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NEW YORK –After seven years of pretrial litigation, millions of pages of discovery and hundreds of depositions, attorneys William DeProspo and Steven Phillips are now about to get their day in court in front of a jury. Their fight with International Business Machines Corp. (IBM) over chemicals in its plants began in May 1995, when Keith Barrack walked into DeProspo’s new law office in Goshen, N.Y., and said that he had been diagnosed with testicular cancer. Barrack suspected there was a connection between his cancer and his years of working in a “clean room” at IBM’s semiconductor chip manufacturing plant in East Fishkill, N.Y., because toxic chemicals were used in the manufacturing process. Barrack’s story prompted an investigation by DeProspo and, ultimately, scores of lawsuits against IBM and companies that allegedly manufactured the chemicals used in the clean rooms at IBM plants in East Fishkill; Burlington, Vt.; Rochester, Minn. and San Jose. Approximately 200 suits have been brought against IBM, the chemical companies, or both by former IBM employees or their survivors. The suits claim that exposure to chemicals used in IBM clean rooms between 1964 and 1996 caused the workers’ cancer. Another 50 or so cases were brought by children of ex-IBM employees who claim they were born with birth defects caused by the exposure of one or both parents. While DeProspo and Phillips represent plaintiffs in both kinds of cases, they now are focused on those involving birth defects. On Jan. 16, Judge Joan Lefkowitz of New York State Supreme Court, a trial court, ruled that the negligence and fraud case brought on behalf of Candace Curtis, the child of an ex-IBM employee, will go to trial on March 2 in White Plains, N.Y. It will be the second case against IBM to be tried, but the first involving a birth defect. (One birth defect case was settled confidentially in 2001.) In the first trial, now ongoing in state court in San Jose, two ex-IBM employees claim that IBM knowingly exposed them to toxic chemicals and that the exposure caused their cancer. It’s the birth defect cases that DeProspo, Phillips and lawyers not involved in the litigation say have the greatest potential for huge damages awards. That’s “in part because there are natural sympathies for a child,” said Cliff Zatz, a partner in Akin Gump Strauss Hauer & Feld’s Washington office who specializes in defending toxic tort claims and is not involved in the IBM case. For compensatory damages alone, IBM could face a judgment for a lifetime of lost earnings and pain and suffering, he said. A plaintiff’s story Curtis, 23, was born with microcephaly, a deformed skull that caused brain damage. She is retarded, Phillips said, and has skeletal deformities, including a lack of knee caps, and a seizure disorder. Needing special care, she alternates living with her mother and father, who are divorced. The plaintiff’s lawyers will try to convince a jury that her deformities came about because her mother, Heather Curtis, was exposed to toxic chemicals at IBM’s East Fishkill plant in 1980. When she was hired, Heather Curtis told an IBM nurse she thought she might be pregnant. Yet she was assigned to work first in a clean room, then a room next door where she was still exposed to dangerous chemicals, according to plaintiff’s court papers. The clean room got its name because of a process designed to keep the semiconductor chips, wafers and boards dust-free during their manufacture and assembly for use in computers. A single particle settling on a component during manufacture can make it defective. Workers wear polyester protective suits head to toe, and hats, gloves and booties so that hair and lint do not contaminate the product. More than 300 chemicals, some of them toxic, are used in the manufacturing process. For example, early in the process, the chip is coated with a highly toxic chemical, and later, after the circuitry imprint has been made on the chip, semiconducting metals, including lead and chrome, also toxic, are poured into the chip to create the circuitry. Phillips, of New York’s Levy Phillips & Konigsberg, was brought into the case by DeProspo, of Goshen’s DeProspo Petrizzo & Longo, to head the litigation in New York because of his success in representing plaintiffs in asbestos, Dalkon Shield and lead-paint litigation, among others. Up to $200 million? Because punitive damages could be awarded, Phillips said, he believes juries in the Curtis case and the other 35 or so that involve severe birth defects could return verdicts of as much as $200 million. He estimates compensatory damages at $50 million, including as much as $10 million for medical bills for life, several million for as much as four decades of lost earnings, since Candace Curtis will never be able to work, and the rest for pain and suffering. He said $150 million for punitive damages is justified and is constitutional under the 2003 U.S. Supreme Court requirement of a rational relationship between compensatory and punitive damages. ( State Farm Mut. Auto Ins. Co. v. Campbell, 123 S. Ct. 1513.) “She is a conscious woman with an IQ of 56. She has a tracheotomy and she is grotesque and she knows it,” Phillips said of Candace Curtis. “And she walks like Frankenstein and she can’t have a sex life. What will a jury award her for living 72 years like that?” “He’s actually told me that figure,” said Robert Weber of Jones Day, one of IBM’s two chief outside counsel on the litigation, referring to $200 million. “I worry sometimes for Steve’s own sake that Steve might believe that. No way you can look at actual verdicts in New York and say it is in the order of magnitude of what a jury would award and what a judge would uphold.” Weber, along