Schafer v. American Cyanamid Co.

• Decision Date: 07 September 1993
• Docket Number: No. 93-1422,93-1422
• Citation: 20 F.3d 1
• Parties: , Prod.Liab.Rep. (CCH) P 13,850 Mark SCHAFER and Melissa Schafer, a Minor By and Through Mark Schafer, Natural Parent and Guardian of Melissa Schafer, Plaintiffs, Appellees, v. AMERICAN CYANAMID CO., Parent of Lederle Laboratories, a Division of American Cyanamid Co., Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1

20 F.3d 1

62 USLW 2615, Prod.Liab.Rep. (CCH) P 13,850

Mark SCHAFER and Melissa Schafer, a Minor By and Through Mark Schafer, Natural Parent and Guardian of Melissa Schafer, Plaintiffs, Appellees, v. AMERICAN CYANAMID CO., Parent of Lederle Laboratories, a Division of American Cyanamid Co., Defendant, Appellant.

No. 93-1422.

United States Court of Appeals First Circuit.

Heard Sept. 7, 1993.

Decided March 24, 1994.

J. Peter Coll, Jr. with whom Charles W. Gerdts, III, Nicole M. van Ackere, Lawrence H. Cooke, II, Donovan Leisure Newton & Irvine, New York City, Thomas A. Mullen, and Fordham & Starrett, Boston, MA, were on brief, for appellant.

Walter S. Kyle, Boston, MA, for appellees.

Before BREYER, Chief Judge, SELYA and STAHL, Circuit Judges.

BREYER, Chief Judge.

The National Childhood Vaccine Injury Act, 42 U.S.C. Secs. 300aa-1 to 300aa-34, provides a special procedure to compensate those who are injured by certain vaccines. The Act bars those who accept an award under that procedure from later bringing a tort suit to obtain additional compensation. Id. Sec. 300aa-21(a). The question before us in this appeal (under 28 U.S.C. Sec. 1292(b)) is whether the Act also bars the family of such a person from bringing a tort suit to obtain compensation for their own, related, injuries, in particular, for loss of companionship or consortium. Assuming that state law permits such suits, we find nothing in the Act that explicitly or implicitly bars them. And, we affirm the similar determination of the district court.

I Background

A The Statute

The National Childhood Vaccine Injury Act represents an effort to provide compensation to those harmed by childhood vaccines outside the framework of traditional tort law. Congress passed the law after hearing testimony 1) describing the critical need for vaccines to protect children from disease, 2) pointing out that vaccines inevitably harm a very small number of the many millions of people who are vaccinated, and 3) expressing dissatisfaction with traditional tort law as a way of compensating those few victims. Injured persons (potential tort plaintiffs) complained about the tort law system's uncertain recoveries, the high cost of litigation, and delays in obtaining compensation. They argued that government had, for all practical purposes, made vaccination obligatory, and thus it had a responsibility to ensure that those injured by vaccines were compensated. Vaccine manufacturers (potential tort defendants) complained about litigation expenses and occasional large recoveries, which caused insurance premiums and vaccine prices to rise, and which ultimately threatened the stability of the vaccine supply.

See generally National Childhood Vaccine Injury Compensation Act of 1985: Hearing on S. 827 Before the Senate Comm. on Labor and Human Resources, 99th Cong., 1st Sess. pt. 2 (1985) [hereinafter "Hearings on S. 827"]; Vaccine Injury Compensation: Hearings on H.R.5810 Before the Subcomm. on Health and the Environment of the House Comm. on Energy and Commerce, 98th Cong., 2d Sess. (1984) [hereinafter "Hearings on H.R.5810"]; National Childhood Vaccine-Injury Compensation Act: Hearings on S.2117 Before the Senate Comm. on Labor and Human Resources, 98th Cong., 2d Sess. (1984) [hereinafter "Hearings on S. 2117"]; H.R.Rep. No. 908, 99th Cong., 2d Sess. (1986) [hereinafter "Vaccine Act Report"], reprinted in 1986 U.S.C.C.A.N. 6287, 6344; Staff of the Subcomm. on Health and the Environment of the House Comm. on Energy and Commerce, 99th Cong., 2d Sess., Childhood Immunizations (Comm. Print 1986) [hereinafter "Childhood Immunizations" ]; Office of Technology Assessment, Compensation for Vaccine-Related Injuries (1980) [hereinafter "OTA Report"]; Denis J. Hauptly & Mary Mason, The National Childhood Vaccine Injury Act, 37 Fed.B.News & J. 452 (1990).

