McKee v. Cutter Laboratories, Inc.

• Decision Date: 30 January 1989
• Docket Number: No. 88-5070,88-5070
• Citation: 866 F.2d 219
• Parties: Stella Mae McKEE, individually and as Administratrix of the estate of David Allen McKee, Plaintiff-Appellant, v. CUTTER LABORATORIES, INC. and Miles Laboratories, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 219

866 F.2d 219

57 USLW 2507

Stella Mae McKEE, individually and as Administratrix of the estate of David Allen McKee, Plaintiff-Appellant, v. CUTTER LABORATORIES, INC. and Miles Laboratories, Inc. Defendants-Appellees.

No. 88-5070.

United States Court of Appeals Sixth Circuit.

Argued Oct. 14, 1988.

Decided Jan. 30, 1989.

Larry F. Sword (argued), John McClorey, Somerset, Ky., for plaintiff-appellant.

James A. Ridings (argued), Hamm, Milby, & Ridings, London, Ky., Duncan Barr, Lisa T. Ungerer, O'Connor, Cohn, Dillon & Barr, San Francisco, Cal., for defendants-appellees.

Before MERRITT and RYAN, Circuit Judges; and WALINSKI, District Judge. ^*

RYAN, Circuit Judge.

Plaintiff Stella Mae McKee appeals the district court's grant of summary judgment for defendants Miles Laboratories, Inc., and Cutter Laboratories, Inc., in this product liability action involving strict liability and negligence claims. The action arose from the death of plaintiff's decedent, David McKee, who died after contracting acquired immune deficiency syndrome (AIDS) from a contaminated antihemophilic blood product allegedly manufactured by Cutter. The district court granted summary judgment for defendants on the grounds that (1) the Kentucky blood shield statute, KRS 139.125, barred plaintiff's strict liability claims, and (2) defendants were not negligent because they met the standard of care for production of the blood product. We affirm.

The record on appeal, viewed in a light favorable to plaintiff, establishes the following. Plaintiff's decedent, David McKee, was a type A hemophiliac who used "Koate," an antihemophilic blood product produced by Cutter Laboratories, a division of Miles Laboratories. Koate is used by hemophiliacs to supply Factor VIII, a blood protein necessary for blood coagulation. David McKee used Koate that had been produced from blood contaminated with human immunodeficiency virus (HIV), the retrovirus that is now known to cause AIDS. Mr. McKee was diagnosed with "full blown" AIDS in October 1983, and he died in 1984.

In January 1985, plaintiff, Mr. McKee's wife, brought this product liability action against Cutter Laboratories and Miles Laboratories in federal district court under diversity jurisdiction. Plaintiff claimed that defendants were liable for her husband's death under strict liability and negligence theories, and she sought compensatory and punitive damages. After discovery, the district court granted defendants' motion for summary judgment on the grounds that (1) KRS 139.125, Kentucky's "blood shield statute," barred plaintiff's strict liability claims, and (2) defendants were not negligent because the standard of care for production of Factor VIII products before the AIDS virus was discovered did not require producers to treat or test the products in ways that have subsequently been discovered to eliminate the risk of AIDS contamination. McKee v. Miles Laboratories, Inc., 675 F.Supp. 1060 (E.D.Ky.1987). This appeal followed. ¹

I.

This court reviews a district court's grant of summary judgment de novo. Gutierrez v. Lynch, 826 F.2d 1534, 1536 (6th Cir.1987). Summary judgment is appropriate "[w]here the moving party has carried its burden of showing that the pleadings, depositions, answers to interrogatories, admissions and affidavits in the record, construed favorably to the nonmoving party, do not raise a genuine issue of material fact for trial." Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)); see Fed.R.Civ.P. 56(c). "[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986) (citations omitted).

A.

Plaintiff first contends that the district court erred in holding that her strict liability claims are barred by the Kentucky blood shield statute, KRS 139.125. This statute, which was enacted in 1968, provides in full:

139.125 Procurement, processing or distribution of blood or human tissue deemed service and not sale

The procurement, processing, distribution or use of whole blood, plasma, blood products, blood derivatives and other human tissues such as corneas, bones or organs for the purpose of injecting transfusing or transplanting any of them into the human body is declared to be, for all purposes, the rendition of a service by every person participating therein and, whether or not any remuneration is paid therefor, is declared not to be a sale of such whole blood, plasma, blood products, blood derivatives or other tissues, for any purpose, subsequent to enactment of this section.

