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05/25/88 Sandra Smith, v. Eli Lilly & Company Et Al.

May 25, 1988

SANDRA SMITH, PLAINTIFF-APPELLEE AND CROSS-APPELLANT

v.

ELI LILLY & COMPANY ET AL., DEFENDANTS-APPELLANTS AND CROSS-APPELLEES (PENICK CORPORATION ET AL., DEFENDANTS AND CROSS-APPELLEES)



Before addressing the issues they present, we note that "'[summary] judgment is properly granted only where there is no genuine issue of material fact [citations], and this is to be determined from the pleadings, depositions, affidavits, and admissions on file in each case [citations].'" (People ex rel. First National Bank v. City of North Chicago (1987), 158 Ill. App. 3d 85, 103, 510 N.E.2d 577, 588-89, quoting Komater v. Kenton Court Associates (1986), 151 Ill. App. 3d 632, 636, 502 N.E.2d 1295, 1297-98; see also Ill. Rev. Stat. 1985, ch. 110, par. 2-1005(c).) A party seeking summary judgment must affirmatively establish that his right thereto is clear, without doubt, and determinable solely as a matter of law. (Schwaner v. Belvidere Medical Building Partnership (1987), 155 Ill. App. 3d 976, 508 N.E.2d 522.) In determining whether genuine issues of fact exist, the evidence must be construed strictly against the moving party, and any inferences reasonably drawn therefrom are to be resolved in favor of the motion's opponent. (People ex rel. First National Bank v. City of North Chicago (1987), 158 Ill. App. 3d 85, 510 N.E.2d 577.) With these standards in mind, we initially consider the history of DES as discussed in the record here and in numerous reported cases.*fn4

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION

527 N.E.2d 333, 173 Ill. App. 3d 1, 122 Ill. Dec. 835 1988.IL.815

Appeal from the Circuit Court of Cook County; the Hon. Myron T. Gomberg, Judge, presiding.

APPELLATE Judges:

JUSTICE BUCKLEY delivered the opinion of the court. SCARIANO and MURRAY, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE BUCKLEY

The present consolidated appeal arises out of a pharmaceutical product liability action brought by plaintiff against various drug companies seeking recovery for injuries allegedly caused by her mother's ingestion of diethylstilbestrol . The trial court granted the drug companies' joint motion for summary judgment as to counts I through IX of plaintiff's second-amended complaint, but denied the motion as to count X alleging a strict liability cause of action based upon the market share theory. Other companies were granted summary judgment on all counts of the complaint as they were determined not to be part of the relevant DES market. For the reasons set forth below, we affirm in part and reverse in part and remand the cause for further proceedings.

In 1952, Elizabeth Smith became pregnant with Sandra Smith, the plaintiff in this case. Having had a history of difficulty with pregnancy, Mrs. Smith consulted with her physician, Dr. Jack E. Davis of the Field Clinic in Chicago, Illinois. In March 1953, he prescribed DES, which Mrs. Smith took throughout the remainder of her pregnancy. At her deposition, Mrs. Smith described the medication as a "white tablet," "smaller than an aspirin" to be taken three times a day. On July 13, 1953, plaintiff was delivered by cesarean section.

Twenty-five years later, in September 1978, after undergoing a dilation and curettage, cervical biopsy, and excisional biopsy of the vaginal wall, plaintiff was diagnosed as having a form of cancer medically referred to as clear cell adenocarcinoma of the vagina, and shortly thereafter, underwent radical surgery. Plaintiff allegedly developed this cancer as a result of her in utero exposure to DES.

Mrs. Smith obtained her DES prescription from the Field Clinic pharmacy. While the pharmacy's records indicate that she was administered "Tab 98," 25-milligram tablets of DES, the identity of the specific manufacturer of the product was not disclosed. Moreover, Dr. Davis and the purchaser of the products stocked by the pharmacy are deceased.

In August or September 1980, plaintiff filed her initial complaint against more than 100 drug companies which allegedly distributed DES to the Field Clinic, 70 of which filed appearances. *fn1 In November 1982, plaintiff filed a second-amended complaint consisting of 11 counts. *fn2 Counts I through VI sound in, respectively, negligence, strict liability, breach of express warranty, fraud, breach of implied warranty, violation of the Federal Food, Drug and Cosmetic Act, and counts VII and VIII, in conspiracy. These counts pray for assessment of damages on various bases of "concerted action," "joint and several" liability and "joint enterprise" liability. Counts IX and X allege theories of negligence and strict liability, respectively, and invoke "market share" as the means of determining damages. The thrust of plaintiff's causes of action is the drug companies' alleged failure to properly test DES and to adequately warn of its dangers.

