Stuart v. American Cyanamid Co., 97-9548

Citation158 F.3d 622
Decision Date21 September 1998
Docket NumberNo. 97-9548,97-9548
PartiesBrian Keith STUART, a minor, by his natural guardian and next friend Pamela Jean Craven; Pamela Jean Craven, individually; Paula Kairdolf; Errol M. Kairdolf, as parents and natural guardians of Michella Renee Kairdolf, a minor; Paula Kairdolf, individually; Errol M. Kairdolf, individually, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. AMERICAN CYANAMID COMPANY, a wholly owned subsidiary of American Home Products Corporation, Defendant-Appellee. American Home Products Corporation, Defendant.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Marc S. Moller (Henry Glukstern, of counsel), Kreindler & Kreindler, New York City, (Stanley P. Kops, Kops & Fenner, P.C., Philadelphia, Pennsylvania, of counsel), for Plaintiffs-Appellants.

Daniel J. Thomasch (Elyse D. Echtman, of counsel), Donovan, Leisure, Newton & Irvine LLP, New York City, for Defendant-Appellee American Cyanamid Company.

Before: MINER, McLAUGHLIN, and LEVAL, Circuit Judges.

BACKGROUND

McLAUGHLIN, Circuit J.

Polio is a disease of the central nervous system for which Dr. Jonas Salk developed a vaccine in 1955. The Salk vaccine was an inactivated polio vaccine ("IPV"), derived from a dead polio virus. Although the Salk vaccine dramatically decreased the incidence of polio, it did not eradicate the disease.

While Dr. Salk was developing his IPV which had to be injected, other scientists, notably Dr. Albert Sabin, were working on an oral polio vaccine ("OPV"). Unlike IPV, OPV is produced from a live virus that is attenuated, but not killed, during the production process. OPV has several advantages over Dr. Salk's IPV. First, OPV is less expensive and requires only a single dose, as opposed to three inoculations of IPV and a follow-up booster shot. In addition, a person who receives OPV cannot transmit polio. In contrast, persons inoculated with IPV can serve as carriers of the disease, even though they would not themselves be infected.

OPV, however, is no more a miracle drug than an IPV injection. Like all vaccines cultivated from live viruses, OPV creates immunity by inducing a mild infection in the recipient. Thus, a person who receives OPV, or comes in close contact with such a recipient during the infection period, may develop polio.

In 1960, the Surgeon General of the United States approved OPV for use in the United States. One year later, the Division of Biological Standards of the National Institutes of Health ("DBS"), adopted regulations governing the issuance of manufacturing licenses for OPV. In 1962, American Cyanamid Company ("Cyanamid"), which had purchased the vaccine material developed by Dr. Sabin, applied to the DBS for a license to manufacture OPV. The DBS licensed Cyanamid to manufacture and sell OPV. Since 1963, Cyanamid has distributed an OPV product under the trade name "Orimune."

A. The Craven/Stuart Action

On December 9, 1978, Brian Stuart was born in Nebraska. At the age of three months, Brian received Orimune at the University of Nebraska Medical Center Clinic. Within thirty days of receiving the vaccine, he became permanently paralyzed. In May 1979, doctors told Brian's mother, Pamela Jean Craven, that they were "99 percent certain" that Brian's paralytic condition was caused by a vaccine-induced polio infection.

Later that month, Craven retained an attorney, Daniel Cullan, to pursue Brian's legal rights with respect to the vaccine-induced polio. Attorney Cullan informed Ms. Craven that she "had a case." However, no suit was commenced against Cyanamid.

Eleven years later, Ms. Craven retained a new attorney, Edward Jelinek. On September 27, 1990, Attorney Jelinek and Ms. Craven filed a petition on Brian's behalf in the United States Court of Claims under the National Childhood Vaccine Injury Compensation Act of 1986 ("VCA"), 42 U.S.C. § 300aa et seq.. The VCA was established to compensate for specified injuries, including polio, caused by a covered vaccine.

In 1994, Craven changed counsel again, this time retaining Marc Moller and Stanley Kops. Acting on the advice of Moller and Kops, Craven withdrew the VCA petition on November 25, 1994, leaving no action pending on behalf of Brian Stuart.

B. The Kairdolf Action

Michella Kairdolf was born in Louisiana on November 22, 1982. Two months later, she received Orimune at the office of her pediatrician The Kairdolfs filed a petition on behalf of Michella under the VCA on January 31, 1991. On October 24, 1994, acting on the advice of Moller and Kops, the Kairdolfs withdrew the petition, leaving no action pending on behalf of Michella.

