Mulligan v. Lederle Laboratories, Div. of American Cyanamid Co.

• Decision Date: 20 March 1986
• Docket Number: No. 85-1111,85-1111
• Citation: 786 F.2d 859
• Parties: , Prod.Liab.Rep.(CCH)P 10,960 Maria MULLIGAN, Appellee, v. LEDERLE LABORATORIES, a DIVISION OF AMERICAN CYANAMID COMPANY, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 859

786 F.2d 859

54 USLW 2508, Prod.Liab.Rep.(CCH)P 10,960

Maria MULLIGAN, Appellee, v. LEDERLE LABORATORIES, a DIVISION OF AMERICAN CYANAMID COMPANY, Appellant.

No. 85-1111.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 18, 1985.

Decided March 20, 1986.

Alston Jennings, Little Rock, Ark., for appellant.

Charles Phillip Boyd, Jr., Little Rock, Ark., for appellee.

Before LAY, Chief Judge, ARNOLD and FAGG, Circuit Judges.

ARNOLD, Circuit Judge.

Lederle Laboratories brings this appeal to challenge jury verdicts of $50,000 in compensatory and $100,000 in punitive damages awarded to Maria Mulligan. Mrs. Mulligan, a medical laboratory technician, brought this action in 1979, alleging that Varidase, a drug manufactured by Lederle and given to her in 1960, caused her to develop several chronic health problems, including mouth sores in 1962, microscopic hematuria in 1967, and red cell cast, indicating kidney disease, in 1976.

The defendant makes two arguments on appeal. First, it claims the District Court ¹ incorrectly refused to hold that the three-year statute of limitations had run on Mrs. Mulligan's cause and, instead, submitted the limitations question to the jury. Second, Lederle argues that there was insufficient evidence to support an award of punitive damages, and that the District Court should have either refused to submit the question to the jury or granted defendant's motion for judgment notwithstanding the verdict. Plaintiff responds to the merits of defendant's claims but also relies on the District Court's ruling that Lederle failed to renew its motion for a directed verdict at the close of its case, and, under Fed.R.Civ.P. 50, has therefore waived its right to ask for judgment notwithstanding the verdict or to challenge the factual findings made by the jury. The defendant replies that it substantially complied with the dictates of Rule 50. We assume for purposes of this appeal that Lederle's motions were properly preserved, and affirm on the merits.

I.

Varidase was a biological drug product developed by Lederle about 1949 for the treatment of inflammation and to break up deposits of clotted blood as well as accumulations in tissues and tissue surfaces of fluid, cells, and cellular debris which have escaped from blood vessels. The product was made of a mixture of the enzymes streptokinase and streptodornase, which had been extracted from streptococcus bacteria. During the 1950's, Lederle first began producing Varidase to be applied directly to clots and inflammation in topical form; later, an intramuscular product was developed, and finally buccal tablets were produced to be held in the mouth and dissolved. ² Although the precise scientific mechanisms have never been understood, streptokinase has been recognized for some time as an activator of plasminogen, capable of breaking up blood clots.

Maria Mulligan, then 27 years old, was given Varidase by intramuscular injection in February and March 1960 to break up blood clots caused by the episiotomy performed during the delivery of her first child on February 21, 1960, in Lake Village, Arkansas. She received a total of seven injections and was released from the hospital on March 4. In 1962, Mrs. Mulligan developed oral sores or lesions, which have recurred since that time. Treatment of the sores, known as aphthous stomatitis, has been successful only very briefly; they disappeared completely only when Mrs. Mulligan was again pregnant. In 1967, when doing her own urinalysis, Mrs. Mulligan first noticed microscopic hematuria, red blood cells that could be seen only by microscope. This condition persisted and went undiagnosed, despite visits to various physicians, as well as frequent conversations with the doctors at the Lake Village clinic where she worked. She testified that she assumed the problem was related to her bladder until 1976, when her urinalysis revealed red blood cell cast, indicating glomerulonephritis, a kidney condition. Also in 1976, Mrs. Mulligan came across an article on drug-induced nephritis, which led her to connect her condition to the Varidase she was given in 1960. In response to a letter drafted by Mrs. Mulligan and signed by her physician, a Lederle official said the company had no knowledge of any possible link between the drug and nephritis or her other symptoms. ³ Continued investigation by plaintiff led her to the conclusion that such a link was possible, and she filed suit in June 1979. ⁴

