MDL, and is over and above the contingency fee they receive on their own cases.
What Stryker chooses to do remains to be seen. I would suspect that they will deploy one or more of these options. Time will tell.
