San Jose, Calif. - With the start of trial over whether chemicals used at an IBM plant here caused cancers among manufacturing employees, the electronics industry is just starting to see the tip of the tip of a very large legal iceberg headed its way.
Last week, attorneys representing two former employees at IBM Corp.'s pc-board- and disk-drive-manufacturing facility on Cottle Road here began the first trial in what looms as a very long list of personal-injury and wrongful-death lawsuits. More than 255 such claims, grouped into 36 cases, have been filed against IBM alone, in California, New York and Minnesota. Industry observers believe the trend could one day affect other longtime electronics manufacturers such as Hewlett-Packard, Intel and Texas Instruments. Ongoing coverage can be found on EETimes.com.
Indeed, plaintiffs' attorney Richard Alexander says he is trying to set a legal precedent with this case that would hold IBM liable for knowingly exposing workers to carcinogenic chemicals and toxins that cause birth defects and for withholding from employees information about the health risks.
In the first two suits, which are being tried together in the Superior Court of California, Santa Clara County, former employees Alida Hernandez, 73, and Jim Moore, 66, claim such exposure resulted in Hernandez's contracting breast cancer and Moore's contracting non-Hodgkins lymphoma. The two seek unspecified damages.
The case in essence builds on the foundation of personal-injury and wrongful-death suits brought by smokers against tobacco companies and, before that, by workers exposed to asbestos. (Coincidentally, IBM has employed as its defense counsel a law firm that has defended tobacco companies: Jones Day, of Cleveland).
But the case in San Jose shines a spotlight on a dark issue that many companies would like to keep hidden below the highly buffed marketing gleam of Silicon Valley. Ted Smith, executive director of the Silicon Valley Toxics Coalition, asserts that the industry has delayed conducting needed epidemiological tests on the chemicals used in electronics manufacturing and has failed to take seriously the potential threat to workers of low levels of exposure to mixtures of these agents (see www.svtc.org/hightech_prod/inventory.htm).
"They need to do the same level of epidemiological studies other industries have been doing for years. They need to do medical monitoring so people who start to get sick don't develop cancers and die. And they need to phase out some of the most toxic chemicals they use," said Smith.
At the same time, representatives of many electronics giants are saying that if the suits against IBM prove successful, the movement of electronics manufacturing offshore to "less hostile" environments will accelerate. "The impact of lawsuits is making the United States a less attractive place to do business, period," a spokesman for LSI Logic (Milpitas, Calif.) said.
But Smith of the Toxics Coalition called the industry attitude "bull."
"Electronics companies have already moved manufacturing out of California and the United States," Smith said.
Some industry players pointed to the IBM suit as an indication that trial lawyers are seeking new ground in the aftermath of the asbestos trials. A recent report titled "Trial Lawyers Inc." from the Manhattan Institute, a New York think tank, states that tort litigation settlements now exceed $200 billion annually, or 2 percent of the U.S. gross domestic product, with lawyers taking $40 billion of that sum in revenues.
"We're watching it to see what happens, but right now it's an issue between IBM and former employees," said Intel Corp. CEO Craig Barrett. "I think everybody is watching them. Since Dow Corning and breast implants and asbestos, it's on everybody's mind. It's what can potentially happen when you start to take the plaintiffs' bar [legal counsel] and give them some ammunition, real or not."
Hard data scarce
The IBM trial brings into the spotlight a long debate about whether the industry is responding appropriately to the possibility of health risks in chip and hard-drive manufacturing. In this debate, opinions run strong while hard data is scarce.
Many of the chemicals that electronics companies employed in the early 1970s to manufacture hard drives, printed-circuit boards and integrated circuits are today classified as carcinogens, or cancer-causing agents. Both Smith at the Silicon Valley Toxics Coalition and plaintiffs' attorney Alexander said that the most modern manufacturing facilities appear to be much safer than they once were and have much more stringent chemical controls in place because they are now highly automated. That was not the case in earlier decades.
