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$30 million settlement reached in spinal implant device royalties case

In 2001, five orthopedic spine surgeons in Louisville, Kentucky agreed to work exclusively with a leading medical device manufacturer to develop a spinal implant system. By 2012, the new system had sales of more than $1 billion. The doctors were paid a royalty, which they shared equally through an LLC. However, in 2006, two of the five doctors privately negotiated with the manufacturer to be developers of the next generation of the system, with royalties being paid only to them. On behalf of one of the doctors and the LLC, our firm filed suit in state court in Louisville against the two doctors and the device manufacturer.

The causes of action included breach of contract, breach of fiduciary duty, tortious interference, and conspiracy. Jim Beasley and Joe Galardi took the depositions of 19 fact and expert witnesses located throughout the country, and also conducted extensive document discovery. The defendants produced over 750,000 pages of documents, creating numerous complex “e-discovery” issues. After two years of litigation, the trial court bifurcated the case. The first trial was solely on whether the two doctors had breached their contract with the other three. After a two week trial, ending in October 2012, the jury returned a plaintiffs verdict against the two defendant doctors. The case settled several days before the phase two trial against the two doctors and the manufacturer was to begin. Our clients received full recovery of all economic damages they claimed, estimated in the trial court’s final order to be approximately $30 million, and reimbursement for all of their legal fees and expenses. In the final order, the trial stated that it was a “novel case of substantial complexity,” and that the “experience, reputation and ability” of Plaintiff’s counsel supported a significant attorneys’ fee award.

Most cases result in lower recovery. It should not be assumed that other clients will have as beneficial a result. The stated settlement is the net amount to the clients.