ROBINS PRESIDENT E. CLAIBORNE ROBINS' DALKON SHIELD REMARKS EXCERPTED FROM PRESENTATION TO SHAREHOLDERS APRIL 24
I believe this meeting is an appropriate forum to respond to a poisonous attack made upon this company, its people and its products by Miles Lord, a Federal Judge in Minneapolis. Let me reconstruct to you what happened to us at his hand. Judge Lord came to my attention in January when I was informed that several Dalkon Shield cases would be tried in his court. At that time, I was furnished a copy of a speech entitled "The Church's Claim on the Corporate Conscience: Toward a Redefinition of Sin," which he delivered to the Minnesota Council of Churches in 1981. In that speech the judge attacked American corporations generally, going so far as to compare them unfavorably with Adolf Hitler. Here is part of what he said: Even Hitler, when he was butchering people, articulated a reason to his madness. We don't even do that. We go along and make those sacrifices in easy stages. We poison them in the womb and in the milk of their mothers' breasts and the air that they breaths, the water that they drink, the food they eat. Judge Lord asserted that corporations are extremely dangerous because they are actual or potential criminal conspiracies. He expressed a belief that corporate employees believe a criminal ethic is necessary to corporate functioning and charged that American corporate employees subscribe to the Mafia's code of silence. He also expressed the view that corporations are principally responsible for the ills of society, stating: Now is that a very good system to turn loose to controlthe long-term destiny of mankind? Having selfishness and greed control our environment, control our work places, decide that which we are going to breathe, what we are going to eat, what we are going to drink, whether or not we go to war? You read horror stories daily about the unfit and unsafe food, drugs, air and water to which we are exposed. Who is doing these things and why are they being done? By and large, it is corporate activity. You can imagine the concern we felt about the possibility of having to be tried before this man. Our concern was heightened when we learned that Judge Lord had been admonished by the Eighth Circuit Court of Appeals concerning his appearance of bias and lack of proper judicial bearing in a case involving corporate defendants. Indeed, in another case, Judge Lord's bias against a corporate defendant caused the Appeals Court to remove him from the case. The Appeals Court's removal order included the following observation: Judge Lord seems to have shed the robe of the judge and to have assumed the mantle of the advocate. The Court thus becomes lawyer, witness and judge in the same proceeding and abandons the greatest virtue of a fair and conscientious judge -- impartiality. Any hope that Judge Lord might have changed his manner of dealing with corporate defendants was erased in late January, when in a highly unusual step, he visited our headquarters here in Richmond during the taking of videotape depositions of several officers of our company. Shockingly, Judge Lord participated not as an impartial arbiter, but as an aggressive advocate for the plaintiffs. The hostile grilling over many days by two attorneys for the plaintiffs, together with Judge Lord, was especially hard on two retired Robins employees who had suffered prior heart attacks. I remain angered over the manner in which both men were abused and their lives imperilled. Even more astounding were Judge Lord's comments upon his return to Minneapolis. His mind-set was revealed by what he said about the depositions. He actually said -- and it was reported in the press -- that Robins engaged in electronic surveillance of the plaintiffs' lawyers attending the depositions. Now please bear with me because I do want to attempt to answer Judge Lord, regardless of how absurd his charges. I don't know whether you've ever seen a videotape deposition but I can tell you that they are arranged like a television studio with cameras and microphones. Well, in Judge Lord's deeply suspicious mind, the fact that the plaintiffs' lawyers were heard through the microphones was translated into eavesdropping. I wish you could see the videotape depositions showing Judge Lord at work. He even seemed to be worried that the hearing aid of one of our witnesses was a clandestine listening device. With so much of this madness taking place, I was pleased when an agreement was reached to settle the remaining cases in Judge Lord's court. But in another highly unusual action, the judge directed that William Forrest, Jr., our general counsel, Dr. Carl Lunsford, who now heads our research and development program but did not during the years we marketed the Dalkon Shield, and I appear before him in Minneapolis. We were told he would not permit the settlement agreement to go forward and the cases to end until we appeared. So the three of us went to Minneapolis on February 29. In his courtroom Judge Lord directed us to read his speech on "Corporate Sin" to which I referred earlier. He then delivered a prepared speech extremely critical of the Robins company, of those of us attending on behalf of the company, of its attorneys and of the Dalkon Shield. Judge Lord admitted that he had been engaged in the preparation of this scathing condemnation for "weeks" or "months," which clearly indicates that his intention to publicly castigate Robins was conceived at the very early stage of his assignment to the cases. His highly colored language obviously was intended to attract the attention of the media and did so, resulting in another round of adverse publicity for the company. During the course of his