Natale v. Upjohn Company, Civ. A. No. 2841.

• Decision Date: 05 November 1964
• Docket Number: Civ. A. No. 2841.
• Citation: 236 F. Supp. 37
• Court: U.S. District Court — District of Delaware
• Parties: Anthony NATALE and Julia Natale, his wife, Plaintiffs, v. The UPJOHN COMPANY and Lakeside Laboratories, Inc., Defendants.

236 F. Supp. 37

Anthony NATALE and Julia Natale, his wife, Plaintiffs, v. The UPJOHN COMPANY and Lakeside Laboratories, Inc., Defendants.

Civ. A. No. 2841.

United States District Court D. Delaware.

November 5, 1964.

Joseph F. Mulcahy, Jr., James P. McHugh, Chester, Pa., and Henry A. Wise, Jr., Wise & Suddard, Wilmington, Del., for plaintiffs.

E. N. Carpenter, II, Richards, Layton & Finger, Wilmington, Del., for defendant The Upjohn Co.

Herbert L. Cobin, Coxe, Booker, Walls & Cobin, Wilmington, Del., for defendant Lakeside Laboratories, Inc.

STEEL, District Judge.

Defendant's motion to dismiss the complaint raises the question, among others, whether the Pennsylvania or Delaware statute of limitations is applicable to a cause of action which arose in Pennsylvania, when jurisdiction is based upon diversity of citizenship.

The claim of plaintiff, Mrs. Natale, is for personal injuries alleged to have been sustained by her as a result of the use of two drugs which were prescribed by her physicians. The drugs, Monase and Catron, were manufactured by the two defendants. The claim of the other plaintiff, Mrs. Natale's husband, is for medical expenses, loss of income and consortium due to Mrs. Natale's injuries.

The complaint alleges that the defendants warranted expressly and impliedly that Monase and Catron were fit and safe for human use and consumption, and for medical prescription for depressive disorders, that they had no other "side effects" than those specifically mentioned on the labels and advertising material, and that defendants expressly warranted that the drugs possessed the qualities and properties and would give humans the effects stated in their labelling and sales promotion material; whereas in truth and in fact they did not possess such qualities and properties, nor did they give the minimal side effects which defendants warranted. The complaint further alleges that the physicians who treated Mrs. Natale, relied upon the warranties to the detriment of Mrs. Natale, without being apprised of the dangers present in the drugs which occasioned the injuries. Stated conceptually, the action is for breach of (1) express warranty, (2) implied warranty of merchantability, and (3) implied warranty of fitness for a particular purpose.

The drugs were administered to Mrs. Natale in Pennsylvania. The complaint does not allege where the warranties were made or brought to the attention of Mrs. Natale or her physicians. The Court will assume that the cause of action arose in Pennsylvania since this is the basis upon which it has been presented by the parties.

The complaint alleges that Mrs. Natale was started on Monase about April 29, 1960 and on Catron about May 1960, that some blurring of her vision occurred in May of 1960 and has continued until the present time, and that Mrs. Natale's physicians continued to administer Monase and Catron to plaintiff after her initial vision complaints. The time when Mrs. Natale ceased using the drugs is not alleged. Nor is the time when they were last sold by the defendants or to Mrs. Natale or her physicians. Although the complaint fails to allege facts from which it can be ascertained when the cause of action accrued, at the argument both parties assumed that it was in 1960.¹ Both arguments were presented upon the premise that if the Delaware Statute of Limitations applied, the action would be barred, regardless of whether the one or two year statute was controlling,² while if the four year statute of limitation of Pennsylvania governed,³ the action was timely, instituted as it was on April 29, 1964.

Since jurisdiction is based on diversity of citizenship, the principles of conflict of laws of Delaware must be applied. Klaxon Company v. Stentor Electric Manufacturing Company, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). The conflict rule in Delaware pertaining to the limitation of actions would appear at first blush to be stated in the Delaware "borrowing statute". It provides that in an action by a non-resident on an out-of-state cause of action (the situation at bar), there shall be applied the period of limitation of Delaware or of the state where the cause of action arose, whichever is shorter.⁴ If the "borrowing statute" is applicable, the action is barred by the Delaware statute of limitations.

