DES Market Share Litigation, Matter of

• Citation: 591 N.E.2d 226,582 N.Y.S.2d 377,79 N.Y.2d 299
• Parties: , 591 N.E.2d 226, 60 USLW 2644 In the Matter of DES MARKET SHARE LITIGATION.
• Decision Date: 31 March 1992
• Court: New York Court of Appeals Court of Appeals

Page 377

582 N.Y.S.2d 377

79 N.Y.2d 299, 591 N.E.2d 226, 60 USLW 2644

In the Matter of DES MARKET SHARE LITIGATION.

Court of Appeals of New York.

March 31, 1992.

[79 N.Y.2d 300] [591 N.E.2d 227] Kenneth A. Cohen, Marshall Simonds, Robert W. Keller, Jay P. Mayesh and David M. Covey, for Eli Lilly and Co. et al., appellants.

Charles J. Walsh, Stuart M. Feinblatt, Theodore V.H. Mayer, Carl H. Sword, Jr., Paul K. Stecker, Tamar P. Halpern, Leslie A. McHugh and Karl E. Seib, Jr., for E.R. Squibb & Sons, Inc., et al., appellants.

[79 N.Y.2d 301] William D. Fireman and Stuart A. Schlesinger, for respondents.

OPINION OF THE COURT

WACHTLER, Chief Judge.

In Hymowitz v. Lilly & Co., 73 N.Y.2d 487, 507, 541 N.Y.S.2d 941, 539 N.E.2d 1069, this Court, recognizing that "extant common-law doctrines, unmodified, provide no relief for the DES plaintiff unable to identify the manufacturer of the drug that injured her," adopted a market share theory to create a "realistic avenue of relief for plaintiffs injured by DES." Since our decision in that case three years ago, Supreme Court, Erie County, has issued an order severing the market share issue from every DES case pending in New York and consolidating these actions so that the market share issue can be resolved in a single proceeding. The question now before us is whether the DES plaintiffs are entitled to a jury trial on the issue of market share. We agree with the Appellate Division, 171 A.D.2d 352, 578 N.Y.S.2d 63, that plaintiffs have a constitutional right to a jury in the market share trial and consequently affirm.

As we noted in Bichler v. Lilly & Co., 55 N.Y.2d 571, 576, 450 N.Y.S.2d 776, 436 N.E.2d 182 and in Hymowitz, diethylstilbestrol or DES is a synthetic substance that duplicates the activity of estrogen, a naturally formed female hormone. DES was invented by British researchers in 1937, but it was never patented. It was therefore available for production by any pharmaceutical company that obtained the requisite Food and Drug Administration (FDA) approval.

In 1941, the FDA approved the new drug applications (NDAs) of 12 drug manufacturers to market DES for a variety of ailments not related to pregnancy. In 1947, the FDA began to approve the NDAs of drug manufacturers who sought to market DES for the prevention of human miscarriages. By 1951, the FDA had concluded that the drug was generally safe for use during pregnancy and ceased to require that an NDA be submitted by a drug manufacturer when it wanted to market DES for that purpose. In 1971, however, the FDA banned the use of the drug for the treatment of problems of pregnancy after studies indicated that DES caused vaginal adenocarcinoma, a rare disease involving cancerous growth in glandular tissue, and adenosis, a precancerous vaginal or cervical growth, in the daughters of women who took DES during pregnancy. In New York State alone it has been estimated that more than 100,000 women were injured by exposure to DES in utero (Bichler v. Lilly & Co., supra, 55 N.Y.2d at 577, 450 N.Y.S.2d 776, 436 N.E.2d 182).

In Hymowitz, we detailed the formidable obstacles that make traditional legal recovery a virtual impossibility for many DES plaintiffs. Foremost among these is the plaintiffs' difficulty in identifying the manufacturer of the DES ingested in a particular case. Because all DES produced had the identical chemical composition, druggists often filled prescriptions with whatever drug was available. Approximately 300 companies produced the drug for pregnancy use, but during the relevant time period, drug companies both entered and left the market. These problems were only exacerbated by the long latency period for DES injuries. As we stated in Hymowitz, "the pregnant women who took DES generally never knew who produced the drug they took, and there was no reason to attempt to discover this fact until many years after ingestion, at which time the information is not available" (id., 73 N.Y.2d at 503, 541 N.Y.S.2d 941, 539 N.E.2d 1069).