remarks, Judge Lord made many allegations. He assumed the Dalkon Shield to be dangerously defective and the cause of thousands of cases of pelvic infection. He assumed that the company has done nothing to notify the medical profession and the public about the Dalkon Shield and citicized the company for not ordering a recall. He accused the company and its counsel of harassing plaintiffs through inquiries into their sexual practices. He accused the company of clogging court calendars and consuming vast amounts of judicial and jury time by employing tactics designed to delay the disposition of cases. He charges that we force women of little means to "withstand the onslaught of your well-financed nationwide team of attorneys and to default if they cannot keep pace." He stated that there was no evidence to show that our company has suffered any penalty whatever from the litigation. And departing from his prepared remarks, he charged that the company has withheld the most relevant documents from multidistrict discovery. It is difficult to convince the public that these charges did not come as a result of a trial. People are shocked when they learn that Judge Lord spoke not at the conclusion of a trial, but during the course of a settlement between Robins and several plaintiffs and before Robins had the opportunity to present any evidence in its defense. In other words, guilty until proven innocent! I submit that Judge Lord has no basis for his remarks. He formed the opinion that the Dalkon Shield is dangerously defective without hearing a word of expert medical testimony. Robins' position is that the greater weight of the medical evidence shows that the infection rate associated with the Dalkon Shield is not statistically different from infection associated with other IUDs. There is substantial medical doubt that any IUD causes pelvic infection. Even if causation is made out, there is a general medical consensus that in the proper patient the benefits of a properly used IUD outweigh its risks. It is safer to wear an IUD than to become pregnant. But Judge Lord never heard Robins' case; he didn't want to hear it. Judge Lord's accusation that the company has done nothing to notify the medical profession and the public about the Dalkon Shield is contrary to the record. From infection warnings on the product labeling, through a 1973 letter to the Food and Drug Administration, a 1974 letter mailed to thousands of physicians, hospitals and birth control organizations setting forth precautionary steps to be followed in the management of women using the Dalkon Shield, the suspension of sales that same year, the 1975 retrieval of unused devices, numerous news releases and responses to news media inquiries, and another special letter to thousands of physicians, hospitals and birth control organizations in 1980 recommending removal, Robins has taken actions and issued warnings to the degree and with the intensity warranted by the medical evidence. Recognition of our proper course of conduct in this regard was provided early on when the Food and Drug Administration, in a 1974 response to an erroneous article by a natl. publication, said "the A.H. Robins Company has acted responsibly in reporting patient complications from the Dalkon Shield to both physicians and the FDA." But Judge Lord chose to overlook all of this. In charging that Robins takes discovery of alternative causes of infection for the purpose of harassing plaintiffs, Judge Lord in effect said the company has no right to determine whether or not, in fact, its product was at fault. Even doctors testifying for plaintiffs in Dalkon Shield cases acknowledge that most pelvic infections are caused by sexually transmitted organisms, whether or not a woman is wearing an intrauterine device. As a result, neither plaintiffs' nor Robins' experts can give an opinion about causation unless they have adequate information about the possibilities of exposure to such organisms. To appropriately defend itself against assertions of infections, Robins must be permitted to inquire into alternative causes. Judges throughout the country have repeatedly recognized the propriety of such inquiries. Judge Lord's allegation that Robins employs tactics designed to delay disposition of cases and thereby burdens the courts doesn't hold water, either. We have always endeavored to settle cases in an expeditious manner and have sent our lawyers into the courtroom only on those few occasions when a reasonable settlement could not be reached. Consequently, only 36 Dalkon Shield cases have been tried to a conclusion over the past 10 years and, I might point out, Robins has prevailed in 19 of these. During 1983, the company settled 1,400 cases and claims, and has settled an additional 400 cases and claims during the first three months of 1984, bringing the total to 6,900. This certainly is not indicative of foot-dragging by Robins. Judge Lord's suggestion that some women lack the means to bring suit is ridiculous. The judge cannot be blind to the fact that plaintiffs' lawyers have unabashedly advertised for Dalkon Shield clients throughout the county. He must show that these advertisements usually state that bringing a suit against Robins will not involve any legal fees unless the plaintiff wins. Judge Lord knows, or should know, that law firms regularly advance expenses of litigation in hopes of recovering their usual percentage of any award or settlement. Their percentage is usually between 33 and 40 percent. It is our experience that any woman wanting to bring suit today can find a law firm ready and willing to undertake that effort. To Judge Lord's charge that Robins has not suffered any penalty from the litigation, I