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Dow Chemical Company v. Mahlum12/31/1998
o the scientific or medical community, efforts would have been made to stop the use of medical products containing liquid silicones until further tests established the safety of such products. Charlotte Mahlum also testified that had she known of the significant health hazard posed by liquid silicones, she would have refused Dow Corning's breast implants.
It was foreseeable that proceeding with the marketing of silicone breast implants and failing to present any information regarding the potential dangers of silicone fluids would result in women electing to receive the implants without a full appreciation of the risks involved. Based upon the evidence adduced at trial, the jury could have found that Dow Chemical had a significant level of control over Dow Corning and its products. Dow Chemical certainly had the authority to influence Dow Corning and to assert direc pressure on Dow Corning through its trademark agreement. Dow Chemical, however, did nothing.
We previously discussed the nature of duty and potential section 324A liability in Wright v. Schum, 105 Nev. 611, 781 P.2d 1142 (1989). Wright recognized that a landlord could be liable, under section 324A, for injuries caused by a dog known to be vicious that escaped from the leased premises through an obviously broken gate. The Wright opinion recognized that "the mere advice or warning by one person to another that care should be taken to avoid a certain risk does not in itself create an undertaking and consequent liability on the part of one giving such advice." Id. at 616, 781 P.2d at 1145. We also emphasized in Wright that the landlord was not liable simply because he was the landlord; instead, the landlord had intended to and did influence the conduct of his tenants by threatening to evict them unless they kept the dog in the house or on a chain. Id. at 616-17, 781 P.2d at 1145. Nevertheless, this court noted that the landlord's status as a landlord created the general liability under section 324A. Id. at 616 n.2, 781 P.2d at 1145 n.2. Specifically, since the landlord had the power to enforce his demand that the tenant take care of the dog, and used this power, he undertook a duty to exercise due care and could be found liable for his breach of this duty. Id. at 617, 781 P.2d at 1145-46.
Here, as in Wright, Dow Chemical's duty and resulting liability is not based solely on its status as a parent corporation. By virtue of its status as a creator parent, however, Dow Chemical had a degree of power over Dow Corning. As has been previously mentioned, Dow Chemical maintained fifty percent ownership of Dow Corning's stock and one-third control of Dow Corning's board of directors. Dow Chemical also tested and advised Dow Corning on its silicone products for several decades. During most of this time, Dow Corning lacked its own toxicology lab, and Dow Corning's Bioscience Research Department was located within the same building as Dow Chemical's toxicology and research laboratories from 1965 until 1970. Dow Chemical designed testing protocol and exercised influence in the area of toxicology, and, over the years, Dow Chemical freely transferred its employees to and from Dow Corning. Further, Dow Chemical entered into a 1966 joint development agreement, a 1969 information development agreement, and a 1975 trademark agreement with Dow Corning. These agreements could support a finding by the jury that Dow Chemical was exercising actual control over the development of information and silicone products. The record is also replete with examples of Dow Corning following Dow Chemical's lead; in fact, our review of the record discloses no instance when Dow Corning failed to act in accordance with Dow Chemical's instruction. Consequently, we conclu
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