Taranto v. Orthopedics Inc et al

Filing 44

OPINION AND ORDER: DENYING 35 MOTION for Settlement Enforcment of Agreement filed by Rita Taranto.. Signed by Judge Robert L Miller, Jr on 3/23/15. (jld)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION

IN RE: BIOMET M2a MAGNUM HIP
IMPLANT PRODUCTS LIABILITY
LITIGATION (MDL 2391)

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CAUSE NOS.

3:14-CV-737
3:14-CV-1434
3:14-CV-1505

OPINION AND ORDER
The plaintiffs’ motions to enforce the Master Settlement Agreement are
before me. The defendants (collectively referred to as “Biomet”) objected, and I
heard oral arguments on March 17, 2015. For the following reasons, I deny the
plaintiffs’ motions.

I. BACKGROUND
The following facts are derived from the exhibits attached to plaintiffs’ reply
brief [Doc. No. 32-1 and 32-2] (emails between plaintiffs’ counsel, Ilyas Sayeg, and
Biomet’s lead counsel, John Winter ) and Mr. Winter’s affidavit [Doc. No. 30-1].
In November 2014, Biomet exercised its right under ¶ 3(b) of the Settlement
Agreement to dispute the amount of compensation payable to these plaintiffs —
George Holmes, Griseth DeJesus, and Rita Taranto — and to proceed to
mediation. Mediation had yet to occur when, on December 1, Mr. Winter emailed
plaintiffs’ counsel, Mr. Sayeg, and (1) made an offer to settle Mr. DeJesus’s and
Ms. Taranto’s claims, (2) gave an estimate of what he thought Mr. Holmes’s claim

was worth, and (3) told Mr. Sayeg that one or more of the cases could proceed to
mediation if the plaintiffs wished.
No evidence was presented as to whether Mr. DeJesus or Ms. Taranto
formally accepted Biomet’s offers to settle, or, if so, when that might have
occurred. But Mr. Sayeg emailed Mr. Winter on December 22, 2014 and made a
“counter offer” to settle Mr. Holmes’ claim, to which Mr. Winter replied: “Ok to
resolve at $[redacted]K.”
During the course of these negotiations, Mr. Sayeg and/or his firm and Mr.
Winter were engaged in an ongoing discovery dispute involving a motion to compel
production of documents in an unrelated Biomet case pending in a Florida circuit
court, Zaremba v. Orthopedics, Inc, et al,Case No. 2014-CA-01932-NC. On January
6, Mr. Winter notified Mr. Sayeg that “either he accepted the rules approved by
this Court regarding the format of documents already produced or Biomet was
going to revoke any settlement offers previously discussed.” Mr. Sayeg declined.
Mr. Winter revoked the offers to settle these cases.
The next day (January 7), Mr. Sayeg reportedly sent “fully signed and
executed settlement agreements” to Biomet on behalf of DeJesus, Taranto, and
Holmes, “accept[ing] the terms of the MSA [Master Settlement Agreement].”
On January 11, Mr. Winter sent Mr. Sayeg a letter reiterating that Biomet’s
offers to settle had been revoked on January 6.

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II. DISCUSSION
The plaintiffs moved to enforce the terms of the Master Settlement
Agreement, contending that it is “binding” and that they’re “eligible plaintiffs”
within the meaning of the Master Settlement Agreement, so Biomet is required to
settle their claims; that Biomet doesn’t have any authority under the Master
Settlement Agreement to revoke the settlement offers; and that Biomet shouldn’t
be allowed to punish these plaintiffs simply because they’re represented by the
same law firm that represents the plaintiff in Zaremba. The plaintiffs’ arguments
aren’t supported by any legal authority and are inconsistent with key provisions
in the Master Settlement Agreement.
Paragraph 3 of the Master Settlement Agreement gives both the plaintiffs
and Biomet the right to dispute the base compensation amounts to which specific
plaintiffs would otherwise have been entitled to under ¶ 2, and required mediation
in those cases. It provides in relevant part:
3. Mediation of Cases: The cases selected by Plaintiffs and
Biomet for resolution pursuant to this paragraph will be referred to
as the “mediation cases.” Cases to be mediated are as follows:

(b)

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Contested Cases. Biomet also believes that there is good
cause to reduce the amounts to be paid on cases that
qualify for payments, pursuant to Paragraph 2 of this
Settlement Agreement. Good cause for Biomet to seek to
reduce the amount to be paid to a specific plaintiff,
include, but are not limited to, evidence of trauma,
infection or other objective explanations for a premature
failure of the hip system with the absence of evidence of
a MoM injury. By May 30, 2014, Biomet shall provide a
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list of its contested cases from all filed cases with
materially completed fact sheets as of December 31,
2013. By September 19, 2014, Biomet shall provide a list
of its contested cases from all filed cases with materially
completed fact sheets served between January 1, 2014
and June 13, 2014
(c)

Mediation Process. The cases selected by Plaintiffs and
Biomet for resolution pursuant to this paragraph, will be
mediated with the assistance of Thomas Rutter of ADR
Solutions in Philadelphia, who will act as the mediator to
work with the Parties to resolve any of the mediation
cases, pursuant to this paragraph. Beginning in October
2014, the mediator will schedule, in consultation with
the PEC and Biomet, firm-by-firm mediations to take
place in Philadelphia. The Parties will confer in good
faith, attempting to agree on values for all mediated
cases. Any mediated case not resolved by [March 2,
2015], subject to the aggregate settlement percentage
requirements set forth in Paragraph 5, will be remanded,
pursuant to an appropriate order of the Court.

(Emphasis added). [Doc. No. 1317-1].
The plaintiffs’ claims fall within the “contested cases” category, so they were
subject to mediation.
The Master Settlement Agreement gave Biomet the right to contest any case
if it “believe[d] that there [was] good cause to reduce the amounts to be paid
[under ¶ 2 of the MSA]”, and did so within the time limits provided in ¶ 3(b). The
plaintiffs’ don’t challenge the timeliness of Biomet’s actions, but contend that they
qualified for payments under ¶ 2 and that Biomet lacked good cause to reduce the
amounts they were to be paid. But what constitutes “good cause” for purposes of
this provision is subjective rather than objective, and isn’t limited to the examples

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set out in ¶ 3(b). If the plaintiffs disputed Biomet’s reasons for seeking a
reduction, their remedy under the Master Settlement Agreement was to proceed
to mediation. They chose not to do so.
Express language in the Master Settlement Agreement supports Biomet’s
assertion that the settlement agreements weren’t finalized before they were
revoked on January 6, 2015:
11. Releases. Each Plaintiff who receives a payment from
Biomet pursuant to this Settlement Agreement, will execute a Release
and Settlement Agreement and Covenant Not to Sue (“Release”) in a
form mutually agreed to by the Parties....”
[Doc. No. 1317-1].
Mr. Sayeg indicated in his motion and at the hearing that he mailed
settlement agreements to Biomet on January 7, 2015 evidencing the plaintiffs’
acceptance of the Master Settlement Agreement’s terms, but Biomet had already
revoked its offers and agreements to settle by that time. There’s no evidence to
suggest that the Release and Settlement Agreements contemplated under ¶ 11
were executed “in a form mutually agreed to by the Parties” before Biomet revoked
the offers and/or agreements.

III. CONCLUSION
Under the terms of the Master Settlement Agreement, the plaintiffs had two
options once Biomet revoked the offers to settle: mediate their claims or proceed
to trial on the merits. While the March 2 deadline for mediation has passed,
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Biomet indicated at the hearing that it would be willing to mediate these cases. I
encourage the plaintiffs to avail themselves of that opportunity.
For the foregoing reasons, the plaintiffs’ motions to enforce the Master
Settlement Agreement [Doc. No. 29 in 3:14cv737][Doc. No. 35 in 3:14cv1434][Doc.
No. 34 in 3:14cv1505] are DENIED.
SO ORDERED.
ENTERED:

March 23, 2015

/s/ Robert L. Miller, Jr.
Judge, United States District Court

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