LITIGATION: The Copper-7’s Costly Legacy

Executives at the Monsanto chemical company must have watched the stock-market opening last week with unusual trepidation. For good reason: after the market closed the previous Friday, a federal court jury in St. Paul awarded $8.75 million to a woman hurt by a Copper-7 intrauterine contraceptive device manufactured by G.D. Searle, a Monsanto subsidiary. The penalty raised a question: Could Monsanto go the way of A.H. Robins, which was forced into bankruptcy proceedings because of lawsuits generated by its Dalkon Shield IUD?

Probably not, but many Monsanto shareholders wanted to sell while they had a chance. In two days of hectic trading, the company’s shares tumbled $11.13, bottoming at $74.63 before recovering a bit to close the week at $77.88.

The jury found that Searle had insufficiently tested the birth-control device and concluded that the IUD caused Plaintiff Esther Kociemba to develop a pelvic infection that led to sterility. Until that verdict was handed down, Searle had won all but three of the Copper-7 cases that had gone to jury trials. Two of the cases ended with awards of just $550,000; in the third case no award has yet been made. Hundreds of complaints, though, were settled out of court for undisclosed sums. Some 1,300 separate lawsuits have been filed against Searle since 1974, and more are no doubt on the way. Monsanto is confident that any hefty judgment will be reversed on appeal.