Kramer Levin Defeats Attempt to Block $100 Million in Payments to Injured Breast Implant Recipients

A federal appeals court has rejected an attempt to stay pending appeal an order obtained by Kramer Levin in a Michigan federal court ordering the Dow Corning Settlement Facility to immediately issue $100 million in “premium” payments to thousands of breast implant recipients who settled their claims against Dow Corning. The payments are part of a $3 billion settlement of Dow Corning’s mass tort bankruptcy that Kramer Levin, as counsel to the Tort Claimants’ Committee, helped negotiate and implement in 2004. The settlement resolved hotly contested disputes over the harms caused by breast implants and provides payments of up to $250,000 for disease claims and $20,000 for rupture claims to women who can document that they had Dow Corning breast implants. The settlement also provides that, if there is adequate funding, claimants will receive premium payments of an additional 20 percent for those with approved disease claims and $5,000 for approved rupture claims.

The U.S. District Court for the Eastern District of Michigan recently determined that adequate funding exists at this time to authorize payment of one-half of premiums earned – approximately $100 million. Dow Corning, which still has funding obligations under the settlement, appealed that decision to the U.S. Court of Appeals for the Sixth Circuit and then moved to stay the District Court’s order pending appeal. Kramer Levin opposed that motion on behalf of the Claimants’ Advisory Committee, which represents the interests of claimants under the settlement. Dow Corning’s motion was denied first by the District Court and again by the Court of Appeals, in an order issued on March 31 – clearing the way for payments to be issued starting in April.

Kramer Levin’s team on the matter is led by litigation partner Jeffrey S. Trachtman and includes associates Carl D. Duffield, Theodore S. Hertzberg, and Daniel Schumeister. The original bankruptcy engagement was overseen by Kenneth H. Eckstein, co-head of Kramer Levin’s Corporate Restructuring and Bankruptcy Department.