# In Re Dow Corning Corp.

> United States Bankruptcy Court, E.D. Michigan · July 29, 1997 · 211 B.R. 545

URL: https://www.frixlaw.com/law-library/cases/1978765

## Case

- **Full name:** In Re DOW CORNING CORPORATION, Debtor
- **Court:** United States Bankruptcy Court, E.D. Michigan
- **Decided:** July 29, 1997
- **Citations:** 211 B.R. 545; 1997 Bankr. LEXIS 1173; 1997 WL 435029
- **Precedential status:** Published
- **Opinion:** Opinion by Spector
- **Judges:** Arthur J. Spector
- **Cited by:** 27 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/1978765

## How later opinions describe it (automated extraction)

- Finding no cause to estimate personal injury tort claims because: substantial time delays could result from estimation, perceived benefit to debtor or creditors was questionable, and claimants could suffer abrogation of their right to jury trial.

## Opinion text

OPINION ON ESTIMATION, PANEL OF SCIENTIFIC EXPERTS AND COMMON ISSUES TRIAL
ARTHUR J. SPECTOR, Bankruptcy Judge.
I. Introduction
On February 15, 1996, Dow Corning Corporation (the “Debtor”) filed two motions. One was styled a “Motion ... to Estimate the Tort Claims and to Establish Estimation Hearing Procedures”. The other was a “Motion for the Appointment of an Independent Panel of Scientific Experts Under Federal Rule of Evidence 706.”
The Official Committee of Tort Claimants (“TCC”) filed a motion of its own on March 5, 1996. This motion seeks judicial approval of a tort-claims estimation procedure which differs markedly from that proposed by the Debtor. Predictably, each party objected to the other’s estimation motion.
1
The TCC also objected to the Debtor’s request that a panel of experts be appointed.
2
The disposition of those motions constitute core proceedings within the jurisdiction of this Court. 28 U.S.C. §§ 1334 , § 157(a), (b)(2)(A) and (B). This Opinion sets forth the Court’s findings of fact and conclusions of law.
See
F.R.Civ.P. 52(a) (incorporated by F.R.Bankr.P. 7052); F.R.Bankr.P. 9014.
A. Pre-petition History
Dow Corning Corporation, which is the result of a joint venture between The Dow Chemical Company and Corning Glass Works (now Corning, Incorporated), was formed in 1943 for the purpose of developing and producing products based on silicone chemistry. At present, Dow Holdings, Inc. (a wholly owned subsidiary of Dow Chemical) and Corning are the sole shareholders of the Debtor, each owning 50% of the common stock.
Because they are spelled so similarly, “silicone” is frequently mistaken for “silicon.” However, silicone is a man-made substance that was discovered shortly before World War II.
See Hall v. Baxter Healthcare Corp.,
947 F.Supp. 1387 , 1401 n. 30 (D.Or.1996); Marcia Angell, M.D.,
Science on Trial: The Clash of Medical Evidence and the Law in the Breast Implant Case
36 (1996). Silicone is a synthetic polymer (or chain) primarily composed of two of the earth’s most common elements, silicon and oxygen. Angell,
supra
at 36. “[Rjepeating silicon and oxygen atoms [are] bonded together” to form the polymer’s “backbone.” Stuart R. Kerr, III,
UV Silicone Release Coatings: State of the Art,
Adhesives Age, July 1, 1996. Attached to
*550
each silicon atom are side chains of hydrogen and carbon.
Id.
By varying the polymer’s length and configuration, silicone can be given almost any consistency ranging from liquid to solid. Angell,
supra
at 36. Due to its pliability, as well as its possession of certain other physical characteristics, silicone has proven to be a very versatile product.
The Debtor, along with its subsidiaries, produces thousands of silicone-based products, the great majority of which are directed toward non-medical uses. However, silicone has also been found to be useful in the medical products industry. “Physicians have used silicone products in the human body for various purposes since the 1950s.”
Hall v. Baxter
Healthcare, 947 F.Supp. at 1401 . Examples of medical devices that contain silicone include various types of implants, artificial joints, heart valves, shunts, disposable needles and implantable contraceptives.
Id.;
Angelí,
supra
at 36. The Debtor has either produced, provided component parts for, or supplied raw materials for many of these medical products.
3
Silicone was first used to enlarge women’s breasts shortly after World War II in Japan. The implanted silicone was not contained in a packet, but instead was injected directly into the breast. Angell,
supra
at 35-36. The effects of the direct silicone injections were more often than not disastrous for the women who received them.
Id.
at 36. Typically, these women not only suffered disfigurement but also had to endure extremely painful complications.
Id.
at 38. At the time, silicone was generally considered to be inert inside the human body and was not itself considered to be the problem.
Id.
at 36. Concerns about the possible toxicity of silicone when placed inside the human body did not arise until a much later date.
In 1961, two plastic surgeons, Drs. Thomas Cronin and Frank Gerow, developed the idea of placing silicone gel inside a sealed packet that would then be surgically implanted inside the woman’s breasts.
Id.
at 38-39. The doctors collaborated with the Debtor to create implants “consist[ing] of a rubbery silicone envelope containing silicone gel.”
Id.
at 39. Despite various innovations and improvements since that time, this is still the basic design of the breast implant. The intent of the design was to eliminate both the migration of silicone throughout the body and the uneven and irritating nature of the scarring that resulted from direct silicone injections.
Id.
Silicone gel-filled packets were first placed inside a woman for purposes of breast augmentation in 1962. In 1964, the Debtor introduced silicone-gel breast implants to the market.
Id.
They were immediately considered a great improvement over silicone injections.
Id.
at 40. Nonetheless, it has long been known that silicone-gel breast implants can lead to certain problems separate and distinct from any pathogenic effect that they might have. The body’s natural reaction to the presence of a foreign body inevitably leads to the formation of scar tissue that encapsulates the invader. Problems can arise when the scar tissue that surrounds the implant contracts. If contracture occurs, the scar tissue squeezes in on the implant, which can cause it to become hard and misshapen.
Id.
Silicone-gel breast implants have also been shown to leak or “bleed” over time and under certain conditions are susceptible to rupture. The primary concern with both leakage and rupture is that once the silicone escapes the rubbery envelope, it may not stay contained within the encasing scar capsule, thus enabling silicone to escape into the body.
Id.
at 41. Another non-pathogenic problem is that breast implants make it difficult to perform mammographies because they obstruct the passage of x-rays through the breast tissue,
id.
at 42, thereby creating a potential
*551
impediment to the early detection of breast cancer. Heidi Li Feldman,
Science and Uncertainty in Mass Exposure Litigation,
74 Tex. L.Rev. 1, 19 (1995). But through proper manipulation
oí
the breast implant, mammography can still be performed. Angell, supra at 42.
Around 1977, a jury awarded a silicone-gel breast implant recipient $170,000 for complications that developed after her implants ruptured. See
V. Mueller & Co. v. Corley,
570 S.W.2d 140 (Tex.Civ.App.1978);
see also
Deborah R. Hensler and Mark A. Peterson,
Understanding Mass Personal Injury Litigation: A Socio-Legal Analysis,
59 Brook. L.Rev. 961, 992 (1993). Purportedly, this was the first successful breast implant lawsuit against the Debtor. Package inserts soon began warning implant recipients of the potential non-pathogenic side effects. Angell,
supra
at 42. As a result, complaints about these side effects have never been a source of great legal difficulty for the Debtor.
4
In the 1980s, a few reports surfaced suggesting that silicone gel may be pathogenic— i.e., that it can cause systemic disease in humans. This period also saw the beginning of a slow trickle of lawsuits alleging that silicone gel leaking from breast implants can cause much more grievous harm to the recipient than the non-pathogenic complications mentioned above.
Id.
at 52. The lawsuits were initially brought by women alleging that silicone gel had caused them to develop an auto-immune connective tissue disease such as lupus, scleroderma or rheumatoid arthritis. Gina Kolata,
A Case of Justice, or a Total Travesty?,
New York Times (June 13, 1995). Ultimately, many lawsuits alleged that the presence of silicone gel in the plaintiffs body resulted in more “general symptoms like aches and pains, fatigue, insomnia, memory loss and headaches.”
Id.
The various symptoms proved hard to classify and eventually the term “silicone disease” was coined.
Id.
The first suit to successfully assert that silicone gel caused connective tissue disease was the 1984 case of Maria Stern, in which the jury awarded the plaintiff a verdict of $2 million.
Stern v. Dow Corning Corp., et al.,
No. C-83-2348-MHP (N.D.Cal.1984); Angell,
supra
at 52. After this lawsuit the Debtor modified its package inserts to include an acknowledgment that there were “reports of suspected immunological responses to silicone mammary implants____” Angell,
supra
at 57. However, the Debtor’s new package insert warning also added that “convincing evidence does not exist to support a causal relationship between exposure to silicone materials and the acquisition or exacerbation of a variety of rheumatic and connective tissue disorders.”
Id.
In March of 1992, the Debtor ceased marketing silicone gel for breast implantation. Two' months later, the Food and Drug Administration ordered that implants containing the gel be taken off the market. Subsequent to the FDA’s action and the attendant publicity, the volume of lawsuits against breast implant manufacturers began to increase dramatically. In 1992, more than 3,000 such suits were commenced against the Debtor. Another 8,000 actions were filed in 1993, followed by 7,000 new cases in 1994.
In re Dow Corning Corp.,
187 B.R. 919, 921 (E.D.Mich.1995),
rev’d,
103 F.3d 129 (6th Cir.1996). Many similar suits were also filed in Canada.
In an attempt to make this crush of lawsuits more manageable, the Judicial Panel on Multidistrict Litigation consolidated those actions pending in federal court for administration pursuant to 28 U.S.C. § 1407 .
In re Silicone Gel Breast Implants Prods. Liab. Litig.,
793 F.Supp. 1098 (Jud.Pan.Mult.Lit.1992). The MDL Panel assigned the cases to the Honorable Sam C. Pointer, Jr. of the Northern District of Alabama.
The purpose of the consolidation was primarily to coordinate pretrial activities. However, as the MDL proceedings progressed, efforts to achieve a global settlement intensi
*552
fied.
Dow Corning,
187 B.R. at 922 . The Debtor maintained then, as it does now, that silicone-gel breast implants do not have the pathogenic effects alleged.
Id.
Nonetheless, the Debtor asserted that it was willing to settle the controversy because of two key factors. First, financial resources needed to continue the legal battle were not unlimited. In 1994 alone, the Debtor allegedly incurred more than $200 million in litigation costs. And absent a resolution to the controversy, legal costs would continue at this level, if not higher, having a potentially crippling effect on the company.
Id.
Second, the conflict was diverting attention of key management personnel away from the company’s core business.
Id.
Months of negotiating between the defendant manufacturers and a court-appointed plaintiffs’ steering committee eventually led to a proposed $4,225,070,000 global settlement.
Lindsey v. Dow Corning Corp. (In re Silicone Gel Breast Implant Prods. Liab. Litig.),
No. CV 92-P-10000-S, Civ. A. No. CV 94-P-11558-S, 1994 WL 578353 , at *1 (N.D.Ala. Sept. 1, 1994). Of this sum, the Debtor agreed to contribute $2.02 billion.
Dow Coming,
187 B.R. at 922 . The proposed settlement, approved by Judge Pointer as fair and equitable on September 9, 1994, has been praised by commentators as a potential model for future mass tort settlement negotiations.
See
John C. Coffee, Jr.,
Class Wars: The Dilemma of the Mass Tort Class Action,
95 Colum. L.Rev. 1343, 1404-10 (1995). The praise stems primarily from the way the process brought all the various factions to the negotiating table and because of the openness with which the negotiations were conducted.
Id.
Unfortunately, the global settlement ultimately proved to be unsuccessful.
When the settlement was first announced, potential class members were initially told that, depending upon their injury, they would each receive between $200,000 and $2 million.
Id.
at 1407-08. The payoff estimates were later reduced to a range of $105,000 to $1.4 million. Of course, the amount each claimant would receive was entirely dependent upon an unknown variable — the number of claims actually filed.
Id.
To protect claimants, the settlement agreement provided that class members would have an additional opportunity to opt out if the number of claims actually filed caused the settlement figures to fall below the estimated amounts.
Id.
By the spring of 1995 approximately 440,000 women had filed claims with the global settlement fund, a number much higher than expected.
5
Consequently, the settlement would have provided claimants with only a small percentage, perhaps as little as 5%, of the amount promised.
Id.
at 1408. According to some estimates, the defendant manufacturers would have had to jointly contribute another $24 billion to the settlement fund to pay all claimants the amounts promised.
Id.
at 1409. Not surprisingly, the defendant manufacturers were not interested in increasing their already substantial monetary commitment. At least 15,000 class members chose to opt out of the proposed settlement in order to preserve their right to pursue individual trials.
Dow Corning,
187 B.R. at 922 . The settlement quickly began to unravel and by May, 1995 was essentially dead.
At the same time, approximately 90 state trials were set to begin against the Debtor.
