RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 10a0385p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
-
In re: SETTLEMENT FACILITY DOW CORNING
-
TRUST
____________________________________ -
-
Nos. 09-1827/1830
,
>
Interested Party-Appellant, -
DOW CORNING CORPORATION,
-
-
-
v.
-
-
Interested Party-Appellee. -
CLAIMANTS’ ADVISORY COMMITTEE,
-
N
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 00-00005—Denise Page Hood, District Judge.
Argued: June 10, 2010
Decided and Filed: December 17, 2010
Before: BATCHELDER, Chief Judge; SUTTON and KETHLEDGE, Circuit Judges.
_________________
COUNSEL
ARGUED: John Donley, KIRKLAND & ELLIS, LLP, Chicago, Illinois, for Appellant.
Jeffrey S. Trachtman, KRAMER LEVIN NAFTALIS & FRANKEL LLP, New York,
New York, for Appellee. ON BRIEF: John Donley, Douglas Geoffrey Smith, G. David
Mathues, KIRKLAND & ELLIS, LLP, Chicago, Illinois, Deborah E. Greenspan,
DICKSTEIN SHAPIRO LLP, Washington, D.C., for Appellant. Jeffrey S. Trachtman,
KRAMER, LEVIN, NAFTALIS & FRANKEL, LLP, New York, New York, Ernest H.
Hornsby, FARMER, PRICE, HORNSBY & WEATHERFORD, LLP, Dothan, Alabama,
Dianna Pendleton-Dominguez, LAW OFFICE OF DIANNA PENDLETON-
DOMINGUEZ, St. Marys, Ohio, for Appellee.
KETHLEDGE, J., delivered the opinion of the court, in which SUTTON, J.,
joined. BATCHELDER, C. J. (pp. 9-16), delivered a separate opinion concurring in part
and dissenting in part.
1
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 2
_________________
OPINION
_________________
KETHLEDGE, Circuit Judge. Normally our task in construing a contract or
similar document is to identify not merely a reasonable interpretation, but the best one.
In some cases, however, some other court or entity is better-positioned to determine what
interpretation is best. In those cases, we might ask whether that court’s interpretation
is reasonable, and if so leave matters there.
This is such a case. At issue in these now-consolidated appeals are two orders
interpreting different provisions of a single bankruptcy plan. The court that entered
those orders is more familiar with the plan and the circumstances surrounding it than we
are, so we ask primarily whether its interpretations of the two provisions are reasonable.
We conclude that its interpretation of one provision is reasonable, but that, for technical
grammatical reasons, its interpretation of the other provision is not.
I.
In 1995, Dow Corning had pending against it thousands of lawsuits relating to
breast implants it had manufactured. Dow Corning filed bankruptcy under Chapter 11
that year to facilitate settlement of those claims. We have already described those
bankruptcy proceedings in prior opinions. See, e.g., In re Dow Corning Corp., 456 F.3d
668 (6th Cir. 2006). Here, we describe only the facts relevant to these consolidated
appeals.
Dow Corning’s Amended Joint Plan of Reorganization (the Plan) took effect in
June 2004. The Plan establishes a $1.95 billion fund—administered by the Settlement
Facility-Dow Corning Trust—for claimants who choose to settle rather than litigate their
claims. Each of the orders before us today involves a Plan definition that affects
payments made pursuant to the Plan.
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 3
The first order concerns tissue expanders, which are devices implanted in the
body and then gradually filled with saline solution in the weeks that follow. Their
purpose is to expand the patient’s skin around the device; and upon accomplishing that
purpose, they are typically (if not always) removed. Dow Corning has manufactured
more than 250 kinds of tissue expanders, three of which are specifically designed to be
implanted in the breast. The question presented in the first appeal is whether those three
types of tissue expanders are “Breast Implants” as defined by the Plan. The district court
held they were, thereby opening the door to settlement payments based on a claimant’s
use of them.
