In re Telectronics Pacing Systems, Inc., No. MDL-1057.

• Citation: 137 F.Supp.2d 985
• Decision Date: 08 March 2001
• Docket Number: No. MDL-1057.,No. C-1-95-87.
• Parties: In re TELECTRONICS PACING SYSTEMS, INC., Accufix Atrial "J" Leads Products Liability Litigation
• Court: U.S. District Court — Southern District of Ohio

137 F.Supp.2d 985

In re TELECTRONICS PACING SYSTEMS, INC., Accufix Atrial "J" Leads Products Liability Litigation

No. MDL-1057.

No. C-1-95-87.

United States District Court, S.D. Ohio, Western Division.

March 8, 2001.

COPYRIGHT MATERIAL OMITTED

Richard Stuart Wayne, Strauss & Troy, Cincinnati, OH, Ronald Richard Parry, Arnzen Parry & Wentz, Covington, KY, Stanley Morris Chesley, Waite, Schneider, Bayless & Chesley, Cincinnati, OH, for Eugene H Owens, on behalf of himself and all others similarly situated.

Ronald Parry, Arnzen Parry & Wentz, Covington, KY, for Elise Marie Owens.

Frank Chester Woodside, III, James Albert Comodeca, Dinsmore & Shohl, Cincinnati, OH, Charles P Goodell, Jr., Richard M Barnes, Goodell DeVries Leech & Gray, Baltimore, MD, for TPLC Inc. dba Telectronics Pacing Systems Inc.

Frank Chester Woodside, III, Dinsmore & Shohl, Cincinnati, OH, Charles P Goodell, Jr., Goodell DeVries Leech & Gray, Baltimore, MD, for Telectronics Holdings Ltd.

Gerald Joseph Rapien, Daniel R Warncke, Taft Stettinius & Hollister, Cincinnati, OH, for Telectronics Pty Limited.

Amanda Frost, Public Citizen Litigation Group, Washington, DC, amicus.

Gerald Joseph Rapien, Daniel R Warncke, Taft Stettinius & Hollister, Cincinnati, OH, S Patrick McKey, Gardner Carton & Douglas, Chicago, IL, for Pacific Dunlop Limited and Nucleus Limited.

Virginia Conlan Whitman, Special Master, Cincinnati, OH.

OPINION

SPIEGEL, Senior District Judge.

This matter is before the Court on the Sixth Circuit's July 19, 2000 Order Reversing the Class Action Settlement (doc. 903); the Court's November 20, 2000 Order Preliminarily Approving the Settlement (doc. 964); Defendants TPLC's and Teletronics' Motion in Support of the Proposed Settlement Agreement (doc. 1016); the PSC's Motion in Support of the Proposed Settlement Agreement (doc. 1018); Defendants Pacific Dunlop Ltd.'s and Nucleus's Joint Motion in Support of the Proposed Settlement Agreement (doc. 1021); and Public Citizen's Memoranda in Opposition to the Proposed Settlement Agreement (docs. 1004, 1005, 1024 & 1096).

In addition, the Court held an all-day Fairness Hearing in this matter on February 15, 2001, which was open to the all of the class members, Counsel representing the Parties to this action, any Objectors or opt-out claimants to the proposed settlement, and to Public Citizen, as amicus curiae (doc. 1035).¹

I. BACKGROUND

A. Introduction

1. The Complaint.

This case involves a nationwide products liability action, alleging that Defendant TPLC Holdings, Incorporated (formerly, Telectronics Pacing Systems, Incorporated) and Defendants Accufix Research Institute, Incorporated (formerly TPLC, Incorporated) (hereinafter, "TPLC" or "ARI")², as well as Pacific Dunlop Limited (hereinafter, "Pacific Dunlop" or "PDL") and Nucleus Limited ("Nucleus") (hereinafter, collectively referred to as the "Australian Defendants" or "Defendants"), allegedly placed into the stream of commerce defective Accufix Atrial "J" Pacemaker Leads, Model Nos. 330-801 and 329-701 (hereinafter, referred to as the "J Leads" or the "Accufix Leads") (see doc. 1, the "Complaint").³

2. Defendants' Responses.

Pacific Dunlop is a publicly-traded Australian company (see doc. 1021). At relevant times, Pacific Dunlop was the ultimate parent and beneficial owner of Accufix Research Institute, Inc. f/k/a/ TPLC, Inc., and TPLC Holdings, Inc. f/k/a/ Teletronics Pacing Systems, Inc. (hereinafter, collectively known as "Teletronics"). Teletronics manufactured, marketed, and distributed the Accufix Atrial "J" Leads, Model Nos. 329-701 and 330-801, that are the subject of this litigation. The "Nucleus" corporation is a wholly-owned subsidiary of Pacific Dunlop that also held, at relevant times, a beneficial ownership interest in Teletronics.

On behalf of all recipients of Accufix Leads (and their spouses), the Plaintiffs' Steering Committee (hereinafter, the "PSC", "Plaintiffs," or "Plaintiffs' Counsel") alleged in the Complaint that Teletronics was liable for its manufacture and distribution of the Accufix Leads, and requested compensatory and other damages. With respect to Pacific Dunlop and Nucleus, the PSC alleged that these entities were the principals and/or alter egos of Teletronics and were liable for any injury or damage caused by Teletronics. All Defendants answered the Complaint and denied any wrongdoing or liability for the alleged damages to Plaintiffs.