Id.
at 923 . Due to the complexity of the issues involved, the Debtor claims that silicone-gel breast implant trials last anywhere from two to eleven weeks, not including the weeks of pretrial preparation necessary for each case.
Id.
at 922 . Since many of the
*553
trial dates were overlapping, the situation facing the Debtor was daunting.
Id.
at 923 . According to the Debtor, the possibility of defending itself on so many fronts simultaneously was financially and logistically impossible. Financially, the total cost to litigate each of the pending trials would have been staggering. On the other hand, the Debtor was not willing to “succumb” to what it thought were “exorbitant settlement demands.”
Id.
Logistically, the Debtor felt that it simply could not muster the manpower necessary to effectively defend itself on so many concurrent fronts. Alison Frankel,
Dow Corning Goes For Broke,
The American Lawyer, January/February 1996, at 80. In addition, since the global settlement involving the federal cases was now in shambles the Debtor faced the almost certain prospect that thousands of new lawsuits would soon be filed against it.
Id.
at 79.
As stated above,
supra
p. 550, the Debtor also manufactured or supplied materials for other silicone-containing medical products. A number of lawsuits involving these various nonbreast implant medical products have been asserted against the Debtor as well. The majority of the nonbreast implant lawsuits claim that the products cause injuries similar to those allegedly caused by silicone-gel breast implants. While the nonbreast implant lawsuits are not nearly of the same magnitude or scope as the silicone-gel breast implant lawsuits, they nonetheless served to further complicate the Debtor’s already onerous legal situation. In response to what it perceived as an overwhelming legal scenario, the Debtor filed for relief under Chapter 11 on May 15,1995. As of the petition date, the Debtor was a defendant in over 19,000 individual silicone-gel breast implant lawsuits and at least 45 putative silicone-gel breast implant class actions.
Dow Corning,
187 B.R. at 922 . As for the nonbreast implant medical products, approximately 470 lawsuits, some involving multiple plaintiffs, had been asserted against the Debtor by that time. Pursuant to § 362(a)(1) of the Bankruptcy Code, all legal action against the Debtor has been stayed.
B. Post-petition History
Since the Debtor filed for chapter 11 bankruptcy relief, several motions have been filed which are relevant to the issue of how to best determine the value of implant claims pending against the Debtor. They are briefly summarized below.
One of the first steps taken by the Debtor after commencing this bankruptcy case was to file a motion seeking to transfer to the Eastern District of Michigan all actions filed by the women who had opted out of the MDL settlement. It sought this relief not only with respect to claims made against itself, but also such claims as were asserted against its two shareholders, Dow Chemical and Corning, Inc.
The District Court granted the motion insofar as it pertained to claims against the Debtor, and extended the reach of the transfer order to include the actions filed by plaintiffs who chose to remain part of the MDL settlement. See
Dow Corning,
187 B.R. at 919, 934 . However, the court declined to transfer the claims against the Debtor’s shareholders, reasoning that it had no jurisdiction over those claims.
Id.
at 933 ;
see also In re Dow Corning Corp.,
187 B.R. 934 (E.D.Mich.1995) (denying motion by nondebt- or breast implant manufacturers to transfer breast implant claims pending against them to the Eastern District of Michigan).
Various parties appealed on the issue of whether the District Court had jurisdiction over breast implant claims pending against nondebtor defendants. The Sixth Circuit reversed, holding that the District Court does have such jurisdiction.
Lindsey v. O’Brien, Tanski, Tanzer and Young Health Care Providers of Connecticut (In re Dow Corning Corp.),
86 F.3d 482, 493-94 (6th Cir.1996),
cert. denied,
— U.S. -, 117 S.Ct. 718 , 136 L.Ed.2d 636 (1997). The District Court subsequently declined to exercise jurisdiction under abstention principles.
See In re Dow Corning Corp.,
No. 95-CV-72397-DT, 1996 WL 511646 (E.D.Mich. July 30, 1996). The Sixth Circuit reversed that ruling, but only with respect to the Debtor’s shareholders.
See Lindsey v. Dow Chemical Co. (In re Dow Corning Corp.),
113 F.3d 565 (6th Cir.1997),
cert. denied,
— U.S. -, 117 S.Ct. 718 , 136
*554
L.Ed.2d 636 (1997). The upshot, then, is that all claims which were pending against the Debtor or its shareholders have been (or will be) transferred to the Eastern District of Michigan.
There are two other matters of interest and some relevance. Because of the large number of claims expected to be filed in this case, a special claims filing procedure was established. On August 7, 1996, the Court set a bar date for filing proofs of claim; approved the use of alternative proof of claim forms for filing certain proofs of claim; and approved notice procedures. The extensive notification procedure, which cost $8 million, began with a press conference in Washington D.C. on September 5, 1996, and included press releases, public relations initiatives, television and print advertising, direct mail, targeted mailings to specific interest groups, internet postings, and a toll-free telephone number. The bar date for domestic claimants was fixed at January 15, 1997. Order Regarding Debtor’s Renewed Motion For Order (1) Setting Bar Date ... at 3. The bar date for foreign claimants was fixed at February 14, 1997.
Id.
On April 7,1997, the Debtor filed an Omnibus Disease Objection to Breast Implant Claims, in which the Debtor seeks disallowance of all personal injury claims asserting that the Debtor’s silicone gel caused disease. Its principal objection was that the claimants have no scientific evidence which would show that silicone gel causes illness. In furtherance of that objection, the Debtor contemporaneously filed a Motion for Summary Judgment. In the motion, the Debtor states: “There is not sufficient evidence or expert opinion testimony admissible under the standards set in
Daubert v. Merrell Dow Pharm., Inc.,
509 U.S. 579 , 113 S.Ct. 2786 , 125 L.Ed.2d 469 (1993), and its progeny, for the claimants to support a finding, by a court or a jury, that it is more likely than not that silicone-gel breast implants have caused any systemic disease, or indeed, that silicone-gel breast implants are even capable of causing systemic disease.” Motion for Summary Judgment at 1. The Debtor objected on different grounds to the other personal injury claims. Proceedings on these contested matters have been stayed pending the issuance of this Opinion. Order on Scheduling of Motions Regarding Omnibus Implant Claims, entered May 2,1997.
II. The Estimation Motions
The present case is perhaps the first mass tort bankruptcy where liability has been disputed by a debtor. Case law provides little guidance on how to determine the fairest and most efficient way to value the pending personal injury claims. In substantially all of the mass tort bankruptcy eases which preceded this one, the major questions were how much would be needed to satisfy the thousands of tort claims; how best to raise the money; and what would be the best methodology to fairly apportion those funds among the claimants. Most nonbankruptcy mass tort cases are only of moderate help. Recognizing this lack of precedent, the Court has encouraged counsel for the various parties in this case to reach into the depths of their vast experience in both mass torts and bankruptcy to find solutions to the problems now facing them and the Court.
Competing estimation proposals were filed by the Debtor and the TCC. Both proposals are impressive in their originality and creativity and both have some merit. Nonetheless, the Court is denying the motions even though certain components of the movants’ proposals have been incorporated into our subsequent recommendations. Before setting forth the reasons for the denial, it will be helpful to summarize the two competing proposals.
A. Debtor’s Proposal
The Debtor asked the Court to “estimate certain mass tort claims pursuant to 28 U.S.C. § 157 (b)(2)(B) and 11 U.S.C. §§ 1129 and 502(c) and to establish procedures for the estimation hearing.” Debtor’s Estimation Motion at 1. The Debtor’s proposal is founded upon the following assertions. It claimed that pursuant to 28 U.S.C. § 157 (b)(5), this Court lacks the ability to liquidate personal injury claims.
6
However,
*555
the Court does have authority to estimate the mass tort claims for purposes of confirming a plan. Debtor’s Estimation Motion at 2. Moreover, “[g]eneral bankruptcy principles ... require” the Court to take such action. [Debtor’s] Brief in Support of its Motion to Estimate Tort Claims and to Establish Estimation Hearing Procedures (“Brief in Support of Debtor’s Estimation Motion”) at 17. The bankruptcy court shall estimate for purposes of allowance, “any contingent or unliquidated claim” when liquidation of that claim “would unduly delay the administration of the case.” 11 U.S.C. § 502 (c)(1). According to the Debtor, “adjudication of the thousands of individual tort claims would substantially delay ... [the Debtor’s] reorganization.” Brief in Support of Debtor’s Estimation Motion at 18. Therefore, “it is necessary and appropriate to estimate the tort claims against the [Debtor] for purposes of confirmation.”
Id.
at 17 . Only after estimation is complete will the Court be able to properly evaluate and determine whether the Debtor’s plan of reorganization is feasible, and thus confirmable pursuant to 11 U.S.C. § 1129 .
Id.
at 18 .
The procedure which the Debtor proposes for estimation essentially consists of the following steps:
1. Identify Universe of Breast and Non-breast Implant Claims — By a court-ordered bar date for filing proofs of claim.
7
2. Designation of Counsel — Court designation of lead counsel to represent the breast implant claimants during the estimation process. Debtor’s Estimation Motion at 3.
3. Pretrial Management — Court establishment of a timetable for the estimation process and the entry of any necessary orders under F.R.Bankr.P. 7016.
Id.
4. Scientific Panel — Court appointment of an independent scientific panel of experts pursuant to Federal Rule of Evidence 706. The panel would engage in an independent review of relevant scientific literature and studies in order to render an impartial and objective assessment of the scientific evidence to the Court. Brief in Support of Debtor’s Estimation Motion at 20-21.
8
5. Breast Implant Estimation Trial— Presentation of evidence by both the Debt- or and breast implant claimants on the issue of silicone gel’s disease-causing potential (the “causation” issue). Only science satisfying the Daubert
9
standard would be admissible.
Id.
at 21 . Based upon the admissible scientific evidence, the Court would estimate the total aggregate value of all contingent breast implant claims.
Id.
at 20 .
6. Estimation of Nonbreast Implant Claims — The estimation hearing on non-breast implant claims would be held immediately following estimation of breast implant claims. In general, discovery and other pretrial matters would run contemporaneously with the pretrial schedule for breast implant estimation.
Id.
at 29 . Nonbreast implant estimation would involve: a) identifying the universe of such claims (via the claims bar dates); b) “screening the claims for product identification, limitations, or other deficiencies;” c) presenting scientific evidence on the issue of disease causation; d) statistically identifying and quantifying the “scope of the potentially valid claims;” e) valuing the nonbreast implant claims “by identifying and estimating the cost of the applicable medical procedures involved in remedying the alleged injuries.”
Id.
7. Confirmation Hearing — The Debtor would then seek confirmation of its proposed plan of reorganization, a plan that would purportedly pay all allowed claims in full.
Id.
at 22 . As part of its plan of
*556
reorganization, the Debtor would reserve the right to hold a single common-issue causation trial before the District Court, seeking disallowance of some or all of the breast implant claims.
Id.
at 22-23 . If the Debtor chooses to exercise this right, the trial would either take place immediately following the estimation process, or immediately following plan confirmation but prior to the plan becoming effective.
Id.
at 23 .
8. Claims Resolution Facility — The plan of reorganization would establish a breast implant claims resolution facility.
Id.
Tort claimants with allowed claims would only be able to recover from one of two trust accounts that would be established as part of the claims resolution facility- — a Settlement Trust and a Litigation Trust. Both trust accounts would be funded by the Debtor.
10
The claims resolution facility would provide breast implant claimants with three options on how to pursue their allowed claim. Brief in Support of Debtor’s Estimation Motion at 24-25. The options would be distinguished by the type of breast implant claim pursued: 1) local complications; 2) rupture; or 3) disease.
Id.
Regardless of which option is chosen, the claimant would have to present certain specified proof of injury before receiving compensation.
B. TCC’s Proposal
The TCC’s recommended approach to estimation is built upon the following asserted principles. All tort claimants possess an absolute right to have their claims liquidated by . a jury trial. 28 U.S.C. § 1411 (a); TCC’s Estimation Motion at 7. Thus, “it is the tort system that [should] provide! ] the ultimate basis” for determining the value of tort claims pending against the Debtor.
Id.
at 7 . However, the power to conduct jury trials resides not with the bankruptcy court but with either the District Court of this district or the district eourt(s) where the tort claims are pending. 28 U.S.C. § 157 (b)(5); TCC’s Estimation Motion at 7-8. Nonetheless, “this Court can and must [estimate]” the aggregate value of the pending tort claims “for plan feasibility purposes.”
Id.
at 8 . Although a bankruptcy court has broad discretion to determine the most appropriate method of estimation,
id.
at 7 (citing
Bittner v. Borne Chem. Co.,
691 F.2d 134 , 135 (3d Cir.1982)), this Court should strive “to implement a process that will produce [values] ... substantially” equivalent to “actual liquidated tort system values.”