In the only reported Kentucky case to discuss KRS 139.125, McMichael v. American Red Cross, 532 S.W.2d 7 (Ky.1975), the Kentucky Court of Appeals (Kentucky's highest court at that time) did not reach the applicability or constitutionality of the statute. In McMichael, plaintiff brought strict liability and breach of implied warranty claims against a blood supplier that had allegedly supplied blood contaminated with the serum hepatitis virus. The trial court, at the close of the opening statement, directed a verdict in favor of the defendant-blood supplier on the ground that the action was barred by KRS 139.125. The Kentucky Court of Appeals affirmed the directed verdict for defendant, but on a different ground. It did not reach the applicability or constitutionality of KRS 139.125; instead, it held that defendant was entitled to a directed verdict on the ground that the blood in question was not "unreasonably dangerous" because it was "unavoidably unsafe" under Comment (k) to Section 402A of the Restatement of Torts 2d. "[T]here were no methods available at the time in question by which hepatitis virus could effectively be excluded from blood or the presence of the virus determined." McMichael, 532 S.W.2d at 9.

In the present case, the district court sought certification of the applicability and constitutionality of KRS 139.125, but the Kentucky Supreme Court declined the certification request, referring to McMichael. The district court, therefore, was required to decide whether KRS 139.125 barred plaintiff's strict liability claims. It held:

Because [under KRS 139.125] transactions involving blood and blood components are to be considered services, as opposed to sales, they are outside the purview of Kentucky's product liability statute. K.R.S. 411.300; 411.320; 411.340; McMichael, supra.

... [B]lood shield statutes in other states uniformly have been interpreted as barring strict liability claims. To permit the plaintiff to circumvent the exemption of blood and blood derivatives by pursuing claims under the product liability statute would defeat the obvious legislative intent of K.R.S. 139.125. Consequently, plaintiff's claims against defendants arising under strict liability should be dismissed.

675 F.Supp. at 1063.

Plaintiff contends that the district court erred in dismissing her strict liability claims on this ground. She argues that although KRS 139.125 makes a transaction in blood products not a sale, Kentucky law does not require a product sale for the doctrine of strict liability to apply. Plaintiff relies on two cases for this proposition: Taylor v. General Motors, Inc., 537 F.Supp. 949 (E.D.Ky.1982), and Embs v. Pepsi-Cola Bottling Co., 528 S.W.2d 703 (Ky.1975).

In Taylor, the district court held that under Kentucky strict product liability doctrine a product "seller" may include those responsible for placing a product in the stream of commerce, even if they are not within "the technical category of a 'seller.' " 537 F.Supp. at 952. In Embs, the Kentucky Court of Appeals (Kentucky's highest court at that time) held that, in addition to products consumers and users, bystanders whose injuries were reasonably foreseeable may bring strict product liability actions. 528 S.W.2d at 706. These cases expanded the availability of strict product liability actions under Kentucky law, but neither supports plaintiff's contention that her strict liability claims are actionable notwithstanding KRS 139.125.

KRS 139.125 provides that transactions in blood, blood products, and other human tissues are not to be considered "sales"--they are to be considered "for all purposes, the rendition of a service." Although we are aware of no Kentucky case that holds specifically that a strict product liability action is unavailable against one who renders a service, we have no hesitancy in concluding that this would be the holding of the Kentucky Supreme Court were it faced with the question. ² Since Dealers Transport Co. v. Battery Distributing Co., 402 S.W.2d 441 (Ky.1965), Kentucky has followed the view of strict product liability expressed in Section 402A of the Restatement of Torts 2d, which is entitled "Special Liability of Seller of Product for Physical Harm to User or Consumer" (emphasis added). Courts in other jurisdictions have consistently held that "[s]ection 402A does not apply to those who provide a service." Klein v. Council of Chemical Associations, 587 F.Supp. 213, 223 (E.D.Pa.1984); see also Annotation, Application of Rule of Strict Liability in Tort to Person Rendering Services, 29 A.L.R. 3d 1425, 1426 (1970 & 1988 Supp.). Furthermore, Kentucky's Product Liability Act, KRS 411.300 to 411.350, which was enacted in 1978, defines a "product liability action" to include

any action brought for or on account of personal injury, death or property damage caused by or resulting from the manufacture, construction, design, formulation, development of standards preparation, processing, assembly, testing, listing, certifying, warning, instructing, marketing, advertising, packaging or labeling of any product.

KRS 411.300 (emphasis added). We hold that KRS 139.125, which defines a...