Nelson v. Sandoz Pharmaceuticals Corp., 00-4062.

Decision Date29 April 2002
Docket NumberNo. 01-1824.,No. 00-4062.,00-4062.,01-1824.
Citation288 F.3d 954
PartiesLisa D. NELSON and David A. Nelson, Plaintiffs-Appellants, v. SANDOZ PHARMACEUTICALS CORPORATION, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Gary Becker, Louisville, KY, Ellen Relkin (argued), Weitz & Luxenberg, New York City, for Plaintiffs-Appellants.

Joe G. Hollingsworth, Kirby Griffis (argued), Spriggs & Hollingsworth, Washington, DC, F. Joseph Jaskowiak, Hoeppner, Wagner & Evans, Merrillville, IN, for Defendant-Appellee.

Before POSNER, RIPPLE and KANNE, Circuit Judges.

RIPPLE, Circuit Judge.

On April 11, 1990, shortly after the birth of her first child, Lisa Nelson, at the age of twenty-five, suffered a debilitating stroke that impaired the left side of her body. At the time of her stroke, Mrs. Nelson had a prescription for, and was using, the drug Parlodel. Approximately five years after suffering the stroke, Mrs. Nelson and her husband, David, (collectively, "the Nelsons") filed this action against Sandoz Pharmaceuticals Corporation ("Sandoz") — the manufacturer of Parlodel. They alleged that the prescription drug had precipitated Mrs. Nelson's stroke. The district court entered summary judgment for Sandoz, concluding that the Nelsons had failed to file their action within the applicable statute of limitations period. The district court also rejected the Nelsons' contention that Sandoz should be equitably estopped from asserting the statute of limitations as a defense to the action because of alleged misrepresentations it made to Mrs. Nelson's physician. For the reasons set forth in the following opinion, we affirm in part and reverse in part the judgment of the district court, and we remand this case for further proceedings.

I BACKGROUND
A. Facts

At a hospital located in Wabash, Indiana, Mrs. Nelson, an Indiana resident, gave birth to her first child on March 21, 1990. In the days following the delivery, a physician prescribed the drug Parlodel for Mrs. Nelson. This medication is designed to suppress lactation in postpartum women. Sandoz Pharmaceuticals, a Delaware corporation, manufactured Parlodel and marketed the product to various individuals, including physicians in Indiana.

On April 5, 1990, Mrs. Nelson began her regimen of Parlodel therapy, which consisted of a 2.5 milligram dose of the medication taken twice a day for fourteen consecutive days. Although her consumption of the medication coincided with the onset of nausea and headaches, Mrs. Nelson continued to follow the prescription. On approximately the seventh day of the Parlodel regimen, Mrs. Nelson collapsed; her husband discovered her lying unconscious on the floor of their home. At a local hospital, physicians treated Mrs. Nelson and concluded that, at the age of twenty-five, she had suffered a severe stroke.

During Mrs. Nelson's hospitalization, Dr. Matthew Sprunger, a treating physician, learned that Mrs. Nelson had taken Parlodel and initially suggested a possible correlation between the medication and his patient's condition. Specifically, in Mrs. Nelson's progress report, Dr. Sprunger noted, "Had been on Parlodel for lactation suppression. Some case reports in the literature of postpartum cardiac and vascular insults in [patients] on Parlodel. [Question or question of] relationship in this case. Will [check] literature."1 Vol. VI, Ex.A. Investigating his theory, Dr. Sprunger turned to the Physicians' Desk Reference ("the PDR") — a medical reference that provides information concerning the uses and side effects of numerous prescription drugs. Under its entry for Parlodel, the PDR indicated that incidents of stroke had been reported among individuals who used the medication. In particular, the reference noted that "[s]erious adverse reactions reported include ... 15 cases of stroke.... An unremitting and progressively severe headache, sometimes accompanied by visual disturbance, often preceded by hours to days, many cases of seizure and/or stroke." Vol. V, R.43, Ex.H. However, the PDR, cautioned that "[t]he relationship of these adverse reactions to Parlodel ... administration has not been established." Id.

Dr. Sprunger next consulted Elaine Thomas, the Sandoz sales representative for the Fort Wayne, Indiana area. Dr. Sprunger informed Ms. Thomas that he sought information from Sandoz concerning a possible link between Parlodel and the occurrence of strokes in postpartum women. During deposition testimony regarding her conversation with Dr. Sprunger, Ms. Thomas stated:

Basically, I told him that we were aware of some episodes of stroke but that they occurred more frequently in the postpartum population than in the normal population anyhow, and it was my understanding that they didn't occur any more frequently with patients treated with Parlodel than they did in the postpartum population.