The second order concerns the Plan’s definition of total disability, which is set
forth in a Plan document that the parties call Annex A. Claimants who meet the Plan’s
definition of total disability receive larger settlement payments than they otherwise
would under the Plan. Dow Corning and the Claimants’ Advisory Committee (the
Committee) disagree as to what this definition means: Dow Corning takes a narrower
view of the definition, the Committee a broader one. The district court held that the
broader view is the correct one.
Dow Corning appealed both orders.
II.
A.
The parties dispute the standard of review. At issue in each appeal is the district
court’s interpretation of a definition set forth in the Plan. We review for abuse of
discretion a bankruptcy court’s interpretation of a plan that the court had confirmed. See
Dow Corning, 456 F.3d at 676. But these appeals involve a decision by a district court,
not a bankruptcy one, so the Dow Corning standard does not apply by its terms here.
Dow Corning would take us to the other extreme: It argues that our review should be
de novo, citing our rule that, “[i]n a bankruptcy case on appeal from a district court, we
owe no special deference to the district court’s decision[.]” In re Eagle-Picher Indus.,
Inc., 447 F.3d 461, 463 (6th Cir. 2006). But that rule does not apply by its terms either,
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 4
because the district court here did not sit merely as an appellate court. It decided the
issues before us in the first instance.
So we look to the underpinnings for each standard. On the one hand, the district
court was not “interpret[ing] its own prior language or intent” when it interpreted the
Plan, Dow Corning, 456 F.3d at 677, so that particular rationale for deference is not
present here. But other rationales are. The district court judge who entered the orders
at issue—Judge Denise Page Hood—has presided over this bankruptcy case
continuously since 1995. She was present on the bench for two days of the Plan’s
confirmation hearings. And she has adjudicated the case directly since 2001, which is
when she withdrew the reference to the bankruptcy court. (The bankruptcy judge who
had entered the confirmation order departed the bench that year.) Thus, Judge Hood has
presided over this case for fifteen years, and acted as the court of first resort for nine.
There is simply no denying that she is much more familiar with this Plan—and with the
parties’ expectations regarding it—than we are.
So a measure of deference is in order. The question is how to characterize it.
The district court’s orders involve interpretation of the Plan; and “[i]n interpreting a
confirmed plan, courts use contract principles[.]” Id. at 676. Contractual interpretation
is not discretionary, so it is awkward to say that we review the court’s interpretation for
abuse of discretion. We need to convert the language of discretion to fit the task at hand.
A basic principle of contractual interpretation is that “[a] term is deemed
ambiguous when it is capable of more than one reasonable interpretation.” Id. (internal
quotation marks omitted). Our court is reasonably well-equipped to determine whether
a plan provision is ambiguous—we construe contracts all the time—though in this case
we should be mindful that our blind spots with respect to how one provision might
interrelate with others are likely much larger than are the district court’s. On the whole,
however, the determination whether a plan provision is ambiguous is not a point on
which we substantially defer.
That point arrives, instead, when we determine that a provision is ambiguous.
Then, under the law of virtually any jurisdiction, we open the cleanroom of textual
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 5
interpretation to whatever extrinsic evidence awaits outside. Here, each party has
amassed a formidable dump of such evidence; and each side argues, in great detail, that
its evidence shows that the other’s interpretation would confound everyone’s
expectations as to what the Plan was supposed to mean. This is where we start to defer
in earnest. The district court in this case, like the bankruptcy courts in others, is far-
better equipped, not least in terms of background knowledge, to sort through that
evidence and determine what is important.
Thus, to summarize: For purposes of plan interpretation, an ambiguous provision
can reasonably be read more than one way. To determine which of the reasonable
readings is best, the court normally may assess extrinsic evidence. That assessment is
best left to the district court here. Thus, if the court assessed extrinsic evidence in
choosing among reasonable interpretations of the Plan, we will not disturb its choice.
