$3.75-Billion Settlement of Implant Suits Is OKd : Litigation: Agreement by three makers of silicone gel pouches is nation’s largest in a product liability case.
Three major U.S. corporations Wednesday signed a record-breaking $3.75-billion settlement with lawyers representing thousands of women who contend they were seriously injured by silicone gel breast implants.
Dow Corning Corp., Baxter International Inc. and Bristol-Myers Squibb Co. agreed to fund the largest settlement of a product liability case in U.S. history.
Several other companies have tentatively agreed to put in about another $170 million, bringing the settlement pot to almost $4 billion. It is possible that the deal could be enriched by another $750 million if 3M, Union Carbide Corp. and General Electric Co. join in. Negotiations with those companies are continuing, the plaintiffs’ lawyers said.
Although he maintained that Dow has a strong defense to the thousands of lawsuits against it, Gary E. Anderson, executive vice president, said “a settlement is in the best interest of all parties involved.” Baxter and Bristol representatives confirmed that a settlement had been concluded but did not issue statements.
The implants have become a litigation nightmare for the companies. About 12,000 cases have been filed around the country by women who contend that they are suffering from a variety of medical problems stemming from their implants. Dow and the other firms are spending millions each month to defend the cases.
About 1 million women received implants between 1962 and 1992, when the Federal Food and Drug Administration restricted their use. Many of the suits maintain that silicone leaked out of the implant pouch and migrated throughout women’s bodies, causing autoimmune diseases including scleroderma, arthritis, lupus, atypical neurological disease syndrome, mixed connective tissue disease and atypical rheumatic syndrome. About a dozen cases have been tried so far. The plaintiffs have won most of them, including several multimillion-dollar verdicts, but most are being appealed.
Wednesday’s deal still could fall apart. The companies could back out if a large number of women reject the settlement.
However, San Francisco lawyer Elizabeth J. Cabraser, one of the plaintiffs’ negotiators, expects many women to take part in the settlement. She said it offers them an opportunity to receive substantial compensation--from $160,000 to $1.6 million, depending on their ages and severity of their injuries--without having to wage lengthy court battles. Those amounts could be increased to a range of $200,000 to $2 million if more companies join the accord.
“It will be a uniquely beneficial settlement for women,” Cabraser said. “For the first time in a mass tort settlement, women will be entitled to know the benefits they will receive, and they will not be obligated to participate if the settlement cannot deliver those benefits.”
One of the key elements of the settlement is that women will not be required to prove that there is a causal relationship between having an implant and the numerous diseases that women contend they got because of their implants.
Rather, women will simply be required to prove that they had an implant put in and have a board-certified doctor substantiate that they have one of the medical problems covered by the settlement.
“That is critical because it means women won’t have to go through a complicated medical arbitration proceeding,” said Michael Gallagher, a Houston attorney who also was on the plaintiffs’ negotiating team.
The settlement is to be funded over 30 years. It also includes money for implant removal and medical monitoring. Women who are not sick now but later develop diseases that are covered by the agreement could get compensation.
Wednesday’s announcement, culminating more than 18 months of negotiations, sets in motion a process whereby women around the country will be notified in newspaper and broadcast ads and by mail of the pending settlement.
The notices are expected to go out starting April 4, subject to approval by U.S. District Judge Sam C. Pointer Jr. of Birmingham, Ala., who is presiding over several thousand implant suits that have been consolidated there.
On Wednesday, a court-approved, toll-free, 24-hour phone line, (800) 887-6828, was set up so women can call and request information about the settlement.
Pointer also has to decide how much time women will have to make an initial decision about whether to participate in the settlement or to pursue solo lawsuits. Lawyers for the plaintiffs and the companies said they expect it will be about 60 days.
However, Sybil N. Goldrich of Beverly Hills, co-founder of the Command Trust Network, a national information clearinghouse for women with implants, said she thought 60 days is not enough time.
“I hope Judge Pointer will allow women at least 90 days,” she said. “This is a complicated settlement, and a woman may need to consult with a lawyer or a counselor” to determine if the settlement makes sense for her.
Attorneys said they expected Pointer to hold a hearing in August on the settlement’s fairness. Although scores of plaintiffs’ attorneys and lawyers for the companies will support the deal, Alan B. Morrison, director of Ralph Nader’s Public Citizen Litigation Group, indicated Wednesday that he would challenge it.
Morrison said he had concerns about whether the settlement fund would be adequate, whether all the appropriate diseases were covered and how claims administration would be handled.
“There will be many more claims than they anticipated and the companies will attempt to ratchet down” the compensation amounts for each disease, predicted Los Angeles lawyer Roman M. Silberfeld, who represents several hundred women with implants.
New York lawyer Robert Gordon, whose firm represents 4,500 women with implants, also predicted that the settlement cap would be busted.
Then the companies would be faced with the choice of putting more money into the deal or having thousands of women opt out. “This will be very interesting over the next couple of months; it’s like playing an open hand of poker,” Gordon said.
Francine Gingras of Bristol Myers-Squibb said the company is participating in the agreement to put the implant problem behind it. “There is still no scientific research that links breast implants and disease.” Plaintiffs’ lawyers noted that several scientific studies say there is a link, but they acknowledge that there is a dispute in the scientific community on the issue.
In his statement today, Dow’s Anderson said: “The success of the settlement depends on virtually all women participating in it.” Another Dow spokesman said that if more women than expected file claims, the settlement could be reworked.
Anderson also said Dow’s participation in the settlement “is based on receiving substantial and timely support from its insurance carriers.” Dow and the other companies are currently in legal disputes with their carriers over who is responsible for implant litigation expenses.
In January, Dow estimated that legal and other expenses related to the implant litigation would cost the company $1.24 billion; it expected to recover about $600 million from its insurance coverage. Bristol-Myers said in February that it expected its expenses to reach $1.5 billion and that it expected to recover about $1 billion from insurers.
Dow’s share of the agreement is just over $2 billion, Bristol’s share is $1.15 billion and Baxter’s share is $555.7 million.
Plaintiffs’ lawyers said it would be necessary to review the terms of the settlement with each client to determine whether the deal makes sense for her. The accord gives women three separate opportunities to opt out at various stages of the process.
Several women with implants said they were pleased by the settlement but wanted more details. “A lot of women are not going to jump for joy and drop their lawsuits without knowing the exact dollars and what classification they are in,” said Barbara Norman of Agoura Hills.
Norman, who suffers from chronic fatigue, immune system disorders, joint pain and hair loss, believes those conditions are linked to several breast implant operations she had beginning in 1981. “The main thing I’ve had is this loss of energy since 1987. It alienated my friends and my sons from me because they thought I was just being lazy.”
