US District Judge Stephen V. Wilson in California approved a meager $12.5 million settlement to be shared pro rata by 4,000 plaintiffs suing over Caldera Medical Inc.’s defective transvaginal pelvic mesh, because that’s all that is available for the company’s insurance policies.
The plaintiff attorneys recovered only $670,020 in fees, less than 6% of the settlement fund.
The claims being settled relate to injuries caused by transvaginal mesh (“TVM”) devices manufactured by Caldera under the following trade names: T-Sling®, Desara®, Ascend®, Hydrix®, POPmesh®, and Vertessa®. The products caused extreme pain, erosion of internal bodily tissue, dyspareunia, painful scarring, and other injuries.
Liability estimated at $100 million
The judge said that Caldera’s liability was estimated at $100 million, but that its insurer had no current income and a negative liquidation value that would not provide more money for the plaintiffs. Federal Insurance Company v. Caldera Medical, Inc., U.S.D.C., Central District of California Case No. 2:15-cv-00393.
Although Caldera initially had $20 million in coverage, after defense costs, only $12.5 million was left over. Further, $1 million will be held back for costs of the class notice and settlement administration.
The July 2015 settlement is intended to resolve all known TVM claims relating to Caldera’s TVM products. It was reached after unsuccessful mediation sessions in November 2014 and January 2015. Fo1iy-six class members (1.15% of the class) objected to the settlement. The issue was whether there was any way to get more funds to contribute to the settlement.
Caldera’s records demonstrated that it had no net profits or liquid funds to contribute to a settlement and that it also had significant debt secured by its assets, which prevented borrowing. The parties submitted the liquidation analysis of an expert, Dr. Joseph Tanimura, who concluded that the liquidation of Caldera would not raise any additional money.
Caldera’s current liabilities totaled $3.6 million, and the book value of its assets was only $2.9 million, most of which would sell for far less in a forced liquidation. After deducting transaction costs, Dr. Tanimura concluded that a liquidation of Caldera would produce a value of negative $3 million.
On January 25, 2016, the Court granted the parties’ motion for preliminary settlement approval, preliminary class
certification, and class notice. The plaintiffs are represented by Gordon Renneisen of the Cornerstone Law Group in San Franciso and David Bricker of Waters Kraus & Paul in El Segundo, CA.