That is the deference we afford the district court in these consolidated appeals.
B.
The first order concerns the Plan’s definition of “Breast Implant.” Section 1.17
of the Plan provides:
Breast Implant means all silicone gel and saline-filled breast implants
with silicone elastomer envelopes manufactured and either sold or
otherwise distributed by the Debtor.
The issue before us is whether this definition encompasses tissue expanders that
Dow Corning designed and manufactured specifically for implantation in the breast. The
district court held, and Dow Corning does not dispute, that the three types of tissue
expanders at issue here had silicone elastomer envelopes and were saline-filled. The
only element of the definition that is disputed, therefore, is whether the subject
expanders were “breast implants” as that term is used in the definition.
A definition that contains the defined term within it is very likely to be
ambiguous. So it is here. The term “breast implant,” as used in the definition (of
“Breast Implant,” amazingly), can reasonably be read to refer to any device specifically
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 6
designed for implantation in the breast. That is how the district court read the term; and
that reading draws additional support from the definition’s use of the word “all[.]”
But there is another reading of the provision. Dow Corning essentially contends
that “breast implant” is a term of art, whose meaning was generally understood in the
medical community to include only devices designed for long-term
implantation—which, of course, tissue expanders are not. And Dow Corning argues that
“breast implant” should be given that technical meaning in § 1.17. But that argument
begs the question whether the words “breast implant” were used in a technical or more
ordinary sense in this provision. We see nothing in the definition’s text that answers that
question as a matter of logical necessity. And we are not at all convinced by Dow
Corning’s “structural” arguments concerning the “qualifying product identifiers” in
Annex A and the definition of “Other Products” in § 1.117 of the Plan. Each of those
arguments assumes that tissue expanders are not “Breast Implants”—which is to say the
arguments are entirely circular.
The choice between these different readings of § 1.17, therefore, lies with the
district court. Even so, we cannot now affirm the order before us in case 09-1827.
Although we hold that § 1.17 is ambiguous, the district court apparently thought it was
not. As a result, the court did not assess the parties’ extrinsic evidence with respect to
the provision. And thus we have no such assessment to which we can defer.
Had the district court been the court that entered the order confirming the Plan,
we would owe the court more deference than we owe it here, and would affirm the
court’s decision notwithstanding that omission. See Dow Corning, 456 F.3d at 677
(“disagree[ing] with the bankruptcy court’s conclusion that the plan was
unambiguous[,]” but holding that the bankruptcy court did not “incorrectly interpret[]
its own prior language or intent”). The court that enters an order has less need to
consider extrinsic evidence of the order’s meaning than a court that does not. But the
district court here did not enter the order confirming the Plan. We therefore vacate the
district court’s order with respect to tissue expanders and remand the case to allow it to
assess the relevant extrinsic evidence. Once it does so, we expect to defer to its decision.
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 7
C.
The second order concerns the Plan’s definition of total disability. The relevant
portion of Annex A provides:
Death or total disability resulting from the compensable condition. An
individual will be considered totally disabled if she demonstrates a
functional capacity adequate to consistently perform none or only few of
the usual duties or activities of vocation or self-care.
The parties dispute the showing necessary to meet this definition. Dow Corning
says the claimant must be disabled in both categories—vocation and self-care. The
Committee says that a claimant need be disabled in only one. Thus, in the Committee’s
view, a claimant’s inability to do more than a few activities in only one of the
categories—vocation or self-care—is enough to meet the definition of total disability,
even if she can do many activities in the other.
The district court’s reasoning with respect to this provision was straightforward.
Simply put, the court held that the word “or,” as used in “vocation or self-care,” was
disjunctive, and that a showing of disability in either category was therefore enough to
meet the definition. In doing so, the court deemed the provision “unambiguous” and
“look[ed] solely to the plain language used by the parties within the four corners of the
contract.” Order at 11, 10.