Dr. James Michalik. Within thirty days, Michella became paralyzed. In August 1984, she was referred to the Centers for Disease Control of the United States Public Health Service and diagnosed as having vaccine-induced polio. Dr. James Bennett confirmed this diagnosis and informed Michella's parents, Errol and Paula Kairdolf, on March 17, 1987 that there was a "connection between the medical treatment [i.e., OPV vaccination] and [Michella's] disease."

C. The District Court Proceedings

On June 29, 1995, Pamela Craven, Paula Kairdolf, and Errol Kairdolf commenced a putative class action in the United States District Court for the Southern District of New York against Cyanamid and its parent corporation, American Home Products. The action, brought on behalf of Craven, the Kairdolfs, Brian and Michella, and all other similarly situated persons alleged six theories of liability: (1) strict liability; (2) fraud; (3) negligence; (4) breach of implied warranty of merchantability; (5) breach of implied warranty of fitness for a particular purpose; and (6) breach of express warranty of fitness for a particular purpose.

The case was initially assigned to Judge Miriam Cedarbaum, who held a pretrial conference. Following the initial conference, the case was reassigned to Judge Peter Leisure. When Judge Leisure recused himself shortly after receiving the assignment, the case was assigned to Judge Allen Schwartz.

On January 22, 1996, Judge Schwartz held a pretrial conference and set a schedule for motions. Cyanamid moved for summary judgment, contending that: (1) plaintiffs' claims were time-barred; (2) plaintiffs lacked standing; and (3) the district court lacked subject matter jurisdiction.

On June 26, 1997, while the summary judgment motion was still pending, the case was reassigned to Judge Robert Sweet. Judge Sweet scheduled a conference for November 5, 1997. Before this conference could occur, however, the case was reassigned to Judge Denise Cote. On November 5, 1997, Judge Cote granted Cyanamid's motion for summary judgment. By Opinion and Order, Judge Cote held that: (1) Craven's claims on behalf of herself and Brian Stuart were time-barred under Nebraska's ten-year statute of repose for product liability actions; and (2) the Kairdolfs' claims were time-barred under Louisiana's one-year statute of limitations for tort actions. Because Judge Cote found that all claims were barred by the relevant statutes of limitations and repose, she declined to address Cyanamid's claims that the court lacked subject matter jurisdiction or that plaintiffs lacked standing. Craven and the Kairdolfs now appeal.

DISCUSSION
I. Standard of Review

This Court reviews Judge Cote's grant of summary judgment de novo, viewing all facts in the light most favorable to Craven and the Kairdolfs. See Bedoya v. Coughlin, 91 F.3d 349, 351 (2d Cir.1996).

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A dispute regarding a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

II. Statutes of Limitations and Repose
A. Choice-of-Law Rules

Where jurisdiction rests upon diversity of citizenship, a federal court sitting in New York must apply the New York choice-of-law rules and statutes of limitations. See Guaranty Trust Co. v. York, 326 U.S. 99, 108-09, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945); Klaxon Co. v. Stentor Elec. Mfg. Co Under C.P.L.R. § 202, when a nonresident plaintiff sues upon a cause of action that arose outside of New York, the court must apply the shorter limitations period, including all relevant tolling provisions, of either: (1) New York; or (2) the state where the cause of action accrued. See N.Y.C.P.L.R. § 202 (McKinney 1990). For purposes of C.P.L.R. § 202, a cause of action sounding in negligence or product liability accrues in the state where the injury occurs. See Dugan v. Schering Corp., 86 N.Y.2d 857, 635 N.Y.S.2d 164, 165, 658 N.E.2d 1037 (N.Y.1995); Besser v. E.R. Squibb & Sons, Inc., 146 A.D.2d 107, 539 N.Y.S.2d 734, 736 n. 3 (1st Dep't 1989) (citations omitted), aff'd, 75 N.Y.2d 847, 552 N.Y.S.2d 923, 552 N.E.2d 171 (N.Y.1990). Hence, an action by a nonresident on a foreign cause of action is untimely if it is barred under the law of either New York or the state where the injury occurred.

313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). New York courts generally apply New York's statutes of limitations, even when the injury giving rise to the action occurred outside New York. See Stafford v. International Harvester Co., 668 F.2d 142, 147 (2d Cir.1981). This general rule, however, is subject to a traditional statutory exception, New York's "borrowing" statute, C.P.L.R. § 202.

B. The Craven/Stuart Claims
1. Applicability of Nebraska's Statute of Repose

Under Neb.Rev.Stat. § 25-224(1), "[a]ll product liability actions, ... shall be commenced within four years next after the date on which the death, injury, or...

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