Philips
(NYSE: PHG)
will pay at least $613 million to settle economic lawsuits related to its recall of millions of CPAPs and other respiratory devices.
U.S. District Court Judge Joy Flowers Conti, who has been overseeing the multidistrict litigation out of her court in Western Pennsylvania, approved the final settlement yesterday.
“The amount of value created and number of persons benefitted favors approval of this award,” Conti said in her order.
“Under the terms of the settlement agreement, there are set payments ranging from $55.63 to $1,552.25 per recalled device … for device payment awards, and $100 per recalled device for device return awards to users. Thus, the non-reversionary $506.3 million refund represents a floor, not a ceiling, and that amount will increase as additional returns of recalled devices are made, and additional claims for device payment awards are filed and approved. When including the costs for the claims administrator, attorneys’ fees and held costs, the total minimum constructive common fund becomes $613.3 million.”
Philips first announced the settlement in September. The deal only covers economic losses. Philips did not admit liability, wrongdoing or fault in the settlement and still faces significant lawsuits claiming deaths, injuries and medical costs related to the recall, which is related to sound abatement foam potentially degrading in the devices and getting into airways.
Since April 2021, the FDA has received 116,000 reports of problems — including 561 reports of deaths associated with the foam degradation issue. Earlier this month, Philips finalized a consent decree agreement with the U.S. Department of Justice and FDA over the management of the recall that includes a remediation payment option for the devices.
In a statement shared with MassDevice, the plaintiffs’ co-lead counsel in the case said they were pleased that Conti had granted final approval to the settlement, which had received more than 5 million people who purchased, leased, or rented recalled Philips devices.
Sandra L. Duggan of Levin Sedran & Berman, Kelly K. Iverson of Lynch Carpenter, Christopher A. Seeger of Seeger Weiss, and Steven A. Schwartz of Chimicles Schwartz Kriner & Donaldson-Smith said: “This agreement provides expedient payments and extended warranties on remanufactured machines to class members and holds Philips accountable for selling defective and unsafe products. We will continue to pursue justice on behalf of those injured by Philips’ defective products.”
MassDevice has a full timeline of the recall, which started three years ago.
