A federal bankruptcy judge yesterday paved the way for Dow Corning Corp. to pay out $3.2 billion to settle claims by some 170,000 women who say they were injured by the company's silicone breast implants.
Judge Arthur Spector, who announced the ruling yesterday in Michigan, said he will give full details in an opinion to be handed down next week. But Dow Corning's lawyers said the judge essentially approved a July 1998 proposal that was submitted jointly by Dow Corning, implant recipients and other creditors to end one of the most protracted and acrimonious disputes in American jurisprudence.
For those who choose to accept a settlement, the plan offers specific monetary damages for the various problems linked to the devices. Women whose implants ruptured or leaked can get up to $25,000, and women who want to remove their implants can get $5,000 for the procedure. Those claiming that the devices caused systemic illness such as ailments of the immune system will be able to get as much as $300,000. Dow Corning says that 94 percent of women with claims against the company have said they will settle.
"We've got a great step forward in both concluding the Dow Corning bankruptcy case and concluding the breast implant controversy for Dow Corning," said Barbara Houser, the lead bankruptcy lawyer for the company.
The battle over the implants has been held up as a textbook example of the inherent conflicts between science and law. Cases were filed on behalf of sick women long before sound scientific studies had been performed to show whether or not silicone causes disease, and no study since then has found a strong link between implants and diseases like lupus and scleroderma. The companies that made implants--Dow Corning was the biggest--have long contended that the women's illnesses were caused by something other than silicone. The women and their attorneys have countered that the studies, many of which were funded by the industry, don't tell the whole story.
The $3.2 billion for implant recipients is part of a larger $4.5 billion settlement with all of Dow Corning's creditors, including financial institutions and health-care companies. Of the $3.2 billion, women who decide not to accept the settlement can use $400 million to pursue litigation. Those opting to litigate will not be allowed to sue Dow Corning's corporate parents, Dow Chemical Co. and Corning Corp., nor will they be able to receive punitive damages if they win their cases.
"Obviously, we are pleased with the judge's decision," said Edward Blizzard, a Houston attorney who represented implant recipients on the committee of creditors. Blizzard said that he and his clients look forward to the next step in the process--a ruling from a judge in a higher court that will actually put into place the procedures for settlement, and for opting out of the settlement. After that step, which could come within two months, "the women can begin receiving the benefits of the plan that they've waited for for so long," Blizzard said.
In a court-ordered vote among the Dow Corning implant recipients, 94 percent favored the bankruptcy plan--an unusually favorable percentage in bankruptcy proceedings, Houser said. Relatively few women are expected to pursue the individual lawsuits allowed under the plan, Blizzard said, though he added that he would review the settlement offer with each of his clients and expected that some would sue.
Not everyone is pleased with the bankruptcy plan. Among them are attorneys representing implant recipients who live outside of the United States and who will receive less money under the settlement than their U.S.-based counterparts. An appeal based on these concerns could further delay final action on the plan.
Another critic is attorney Geoffrey White of Reno, Nev., who represents 49 women in cases against Dow Chemical. White called Judge Spector's ruling a "shocking decision," because it wipes out legal rights granted to his 50 clients by the Nevada courts to sue Dow Chemical.
During the long controversy over implants--which have been used in America since 1963--the science underlying the cases has shifted considerably. In 1988, the Food and Drug Administration called for research into implant safety. Unsatisfied with the evidence the companies provided, FDA Commissioner David A. Kessler in 1992 ordered the devices off the market, except for use in reconstructive surgery and replacement of prior silicone implants.
With the moratorium, litigation boomed. Yet scientific evidence showing that the implants were or were not safe had yet to emerge. No one disputes that so-called "local complications" such as infection following surgery occur in as many as 24 percent of cases, and many implants break or cause painful tissue contraction and scarring.
Many of the lawsuits, however, have focused on much broader patterns of illness that the recipients blamed on implants: debilitating diseases of the immune system that resembled lupus, fibromyalgia and scleroderma and included symptoms like joint pain, inflammation and profound fatigue.
A series of studies which began to appear in the mid-1990s found no strong link between these diseases and implants. But none of the studies has been able to definitively rule out that implants may increase the risk for rare tissue diseases, or new, atypical disease.
By the 1990s, hundreds of thousands of cases clogged the courts. Implant makers in 1993 offered to settle all claims for $4.25 billion--an agreement that collapsed as the number of claims grew beyond the ability of the fund to pay. (The other major implant makers subsequently proposed another settlement, and have paid out hundreds of millions of dollars in claims.) Then, in May 1995, Dow Corning sought Chapter 11 bankruptcy protection. Prior proposals by the company to emerge from bankruptcy protection have been rejected by the judge.