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Dow Chemical Company v. Mahlum

12/31/1998

ing, including some control over Dow Corning's products and significant control of testing and protocol, one-third control of Dow Corning's board of directors, fifty percent control of Dow Corning's shares, and the control inferred from its various agreements with Dow Corning, Dow Chemical should have used its influence to halt the marketing of Dow Corning's silicone breast implants until the long-term effect of silicone breast implants on humans was understood and these products were determined to be safe.


Furthermore, Dow Chemical could have acted directly under its 1975 trademark and trade name licensing agreement with Dow Corning. The agreement required that products using Dow Chemical's name be "of a nature and quality that is acceptable to Dow Company and shall not damage or reflect adversely on the reputation or goodwill associated with the name and mark 'Dow'" and that Dow Corning, if requested, submit specimens of its products to Dow Chemical and permit inspection of its premises to examine the quality of Dow Corning's products. Additionally, pursuant to this agreement, Dow Chemical preserved the right to withdraw its consent to Dow Corning's use of its name.


Aside from any actual control reflected by this agreement, the agreement gave Dow Chemical authority to revoke Dow Corning's license to use the corporate name "Dow" on any questionable products. As Dow Chemical knew of the risks associated with DC 360, and was aware of specific problems that implant recipients had experienced through its subsidiary Lepetit, Dow Chemical should have exercised its power to revoke Dow Corning's trademark and tradename license with respect to breast implants, if Dow Corning had refused to stop marketing these products.


Finally, given that Dow Chemical knew that much of the extensive and specific information it had of DC 200, DC 360, and other liquid silicones, potential danger was not widely disseminated, it could have also published its knowledge of the potentially hazardous biological effects of liquid silicones. Such publication would have put the medical community on notice of the potentially significant dangers that could result from implantation. Unfortunately, Dow Chemical failed to take any of these actions. Instead, it continued to market Dow Corning breast implants outside of the United States and to reap the financial benefits of Dow Corning's domestic sales. The jury could therefore reasonably conclude from these facts that Dow Chemical negligently performed its undertaking with regard to the safety of the liquid silicone subsequently used in breast implants, as it failed to completely test the silicone liquid for safety and failed to protect the third-party implant recipients.


The jury also had sufficient evidence to conclude that Charlotte Mahlum's physical harm resulted from Dow Chemical's failure to exercise reasonable care. See section 324A (one who) undertakes to render services that should be recognized as necessary for a third person's protection "is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to perform this undertaking.") As discussed above, the Mahlums introduced expert testimony which tended to prove that Dow Corning's breast implants caused Charlotte Mahlum's illnesses.


Obviously, had Dow Chemical acted to prevent Dow Corning from marketing its breast implants, either through direct influence or its trademark agreement, Charlotte Mahlum would not have suffered injuries from these implants. In addition, testimony at trial included the opinion of Charlotte Mahlum's expert witness, Dr. Lappe, that had Dow Chemical publicized its knowledge of the dangers of liquid silicone t

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