Settlement Talks Falter in Breast Implant Case

Dow Corning Corp. and other companies being sued over silicone breast implants failed over the weekend to meet the court-imposed deadline for agreeing on a proposed $4.75-billion fund to compensate women who claim they were harmed by the implants, lawyers involved in the negotiations say.

Lawyers representing plaintiffs had already been preparing to take thousands of cases to trial across the country if a class-action settlement was not reached. Plaintiffs’ lawyers said their phones have been ringing off the hook since Dow Corning announced the proposed settlement in September, as breast implant recipients have sought legal advice about the proposed deal.

Hundreds of new lawsuits have been filed, lawyers said, and the total number of claims filed in state and federal courts nationwide is estimated at up to 15,000.

Lawyers for both sides said the complex negotiations bogged down over the issue of how much each of the major defendants would contribute to the settlement fund. Besides Dow Corning, which is jointly owned by Dow Chemical Co. and Corning Inc., other major defendants include Bristol-Myers Squibb Co. and Baxter Healthcare Corp.

Sam C. Pointer Jr., chief judge of the U.S. District Court in Birmingham, Ala., who is overseeing the class-action suit, had given the defendants until today to work out the financing details of the settlement.

A lawyer for one of the defendants said, “Judge Pointer has made it clear he’ll permit additional time to work out a deal.”

But other lawyers noted that Pointer had instructed the parties that they had a “window of opportunity” to complete the settlement agreement, perhaps signaling that he would not permit protracted negotiations.

Ralph Knowles, an Atlanta plaintiffs’ attorney, said he is surprised at the inability of the defendants to settle on funding.

“If the defendants don’t fully fund this, they will live to regret not having done so,” he said. “There will be a mass of litigation.”

The settlement--one of the largest ever in a class-action suit--would be funded by contributions from companies that made the implants or supplied the raw material for them, as well as insurance companies, doctors and other health care providers. The Food and Drug Administration now restricts the use of silicone breast implants, allowing them for medical reasons but not for purely cosmetic ones.

Women with implants who claim to have acquired one of eight diseases would receive from $200,000 to $2 million, while others could seek money for such things as the removal of the implants, medical care or mental anguish. The fund would also provide money for women who currently have no medical problems but may develop them over the next 30 years.

An estimated 1 million to 2 million women in the United States have received the implants.

Even had a deal been reached, plaintiffs’ lawyers said they would expect some women who are not satisfied with the compensation to opt out of the settlement and pursue lawsuits in state and federal courts.

But “assuming there is no reduction in the (settlement funds), I would recommend to the majority of my clients that they go with the global settlement,” said Margaret Branch, an Albuquerque, N.M., lawyer and member of the plaintiffs committee. An example of someone who may choose not to join the class action, she said, would be a young professional woman who claims that breast implants caused severe physical disabilities resulting in drastically reduced earning power.

Meanwhile, the prospect of a settlement has resulted in “very aggressive activity by lawyers to sign up people for the settlement,” said Elizabeth J. Cabraser, a San Francisco attorney who is on the 17-member plaintiffs’ lawyers committee.

Lawyers involved in settlement negotiations have asked Pointer to consider sanctions or other penalties against law firms deemed to be overzealous in their solicitation of clients through advertisements in newspapers and magazines and on television. The two major problem areas, Cabraser said, are lawyers misrepresenting the existence of a deadline for filing claims--there is none--or claiming to have expertise that would put their clients at an advantage in the claims process.