Exactech Recall Lawsuits Placed On Hold While Bankruptcy Process Plays Out

A stay on all lawsuits over failed Exactech knee, hip and ankle replacements was anticipated, after the company declared bankruptcy late last month under weight of the litigation.

The U.S. District Judge presiding over all Exactech recall lawsuits has placed a stay on all litigation involving the company’s defective knee, hip and ankle replacement components, after Exactech filed for Chapter 11 bankruptcy due to the mounting costs associated with the claims.

In late 2021 and early 2022, a series of Exactech recalls were announced after it was discovered that certain components had been stored in “out-of-specification” vacuum sealed bags, which allowed oxygen to reach the components before they were implanted in patients.

This caused various different Exactech knee, hip and ankle implants to degrade prematurely, increasing the risk of early failure and the need for risky revision surgery. The recalls impacted Exactech Optetrak, Optetrak Logic and Truliant knee replacement systems, Exactech Vantage ankle systems, and Exactech Novation and Acumatch hip implants.

In response, more than 2,500 Exactech lawsuits have been filed in both federal and state courts against the manufacturer, with about 1,800 claims pending in a centralized multidistrict litigation (MDL) before U.S. District Judge Nicolas G. Garaufis, in the Eastern District of New York.

The staggering cost associated with the litigation led the manufacturer to announce late last month that it will need to resolve the Exactech recall litigation through bankruptcy, leading to a pause on all active proceedings in any of the cases.

Prior to the bankruptcy filing, the parties were preparing for a small group of cases to go before juries as “bellwether” trials, to help gauge how juries may respond to certain evidence and testimony that would be repeated throughout the litigation. An Exactech hip implant lawsuit was expected to go before a Florida state court jury in December 2024, and a series of federal bellwether trials were expected to begin in September 2025. However, those trial dates have now been delayed, and may never happen following the bankruptcy announcement.

In a standard and expected move after the Exactech bankruptcy, Judge Garaufis issued a court order (PDF) on November 1, announcing a stay on all proceedings in the federal MDL. This puts the entire litigation on pause until the bankruptcy is resolved.

The Court did indicate that it will continue to accept new lawsuits into the Exactech MDL, which have been transferred from other U.S. District Courts.

During the Exactech bankruptcy stay, Judge Garaufis has ordered the parties to update him on the status of the reorganization every 90 days, following a status conference scheduled for January 9, 2025.

To manage the mounting liability and legal costs, Exactech indicates that it will be purchased by a group of private equity and asset firms during the bankruptcy, estimating the company’s values and assets are about the same: between $100 and $500 million. The company claims the sale and restructuring will result in an infusion of capital that it can use to provide payouts for Exactech recall lawsuit plaintiffs.

It is unclear at this time how much will be offered to plaintiffs through any Exactech recall settlements in the bankruptcy, as that will be dependent on proceeds from a court-supervised sale of assets to the investor groups.