3. The February 15th Hearing.

On February 15, 2001, the Court held a Fairness Hearing on the Plaintiffs' Steering Committee's Motion To Approve The Proposed Class Action Settlement and Mandatory Class Certification (hereinafter, the "February 15th Hearing") (see docs. 1018 & 1035).

At the February 15th Hearing, the Court also heard oral arguments from members of the PSC in support of class certification and settlement approval as well as arguments made in support of the proposed settlement by attorneys representing Defendants TPLC, PDL, and Nucleus.

Additionally, the Court heard arguments presented by Ralph Nader's public advocacy group, Public Citizen, as amicus curiae (see 1006), which opposes certain aspects of the Proposed Settlement Agreement (hereinafter, referred to as the "Second Settlement" or the "Agreement"). The Court granted Public Citizens amicus curiae status even though it did not seek leave to intervene or formally object, but instead filed a Motion for Leave to Participate as Amicus Curiae (docs. 1004 & 1005). Apparently this is the case, because its only client, Harold Reed, has withdrawn his Objections and he has decided to opt-out of this Settlement.

The Court will detail the arguments of Public Citizens in a later section of this Order.

4. Dr. Granata's Report.

The PSC also submitted into evidence the Report of Atillio V. Granata, M.D., M.B.A. (hereinafter, the "Report"), which Report concludes that the amount of monies allocated to the Patient Benefit Fund and the Reserve Fund (hereinafter, collectively referred to as the "Fund") is ample enough to cover the 2001 Plan of Allocation drafted by Class Counsel (hereinafter, referred to as the Second Plan of Allocation) (see doc. 1015).

In connection with the Settlement of 1998 (hereinafter, the "First Settlement"), the PSC consulted with Alan L. Hillman, M.D., M.B.A., and an Associate Professor of Medicine and Associate Professor of Health and Management at the School of Medicine and the Wharton School of the University of Pennsylvania. Professor Hillman was consulted in order to determine whether sufficient funds existed to pay all claims according to the 1998 Plan of Allocation (hereinafter, referred to as the "Second Plan of Allocation").

Dr. Hillman had concluded that the Settlement Master would be able to distribute the settlement proceeds according to the First Plan of Allocation. Dr. Hillman's 1998 Report was filed with this Court at that time. In our Order approving the First Settlement, the Court noted that we found Dr. Hillman's analysis credible and persuasive (doc. 712). See In re Telectronics Pacing Sys., Inc., 186 F.R.D. 459, 470 (S.D.Ohio 1999).

5. The Members of the Class.

As of the February 15th Hearing, the class totaled over 25,000 members, approximately 13,000 members are alive and 12,000 are deceased, with the average age of the class members estimated by the Settlement Master to be approximately 77.5 years of age. Only two of the class members were present at the Hearing, and although they were given an opportunity to be heard on the record, the two class members who were present at the Hearing chose not to speak on the record at that time.

There were no other formal Objectors, opt-out individuals, or class members at the Hearing.

6. The Objectors.

As of the date of the February 15th Hearing, the Court is aware of no Objectors to this Settlement, except for those of class member Viola Watts, who agreed with the concerns of non-party and non-intervener, Public Citizen, which was given a full opportunity to be heard by the Court during the Hearing in regards to the issue of the approval of the Settlement Agreement.

7. The Court's Holding.

The PSC, Plaintiffs' Counsel, Defendants' Counsel and Public Citizens diligently briefed the issue of approval of the proposed Second Settlement Agreement in regards to this class action, providing the Court with a significant amount of briefing, memoranda of law citations, submissions, testimonials, and other evidence.

Having reviewed and considered all of the briefs, points of authority, and supporting documents filed with the Court, as well as considering the oral arguments, testimony, documentary evidence, declarations, and objections made on the record at the February 15th Hearing, the Court is now prepared to rule on the PSC's Motion To Approve The Proposed Class Action Settlement and Mandatory Class Certification. This Opinion and Order sets forth the Court's ruling on these matters.

After reviewing the entire Second Settlement, we conclude that the Agreement as a whole is fair, adequate, and reasonable in this case. Therefore, we GRANT Plaintiffs' Steering Committee's and Defendants' Motions To Approve The Proposed Class Action Settlement (docs. 1016, 1018 & 1021).

B. Factual History

Defendant Teletronics manufactured the Accufix Atrial "J" Lead (see doc. 1018). The Lead is part of a pacemaker that physicians routinely surgically implant to restore a normal heartbeat. Teletronics distributed Model No. 330-801 and 329-701 in the United States. The J-Lead is a fish hook shaped electrode that is implanted in the atrium of the heart. The Lead contains two coiled electrical wires. The Lead also has a three and one-half inch long flat wire. The flat wire is known as the "stiffner wire," or "retention wire," or "J-wire."

This wire maintains the shape of the Lead during and after implantation. The wire is encased directly underneath the polyurethane insulation. As the heart beats, the retention wire bends...