Id.
at 8. In so doing, the Court “will increase the reliability of the estimated aggregate values and ensure that a reorganization plan, which is dependent upon these values, will in fact be feasible____”
Id.
In its basic form, the TCC’s proposal is designed to solve a simple estimation equation: the total number of pending tort claims multiplied by the average value of each claim equals the total aggregate value of all claims.
Id.
at 17. Its procedure would first have this Court identify the relevant categories of tort claims.
Id.
Second, the number of claims in each category would be determined. Third, the value of claims in each identified category would be estimated.
Id.
Fourth, the total aggregate claim value for each category would be calculated. Finally, the total values for each category of claims would be added together to provide the total aggregate value of all pending tort claims.
Id.
Specifics of the TCC’s proposal are summarized as follows:
1. Identify Relevant Categories of Pending Tort Claims — Tort claims would be separated into the following categories:
Id.
at 18.
a. Breast Implant Nondisease Claims — Claims alleging injury from nondisease complications such as: hardening of breasts due to capsular contracture; rupture of the implant; bleed
*557
ing or leaking of silicone gel through the encasing envelope; injury resulting from subsequent migration of silicone gel throughout the body; inflammation and infection; interference with the ability to take accurate mammograms; and physical and emotional injuries caused by the complications stated above.
Id.
at 2.
b.Breast Implant Disease Claims— Claims alleging that silicone gel “causes a disease process in
women
implanted with silicone gel breast implants.”
Id.
at 4.
e. Breast Implant Explantation/Financial Loss Claims — Claims for the recovery of financial costs associated with explantation and reconstruction and nonflnancial damages arising from the disfigurement, pain and trauma associated with such procedures.
Id.
at 5. d. Nonbreast Implant Claims — Claims alleging injury from the use of non-breast implant medical devices either manufactured by the Debtor or containing silicone supplied by the Debtor. Examples of such devices include: temporomandibular joint (“TMJ”) devices; Norplant implantable contraceptive devices; small joint orthopedic devices (“SJO”); nasal implants; chin implants; testicular implants; and penile implants.
Id.
at 15. Nonbreast implant claims allege both disease and nondisease related injuries.
2. Estimating the Total Number of Breast Implant Claims — Estimation of the total number of breast implant claims can be performed in any of these ways,
a. Method 1: Identify Number of Claims Using Existing Databases — Two databases currently exist that contain names of potential breast implant claimants — the MDL database, which consists of information provided by persons who registered to be part of the now defunct MDL Settlement; and a database maintained by the Debtor, which contains information on about 82,000 persons who filed lawsuits or claims against it involving breast implants.
Id.
at 20-23. Information contained in both databases would be used to assist the Court in identifying, categorizing, and valuing claims for purposes of estimation.
b. Method 2: Extrapolate Additional Claims From The Existing Data — The Court would use existing data to estimate the future incidence of disease and nondisease injuries likely to occur among present claimants.
Id.
at 24.
c. Method 3: Infer Number of Claimants From Population of Women With Silicone-Gel Breast Implants — After estimating the total number of women with breast implants, the Court would apply this number to estimates concerning the frequency of disease and nondisease injuries arising from breast implants. In so doing, the Court could project the total number of women likely to assert breast implant claims now and in the future.
Id.
at 25.
d. Method 4: Identify Claims Filed in Response to a Bar Date
11
3. Estimating Value of Breast Implant Claims — The method used to estimate the value of breast implant claims would vary depending on the type of breast implant claim at issue.
a. Breast Implant Nondisease Claims — The value of nondisease breast implant claims may, by themselves, exceed the Debtor’s total enterprise value.
*558
If this turns out to be the case, there would be no need for the Court to undergo the time consuming process of estimating the other two categories of breast implant claims. Therefore, the Court should give first priority to this category of claims.
i.
Summary Estimation Jury Trials
— This method is designed to “mirror[ ] the process employed in the tort system, and ... [should, therefore,] provide the most reliable data on the ultimate values of the unliquidated tort claims.” Exhibit A-l to TCC’s Estimation Motion at 3. Six different summary jury trials designed to produce 384 jury verdicts within a 60-day period,
id.
at 4-5, would be implemented as follows:
A.
Selection of Cases
— Four plaintiffs would be selected for each summary trial. Potential plaintiffs would be selected from eases filed and pending against the Debtor at the time the bankruptcy petition was filed.
Id.
at 7. To select the plaintiffs, the TCC and the Debtor would both submit a list of five claimants.
Id.
at 6. Each side would strike three claimants from the other’s list. The remaining four claimants — two from each list — would comprise the plaintiffs for one summary jury trial.
Id.
at 6. This process would be repeated five more times until sufficient plaintiffs for six summary jury trials have been selected. The summary jury trial process would consist of a total of 24 plaintiffs.
B.
Expedition of Pretrial Discovery
— Within ten days of the selection of the plaintiffs, each party would be required to file a “Summary Estimation Jury Trial Disclosure Form,” which would contain certain predetermined information about each of the selected plaintiffs.
Id.
at 7. Pretrial discovery would begin immediately upon receipt of the disclosure form and would last no longer than 30 days.
Id.
at 8. Certain limitations would be placed on the scope of discovery. For instance, plaintiff depositions could not exceed two hours, fact witness depositions could not exceed three hours, and expert witness depositions could not exceed four hours.
Id.
at 9. Disputes concerning witness availability or the location of depositions would be resolved by this Court. Evidentiary disputes would be resolved by the District Court.
Id.
at 9-10.
C.
Pretrial Conference and Rulings
— Upon the close of discovery, parties would have five days to exchange lists of witnesses and exhibits.
Id.
at 10. After this exchange, parties would have an additional five days to file all evidentiary related motions and objections with the District Court. Seven days after the filing of motions and objections, the District Court (or a magistrate judge designated by the District Court) would conduct a pretrial conference at which time the District Court would rule on all evidentiary matters. Three days after the pretrial conference, parties would exchange final exhibit and witness lists.
Id.
at 10-11.
D.
Summary Estimation Jury Trials
— As soon as practicable after completion of all pretrial matters, the summary jury trials would be conducted before the district judge (or a magistrate judge designated by the District Court).
Id.
at 11. Each summary jury trial would consist of “opening statements, direct and cross examination, the presentation of ... visual exhibits, and final arguments.”
Id.
at 4. Each side would have a total of four hours, including time spent on both direct and cross-examination, to present its case.
Id.
at 11. Each summary jury trial would be videotaped for future presentation to a jury.
Id.
E.
Venue Selection
— Four different venues would be selected for presentation of the videotaped summary jury trials. The TCC and the Debtor would be jointly responsible for venue selection as well as the scheduling of the time and location of each summary jury trial.
Id.
at 13-14. Cities and
*559
states where large numbers of breast implant cases are pending against the Debtor would be appropriate venue choices.
Id.
at 13.
F.
Presiding Judicial Officers
— Retired federal and state court judges would be selected to preside over jury selection in the chosen venues.
Id.
at 12. The presiding judicial officers would also be responsible for performing any duties necessary to preserve proper judicial decorum and procedure during presentation of the videotaped summary jury trials to the various juries.
Id.
G.
Selection of Jury Pools and Juries
— For each venue, the TCC and the Debtor would jointly select a random jury pool. Actual jury selection would be implemented through an expedited
voir dire
process.
Id.
at 14-15. Juries would consist of eight persons and two juries would be impaneled for each presentation of a videotaped summary jury trial.
Id.
at 14.
H.
Presentation of Videotaped Summary Jury Trials
— The six videotaped summary jury trials would each be presented twice in the four chosen venues.
I.
Rendering of Verdicts
— Each jury would deliberate on the evidence and render a verdict. A liability verdict could only be returned by agreement of at least seven of the eight jurors.
Id.
at 15. A damage verdict could only be returned by agreement of at least six of the eight jurors.
Id.
The protocol would result in 16 verdicts for each of the 24 plaintiffs for a total of 384 verdicts on nondisease breast implant claims.
J.
Summary Jury Verdicts and Purposes of Estimation
— Data obtained through the summary jury trials would be used by the Court to assist in estimating the total value of all nondisease breast implant claims, ii.
Identify Component Costs and Values of Damages
— Actual costs to perform certain mammary surgical procedures (i.e. the costs of explantation and reconstruction) would be compiled. This information would be used to supplement data obtained through summary jury trials. TCC’s Estimation Motion at 37.
b. Breast Implant Disease Claims
i.
Closed Claims Analysis
— This method of estimation involves two steps. First, prebankruptcy cases resolved by the Debtor, through settlement and actual verdict, would be analyzed to determine the value placed on each claim and how the amount related to the characteristics of the claims (i.e. how payment amounts differed for each type of injury, severity of injury, place of resolution, date of resolution, etc.).
Id.
at 29-30. Next, values determined in step one would be applied to claims pending before this Court.
Id.
at 30.
ii.
Analysis of MDL Settlement Data
— Values obtained through Closed Claims Analysis would be supplemented with analysis of the MDL Settlement values.
iii.
Summary Estimation Jury Trials
— Not recommended as a method for estimating the value of breast implant disease claims because enough data already exists to value these claims fairly and efficiently.
Id.
at 28-29.
c. Breast Implant Explantation/Financial Loss Claims — The value of these claims would generally be estimated by utilizing data obtained through the breast implant nondisease claims estimation procedures detailed above.
Id.
at 38.
4. Estimating the Value of Nonbreast Implant Claims
12
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a. Closed Claims Analysis — The Court would analyze claims against the Debtor that were resolved, through settlement or actual verdict, prebankruptcy. However, the amount of data available for resolved nonbreast implant claims, is limited.
Id.
at 41. Therefore, the Court may need to supplement this estimation method with the methods described below.
Id.
at 38.
b. Identify Component Costs and Values of Damages — The costs of performing certain corrective surgical procedures would be compiled and used to supplement data obtained through closed claims analysis.
Id.
c. Summary Estimation Jury Trials— This method of estimation would only be used if the above methods prove insufficient.
Id.
If summary jury trials do become necessary to fairly estimate the value of this category of claims, a protocol similar to that used with breast implant nondisease claims would be utilized.
5. Post-Estimation Procedures— Though not directly addressed by its Estimation Motion, the TCC would anticipate, as part of a confirmed plan of reorganization, the establishment of a claims resolution facility for the purpose of liquidating allowed claims post-confirmation.
Id.
at 49.
III. The Claims Allowance Process
In relevant part, the Bankruptcy Code defines a “claim” as a “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.” 11 U.S.C. § 101 (5). Given this broad definition, there is no question that a personal injury claim not yet reduced to judgment falls within its scope. 2
Collier on Bankruptcy,
¶ 101.05[6] (15th ed. rev.1997);
See also
28 U.S.C. § 157 (b)(2)(B) (implicitly assuming that “unliquidated personal injury tort or wrongful death claims” constitute “claims”). Upon filing a bankruptcy petition, a debtor must list all known claimants, including both commercial and tort claims. 11 U.S.C. § 521 (1). As a general rule, a creditor must file a proof of claim to be able to share in the bankruptcy estate. 11 U.S.C. § 501 . However, in chapter 11 cases, claims originally scheduled by the debtor per § 521(1) will be deemed filed unless the debtor lists those claims as “disputed, contingent, or unliquidated.” 11 U.S.C. § 1111 (a). If the validity of a claim is contested by the debtor in this manner, then the potential claimant must physically file a proof of claim in order to satisfy the requirements of § 501. In this case, the Debtor scheduled virtually all personal injury claims against it as either “disputed, contingent, or unliquidated.” As a result, personal injury claimants wishing to share in the Debtor’s bankruptcy estate were required to file a proof of claim by the deadlines fixed by the Court. Section 502(a) provides that all claims filed pursuant to § 501 are deemed allowed unless a party in interest objects to it. 11 U.S.C. § 502 (a). To nobody’s surprise, the Debtor did just that with respect to the allowance of virtually all of the tort claims filed in this case.
When a party objects to the allowance of a claim in bankruptcy, the bankruptcy court generally determines whether the claim is valid under applicable nonbankruptcy law and, if so, in what amount. 11 U.S.C. § 502 (b);
In re Dow Corning Corp.,
No. 95-20512, 1995 WL 495978 (Bankr.E.D.Mich. Aug. 9, 1995). In addition, when “the fixing or liquidation of [an unliquidated claim] ... would unduly delay the administration of the case,” the bankruptcy court has the authority to estimate a claim for purposes of allowance.
13
11 U.S.C. § 502 (c). However, there
*561
are limitations to this rule and a bankruptcy court’s authority to either liquidate or estimate the value of a claim for purposes of allowance and distribution may be circumscribed depending on the type of claim with which the court is confronted.
Typically, a bankruptcy judge will “hear and determine” an objection to the allowance of a claim because the allowance of a claim is a “core proceeding.” 28 U.S.C. § 157 (b)(1), (2)(B). However, the liquidation or estimation of a
personal injury or wrongful death claim
for purposes of allowance and distribution is not a core proceeding. 28 U.S.C. §§ 157 (b)(2)(B), (0). Pursuant to 28 U.S.C. § 157 (c), a bankruptcy judge may preside over (that is, “hear”) a non-core proceeding that is otherwise related to the case in one of two ways.
