Judge: Women opposed to breast-implant deal may not sue corporate parents

Jim Suhr

Monday, Nov. 13, 2000 | 4:36 a.m.

DETROIT - A federal judge on Monday ruled that women opposed to a $3.2 billion settlement over silicone breast implants may not sue Dow Corning Corp.'s corporate parents, reversing a bankruptcy judge's opinion that negotiators said crippled the deal.

The 168-page ruling by U.S. District Judge Denise Page Hood set aside federal Bankruptcy Judge Arthur Spector's opinion last December, which the settlement's backers complained changed pivotal terms of the deal he approved weeks earlier.

Barring additional appeals, Hood's ruling sets the stage for the case's claimants to begin receiving compensation, Dow Corning spokesman T. Michael Jackson said.

"This really will let the process move forward and allow claimants to receive payment for their claims," Jackson said. "We hope that with this positive ruling that those who filed objections will not file further appeals.

"We don't think eligible claimants should have to wait longer."

But more appeals are planned, according to a Nevada lawyer among those who fought the settlement's no-lawsuit release. Geoffrey White represents a group of women in Nevada, where that state's supreme court has upheld damages against Dow Chemical Co. - one of Dow Corning's corporate parents - over silicone implants, opening the door for similar lawsuits.

In light of Monday's ruling that left him "disappointed but not defeated," White said he would take the matter to the 6th U.S. Circuit Court of Appeals in Cincinnati, saying the issue "won't end until it goes through the appellate process."

"Judge Hood has taken away those rights of those people who voted no on the plan, and our opinion is that the bankruptcy court who lived with this issue for years was appropriate," White said. "One side or another will appeal this to the U.S. Supreme Court."

White estimated it could take 18 months to two years for the appeals process to run its course.

During an April hearing, Dow Corning attorney George Tarpley told Hood that Spector's opinion should be set aside as "an error of law" that, if allowed to stand, could doom the settlement that took years to reach and was approved by 94 percent of the 112,774 women who voted on it last year.

The companies and lawyers for women who voted in favor of the settlement argued that Spector's opinion changed terms of the settlement he approved Nov. 30 as part of Dow Corning's $4.5 billion plan to emerge from Chapter 11 bankruptcy.

That plan included a $3.2 billion settlement of claims by more than 170,000 women blaming various health problems on silicone implants once made by the company.

But in his December opinion, Spector said women opposed to the deal may sue Dow Corning's parent companies. He said he lacked the power to release the parent companies from future liability, and the settlement wasn't designed to grant such a release anyway.

Hood ruled otherwise, saying Spector "went beyond the bankruptcy code to find that it had no authority to issue an injunction against those who did not accept the plan" as part of a bankruptcy matter she called "an unusual case."

"This court is aware that this case is one of the largest mass tort bankruptcy actions ever filed in this country's judicial system and that many lives are affected by the outcome of the case," Hood wrote.

"This court has attempted to ensure that all litigants and parties before it have had the opportunity to fully present their concerns with the procedural rules and laws governing the action and the judicial system. The court will attempt to do so in the future."

Alluding to the settlement's lawsuit-release provision, Hood wrote that "there is no question that this is a fundamental issue that has the potential of seriously affecting the (plan's) proponents and shareholders in the future."

Tarpley had told Hood that Dow Corning - a 50-50 joint venture between Dow Chemical and Corning Inc. - was prepared to begin paying claimants, if Spector's opinion was reversed.

"It serves no purpose whatsoever to pay out $3 billion over a number of years only to have this litigation continue in other forms, as it did before bankruptcy," Tarpley told Hood. "We want to shut down litigation. If we're gonna pay money for it, we want it over with."

Spector handles proceedings stemming from Dow Corning's bankruptcy filing, while Hood handles the case's appeals.