correction
On Sunday, an article on the tentative settlement of litigation involving the drug Bendectin said that all children and families who have sued Merrell Dow Pharmaceuticals in connection with birth defects will be free either to participate or to take a chance in the courts. Yesterday, however, the source of the information, plaintiffs' attorney Allen T. Eaton of Washington, said he may have been misleading. The option all current plaintiffs do have, Eaton said, is to object to the settlement at or before a fairness hearing that will be held by Chief U.S. District Judge Carl B. Rubin. If a substantial majority accepts the plan, Rubin is expected to approve it. All litigants -- including those whose lawsuits are not before him -- then would be required to participate and would be barred from persisting in litigation.
Merrell Dow Pharmaceuticals yesterday agreed to pay $120 million to settle current and future claims that its drug, Bendectin, which for 27 years was the only government-approved prescription drug for the "morning sickness" of early pregnancy, caused birth defects.
The class-action settlement would be the third-largest of any such litigation on record.
There has never been proof that Bendectin caused birth defects. In recent years, evidence has associated Bendectin with a few birth defects, particularly a serious stomach deformity, but even the drug's critics say no cause-and-effect relationship between the drug and any birth anomaly has been proved.
A Merrell Dow attorney and three of the five members of the committee that represents counsel for the plaintiffs signed the agreement in Cincinnati. Chief U.S. District Judge Carl B. Rubin incorporated the terms of the agreement into an order that he made public.
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Each of the 678 plaintiffs will receive a copy of Rubin's order. Each will have to decide whether to seek to share in the settlement or take a chance in the courts. All persons who may sue hereafter also may seek to share in the pooled fund.
Rubin is expected to hold a hearing on the fairness of the settlement. Some plaintiffs' lawyers will criticize it. One attorney, Barry J. Nace of Bethesda, mailed papers Friday in which he criticized the terms, the judge and the committee majority. But Rubin is expected to give final approval by mid-September.
Within 30 days of final approval, Merrell Dow would pay $40 million into a settlement fund. On each of the next two anniversary dates, it would pay $20 million more, with the balance following in smaller annual installments over the next 17 years.
Only two class-action settlements on record are larger. Last May, Dow Chemical Co., parent of Merrell Dow, and Monsanto Co. agreed to pay $180 million to at least 10,000 Vietnam veterans in the Agent Orange herbicide case. In May 1983, MGM agreed to pay $142 million to about 1,500 persons who were burned or injured in a fire in a Las Vegas hotel owned by the company.
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Merrell Dow counsel Frank Woodside III yesterday termed Rubin's order "reasonable," considering "the current climate of litigation." For the plaintiffs' committee, Allen T. Eaton of Washington, D.C., endorsed the settlement, stressing that each plaintiff can opt in or out of the arrangement.
Plaintiffs' lawyers have estimated that in the most serious cases -- those involving persons who must be cared for in institutions -- the top lifetime payment would range from $1.5 million to $2 million.
The agreement resulted from a June 18 order that Rubin designed to encourage a settlement and as a possible model for "prompt and equitable" resolution of unrelated product-liability lawsuits without trials.
"The Bendectin litigation is but one example of massive product-liability lawsuits involving large numbers of plaintiffs, protected trials and substantial litigation costs," the judge said in his June 18 order. "The traditional court system is simply unequipped to handle such litigation in a conventional manner without materially depleting the judicial resources available for all other litigation."
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The 678 plaintiffs say they took Bendectin in either a three- or two-ingredient formulation. They blame the drug for congenital deformities involving arms, hands, legs, feet, the heart, the head, and the gastrointestinal, musculo-skeletal and respiratory systems. A central problem in the litigation has been that such defects also occur in the embryos of women who have taken no drug.
Merrell Dow and its predecessor, which was owned by Richardson Merrell Inc., deny that Bendectin caused birth defects. Rubin's order says that "Merrell Dow denies any liability whatsoever in the Bendectin litigation."
The antihistamine in Bendectin was suspected as a possible cause of defects. Called doxylamine succinate, it is in many over-the-counter (OTC) cold, cough and sedative medications that carry labels warning against use during pregnancy.
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Bendectin -- called Debendox, Lenotan or Merbental in many countries in which it was often sold over the counter -- went on sale in 1956; an estimated 33 million women worldwide took or received it. Merrell Dow stopped making Bendectin in June 1983 for "compelling nonmedical reasons," particularly litigation costs.
The settlement fund will be managed by a board named by the court with input from Merrell Dow and the plaintiffs' counsel committee. The board will review claims, determine claimants' eligibility and the size of payments, and gather information on each claimant that Merrell Dow needs for "insurance purposes." How much of the $120 million is covered by insurance was not disclosed.
Of the 678 lawsuits, 381 federal cases were consolidated for trial in Rubin's court, 187 more cases are in federal courts elsewhere, 71 are in state courts and 39 parallel cases are in both federal and state courts. A full trial of 678 cases "might require 21,000 trial days or . . . one judge for 105 years or 105 judges for one year," Rubin said in his June 18 order.
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