14
The first possibility is that the bankruptcy judge’s findings of fact and conclusions of law will be submitted to the district judge who will then enter any final order or judgment (that is “determine” the matter) after making a
de novo
review. 28 U.S.C. § 157 (c)(1). Under the second possibility, the bankruptcy judge can not only hear, but also determine the dispute by entering a final order, subject only to a formal appeal. 28 U.S.C. § 157 (c)(2). Importantly, this second possibility can occur only if all of the parties to the proceeding consent.
Id.
There are even more complications when the claim is one for personal injuries or wrongful death. Under 28 U.S.C. § 157 (b)(5), the district court where the bankruptcy case is pending “shall order that personal injury tort and wrongful death claims shall be tried in the district court in which the bankruptcy case is pending, or in the district court in the district in which the claim arose.” See
also
28 U.S.C. § .1334(c)(1) (permitting the district court to “abstain[] from hearing a particular proceeding” so that a state court can hear it). At first glance, these statutory provisions appear to take away all bankruptcy court authority to even hear a personal injury claim for purposes of allowance or distribution. But as stated, one choice of venue is to have the personal injury claim tried in the district court where the bankruptcy case is pending. The statute does not necessarily say that the district judge where the bankruptcy case is pending will hear the claim, only that the claim will be heard in the district court. The bankruptcy court is of course a unit of the district court. 28 U.S.C. § 151 . This suggests that Congress left the door open for a bankruptcy judge to hear a personal injury case. Such a conclusion is potentially qualified by 28 U.S.C. § 1411 (a), which provides that bankruptcy does not affect an individual’s right to a jury trial regarding personal injury claims. However, 28 U.S.C. § 157 (e) provides that if a right to a jury trial applies to a proceeding in bankruptcy, the bankruptcy judge may conduct a jury trial if the district court gives approval and all the parties expressly consent.
The above analysis indicates that so long as the procedural requirements of 28 U.S.C. § 157 (c) and (e) are satisfied, a bankruptcy judge possesses the authority to hear and to determine a personal injury claim for purposes of allowance and distribution. In theory, all parties can waive their rights to a jury trial, and consent to determination by the bankruptcy judge sitting without a jury. Alternatively, they can retain the jury trial right but consent to the bankruptcy judge conducting it.
15
Nonetheless, in this case, the likelihood of satisfying all the procedural prerequisites is, to say the least, remote. Moreover, a district judge is much better qualified to preside over a complex product liability jury trial than a bankruptcy judge lacking any comparable experience.
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It is apparent, then, that the Court’s role in liquidating the claims of greatest relevance to the Debtor’s reorganization is quite limited. Perhaps in recognition of this limitation, the movants have asked the Court to play the role of a referee in a shadow-boxing contest — the estimation of the aggregate value of tort claims pending against the Debtor. The wisdom of engaging in such an endeavor is discussed below.
IV. Inappropriateness of Estimating the Tort Claims
A. Preface
In this portion of the Opinion we provide a disclosure and a caveat. First the disclosure. The Court made an unsigned draft of this Opinion available to counsel for the Debtor, its shareholders, the official committees, the Blue Cross/Blue Shield plans and the breast implant co-defendant manufacturers. Receipt of the draft was made subject to assurances of confidentiality. The Court received written responses from the recipients and conducted a chambers conference with them to discuss their views and the general status of the case. Those responses were considered and this Opinion reflects certain changes made to the draft as a result.
Now the caveat. Although the Debtor has filed a plan, it was never meant to be the vehicle to carry the Debtor out of bankruptcy.
See In re Dow Corning Corp.,
208 B.R. 661, 665 (Bankr.E.D.Mich.1997). The thoughts which follow are based on a single assumption: that no plan of reorganization is proposed which has the support of all of the necessary constituencies. If, as we fervently desiré, the parties are able to bridge the substantial divide in their positions and come together on a consensual plan which garners the acceptances of the voting classes, our comments should be read solely as footnotes to history. We therefore do not irrevocably foreclose the possibility of estimating unliquidated tort claims, say as part of a confirmed consensual plan of reorganization. But if this case deteriorates into litigation Armageddon, let this be a start to the design of the battlefield. Based on this enormous caveat, and in the context of a case in which no plan has obtained even the mild approval of any relevant constituency, we now begin to explain why both motions for estimation protocols will be denied.
Both the Debtor and the TCC seem to have assumed that cause exists to estimate the tort claims pursuant to § 502(c) as neither one presented any evidence with respect to this point.
16
Indeed, the cross-motions start from a common premise that estimation is necessary and diverge only on the method of doing so. However, the establishment of cause is a predicate to any discussion over which of the proposed methods of estimation would most accurately approximate the value of pending tort claims. Consequently, the Court begins by addressing the cause issue, and for the following reasons, determines that cause does not exist to estimate the tort claims.
B. Delay Associated With Liquidating Tort Claims Not “Undue”
1.
When Estimation Is Required by the Bankruptcy Code
The Bankruptcy Code only requires the Court to estimate the pending tort claims if their “liquidation ... would unduly delay the administration of the ease.” 11 U.S.C. § 502 (c)(1).
See O’Neill v. Continental Airlines, Inc. (In re Continental Airlines, Inc.),
981 F.2d 1450, 1461 (5th Cir.1993) (“In order for the estimation process of § 502(c) to apply, ... fixing the claim must entail undue
*563
delay in the administration of justice.”);
Apex Oil Co. v. Stinnes Interoil, Inc. (In re Apex Oil Co.),
107 B.R. 189, 193 (Bankr.E.D.Mo.1989) (“[T]he duty to estimate is not mandatory
until
the court determines that liquidation of the claim outside of the bankruptcy court would unduly delay the bankruptcy proceeding.”). From the plain language of § 502(c), it is clear that estimation does not become mandatory merely because liquidation may take longer and thereby delay administration of the case. Liquidation of a claim, in fact, will almost always be more time consuming than estimation. Nonetheless, bankruptcy law's general rule is to liquidate, not to estimate. For estimation to be mandatory, then, the delay associated with liquidation must be “undue.”
Something is “undue” if it is “unjustifiable.” Random House College Dictionary, at 1433 (rev. ed.1980). Inquiry into whether liquidating the tort claims would be unjust, due to any case delay that may result therefrom, dictates that the Court perform a kind of cost-benefit analysis by considering the time, costs and benefits associated with both estimation and liquidation.
2.
Effects of Estimation on Administration of the Case
There are good reasons to liquidate, and not simply estimate, unliquidated claims. First, the very real concern that the estimates may prove to be inaccurate would be eliminated.
See, e.g., In re Joint Eastern and Southern Dist. Asbestos Litig.,
78 F.3d 764, 769 (2d Cir.1996). Second, none of the time delay or expense associated with litigation over the question of how to best estimate the tort claims would be incurred.
17
Third, time delay and expense associated with the estimation process itself would be avoided.
In contrast, the primary disadvantage associated with pursuing the liquidation process from a case administration standpoint— time delay — is highly speculative and, in any event, need not be terribly onerous. It is speculative because, as the second and third benefits listed above suggest, there is no guarantee that estimation would in fact move matters along significantly faster. To begin with, regardless of the estimation method selected, for the process to have any semblance of fairness it will necessarily involve hearings that would be quite lengthy and protracted. After all, the extremely contentious issues surrounding the tort claims are highly complex and their resolution will require the presentation of many witnesses, many pieces of evidence and extensive oral argument. Abbreviating the time parties have to present their eases at an estimation hearing would, in the Court’s opinion, be ill-advised. Considering the magnitude of the claims involved and the absolute importance of rendering a fair and accurate decision, the Court cannot countenance a valuation procedure that would place artificial time constraints on the parties’ ability to properly present their cases. And after completion of the estimation hearings, the Court would undoubtedly require considerable time to sift through and reflect upon the massive amount of evidence presented before issuing its ruling.
The above-noted time delays that result. from estimation are directly applicable to the Debtor’s Estimation Motion since its proposal would involve a determination of the disease-causing potential of silicone gel through a full-blown causation hearing. On the other hand, the TCC would likely argue that its estimation proposal does not involve extensive time delay. First, with respect to breast implant disease claims, the TCC proposes to estimate the value of such claims through statistical extrapolation of existing data. Consequently, time delay associated with discovery and hearings would be avoided. However, for reasons which will be discussed in more detail under Part IV.D.,
infra
pp. 570-572, this aspect of the TCC’s proposal is
*564
without merit and the time savings associated with it are not worth considering.
With respect to the estimation of nondisease breast implant claims, the TCC proposes that such claims be resolved through summary jury trials designed to generate 384 jury verdicts in an accelerated period of time. While no attempt has been made to quantify the actual anticipated cost of implementing this proposal, there can be little doubt that such a procedure would be very expensive as well as complex in that it would involve considerable coordination between this Court and various courts around the country. Additionally, the time involved, while certainly not approaching that which would be involved in trying 384 cases to actual jury verdict, would nonetheless be considerable. Furthermore, even if the use of summary jury trials for estimating the value of nondisease claims were justified, the rendering of the mock jury verdicts would not end the estimation inquiry. The results would have to be extrapolated to the rest of the claims in order to come up with a total nondisease value figure. Since estimation is ultimately a determination to be made by the bankruptcy court, this extrapolated information would then be presented to the Court to assist us in estimating the value of all tort claims pend,ing against the Debtor.
Moreover, dissatisfaction with an estimation of the total value of tort claims could, as in
Bittner,
691 F.2d at 135, result in an appeal, occasioning further time delay. One could argue that an estimate of the value of all of the tort claims is not immediately appealable since it does not fully decide the rights of any party. Nevertheless, just arguing that threshold question would take time even if the appellate court(s) ultimately agree(s) that the appeal was interlocutory and refused to entertain it. And even if a reorganization plan is approved over the objections of an aggrieved party in interest, disagreement with the Court’s estimation could be a basis for appealing such approval.
Cf. Colorado Mountain Express, Inc. v.
Aspera
Limousine Serv., Inc. (In re Aspen Limousine Serv., Inc.),
193 B.R. 325, 339 (D.Colo.1996) (wherein appellants argued that “[h]ad the bankruptcy court ... properly” estimated its claims, “it would have found the plan unconfirmable under §§ 1129(a)(9)(A) and (a)(ll)”). In that event, the court(s) of appeals would have to revisit the estimation issue and the resultant delay would essentially be the same as if estimation were not interlocutory.
3.
Effects of Estimation on the Parties in Interest
Even if estimation would result in a substantially faster plan confirmation process, it certainly seems reasonable to question the real significance of that perceived benefit. The Debtor asserted that a quick resolution of this bankruptcy case is necessary because both customers and employees are growing anxious over the eventual outcome of the case and that such nervousness could have a detrimental effect on its business. But the fact is, the Debtor continues to operate on a profitable basis in more-or-less the same fashion as it did pre-petition, except that it no longer has the pressure of thousands of lawsuits proceeding against it simultaneously. In addition, no party in interest has expressed a desire to see the Debtor dissolved or liquidated at the end of this ease. The only question is who will be the owners of the reorganized Dow Corning. Consequently, there is little reason for customers to be anxious.
Employees, on the other hand, may indeed have reason to be nervous. Considering the highly charged nature of this case, if the tort claimants are successful in acquiring ownership of the reorganized Dow Corning it is not inconceivable that there would be a subsequent management shakeup. However, this factor is an underlying current in many chapter 11 bankruptcies, particularly when a large company is involved. The Debtor’s management has successfully operated under this cloud of uncertainty since the beginning of the case and there is no reason to believe that management cannot effectively continue to do so now.
Another potential consideration is the fact that the Debtor’s incurrence of bankruptcy-related legal costs is ongoing. However, it does not seem that the Debtor would experience a dramatic increase in those costs should the bankruptcy case be prolonged
*565
pending claim liquidation. The case would essentially be in a kind of “holding pattern” during this extended period of time. Furthermore, any such incremental cost would be offset to the extent the estate avoids estimation-specific costs that would otherwise have been incurred.
The Debtor argued that it is incurring interest expense to its commercial creditors while this case remains in chapter 11. But that is not necessarily true. If, as the TCC maintains, the Debtor is hopelessly insolvent due to the billions of dollars of liability owed to the tort claimants, the commercial creditors might not be entitled to interest, 11 U.S.C. § 502 (b)(2) — or for that matter, full payment of principal. Even if interest is accruing, since the Debtor currently has use of the money, it certainly has the ability to invest the funds to at least partially offset such expense. Moreover, it is safe to assume that the Debtor, being a large, sophisticated company, is already engaged in such prudent investment activity. In any event, no attempt to quantify this contingent expense was made. For all of the above reasons, it is therefore not readily apparent why
“time is
of the essence” for the Debtor with regard to plan confirmation.