Vol. VI, Ex.E, at 26. Although Ms. Thomas provided Dr. Sprunger with literature relating to this topic, neither individual recalls the article's author, title or precise contents.

After conducting this investigation, Dr. Sprunger concluded that a connection did not exist between Mrs. Nelson's stroke and Parlodel, and he relayed this determination to Mrs. Nelson's family practitioner. In Mrs. Nelson's progress report, Dr. Sprunger wrote: "Obstetrics, see information on front of chart re: Parlodel and strokes. As per Sandoz information, negative correlation of Parlodel and stroke. Will sign off." Vol. VI, Ex.A. (emphasis in original). During deposition testimony, Mr. Nelson indicated that Dr. Sprunger also relayed these findings to him.

The Nelsons also relate that they asked a second physician, Mrs. Nelson's neurologist, if Parlodel induced the stroke. According to the Nelsons, the neurologist brushed aside this theory. Soon after, Mrs. Nelson's physicians discharged her from the hospital, and she returned home.

In October 1992, Mrs. Nelson gave birth to her second child. After the delivery, Mrs. Nelson informed her nurse that she would not take Parlodel. In particular, on Mrs. Nelson's chart, the nurse wrote "states had `stroke' 3 [weeks] past due last [pregnancy]. States won't take Parlodel." Vol. V, R.43, Ex.J. (emphasis in original). Also in 1992, the Nelsons contacted an attorney and inquired whether Mrs. Nelson's family practitioner bore some responsibility for her earlier stroke. The attorney informed them that they lacked adequate information to proceed with a case against this physician.

Two years later, in August 1994, an investigative news program aired by the National Broadcasting Company ("NBC") concerning the incidence of stroke among postpartum women who had taken Parlodel. Mrs. Nelson viewed this program. Later that year, the FDA issued a notice of its intent to withdraw its approval for the use of Parlodel in the treatment of postpartum lactation.

B. District Court Proceedings
1.

On December 26, 1995, invoking the diversity jurisdiction of the district court,2 the Nelsons filed this products liability action against Sandoz in the United States District Court for the District of New Jersey, alleging that Parlodel had induced Mrs. Nelson's stroke.3 Faced with a flurry of similar cases, the district court, for purposes of discovery, consolidated the Nelsons' action with those of other Parlodel plaintiffs. When this phase of the litigation had concluded, the Parlodel plaintiffs moved to continue the consolidation of their cases for the purpose of trial; the district court, however, denied the motion. In response to this ruling, Sandoz moved, pursuant to 28 U.S.C. § 1404(a), to transfer each of the actions to the home district of the specific plaintiff who had filed the claim. The district court granted the motion, eventually resulting in the transfer of the Nelsons' case to the United States District Court for the Northern District of Indiana.4

Once before the district court, Sandoz moved for summary judgment, alleging that the Nelsons had failed to file their claims within the applicable statute of limitations period.5 As a threshold matter, Sandoz submitted that Indiana, rather than New Jersey, substantive law governed the litigation. Proceeding on this theory, the pharmaceutical company argued that, under Indiana law, the Nelsons' cause of action accrued in April 1990 — the date of Mrs. Nelson's stroke. According to Sandoz, to have filed a timely claim, the Nelsons should have instituted any action relating to the stroke by April 1992 — the date Indiana's two-year statute of limitations period for product liability suits would have expired on these claims. Although conceding that Indiana recognized the discovery rule,6 Sandoz submitted that the Indiana courts applied the doctrine sparingly and would not permit its invocation in this case. Sandoz further argued that, even if the discovery rule applied, the Nelsons should have known of their claims against the pharmaceutical corporation as early as 1992.

In response, although the Nelsons continued to urge the application of New Jersey substantive law to their claims, they also submitted that, under either New Jersey or Indiana law, they had instituted their suit in a timely manner. Submitting that either state would apply the discovery rule to their case, the Nelsons argued that, under this doctrine, their cause of action accrued on the date of the NBC telecast. The Nelsons submitted that, having learned of their claims only in 1994, they filed this action well within both states' two-year statute of limitations periods for product liability suits. In the alternative, the Nelsons submitted that, based on Sandoz' purported efforts to conceal the link between its medication and strokes, the pharmaceutical company should be equitably estopped from asserting the statute of limitations defense.

2.

After considering the parties' positions, the district court entered...

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