Breast Implant Litigants Closer to $4-Billion Deal
Significant progress was made this weekend toward a record-setting $4.2-billion settlement to compensate thousands of women claiming injuries from silicone breast implants, according to attorneys for the women and three major corporations.
“It’s a done deal,” said a representative of one company, who spoke on condition of anonymity. Negotiators met over the weekend in Birmingham, Ala.
Another defense lawyer and attorneys for the women made similar comments, although they were not quite as definite.
“We made terrific progress with the Big Three and some of the smaller defendants,” said attorney Stanley Chesley of Cincinnati, one of five plaintiff lawyers involved in the negotiations. The Big Three he was referring to are Dow Corning Corp., Bristol-Myers Squibb Co. and Baxter Health Care Corp., the three chief distributors of the implants.
A $4.2-billion settlement would be twice as large as any settlement of a civil case in U.S. history, according to legal experts.
The money would provide funds to settle silicone implant litigation worldwide over the next 30 years. For the plaintiffs, the settlement would compensate women for a wide range of medical problems, with the amount of compensation depending on the severity of injury. For the defendants, it would erect a partial ceiling on liability for companies participating in the deal.
Two major defendants, 3M and General Electric Co., have not joined the tentative settlement, according to Chesley and Michael Gallagher, a Houston lawyer who is on the plaintiffs’ negotiating committee.
At a court hearing in Birmingham on Friday, U.S. District Judge Sam E. Pointer Jr., who is presiding over the thousands of breast implant suits represented in this negotiation, expressed concern that a tentative settlement disclosed in September had not come to fruition, and a March 8 deadline that he had set for a final version of an accord had come and gone.
On Friday afternoon, Pointer directed representatives of the companies and the plaintiffs to stay in Birmingham until they had drafted a deal. Lawyers worked late into the night Friday and Saturday, concluding their sessions at 2 a.m. Sunday, according to sources on both sides.
They gave the judge a copy of their draft agreement Sunday morning, and are to meet with him Wednesday. Any deal would have to be approved by Pointer.
One major point that has been resolved, according to lawyers on both sides, is how Dow Corning’s share of the settlement--more than $2 billion--would be guaranteed. Dow Corning is jointly owned by Dow Chemical Co. and Corning Inc., and there have been questions about what role those parent companies would play in funding the settlement.
Dow Corning was the world’s largest maker of silicone breast implants until it stopped manufacturing them in 1992. The Midland, Mich., company also supplied silicone gel to many other implant makers for decades. The company said in January that it had been named as a defendant in more than 6,800 lawsuits relating to silicone breast implants.
Use of the implants was restricted by the Food & Drug Administration in 1992 after mounting complaints by women and after new information raising questions about implant safety was revealed in civil lawsuits. It is estimated that about 1 million women worldwide have breast implants. Lawyers on both sides have no clear idea how many women would file claims if the settlement is approved. About 12,000 lawsuits have been filed.
“The Dow guarantee has been satisfactorily taken care of,” Gallagher said. He said escrow accounts would be set up and other mechanisms put in place to make sure that the funds would be available.
“I’m very pleased about that development,” said Sybil N. Goldrich of Beverly Hills, co-founder of the Command Trust Network, a nationwide nonprofit information clearinghouse for women with breast implants. “I was quite concerned that the deal might fall apart.”
Any settlement would have to be cleared by a plaintiffs’ steering committee of 17 attorneys, as well as by the boards of the three companies. The companies also have to notify their insurance carriers, which would have to foot a hefty portion of the bill.
Originally, it was anticipated that 3M and GE would be part of a $4.75-billion settlement, along with Dow, Bristol Myers and Baxter. But snags arose as to how much of the package those two would fund.
According to sources, 3M’s desire to participate in the settlement was heightened considerably this month after a Houston state court jury awarded more than $30 million in compensatory and punitive damages and legal fees to three women with health problems stemming from breast implants.
3M’s general counsel, Thomas Boardman, negotiated with Gallagher over the weekend, but sources said they remained far apart on how much 3M’s share of the deal would be.
At one point the plaintiffs had asked 3M to contribute $500 million. Gallagher said Sunday that they were now asking for less, but declined to say how much. Nor would he say how much 3M offered in the weekend negotiations, but it was previously reported that the company had proposed something in the range of $250 million.
“Our (position) is non-negotiable,” Gallagher said. “They’ve had ample opportunity to come to the program. They have waited too long. They will become the focus of a separate class-action suit,” Gallagher said.
“We’re still negotiating,” said 3M spokeswoman Marsha Arko. She declined to elaborate.
One issue that has surrounded the breast implant litigation since the proposed global settlement surfaced in September was what portion of the money would go into a fund for the women claimants themselves.
In the past, there has been considerable criticism that victims of “toxic torts” have not received nearly enough of the money stemming from trial victories or out-of-court settlements.
RAND studies have noted that only one-third of the money paid out by companies in asbestos litigation went to victims, while two-thirds of the funds went to litigation costs, including lawyer fees on both sides.
On Friday, Pointer said it was his goal to ensure that women get 75% of the settlement fund and that 25% goes for legal fees and other costs. That would be far more than claimants have gotten in prior settlements of this type.
“I’m not aware of any other large settlement where transactional costs were held to 25%,” the judge said. “But I think there’s a way to do it. I’m looking for ways to do it.”
The judge acknowledged that 25% of $4.2 billion “is a lot, but if we can hold it at that, we’ll be doing well.”
