In Re Dow Corning Corp.

211 B.R. 545, 1997 Bankr. LEXIS 1173, 1997 WL 435029
United States Bankruptcy Court, E.D. Michigan·Decided July 29, 1997·No. 19-30472·Published·Cited by 26 cases

Opinion

OPINION ON ESTIMATION, PANEL OF SCIENTIFIC EXPERTS AND COMMON ISSUES TRIAL

ARTHUR J. SPECTOR, Bankruptcy Judge.

I. Introduction

On February 15, 1996, Dow Corning Corporation (the “Debtor”) filed two motions. One was styled a “Motion ... to Estimate the Tort Claims and to Establish Estimation Hearing Procedures”. The other was a “Motion for the Appointment of an Independent Panel of Scientific Experts Under Federal Rule of Evidence 706.”

The Official Committee of Tort Claimants (“TCC”) filed a motion of its own on March 5, 1996. This motion seeks judicial approval of a tort-claims estimation procedure which differs markedly from that proposed by the Debtor. Predictably, each party objected to the other’s estimation motion. 1 The TCC also objected to the Debtor’s request that a panel of experts be appointed. 2

The disposition of those motions constitute core proceedings within the jurisdiction of this Court. 28 U.S.C. §§ 1334, § 157(a), (b)(2)(A) and (B). This Opinion sets forth the Court’s findings of fact and conclusions of law. See F.R.Civ.P. 52(a) (incorporated by F.R.Bankr.P. 7052); F.R.Bankr.P. 9014.

A. Pre-petition History

Dow Corning Corporation, which is the result of a joint venture between The Dow Chemical Company and Corning Glass Works (now Corning, Incorporated), was formed in 1943 for the purpose of developing and producing products based on silicone chemistry. At present, Dow Holdings, Inc. (a wholly owned subsidiary of Dow Chemical) and Corning are the sole shareholders of the Debtor, each owning 50% of the common stock.

Because they are spelled so similarly, “silicone” is frequently mistaken for “silicon.” However, silicone is a man-made substance that was discovered shortly before World War II. See Hall v. Baxter Healthcare Corp., 947 F.Supp. 1387, 1401 n. 30 (D.Or.1996); Marcia Angell, M.D., Science on Trial: The Clash of Medical Evidence and the Law in the Breast Implant Case 36 (1996). Silicone is a synthetic polymer (or chain) primarily composed of two of the earth’s most common elements, silicon and oxygen. Angell, supra at 36. “[Rjepeating silicon and oxygen atoms [are] bonded together” to form the polymer’s “backbone.” Stuart R. Kerr, III, UV Silicone Release Coatings: State of the Art, Adhesives Age, July 1, 1996. Attached to *550 each silicon atom are side chains of hydrogen and carbon. Id. By varying the polymer’s length and configuration, silicone can be given almost any consistency ranging from liquid to solid. Angell, supra at 36. Due to its pliability, as well as its possession of certain other physical characteristics, silicone has proven to be a very versatile product.

The Debtor, along with its subsidiaries, produces thousands of silicone-based products, the great majority of which are directed toward non-medical uses. However, silicone has also been found to be useful in the medical products industry. “Physicians have used silicone products in the human body for various purposes since the 1950s.” Hall v. Baxter Healthcare, 947 F.Supp. at 1401. Examples of medical devices that contain silicone include various types of implants, artificial joints, heart valves, shunts, disposable needles and implantable contraceptives. Id.; Angelí, supra at 36. The Debtor has either produced, provided component parts for, or supplied raw materials for many of these medical products. 3

Silicone was first used to enlarge women’s breasts shortly after World War II in Japan. The implanted silicone was not contained in a packet, but instead was injected directly into the breast. Angell, supra at 35-36. The effects of the direct silicone injections were more often than not disastrous for the women who received them. Id. at 36. Typically, these women not only suffered disfigurement but also had to endure extremely painful complications. Id. at 38. At the time, silicone was generally considered to be inert inside the human body and was not itself considered to be the problem. Id. at 36. Concerns about the possible toxicity of silicone when placed inside the human body did not arise until a much later date.

In 1961, two plastic surgeons, Drs. Thomas Cronin and Frank Gerow, developed the idea of placing silicone gel inside a sealed packet that would then be surgically implanted inside the woman’s breasts. Id. at 38-39. The doctors collaborated with the Debtor to create implants “consist[ing] of a rubbery silicone envelope containing silicone gel.” Id. at 39. Despite various innovations and improvements since that time, this is still the basic design of the breast implant. The intent of the design was to eliminate both the migration of silicone throughout the body and the uneven and irritating nature of the scarring that resulted from direct silicone injections. Id.

Silicone gel-filled packets were first placed inside a woman for purposes of breast augmentation in 1962. In 1964, the Debtor introduced silicone-gel breast implants to the market. Id. They were immediately considered a great improvement over silicone injections. Id. at 40. Nonetheless, it has long been known that silicone-gel breast implants can lead to certain problems separate and distinct from any pathogenic effect that they might have. The body’s natural reaction to the presence of a foreign body inevitably leads to the formation of scar tissue that encapsulates the invader. Problems can arise when the scar tissue that surrounds the implant contracts. If contracture occurs, the scar tissue squeezes in on the implant, which can cause it to become hard and misshapen. Id.

Silicone-gel breast implants have also been shown to leak or “bleed” over time and under certain conditions are susceptible to rupture. The primary concern with both leakage and rupture is that once the silicone escapes the rubbery envelope, it may not stay contained within the encasing scar capsule, thus enabling silicone to escape into the body. Id. at 41. Another non-pathogenic problem is that breast implants make it difficult to perform mammographies because they obstruct the passage of x-rays through the breast tissue, id. at 42, thereby creating a potential *551 impediment to the early detection of breast cancer. Heidi Li Feldman, Science and Uncertainty in Mass Exposure Litigation, 74 Tex. L.Rev. 1, 19 (1995). But through proper manipulation the breast implant, mammography can still be performed. Angell, supra at 42.

Around 1977, a jury awarded a silicone-gel breast implant recipient $170,000 for complications that developed after her implants ruptured. See V. Mueller & Co.

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In Re Dow Corning Corp., 211 B.R. 545, 1997 Bankr. LEXIS 1173, 1997 WL 435029 (Mich. 1997).

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