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Dow Chemical Company v. Mahlum12/31/1998
tific advisor. While ostensibly a Lepetit employee, Hinman remained on Dow Chemical's payroll. Lastly, R. William Caldwell, a Dow Corning employee, transferred in 1967 to Dow Chemical as its assistant general manager of bioproducts department. Shortly thereafter in 1968, Dow Chemical sent Caldwell to Lepetit, gave him the title of "administratore delegato," and authorized him to buy, sell, and trade Lepetit without prior approval of Lepetit's board. Caldwell testified that he viewed himself a Dow Chemical employee, despite the changes he underwent in employment.
Additionally, various documents chronicle Dow Chemical's testing of Dow Corning's silicone materials from the late 1940s into the mid-1970s. Based on the Chenoweth study, Dow Chemical knew as early as 1956 that the silicone fluid DC 200 (the chemical equivalent of DC 360 fluid used in Dow Corning's breast implants), when injected intramuscularly into rats, migrated throughout the body into major organs, including the brain. The Chenoweth study also specifically recognized that silicone fluids were being studied for medicinal purposes and sought to explore their biological activities. In 1957, Dow Chemical's Dr. Rowe knew that the Miami study involving DC 200 fluid showed that the fluid lowered the granulocytic (immune) elements of the female test subjects, blood. During the 1950s and 1960s, Dow Chemical knew that Dow Corning was marketing medical products containing silicones: catheters, brain shunts, heart valves, and drainage valves. Also, in its annual report to stockholders in 1959, Dow Chemical noted that " ecause of their chemical inertness and lack of toxicity, silicones are rapidly finding use in medical research." Thus, Dow Chemical was aware that many of the silicone substances being tested were destined for use in medical devices, including implants.
In 1970, after Dow Chemical began marketing Dow Corning breast implants outside of the United States through its subsidiary Lepetit, Dow Chemical's pathologist Gary Sparschu found that experiments performed on rats injected with DC 360 fluid showed that the fluid had migrated to different parts of the body, including the bone marrow. The female test animals also showed decreased brain weights. Because Dow Chemical knew prior to the 1970s that other silicone materials developed for medical purposes were being used as implants, knew that liquid silicone was being developed for medicinal uses, and knew at the time of Sparschu's tests that Dow Corning was using liquid silicone in its breast implants, the jury could reasonably infer that Dow Chemical should have known that the services it rendered (e.g., its professional advice and protocol design by Dr. Rowe), the exchange of key personnel to and from Dow Corning, and its toxicological testing of Dow Corning's liquid silicone, were a necessary step in the protection of third persons who would purchase liquid silicone in the form of breast implants. As Justice Mosk of the California Supreme Court explained in Artiglio,
" hat Dow Chemical acted without a focus on silicone breast implants does not negate the fact that it acted with a focus on silicone implants. Further, that it acted without awareness of plaintiffs as recipients of silicone breast implants does not negate the fact that it acted with awareness of the general class of persons to which plaintiffs belong, that is, recipients of silicone implants." Artiglio, 957 P.2d at 1323 (Mosk, J., Dissenting). Put another way, " f Dow Chemical knew that its testing was being relied upon to develop products that would be implanted in humans, Dow Chemical had a duty to use due care in providing reasonably accurate and complete information even if it did not specifically know in wh
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