At trial, plaintiff introduced evidence showing that in the 1950s, batches of Varidase were unpredictably pyrogenic, that is, fever-causing. Both internal Lederle documents and company letters to physicians inquiring about apparent patient reactions to Varidase indicate that a majority of those given Varidase suffered some sort of fever, and others also suffered mouth ulcers, nausea, hematuria, cystitis, nephritis, muscle aches, and anaphylactic shock. Plaintiff's expert witnesses testified that the defendant's description in the 1960 Physician's Desk Reference (PDR) of the drug's possible side effects were not "full proper disclosure," Tr. at 204, and "grossly inadequate," id. at 396. The internal documents also suggested problems with the product's purity. One expert criticized the way Lederle tested for pyrogenicity and toxicity, and both witnesses suggested the drug, which was removed from the market in 1981, had never been effective.

As to plaintiff's particular circumstances, Mrs. Mulligan's 1960 hospital records were used to suggest that she had had a febrile reaction shortly after being given Varidase, although her experts disagreed on whether such a reaction had in fact occurred. Dr. Russell Steele, professor of pediatrics and director of the clinical immunology center for the University of Arkansas for Medical Sciences, said of Varidase and plaintiff's condition that "there is a tie-in, this is a streptococcal antigen, with a production of kidney disease that's called nephritis or glomerulonephritis, ... and I feel it is, the most probable precipitating event for her development of hematuria and red cell cast." Tr. at 468-469. As support for the theory that Varidase caused plaintiff's condition, Dr. Steele, who was described at trial as the only physician-clinical immunologist in Arkansas, cited a variety of articles and studies, dating from both before and after 1960, including a reference in a 1971 book written by Lederle's director of medical communications.

On cross-examination, Dr. Steele acknowledged that the medical literature indicated that the longest reported reaction to Varidase was three months in duration and that there were no conclusive data to show plaintiff's mouth sores were caused by intramuscular Varidase. ⁵ Defendant presented two physicians as experts to rebut plaintiff's theory. One, the director of transplantations at the University of Arkansas Medical Center, testified that he examined Mrs. Mulligan in 1976 and found no evidence of glomerulonephritis. Both expert witnesses said they believed there was no connection between Mrs. Mulligan's condition and her 1960 treatment with Varidase. Defendant also emphasized the unsubstantiated nature of physician complaints about the drug, as well as the fact that each lot of Varidase was approved by the federal Bureau of Biologics.

II.

Mrs. Mulligan was injected with Varidase in 1960; this lawsuit was filed in 1979. The parties agree that the applicable limitations period is contained in the Arkansas Product Liability Act of 1979, Ark.Stat. Secs. 34-2801 et seq., which requires that such a cause of action be "commenced within three (3) years after the date on which the death, injury, or damage complained of occurs." Ark.Stat. Sec. 34-2803. The question here is whether the limitations period started to run prior to June 6, 1976, three years before the suit against Lederle was filed. The District Court denied defendant's motion asserting that the statute had run as a matter of law and instead instructed the jury to find for Lederle if Mrs. Mulligan's injuries were "manifested" or if she received an "informed diagnosis" before the critical date. Tr. at 737-738. In addition, the court told the jury a statutory limitations period is tolled if a defendant committed "some positive act of fraud which would conceal a plaintiff's cause of action." Id. at 743. Plaintiff argues before this Court that the jury's rejection of the limitations defense could be upheld on either of the grounds presented to it by the District Court. Defendant, however, claims that the limitations period began either in 1960 when Mrs. Mulligan was given Varidase, or at the latest in 1967, when she first found microscopic hematuria in her urine.

We begin by looking at the statute itself. In product-liability cases, Section 34-2803 supplants Ark.Stat. Sec. 37-206, which requires a lawsuit be filed "within three (3) years after the cause of action shall accrue." There appears to be no particular reason for the change in language to "after the date on which the death, injury, or damage complained of occurs." One commentator called the "failure ... to use the same language ... puzzling," Comment, The Arkansas Product Liability Act of 1979, 35 Ark.L.Rev. 364, 369 (1981), and suggested Sec. 34-2803 represents either a codification of the case law developed around Sec. 37-206 or perhaps an enlargement of the previous limitations period since "damage complained of" could include later injuries developed more than three years after the original harm, but within three years of the current action. The statute clearly rejects the concept found in some older Arkansas cases that a cause of action accrues when the tort is complete; for example, in an automobile accident case "at the moment the car was turned over," Faulkner v. Huie, 205 Ark. 332, 336, 168 S.W.2d 839, 841 (1943). Obviously, the plaintiff must suffer some harm before the new limitations period starts to run. This...