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Attorney, Relatives Awarded Nearly $20 Million in Dispute Over Breast Implant Business
Daily Business Review
Jean-Claude Mas, a former traveling salesman and founder of a French company that made tens of thousands of bad breast implants, already faces trial in his native land.
Now he has a $19.8 million judgment from Miami-Dade Circuit Court to contend with. A jury awarded about $7.8 million in compensatory damages and interest, plus $12 million in punitive damages, to Steven Kwartin, a Hollywood, Fla., tax lawyer, and other members of his family.
A judge had already found Mas lied and schemed to take a Florida distribution company away from Kwartin, cheat him and his relatives of their investment, and cover Mas' own tracks, in part to avoid paying corporate and personal taxes in France and the U.S.
The 14-year litigation over Kwartin's employment contract imploded in July when Circuit Judge Gill S. Freeman struck Mas' pleadings, threatened him with a contempt finding and sent the case to trial on damages only. Circuit Judge John W. Thornton Jr. presided over the trial that ended January 29 with the verdicts.
Freeman wrote in her July 9 order, "Mas' perjuries, prevarications, multiple submissions of fraudulently contrived documents and obstructionist tactics ... evidence his contempt for the authority and dignity of this court and his ongoing disregard of the sanctity of the oath of a witness in proceedings before this court."
Mas and co-defendant Donald McGhan backdated documents to avoid an injunction Kwartin obtained to protect his employment contract, said plaintiffs attorney Arthur Tifford of Tifford and Tifford in Miami. McGhan, who worked in the Dow Corning lab that produced the first breast implant in 1963, is widely regarded as a pioneer in the field.
"They got caught, and then they lied and fabricated, and the more they tried the worse they made it for themselves," Tifford said.
He said Mas was represented by a series of counsel, most recently Fort Lauderdale attorney Christopher Leigh. He could not be reached for comment by deadline. McGhan is serving a 10-year prison term in Texas for wire fraud after diverting real estate investments into another implant business. Both men are in their 70s.
According to Freeman's order, a friend of Kwartin's was partners with Mas in P.I.P./USA, a Florida corporation set up to distribute saline-filled breast implants manufactured by Poly Implant Prostheses S.A., Mas' French company. In 1996, the Food and Drug Administration approved the implants for marketing and sale in the U.S., finding them similar to other products in the American market.
It was later revealed that Mas used industrial-grade silicone, instead of the more expensive surgical-grade product, and the implants had a tendency to break and leak silicone into the body. The company was closed by French authorities in 2010 and liquidated, but not before selling tens of thousands of implants in Brazil, Britain, France, Venezuela and other countries.
In 1997 Kwartin's friend, who was Mas' partner, approached Kwartin about investing in P.I.P./USA. Ultimately, he and several other family members invested. Then the friend sold his stake to Mas, who began running the American company. After a couple more management changes, Kwartin notified Mas in 1998 that he and his relatives wanted to end their investment and recoup their funds.
Mas met with the Kwartins and persuaded them to "leave their money in the company," Freeman's order states. He also persuaded Kwartin to accept the presidency of P.I.P./USA.
In 1999 Mas met McGhan at a plastic surgery convention in Dallas and "conceived a plan for McGhan to take over P.I.P./USA." Testimony in the case showed Mas wanted McGhan's involvement because he thought McGhan could overcome what had become a major regulatory stumbling block to U.S. sales.
The FDA decided to require a pre-market application from makers of saline-filled breast implants. The application had to be based on extensive testing and clinical studies, and fully carrying out those requirements would push back the application to 2001 or beyond.
Mas and McGhan hoped to cut corners by including clinical data from France. Mas believed McGhan could make that happen because of his perceived influence with the FDA.
On September 27, 1999, Kwartin was fired without cause as president and replaced. Later that year Kwartin filed his first lawsuit, and eventually four suits were consolidated in the court's complex business litigation division.
Mas tried to transfer control of the distributorship to McGhan. That's when the backdated documents were fraudulently submitted to the court, contravening an injunction Freeman had issued.
In January 2012 Mas was detained after a raid on his house in France. He was charged with multiple counts of involuntary injury and released in October pending trial later this year.
The next step is to attach Mas' assets to pay the $19.8 million award, Tifford said. "We will execute on the judgment wherever we find assets of the defendant." He's also going after McGhan's assets to pay the compensatory award. McGhan, who defaulted in 2007, is not liable for the punitive damages.
He said Mas tied up the Miami-Dade litigation from 2001 to the end of 2005 by filing a breach of contract suit against Kwartin in France. The case was dismissed, and the dismissal was upheld by France's highest court, which said any claim Mas had against Kwartin would have to be pursued in Miami as part of the ongoing litigation. A choice-of-forum clause in Kwartin's employment contract gave Florida courts jurisdiction over any disputes.
Mas' sole motive for filing his case in France was delay, Tifford said. "He could have filed counterclaims here, but he never did."