Roginsky v. Richardson-Merrell, Inc.

• Decision Date: 04 April 1967
• Docket Number: Docket 30629.,No. 266,266
• Citation: 378 F.2d 832
• Parties: Sidney ROGINSKY, Plaintiff-Appellee, v. RICHARDSON-MERRELL, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

378 F.2d 832 (1967)

Sidney ROGINSKY, Plaintiff-Appellee, v. RICHARDSON-MERRELL, INC., Defendant-Appellant.

No. 266, Docket 30629.

United States Court of Appeals Second Circuit.

Argued January 4, 1967.

Decided April 4, 1967.

Rehearing Denied May 8, 1967.

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Lawrence E. Walsh, New York City (Davis, Polk, Wardwell, Sunderland & Kiendl, Richard E. Nolan, Alfred E. Schretter, New York City, Robert M. Hallman, Costello, Ward, Tirabasso & Shea, Joseph M. Costello and Mortimer C. Shea, New York City, of counsel), for defendant-appellant.

Paul D. Rheingold, New York City (Speiser, Shumate, Geoghan & Krause, Stuart M. Speiser, William F. X. Geoghan, Jr., and Alfred W. Gans, New York City, of counsel), for plaintiff-appellee.

Before MOORE, FRIENDLY and HAYS, Circuit Judges.

FRIENDLY, Circuit Judge:

In this diversity action¹ Sidney Roginsky sought to recover compensatory and punitive damages for personal injuries, primarily cataracts, from taking at his home in Pennsylvania² a drug, MER/29, developed by Richardson-Merrell Company for lowering blood cholesterol levels. Roginsky's was the first to be tried of some 75 similar cases now pending in the District Court for the Southern District of New York. Several hundred actions have been filed elsewhere, see Rheingold, Products Liability — The Ethical Drug Manufacturer's Liability, 18 Rutgers L.Rev. 947-48 n. 4 (1964), in at least three of which trial courts have rendered large judgments for the plaintiffs.³

Although other theories of liability for compensatory damages had been advanced in the complaint, plaintiff withdrew all except negligence and fraud upon the Food and Drug Administration (FDA). Defendant moved for a directed verdict on all claims for injury by cataract as unsupported by sufficient proof of causation and on the fraud and punitive damage claims as unsupported by the evidence; the motions were denied. The judge instructed the jury it must first determine the issue of causation; if it found for the plaintiff on that, it should then pass upon the other issues, which he explained in a charge to which defendant took no exception. He helpfully submitted six separate questions: (1) causation, (2) negligence, (3) fraud upon the FDA, (4) amount of compensatory damages, (5) liability for exemplary damages, and (6) the amount thereof. The jury gave affirmative answers to all the questions relating to liability and fixed compensatory damages at $17,500 and punitive damages at $100,000, which the judge later declined to eliminate or reduce, 254 F.Supp. 430 (1966). On appeal defendant contends that its motions for directed verdicts should have been granted; it argues also that evidence erroneously admitted, much of it in support of what it considers the unsubstantiated fraud count, could have prejudiced the jury's determination of the issues of negligence and of conduct warranting the award of punitive damages. It also raises other objections to the receipt of evidence and complains that the award of punitive damages, "unless restricted to fixed and measurable amounts," violates due process. We affirm the award of compensatory damages but find that the evidence was not sufficient to warrant submission of the punitive damage issue to the jury.

I.

A summary of certain undisputed facts from this enormous record will be useful by way of introduction. MER/29 was developed in the late 1950's by The Wm. S. Merrell Company, a division of defendant, for the purpose of lowering blood cholesterol levels. At that time most physicians believed that a high level of cholesterol was a significant precursor of atherosclerosis, the leading single cause of death in the United States.

Before the drug was placed on the market there had been 246 experiments involving 3907 animals and it had been administered to over 2000 human patients under close clinical observation. Eighty per cent of these patients who had used the drug for 90 days or longer experienced a reduction of cholesterol levels averaging 20%. The only reported side effects were dermatitis of several different types, two reports of hair loss, some nausea and vomiting, one report of a drop in white blood cell count, two cases of vaginal bleeding or spotting, three cases of tearing or watering of the eyes, and one of blurred vision. In December 1959 many of the clinicians who had been administering the drug reported to a conference of eminent scientists and physicians held under defendant's auspices at Princeton, N. J.