With respect, we read the provision differently. The word “or” is normally
conjunctive when introduced by “none” or “not.” See, e.g., Huddleston & Pullum,
Cambridge Grammar of the English Language 1298 (“When a subclausal or-
coordination falls within the scope of a negative, it is equivalent to an and-coordination
of negative clauses”). To say that “none of the teachers or students will be at the school
on July 4,” for example, does not mean that only one of those groups will be absent that
day. It means that both groups will be. So it is here: to say that a claimant can perform
none (or only a few) of the activities of vocation or self-care, means that she is disabled
from performing both types of activities. (In the district court’s defense: to say that this
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 8
provision is ultimately unambiguous, as we do here, is not to say that it is well-drafted.)
Dow Corning’s reading of this provision is correct.
* * *
We vacate the order in case 09-1827, reverse the order in case 09-1830, and
remand the cases for proceedings consistent with this opinion.
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 9
___________________________________________________
CONCURRING IN PART AND DISSENTING IN PART
___________________________________________________
ALICE M. BATCHELDER, Chief Judge, concurring in part and dissenting in
part. I concur with the majority opinion’s conclusion that the Plan definition of “total
disability” requires a showing of disability in both vocational and self-care activities.
In my opinion, that conclusion is required by the rules of English grammar, as
recognized by the majority opinion, and by simple common sense. I write separately
because I believe the majority opinion’s discussion confuses, rather than clarifies, the
standard of review in cases such as these. I must also dissent from the majority
opinion’s holding that the Plan definition of “Breast Implants” is ambiguous and its
conclusion that the definition is even susceptible to the district court’s interpretation.
A. Standard of Review
The majority opinion searches for a new way to describe the standard of review
in cases such as this. Our prior case law establishing the standard of review is not a
model of clarity, but the majority opinion’s efforts to “convert the language of discretion
to fit the task at hand,” Maj. Op. at 4, serves only to further muddy the waters. In my
opinion, we should avoid crafting new standards of review when existing standards can
be clarified.1 Therefore, we should simply restate what was once plain—a district
court’s legal conclusions are reviewed de novo, and its factual findings are reviewed for
an abuse of discretion. Cf. In re Terex Corp., 984 F.2d 170, 172 (6th Cir. 1993) (holding
that a bankruptcy court’s legal conclusions regarding the Bankruptcy Code were subject
to de novo review, but that interpretation of the terms of a bankruptcy plan were
reviewed under an abuse of discretion standard).
1
The majority opinion leaves open the question of whether it is discarding all old standards of
review or whether it is crafting a new standard only for situations like the one before us. Unfortunately,
the majority opinion also fails to elaborate on precisely what is unique about the “task at hand.” Maj. Op.
at 4. The inevitable result of this type of vagueness is a flood of new litigation, with litigants attempting
to define the boundaries of the majority opinion’s new standard.
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 10
We apply contract principles when we interpret a confirmed bankruptcy plan,
“since the plan is effectively a new contract between the debtor and its creditors.” In re
Dow Corning Corp., 456 F.3d 668, 675 (6th Cir. 2006). “State law governs those
interpretations, and under long-settled contract law principles, if a plan term is
unambiguous, it is to be enforced as written.”2 Id. A district court faced with the task
of interpreting a confirmed bankruptcy plan, therefore, must engage in a two-step
process. First, the district court must determine whether the plan’s terms are ambiguous,
a purely legal question under the state law of most states. If the district court finds the
plan to be unambiguous, state contract law will typically require the district court to
enforce the plan as written, without reference to extrinsic evidence. If, however, the
district court finds the plan to be ambiguous, defined as being “capable of more than one
reasonable interpretation,” id., then the meaning of the plan must be determined, a
process which, in most states, requires consideration of the intent of the parties. In the
first step, then, the district court engages in a purely legal inquiry, and begins its factual
inquiry only in the event that it reaches the second step.
