Dow Corning proposes $2.4 billion to settle breast implant claims
Aug. 25, 1997
DETROIT (AP) _ Dow Corning Corp. on Monday offered to settle breast implant legal claims for up to $2.4 billion as part of a $3.7 billion plan to get out of bankruptcy, but refused to accept blame.
In making the offer, Midland, Mich.-based Dow Corning did not concede that breast implants cause disease. Company officials said they made the offer to ``agree to disagree'' with the nearly 200,000 women worldwide who claimed they suffered from auto-immune and other disorders due to the implants.
``We still believe very strongly that the scientific evidence shows there's no connection between breast implants and medical conditions, although we do know there are local complications and that implants can occasionally rupture,'' Dow Corning chief executive officer Richard Hazleton said.
The $2.4 billion plan, in addition to $1.3 billion for commercial claims against the company, requires the approval of a bankruptcy court and a two-thirds majority of women suing the company.
The Dow Corning plan marks an increase from the company's $2 billion share of the original, $4.2 billion global settlement. That plan fell apart because an unexpectedly high 440,000 women sought payments. The offer comes days after Dow Corning's half-owner, Dow Chemical, lost a key negligence case in Louisiana over implants.
Jama Russano, who got her implant at age 14, said the $200,000 payment she could receive wouldn't even cover the nearly $300,000 in medical bills she has accrued.
``I felt almost insulted, I felt like this is such a tragedy,'' said Mrs. Russano, 40, of Northport in Suffolk County, N.Y., who had a Dow Corning implant and then a replacement for more than 20 years. ``They're offering women no more than $8,000 for a rupture ... Many women will bear the burden of Dow's mistake.''
The settlement came as part of the reorganization plan Dow Corning was required to file to recover from Chapter 11 bankruptcy.
It is structured so that the more women vote for it, the more money is made available _ up to a total of $2.4 billion. If any money is left over, it would go to research ``to continue to research what does cause autoimmune-type diseases,'' company spokesman T. Michael Jackson said.
The precise payment each woman would receive depends on how many approve the pact and the extent of the injuries they claim implants caused them. Individual settlement amounts range from $650 to $200,000.
The company said it would also cover the cost of removing implants.
Dow Corning attorney Barbara Houser said the settlement money could be available by late spring or early summer of next year.
If a two-thirds majority is not met, company officials said they would pursue other legal means to recover from bankruptcy.
In order to expedite the smallest settlements _ $650 to $1,000, depending on the number of women voting to settle _ a woman must give the company evidence she has a Dow Corning implant and sign an affidavit saying she was harmed by the product. Higher claim amounts would require a doctor to verify the woman's condition.
The $2.4 billion would go mostly to breast implant claims, but also includes claims made by people with other medical devices containing silicone, such as joint implants, as well as other devices.
Gayle Troutwine, a Portland attorney representing 550 women who have filed claims against Dow Corning, criticized the offer.
``It doesn't sound reasonable,'' Ms. Troutwine said. ``It averages out to about $5,000 per woman. I guess I'd have to say that is paltry.''
A Louisiana state jury ruled last week that Dow Chemical, which owns half of Dow Corning, was negligent in testing silicone for breast implants, lied about the possible risks and plotted with Dow Corning to hide potential health dangers.
Women seeking settlements had gone after Dow Chemical after Dow Corning filed for bankruptcy under the weight of thousands of breast implant claims.
By entering the settlement, women would give up their rights to make claims against any Dow Corning products or its shareholders _ meaning that Dow Chemical would also be free from claims, Houser said.
Plaintiff's attorneys accused Dow Corning of helping get its parent company off the hook.
``From the outset, this bankruptcy has been run for the benefit of Dow Chemical,'' Houston attorney Ed Blizzard said. ``Now, this plan provides a bailout for Dow Chemical without them having to contribute a dime toward the plan.''
As Dow Corning and Dow Chemical sorted out their liability and the bankruptcy case, other manufacturers _ Bristol-Myers, 3M Corp. and Baxter International _ have offered women fixed settlements ranging from $5,000 for those who claim the least harm to $100,000 for women whose implants ruptured and leaked silicone throughout their bodies. So far, nearly 100,000 women have accepted those settlement offers.