Settling Dalkon Lawsuits Could Cost $7 Billion

A lawyer for women allegedly injured by the Dalkon Shield birth control device said Thursday that settling their claims could cost the A. H. Robins Co. up to $7 billion, five times what the company estimated.

Robins, which filed for protection from creditors in U.S. Bankruptcy Court in 1985 in the face of mounting claims, places the value of the claims between $700 million and $1.2 billion.

It has proposed a $1.75-billion settlement fund under its Chapter 11 reorganization plan, which includes a merger with the suburban Philadelphia-based Rorer Group.

At a hearing before U.S. District Judge Robert R. Merhige Jr. and U.S. Bankruptcy Judge Blackwell N. Shelley, who have presided over the Robins case jointly, a lawyer for the Dalkon Shield Claimants’ Committee estimated that it would take $4 billion to $7 billion to settle the claims.

“Our position is that a cap of $1.75 billion simply cannot deal with this calamity,” said committee lawyer John Walsh.

‘Statistical Purgatory’

More than 100 people, including a number of women who contend that they were injured by the intrauterine device, signed up to give testimony at the hearing, which is expected to last through the weekend and possibly into next week.

Outside the courthouse, about a dozen women protesting Robins’ reorganization plan held a protest and carried signs to demand full compensation for Dalkon Shield victims.

Walsh, in an opening statement, said Robins’ estimate of the number of claims that probably would need a settlement above a minimum amount was too exclusive. Too many women were relegated to “the statistical purgatory of $300 claims,” he said.

Based on about 200,000 active, potential claims against the IUD, which Robins sold in the early 1970s, Robins’ experts said about 30,000 women may require compensation for injuries that can be proved to be Dalkon Shield-related.

James C. Roberts, an attorney for Robins, said the company’s estimators screened claims for a number of factors, including injuries that could be attributed to other causes and problems with medical records.

But an attorney for Aetna, which had insured the IUD, said its estimate of women who had more than nominal claims was more than 90,000. Aetna’s estimate for settling the claims was $2 billion to $2.5 billion.

Walsh told the judges the Aetna figure was “a floor below which this court should not go.”

After the opening statements, testimony began from the various experts who reached the estimates. Merhige and Shelley will have to establish a compensation amount for claims if the lawyers in the case cannot reach a compromise.