The majority opinion does not completely abandon de novo review of the district
court’s legal conclusions in the first step, but the language it uses casts unnecessary
doubt on the ability of this court to correctly resolve questions of law which are not
dependent upon the facts of the case. Maj. Op. at 4 (“Our court is reasonably well-
equipped to determine whether a plan provision is ambiguous . . . though . . . we should
be mindful that our blind spots . . . are likely much larger than are the district court’s. . . .
whether a plan provision is ambiguous is not a point on which we substantially defer.”)
(emphasis added). In my opinion, this type of equivocation is unnecessary and
inappropriate. Instead, we should strongly affirm that we will review any legal
conclusions de novo, as we have always done, without deference to the district court.
Application of our previous standard of review to the second step seems equally
uncontroversial. It is true that the district court, in cases where the meaning of the plan
2
Notably, the majority opinion fails even to discuss the applicable state contract law. As I
explain, infra, application of state contract law would preclude the majority opinion’s conclusion that the
Plan definition of “Breast Implant” is ambiguous.
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 11
is ambiguous, will often be presented with mountains of extrinsic evidence. It is within
the discretion of the district court to determine what evidence it will rely upon, and that
choice by the district court will determine its ultimate conclusion as to the interpretation.
When the case comes before us on appeal, we must determine whether the district court
abused its discretion in arriving at its decision. In essence, we must affirm the district
court unless we decide that the district court was unreasonable in its reliance on the
evidence expressly or impliedly described in its opinion, or unless we decide that the
district court was unreasonable in its rejection of other evidence that runs counter to its
opinion.
The majority opinion paints this task as especially difficult and treacherous, in
part due to the large quantity of extrinsic evidence. I disagree. Federal appellate judges
are routinely called upon to review decisions of the district courts in cases where the
record is extensive and complex–for example, petitions for writs of habeas corpus.
Having sat as a bankruptcy judge, I am aware that bankruptcy cases can be complex, but
not so much more so as to justify shirking our responsibility to provide the type of
appellate review that we are responsible for under the Constitution and laws of the
United States. Moreover, the majority opinion seems to ignore the reality that the
district court’s opinion, supplemented by the briefs filed by the parties, significantly
narrows the range of issues that we must consider.
In short, I simply cannot join the majority opinion in setting forth a new standard
of review which, I believe, will only serve to further confuse an area of law already beset
with significant confusion. Instead, I would reiterate and apply our existing standard of
review.
B. The Plan’s Definition of “Breast Implant”
Because state law governs our interpretation of a confirmed bankruptcy plan, In
re Dow Corning Corp., 456 F.3d at 676, our first task must be to identify the applicable
state law. Surprisingly, the majority opinion neither identifies the applicable state
law–Section 6.13 of the Plan states that New York law governs interpretation of Plan
provisions–nor does the majority opinion discuss how the application of New York law
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 12
governs the conclusion reached. My review of New York law, as it applies to this case,
leads me to conclude that application of New York law requires a conclusion opposite
to that reached by the majority opinion. Applying New York law, I conclude that the
Plan definition of “Breast Implant” is not ambiguous and that, as a matter of law, the
Plan does not cover tissue expanders.
1. Is the Plan Language Ambiguous?
Under New York law, as in most states, whether a contract term is ambiguous
is a question of law. Tenorio v. Tenorio, 894 N.Y.S.2d 143, 144 (N.Y. App. Div. 2010).
A term is deemed ambiguous when it is capable of more than one reasonable
interpretation. Discovision Assocs. v. Fuji Photo Film Co., Ltd., 898 N.Y.S.2d 11 (N.Y.
App. Div. 2010) (quoting Evans v. Famous Music Corp., 1 N.Y.3d 452, 458 (2004).
When a term becomes, within a certain industry, a term of art, courts are to apply the
technical meaning of the term instead of any other “plain meaning” in general society.
See Madison Avenue Leasehold, LLC v. Madison Bentley Assocs. LLC, 811 N.Y.S.2d 47,
52 (N.Y. App. Div. 2006); Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792,
798 (6th Cir. 2005).
