Da Vinci Surgical Robot Maker Reserves $67M To Settle Product Liability Claims

Da Vinci Surgical Robot Maker Reserves $67M To Settle Product Liability Claims

SUNNYVALE, Calif. — (Mealey's) Intuitive Surgical Inc. on April 8 announced that it has taken a $67 million charge against 2014 earnings to settle an unspecified number of product liability claims involving the company’s da Vinci surgical robot. In a press release, Intuitive said the $67 million is the estimated cost of settling claims alleging complications from surgeries performed with certain versions of the Monopolar Curved Scissors (MCS) instruments that were recalled in 2013 and with a first-generation MCS tip cover that was withdrawn in 2012.  It said the estimated settlement amounts apply to legal claims that were tolled, the oldest of which dates back to October 2012. 

Intuitive said that after an extended mediation process with plaintiffs’ counsel, it “determined that in light of the costs and risks of litigation, settlement of certain claims is appropriate.”  It said its estimate is based on negotiations with plaintiffs’ counsel covering about 3,000 claims submitted beginning in October 2012. 

Nonparticipation Possible 

From 2004 to 2013, about 1.7 million surgical procedures were performed in the United States using the da Vinci system, Intuitive said.  “It is possible for these claimants, as well as those claimants who have not participated in negotiations, to pursue greater amounts in mediation or in a court of law,” the company said. 

“It is also possible that more claims will be filed by individuals who allege they suffered injury after undergoing surgery in which the da Vinci Surgical System was used,” the company continued.  “The Company does not currently know how many individuals will ultimately file lawsuits or how many additional individuals will decide to pursue claims against the Company.” 

“The Company is also unable at this time to reasonably estimate the financial impact of such lawsuits or additional claims,” the company continued.  

76 Suits Reported Filed 

In its Form 10-K report filed Feb. 3 with the U.S. Securities and Exchange Commission, Intuitive said it was named as a defendant in about 76 individual product liability lawsuits filed in federal and state court and in a class action filed in federal court.  It said that plaintiff attorneys continue to engage in a well-funded national advertising campaign soliciting clients who underwent surgery using a da Vinci robot. 

Intuitive said in the 10-K that it previously announced that it entered into tolling agreements with certain plaintiffs’ counsel in exchange for filing claims in agreed-upon venues.  It said the tolling agreements have led some plaintiffs’ counsel to withdraw a “sizeable number” of claims.

 A wrongful death case went to trial in May 2013 in the Kitsap County, Wash., Superior Court and ended in a defense verdict (Josette Taylor, et al. v. Intuitive Surgical, Inc., No. 09-2-03136-5, Wash. Super., Kitsap Co.; See 6/6/13, Page 7).  Intuitive said the plaintiffs have filed a notice of appeal. 

Insurance, Investor Litigation 

The company also reports in the 10-K that it has been sued by Illinois Union Insurance Co. and Navigators Insurance Co., which seek to rescind products liability insurance coverage.  It also faces a shareholder class action and two derivative lawsuits. 

For 2013, Intuitive reported that revenues increased 4 percent to $2.26 million with earnings of $1.59 million.

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