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Court Says Implant Cases Must Be United

Litigation: Thousands of suits against Dow Chemical will be combined, meaning firm won't have to defend as many claims elsewhere.

May 10, 1997|From Bloomberg News

Thousands of lawsuits against Dow Chemical Co. over silicone breast implants must be consolidated in the federal court supervising the bankruptcy reorganization of its Dow Corning Corp. unit, an appeals court ruled Friday.

The ruling, by a panel of the U.S. 6th Circuit Court of Appeals in Cincinnati, means that Dow Chemical probably won't have to defend as many suits elsewhere, where it has a mixed record. While Dow Chemical has won almost all the cases that haven't been dismissed, it lost a $14.1-million verdict in Nevada now on appeal and a Houston verdict that was later thrown out.

Thousands of implant lawsuits have been pending in numerous courts since July 1996, when a federal court in Detroit allowed plaintiffs to sue Dow Chemical elsewhere.

The Cincinnati panel said consolidating the claims is the "only way to achieve an efficient resolution to this litigation, the development of a successful reorganization plan, and the adequate compensation of deserving claimants."

Dow Corning filed for bankruptcy protection in May 1995 after it was unable to resolve billions of dollars in implant lawsuits. Midland, Mich.-based Dow Chemical owns half of Dow Corning, while Corning Inc. owns the rest of the joint venture.

"I'm sure the company [Dow Chemical] is cheering now that all of the litigants will fall into one court rather than many," said James Kelleher, an analyst with Argus Research.

Other breast-implant defendants, including Baxter International Inc., Minnesota Mining & Manufacturing Co. and Bristol-Myers Squibb Co., lost a bid to have their cases consolidated in Michigan, attorneys said.

John Scriven, Dow Chemical general counsel, said he expected the plaintiffs to ask for a rehearing by the full circuit court. Ed Blizzard, an attorney for some breast-implant plaintiffs, said no decision had been made.

"We're now on a path to a final resolution for the women, companies and the judicial system alike," Scriven said.

The order applies to suits in "various jurisdictions," which Dow Chemical said includes state courts. Blizzard said the ruling shouldn't apply to cases in those courts, especially those cases that have already been reviewed by federal courts to see whether they should be moved to Michigan.

That's what happened in a Louisiana class-action suit, which has now been in trial for two months. A Nevada case on appeal after a judgment also had been reviewed earlier by a federal court, Blizzard said.

The federal review could be important because the appeals panel faulted the U.S. District judge in Michigan for not considering each case to see whether it belonged under her control.

Plaintiffs claim breast implants can cause autoimmune and other diseases. The company has denied any connection between breast implants and disease.

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