The following drug companies jointly moved for summary judgment on counts I through X of plaintiff's second-amended complaint: Abbott Laboratories, Eli Lilly & Company, Premo Pharmaceutical Laboratories, Inc., Carroll Dunham Smith Pharmacal Company, William H. Rorer, Inc., S. E. Massengill Company, Boyle and Company (the preceding seven companies hereinafter will be referred to as defendants), Penick Corporation, CPC International, Inc., Kremers-Urban Company, Merck & Company, Inc., American Home Products Corporation, Ayerst Laboratories, Inc., Harvey Laboratories, Inc., and Rexall Drug Company. Thereafter, the latter eight drug companies as well as Carnrick Laboratories, Inc., E. R. Squibb & Sons, Inc., Sterling Drug, Inc., Armour Pharmaceutical, The Upjohn Company, and Breon Laboratories, Inc. (cross-appellees) filed individual motions for summary judgment on the ground that they had not manufactured DES of the kind and size ingested by plaintiff's mother. *fn3

On February 21, 1985, the trial court granted the joint motion for summary judgment on the first nine counts of plaintiff's second-amended complaint, but denied the motion with respect to count X, thereby adopting in its memorandum of opinion a strict liability cause of action based on the market share theory articulated by the California Supreme Court in Sindell v. Abbott Laboratories (1980), 26 Cal. 3d 588, 607 P.2d 924, 163 Cal. Rptr. 132, cert. denied (1980), 449 U.S. 912, 66 L. Ed. 2d 140, 101 S. Ct. 285. In separate orders filed the same day, the trial court also granted the individual motions for summary judgment as to all counts of the complaint.

Pursuant to Supreme Court Rule 308 (87 Ill. 2d R. 308), this court granted defendants' application for leave to appeal the denial of their motion for summary judgment as to count X. Plaintiff cross-appealed, challenging the grant of summary judgment as to counts I through IX and the other orders entered against her on February 21. The two appeals have been consolidated for review.

DES is a synthetic substance which duplicates the activity of estrogen, a female sex hormone present in all women and crucial to female sexual development and fertility. The drug was discovered in the late 1930s by a group of British scientists, but its formula was not patented. As a result, DES was available for production and marketing to any pharmaceutical manufacturer.

Before DES could be marketed in the United States, however, approval of the Food and Drug Administration was required. Under the provisions of the Federal Food, Drug and Cosmetic Act of 1938 (Pub. L. No. 717, 52 Stat. 1040 (1938)), each company wishing to market DES had to file a new drug application with the FDA which outlined the proposed uses of the drug, clinical data establishing its safety, the drug's chemical composition, methods of manufacture, and proposed labeling. By 1940, 10 pharmaceutical manufacturers had submitted NDAs seeking permission to market DES for the treatment of vaginitis, engorgement of the breasts, excessive menstrual bleeding and symptoms of menopause. None of the proposed uses related to miscarriage prevention.

Believing that the individual NDAs did not contain sufficient clinical data to properly evaluate the safety or effectiveness of DES, the FDA requested that the drug companies submit their clinical data jointly in a "master file." Accordingly, several pharmaceutical manufacturers formed a "small committee," chaired by Eli Lilly & Co., which pooled the data gathered by each company filing an NDA for the approval of DES and presented the "master file" to the FDA. In late 1941, the FDA approved the production and marketing of DES for purposes unrelated to pregnancy. Thereafter, the "small committee" dissolved.

Six years later, in 1947, the first supplemental NDAs for the use of DES as a miscarriage preventive were filed. Only a few companies performed their own experiments to determine whether DES was safe and effective for this purpose. Among these, none tested DES on pregnant laboratory animals. The applicants instead relied upon published studies done by independent researchers. Although the results of these studies received substantial criticism soon thereafter, *fn5 the supplemental NDAs were nevertheless approved, and DES continued to be marketed as a miscarriage preventive from 1947 to 1971. During this period, DES was prescribed for millions of pregnant women.

In 1952, the FDA determined that DES was generally safe, and thus no longer considered it a "new drug" within the meaning of the Federal Food, Drug, and Cosmetic Act. This action signified that any manufacturers wishing to produce and market DES could do so without having to file NDAs.

In 1971, Dr. Arthur Herbst and several other physicians published a study linking the outbreak in young women of clear cell adenocarcinoma, a form of cancer, with the ingestion of DES by their mothers during pregnancy. *fn6 Later that year, the FDA banned the marketing of DES for use by pregnant women. Today, the FDA continues to permit the use of DES in treatments for nonpregnancy-related disorders.

