Baroldy v. Ortho Pharmaceutical Corp.

• Decision Date: 22 March 1988
• Docket Number: CA-CIV,No. 1,1
• Citation: Baroldy v. Ortho Pharmaceutical Corp., 157 Ariz. 574, 760 P.2d 574 (Ariz. App. 1988)
• Parties: , Prod.Liab.Rep. (CCH) P 11,732 Roberta BAROLDY and Lee Baroldy, wife and husband, Plaintiffs-Appellees Cross Appellants, v. ORTHO PHARMACEUTICAL CORPORATION, a foreign corporation, Defendant-Appellant Cross Appellee. 9204.
• Court: Arizona Court of Appeals

Page 574

760 P.2d 574

157 Ariz. 574, Prod.Liab.Rep. (CCH) P 11,732

Roberta BAROLDY and Lee Baroldy, wife and husband, Plaintiffs-Appellees Cross Appellants, v. ORTHO PHARMACEUTICAL CORPORATION, a foreign corporation, Defendant-Appellant Cross Appellee.

No. 1 CA-CIV 9204.

Court of Appeals of Arizona Division 1, Department A.

March 22, 1988.

Review Denied Sept. 14, 1988.

[157 Ariz. 576] Fennemore Craig, P.C. by John D. Everroad, Paul J. Mooney, E.J. Kotalik, Jr., Phoenix, for plaintiffs-appellees, cross appellants.

Evans, Kitchel & Jenckes, P.C. by William M.J. Shattuck, Phoenix, Arter & Hadden by George Gore, John D. Maddox, Cleveland, Ohio, for defendant-appellant, cross appellee.

OPINION

CORCORAN, Presiding Judge.

Defendant-appellant Ortho Pharmaceutical Corporation (Ortho) appeals from the judgment entered in favor of appellees Roberta Baroldy and Lee Baroldy (plaintiffs) after a jury awarded them $1,500,000 in this products liability suit.

Ortho is incorporated in Delaware with headquarters in New Jersey. It does business in all 50 states. Ortho contends on appeal that the trial court erred in applying Arizona law rather than North Carolina law, and then applied that law erroneously in its evidentiary rulings, resulting in prejudice to Ortho that requires a new trial. Ortho does not claim that Arizona courts do not have jurisdiction or provide a proper venue.

Plaintiffs cross-appeal on the basis of an evidentiary ruling, but because they request no affirmative relief and conceded at oral argument that they do not desire reversal, we do not address that issue.

Because we find no reversible error, we affirm the judgment.

1. Factual Background

Approximately 6 weeks after the birth of her first child in April 1982, Roberta Baroldy's obstetrician prescribed an Ortho All-Flex diaphragm. Ortho has manufactured and sold many millions of diaphragms for more than 40 years. Roberta began using the diaphragm in early July 1982, and experienced discomfort. She returned to her obstetrician on July 8, 1982, to check the fit of the diaphragm, and was assured it fit well. During the next three days, she inserted and removed the diaphragm repeatedly, wearing it for extended periods. On July 11, 1982, Roberta awoke with a high fever and a flushed appearance. Her husband, Lee, took her to the emergency room of the local hospital, where she was told she had the flu. Roberta returned home, where her symptoms worsened. She returned to the emergency room late that afternoon, and was admitted for treatment. Her hospital record indicates that a culture taken from her diaphragm tested positive for Staphylococcus aureus (S. aureus ), a common symptom of toxic shock syndrome (TSS). See generally Chesney, Bergdoll, Davis & Vergeront, The Disease Spectrum, Epidemiology, and Etiology of Toxic-Shock Syndrome, 38 Ann.Rev.Microbiol. 315 (1984). The admitting physician recorded in Roberta's medical record that his initial evaluation was "Toxic shock state secondary to retained vaginal diaphragm." Roberta was hospitalized for 41 days with TSS, at times comatose and near death.

Ortho does not dispute on appeal that Roberta had TSS, although that issue was litigated at trial. Plaintiffs' medical witnesses testified at trial that Roberta will continue to have physical problems the rest of her life as a result of the disease.

At the time Roberta's diaphragm was prescribed, the Patient Information Booklet (PIB) accompanying the device contained the following statements:

You need not feel any urgency about removing the diaphragm. It is safe to let it remain in position for 24 hours. Should you forget to remove it for some hours, or should removal be inconvenient at any particular time, that is no cause for concern. Just bear in mind that if you desire to have intercourse again, you must first apply more spermicidal jelly or cream.

Prior to and during Roberta's hospitalization, plaintiffs were living in North Carolina, where Lee was temporarily stationed in the United States Army. After Roberta's release from the hospital, plaintiffs returned to Arizona, where they had lived prior to Lee's enlistment. In October 1983, plaintiffs filed this products liability suit against Ortho in Arizona, claiming first, that the diaphragm was defective under 2 Restatement (Second) of Torts § 402 A (1965) (§ 402A) because Ortho's PIB failed to warn diaphragm users of the danger of TSS, and second, that the product was defective under § 402B because the PIB contained false or misleading statements. Plaintiffs also asserted claims of negligence and breach of warranty, which were later withdrawn.