On the other hand, it may well be true that time is not on the side of some or, perhaps, many of the tort claimants. Obviously, those who are in poor health or financially strapped would understandably view even a six-month distribution delay as “undue.” However, there is no reason to believe that estimation would result in a faster distribution of proceeds to tort claimants in the event that the Debtor is found liable. In fact, analysis suggests that estimation would only lengthen the time to distribution since funds would not be disbursed until claims are liquidated post-confirmation. Estimation would merely put off the unavoidable eventuality of liquidation.
Commercial claimants could argue that they should not be made to wait indefinitely for payment while the tort litigation carries on into the next millennium. While this argument was not raised by the TCC or the Debtor in connection with their estimation motions, it is worth considering because fully and finally adjudicating all tort claims against the Debtor could take several years and the Court recognizes that some commercial creditors may suffer financial hardship during the intervening period. One must remember, though, that one of the primary goals of bankruptcy is to treat all similarly-situated creditors fairly and equally. In other words, the tort and commercial claimants “enjoy equal standing against the debtor’s assets.”
In re ARN Ltd. Partnership,
140 B.R. 5, 14 (Bankr.D.D.C.1992). Consequently, they are entitled to share in the estate on a
pro rata
basis, without regard to whether their respective claim is based in tort or contract.
See Begier v. Internal Revenue Service,
496 U.S. 53, 58 , 110 S.Ct. 2258, 2262-63 , 110 L.Ed.2d 46 (1990) (“Equality of distribution among creditors is a central policy of the Bankruptcy Code. According to that policy, creditors of equal priority should receive
pro rata
shares of the debtor’s property.”). A
pro rata
division of assets can only be performed once the value of all pending claims has been determined. Therefore, a pre-liquidation distribution to commercial creditors would first require estimation of all claims pending against the Debtor.
18
Moreover, concern for prompt payment to commercial creditors has been substantially lessened for another reason. Many commercial claims have been purchased by compa
*566
nies that are in the business of buying trade claims at discounted values with the expectation that they will be able to make a profit on the transaction when payment is eventually received from the bankruptcy estate. A viable market for buying and selling commercial claims against the Debtor exists. Thus, remaining original commercial creditors as well as trade claim specialists who have recently arrived upon the scene both have the ability, as some have already demonstrated, to remove themselves as parties in interest from this bankruptcy case whenever they so choose.
4.
Need for Liquidation Not Eliminated by Estimation
In addition, one must add to the list of time considerations associated with estimation the fact that once estimation is completed and a plan of reorganization confirmed, individual tort claims would still have to be liquidated. The Debtor’s plan envisions a common-issue causation trial taking place before the District Court post-confirmation. Such a trial would take as long or longer than the estimation hearings, would essentially duplicate them and would be subject to immediate appeal. The TCC’s Estimation Motion does not describe how tort claims should be liquidated post-confirmation. Nonetheless, post-confirmation liquidation of tort claims cannot be avoided. Whether liquidation occurs through a common-issue trial, through individual trials, through a series of representative trials with the results being extrapolated to the tort claims as a whole or through some other acceptable means, liquidation must occur. And regardless of the form that it takes, the liquidation process would be time consuming.
Viewed in this light, estimation under the protocols of either movant becomes more or less superfluous to the valuation process for the issue of liability would end up being litigated more than once: once during estimation, and once (if not multiple times) post-confirmation. Concededly, estimation may allow the Debtor to exit from bankruptcy a little sooner. But it would almost certainly serve to lengthen the time of recovery for valid tort claims (and valid commercial claims, for that matter). When determining whether delay to the administration of a case is unjust, a bankruptcy court must consider the rights of all parties in interest, not just those of the debtor. And in this Court’s view, opting for estimation so that the Debt- or can quickly exit from bankruptcy with discharge in hand, while injured victims with valid claims struggle on for years before finally receiving compensation is unjust.
5.
Advantage of Proceeding Directly to Liquidation
From the above discussion, it is apparent that, in the current context,
19
estimation is not necessarily advantageous from a case administration standpoint and may in fact be detrimental. While estimation may be a somewhat abbreviated form of liquidation, they are still essentially duplicative processes. With nonpersonal injury claims, estimation is often justified because it can entirely eliminate the need for liquidation. However, the present motions deal with estimating the value of personal injury claims and, absent settlement, liquidation simply cannot be avoided. As a result, proceeding directly to liquidation will have the salutary effect of saving time, money and eliminating potential negative side effects that could easily result from the estimation process. The method of liquidation which we believe is most appropriate for the present situation is discussed in detail under Part V,
infra
pp. 574-598. While the above discussion provides sufficient justification for denying the pending motions, there are additional reasons which strongly counsel against proceeding down the estimation path.
C. Estimation Not Necessary to Debtor’s Proposed Plan of Reorganization
The strategy behind the Debtor’s request for estimation of the aggregate value of tort claims is to limit the amount it will
*567
ultimately have to pay on account of tort liability. In other words, the Debtor’s strategy assumes that estimation will lead to a discharge of all liability and that individual post-confirmation liquidation can only be had against a trust fund established as part of a plan of reorganization regardless of whether such liquidation proves that the estimate was too low. But this is not a foregone conclusion. And if the assumption is incorrect, the estimation process would have been a colossal waste of time and money.
The Debtor argues that estimation is necessary because parties in interest must know whether the amount the Debtor intends to set aside for payment of these claims will be sufficient to pay them in full, as it purportedly intends to do. Since the hearings on the estimation motions, the Debtor has filed its proposed plan of reorganization, which contains a provision earmarking a fund of up to $600 million to settle personal injury claims and another fund of $1.4 billion to litigate personal injury claims.
20
This additional reasoning justifying the need for estimation is unpersuasive. For one thing, no matter what answer this Court were to give as its estimate of the value of all tort claims, there is almost no likelihood that the estimate would prove accurate.
21
Therefore, parties in interest will derive no comfort from the results of a lengthy and complex estimation war. And second, under the Debtor’s plan pre-confirmation claims estimation is simply unnecessary. The plan’s treatment of tort claims is summarized in the Debtor’s disclosure statement as follows:
At Closing, the Reorganized Debtor will, in full satisfaction and discharge of its liability for all [tort claims], cause the following to occur: (a) the execution and delivery by the Reorganized Debtor of the Settlement Trust Agreement and the Litigation Trust Agreement, thereby establishing the Settlement Trust and the Litigation Trust and (b) the execution and delivery by the Reorganized Debtor of the Settlement Trust Funding Payment Agreement and the Litigation Trust Funding Payment Agreement, together with any payment, transfer or assignment then due thereunder. Debtor’s [Proposed] Disclosure Statement With Respect to Plan of Reorganization of Dow Corning Corporation at 70.
The Settlement Trust Funding Payment Agreement shall provide that the Reorganized Debtor shall fund $600 million to the Settlement Trust in satisfaction of all Products Liability Claims resolved through the procedures established by the Settlement Trust Agreement. Id at 86.
The Litigation Trust Funding Payment Agreement shall provide that the Reorganized Debtor shall fund up to $1.4 billion to the Litigation Trust in satisfaction of all Products Liability Claims that are not resolved through the procedures established by the Settlement Trust Agreement. Id
The funding of the Trusts has been specified in an amount sufficient to provide for total funding (fixed and contingent) in an amount equivalent to the Global Settlement. ... Reference is made to the Global Settlement for purposes of the derivation of the amount of funding for the Trusts not because DCC (the Debtor) believes that these Claims have this value but reflects the fact that the Global Settlement, accepted by tort plaintiffs under conditions much more favorable to their alleged disease Claims, should provide adequately for the maximum aggregate value of these Claims in the event that an adverse causation determination occurs. Id at 88.
Upon Allowance, Claims shall be paid in whole or in part based upon the amount then available under the Litigation Trust Funding Payment Agreement. In the event of the Trustees’ evaluation that there will be insufficient funds to pay all Allowed
*568
Claims in full immediately, the Trustees may pay an appropriate Pro Rata amount of the Allowed Claims (based upon the principle of treating all similar Claims in substantially the same manner), with further payments to be made when additional funds become available to the Trust.
Id.
at 102 .
Except as otherwise expressly provided in the Plan or the Confirmation Order, confirmation of the Plan shall discharge the Debtor as of the Effective Date from and completely extinguish the Debtor’s liability for any Claim and Debt, whether reduced to judgment or not, liquidated or unliquidated, contingent or noncontingent, asserted or unasserted, fixed or not, matured or unmatured, disputed or undisputed, legal or equitable, known or unknown, that arose from any agreement of the Debtor entered into or obligation of the Debtor incurred before the Confirmation Date, or from any conduct of the Debtor prior to the Confirmation Date, or that otherwise arose before the Confirmation Date, including, without limitation, all interest, if any, on any such Debts, whether such interest accrued before or after the date of commencement of the Case, and including, without limitation, all Claims and Debts based upon or arising out of Products Liability Claims, and from any liability of the kind specified in sections 502(g), 502(h), and 502(i) of the Bankruptcy Code, whether or not a Proof of Claim is filed or is deemed filed under section 501 of the Bankruptcy Code, such Claim is allowed under section 502 of the Bankruptcy Code, or the holder of such Claim has accepted the Plan.
Id.
at 102-03 .
Except as otherwise expressly provided in the Plan, on the Effective Date all Persons who have held, hold, or may hold Claims, including, without limitation, Breast Implant Claims, Non-breast Implant Claims, and LTCI Claims, in consideration of the obligations of the Debtor and its Joint Ventures and Subsidiaries under the Plan, including the establishment and funding of the Trusts, shall be deemed'to have forever waived and released all rights or Claims, whether based upon tort or contract, or otherwise which they heretofore, now or hereafter possess or may possess against the Debtor, the Joint Ventures, the Subsidiaries, the Shareholders and the current and former officers,.... M at 104.
To restate what the above excerpts make abundantly clear, the Debtor’s plan does
not
say: “The Reorganized Dow Corning will pay all tort claims in full. The Debtor expects that the $600 million set aside in the Settlement Trust and the $1.4 billion reserved for the Litigation Trust will be sufficient to do that. However, if it proves to be inadequate, the Reorganized Debtor will nevertheless pay however much is required to satisfy all such claims in full.” Such a provision would truly be a promise to pay all tort claims in full. And if the Debtor’s plan did contain this hypothetical provision, it would be necessary to determine the aggregate value of tort claims because that value could potentially exceed the financial capabilities of the Reorganized Debtor. Nobody doubts the Debtor’s ability to put up war chests totaling $2 billion. But it could be that the aggregate amount of tort claims far exceeds $2 billion and that the Reorganized Debtor is incapable of paying the additional amounts necessary to satisfy those claims in full. In that case, the Court could not confirm the proposed plan because the Debtor would be unable to satisfy 11 U.S.C. § 1129 (a)(ll), commonly referred to as the requirement to establish the “feasibility” of a plan.
Instead, the Debtor’s plan essentially says: “The Reorganized Dow Corning will set aside $600 million for settlement of personal injury claims and an additional $1.4 billion for litigation of personal injury claims. The Debtor expects that these amounts will be sufficient to pay all such claims in full. However, if it proves to be inadequate, the claimants will nevertheless receive only that amount and have to share these amounts
pro rata.
To the extent these claimants are not paid in full, the remaining debt will be discharged.”
From this summary it is clear why estimation is not necessary for plan confirmation purposes. The Reorganized Debtor’s ability to pay tort claims in full would simply not be an issue under § 1129(a)(ll) for no matter how large the actual aggregate tort liability may turn out to be, the Reorganized Debtor
*569
would clearly be able to perform the pertinent terms of the plan. If the Court estimated the aggregate claims at something within the $2 billion treasury, the plan would be feasible. If the Court estimated the claims at an amount far in excess of $2 billion, the plan would still be feasible, because the Reorganized Debtor’s obligation is capped by the plan at $2 billion, and the Debtor has $2 billion.
Furthermore, as noted,
supra
pp. 560-562, there are special rules for personal injury and wrongful death claims. These claims must be liquidated via a jury trial if the claimant requests one, and they cannot be estimated by a bankruptcy judge for purposes of distribution unless all parties consent. However, allowing a bankruptcy judge to estimate the aggregate value of all claims for the apparently benign reason of determining feasibility of a plan of reorganization, when combined with the effects of 11 U.S.C. § 1141 (d), can create the result that the estimation was actually for purposes of distribution as well.
A personal injury claimant would, of course, contend that a plan cannot permit discharge of her claim without providing for actual — not hypothetical via estimation — payment in full. Such a claimant might, therefore, request the court to add appropriate conditions to the discharge which a debtor receives under § 1141(d) upon plan confirmation (“Except as otherwise provided in ... the order confirming the plan, the confirmation of a plan — (A) discharges the debtor from any debt____”).