As noted earlier, the problem this DES plaintiff faces, as do many others, *fn7 is that she is unable to identify the particular drug company that she alleges caused her injury. DES was marketed generically by as many as 300 drug companies utilizing the same formula during a 24-year span, with different companies entering and leaving the market throughout this period. The problems arising from its use arose many years following exposure, *fn8 and during those intervening years, memories have faded, records have been lost or destroyed, and witnesses have either died or moved or their whereabouts are otherwise unascertainable. Consequently, we are presented with a conflict between recognizing a remedy for the DES plaintiff which will relax the traditional tort principle of causation in fact *fn9 and allowing possibly negligent pharmaceutical manufacturers to escape liability to the victims of this tragedy. Based on the legal, equitable, economic, and societal considerations underlying Illinois tort law and Sindell v. Abbott Laboratories (1980), 26 Cal. 3d 588, 607 P.2d 924, 163 Cal. Rptr. 132, cert. denied (1980), 449 U.S. 912, 66 L. Ed. 2d 140, 101 S. Ct. 285, we elect to follow the former alternative and therefore adopt a form of market share liability as recognized in Martin v. Abbott Laboratories (1984), 102 Wash. 2d 581, 689 P. 2d 368, with respect to both counts IX and X. The trial court adopted the market share theory only with respect to count X, based on strict liability, yet we find no reason that market share should not equally apply to plaintiff's count IX, a negligence count. *fn10

Sindell, like the instant case, involved a plaintiff who alleged she was injured by DES which her mother took during pregnancy to prevent miscarriage. She filed an action against various drug manufacturers, claiming that they had all produced DES, and stating causes of action for negligence, strict liability, violation of express and implied warranties, and false and fraudulent representations. After the plaintiff admitted that she was unable to identify the particular manufacturer of the DES ingested by her mother, the trial court sustained the defendants' demurrers without leave to amend and dismissed the action.

The supreme court reversed, and in so doing, modified the doctrine of "alternative liability" established in Summers v. Tice (1948), 33 Cal. 2d 80, 199 P.2d 1, *fn11 and formulated a new theory of manufacturers' liability based on market share. The court held that once a plaintiff has joined the manufacturers of a "substantial share" of the relevant market and has submitted a prima facie case on each element of the tort except identification of the direct tortfeasor, the burden of proof shifts to the defendants to exculpate themselves by demonstrating that they did not make the offending drug. (Sindell, 26 Cal. 3d at 612, 607 P.2d at 937, 163 Cal. Rptr. at 145.) Those defendants failing in this regard are held liable for the percentage of damages which reflects their share of the market. 26 Cal. 3d at 612, 607 P.2d at 937, 163 Cal. Rptr. at 145.

In reaching its Conclusion, the Sindell court recognized that there was little likelihood that all the manufacturers who made DES at the time in question were still in business or subject to the jurisdiction of the California courts, but, nevertheless, it found forceful arguments in the plaintiff's favor, stating:

"In our contemporary complex industrialized society, advances in science and technology create fungible goods which may harm consumers and which cannot be traced to any specific producer. The response of the courts can be either to adhere rigidly to prior doctrine, denying recovery to those injured by such products, or to fashion remedies to meet these changing needs. Just as Justice Traynor in his landmark Concurring opinion in Escola v. Coca Cola Bottling Company (1944), 24 Cal. 2d 453, 467-68, 150 P.2d 436, recognized that in an era of mass production and complex marketing methods the traditional standard of negligence was insufficient to govern the obligations of manufacturer to consumer, so should we acknowledge that some adaptation of the rules of causation and liability may be appropriate in these recurring circumstances. The Restatement comments that modification of the Summers rule may be necessary in a situation like that before us . . .." *fn12 26 Cal. 3d at 610, 607 P.2d at 936, 163 Cal. Rptr. at 144.

According to the Sindell majority, the most persuasive reason for finding that the plaintiff stated a cause of action was that "between an innocent plaintiff and negligent defendants, the latter should bear the cost of the injury." (26 Cal. 3d at 610-11, 607 P.2d at 936, 163 Cal. Rptr. at 144.) The court reasoned that from a policy standpoint, defendants are better able to bear the cost of the injury because such risk can be insured against by the manufacturer and, in turn, distributed among the public. The court further noted that manufacturers are in the best position to discover and guard against defects, and, therefore, holding a manufacturer liable for defects and any failure to warn provides an incentive to ...


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