Plaintiffs argue that the Delaware "borrowing statute" relates to an "ordinary" foreign statute of limitation which only bars the remedy, and that it is without application to a "built-in" or "integrated" statute which creates a right or liability and also fixes the period in which it can be asserted. In the latter situation, plaintiffs argue, the statute not only bars the remedy but also constitutes a part of the substantive right which the statute creates, and the limitation period in the foreign statute is, therefore, substantive and not procedural. When a cause of action is asserted under such a statute, plaintiffs argue, the foreign substantive period of limitation is controlling. This argument is predicated upon the assumption that plaintiffs are asserting a claim for a breach of warranty which was created by the Uniform Commercial Code of Pennsylvania, 12A P.S. §§ 2-313, 2-314, 2-315, 2-714.

In White v. Govatos, 40 Del. 349, 10 A.2d 524 (Super.Ct.1939) the Court stated that when a period of limitation in a statute which creates a right has expired but that of the forum has not, the action cannot be maintained. The Court held, however, that in the converse situation, i. e. when a statute of limitation of the forum has expired, as was true in the case then before the Court, (and now before this Court) the action cannot be maintained even though the period of limitation fixed by the foreign statute which creates the right has not expired. This conclusion was reached unaided by any "borrowing statute" since at the time of the decision none had been enacted.

If the Govatos decision could be accepted as a statement of the present law in Delaware, its rationale would provide a four-square answer to plaintiffs' argument and require its rejection. Doubt is cast on Govatos, however, by the more recent Delaware Supreme Court decision in Pack v. Beech Aircraft Corporation, 11 Terry 413, 50 Del. 413, 132 A.2d 54, 67 A.L.R.2d 207 (1957). There it was held that Delaware personal representatives of a Delaware resident who sought to recover for the latter's death due to an accident in New Jersey, were barred by the two-year period of limitation in the Wrongful Death Act of New Jersey and not by the Delaware three-year statute. In discussing the Delaware "borrowing statute" the Court said that it dealt only with "ordinary statutes of limitations" (132 A.2d p. 58). The Court strongly intimated that when a statute in the state where a cause of action arises creates the substantive right which is asserted, and also includes a "built-in" time limitation, the Delaware "borrowing statute" is without application since it deals only with the remedy, and the limitation in the foreign statute is controlling. (132 A.2d p. 58-59). In expressing these views, the Court said that it did so "with deference to high authority supporting the Govatos case" (132 A. 2d p. 58), that it found the result to be "quite illogical" and that "there is much judicial authority and opinion to the contrary" (132 A.2d p. 59).⁵

The circumstances of the instant case, however, make it unnecessary to consider whether the decision in Pack destroys the validity of Govatos as a current expression of Delaware law, for plaintiffs have erroneously assumed that the four year period of limitation in Pennsylvania is an integral part of a right granted to Mrs. Natale by the Uniform Commercial Code.

The question whether a statute of limitations is such an integral part of a statutory right as to be deemed a part of the substance of the right, is a matter of legislative intention. Mid-State Horticultural Co. v. Pennsylvania Railroad Co., 320 U.S. 356, 360, 64 S.Ct. 128, 88 L.Ed. 96 (1943). And where the Courts of the state which enact legislation have construed it, their construction must be accepted by the Court of the forum. Pack v. Beech Aircraft Corporation, supra, 50 Del. at 416, 132 A.2d at 57. See Goodwin v. Townsend, 197 F.2d 970, 972-973 (3rd Cir. 1952).

Plaintiff contends that Gardiner v. Philadelphia Gas Works, 413 Pa. 415, 197 A.2d 612 (1964), holds that the four year period of limitation in the Uniform Commercial Code imposes a limitation not only upon the remedy but also upon the right to sue for breach of warranty. This is an unwarranted interpretation of the decision. The only issue before the Court was whether the two year period of limitation for the commencement of an action for personal injuries established by the Act of 1895, 12 P.S. § 34, or the four year period of limitation specified in the Uniform Commercial Code enacted in 1953, 12A P.S. § 2-725, was controlling when a personal injury resulted from a breach of warranty incident to a contract of sale. The Court held that the latter limitation governed. This was because, among other reasons, the Court found the period of limitation in the Code to be inconsistent with that in the Act of 1895, and therefore by the express terms of 12A P.S. § 10-103, the earlier statute was repealed when the Code was enacted. The Court in no way held or intimated that the Code contained a "built-in" period of limitation which was a substantive part of a statutory right.

Neither of the parties has cited any Pennsylvania or other decision, nor has independent research revealed any, which bears directly on the question whether the Pennsylvania four year period of limitation should be interpreted as substantive or procedural. Nevertheless, there are authorities both in Pennsylvania and elsewhere relating to other types of statutes, which support the conclusion that if the problem should arise in Pennsylvania, its Courts would probably hold that its four year...