3 Companies in Landmark Accord On Lawsuits Over Breast Implants
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In the largest settlement ever negotiated in a class-action lawsuit, officials of three companies gave final approval yesterday to an agreement to pay $3.7 billion over 30 years to women claiming they were injured by silicone breast implants. In the highly complex settlement, the companies, the Dow Corning Corporation, the Bristol-Myers Squibb Company and the Baxter Healthcare Corporation, will pay women specific amounts for injuries. “We finally did it,” said Gary E. Anderson, Dow Corning’s executive vice president. Judge’s Approval Needed The agreement is still subject to approval by the companies’ boards of directors and by Judge Sam C. Pointer of Federal District Court in Birmingham, Ala. Even if he approves it, the settlement can crumble if too few women sign up. But if it goes through it will clear the courts of many of the 12,000 cases involving more than 25,000 women who had implants and say they were injured. The manufacturers say there is no scientific evidence that the implants are harmful, and they are agreeing to the settlement to put the expensive litigation behind them. Dow Corning agreed to pay $2.018 billion, Bristol-Myers Squibb $1.154 billion and Baxter Healthcare $555 million. An estimated one million to two million women had silicone breast implants in the last 25 years. Some women and doctors say the devices caused a variety of diseases, including autoimmune disorders, like lupus, and connective tissue disorders, like scleroderma, a progressive hardening and thickening of the skin and internal organs. Although the amount of money that the three companies agreed to pay sounds enormous, part of it will be paid by insurance companies and part in future dollars whose value will have been eroded by inflation. John Churchfield, chief financial officer of Dow Corning, said insurance would pay about $1.2 billion of Dow Corning’s $2.018 billion contribution. He said the value of the insurance payment in current dollars is $600 million and the value of the balance to be paid by Dow Corning in current dollars is $640 million. Geoffrey Miller, a law professor at the University of Chicago who studies large class-action lawsuits, said the agreement was virtually unprecedented because of its size and complexity. “It’s going to be a model for future class-action litigation,” he said. Mr. Anderson said the settlement was at least twice as large as the largest previous class-action agreement, which involved workers with asbestos. The breast-implant agreement provides that set amounts will be paid to women with specific medical conditions, with no requirement that they show that their implants caused the disorders. But the fees can be reduced if too many women sign up. If that happens, the women are allowed to drop out of the class-action agreement. The companies can also opt out if too few women sign up. “We can’t pay both the immense costs of litigation and the settlement,” said T. Michael Jackson, a spokesman for Dow Corning, whose ownership is divided equally between the Dow Chemical Company and Corning Inc. But Ralph Knowles, a co-chairman of the plaintiffs’ negotiating committee, said that if the companies backed out the settlement would probably collapse. “If any defendant walks away, we the plaintiff’s settlement committee, can say, ‘This is so significant that we are cratering the deal,’ ” Mr. Knowles said. John McGoldrick, the chief negotiator for Bristol Meyers-Squibb, said that all or nearly all of the company’s contribution would be paid by insurance. Two Years of Negotiations The agreement culminates two years of negotiations between lawyers for women who had implants and the companies that made them. In that time, Mr. Knowles said, the lawyers gathered more than three million documents and more than 100 videotaped depositions. Stanley Chesley, the other co-chairman of the plaintiffs’ negotiating committee, said, “The plaintiffs are an army of lawyers completely armed with phenomenal documents and depositions and materials necessary to be successful in a courtroom.” And, he added, that preparation for lawsuits “was an effective deterrent” to the companies, nudging them toward a settlement. Source : query.nytimes.com |