In our effort to address this critical problem of proof unique to DES cases, we examined the common-law doctrines of alternative liability and concerted action and concluded that these doctrines, unaltered, would not afford relief to DES plaintiffs (id., at 505, 541 N.Y.S.2d 941, 539 N.E.2d 1069). Next, we looked for guidance to other State courts that had already considered the identification dilemma faced by DES plaintiffs (id., at 509-511, 541 N.Y.S.2d 941, 539 N.E.2d 1069). Based on our survey of the various approaches taken by other State courts and our appreciation for the realities of mass tort litigation in this State, we concluded that a market share theory, based on a national market, was the best solution to the identification problem unique to DES cases (id., at 511, 541 N.Y.S.2d 941, 539 N.E.2d 1069). Under that theory, each defendant who marketed DES for pregnancy use was to be held liable according to that manufacturer's market share.

In choosing to adopt a national market share theory as a matter of New York law, we stated that "[u]se of a national market is a fair method * * * of apportioning defendants' liabilities according to their total culpability in marketing DES for use during pregnancy. Under the circumstances, this is an equitable way to provide plaintiffs with the relief they deserve, while also rationally distributing the responsibility for plaintiffs' injuries among defendants" (id., at 512, 541 N.Y.S.2d 941, 539 N.E.2d 1069). Only those defendants who did not participate in the marketing of DES for pregnancy use would not be held liable for a particular plaintiff's injury. "[B]ecause liability * * * 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" (id., at 512, 541 N.Y.S.2d 941, 539 N.E.2d 1069).

After Hymowitz, the market share issue remained to be litigated. By order filed April 4, 1990, the DES market share issue in the cases pending in the New York courts was severed, consolidated for the purpose of discovery and trial, and venued in Erie County. The trial court entered a case management order in August of 1990 in which it provided that certain motions could be filed within 45 days of entry, including a motion addressing whether any of the parties had a right to a jury trial. By notice of motion dated August 31, 1990, plaintiffs' liaison counsel requested an order granting a jury trial of the market share issue.

In a decision dated March 8, 1991, this motion was denied. Calling the market share theory a newly created remedy unknown at common law, the trial court concluded that the plaintiffs had neither a constitutional nor a statutory right to a jury trial. Further, the trial court held that the market share trial was not itself a cause of action, but was more in the nature of a pretrial proceeding. Because causation and damages would be tried to a jury in the main action, the court determined that there was no right to a jury trial of the severed market share issue.

The Appellate Division reversed, with two Justices dissenting. The majority held that Hymowitz had not created a new equitable remedy, as the defendants urged; instead, it brought about the modification of a preexisting legal cause of action (171 A.D.2d 352, 354, 578 N.Y.S.2d 63). Because the essential nature of each DES case was a cause of action at law to recover money damages for personal injury, the plaintiffs were entitled to a jury trial under article I, § 2 of the New York Constitution. The dissenters by contrast termed the market share issue preliminary and collateral and reasoned that no right to a jury trial attached.

Article I, § 2 of the New York Constitution provides that "[t]rial by jury in all cases in which it has heretofore been guaranteed by constitutional provision shall remain inviolate forever." The express language of this provision exhorts us to consider as an historical matter the types of actions to which the right to a jury trial has traditionally attached (see, Motor Vehicle Mfrs. Assn. v. State of New York, 75 N.Y.2d 175, 180, 551 N.Y.S.2d 470, 550 N.E.2d 919). The first Constitution, that of 1777, guaranteed a right to trial by jury in all cases in which it had "heretofore been used" (N.Y. Const. of 1777, art. XLI). The effect of this language was to constitutionalize the right to a jury trial as it existed in the common law at that time (see, Motor Vehicle Mfrs. Assn. v. State of New York, supra, at 181, 551 N.Y.S.2d 470, 550 N.E.2d 919; Matter of Luria, 63 Misc.2d 675, 677, 313 N.Y.S.2d 12; see also, Siegel, N.Y.Prac. § 377). The Constitutions of 1821, 1846 and 1894 contained similar language guaranteeing the right to a jury trial in all cases as it had "heretofore been used"; the result of the continuation of this broad "heretofore" language was to accord constitutional significance to those cases in which the right to a jury trial had been guaranteed by statute between 1777 and 1894 (see, Matter of Luria, supra, at 677, 313 N.Y.S.2d 12). The 1938 Constitution narrowed the "heretofore" clause to grant the right to a jury trial only as it was "heretofore * * * guaranteed by constitutional provision" (emphasis added). This change in language thus guarantees a jury trial (1) in all those cases to which it would have traditionally been afforded under the common law before 1777, and (2) in all cases to which the Legislature by statute extended a right to a jury trial between 1777 and 1894 (Motor Vehicle Mfrs. Assn. v. State of New York, supra, 75 N.Y.2d at 181, 551 N.Y.S.2d 470, 550 N.E.2d 919; 4 Weinstein-Korn N.Y.Civ.Prac. p 4101.08). In addition, it has been held that the right to a jury trial is not strictly limited to those instances in which it was actually used in 1894, but also extends to new cases that are analogous to...