22
And if estimation for plan confirmation purposes results in
defacto
estimation for distribution purposes via the effects of the plan of reorganization and the discharge provisions of § 1141(d), a claimant’s right to a jury trial for purposes of liquidating her claim becomes hollow. Therefore, a strong argument can be made that estimating the aggregate value of tort claims for plan purposes runs roughshod over personal injury claimants’ rights.
But if a debtor cannot be assured of a discharge of all tort claims, it would not truly be reorganized; the debtor would continue to be a pariah in the credit markets, and that could seriously impair its chances for the business success which would be key to the plan. A debtor would surely argue that a personal injury claimant’s right to a jury trial is perfectly protected by post-confirmation liquidation. A right to have a jury decide whether a claimant has a valid claim and if so, how much of one, means only that it would be a jury and not a judge who will decide those questions. A right to a jury trial does not mean a right to payment in full of the liquidated amount of the claim.
These are very powerful arguments. The Court is not yet called upon to decide them. However, even if the § 1141(d) discharge were effective against a fully or partially unsatisfied personal injury claim liquidated post-confirmation by a jury, the Debtor’s proposal cannot be permitted to be the hidden lever to that result. For that would, in effect, mean that the bankruptcy court’s estimation would result in an estimate of personal injury claims for distribution purposes. As we noted,
supra
p. 560, estimation of personal injury claims for distribution purposes is not a core proceeding. Since all of the personal injury claimants have not stipulated to this Court’s determining the estimation, we would seem to lack the statutory authority to do anything but hear the estimation. And what a monumental waste it would be if all this Court did was hear, i.e., conduct, the estimation trial and issue proposed findings of fact and conclusions of law subject to
de novo
review by the district court.
On the other hand, an estimation of the aggregate value of all tort claims possessing all the consequences outlined above — possible discharge of personal injury claims which were insufficiently provided for due to a low estimation — could be something the district court could do. Although estimation for purposes of distribution is not a core proceeding, that only means that when done, it is a non-core proceeding which is otherwise well with
*570
in the bankruptcy jurisdiction of the district court.
23
However, the problem with allowing an estimation of a personal injury claim for distribution purposes even by a district judge is that it really does cut the heart out of a claimant’s right to a jury trial. Once the estate pays the estimated claim and all the funds of the estate are disbursed, there would be no sense in seeking liquidation of the claim by a plenary trial of any type.
24
These exceedingly complex questions all flow from the narrow special interest legislation of 1984 which created these unique protections for personal injury claims. Unfortunately, as so frequently occurs when Congress legislates piecemeal special interest provisions in the Bankruptcy Code, it fails to anticipate the havoc it wreaks on the flow and logic of the Code. Placing even a toe into these murky waters is unwise, for as we have shown, they hide the quicksand of deeper, more unanswerable questions. In summary, it is conceivable that, when plugged into a confirmed plan, an estimation of the aggregate value of all personal injury claims for purposes of feasibility, which on the surface appears benign and “core,” would be transformed into a discharge of unsatisfied personal injury claims via § 1141(d). If that were the case, the estimation would turn out to be “non-core” for purposes of distribution and a bankruptcy court lacking the consent of all parties that would be affected thereby, would not have the authority to perform such an estimation.
D. Specific Reasons for Rejecting TCC’s Proposal
The TCC proposes an entirely different method of estimating tort claims than the Debtor, based upon an entirely different view of the major issues to be tried. The Debtor wants the issue of silicone gel toxicity to be heard in a single common-issue estimation in the Bankruptcy Court. The Court would then pin a number on the amount of aggregate damages that breast implant claimants should receive from a confirmed plan of reorganization. The TCC wants to focus on the implants’ tendency to rupture or leak and to fix the amount of damages by holding a series of summary jury trials in courts around the country. Thereafter, experts would extrapolate from the results of those “verdicts” and arrive at a figure for the aggregate tort liability.
According to the Debtor, the breast implant debate turns on whether silicone gel is a toxic substance. It contends that the substance is bio-inert, which means that it has no systemic effect in the human body. The TCC most decidedly takes the contrary view, contending that silicone gel can cause — and in thousands of women has caused — serious diseases. The TCC says that the debate over the alleged toxicity of silicone gel can be indefinitely postponed pending the outcome of further scientific studies because even if the substance proves to be nontoxic, the damages due to the numerous women who will inevitably suffer from ruptured or leaking implants is so great as to wipe out equity’s interest in the company, leaving the company to its creditors. It therefore argues that the Court should embark upon an estimation of the likely amount of aggregate damages due solely to rupture and leakage without even considering the potential diseases which women may contract from the implants.
25
*571
The Debtor counters by pointing out that in the nearly three decádes that it marketed breast implants, nondisease claims were not only few in number, but were easily and inexpensively resolved. Moreover, it argues, the amount of damages to which a woman might be entitled if her breast implant ruptures or leaks is directly related to whether the now free-floating silicone gel is likely to cause her to become ill. Thus, the question always comes back to one of toxicity.
The Debtor clearly has the better of this argument. Even the expert whom the TCC called to establish its premise about ruptured and leaking implants, plastic surgeon Lawrence E. Wolf, who for a short while was a member of the PCC,
26
supported the Debt- or’s hypothesis. Although he believed that over time, nearly every breast implant will rupture or leak, he also testified that he, like the FDA, would counsel patients not to have the implants removed if he was sure (like he used to be) that silicone was harmless. The guiding factor in whether to implant or ex-plant, in his opinion, is the wishes of the patient. As a plastic surgeon, he recognizes that there usually is no immediate medical reason necessitating the performance of a particular procedure, especially with procedures pertaining to a breast implant. Whether or not others see the need, the patient of a plastic surgeon generally has a psychological need or desire to improve his or her appearance. After a successful procedure is performed, the patient should have greater self-esteem which itself can spawn improvements in the patients overall health. On the other hand, if the implants, which had previously provided the patient with good feelings about herself, now generate the negative emotions of fear and anxiety, it is in the patient’s interest to remove them. Consequently, Dr. Wolf acknowledged, if it can be shown to a reasonable scientific certainty (a certainty he at one time claimed to have had in light of his having implanted thousands of women) that silicone is harmless, he would not only stop explanting women, but would even resume implanting them with silicone-gel implants. Transcript, July 18, 1996, at 129-132.
Although the Debtor will not be able to convince Dr. Wolf of the safety of silicone gel merely by the salutary results of a so-called common-issue trial, it is certainly likely that the fears and anxieties of thousands of implanted women will tend to subside after publicity about such a verdict. Indeed, Dr. Wolf has noticed that the number of patients seeking explantation is trending lower as more and more studies tend to show no connection between silicone gel and disease.
If the jury in such a trial were to determine that silicone gel is not toxic, and if fear and anxiety is thereby reduced, the leakage/rupture issue loses much of its force. Indeed, many women experiencing such symptoms might very well elect re-implantation, which according to the Debtor, is one of a number of remedies that was provided in nondisease cases before 1992. For this reason, the Debtor’s suggestion that there be a common-issue trial on the issue of silicone gel toxicity is by far the better approach.
Finally, the TCC’s summary jury trial proposal is flawed. It is worth noting that the Fifth Circuit has recently held a very similar proposal to be improper.
In re Chevron U.S.A., Inc.,
109 F.3d 1016 (5th Cir.1997). In that case, over 3,000 plaintiffs claim to have been injured as a result of acts and omissions of the defendant oil company.
Id.
at 1017 . The district court ordered a “unitary trial” to determine the issue of generic causation for all plaintiffs as well as the issues of individual causation and damages for a selected group of claimants.
Id.
The group was to consist of 30 claimants, 15 to be selected by the plaintiffs and 15 to be selected by the defendant.
Id.
The court of appeals was favorable, under appropriate circumstances, to the use of a “bellwether” trial, the results of which would then be extrapolated to the group as a whole.
Id.
at 1019— 20. Nonetheless, the court of appeals held that the trial contemplated by the district court was not a bellwether trial and that the results could, therefore, not be extrapolated to the remaining plaintiffs.
Id.
at 1019 . The court stated that:
A bellwether trial designed to achieve its value ascertainment function for settle
*572
ment purposes or to answer troubling causation or liability issues common to the universe of claimants has a core element [ — ] representativeness — that is, the sample must be a randomly selected one of sufficient size so as to achieve statistical significance to the desired level of confidence in the result obtained.
Id.
at 1019 . The court continued:
The selected thirty ... cases included in the district court’s “unitary trial” are not cases calculated to represent the group of 3,000 claimants. Thus, the results that would be obtained from the trial of these thirty ... cases lack the requisite level of representativeness so that the results could permit a court to draw sufficiently reliable inferences about the whole that could, in turn, form the basis for a judgment affecting cases other than the selected thirty. While this particular sample of thirty eases is lacking in representativeness, statistical sampling with an appropriate level of representativeness has been utilized and approved.
Id.
at 1020 .
See also E.K Hardison Seed Co. v. Jones,
149 F.2d 252, 256 (6th Cir.1945) (stating that to be valid “the sample portion should be of such nature as to be fairly representative”);
United States Steel Group v. United States,
96 F.3d 1352, 1366 (Fed.Cir.1996) (noting that to be reliable a sample must be representative);
Cimino v. Raymark Indus., Inc.,
751 F.Supp. 649, 664 (E.D.Tex.1990) (concluding that the sample group must be representative of the group as a whole); John F. Shampton,
Statistical Evidence of Real Estate Valuation: Establishing Value Without Appraisers,
21 S. Ill. U.L.J. 113, 124 (1996) (observing well established principle that if a statistical prediction is to be valid “the sample must be representative that is, an unbiased, random sample”); Michael J. Saks and Peter David Blanck,
Justice Improved: The Unrecognized Benefits of Aggregation and Sampling in the Trial of Mass Torts,
44 Stan. L.Rev. 815, 841 (1992) (“Representativeness is the touchstone of good sampling.”).
27
Inasmuch as the TCC’s summary jury proposal provides that it and the Debtor would select the plaintiffs, it would seem to be subject to the same criticisms noted above. Additionally, there has been no showing that the TCC’s proposal creates a sample — 384 jury verdicts engineered from the trial of 24 plaintiffs — that is of sufficient size to enable the results to be extrapolated to all breast implants claimants with a statistically acceptable level of confidence. Robert G. Bone,
Statistical Adjudication: Rights, Justice and Utility in a World of Process Scarcity,
46 Vand. L.Rev. 561, 577-87 (1993) (discussing the importance of both sampling size and representativeness); Saks and Blanck, 44 Stan. L.Rev. at 842 (discussing how sample size is an important factor in outcome accuracy).
E. Two Other Possible Needs for Estimation
1.
The Need for Estimation in Case of Attempted Cramdown
If the class of personal injury claimants (or the subclass of breast implant claimants) rejected the Debtor’s plan, the Debtor might seek cramdown under 11 U.S.C. § 1129 (b)(2)(B). What about the need to estimate the aggregate amount of breast implant claims for purposes of defeating an attempted cramdown? Because the plan proposes that the Debtor’s shareholders will retain their equity interests in the Debtor despite the possibility that breast implant claims will not be paid in full, it would be difficult (if not impossible) for the Debtor to cram down the plan over the dissent of that class of unsecured claims pursuant to 11 U.S.C. § 1129 (b)(2)(B)(ii). If the Debtor instead relied on § 1129(b)(2)(B)© to attempt cramdown, it would be necessary to determine whether or not “the plan provides that each holder of a claim of such class receive or retain on account of such claim property of a value, as of the effective date of the plan, equal to the allowed amount of such claim” (in short, whether the plan will in fact pro
*573
vide for full payment). In that case, an estimation of the aggregate amount of such claims might be needed. But this whole exercise presupposes that the class (or subclass) of claimants will vote to reject the Debtor’s plan. Perhaps we should wait to see whether that occurs before embarking upon a long and complex estimation. For if the class of claimants nevertheless accepts the plan, there would be no need to hold a hearing under § 1129(b)(2)(B).
2.
Estimating Claims for Purposes of Voting on a Proposed Plan
Another purpose for estimating unliquidated tort claims would be to determine whether the class has accepted or rejected the plan. As a threshold matter, the tort claimants would have to get past the fact that such claims will most likely have no vote because the Debtor has objected to each of these claims. 11 U.S.C. § 1126 (a) (“The holder of a claim or interest allowed under section 502 of this title may accept or reject a plan.”); § 502(a) (“A claim ... is deemed allowed, unless a party in interest ... objects.”). Therefore, before we get to the need for estimating these claims, the Court must first “temporarily allow the claim ... in an amount which the court deems proper for the purposes of accepting or rejecting a plan.” F.R.Bankr.P. 3018(a).
Assuming that the implant claims were temporarily allowed for the purposes of voting on the plan, the Court would still have to determine how much each such claim is worth. Obviously, a claimant with no discernible illness should not have a claim equal in amount to another claimant who is suffering grievously.
