In a move to quell the lingering controversy over silicone breast implants, Dow Corning Corp. Monday offered $2.4 billion to more than 360,000 people, mostly women, who have filed claims against the company.
But advocates and attorneys for claimants immediately denounced the proposed settlement, calling it unfair and inadequate.
Dow Corning submitted the proposal as part of its $3.7 billion plan to emerge from bankruptcy, which the company sought in 1995 after being besieged by lawsuits from women who claimed that breast implants made them ill.
For the first time, Dow Corning acknowledged Monday that its silicone breast implants could cause “complications.” But company officials continued to insist that there was no reliable scientific evidence linking the devices to disease.
“At some point, we have to close this issue and put it behind us,” said Dow Corning spokesman Michael Jackson. “We’ve listened to a lot of women and they’ve told us about their problems. We want to offer them options and move on.”
Under the proposed settlement, Dow Corning would pay women anywhere from $650 to $200,000, depending on the nature of their claims, their medical problems and the number of people who elect a settlement.
The proposal applies to 200,000 women with Dow Corning breast implants; 161,000 women who had breast implants from other manufacturers using Dow Corning materials; and about 18,000 people with other silicone-based implants made in whole or part by Dow, such as those used in joints.
The company would also finance removals of breast implants, a pressing issue for distressed women who have implants but lack the resources to have them taken out.
Ed Blizzard, an attorney for the Dow Corning bankruptcy Tort Claimants Committee, said the proposed settlement amount wasn’t nearly enough. “Instead of helping women out of a financial hole, it keeps them there,” the Houston lawyer said.
According to his estimates, the net present value of the settlement, which extends until 2010–that is, its value over the full term of the settlement, adjusted for inflation–would approximate $1.5 billion.
The average settlement amount would be about $5,000, according to Blizzard’s calculations. “That’s less than what we believe most people have in medical expenses,” he said.
But Dow Corning appears to be banking on women’s desire to get at least some financial compensation from the company, while avoiding protracted, expensive lawsuits.
“This plan is designed for the claimants, not the lawyers,” Jackson said. “We believe it’s a fair offer, And we believe very strongly that by taking this case to the women, they will vote for the settlement, not litigation.”
Perhaps so, say advocates for women, but only because many women are desperate and afraid.
“Many women just don’t know what to do,” said Jama Russano, a 40-year-old mother of two boys.
She twice had Dow Corning breast implants removed after developing serious medical problems. Because she had the implants for medical reasons, insurance has covered her medical bills. But many other women have no insurance coverage.
Russano called the proposed settlement “an insult” and said she would vote against it.
Under the proposal, women could opt either to pursue litigation or to accept a pre-set settlement amount, which would be tied to certain specific medical conditions such as sclerosis, scleroderma, poly-arthritis, immune-mediated skin rash, chronic fatigue, Lupus and Raynaud’s phenomenon, among others.
Lawyers warned that if more women than expected applied for settlement payments in various illness categories, the amount they actually received could be less than originally stated.
That’s because the total amount for payments is limited. “If assumptions are wrong, people get less,” Blizzard said.
Dow Corning’s settlement move comes less than a week after a Louisiana jury found that Dow Chemical Corp. had been negligent in adequately testing silicone and informing consumers about the health risks associated with implants.
Dow Chemical owns Dow Corning, together with Corning Inc.
Jackson, the Dow Corning spokesman, said the proposed settlement had “nothing to do” with the Louisiana lawsuit. But he acknowledged that the settlement amount would cover Dow Chemical’s implant-related liabilities, in effect “releasing” it from potential future claims.