The majority opinion recognizes Dow Corning’s argument that the term “breast
implant” is a term of art, Maj. Op. at 6, but then dismisses that argument by concluding
that the Plan is ambiguous as to whether the term was used “in a technical or more
ordinary sense” in the Plan, id. I believe the majority opinion’s dismissal of Dow
Corning’s argument is both legally and factually flawed. Legally, the New York courts
have already rejected the majority opinion’s perceived conflict, holding that a term of
art automatically trumps any “ordinary meaning.” Madison Avenue Leasehold, LLC,
811 N.Y.S.2d at 52. If, as Dow Corning claims, the term “breast implant” is a term of
art, then we are bound to apply that term of art in our interpretation of the Plan.
Dow Corning’s argument is supported by the undisputed evidence that the
medical community and the FDA both considered tissue expanders to be an entirely
separate product from breast implants. The doctors who perform procedures using these
products know what a breast implant is and know that a tissue expander is not a breast
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 13
implant. Likewise, “breast implant” means something very specific to the FDA, which
has the authority to regulate all medical devices and has chosen to regulate breast
implants but not tissue expanders. Appellee also argues that it should not be required
to accept the term of art because the members of the Claimants’ Advisory Committee are
not in the medical device community, and wouldn’t have understood the specific
meaning of the term. In making this argument, however, Appellee fails to mention that
each claimant was represented by counsel, and their counsel cannot be so easily
classified as ignorant of the legal ramifications of the document they ratified.
Appellee’s argument also ties into the factual flaw in the majority opinion’s
dismissal of Dow Corning’s term-of-art argument. Specifically, the district court,
Appellee, and now the majority opinion all struggle to contrive a conflict between
technical meaning and “ordinary” meaning when, in my opinion, no such conflict exists.
It is unreasonable to suppose, as the majority opinion does, that any reasonable lay
person would consider tissue expanders to be “breast implants”; the term “breast
implants” has not only achieved term-of-art status among the medical community, but
also among the public at large. I have no doubt that if one hundred average Americans
were approached on the street and asked to define a breast implant, none would describe
a tissue expander. If a tissue expander were then described to them, and they were asked
if a tissue expander was a breast implant, the vast majority would say no. Only lawyers
and others who favor hyper-technical definitions might be inclined to include tissue
expanders in the definition of breast implants, and I am convinced they would only do
so after a significant amount of consideration and parsing of the terms.
Common sense and New York law compel the conclusion that the term “breast
implant” unambiguously excludes tissue expanders, as a matter of law, and I would
reverse the district court’s determination to the contrary. Because the majority opinion
fails to consider New York law and, consequently, arrives at the opposite conclusion, I
respectfully dissent.
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 14
2. Extrinsic Evidence
The question of ambiguity is a question of law, and therefore does not allow for
consideration of the intent of the parties. And, as explained supra, there is no ambiguity
in the terms of the Plan. However, even if there were ambiguity, I believe that the
extrinsic evidence in this case clearly favors Dow Corning’s interpretation of the Plan.
Having conducted my own review of the record in this case, I would find that it is
unreasonable to conclude that the Plan definition of “Breast Implants” includes tissue
expanders, and I would not defer to the district court if it arrived at a contrary
conclusion.
Under New York contract law, a contract “must be read as a whole to determine
the parties’ purpose and intent, giving a practical interpretation to the language
employed so that the parties’ reasonable expectations are realized.” Krape v. PDK Labs,
Inc., 826 N.Y.S.2d 340, 342 (N.Y. App. Div. 2006) (internal quotation marks and
citations omitted). Moreover, “[a]lthough the words in a contract might seem to admit
of a larger sense, yet they should be restrained to the particular occasion and to the
particular object which the parties had in view.” Id. at 342-43 (internal quotation marks,
citations, and brackets omitted).