with co-counsel and partner Mary Ellen Powers, is now defending IBM in the San Jose case. On the potential damages, Weber may have a point. According to VerdictSearch, an affiliate of The Recorder, there has not been a jury verdict in New York state in at least two years of $200 million or more. The two highest since January 2002 were $132 million each, both business disputes. Two other verdicts reached $100 million: $112 million in a medical malpractice case and $100 million for a wrongful death. In its 2003 Form 10-K filing with the U.S. Securities and Exchange Commission, IBM said that it did not believe the litigation would have a material impact on its bottom line. However, Devin Crago, a stock analyst with New York-based Innovest Strategic Value Advisors, said his company has informed its clients, large institutional investors, that the litigation as a whole could have a negative impact on IBM’s finances. “It’s certainly something we’ve put a red flag on for our clients,” he said. IBM refused to comment on its liability insurance coverage. David Gross, who defends large companies in toxic tort cases as a partner at Newark, N.J.’s Saiber Schlessinger Satz & Goldstein, said that although he had no knowledge of IBM’s insurance, large companies generally have comprehensive general liability policies covering compensatory damages, but usually not punitives. Causation Monetary damages, of course, will be beside the point unless a jury first decides Curtis’ birth defects were caused by her mother’s exposure at IBM and that IBM should be liable for it. The plaintiff’s side said doctors will testify that the mother’s exposure to toxic chemicals caused the problems. Weber and Powers maintain there is no scientific evidence that the chemicals caused any of the birth defects. They said that Curtis’ conditions are genetic, not environmental, noting that her mother began work at IBM five to six months after she became pregnant. A focal point of the trial will be a Johns Hopkins University study commissioned by IBM and completed in 1993. It investigated the possibility of a link between reproductive problems and working in the East Fishkill and Burlington clean rooms. “The study looked at birth defects at both plants” and found “no evidence of an unusual pattern or incidence of birth defects,” Powers said. According to the studies’ executive summary and conclusions, however, “Numbers were too small to examine effects on birth defects.” The highly technical, 392-page study did report that the rate of miscarriages for women working in the clean rooms was 16.7 percent per 100 pregnancies, not a statistically significant higher rate than for women working in nonclean-room areas. Phillips said the study is one of the plaintiff’s smoking guns. Not only did it show that women who worked in the clean rooms and were exposed to such chemicals as ethylene glycol ethers suffer more miscarriages and have greater infertility, he said that the Hopkins study allows his experts to make even more important conclusions. Extrapolating from the number of live births examined in the study from 1980 to 1989, Phillips said, his medical and science experts were able to conclude that IBM’s clean room workers had 1,500 live births from 1980 to 1999. His legal team discovered that Candace Curtis was one of at least nine children who suffered “central nervous system anomalies,” Phillips said. His experts concluded that such birth defects occurred at more than 12 times the expected rate, he said. Powers called the plaintiff side’s calculation inaccurate and said it isn’t known how many births occurred during the period in question. “They are making those numbers up out of thin air,” she said. In a big victory for the plaintiff, a ruling in September by the New York Supreme Court’s Appellate Division gave the plaintiff side the right to try to prove fraud. If it succeeds, the jury can consider punitive damages. “[A] surviving child injured in utero as the result of a fraudulent statement relied upon by his or her mother does, in fact, possess a valid fraud case of action,” the court ruled. Among other things, the plaintiff’s lawyers will argue that IBM failed to remove Heather Curtis immediately from a dangerous work environment once the company learned she was pregnant. Instead, supervisors moved her to the tool cleaning area, where she was still exposed to hazardous substances, they said. ‘Unfounded assurance’ “IBM’s physician . . . failed to properly counsel Heather Curtis, and instead gave her inaccurate, misleading and altogether unfounded assurance that her work . . .posed no health threat to her and her unborn fetus,” a plaintiff’s document states. That allegation is a key element of Curtis’ fraud claim, Phillips said. IBM denies that it misled Heather Curtis “in any respect regarding either her or her unborn child’s safety,” said Jones Day partner Tom Sear, in an e-mail response. IBM has appealed the fraud ruling to the New York Court of Appeals, the state’s highest court. But the trial is scheduled to go forward before the appellate court will hear the oral arguments. Although both sides acknowledge a settlement is always possible, Weber said he expects the birth defect cases to go to trial. He said he is confident that IBM acted properly and responsibly. “IBM had clear and knowledgeable respect for these chemicals and designed its workplace so that they could be used safely,” Weber said. DeProspo said that with so many other cases pending, IBM is taking a huge risk by going to trial. “But if that’s the business decision it takes, so be it,” he said. Peter Aronson is a reporter for The National Law Journal , a Recorder affiliate based in New York City.

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