In re Silicone Gel Prod. Liability Litigation, CV 92-P-10000-S.

• Citation: 887 F. Supp. 1455
• Decision Date: 25 April 1995
• Docket Number: No. CV 92-P-10000-S.,CV 92-P-10000-S.
• Parties: In re SILICONE GEL BREAST IMPLANTS PRODUCTS LIABILITY LITIGATION.
• Court: U.S. District Court — Northern District of Alabama

887 F. Supp. 1455

In re SILICONE GEL BREAST IMPLANTS PRODUCTS LIABILITY LITIGATION.

No. CV 92-P-10000-S.

United States District Court, N.D. Alabama, Southern Division.

April 25, 1995.

OPINION

Dow Chemical and Corning, Inc. Summary Judgment

POINTER, Chief Judge.

On December 2, 1993, this court entered an interlocutory order granting summary judgment in favor of Dow Chemical and Corning, Inc. The court expressly declined to certify that decision as final under Fed. R.Civ.P. 54(b). Now pending are plaintiffs' motions to vacate this Order, and motions by these defendants to certify the Order as final. For the reasons stated below, the court concludes that, with respect to Corning, Inc., the Order should be confirmed and certified as a final judgment. With respect to Dow Chemical, the Order should be vacated as to the direct liability claims.¹

In its 1993 Order, the court, after reviewing the potential evidence then shown to be available, concluded that Dow Chemical and Corning could not be held liable under "corporate control" theories, that Dow Corning was not a joint venture or partnership, and that its parent corporations had no legal responsibility to plaintiffs with respect to controlling the operations of Dow Corning. Plaintiffs are not actively challenging those conclusions.

Rather, they assert that evidence obtained in 1994, supplementing that previously known, shows Dow Chemical engaged in conduct making it directly liable to plaintiffs under various tort theories. This new evidence, they say, demonstrates that Dow Chemical was significantly involved with Dow Corning's breast implants — indeed, in virtually all testing of silicone from the 1940s until the early 1970s upon which Dow Corning relied. They also contend that Dow Chemical was involved in the distribution of breast implants through its foreign subsidiary, Lepetit. Plaintiffs' theories include negligence, strict liability, concert of action, corporate conspiracy, aiding and abetting, fraud, and fraudulent concealment. Plaintiffs also contend that, although Corning did not research, design, produce, promote, test, or sell breast implants, the actions of Dow Chemical should be attributed to Corning, thereby making Corning liable to plaintiffs to the same extent as Dow Chemical.

I. STANDARD OF REVIEW

The basic principles governing summary judgment under Fed.R.Civ.P. 56 were clarified in the trilogy of cases decided by the Supreme Court in 1986: Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment is proper if, based on the admissible evidence that would be available and the applicable burdens of production and persuasion, a party would be entitled at trial to judgment as a matter of law because of material facts that either are not in substantial controversy or lack sufficient evidentiary support. Facts in genuine dispute are assumed to be favorable to the party against whom summary judgment would be entered.

II. CHOICE OF LAW

In federal multidistrict proceedings, the transferee court applies the substantive law of the transferor courts. See, e.g., In re San Juan Dupont Plaza Hotel Fire Litigation, 745 F.Supp. 79, 81 (D.P.R. 1990) (quoting Ferens v. John Deere Co., 494 U.S. 516, 110 S.Ct. 1274, 108 L.Ed.2d 443 (1990) and MANUAL FOR COMPLEX LITIGATION, SECOND § 31.122 n. 25 (1985)). The transferor courts in diversity cases would be bound to apply the law of the forum state, including its choice of law rules. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). See also MANUAL FOR COMPLEX LITIGATION, SECOND § 33.23 n. 36 (1985).

This MDL proceeding involves diversity-jurisdiction cases filed in, or removed to, federal courts in 90 of the 94 districts, located in virtually every state, the District of Columbia, Puerto Rico, and the Virgin Islands. This court must therefore look to the laws of the several states to determine whether Dow Chemical and Corning should be granted summary judgment. When addressing direct liability issues under choice of law rules, this court may be obliged to apply the laws of many different states. Because of variations in applicable state law, summary judgment could be proper in some cases while not warranted in others.

III. FACTS

In evaluating whether summary judgment should be granted in favor of Dow Chemical and Corning, the court treats the following facts as established, either because they are not in genuine dispute or because they are supported by evidence viewed in the light most favorable to the plaintiffs.

