Dive Brief:
- District Judge Joy Flowers Conti approved a settlement on Thursday that will provide more than $500 million to people who purchased, leased or rented recalled Philips devices.
- Philips must put at least $467.5 million into a settlement fund for users who bought a recalled device and for devices returned to the company. The company must also set aside $34 million into a payer settlement fund. Flowers is a judge for the U.S. District Court for the Western District of Pennsylvania.
- The agreement does not include personal injury and medical monitoring claims, which the plaintiffs’ attorneys are pursuing separately.
Dive Insight:
The settlement is related to Philips’ ongoing recall of sleep apnea devices and ventilators. Philips started recalling the devices in June 2021 because foam used to soundproof the machines could break down and be inhaled by patients, posing potential health risks.
The majority of the funds will go to users, which includes patients who were prescribed a device as well as hospitals and sleep centers that purchased recalled devices, said Sandra Duggan, an attorney with Levin Sedran & Berman and co-lead counsel for the plaintiffs. The settlement is uncapped, meaning that it can go higher depending on the number of claims beyond what has been pre-funded.
“It’s a large settlement for these types of awards,” Duggan said.
The amount each user will get depends on the device. There’s also a flat $100 payment for returning any recalled device to Philips.
“If you had a Dreamstation, and two-thirds of the recalled devices were Dreamstations, that payment is $55.63. If you return the device, you’ll get another $100. So that’s $155.63,” Duggan said in an interview. “Some of the higher price devices like the ventilators are $1,552.25.”
People can also receive payments if they bought their own replacement device before the settlement was announced. Philips will pay up to $15 million into a pot for those claims, Duggan said.
Another term of the settlement is an extended two-year warranty for anyone who gets a remanufactured device through Philips’ recall program.
According to a March 21 court filing, 1.5 million users who registered for the recall or enrolled in the settlement and returned their devices to Philips will receive automatic payments without having to apply for those awards. The awards will be paid out regardless of whether Philips appeals.
“We made this as streamlined as possible so people don’t have to come forward with any receipts. They just need to show the serial number of their device and actually return it,” Duggan said.
The settlement received 78 objections. Most of them aren’t related to the settlement but to the recall itself, such as that it’s taking too long, Duggan said. Some of the concerns were also about personal injury claims, which were carved out of the settlement, meaning that people can still pursue those claims separately.
A portion of the objections also deal with the Dreamstation Go, a travel CPAP machine, because there is currently no FDA approved replacement device. Philips is offering $500 to users who return the device. In that particular case, patients would get more from the recall program than the settlement, Duggan said.
Attorneys fees will be paid out separately from the settlement funds.