But cf. Menard-Sanford v. Matey (In re A.H. Robins, Co.),
880 F.2d 694, 698 (4th Cir.),
cert. denied,
493 U.S. 959 , 110 S.Ct. 376 , 107 L.Ed.2d 362 (1989) (“We do not decide whether the district court’s voting procedure violated § 1126(c) because, in view of the outcome of the vote, the challenged procedure was at most harmless error.”);
Kane v. Johns-Manville Corp. (In re JohnsManville Corp.),
843 F.2d 636 , 646^17 (2d Cir.1988) (same). The estimation would then become extremely protracted as the Court would have to review the alleged symptoms of hundreds of thousands of claimants.
Because of the significant effort that estimation of this type would require, it is not an effort which should even be begun unless the need is real. For example, if the class of tort claimants rejects the plan by number, then there would be no need to value the claims cast. And, if the class accepts by such a super-majority, like in the cases cited above, it might be possible to say that under no circumstances could the aggregate value of rejecting claims equal a blocking jé +1 minority vote. Only if the outcome of the
“%
by amount” vote is unclear will it be necessary to embark upon this burdensome task.
28
F. Concluding Thoughts on Estimation
When dealing with a motion for estimation, a court starts with a baseline knowledge of what is involved with liquidating a claim. Therefore, the party moving for estimation must show that the normal mode of liquidating the claim would create undue delay in the bankruptcy process. A court usually has a
*574
feel for when delay in a case becomes “undue.” It is therefore incumbent upon the movant(s) to establish particulars as to why the delay which would be engendered by a typical liquidation would be undue in a particular instance. For the reasons stated above, neither movant has satisfied this burden.
Estimation has little to recommend it. Moreover, estimation only delays the inevitable. Eventually the contested claims of tort claimants will have to be liquidated. For many claimants, liquidation would likely occur through lengthy jury trials. Better that process begin sooner rather than later. Additionally, no good reason exists why the process of liquidating the claims cannot begin immediately. Since the deadline for filing a proof of claim has expired, there now exists a finite number of claimants possessing an opportunity to share in the Debtor’s estate. The Debtor has filed objections to those claims which it opposes. If, in the near future, the parties do not come to some agreement, it will be necessary for the courts to assume that no agreement is likely and to proceed to litigation mode. That would trigger the hard part. How does the court system handle hundreds of thousands of objections to the allowance of personal injury claims?
29
Y. An Aggregative Approach to Resolving the Pending Tort Claims
A. Characteristics of Mass Tort Cases
Mass tort eases are characterized by several distinguishing features: (1) they involve large numbers of claims that are associated with a single product (i.e. breast implants, asbestos, Daikon Shield); (2) among the various claims there is a “commonality of issues and actors;” and (3) there is an interdependence to the value of claims. Hensler and Peterson, 59 Brook. L.Rev. at 965; Richard A. Nagareda,
Turning From Tort to Administration,
94 Mich. L.Rev. 899, 905 (1996); Coffee, 95 Colum. L.Rev. at 1358-59.
Mass torts are further complicated by two additional factors' — “one temporal, the other geographic.” Nagareda, 94 Mich. L.Rev. at 905-06. The temporal problem arises from the fact that the diseases caused by the product in question “do not strike immediately but develop quietly in the body over an extended period.”
Id.
at 906. Consequently, mass torts typically involve “a latency period of many years or even decades between exposure to the harmful product and the onset of physical impairment.”
Id.
The geographic problem arises from the fact that plaintiffs are dispersed over a wide geographic area.
Id.
at 907. In this case, that geographic area is the entire world. Such geographic dispersion means that litigation proceeds in various federal and state courts around the country and oftentimes in foreign courts as well.
The large number of cases involved creates tremendous impediments to achieving a fair and final adjudication. Coffee, 95 Colum. L.Rev. at 1346 (“[T]he dilemma in mass tort
*575
reform arises precisely because neither efficiency nor fairness, taken alone, is easily realizable.”); Deborah R. Hensler and Mark A. Peterson,
Understanding Mass Personal Injury Litigation: A Socio-Legal Analysis,
59 Brook. L.Rev. 961, 1030-31 (1993) (“[F]ew would disagree with the conclusion that ... [mass tort] cases have proved difficult to resolve efficiently and fairly.”). For plaintiffs, long delays in the scheduling of trial dates can be expected.
Cimino,
751 F.Supp. at 652 (observing the excessive length of time it takes to provide each plaintiff an individual trial in a mass tort case); William H. Schwarzer, Alan Hirsch and Edward Sussman,
Judicial Federalism: A Proposal to Amend the Multidistrict Litigation Statute to Permit Discovery Coordination of Large-Scale Litigation Pending in State and Federal Courts,
73 Tex. L.Rev. 1529, 1530 (1995) (delay is a common consequence of large-scale litigation); Hensler and Peterson, 59 Brook. L.Rev. at 963 (“[C]ases take an inordinately long time to reach disposition, sometimes concluding long after a plaintiffs death.... ”); Bone, 46 Vand. L.Rev. at 568 (“[T]rial opportunities for plaintiffs in large-scale mass tort cases are extremely scarce.”); Edward F. Sherman,
Aggregate Disposition of Related Cases: The Policy Issues,
10 Rev. Litig. 231 , 238-39 (1991) (observing that court congestion caused by mass torts can prevent plaintiffs from getting their cases to trial); Deborah R. Hensler,
Resolving Mass Toxic Torts: Myths and Realities,
1989 U. Ill. L.Rev. 89, 98 (1989) (discussing evidence that suggests opportunities for individual trials are infrequent in mass tort cases).
In addition, plaintiffs typically experience a loss of control over their case. Coffee, 95 Colum. L.Rev. at 1346 (“[Individual plaintiffs have weak to nonexistent control over their attorneys across the mass tort context for reasons that are inherent to the economies of mass tort litigation.”); Saks and Blanck, 44 Stan. L.Rev. at 840 (“[T]ort lawyers and their clients in mass tort cases communicate remarkably little about their cases and ... clients have little control over the course of the litigation.”); Sherman, 10 Rev. Litig. at 249 (“[individual control of litigation is unavoidably affected by the existence of related cases”); Hensler, 1989 U. Ill. L.Rev. at 96 (noting that in mass tort cases the attorney-client relationship is “attenuated ... by the press of the sheer number of claims.”).
And perhaps most importantly, plaintiffs who have obtained judgment often have great difficulty receiving prompt and adequate compensation for their claims. Jack B. Weinstein,
Individual Justice in Mass Tort Litigation: The Effect of Class Actions, Consolidations, and Other Multiparty Devices
141 (1995) (concluding that with respect to asbestos litigation — “If we persist in trying cases on an individual or even small-scale jurisdiction-by-jurisdiction basis, many plaintiffs will die before they are compensated, a great many will wait years, and some may receive nothing as the available monies are dribbled away by earlier awards and transaction costs.”) [hereinafter Weinstein,
Individual Justice];
Schwarzer, Hirsch and Sussman, 73 Tex. L.Rev. at 1530 (observing that “frustration of victims’ rights to compensation” is the norm in mass tort eases); Hensler and Peterson, 59 Brook. L.Rev. at 1031 (noting that claimants frequently wait years to receive compensation and when received the amounts paid can drastically vary between similarly situated plaintiffs); Bone, 46 Vand. L.Rev. at 568 (arguing that due to delay associated with mass torts, it is difficult “to assure a positive net recovery or an amount of compensation above a minimally acceptable level”); Sherman, 10 Rev. Litig. at 243 (observing that with mass torts, funds may be insufficient to compensate later claimants).
The funding problem is even more extreme when the temporal characteristic is considered. It is this temporal quality of mass torts that gives rise to the future claimant problem. Nagareda, 94 Mich. L.Rev. at 906 (identifying problems presented by temporal quality of mass torts); Peter H. Schuck,
Mass Torts: An Institutional Evolutionist Perspective,
80 Cornell L.Rev. 941, 966 (1995) (noting valuation problems presented by presence of future claimants); Thomas A. Smith,
A Capital Markets Approach to Mass Tort Bankruptcy,
104 Yale L.J. 367 , 371-82 (1994) (discussing “fair distribution problem”
*576
created by the presence of future claimants); Hensler and Peterson, 59 Brook. L.Rev. at 1045 (“The civil law is not well fashioned to deal with this latent injury process.”); David Rosenberg,
The Causal Connection in Mass Exposure Cases: A ‘Public Law’ Vision of the Tort System,
97 Harv. L.Rev. 849, 919 (1984) (commenting that the long disease latency periods — and thus the presence of future claimants — presents special difficulties in satisfying the compensation objectives of the tort system).
On the other side of the coin, the large number of cases spread over such a wide geographic area means that a defendant faces tremendous difficulties in fronting a meaningful defense. And when the temporal quality of mass torts is factored in, the extended duration of the litigation can have a potentially crippling effect on a defendant. For the judicial system, the combination of large numbers of plaintiffs, temporal dispersion and geographic dispersion combine to create an overwhelming and unmanageable litigation. Nagareda, 94 Mich. L.Rev. at 907.
B. The Need for Aggregation
Given the characteristics of mass torts, what is the most appropriate method of liquidating the claims pending against the Debt- or? There are three possible paths upon which liquidation could proceed: (1) settlement between the Debtor and tort claimants; (2) individualized adjudication of tort claims; or (3) some form of collectivized adjudication.
See
Saks and Blanck, 44 Stan. L.Rev. at 839.
With an eye towards fostering settlements, one approach would be to allow certain of the cases pending against the Debtor to proceed to trial. Upon the filing of its bankruptcy petition, Bankruptcy Code § 362(a) automatically stayed prosecution of the numerous breast (and other) implant cases that were and are pending against the Debtor in various state and federal courts around the country. When the stay went into effect, many of these cases were at advanced stages — much of the discovery was complete and the cases were nearly ready for trial. The Court could selectively lift the stay and allow some of these advanced cases to be tried. The Debt- or asserts categorically that silicone is not toxic to humans, and the TCC categorically asserts that it is. If enough judicial decisions or jury determinations strongly predominate for one side’s position, it may prompt the other side to abandon or alter its opposing position, thereby facilitating settlement.
See
Francis E. McGovern,
An Analysis Of Mass Torts For Judges,
73 Tex. L.Rev. 1821, 1841-43 (1995) (identifying the various stages of a mass tort and explaining that when a mass tort reaches maturity the likelihood of a global resolution becomes more favorable); Coffee, 95 Colum. L.Rev. at 1439; Schuck, 80 Cornell L.Rev. at 949; Linda S. Mullenix,
Mass Tort Litigation and the Dilemma of Federalization,
44 DePaul L.Rev. 755, 781 (1995).
Unfortunately, the number of jury verdicts needed to facilitate global settlement is unknown; though the concept of what makes a mass tort mature is generally understood, when a mass tort actually reaches that point is hard to pinpoint. If, as stated above, jury verdicts overwhelmingly predominate in favor of one side, it is conceivable that a global resolution could be reached in a fairly short period of time. Conversely, if the jury determinations tend to be more mixed the parties could potentially wage war for years before resolution is achieved. Moreover, while settlement can and should be both encouraged and facilitated by a court; it cannot be forced upon the parties.
30
*577
Consequently, if this method is adopted and quick resolution is not achieved, the liquidation process would degenerate into the traditional tort system where each plaintiffs case is tried one at a time. Obviously, attempting to adjudicate the hundreds of thousands of pending tort claims in this manner is not realistic. To begin with, the traditional approach would be unfair to the Debtor who would be forced into the impossible position of defending itself simultaneously in multiple courtrooms around the country. Not only would the Debtor be forced to trial in one or more venues without the benefit of its primary trial attorneys, but the Debtor’s witnesses, particularly its experts, could not be in two (or more) places at the same time.
Since forcing numerous simultaneous trials upon the Debtor would be unjust, the thousands of lawsuits would have to be tried more or less one at a time. However, the trial of a breast implant lawsuit routinely lasts several weeks. (The 1994 trial of Gladys Laas and Jennifer Ladner against Dow Corning Corp. reportedly took 11 weeks to try.) Moreover, in some cases discovery is still ongoing. And even in those cases where discovery was essentially complete when the Debtor filed for bankruptcy, the Court can only assume that the passage of time will have created a need for some new discovery. Furthermore, human beings (and that includes attorneys) occasionally need some time off. Therefore, to be fair to the Debtor, it is unlikely that more than ten trials could ever be completed in a year. Finally, if one were to assume the impossible — that one trial could be completed every work day — it would take more than 1,900 years to provide trials for each of the approximately half million claimants.
Implementation of the traditional tort system would be equally unfair to the tort claimants. Failure to obtain a quick resolution would mean that the majority of the hundreds of thousands of tort claimants would never live to see the inside of a courtroom and thus never have an opportunity to receive compensation for their injuries. For this reason, the few early complaints voiced by attorneys for individual claimants that the filing of this bankruptcy case was a mere ploy to delay their clients’ day in court, have always rung hollow. (What does an attorney who already has 600 clients advise the 601st about when her case will come to trial? — or perhaps more poignantly, what does the judicial system tell the 200,601st claimant about when she will get her day in court?)