For example, Hernandez, the first plaintiff to testify in the IBM trial last week, described in detail how she manually handled chemicals, now identified under California's Proposition 65 as carcinogens, while working as a hard-disk "coater" in the Cottle Road facility (www.eetimes.com/sys/ news/OEG20031105S0035). Hernandez testified that the coating chemicals frequently soaked through her bunny suit and stained her clothes and skin. She said she was forced to hold her breath because of the strong odors emitted by chemicals she used daily on the job.
But IBM's attorney, Robert Weber, said in opening arguments that the plaintiffs will not be able to prove "one step" of fraudulent concealment on the part of IBM and that the company took extraordinary measures to ensure the health and safety of workers, including having doctors on site at Cottle Road to monitor their health. Weber also showed charts and graphs detailing how IBM's internal standards for chemical exposure were far more stringent than the maximum allowed under federal regulations.
"The question is whether the industry has been a good citizen in terms of health issues, and from my perspective it has," said Jeff Weir, director of worldwide public relations for National Semiconductor Corp. (Santa Clara). Weir also served as public relations director for the Semiconductor Industry Association during the 1990s, when the issue of workers' health first came to broad public attention.
In the first high-profile case, in June 1986, the Boccardo law firm in San Jose won an undisclosed settlement in a suit that had alleged Fairchild Semiconductor had polluted soil and, potentially, groundwater. The pollution was said to have caused birth defects, cancer and miscarriages among residents of a multimillion-dollar housing development near the same Cottle Road facility that is the subject of the IBM case.
The Fairchild case and others like it propelled action groups to push for reforms, resulting in California's Proposition 65. Enacted in late 1986, the proposition mandated that the state's Office of Health Hazard Assessment develop a list of known carcinogens and birth-defect toxins, and set requirements for protecting the populace from exposure to them.
Perhaps most important for the current IBM trial, Prop 65 also switched the burden of proof in such cases. Now, corporations that are found to have exposed the populace to identified carcinogens and other toxins are on the defensive and must prove that those substances did not poison anyone. In effect, it is assumed that mere exposure to identified substances is the cause of a given birth defect or cancer.
National's Weir said that both IBM and the SIA conducted studies in the early 1990s in the light of charges that chemicals used in semiconductor making had led to miscarriages in some employees. As a result of the studies, many chip makers agreed to phase out use of glycol ethers, he said. Later, when employees alleged they had cancers connected to work in fabs, the SIA commissioned a Scientific Advisory Board of seven academics to study the issue. The board recommended in October 2001 that the SIA do a feasibility study to determine whether there was adequate employee data to conduct an epidemiological study. Such a feasibility study is now being conducted by researchers at Johns Hopkins and is expected to be completed next year.
The board also said it found a lack of hard evidence to either support or deny allegations that chemicals used in electronics manufacturing might affect the health of fab workers. Indeed, sources say only one study of the issue has been conducted to date, in the United Kingdom, and that its findings were inconclusive.
The worker safety agency of the U.K. government studied incidences of cancers in workers at National Semiconductor's Greenock, Scotland, fab. In its December 2001 report, the Health and Safety Executive (HSE) said that female workers had two to three times more incidence of lung cancer than expected based on 11 cases, and four to five times more stomach cancers based on just three cases (see www.hse.gov.uk/statistics/nsukrept.pdf).
'No definite proof'
"There is a possibility of a work-related cause for some of these cancers, but there is no definite proof that working at the plant has caused an increased risk of employees developing cancer," the report concluded. The study was triggered in part by pressure from a group of National fab workers in both the U.K. and the United States who filed a class action suit against the company over health issues in January 1999. No trial date has yet been set.
National and the HSE have been in discussions to define the scope and methodology of a follow-on study, but a date to start work on it has not been set.
In the wake of its study, the HSE conducted inspections of 25 semiconductor-manufacturing sites of some 22 companies in the U.K. between February and May 2002. Over a range of health and safety issues explored, only 2 percent of the companies were rated with unacceptable scores. Five sites met all standards, and 19 sites were found to be "approaching minimum legal standards," the HSE stated (see www.hse.gov.uk/fod/eng-util/semicon.pdf).
"Overall . . . the industry generally operates toward good standards of health and safety" and is on par with other manufacturing industries, the HSE concluded.
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