On August 22, 2000, the Michigan Supreme Court denied the insurer applications for leave to appeal from the pro-coverage rulings of the Michigan Court of Appeals in Dow Corning's breast implant insurance coverage case. The Court of Appeals had rejected virtually all of the insurers' challenges to the trial court's coverage rulings in favor of Dow Corning. The Supreme Court ruling left in place significant pro-coverage rulings on trigger and scope of coverage and confirms Dow Corning's rights under more than 300 policies issued by more than 100 insurance companies during the three decades that Dow Corning manufactured breast implants. These insurers issued policies valued at more than $1.5 billion.
Covington has represented Dow Corning in its efforts to obtain insurance coverage for the massive liabilities stemming from the breast implant controversy. We also represented Dow Corning in a series of parallel arbitrations.
For decades, Dow Corning has manufactured a large number and wide variety of silicone products, of which breast implants comprised a small portion. In 1992, the Food and Drug Administration, concerned that the safety of silicone breast implants had not yet been demonstrated to its satisfaction, requested a voluntary moratorium on the use of such implants. Soon thereafter, Dow Corning was inundated by many thousands of claims by implant recipients across the country.
To assist Dow Corning in dealing with the flood of underlying claims, Covington’s coverage lawyers took the lead in efforts to convert the promises of our client's insurance program into actual coverage.
The resulting litigation was factually and procedurally complex, involving:
- Several products manufactured by Dow Corning over a 30 year period.
- Over 300 different insurance policy contracts.
- Over 100 insurer defendants represented by over 50 separate law firms.
- 194 depositions.
- Over 30 summary judgment motions.
- 30 motions in limine.
- Three and a half months of trial, thirteen weeks of which were before a jury.
Despite these complexities, our litigation team brought this case to trial in just over two years from the date suit was brought.
Before trial, we defeated a number of pretrial motions in which the insurers asserted an array of defenses to coverage. In the meantime, a separate team of settlement negotiators led by Covington secured approximately $500 million of primary and excess coverage before jury selection commenced. After the trial began, our settlement team secured an additional approximately $500 million in settlements.
Robert Sayler, William Skinner, Anna Engh, and Laird Hart led the litigation team that defeated the non-settling insurers' defenses at trial. Despite the insurers' efforts to avoid their contractual obligations by villainizing Dow Corning, the jury was not persuaded. After 13 weeks of trial, on February 14, 1996, the jury returned a verdict in favor of Dow Corning on all counts, entitling Dow Corning to recover a third block of $500 million in coverage. The verdict included a finding that two defendants — AIG and Wausau — acted in bad faith. The National Law Journal cited the Dow Corning jury verdict as one of the "10 largest jury awards of 1996."
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