Medical device sterilizer Medline appears to be nearing a settlement to end a swarm of lawsuits that accused the company of emitting too much ethylene oxide, a chemical compound used extensively by industry and which is essential for ensuring surgical tools and other medical devices are free of contagions, but which the lawsuits assert has caused cancer in people living near Medline's Waukegan plant.
However, in a recent court filing, Medline said settlement talks have been jeopardized by alleged intransigence by two insurance companies Medline believes should help fund the settlement payout.
News of the potential settlement was revealed in a lawsuit Medline filed on Oct. 23 in Cook County Circuit Court against National Fire and Marine Insurance Company and National Union Fire Insurance Company of Pittsburgh, excess insurers who Medline said should be forced to assist the company in settling the personal injury lawsuits.
According to Medline's complaint, Medline and attorneys from the firm of Edelson P.C., of Chicago, have been in settlement talks since August, and have reached a tentative agreement through mediation.
According to the lawsuit, Edelson represents "the vast majority of the plaintiffs" in the EtO lawsuits.
In the lawsuit, Medline said it and the Edelson attorneys decided to take their dispute to mediation, rather than take on the risk and expense of "ongoing jury trials for the entirety of 2024 and beyond."
Medline has been in court since mid-2019, defending against a mounting number of personal injury cases related to emission of EtO, or ethylene oxide.
The complaints, mostly filed in Cook County court, have been brought on behalf of people who said they lived within a few miles of Medline's plant in Chicago's north suburbs, and who have either died or have been diagnosed with certain forms of cancer.
The lawsuits blame the cancer on Medline's emissions of EtO.
EtO is used widely in various industries, including many in operation in the Chicago area. In manufacturing, EtO serves as a key building block ingredient for a wide range of products, including antifreeze, recyclable packaging and nearly all products containing fiberglass. Derivatives of EtO area also used to make shampoo and other personal care items, as well as some pharmaceuticals.
Medline and other medical device sterilizers have used EtO to sterilizie a wide variety of medical devices and tools, including surgical implants, like pacemakers and catheters, to ensure they do not increase patients' risk of deadly infections in the operating room.
Medical device makers have said EtO is all but essential to ensuring patient safety.
Because of its widespread use, EtO is present in the ambient air throughout much of the Chicago region, according to air pollution measurements conducted by the U.S. Environmental Protection Agency in 2019.
However, companies that use EtO have been targeted in recent years by a cadre of trial lawyers pressing big money injury claims, relying on government reports indicating long exposure to EtO could increase people's risk of contracting cancer.
In Illinois, the anti-ETO effort began when activists and trial lawyers targeted sterilization company Sterigenics, which operated a sterilization plant in west suburban Willowbrook.
The activists succeeded in persuading state officials to take action against Sterigenics and rewrite Illinois' pollution rules to impose severe limits on EtO emissions, ultimately forcing Sterigenics to pull out of Illinois, even though the company had to that point never violated state or federal EtO emissions limits.
Sterigenics ultimately agreed to pay $408 million to settle more than 870 lawsuits on behalf of people who lived in and around Willowbrook, who claimed that company's EtO emissions had caused cancer.
Meanwhile, the lawsuits against Medline have continued, with the first trials set to begin in early 2024.
At the same time, however, Medline noted more and more lawsuits are being filed against them by other plaintiffs leveling similar accusations over illness allegedly linked to EtO emissions.
To end the litigation, Medline and the Edelson-represented plaintiffs are nearing a settlement, according to the lawsuit.
Medline's lawsuit does not indicate how much the Edelson plaintiffs may have demanded to settle the cases. However, Medline indicated they had received a settlement demand in early August.
Medline has asserted it presented those settlement demands to its insurers at that time.
However, Medline asserts in its new lawsuit that settlement talks have been jeopardized first by "Edelson's continued advertising blitz," seeking new clients to increase their list of potential clients against Medline, and now by the insurance companies' alleged refusal to fund the settlement.
"Medline clearly and continually communicated the urgency of the situation to Medline's excess carriers," Medline wrote, noting the continually growing list of new lawsuits, the "looming trial," and developments in the litigation against Sterigenics that demonstrated the potential peril of taking the cases to trial, rather than settle now.
"All they could focus on was their voracious appetite for more information [about the cases], which by design could never be satisfied," Medline wrote.
Medline said the Edelson firm accepted the settlement figure proposed by the mediator on Oct. 18.
Medline said it then presented the settlement figure to the insurance companies on Oct. 19. Medline noted the figure was "well within National Union's and NFMIC's limits."
However, Medline said the insurance companies instead denied coverage, citing a "pollution exclusion" in their policies that they said prevented them from funding the settlement.
"NFMIC and National Union formally declined to honor their obligations under the Policies and abandoned Medline during this critical juncture in the EtO Litigation," Medline wrote in its complaint. "Notably, as excess insurers, National Union and NFMIC had only one job – to fund a reasonable settlement within limits when one became available.
"In this, they failed miserably."
In the lawsuit, Medline argues the "pollution exclusion" doesn't apply under Illinois law. They argue Illinois courts have ruled such exclusions "apply only to 'traditional environmental pollution.'"
Further, Medline argued "Illinois courts have determined that the typical pollution exclusion is ambiguous as to whether it applies to permitted emissions - the exact same scenario in which we now find ourselves."
Medline, like Sterigenics has consistently argued its EtO emissions never exceeded limits set by state or federal regulations.
And Medline pointed to a decision from an Illinois federal judge who ruled a pollution exclusion in a National Union policy did not prevent the insurer from covering a claim from Sterigenics demanding coverage in the EtO lawsuits against them.
Medline's lawsuit accuses the insurers of breach of contract and bad faith.
Medline is represented in the action by attorneys John S. Vishneski III and Claire M. Whitehead, of Reed Smith LLP, of Chicago.