Kurczi v. Eli Lilly and Co.

Decision Date12 May 1997
Docket Number96-4127,Nos. 96-4124,s. 96-4124
Citation113 F.3d 1426
PartiesProd.Liab.Rep. (CCH) P 14,948 Carla KURCZI, et al., Plaintiffs-Appellees, v. ELI LILLY AND COMPANY, et al. (96-4124); Dart Industries, Inc., f/k/a Rexall Drug Company (96-4127), Defendants-Appellants.
CourtU.S. Court of Appeals — Sixth Circuit

E. Marie Wheeler (argued and briefed), Amer, Cunningham & Brennan, Akron, OH, for Carla Kurczi, et al.

Frederick J. McGavran, Mina J. Jefferson, Jack B. Harrison, Frost & Jacobs, Cincinnati, OH, Robin G. Weaver, Squire, Sanders & Dempsey, Cleveland, OH, James J. Dillon (argued and briefed), Goodwin, Procter & Hoar, Boston, MA, for Eli Lilly and Co., et al. in No. 96-4124.

James R. Vaughn, Roetzel & Andress, Akron, OH, Sheila Ann Moeller (briefed), A. Edward Grashof (argued and briefed), Winthrop, Stimson, Putnam & Roberts, New York City, for Dart Industries, Inc. in No. 96-4127.

Before: MERRITT, RYAN, and SUHRHEINRICH, Circuit Judges.

SUHRHEINRICH, Circuit Judge.

In this interlocutory appeal 1 we must decide whether the Ohio Supreme Court would recognize a market share theory of liability in DES 2 litigation. We hold that the district court erred in predicting that it would.

I.

Plaintiffs are twenty-seven women 3 allegedly suffering damage to their reproductive systems due to their in utero exposure to DES. Plaintiffs claim that each of the defendants was either a manufacturer or distributor of DES. In their complaints each plaintiff asserted strict liability under products liability, negligence under products liability, breach of warranty, market share liability, concert of action and alternative liability. Under the claim headed "market share liability" each plaintiff uniformly alleged that "[t]he passage of time since DES exposure and the Defendants' methods of sale, distribution and promotion of DES has made it unreasonably difficult to determine which Defendant manufactured the exact DES which harmed the Plaintiff." Each plaintiff claimed that "[a]s a result of the difficulty of proof stated [above], the market share theory of liability should be applied, requiring each Defendant [sic] affirmatively prove it did not cause the Plaintiff's injuries."

All defendants moved for summary judgment on all claims based on market share liability on the ground that Ohio had neither adopted such a cause of action nor abandoned the traditional tort requirement that a plaintiff must show, as part of the causation element of her claim, that she was injured by the conduct of a specific defendant. Plaintiffs filed cross-motions for summary judgment on the legal issue of their right to proceed on the theory of market liability. After examining the only two Ohio cases on the subject, the district court concluded that if properly presented with the question, the Ohio Supreme Court would recognize a market share theory of liability in DES litigation. The district court noted that on the one occasion in which the Ohio Supreme Court considered the theory of market share liability in the context of asbestos litigation, the court "[l]e[ft] the issue of market share liability in DES cases open for future consideration." See Goldman v. Johns-Manville, 33 Ohio St.3d 40, 514 N.E.2d 691 (1987)(suit against manufacturers and suppliers of asbestos products). The district court pointed out that the Goldman court did not ultimately apply the theory not because of any disapproval with the concept, but because it found that asbestos was not a fungible product. Moreover, the district court observed that the Goldman court favorably discussed the development of, and policy reasons for, judicially-created market share liability.

The district court also found persuasive Jackson v. Glidden Co., 98 Ohio App.3d 100, 647 N.E.2d 879 (1995), wherein the Ohio Court of Appeals impliedly adopted the theory. See id. 647 N.E.2d at 884 (allowing plaintiffs, a class of persons allegedly injured by exposure to lead paint, to proceed with market share claim). The district court relied on the Jackson court's reading of Goldman to suggest that lack of fungibility was the sole barrier to allowing a market share theory of recovery in an asbestos case. Thus, according to the district court "[b]ecause the Ohio Supreme Court has not definitively ruled whether it would adopt the theory of market share liability under appropriate facts, the Jackson opinion is authoritative."