In 1942, Corning and Dow Chemical agreed to create a corporation in which they would each be 50% shareholders, with Corning supplying silicon technology and Dow Chemical supplying chemical processing and manufacturing know-how. Dow Corning was incorporated in Michigan in February of 1943, and Dow Chemical and Corning have each remained 50% shareholders since its inception. Although Dow Corning is a corporation and its affairs have been conducted in compliance with standards for corporate governance, Dow Chemical and Corning have at times in non-legal statements referred to Dow Corning as a partnership or joint venture.

Dow Chemical scientists performed the initial testing on silicone products and published their results in 1948. The article has been cited as spawning interest in the use of silicones in medical products. The article stated "silicones ... as a class are very low in toxicity" and "finished silicone resins are physiologically inert and present no hazards." The article actually related to handling of commercial silicones. No evidence has been presented to indicate that the statement regarding the inertness of silicone resins is inaccurate. In addition, it is undisputed that over 100,000 kinds of silicone compounds exist, only some of which are bioactive.

Dow Chemical, primarily through one of its scientists, V.K. Rowe, performed toxicological tests on certain silicone compounds, arranged and directed outside research on behalf of Dow Corning, analyzed outside research results, and for many years made recommendations to Dow Corning regarding future testing. In 1970, after Dow Corning had been marketing breast implants for six years, the only toxicology tests on file at Dow Corning's library regarding the fluid contained in breast implants were ones that had been conducted by Dow Chemical. Dow Corning, however, did consult with other outside consultants, not just Dow Chemical.

Tests conducted by both Dow Chemical and Dow Corning on silicones prior to and after the introduction of breast implants in 1964 revealed that some silicones, including some used in breast implants, were not wholly inert, but had some biologically active properties. These studies specifically revealed that low molecular weight silicones could affect the immune system and that certain silicone fluids, including the gel making up about 80% of breast implants, had estrogenic effects. Despite finding these reactions to silicones, Dow Chemical scientists continually notified Dow Corning that the adverse reactions were due to other forces and that no further testing needed to be conducted. Some, but not all, of these studies were published in journals or disclosed to the FDA. Dow Chemical and Dow Corning also conducted joint research regarding the use of organosilicon compounds for pharmaceutical applications and agricultural purposes such as pesticides.

From its creation in 1965 and until 1970, Dow Corning's Bioscience Research Department was housed in the Dow Chemical building where Dow Chemical's toxicology and biochemical research labs were located. Dow Corning apparently did not pay rent for the use of this space.

Until the early 1970s, Dow Corning did not have its own toxicology lab and instead relied on outside consultants, such as Dow Chemical, for information regarding silicone toxicological studies. Dow Corning and its scientists frequently sought input from Rowe and other Dow Chemical scientists on their silicone research. Rowe recommended that Dow Corning create its own toxicology lab and made specific suggestions regarding what types of tests should be conducted in that facility and who should run it. At Rowe's recommendation, Dow Corning hired Ken Olson, a Dow Chemical scientist, to head its toxicology lab. Olson stated that, during his tenure at Dow Corning, his toxicology lab was housed in the same facility as Dow Chemical's and that he had access to and used Dow Chemical's equipment, facilities, lab animals, and personnel in conducting Dow Corning toxicology tests.

Several additional Dow Chemical scientists transferred to Dow Corning for this start-up period, but, like Olson, later returned to Dow Chemical. Although none of them ever, while working at Dow Chemical, specifically opined on breast implant safety or the safety of silicones for use in breast implants, some researched and tested breast implants while at Dow Corning, knew which silicones were contained in breast implants, and knew what hazards were associated with the silicones contained in breast implants. For example, when Olson returned to Dow Chemical in 1973, he had specific knowledge of toxicological studies on breast implants and their components, including knowledge of potential estrogenic effects and gel migration to tissues and organs.

In its 1959 annual report, Dow Chemical stated that "because of their chemical inertness and lack of toxicity silicones are rapidly finding use in medical research." Dow Chemical cited Dow Corning's use of silicones in heart and brain valves, tubes, and coatings. In 1973, Dow Chemical reported to its shareholders in its annual report that Dow Corning breast implants were "the standard of the industry."²

On May 5, 1975, Dow

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