Lynch v. Merrell-National Laboratories, Div. of Richardson-Merrell, Inc.

• Decision Date: 30 September 1987
• Docket Number: RICHARDSON-MERREL,No. 86-2055,INC,MERRELL-NATIONAL,86-2055
• Citation: 830 F.2d 1190
• Parties: , 24 Fed. R. Evid. Serv. 152, Prod.Liab.Rep.(CCH)P 11,553 Margo LYNCH, ppa Dennis Lynch, Dennis Lynch and Margaret Lynch, Plaintiffs, Appellants, v.LABORATORIES, DIVISION OF, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

Page 1190

830 F.2d 1190

56 USLW 2232, 24 Fed. R. Evid. Serv. 152,

Prod.Liab.Rep.(CCH)P 11,553

Margo LYNCH, ppa Dennis Lynch, Dennis Lynch and Margaret Lynch, Plaintiffs, Appellants, v. MERRELL-NATIONAL LABORATORIES, DIVISION OF RICHARDSON-MERRELL, INC., Defendant, Appellee.

No. 86-2055.

United States Court of Appeals, First Circuit.

Sept. 30, 1987.

Elizabeth Mulvey with whom Philip J. Crowe, Jr., and Lubin & Meyer, P.C., Boston, Mass., were on brief, for plaintiffs, appellants.

Thomas H. Bleakley and Bleakley & McKeen, P.C., Detroit, Mich., on brief, for plaintiffs' Lead Counsel Committee, Bendectin Multidistrict Litigation # 486 and plaintiffs' Lead Counsel, Michigan Consolidated Bendectin Cases, amicus curiae.

Frank C. Woodside, III with whom John E. Schlosser, Lynda E. Roesch, Dinsmore & Shohl, Cincinnati, Ohio, Larry C. Kenna, Peter W. Herzog, III, and Choate, Hall & Stewart, Boston, Mass., were on brief, for defendant, appellee.

Before CAMPBELL, Chief Judge, TORRUELLA and NOONAN, ^* Circuit Judges.

NOONAN, Circuit Judge.

Margo Lynch, the minor daughter of Dennis and Margaret Lynch, and her parents, all citizens of Massachusetts, sue Merrell-National Laboratories, Division of Richardson-Merrell, Inc., an Ohio corporation. Jurisdiction is based on diversity of citizenship; Massachusetts law applies. The case is one of a number which have arisen in which the drug Bendectin is alleged to have caused a birth defect. The district court gave judgment for the defendant. Lynch v. Merrell-National Laboratories,

46 F.Supp. 856 (D.Mass.1986). We affirm the district court.

FACTS

Bendectin, as originally designed, was a combination of three components: dicyclomine hydrochloride, an antispasmodic drug, earlier marketed under the name Bentyl; doxylamine succinate, an antihistamine, earlier marketed under the name Decapryn; and pyridoxine (Vitamin B6). The composite was approved by the Food and Drug Administration for sale in the United States in 1956 for use in alleviating morning sickness in pregnancy. In 1976 the composition was altered to omit Bentyl. The defendant was its manufacturer. In 1983, in the face of a host of lawsuits and some congressional criticism, the defendant withdrew it from the market.

In the fourth week of her pregnancy, in the last week of June 1974, Margaret Lynch began experiencing severe 24-hour-a-day morning sickness. Her physician, Ambler Garnett, Jr. of Newburyport, prescribed Bendectin, which she then took for the remainder of her term.

On February 17, 1975, Margaret's daughter Margo was born. She was born without a right hand and without the lower portion of her right forearm. She needed special medical care, which her parents provided. Her losses were, of course, permanent. She and her parents suffered from the cruel injury.

William J. Driscoll III, the obstetrician-gynecologist who delivered Margo, had no opinion as to the cause. Eventually, however, the Lynches came to the conclusion that Bendectin was the cause. On February 10, 1985 they brought suit against its maker, alleging that the manufacturer had negligently designed, developed, selected materials for, manufactured, assembled, tested, inspected, advertised, sold, promoted and distributed the drug; had negligently failed to warn its users; had falsely and misleadingly advertised it; had breached both express and implied warranties of safety; and had put on the market a drug dangerous and defective in design. They sought total damages of $7.5 million.

PROCEEDINGS

The Lynches' case was transferred to the Southern District of Ohio where since 1982 similar cases had been brought for pre-trial proceedings under Judge Carl Rubin. Over 1,000 cases were consolidated for this purpose under the authority of 28 U.S.C. Sec. 1407. The Lynches stipulated to be bound by the pretrial discovery in these proceedings. Given the option, however, of joining in the trial or having their case remanded to the district court in Massachusetts, the Lynches elected the latter course.

