Breast Implant Settlement in Peril : Courts: Flood of legal claims and a threat by Dow Corning to file for bankruptcy protection may jeopardize the proposed $4.23-billion fund.
The largest medical product liability settlement in history was in danger of unraveling Thursday under an unexpectedly large flood of legal claims from women who say they were harmed by silicone breast implants and the threat by former implant maker Dow Corning Inc. to seek bankruptcy protection.
Earlier this week, a federal judge said that because of the number of claims, the proposed $4.23-billion global settlement fund agreed to last year may be too small to pay the benefits promised to implant recipients.
And the company that was once the nation’s biggest supplier of silicone implants, Dow Corning, said Thursday that it is considering filing for bankruptcy protection because of the potentially huge financial liability it faces from breast implant litigation.
Under a settlement reached in April, 1994, a group of companies, including Dow Corning, Bristol-Myers Squibb, 3M Co. and Baxter International, agreed to fund a settlement of $4.23 billion. Dow Corning was the biggest contributor, agreeing to pay $2 billion. While agreeing to the settlement, implant manufacturers and suppliers have continued to deny their products hurt anyone. The Food and Drug Administration in 1992 imposed a moratorium on the sale of silicone implants.
Lawyers for the women met with companies involved in manufacturing or supplying the implants in Washington on Thursday in an effort to salvage the settlement.
U.S. District Judge Sam C. Pointer Jr. in Birmingham, Ala., who is overseeing the case, said Monday that the fund is oversubscribed and may be inadequate to pay the promised benefit of $105,000 to $1.4 million per claimant, depending on their age and health.
The lawyers are discussing whether to increase the size of the settlement pot to account for the number of claims--about 400,000 women have registered as claimants. If the companies don’t come up with more money, women would be faced with accepting significantly less compensation for a host of illnesses that they allege are caused by breast implants.
But many women might find a lesser sum unacceptable, especially those claiming the most severe illnesses, such as scleroderma and rheumatoid arthritis, resulting in disfigurement, hefty medical bills and a loss of careers. Several thousand women have already opted out of the global settlement to pursue their claims in state and federal courts in California, Texas and other states. A smaller payout might prompt thousands more women to take their cases to court.
“Those numbers . . . show the problem is much more widespread than anyone thought,” said Fredric L. Ellis, a Boston lawyer who represents several hundred implant recipients. “It could be devastating to the whole settlement.”
*
“If a settlement is unattainable, women will opt out in very substantial numbers and the companies will face what they wanted to avoid--massive litigation for the rest of this century and into the next,” said Elizabeth Cabraser, a San Francisco lawyer who is on the plaintiffs steering committee.
Today, plaintiffs’ lawyers will meet in Chicago with some implant recipients, who have been playing a key role in the case.
“We’ll do the best we can,” to increase the $4.23-billion fund, said Cincinnati attorney Stanley M. Chesley, a member of the plaintiffs steering committee.
Sybil Goldrich, co-founder of the Command Trust Network, the largest nationwide support group for implant recipients, said she is confident that the companies will come up with more money.
“If we’re asked whether the women would take 50% of what is on the current grid, we’ll say certainly not,” Goldrich said. “Women came into this settlement for privacy and to get closure in their lives. They didn’t come in for humiliation and abuse.”
So far, more than 400,000 women have registered as claimants, including 137,000 who say they already are sick from silicone implants. About $1.2 billion of the settlement fund is allocated to those women. The remaining $3 billion is set aside for women who may contract illnesses during the next 30 years that they claim are caused by silicone implants.
The settlement discussions come against a backdrop of recent studies suggesting that silicone implants may not pose the serious health risks attributed to them by implant recipients.
One study by the Mayo Clinic determined that there was no evidence that women who receive implants are any more likely than anyone else to develop arthritis, lupus, scleroderma and other illnesses that have been linked to implants. And a Harvard Medical School study found that the rate of connective-tissue diseases in a group of 120,000 nurses was roughly the same for nurses with implants and the nurses without them.
Lawyers for plaintiffs said the studies have been cited by companies in several cases but they haven’t seen that much impact on jurors’ opinions.
“Juries are absolutely finding causation between using implants and getting injured,” said Richard Laminack, a Houston plaintiffs’ lawyer. “The studies haven’t affected anything. . . . More and more doctors around the country are beginning to treat women with silicone problems and that kind of witness seems to have a bigger impact on the juries than someone’s bought-and-paid-for study from an ivory tower.”
Dow Corning repeatedly has warned that it can’t contribute to the global settlement while also fighting a rash of lawsuits.
“Dow Corning is not in an immediate financial crisis,” said Richard Hazleton, chairman and chief executive. “We believe, however, that we risk damaging our future business operations and, therefore, our ability to compensate women with breast implant claims, unless we consider a new course of action.”
The Michigan firm faces between 2,000 and 4,000 cases in state and federal courts. “That far exceeds our expectations” of the number of women who would opt out of the settlement pool, said Gary Anderson, Dow Corning president.
Michael L. Williams, a Portland, Ore., lawyer who represents 800 implant recipients, said he thinks Dow Corning’s announcement may be aimed, in part, at prodding other companies, including Bristol-Myers and 3M, to put more money into the settlement.
“It would be a disaster for Bristol and 3M to let the settlement unravel because of their potential exposure,” Williams said. “They would be billions ahead if the global settlement works than if it falls apart.”
The bankruptcy threat also increases pressure on Dow Chemical Co., which owns 50% of Dow Corning but has claimed that it has no legal liability because it was not directly involved in manufacturing or selling the implants. Dow Chemical has not contributed to the settlement fund, although it is named in thousands of lawsuits.
