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Dow Chemical Company v. Mahlum12/31/1998
itting fraudulent misrepresentation. See TMJ Implants, 113 F.3d at 1495; Halberstam, 705 F.2d at 477. The second and third elements should be weighed together, that is, greater evidence supporting the second element requires less evidence of the third element, and vice versa. TMJ Implants, 113 F.3d at 1495.
The Mahlums contend that certain evidence supports the verdict on their aiding and abetting claim. First, they assert that Dow Corning was aware of potential hazards regarding, or at least harbored doubts about, the safety of silicone gel breast implants, and allegedly made misrepresentations about those implants to Charlotte Mahlum. Second, they assert that the Jury could infer that Dow Chemical was aware of Dow Corning's alleged misrepresentations because (a) Dow Chemical representatives held four (of ten) seats -- and later five (of fifteen) seats -- on Dow Corning's Board of Directors; (b) Dow Chemical conducted or supervised some tests on silicone substances for Dow Corning as late as 1970; (c) Dow Chemical's chief toxicologist, Dr. V. K. Rowe, maintained a consulting relationship with Dow Corning from the late fifties until the early seventies regarding Dow Corning's design, conduct, or interpretation of studies regarding silicone substances; (d) Dow Chemical and Dow Corning agreed to test the silicones later used in breast implants for use as pharmaceuticals and pesticides; and (e) Dow Chemical, through its subsidiary, Lepetit, marketed Dow Corning breast implants outside the United States. Finally, the Mahlums assert that Dow Chemical's research of the pharmaceutical and pesticidal uses of liquid silicone, and its marketing of breast implants through its subsidiary outside the United States, "emboldened" Dow Corning's alleged fraudulent misrepresentations regarding the safety of silicone gel breast implants.
We conclude that the verdict on the aiding and abetting claim cannot stand. The evidence does not establish that Dow Chemical knowingly and substantially assisted Dow Corning in committing a fraud. Even though, as discussed below in section E, the Mahlums established that Dow Chemical negligently performed its undertaking to test liquid silicone, the evidence that the Mahlums advance falls short of proving that Dow Chemical Is actions amounted to knowing support or encouragement of Dow Corning's alleqed fraudulent conduct. The difference between the failure of proof regarding aiding and abetting and the adequacy of proof regarding negligent undertaking lies in Dow Chemical's failures to act, rather than its deeds. Here, the proof fails to show the necessary actions that would demonstrate Dow Chemical's knowing participation in Dow Corning's alleged fraud. By contrast, the evidence regarding negligent undertaking is present in the tests and cooperation regarding research that Dow Chemical undertook. In other words, the proof regarding Dow Chemical's research activities does not support knowing participation in a fraud. The Mahlums thus failed to show that Dow Chemical rendered substantial assistance to allegedly fraudulent misstatements that Dow Corning may have made to Charlotte Mahlum.
The Mahlums argue that if Lepetit had refused to market breast implants without warnings, then Dow Corning would not have been emboldened to continue its supposedly false and misleading representations in the United States. The Mahlums' assertion that Lepetit's lack of protest somehow emboldened Dow Corning, thus providing it with substantial assistance, lacks support in the law. To amount to substantial assistance, such encouragement must take the form of a direct communication, or conduct in close proximity, to the tortfeasor. See Halberstam, 705 F.2d at 481-82 (suggestive words may be e
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