After a lengthy trial, the court entered judgment for the plaintiffs on the jury's verdict. The jury awarded plaintiffs compensatory damages in the amount of $1,500,000. Although the issue of punitive damages was submitted to the jury, none were awarded. Ortho has timely appealed from this judgment, but Ortho does not claim that the judgment is excessive.

2. Choice of Law

Ortho first argues that the trial court erred in applying the products liability law of Arizona rather than the negligence law of North Carolina. Arizona has adopted §§ 402A and 402B, but North Carolina has not. Compare Salt River Project Agric Improvement & Power Dist. v. Westinghouse Elec. Corp., 143 Ariz. 368, 694 P.2d 198 (1984) with Smith v. Fiber Controls Corp., 300 N.C. 669, 268 S.E.2d 504 (1980). North Carolina thus does not recognize the doctrine of strict products liability. Byrd Motor Lines, Inc. v. Dunlop Tire and Rubber Corp., 63 N.C.App. 292, 304 S.E.2d 773 (1983). Ortho contends that 1 Restatement (Second) of Conflicts § 146 (1971) (§ 146) ¹ creates a presumption that the law of the state where the injury occurred--here, North Carolina--governs the choice of law issue. Ortho also contends that, under the general principles of § 145, ² North Carolina law should apply because North Carolina has more contacts with the parties and the occurrence than does Arizona.

The parties argued this issue at trial after plaintiffs sought partial summary judgment on the choice of law question. The trial court found that "Arizona law clearly applies and controls this case, rather than the law of either North Carolina or New Jersey," after concluding that "the most significant relationship to the occurrence and the parties exists in this jurisdiction and Arizona has the greater interest in the determination of this matter."

Because choice of law is a question of law, our review of this issue is de novo. See, e.g., Bryant v. Silverman, 146 Ariz. 41, 703 P.2d 1190 (1985); Ambrose v. Illinois-California Express, Inc., 151 Ariz. 527, 729 P.2d 331 (App.1986). Our analysis has three parts. First, we must consider the general principles of § 145 to determine the number of contacts and the weight of each state's contacts with the parties and the occurrence. Second, those contacts must be taken into account in applying the principles of 1 Restatement (Second) of Conflicts § 6 (§ 6) ³ to determine which state has the most significant to the occurrence and the parties. Third, the specific principles of § 146 must be applied. See generally Bates v. Superior Court, 156 Ariz. 46, 749 P.2d 1367 (1988); Bryant v. Silverman; Ambrose v. Illinois-California Express, Inc.; Kimble & Lesher, Products Liability §§ 331-36 (1979).

A. Section 145. Beginning with § 145, we find that Arizona has the most significant contacts with the parties and occurrence. First, although the "place of injury" was North Carolina, that location

was a mere happenstance because Roberta was in North Carolina because of temporary military assignment over which her husband had no control, and because the same injury could have happened to her regardless of where she lived. Cf. Hitchcock v. United States, 665 F.2d 354 (D.C.Cir.1981) (place of injury was fortuitous when plaintiff was injured while temporarily assigned to a location in connection with government service). Additionally, here plaintiffs demonstrated damages for both future medical expenses and loss of future income, indicating that the injuries are likely to continue in Arizona, where plaintiffs are domiciled. Cf. Moore v. Montes, 22 Ariz.App. 562, 566, 529 P.2d 716, 720 (1974) (Arizona has an interest in insuring that its injured residents do not become wards of the state as a result of long-term injuries that require medical treatment).

Second, although the place where the conduct causing the injury occurred is unclear, it is unlikely that the conduct occurred either in Arizona or North Carolina. Cf. Ambrose, 151 Ariz. at 530, 729 P.2d at 334. In a failure to warn case, the "place of conduct" is where the tortious decision is made. See § 146, comment d; Danner v. Staggs, 680 F.2d 427, 430 (5th Cir.1982) (place of misconduct in a negligence action is where the negligent decision is made). Thus, plaintiffs' incidental conduct is not relevant to the choice of law issue. Hitchcock, 665 F.2d at 359-61. Here, Ortho's corporate decision about what to include in its PIB most likely occurred at its principal place of business in New Jersey. ⁴ See Bates, 156 Ariz. at 49-50, 749 P.2d at 1370-71. The parties have agreed that the products liability laws of Arizona and New Jersey are virtually identical for purposes of this analysis; New Jersey law thus presents no "conflict" to resolve. Comment i to § 145 indicates that, when the law of two states does not conflict, the contacts from those two states should be considered as if they were from the state involved in the choice of law question. See also Myers v. Cessna Aircraft Corp., 275 Or. 501, 513, 553 P.2d 355, 367 (1976). Thus, for purposes of our § 145 analysis, the place where the conduct occurred--New Jersey--can be considered an Arizona contact.

Third, the domicile, residence, and principal place of business of the parties again indicate an Arizona contact. Ortho does not dispute that plaintiffs have always been Arizona...