The bankruptcy of Dow and other manufacturers of breast implants arose directly
from the alleged dangers of breast implants, and the relevant portions of the Plan were
to assure that those who allegedly had been injured by Dow Corning breast implants
were able to receive compensation without incurring legal costs. The undisputed
evidence shows that the portion of product liability claims contemporary to the
bankruptcy that arose from the use of tissue expanders was very low.
During the bankruptcy proceedings, Dr. Dunbar, the expert who had been asked
to calculate the approximate amount of money needed in the compensation fund,
expressly excluded all then-existing and predicted lawsuits based on tissue expanders,
and there is no evidence that any party ever objected to his analysis excluding those
lawsuits. Appellee argues that Dr. Dunbar was hired by Dow Corning, so his opinions
cannot be attributed to any claimant, but Dow Corning correctly responds that
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 15
Dr. Dunbar was officially designated in the record as preparing his testimony on behalf
of the Plan “Proponents,” which included both Dow Corning and the Tort Claimants
Committee. See In re Dow Corning Corp., 237 B.R. 364, 369 n.4 (Bankr. E.D. Mich.
1999).
In a somewhat misguided attempt to provide support for its arguments, Appellee
provides numerous examples of the express inclusion of tissue expanders in the
bankruptcy plans of other breast implant manufacturers. Other manufacturers’ plans
expressly list tissue expanders as compensable products or in the definition of breast
implants. One example of the latter defines “Breast Implant” as “any breast implant
device . . . including devices designed for temporary implantation in the breast (i.e.
tissue expanders).” Appellee also provides a Notice associated with another
manufacturer’s bankruptcy that expressly includes tissue expanders. All of these
examples, though provided by Appellee, are strong evidence that tissue expanders were
not intended to be included in the Plan definition; the fact that other manufacturers’
tissue expanders were repeatedly and expressly listed indicates that all relevant parties
understood that the two products were different, and knew how to write an inclusive
definition.
Appellee argues that claimants were assured that the procedures in place prior
to the approval of the plans would be continued after the approval of the plan. “It is
expressly intended that the Settling Breast Implant Claims shall be processed in
substantially the same manner in which claims filed in the MDL-926 Claims Office
under the Revised Settlement Program were processed.” Plan § 4.03. The language
makes clear, however, that the guarantee is a procedural guarantee, not a substantive
one; even if the previous review of claims allowed compensation for claims based on the
use of tissue expanders (and the evidence supporting this claim is sketchy, at best), there
was no substantive guarantee going forward, only a guarantee that the procedures would
not change.
Finally, Appellee argues that the Plan was intended to resolve all pending claims
against Dow Corning, including those based on tissue expanders. That conclusion is not
Nos. 09-1827/1830 In re Settlement Facility Dow Corning Trust Page 16
clear from the record, but even assuming arguendo that it is a correct characterization,
it presumes too much. Specifically, even if all claims were to be resolved, nothing
requires that all claims be resolved in precisely the same manner, or even that all claims
would be compensated from the Plan’s compensation funds. In fact, the Plan
specifically categorizes Dow Corning products into “Breast Implants,” “Other Covered
Products,” and “Other Products.” This classification system indicates that even if the
purpose of the Plan was to resolve all claims, there was no intention of uniformity in how
those claims were to be resolved. Both sides agree that tissue expanders are not included
in the list of Other Covered Products. The third category, Other Products, includes a list
of products, but also states that the list is not exclusive or comprehensive. As the only
category that includes such broad, inclusive language, Other Products includes any term
that does not fit well within the other classifications. Because, as described above, tissue
expanders are not Breast Implants, they must be considered to be an Other Product.
The record in this case is long, but it is not overly complicated, and it simply
does not support Appellee’s preferred interpretation. Because the majority opinion
clearly believes that it would be reasonable for the district court to find otherwise, and
has come precariously close to directing it to do so, I must respectfully dissent.