By July 1993 Charlotte Mahlum, then a 44-year-old housewife living in Elko, Nev., could no longer ignore her pain. For years she had been suffering from muscle tremors, skin rashes and bouts of incontinence.
Eight years earlier, Mahlum had received silicone breast implants as part of reconstructive surgery following a double mastectomy. Though the implants had hardened and seemed malformed, Mahlum didn’t associate any of her medical problems with them. So she was surprised when an MRI by her doctor showed what appeared to be splotches of silicone under her arms and around her ribs.
During surgery to remove the implants, doctors confirmed that one had ruptured, leaving deposits of gel throughout her upper chest. Surgeons could not remove about 10 percent of the silicone because it had become too embedded in her tissues. To this day Mahlum says small slivers of the substance periodically push through the skin on her arms, chest and face.
A few months after her implants were removed, Mahlum sued Dow Corning Corp., maker of her implants, as well as The Dow Chemical Co., one of its parent corporations, alleging that leaking silicone had caused a severe autoimmune disorder. In May 1995, as Mahlum’s suit neared trial, Dow Corning, faltering under a blizzard of similar suits, filed for bankruptcy in its home state of Michigan. A Nevada state judge allowed Mahlum to sever her claim against Dow Corning and go to trial solely against Dow Chemical. Though Dow Chemical protested that it had nothing to do with making or selling the implants, a jury found the company liable and awarded Mahlum and her husband $14.1 million in compensatory and punitive damages. On appeal, the Nevada Supreme Court struck the $10 million punitive award, but let stand the $4.1 million in compensatory damages.
Though a big win, Mahlum’s case doesn’t seem that different from thousands of others, just another battle in the pitched 20-year war between the trial bar and makers of implants. But now the case is at the center of a long-running dispute that features Dow Corning’s defense team and a superstar lineup of plaintiffs lawyers on one side, and two lawyers from Reno on the other.
At stake is $2.35 billion that Dow Corning — and its insurers — have agreed to pay into a fund to compensate tens of thousands of women claiming injuries. The plan was negotiated over four years by counsel for Dow Corning, led by David Bernick, a partner in the Chicago office of Kirkland & Ellis, and a team of trial lawyers from the bankruptcy’s Tort Claimants Committee (TCC), led by Ralph Knowles Jr. of Atlanta’s Doffermyre, Shields, Canfield, Knowles & Devine. The TCC includes such heavy hitters as Cincinnati’s Stanley Chesley, Houston’s John O’Quinn and San Francisco’s Elizabeth Cabraser. The plan was approved in 1999 by the Michigan bankruptcy court, and all the plaintiffs with claims resulting from Dow Corning implants have signed off on it — save for a lone group of 48 holdouts in Nevada represented by Geoffrey White, one of Charlotte Mahlum’s lawyers, and his brother John. Until the Whites’ appeals are resolved, says Dow Corning, the plan will not go into effect.
The Whites’ holdout isn’t winning them many friends among their fellow trial lawyers. “I have been doing what I can in my capacity to prevail upon Geoff and John and their clients to act for the good of the entire group, many of whom are dying and others who desperately need money for health care,” says Knowles, who adds, “I am not and have never criticized the Whites” for opposing the plan. Knowles’s counterpart at Dow Corning is less diplomatic. “What the Whites have done stretches the bounds of believability,” says Bernick. “They’ve been prepared to hold up the payment of millions to tens of thousands of claimants just as impacted as their clients are, with an enormous loss in the time value of money.”
Geoff White bristles at the suggestion that he and his brother are to blame for the delay: “They say we are blackmailing the rest of the country. That’s nonsense. They could make the plan active tomorrow if they wanted to.”
But Dow appears in no hurry. The Reno lawyers have pushed their chips into the center of the table, and Dow is content to call their bet. For more than four years the Whites have pursued federal appeals of the plan, so far without success. Now, with the case before the 6th U.S. Circuit Court of Appeals for the second time, the Whites have signaled they might be willing to toss in their hand and drop the appeal, provided that someone — Dow, the plaintiffs lawyers, the settlement plan — pay them $400,000 to cover their time and expenses. Dow and the TCC have responded by essentially drumming their fingers on the card table. “I’d like to say it will settle, but I’m not real optimistic,” says Ernest Hornsby, an Alabama lawyer who has served as a kind of go-between among the Whites, other plaintiffs lawyers, and Dow Corning. What started as a fight for women injured by leaking silicone has devolved into a game of lawyers’ poker.
To better understand the roots of the Nevadans’ holdout, it’s helpful to briefly review the history of breast implant litigation, a saga that began two decades ago when the first documents emerged in a case against Dow Corning in California suggesting that silicone might cause an immune reaction. Slowly, lawsuits against the makers of breast implants began to sprout and multiply, taking off when the Food and Drug Administration pulled silicone implants off the market in January of 1992 (an action that the FDA refused to rescind earlier this year, despite a divided advisory panel’s recommendation that it do so). The cases chiefly alleged causation of autoimmune tissue disorders such as lupus, scleroderma and rheumatoid arthritis. Though danger posed by silicone implants has been hotly disputed within the scientific community (many recent studies have not found any connection to serious illness), juries weren’t so fussy and began awarding plaintiffs big judgments.
Dow Corning, based in Midland, Mich., was the largest maker of both silicone breast implants and the gel used in other companies’ implants. Formed in 1943 when the military asked Dow Chemical and Corning Inc. to jointly develop silicone insulation for aircraft, the two parent corporations each own 50 percent of Dow Corning, but Dow Chemical has always had much closer ties. (The Michigan headquarters of the two companies are only a few miles apart.) After the war Dow Corning began exploring alternate uses for the miraculous substance, eventually developing some 8,700 silicone-based products.
When the implant litigation storm hit, Dow Corning originally joined in a comprehensive $4.3 billion global settlement agreement worked out between manufacturers of implants and plaintiffs in 1994 under the auspices of federal judge Sam Pointer Jr. That plan fell apart in 1995, when thousands of plaintiffs around the country indicated they would opt out and sue in state court. Dow Corning then declared bankruptcy. (Other major manufacturers, including Bristol-Myers Squibb Co., Baxter International Inc. and 3M Co., struck a revised settlement with plaintiffs in December of 1995.That plan began making payments in 1996.)