In response to defendants' argument that it is the legislature's job to create new theories of recovery, the district court pointed out that the Ohio Supreme Court had not hesitated to adopt the theory of alternative liability in Minnich v. Ashland Oil Co., 15 Ohio St.3d 396, 473 N.E.2d 1199 (1984), so as to avoid injustice upon an innocent plaintiff. The district court also found that the theory of market share liability is entirely consistent with the causation requirement under the Ohio Products Liability Act, because as Goldman noted, market share liability does not eliminate the need for proof of proximate cause, but "merely relaxes" the requirement that the plaintiff identify which one of a group of negligent tortfeasors caused the injury to the plaintiff. See Goldman, 514 N.E.2d at 693.

The district court therefore denied defendants' motion and granted plaintiffs' motion. It then made the determinations necessary under 28 U.S.C. § 1292(b). 4 This court accepted defendants' petitions for permission to appeal on October 11, 1996.

On appeal, defendants contend that the district court misconstrued the duties of a diversity court when it held that the Ohio Supreme Court would adopt a market share theory of liability in this case. They argue that the Supreme Court once declined to adopt that novel theory and has affirmed that a plaintiff must prove that the acts of a specific actor caused her harm. These common law rules were codified in a comprehensive Product Liability Act in 1988, which does not include market share liability, and is antithetical to essential elements of market share. Further, the Ohio Products Liability Act was recently amended in ways that even more clearly preclude a market share theory of liability. The district court's treatment of an intermediate appellate court decision that "impliedly" recognized a market share theory in Ohio as dispositive is wrong, because that decision is merely one datum to be considered by a court sitting in diversity.

Defendant Dart Industries, f/k/a Rexall Drug Company (Rexall), has filed a separate brief, arguing that the district court erred in assuming that all DES products are fungible.

II.

This court reviews the district court's determination of state law de novo. Salve Regina College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991). In Kirk v. Hanes Corp., 16 F.3d 705 (6th Cir.1994), we described the duty of a federal diversity court:

The task of this court, sitting in diversity, is to apply the same law as would be applied by the [Ohio] state courts. See Erie R.R. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). Where a state's highest court has spoken to an issue, we are bound by that decision unless we are convinced that the high court would overrule it if confronted with facts similar to those before us. Bernhardt v. Polygraphic Co. of Am., 350 U.S. 198, 205, 76 S.Ct. 273, 277, 100 L.Ed. 199 (1956). Moreover, where a state appellate court has resolved an issue to which the high court has not spoken, "we will normally treat [those] decisions ... as authoritative absent a strong showing that the state's highest court would decide the issue differently." Garrett v. Akron-Cleveland Auto Rental, Inc. (In re Akron-Cleveland Auto Rental, Inc.), 921 F.2d 659, 662 (6th Cir.1990)(emphasis added).

Id. at 707. More recently we explained that an intermediate appellate decision,

while lacking the controlling force of a decision of a state court of last resort, does serve as "a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise." We may refuse to follow intermediate appellate court decisions where we are persuaded that they fail to reflect state law correctly, but "we should not reject a state rule just because it was not announced by the highest court of the state," even if we believe that the rule is "unsound."

Ziebart Int'l Corp. v. CNA Ins. Cos., 78 F.3d 245, 250 (6th Cir.1996)(internal citations omitted). "Other persuasive data" include the state's supreme court dicta, restatements of law, law review commentaries, and the majority rule among other states. Garden City Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1130 (6th Cir.1995).

"A federal court in a diversity case is not free to engraft onto ... state rules exceptions or modifications which may commend themselves to the federal court, but which have not commended themselves to the State in which the federal court sits." Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4, 96 S.Ct. 167, 168, 46 L.Ed.2d 3 (1975). See also Bailey v. V&O Press Co., 770 F.2d 601, 605 (6th Cir.1985)(stating that "[i]n our evaluation of the content of state law under Erie, we are not commissioned to take a position regarding the advisability or fairness of the state rule to be applied, but are to determine the issue as would the highest court of the state").

III.
A.

Determining how the Ohio Supreme Court would rule requires us to examine the interplay between the Goldman and Jackson decisions and the Ohio Products Liability Act. We approach the question chronologically. In Goldman the Ohio Supreme Court was asked to decide if the theory of alternative liability, as recognized by that court in Minnich, 5 or market share liability theory, as developed by the California Supreme Court in Sindell v. Abbott Labs., 26 Cal.3d 588, 163 Cal.Rptr. 132, 607 P.2d 924 (1980), 6 applied in a suit...

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