See, e.g.,
Georgene M. Vairo,
The Dalkon Shield Claimants Trust: Paradigm Lost (Or Found)?,
61 Fordham L.Rev. 617, 619 (Dec. 1992) (“Can one attorney or firm properly serve hundreds, let alone thousands, of clients?”);
see also id.
at 619 n. 9.
The inescapable conclusion is that the traditional tort system simply does not work in mass tort situations like the one facing the Debtor. In fact, the legal community overwhelmingly concurs on this point.
See
Coffee, 95 Colum. L.Rev. at 1346 (noting the generally accepted view that the traditional tort system must be modified substantially for courts to be able to adjudicate mass torts effectively);
id.
at 1358-59 (noting that the dynamics of mass torts tend[ ] to undercut the traditional ideal of litigant autonomy); Bone, 46 Vand. L.Rev. at 568 n. 19 (observing that the Judicial Conference Ad Hoc Committee on Asbestos Litigation had recently concluded: “It is unrealistic to believe that individual trials can provide relief. The local trial of an individual asbestos claim
*578
takes so long that trying each claim separately would require all the civil trial time for the foreseeable future to the exclusion of all other cases in districts with heavy asbestos case
loads.”
— Report
of the Judicial Ad Hoc Committee on Asbestos Litigation
at 19 (March 1991)); Hensler and Peterson, 59 Brook. L.Rev. at 962-63 (“[AJlmost all
of
those involved would agree that the civil justice system has not performed well in response to the challenge of mass torts. The litany of criticisms is long and familiar: cases take an inordinately long time to reach disposition, sometimes concluding long after a plaintiffs death; outcomes are highly variable, often seeming to have little relationship to plaintiffs’ injuries or defendants’ culpability; transaction costs are excessive, far outstripping the amounts paid out in compensation.”); Judith Resnik,
From “Cases” to “Litigation”,
54 Law & Contemp. Probs. 5 , 66 (Summer, 1991) (“As many have documented, [the traditional tort] system’s commitment to litigant autonomy, attorney fidelity, fair and accurate decisionmaking, and public interaction has not been uniformly borne out in practice nor made available to many would-be litigants.”); Hensler, 1989 U. Ill. L.Rev. at 89-90 (“In the cold light of the failure ... to resolve mass torts, a consensus has now emerged calling for substantial modifications in traditional court processes to improve the efficiency and equity of the mass claims resolution process.”); Rosenberg, 97 Harv. L.Rev. at 900 (“The system’s case-by-case mode of adjudication makes mass exposure litigation needlessly expensive by requiring separate and repeated determinations of various complex issues, such as those regarding causation, that are common to all the claims arising out of any single mass exposure event. Besides squandering the system’s resources, the duplicative adjudication of common questions generally places mass exposure claims at a competitive disadvantage in the claims market and deprives the system of their deterrence value. But the courts’ traditional passive role inhibits resort to interventionist methods that might reduce litigation costs, enable the claims market to reflect the relative deterrence values of competing mass exposure and sporadic accident claims, and inform potential claimants of their rights to sue or to join pending litigation.”); David Rosenberg,
Class Actions for Mass Torts: Doing Individual Justice by Collective Means,
62 Ind. L.J. 561 (1987).
This conclusion does not ignore the fact that aggregation also has potential areas of concern. To begin with, aggregation has the potential for corroding an individual’s ability to control her own claim. Schwarzer, Hirsch and Sussman, 73 Tex. L.Rev. at 1547; Sherman, 10 Rev. Litig. at 247; Hensler, 1989 U. Ill. L.Rev. at 91. But, as noted
supra
p. 575, the loss of individual autonomy seems to be unavoidably endemic to mass tort cases.
31
There is also concern that aggregation can lead to inaccurate compensation measurements — with some plaintiffs receiving too much and others receiving too little. Resnik, 54 Law & Contemp. Probs. at 65; Hensler, 1989 U. Ill. L.Rev. at 92. However, such concern can be substantially eliminated, as will be discussed below, through the implementation of a tiered general causation determination and a well designed sampling methodology to determine specific causation and damages.
The efficient management of a large number of claims by a single court is another concern of aggregation, Schwarzer, Hirsch and Sussman, 73 Tex. L.Rev. at 1547-48, though such management concerns are already part and parcel of this bankruptcy case.
Aggregation can deny plaintiffs their choice of forum. Sherman, 10 Rev. Litig. at 253. Again, however, since all claims against the Debtor are pending before this Court, this is a nonissue.
When a large number of cases are aggregated, there are bound to be certain issues that are unique to individuals or subgroups of plaintiffs.
See
Schwarzer, Hirsch and Sussman, 73 Tex. L.Rev. at 1548. Though as will be discussed below, this problem can be
*579
adequately dealt with through bifurcation of trials, creation of subgroups to adjudicate issues specific to the group, use of linear regression in specific causation and damage determination and, if necessitated, individual adjudication of certain issues.
In addition, with aggregation, negative effects have the potential to be magnified in the sense that “[i]f an error occurs, both the number of parties and the potential impact, will be greater than in the ordinary case management process.” Francis E. McGovern,
Resolving Mature Mass Tort Litigation,
69 B.U. L.Rev. 659, 694 (1989).
And there is the concern that both plaintiffs and defendants may be denied the constitutional guarantees of due process and the right to a jury trial. Bone, 46 Vand. L.Rev. at 566-67
&
n. 16; Saks and Blanck, 44 Stan. L.Rev. at 815; Sherman, 10 Rev. Litig. at 251. Nonetheless, the Court is of the firm opinion that through the careful and prudent design and implementation of the proposal detailed below the legitimate rights of all parties can be safeguarded.
In any event, the point cannot be stressed enough that use of the only alternative to aggregation — individualized adjudication of tort claims — would be “tantamount to denying [most] litigants their due process ... rights altogether.” Saks and Blanck, 44 Stan. L.Rev. at 826. By default, then, some form of collective remedy is mandated.
See
Weinstein,
Individual Justice
1; Kenneth R. Feinberg,
Response to Deborah Hensler, A Glass Half Full, A Glass Half Empty: The Use of Alternative Dispute Resolution in Mass Personal Injury Litigation,
73 Tex. L.Rev. 1647, 1648 (1995) (stating that with respect to the efficient treatment of mass torts: “The answer is aggregation. Aggregation. You must get all of the cases in one forum. Until you do that, any piecemeal solution, however beneficial it may be, does not offer either the plaintiff or the defendant global peace.”); Coffee, 95 Colum. L.Rev. at 1345-46 (recognizing judicial system’s fundamental movement toward collectivized treatment of mass torts, strongly supporting this trend, and concluding that any attempt to “return to a traditional system of individual case litigation” would be “quixotic [and] ... costly”); Schwarzer, Hirsch and Sussman, 73 Tex. L.Rev. at 1550 (“[T]he growth of large-scale litigation may eventually leave no alternative to aggregation procedures if the court’s adjudicatory function is to survive.”); Sehuck, 80 Cornell L.Rev. at 958 (“The number of individual claims currently pending and reasonably anticipated in the future is in some mass tort litigations so large that it is simply not practicable to provide individual trials in the traditional fashion.”); Hensler and Peterson, 59 Brook. L.Rev. at 1031 (“Efficient disposition of a large volume of litigation concentrated within one or a small number of courts requires some type of aggregative or collective procedure.”); Sherman, 10 Rev. Litig. at 231
passim
(recognizing value of aggregating related cases and discussing ways in which current barriers to aggregation can be overcome); Resnik, 54 Law & Contemp. Probs. at 21 (“[M]ost agree that aggregate processing — in some forum — and aggregate treatment of some mass torts in federal courts are essential.”);
id.
at 45 (concluding that the question “is not whether to aggregate mass torts but what if any limits to impose”). Indeed, bankruptcy itself is a collective remedy. How then does bankruptcy accommodate the peculiar carve-out (which is the frustrating cause of so much of the problems in this and other mass tort bankruptcy cases) granted to personal injury and wrongful death claims?
C. Consolidation Under Rule 42
Because bankruptcy has so many of the hallmarks of a class action,
32
the easy an
*580
swer would be to form the breast implant claimants into a class.
See In re Farah,
141 B.R. 920 , 928 n. 7 (Bankr.W.D.Tex.1992) (discussing how bankruptcy is closely analogous to a class action since it creates a common pool of assets for the benefit of all potential creditors/claimants); Richard B. Sobol,
Bending the Law: The Story of the Dalkon Shield Bankruptcy,
70 (1991) (“On a theoretical level, the concept of a class action in the bankruptcy to resolve Robins’s Daikon Shield liability made little sense. Because of the collective and compulsory nature of bankruptcy proceedings, a Chapter 11 case is in essence a mandatory class action, with the official committee as the representative of the class of creditors but without the necessity of satisfying an additional set of technical and difficult requirements from class action law.”) [hereinafter Sobol,
Bending the Law];
Luisa Kaye,
The Case Against Class Proofs of Claim in Bankruptcy,
66 N.Y.U. L.Rev. 897, 897 (1991) (likening bankruptcy law to class actions); 3 Herbert B. Newberg,
Newberg on Class Actions,
§ 20.01 at 581 (2d ed.1985) (characterizing bankruptcy cases as “statutory class actions”); Judith Resnik, Dennis E. Curtis and Deborah R. Hensler,
Individuals Within The Aggregate: Relationships, Representation, And Fees,
71 N.Y.U. L.Rev. 296, 298 (1996) (observing that bankruptcy and class actions are similar in that both seek to achieve resolution of multiple claims against a single party through aggregation); Jack B. Weinstein,
Ethical Dilemmas In Mass Tort Litigation,
88 Nw. U.L.Rev. 469, 477 (same); Patrick D. Shaw,
See No Evil, Speak No Evil: Discharging CERCLA Claims in Bankruptcy Without Notice, 6
Tul. Envtl. L.J. 127, 149 (1992) (same).
Significantly, breast implant plaintiffs sought and obtained class certification under Rule 23 or its state-law or Canadian-law equivalent in several of the lawsuits now pending against the Debtor.
See Dante v. Dow Corning Corp.,
143 F.R.D. 136 (S.D.Ohio 1992);
Spitzfaden v. Dow Corning Corp.,
No. 92-2589 (La.Dist.Ct.);
Harrington v. Dow Corning Corp.,
No. C954330 (British Columbia Sup.Ct.1996);
Doyer v. Dow Corning Corp.,
No. 500-06-000013-934 (Quebec Sup.Ct.1994);
Bendall v. McGhan Medical Corp.,
106 D.L.R. 4th 339, 14 O.R.3d 734 (Ontario Ct. Gen. Div.1993). In each of these cases, the question of silicone’s pathogenicity was identified as a common issue.
Compare Bendall v. McGhan Medical Corp.,
File No. 14219/93, Order entered October 22, 1993 (“Are silicone gel breast implants likely to cause specific medical conditions?”)
with Harrington,
slip opinion at 24 (“Are silicone gel breast implants reasonably fit for the intended purpose?”)
and Doyer,
slip opinion at 22 (“Are silicone breast implants manufactured and sold by the defendants defective in design, composition and manufacture?” (translated from French))
and with Spitzfaden,
Case Management Order, dated March 13, 1997, p. 2 (“Did silicones cause the injuries complained of in these plaintiffs?”).
As indicated earlier, the Debtor not only concedes, but adamantly maintains, that the pathogenicity issue is common to all the breast implant claims pending against it.
*581
And while the TCC opposes a single, general causation trial, its own key witness acknowledged that much of his testimony is “generic” — i.e., repeated in one implant case after another. Transcript, July 19, 1996, at 183-94 (Testimony of Dr. Eric Gershwin). Thus class certification would seem to be a logical mechanism by which to proceed here.
See also In re Silicone Gel Breast Implants Products Liability Litigation,
793 F.Supp. 1098, 1100 (Jud.Pan.Mult.Lit.1992) (“The actions present complex common questions of fact ... on the issue of liability for allegedly defective silicone gel breast implants.”);
see generally In re American Medical Systems, Inc.,
75 F.3d 1069, 1081 (6th Cir.1996) (The MDL Panel’s refusal to consolidate is a relevant factor in considering whether to certify a class).
Matters may not be quite that simple, however. For one thing, both of the moving parties are apparently disinclined to resort to Rule 23. Transcript, July 19, 1996, at 18, 21. If certification were sought under Rule 23(b)(3), moreover, satisfaction of that provision’s “predominance” requirement could prove to be particularly problematic.
See Amchem Products, Inc. v. Windsor,
— U.S. -, 117 S.Ct. 2231 , 138 L.Ed.2d 689 (1997) (“Given the greater number of questions peculiar to the several categories of class members, and to individuals within each category, and the significance of those uncommon questions, any overarching dispute about the health consequences of asbestos exposure cannot satisfy the Rule 23(b)(3) predominance standard.... Differences in state law .

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1978765. Public record. Not legal advice.