In July 1959 defendant filed with the FDA a New Drug Application (NDA) for MER/29. The FDA cleared the drug for release in April 1960, subject to submission of approved labels. The label stated, under the heading "SIDE EF-facts," that "Isolated reports have been received of nausea, vomiting, temporary vaginal bleeding and dermatitis" and under the heading "CAUTION" a warning that "MER/29 has been shown to be entirely safe in the periods the drug has been studied, but long-term or lifetime effects are unknown. Periodic examination of patients on long-term MER/29 therapy is therefore necessary." Marketing began June 1. During the balance of 1960 over 100,000 persons used the drug, with no reports of cataracts.

In January 1961, Merck & Co., which had borrowed a sample of MER/29 and then synthesized its own supply, reported that test animals had developed cataracts. Defendant, after sending a team to Merck's laboratory, decided to make a further experiment on animals selected by it but did not reveal the Merck report to the FDA or the medical profession. On February 1 it learned that a user in Los Angeles, one Lee Anticouni, had developed a cataract; the facts were never run down for reasons later developed, and neither the FDA nor the profession was informed. Meanwhile additional thousands of patients were using the drug, with benefit to cholesterol levels and for the moment without important reported adverse effects.

On defendant's rerun of the Merck experiment, its dogs developed cataracts in October, 1961. At the same time the Mayo Clinic reported cataracts in two, later three, patients who were using MER/29. The combined effect of these two incidents was to cause the defendant, on October 18, 1961, to request the FDA's permission to issue a warning letter to all physicians, such permission then being required by law, 25 F.R. 12595 (1960), 21 C.F.R. § 130.9 (1963 ed.). Believing defendant's proposed letter to be too weak, the FDA withheld permission and insisted on a much stronger one which was approved on November 27 and mailed on December 1 to every doctor in the country and also to defendant's salesmen. With additional reports of cataracts coming in from the field during the early months of 1962, defendant was on the point of holding a high-level intra-company conference to decide upon withdrawal of MER/29 when, about April 1, the Mayo Clinic reported cataracts in a six year old boy who had been given high dosages to counteract a severe case of excessive cholesterol unusual in a child. Early in April defendant decided to withdraw MER/29 from the market; this was done on April 17, 1962.

Plaintiff, then aged 60, began using MER/29 in February 1961. In June he noticed scaling, rashes and falling hair which he reported to his physician. These conditions became aggravated despite treatment; around the year-end he noted disturbing eye symptoms and stopped taking the drug. In about six months the skin and hair conditions disappeared but the eye ailment, later diagnosed as cataracts, became somewhat worse; however, it has not become sufficiently serious for him to have them removed.

II.

Defendant's broadest contention is that a verdict should have been directed in its favor insofar as plaintiff sought damages for cataracts because of lack of adequate proof that these were induced by MER/29.⁴ Plaintiff relied on the testimony of a single physician, the chief of ophthalmology at the well-known Guthrie Clinic in the Robert Packer Hospital at Sayre, Pa. The physician testified that in November 1963 and various later dates he had found slight cataracts in both eyes and that he was of the opinion with a reasonable amount of medical certainty that these were caused by the taking of MER/29; he relied on "medical literature" and "conversations" that many persons who developed skin and hair changes like Roginsky's after taking MER/29 also developed cataracts.

Defendant claims this afforded too weak a basis for an opinion in view of the doctor's admission on cross-examination and the testimony of defendant's two experts that plaintiff's cataracts were in the deep cortex and nucleus of the lens where senile cataracts are most likely to develop, rather than nearer the surface where toxic cataracts usually manifest themselves. To this defendant added the testimony of its experts that the slow development of Roginsky's cataracts, which had been largely arrested at the time of trial, pointed to their being senile rather than toxic, and that his skin ailment had not been of the type that had generally preceded MER/29 induced cataracts. However, plaintiff's medical witness denied such universal distinctions between the manifestation of senile and toxic cataracts and between plaintiff's form of dermatitis and others, and the cross-examination of defendant's experts was not without effect. With all this supplemented by the abundant evidence that symptoms generally like Roginsky's had often been followed by toxic cataracts, the issue of causation was rightly left to the jury, even though on our own appraisal we might well find defendant's experts to be more convincing.

III.

Defendant's next complaint is that an erroneous refusal to direct a verdict for it on the fraud count prejudiced the jury's consideration of the issues of negligence and of liability for punitive damages. While our holding that the evidence was insufficient to warrant submission of the issue of punitive damages moots the...