Controversy surrounded both the Shield and Robins, and allegations that Robins ignored and covered up signs of faulty research and design have been numerous. The company was named after Albert Hartley Robins, a pharmacist who owned an apothecary shop in nineteenth-century Richmond, Virginia. His son, Clairborne Robins, came to work with his father in 1896 and later created the A.H. Robins Company, selling drugs only to physicians. His son, E. Clairborne Robins, entered the business in 1933 and, over the following decade turned the failing company around. By the early 1950s, A. H. Robins had added the cough medication Robitussin to its product line, and sales were taking off. In 1963, sales topped $50 million, Robins acquired the makers of Chap-Stick, and its stock became publicly traded. By 1978, E. Clairborne Robins, Jr., had taken over as CEO and remained at that post until the late 1980s, when the company was bought by American Home Products.

The Dalkon Shield was the first venture into contraceptives for A. H. Robins. In the late 1960s and early 1970s, much controversy surrounded the use of the birth control pill, so there was a large market for a safe and effective method of contraception. A. H. Robins responded to this demand by purchasing the rights to the Shield on June 12, 1970, from the Dalkon Corporation, a small company that had shared ownership between the two creators of the Dalkon Shield, Hugh Davis and Irwin Lerner, and a Connecticut attorney, Robert Cohn. Issues with the research conducted on the Shield by its creators surfaced quickly. Features of the device’s design, including pronged edges and a multifilament string that was thought to “wick” bacteria into the uterus, were claimed to be the cause of thousands of injuries and illnesses.

Despite these early issues, the Shield was aggressively marketed to physicians and women in the United States and worldwide. From the time the device hit the market in 1971 and was pulled in 1974, an estimated 4.5 to 5 million Shields were distributed around the world. Despite the Shield’s success in its first few years on the market, reports of injuries in Shield users were quick to surface, and the first lawsuit against Robins was filed in 1972. The first Dalkon Shield verdict was reached in the case of a Kansas woman, Connie Deemer, who became pregnant, suffered a perforated uterus, and was subjected to emergency surgery to remove the Shield, which had lodged itself in her abdominal cavity. She was awarded $10,000 in actual (compensatory) damages and $75,000 in punitive damages in what was to be the first of many lawsuits to yield awards to Shield users.

By 1985, Robins and its insurer, Aetna Life & Casualty Company, had already paid out $380 million in Shield-related lawsuits, the number of complaints and actions being filed were steadily increasing, and a class-action lawsuit was filed on behalf of nearly two thousand Shield users. Even with Robins reporting its highest-ever operations earnings of $128 million in 1984 (up 21 percent from the previous year) and its stock holding reasonably well, the Shield-related litigations proved to be too costly for the company. In March 1985, Robins announced that it was setting up a reserve fund to pay out Shield claims totaling $615 million, yielding a nearly $1 billion payout level for the company thus far. Creating the fund, however, left Robins with an over $4 million net loss for the year. In addition, records were being set on the amount of damages being awarded to Shield litigants, with a May 1985 decision awarding Loretta Tetuan, a Shield-user who had lost her uterus and ovaries, $7.5 million in punitive damages and $1.1 million in compensatory damages. In an attempt to protect the company and those who had a vested interest from the potentially devastating cost of more multimilliondollar Shield-related awards, Robins filed to seek reorganization under Chapter 11 of the Bankruptcy Code in August 1985.

This froze all monetary claims against the company and caused the company’s stock to plummet to a third of its value. In 1989, The American Home Products Corporation acquired A. H. Robins as part of the reorganization plan from bankruptcy. The consummation of the bankruptcy reorganization made it so that Robins had immunity from any further Shield-related civil litigation. Instead, as part of the deal, American Home agreed to finance a court-ordered trust to fund Shield claimants, putting $2.3 billion into the trust and additional moneys to the company’s shareholders.

The trust was responsible for paying claimants against the Shield for the following 20 years. Those persons who claimed injury from the Shield submitted the claim to the Trust, who then decided the amount to be settled based on adjusted historic settlement values. The reorganization also meant that Robins’s shareholders received American Home Products stock, resulting in large financial gains, since the American Home Products stock was worth four times the price of the Robins stock before bankruptcy was settled.