The consolidated cases proceeded to trial before Judge Rubin in Cincinnati. Just as trial began, he certified the plaintiffs as a class for settlement; the certification was reversed by mandamus. In re Bendectin Products Liability Litigation, 749 F.2d 300 (6th Cir.1984). After a trial on the merits, the jury found for the defendant, Merrell-National Laboratories. In re Richardson-Merrell, Inc. "Bendectin" Products Liability Litigation, 624 F.Supp. 1212 (S.D.Ohio 1985), appeal pending.

In Boston in 1986 the defendant moved for summary judgment against the Lynches. The district court granted the motion, ruling that the Lynches were collaterally estopped by the judgment in the multi-district litigation and that in any event they had presented insufficient proof of causation to permit a reasonable trier of fact to conclude that Bendectin had caused the birth defect of Margo Lynch. The second part of the district court's decision depended on its ruling that the expert testimony proffered by the plaintiffs was inadmissible. The Lynches appealed.

ISSUES

I. Were the Lynches collaterally estopped by the judgment in the multi-district litigation?

II. Was the proffered expert testimony admissible?

III. Was there sufficient evidence of causation to avoid summary judgment?

ANALYSIS

I. Collateral estoppel. The question is close and the thoughtful analysis by the district court all but compelling. A preliminary question is whether, in litigation based on diversity of citizenship, the doctrine of estoppel to be applied is federal or state. See Burbank, "Interjurisdictional Preclusion, Full Faith and Credit and Federal Common Law: A General Approach" 71 Corn.L.R. 733 (1986); Degnaon, "Federalized Res Judicata," 85 YaleL.J. 741 (1976). The parties and the district court have assumed that the law is federal. But the teaching of Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938) is clear as to the law to be applied in diversity:

Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State ... There is no federal general common law.

The law on collateral estoppel is as substantive in its effect as the law of contracts or torts. It is not a law created by the Constitution or an Act of Congress. This court has applied Massachusetts law on collateral estoppel in a case where jurisdiction rested on diversity and an earlier case, relied on by the defendant, had been decided in a Massachusetts court. Standard Accident Ins. Co. v. Doiron, 170 F.2d 206, 207 (1st Cir.1948). On the other hand, the argument must be considered that the federal system has the power and duty to protect its own judgments, and that when the effect of a federal judgment is at issue, even in a diversity action, federal law must govern. Kern v. Hettinger, 303 F.2d 333, 340 (2nd Cir.1962); cf. Byrd v. Blue Ridge Cooperative, 356 U.S. 525, 537, 78 S.Ct. 893, 900, 2 L.Ed.2d 953 (1958).

We need not resolve the question for every possible context. In this case involving the effect of multi-district litigation in a federal court, we believe the same result would follow under either federal or state law. Massachusetts has abandoned the old requirement of strict mutuality and permits a defendant to bind a plaintiff by the plaintiff's previous defeat in another case presenting the same issue, Home Owners Federal Savings and Loan Ass'n v. Northwestern Fire and Marine Insurance Co., 354 Mass. 448, 238 N.E.2d 55 (1968); and Massachusetts permits a plaintiff to bind a defendant by a previous criminal conviction. Aetna Casualty and Surety Co. v. Niziolek, 395 Mass. 737, 481 N.E.2d 1356, 1361 (1985). But so far Massachusetts has not permitted a defendant to bind a plaintiff by the defendant's previous victory in another case presenting the same issue. Federally, the traditional requirement of mutuality has been eliminated to permit a defendant to invoke estoppel against a plaintiff who lost on the same issue to an earlier defendant, Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971), and to permit a plaintiff to invoke estoppel against a defendant who lost to a prior plaintiff. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979).

The preference of both state and federal decisions for judicial economy might well be read as the district court read the federal cases, to indicate that mutuality should also be dispensed with where, as here, a plaintiff presents precisely the issue on which the defendant has prevailed against a prior plaintiff. Such an extension of estoppel has additional appeal where, as here, the plaintiffs had ample opportunity to join the multi-district litigation and chose not to do so, perhaps believing that if the defendant lost in Cincinnati the plaintiffs would avail themselves of that victory while if the defendant won, the plaintiffs would have a second shot in Boston.

Nonetheless we do not believe that either federal or state law would warrant the application of collateral estoppel in the present context. In rejecting certification of the class, the Sixth Circuit noted the teaching of Parklane Hosiery, supra, 439 U.S. at 330, 99 S.Ct. at 651, that later plaintiffs could not invoke to their benefit a favorable result in mass tort litigation. In re Bendectin Products Liability Litigation, supra, 749 F.2d at 305. If later plaintiffs could not, why should the defendant? Judge Rubin himself, dealing with plaintiffs who had opted out of the multi-district litigation, refused to give estoppel effect to the ultimate result in favor of the defendant. In re Bendectin Cases, No. 85-0996 (E.D.Mich.1986). Estoppel should not be applied unless the plaintiffs had a fair and full opportunity to litigate. Parklane Hosiery, supra, at 327, n. 7, 99 S.Ct. at 649, n. 7, citing Blonder-Tongue at 329, 91 S.Ct. at...