$3.2 billion Dow implant deal reached Settlement still needs approval by two-thirds of female claimants

July 09, 1998|By NEW YORK TIMES NEWS SERVICE

Dow Corning Corp. and lawyers for women claiming injury from silicone breast implants agreed yesterday to a $3.2 billion settlement, a long-awaited step toward ending one of the most heated disputes in American corporate history.

The agreement, which if accepted would end a nearly 10-year legal battle, would allow women seeking damages because of implants to receive money as early as next year.

It would enable Dow Corning, a joint venture of Dow Chemical Co. and Corning Inc., to emerge from Chapter 11 bankruptcy, which Dow Corning entered for protection from as many as 19,000 implant-damage suits.

The agreement, however, leaves unresolved the dispute between the two sides over what harm silicone implants may have caused. While localized complications from leaking implants are well documented, Dow Corning, supported by a growing body of research, has denied throughout the battle that implants cause systemic illness such as autoimmune disorders.

"While many of the details remain to be worked out over the next two months, this settlement is a breakthrough in an incredibly complex case," said Gary Anderson, president of Dow Corning.

The agreement, part of Dow Corning's bankruptcy restructuring plan, must be approved by two-thirds of the 170,000 women who filed claims against the company and by Dow Corning's creditors to take effect.

Several factors appeared to bring both sides to the table. A panel of doctors is expected to issue a report this year evaluating the scientific evidence of whether silicone implants caused systemic illnesses, the spark of a long debate between the two groups.

According to sources familiar with the negotiations, neither side wanted to wait on the results of the report. If that wasn't cause enough for Dow Corning, based in Midland, Mich., the company had virtually no hope of emerging from bankruptcy unless it settled its legal woes, lawyers said.

Federal bankruptcy judge Arthur Spector in Bay City, Mich., who is overseeing Dow Corning's case, yesterday reappointed Duke University law professor Francis McGovern to mediate the rest of the deal. Both sides were quick to point out that many of the details had yet to be worked out. One source close to the deal said yesterday that negotiations would continue Monday.

Seldom has a consumer health issue divided corporations and their customers so bitterly. Between 650,000 and 1 million women received silicone breast implants during the 1970s and 1980s.

The legal disputes started soon after, as women complained that leaks from the implants had damaged their health. Heeding the outcry, the Food and Drug Administration asked that the implants be removed from the market in 1992.

Riddled by lawsuits, the breast-implant manufacturers agreed in September 1993 to settle the entire litigation, a payout that would have totaled $4 billion. The deal eventually fell apart, although several manufacturers settled with their claimants two years later.

Inundated with lawsuits over its silicone breast implants, Dow Corning filed for Chapter 11 bankruptcy in 1995, igniting a three-year struggle with plaintiffs' lawyers.

Pub Date: 7/09/98

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