DES Litigation, In re

Citation7 F.3d 20
Decision Date04 October 1993
Docket NumberNo. 1271,D,1271
PartiesIn re DES LITIGATION. Deborah ASHLEY and Andrew Ashley, Plaintiffs-Appellees, v. BOEHRINGER INGELHEIM PHARMACEUTICALS, Defendant-Appellant. ocket 92-9074.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

John Budlong, Seattle, WA (Stafford, Frey, Cooper & Stewart, Seattle, WA, Edward Griffith, Katten, Muchin & Zavis, New York City, on the brief), for defendant-appellant.

Before: NEWMAN, Chief Judge, VAN GRAAFEILAND and ALTIMARI, Circuit Judges.

JON O. NEWMAN, Chief Judge:

This appeal primarily concerns the ability of a party that prevails on the merits to obtain appellate review of adverse interlocutory rulings. The issue arises on the appeal of defendant Boehringer Ingelheim Pharmaceuticals ("Boehringer") from the September 14, 1992, judgment of the District Court for the Eastern District of New York (Jack B. Weinstein, Judge) dismissing with prejudice the complaint of Debra and Andrew Ashley. Boehringer, the successor to a California manufacturer of diethylstilbestrol ("DES"), hopes by this appeal to challenge the District Court's April 13, 1992, interlocutory order that (a) upheld personal jurisdiction over Boehringer in New York and (b) applied to Boehringer New York substantive law on DES liability. In re DES Cases, 789 F.Supp. 552 (E.D.N.Y.1992). Boehringer contends that these rulings are unconstitutional or constitute erroneous interpretations of New York law. We conclude that the general rule prohibiting a prevailing party from appealing applies to this case, and dismiss the appeal.


Some background information concerning DES and the varying approaches to DES liability adopted by different states will assist in understanding Boehringer's motivation in attempting to appeal from the interlocutory rulings. Between 1941 and 1971, approximately 300 pharmaceutical companies marketed DES, a synthetic form of estrogen, for the prevention of miscarriages. In 1971, the FDA banned DES after determining that the drug caused vaginal adenocarcinoma, a form of cancer, and adenosis, a precancerous vaginal or cervical growth, in the daughters of women who took the drug. Although it was made in pills of different shapes and colors, all DES was chemically identical, and druggists generally filled prescriptions from whatever stock they had on hand. Most women ingesting DES did not know the identity of the manufacturer, and by the time their daughters realized they had been injured by DES, it was often impossible to determine the manufacturer.

Faced with this situation, the California Supreme Court adopted a "market share" theory of liability. See Sindell v. Abbot Laboratories, 26 Cal.3d 588, 163 Cal.Rptr. 132, 607 P.2d 924, cert. denied, 449 U.S. 912, 101 S.Ct. 285, 66 L.Ed.2d 140 (1980). The Court held that a plaintiff could recover by showing that her injuries had been caused by DES and by joining as defendants "the manufacturers of a substantial share of the DES which her mother might have taken." Id. at 612, 163 Cal.Rptr. at 145, 607 P.2d at 937. Each manufacturer would "be held liable for the proportion of the judgment represented by its share of [the] market unless it demonstrates that it could not have made the product which caused plaintiff's injuries." Id. In a later case, the California Court clarified that liability was several only, with the consequence that if less than all manufacturers are joined, a plaintiff will recover less than 100 percent of her damages. See Brown v. Superior Court (Abbott Laboratories), 44 Cal.3d 1049, 245 Cal.Rptr. 412, 751 P.2d 470 (1988).

The New York Court of Appeals substantially adopted the Sindell approach. See Hymowitz v. Eli Lilly and Co., 73 N.Y.2d 487, 541 N.Y.S.2d 941, 539 N.E.2d 1069, cert. denied, 493 U.S. 944, 110 S.Ct. 350, 107 L.Ed.2d 338 (1989). However, the Court of Appeals altered the Sindell approach in one significant respect, limiting a defendant's opportunity to exculpate itself from liability by showing that it could not have caused the plaintiff's injuries:

To be sure, a defendant cannot be held liable if it did not participate in the marketing of DES for pregnancy use; if a DES producer satisfies its burden of proof of showing that it was not a member of the market of DES sold for pregnancy use, disallowing exculpation would be unfair and unjust. Nevertheless, because liability here is based on the over-all risk produced, and not causation in a single case, there should be no exculpation of a defendant who, although a member of the market producing DES for pregnancy use, appears not to have caused a particular plaintiff's injury. It is merely a windfall for a producer to escape liability solely because it manufactured a more identifiable pill, or sold only to certain drugstores. These fortuities in no way diminish the culpability of a defendant for marketing the product, which is the basis of liability here.

