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Dow Proposes $4.75 Billion to Settle Breast Implant Suits : Courts: If the amount is approved, it apparently would be the largest medical injury claims payout ever.

September 10, 1993|DAVID R. OLMOS | TIMES STAFF WRITER

Dow Corning Corp., facing thousands of lawsuits over its silicone breast implants, Thursday proposed a $4.75-billion settlement to compensate women who claim their health has been damaged by the implants.

If approved, the settlement apparently would be the largest payout of medical injury claims ever, exceeding the $2.4-billion trust that was established to handle claims arising from the Dalkon Shield contraceptive device.

The proposal could eliminate the majority of lawsuits filed against Dow Corning, which was the leading maker of silicone gel breast implants until it stopped making them last year after a wave of publicity over implants that ruptured or leaked.

The settlement cost would be shared by the implant manufacturers, raw materials suppliers, insurers, doctors and hospitals--although how much each would pay has not been decided.

Ralph Knowles, an Atlanta attorney who represents plaintiffs and is familiar with the settlement talks, said negotiations have been taking place for 10 months. He expects a "broad majority" of plaintiffs' lawyers to support the plan and a settlement to be announced "in a matter of weeks." The plan would then have to be approved by a federal judge in Birmingham, Ala.

"The main hang-up now is the industry has to get the money together to do the deal," he said.

The proposal would provide for compensation for injuries as well as medical treatment, including the removal of implants. Knowles said individuals would get between $200,000 and $2 million, depending on the nature of their cases.

However, other plaintiffs' lawyers sharply disputed those figures, saying they do not take into account the growing number of breast implant lawsuits or the financial damage suffered by women claiming the most serious injuries.

Dow Corning said it has been named in 6,800 lawsuits relating to breast implants.

Plaintiffs' lawyers put the total number of lawsuits for all breast implant cases at about 10,000--about 3,500 of them in California.

Lawyers predict that tens of thousands of additional lawsuits may be filed by the estimated 1 million to 2 million U.S. women who have breast implants made by various manufacturers.

"We're dealing with a disease that has a very long latency period" of up to 25 years, said Sal Liccardo, a San Jose lawyer who represents about 200 breast implant recipients. Liccardo and others said there is sharp disagreement among plaintiffs' representatives over the adequacy of the settlement.

"This is by no means a done deal," said Dan Bolton, a San Francisco plaintiffs attorney. "There are a lot of drawbacks and very few advantages."

Anne Andrews, a Long Beach attorney representing about 1,000 plaintiffs, noted that the Dow plan would have a 30-year payout period. She contended that the figure is misleadingly high and that the actual amount that would be available to pay individuals "is probably something far less."

Dow Corning's proposal would allow claimants to opt out of the settlement, enabling them to sue the company individually.

Andrews, who represents many women who claim serious illnesses such as lupus and scleroderma, says she is likely to recommend that those clients pursue their cases individually in state courts.

Dow Corning stressed that major details of the proposal remain to be decided. "This is only a proposal at this point," said Gary E. Anderson, Dow Corning's executive vice president.

Analysts said the proposal brings into sharper focus the huge financial liability Dow Corning faces. The company is a 50-50 venture of Dow Chemical Co. of Midland, Mich., and Corning Inc. of Corning, N.Y.

Leonard Bogner, an analyst with Prudential Securities in New York, called the proposal a "very positive" development for the company. "We think that the net effect on Dow Corning . . . would not be material."

Stocks of both companies rose in New York Stock Exchange trading. Dow Chemical closed at $59, up 12.5 cents a share. Corning jumped $1.625 to $32.

Dow Chemical said in a statement that the proposed settlement would have "a material adverse effect on Dow's net income for the period in which it is recorded by Dow Corning, but it will not have a material impact on Dow's overall financial condition."

The U.S. Food and Drug Administration ordered a moratorium on silicone breast implants in January, 1992. The FDA partially withdrew the moratorium on the implants in April, allowing them for medical reasons but not for purely cosmetic purposes.

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