The Vaccine Act responds to these complaints by creating a remedial system that tries more quickly to deliver compensation to victims, while also reducing insurance and litigation costs for manufacturers. The Act establishes a special claims procedure involving the Court of Federal Claims and special masters (a system that we shall call the "Vaccine Court"). 42 U.S.C. Sec. 300aa-12. A person injured by a vaccine may file a petition with the Vaccine Court to obtain compensation (from a fund financed by a tax on vaccines). Id. Sec. 300aa-11. He need not prove fault. Nor, to prove causation, need he show more than that he received the vaccine and then suffered certain symptoms within a defined period of time. Id. Secs. 300aa-13, 300aa-14. The Act specifies amounts of compensation for certain kinds of harm (e.g., $250,000 for death, up to $250,000 for pain and suffering). Id. Sec. 300aa-15(a)(2), (4). And, it specifies other types of harm for which compensation may be awarded (e.g., medical expenses, loss of earnings). Id. Sec. 300aa-15(a).

At the same time, the Act modifies, but does not eliminate, the traditional tort system, which Congress understood to provide important incentives for the safe manufacture and distribution of vaccines. The Act requires that a person injured directly by a vaccine first bring a Vaccine Court proceeding. Id. Sec. 300aa-11(a)(2)(A). Then, it gives that person the choice either to accept the Court's award and abandon his tort rights (which the Act transfers to the federal government, id. Secs. 300aa-17), or to reject the judgment and retain his tort rights. Id. Secs. 300aa-21(a), 300aa-11(a)(2)(A)(i). (He can also keep his tort rights by withdrawing his Vaccine Court petition if the Court moves too slowly. Id. Secs. 300aa-21(b), 300aa-11(a)(2)(A)(ii).)

The Act additionally helps manufacturers by providing certain federal modifications of state tort law. For example, it forbids the award of compensation for injuries that flow from "unavoidable side effects," id. Sec. 300aa-22(b)(1); it frees the manufacturer from liability for not providing direct warnings to an injured person (or his representative), id. Sec. 300aa-22(c); it imposes a presumption that compliance with Food and Drug Administration requirements means the manufacturer provided proper directions and warnings, id. Sec. 300aa-22(b)(2); it limits punitive damage awards, id. Sec. 300aa-23(d); and it requires that the trial of any tort suit take place in three phases (liability; general damages; punitive damages), id. Sec. 300aa-23(a).

The upshot is a new remedial system that interacts in a complicated way with traditional tort lawsuits.

B This Case

For present purposes, the relevant facts are simple. Lenita Schafer's small child, Melissa Schafer, received an oral polio vaccine distributed by American Cyanamid in October 1988. Lenita subsequently contracted polio (she and her family think) from Melissa's vaccine. About one year later, in December 1989, all three members of the Schafer family (Lenita, Melissa, and Lenita's husband, Mark) petitioned the Vaccine Court for compensation. In April 1990, Mark and Melissa withdrew their petitions (with permission of the Vaccine Court) and began this lawsuit against American Cyanamid, seeking damages under Massachusetts tort law for loss of Lenita's companionship and consortium. See 28 U.S.C. Sec. 1332 (diversity jurisdiction); Feltch v. General Rental Co., 383 Mass. 603, 421 N.E.2d 67, 70-72 (1981). Lenita, who did not withdraw her petition, eventually accepted a $750,000 award from the Vaccine Court for her own injuries, thereby giving up her right to bring a tort action. At that point, American Cyanamid asked the district court to dismiss Mark's and Melissa's suit on the ground that Lenita's acceptance of the Vaccine Court award barred not only a later tort action for her own injuries, but also a later tort action by family members for related injuries. The district court denied the motion. We review that denial under the authority of 28 U.S.C. Sec. 1292(b) (permitting appeal of interlocutory orders raising certain controlling questions of law).

II The Basic Argument

Cyanamid concedes that this case focuses upon Mark's and Melissa's damages, not Lenita's; that Lenita received Vaccine Court compensation for her own damages, not Mark's or Melissa's; and that the Act's language explicitly bars Lenita, but not Mark or Melissa, from bringing a tort action to recover their own damages (which, we specify, will not duplicate Lenita's). Nonetheless, it argues that to permit Mark or Melissa to bring their own tort action (for related damages) would so seriously interfere with the Act's basic purposes that we must read the Act as implicitly barring those actions, just as it explicitly bars Lenita's. Although Cyanamid's counsel wants to call its argument one of "interpreting the Act in light of its basic policy," we believe that "pre-emption" is a better, alternative, label. The argument seems to amount to a claim that the state law that permits Mark or Melissa to bring this kind of suit so significantly interferes with the federal Act's ability to achieve its important federal purpose that the Constitution's Supremacy Clause requires the state law to yield to the federal law's implicit demand. See Michigan Canners & Freezers Assoc. v. Agricultural Mktg. & Bargaining Bd., 467 U.S. 461, 469, 104 S.Ct. 2518, 2523, 81 L.Ed.2d 399 (1984); Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941). But, however one characterizes the argument, it has two essential elements--an important federal purpose and a significant state interference. And, we shall try to set forth these two elements of Cyanamid's argument in light of the Act's legislative history, and as persuasively as possible.

First, an important federal purpose of the Act is to free manufacturers from the specter of large, uncertain tort liability, and thereby keep vaccine prices fairly low and keep manufactures in the market. Vaccine manufacturers presented Congress with evidence that their tort insurance and litigation costs...