Id. at 512, 541 N.Y.S.2d at 950, 539 N.E.2d at 1078.

On September 30, 1991, a group of plaintiffs, 1 comprising women allegedly injured by DES, along with their husbands, filed the instant suit in the Eastern District of New York against 33 manufacturers, or successors to manufacturers, of DES. The plaintiffs, who are New York or foreign residents, asserted jurisdiction on the basis of diversity of citizenship. The sole appellant, Boehringer, is a Delaware corporation authorized to do business in New York. Boehringer never sold or manufactured DES, but it is the successor to Stayner Corporation, which manufactured limited amounts of DES in Berkeley, California, between 1949 and 1971. Stayner sold products in California, Washington, Oregon, and Montana. It never marketed any products in New York, was not licensed to do business in New York, and had no significant contacts with New York. Stayner's sales of DES were very small; the only years for which figures are available suggest that annual revenue from DES was about $5,000. In 1973, Stayner was acquired by Pharma-Investments, Ltd., a Canadian Corporation, and in 1979, Stayner was merged into Boehringer.

On October 25, 1991, Boehringer moved to dismiss for failure to state a claim and for lack of personal jurisdiction. Judge Weinstein denied the motion in his April 13, 1992, opinion. He concluded (1) that the New York long arm statute reached Boehringer, 789 F.Supp. at 569-73, 591; (2) that this exercise of jurisdiction was constitutional, id. at 573-89, 591-92; (3) that New York would apply its law to Boehringer, id. at 566-68, 590-91; (4) that application of this choice of law rule was constitutional, id. at 568-69 591; (5) that the complaint stated a claim against Boehringer under New York substantive law, id. at 589-90; and (6) that New York substantive DES law was constitutional, id. at 565-66.

Boehringer initially filed a notice of appeal on May 26, 1992. At that time no final judgment had been entered, and Boehringer voluntarily withdrew the appeal at the suggestion of staff counsel. On September 14, 1992, apparently at Boehringer's request, the District Court entered a judgment that provides:

[T]he case having been fully resolved as to all parties and claims by settlement or adjudication on the merits, It is ORDERED AND ADJUDGED that all of the claims in this action, including specifically cross-claims, are DISMISSED, without costs, subject to the right of any party to re-open the final judgment if any settlement is not consummated.

At oral argument, Boehringer attempted to give a fuller explication of the procedural history behind this judgment. Boehringer stated that all the other defendant DES manufacturers settled with plaintiffs, but that Boehringer refused to do so. Trial then commenced against Boehringer, but the plaintiffs declined to present any evidence. The District Court then orally dismissed the complaint as to Boehringer for want of prosecution.


This appeal presents a threshold issue of appealability that implicates the related doctrines of standing and mootness. See Henry P. Monaghan, Constitutional Adjudication: The Who and When, 82 Yale L.J. 1363, 1384 (1973) ("Mootness is ... the doctrine of standing set in a time frame...."). The only appellant is Boehringer, the defendant in the District Court. The plaintiffs have declined to contest Boehringer's appeal, neither filing a brief nor appearing for argument. Apparently their settlements with other defendants diminished their interest in attempting to establish Boehringer's liability.

The absence of any adversary to contest Boehringer's appeal raises an issue of mootness, which suggests that an appropriate disposition might be to declare the case moot and remand with directions to dismiss the complaint. See United States v. Munsingwear, Inc., 340 U.S. 36, 39, 71 S.Ct. 104, 106, 95 L.Ed. 36 (1950). But, though the lack of adversariness reenforces our ultimate unwillingness to accord the defendant standing to pursue this appeal, we are hesitant to rest our decision on grounds of mootness, since it is doubtful that a party, if otherwise entitled to appeal, can be defeated by its adversary's reluctance to join the fray.

It is the defendant's lack of standing that impels us to dismiss this appeal. Boehringer prevailed on the merits by successfully moving to have the plaintiffs' complaint dismissed with prejudice for lack of prosecution. Ordinarily, a prevailing party cannot appeal from a district court judgment in its favor. See Cardinal Chemical Co. v. Morton International, Inc., --- U.S. ----, ----, 113 S.Ct. 1967, 1973, 124 L.Ed.2d 1 (1993); Lindheimer v. Illinois Bell Telephone Co., 292 U.S. 151, 176, 54 S.Ct. 658, 669, 78 L.Ed. 1182 (1934). There are, however, two exceptions to this rule. One exception arises when the prevailing party is aggrieved by the collateral estoppel effect of a district court's rulings. Boehringer observes that at least 42 DES cases are pending against it in New York, and states that it...

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