would point out that the cases and claims which have been disposed of thus far have cost the company and its insurer $195 million. Judge Lord made critical reference to our 1983 earnings, but failed to note that our Dalkon Shield expenses last year amounted to $18.7 million and reduced our net earnings by $9.7 million, or 40 cents per share. I submit that this is a heavy penalty. Again, Judge Lord sees what he wants to see and ignores what he wants to ignore. And the judge's extemporaneous assertion that the company has withheld relevant documents was not based upon any facts. Rather, it apparently was a garbled or misunderstood allusion to the fact that not all documents in our Richmond document depository are in a Wichita, Kansas depository because of an election by plaintiffs' lead counsel. Without basis, Judge Lord was critical of Robins' lead counsel in Richmond. But he remained silent regarding those opposing us in a legal industry spawned by Dalkon Shield litigation. I would recommend to Judge Lord, and to you the reading of the article entitled "The Big Law Business" in the April 16, 1984 issue of Newsweek. For all those such as Judge Lord who presume that corporations are bad and the legal system is the cure, I cite the Washington lawyer who was quoted as saying "the preoccupation of our occupation has become business development." Newsweek reported that law firms now have marketing plans, public relations people and slick advertising brochures. It is my strong belief that we are locked in an economic battle with the plaintiffs' bar, which is more concerned about how to pick our corporate pocket than it is about righting any alleged wrong related to the Dalkon Shield. Judge Lord's tirade prompted counsel for Robins to object to the proceeding as being a product of bias. Judge Lord acknowledged this saying. "You don't have to argue that I am prejudiced at this point. I am." Needless to say, I am dismayed by Judge Lord's performance. More than for myself, I am hurt for our people -- those who built this company and those who work here now. Our people are as fine as any you will find. They are concerned for this company and concerned for others, and have shown this through the years. Their loyalty to A. H. Robins and their generous gifts of time and resources to the public good attest to this. Judge Lord could have spent his time in this community asking about the reputation of the A.H. Robins Company. He could have done this in lieu of his vicious questioning of our chairman during those videotaped depositions. Had he done so he would have discovered that our company hs donated more than two million dollars in pharmaceuticals to the needy around the world during the last four years. That figure, by the way, is far more than the profit we realized from the Dalkon Shield. He would have discovered that our employees' per capita giving to the United Way of Greater Richmond in 1983 was $185.40, probably the highest for our type of firm in the nation. And that figure does not include our corporate gift to the United Way. 1983 was not unique. We have been a leader through the years. Judge Lord would have discovered support for Virginia Union University when it was desperately needed, and for Virginia Commonwealth University when it needed funds to get a desperately needed pharmacy building off the ground. He would have found support for other educational needs in this community and around the country. He would have discovered that our chairman and this company were among the founders of "Businesses Who Care," an organization pledged to increase corporate contributions to civic and charitable programs in metropolitan Richmond by 50% over the last three years. Judge Lord did not look for the good in our leaders, our employees and our company that is there for everyone to see. He could not see and recognize th good that governments of the commonwealth, mayors of the city, B'nai B'rich, the United Negro College Fund, Chambers of Commerce, numerous colleges and universities and a host of other organizations have seen in A. H. Robins through the years. Judge Lord obviously wasn't looking for good. He wasn't prepared to be impartial, as befits a judge. Instead, he was prepared to destroy, to tear down and to demean. Now, Judge Lord may say that the good deeds of this company and its leaders have no bearing on the right or wrong of Dalkon Shield litigation. But he chose to question the integrity, the honesty and the compression of our people. Well, he was wrong, and those who truly know us know he was wrong. If you consider me to be too protective of our company and its people, you must forgive me. I am frustrated, indeed, aggravated. I am tired of seeing a fine company, with a great history, being maligned by plaintiffs' lawyers, some members of the media who are quick to accept allegations as fact, and now Judge Lord. I would say to those who are so quick to make judgments and so ready to condemn that we welcome a review of our record. But make it a fair review. Look at the entire record. Look back through 118 years. Look at our progress that has been built on integrity, fair play and good products. Ask if this company would jeopardize its reputation, its future and its product line by marketing a device it knew to be faulty. We ask that our side be heard. Do not hear only the views of plaintiffs' bar, who may simply want to keep this matter alive for the purpose of bringing in new business. In closing let me re-emphasize that neither this company nor its people, now or in the past, would be a party to the manufacture or marketing of any product known to be defective. This I truly believe!
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