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Dow Chemical Company v. Mahlum12/31/1998
This is an appeal and cross-appeal from a judgment against the Dow Chemical Company ("Dow Chemical") for fraud and negligence in connection with alleged defects in silicone gel breast implants manufactured by Dow Corning Corporation ("Dow Corning").
The issues before this court are whether substantial evidence in the record supports the jury verdict and whether a new trial was warranted based on numerous alleged trial errors. We conclude that the verdict in this case cannot stand as to the fraud and accessory liability claims. We also conclude, however, that the verdict as to the negligence claim is supported by substantial evidence. Accordingly, we reverse the district court's judgment in part and affirm it in part. In addition, we conclude that the district court did not abuse its discretion in denying Dow Chemical's new trial motion.
I. Background
In 1943, Dow Chemical and Corning Incorporated formed Dow Corning for the express purpose of developing commercial and industrial uses for silicone technology. Dow Chemical and Corning Incorporated were, and continue to be, Dow Corning's only stockholders, each owning fifty percent of Dow Corning's stock. Dow Chemical and Corning Incorporated each also initially occupied four of ten seats on Dow Corning's board of directors; later, each parent held five seats out of fifteen.
In 1948, Dr. V. K. Rowe, a toxicologist at Dow Chemical, co-authored an article entitled "Toxicological Studies on Certain Commercial Silicones," which was published in the Journal of Industrial Hygiene and Toxicology. The article, while addressing the hazards surrounding the workplace handling of silicones, concluded that commercial silicones as a group were physically "inert" and were very low in toxicity.
From the 1940s until the 1970s, "every organosilicon compound" made by Dow Corning was sent to Dow Chemical for toxicological testing. While the majority of these tests concerned industrial handling hazards associated with the tested substances, Dow Chemical reports periodically advised Dow Corning on adequate product warnings or on the need for further testing before marketing a particular product. The products containing such silicone ingredients included cosmetics, bathroom caulk, hair conditioner, and foot ointment.
In 1956, Dow Corning commissioned a study co-authored by Dow Chemical employee M. B. Chenoweth entitled "The Physiological Assimilation of Dow Corning 200 Fluid" ("the Chenoweth study"). This study, in its introductory paragraph, noted that prior Dow Chemical experiments had shown that many silicones were inert, and that the increasing use of silicones for medicinal purposes had triggered a need for information on their biological ramifications. The study further revealed that Dow Corning 200 fluid ("DC 200"), when injected intramuscularly in rats and administered orally in dogs, had migrated to all major organs of the body, including the brain. (DC 200 fluid is chemically equivalent to the Dow Corning 360 fluid ("DC 36011) used in the breast implants at issue in this case.) This study was not published to the medical or scientific community.
In 1957, Dow Corning requested Dr. Rowe to set up a study on six silicone materials submitted by Dow Corning. Dr. Rowe arranged for the study ("the Miami study") to be performed by a professor of pharmacology at the University of Miami School of Medicine, Dr. William Deichmann. Although Dr. Deichmann performed the testing, Dr. Rowe designed the testing protocol for the research (i.e., the number and type of test animals, the duration of the test, and the test methods).
Two versions of the Miami study were prepared by Professor
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