decided: March 18, 1980.
SONDRA L. MCKENNA AND JAMES R. MCKENNA, APPELLANTS
ORTHO PHARMACEUTICAL CORPORATION
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA C.A. No. 74-0808
Before Adams, Hunter and Higginbotham, Circuit Judges.
Opinion OF THE COURT
After trial, but prior to the presentation of the case to the jury, the district court in this diversity case granted defendants' motion for a directed verdict on the ground that Ohio law barred recovery. Because we are persuaded by a careful review of the Ohio decisional law, as well as other relevant sources, that the Supreme Court of Ohio would not construe its statute of limitations so as to preclude recovery in this case, we reverse.
James and Sondra McKenna brought this suit for negligence, misrepresentation, and products liability against Ortho Pharmaceutical Corporation (Ortho). The plaintiffs charged that Mrs. McKenna suffered severe personal injury and permanent disability as a result of ingesting Ortho-Novum, an oral contraceptive manufactured and marketed by Ortho. Following the birth of the McKennas' second child, Mrs. McKenna began using Ortho-Novum in January 1965, after receiving assurances both from Ortho's published brochure and from her personal physician, that the drug was safe and posed no serious risks. In 1967, Mrs. McKenna developed severe headaches and also experienced two attacks of transient ischemia. While hospitalized in 1969 for a stomach ailment involving vessel wall damage, Mrs. McKenna was told that she had high blood pressure, which was characterized as hypertension. In June 1969, Mrs. McKenna ceased using the oral contraceptives. Three years later, in March 1972, she suffered a catastrophic cerebrovascular stroke that left her severely and permanently paralyzed.*fn1
One year and nine months thereafter, in November 1973, the McKennas commenced this action in a Pennsylvania state court by a praecipe for a writ of trespass.*fn2 On Ortho's motion, the suit was removed to the federal district court in Pittsburgh, where it was ultimately tried. The plaintiffs claimed that Mrs. McKenna's injuries were caused by her ingestion of Ortho-Novum; that Mrs. McKenna relied on Ortho's false assurances about the product's safety in deciding to use Ortho-Novum; that Ortho knew or should have known that these statements were false; and that Ortho-Novum posed a risk of serious harm to its users.
Prior to trial, the district court denied Ortho's motion for summary judgment on the ground that a genuine issue of material fact existed as to whether the McKennas knew, or reasonably should have known, more than two years prior to the commencement of the suit, that Mrs. McKenna's injuries resulted from the ingestion of Ortho-Novum. During the four weeks of jury trial, the McKennas introduced expert witnesses who testified that the cerebrovascular stroke was the ultimate result of either vessel-wall damage or high blood pressure, and that both of these conditions, as well as the headaches and transient ischemia attacks, were caused by Mrs. McKenna's ingestion of Ortho-Novum. At the close of trial, but prior to submission of the case to the jury, the district court granted Ortho's motion for a directed verdict on the ground that the action was barred under Ohio's statute of limitations. The district court concluded that the Ohio statute began to run, at the latest, in 1969 when Mrs. McKenna developed high blood pressure, and that the cause of action was accordingly barred because it was filed more than two years after that time. It is this conclusion that we review here.
Although Pennsylvania courts ordinarily apply the statute of limitations of the forum state,*fn3 the Pennsylvania "borrowing statute" in effect when the case was tried provided a statutory exception to this rule. It declared:
When a cause of action has been fully barred by the law of the state in which it arose, such bar shall be a complete defense to an action thereon in any of the courts of this Commonwealth.*fn4
The district court, in granting Ortho's motion for a directed verdict, reasoned that the Pennsylvania statute borrowed not only Ohio's two-year limitations period, but also Ohio's law governing the determination when the cause of action arises. In their appeal, the McKennas contend that this was error; they argue that even though the Pennsylvania statute "borrows" the law of Ohio regarding the length of the applicable limitations period, the question when that limitations period begins to run must be determined not by Ohio but by Pennsylvania law.
The McKennas premise their argument on this Court's prior decision in Mack Trucks, Inc. v. Bendix-Westinghouse Automotive Air Brake Company.*fn5 In Mack Trucks, we were asked to decide when an action for indemnity arose, for the purpose of determining whether the Pennsylvania "borrowing statute" was applicable to that action. Noting the "familiar rule" that a statute of limitations "begins to run when the cause of action arises, as determined by the occurrence of the final significant event necessary to make the claim suable," we held that a "cause arises where as well as when the final significant event that is essential to a suable claim occurs."*fn6 Because the final significant event essential to the action for indemnity happened in Florida, we concluded that Florida's statute of limitations applied.
Mack Trucks' application of the Pennsylvania "borrowing statute," the McKennas claim, depended upon the ascertainment of where the cause of action arose, which in turn was based on the prior determination of when it accrued. In support of this interpretation, the McKennas rely on Prince v. Trustees of the University of Pennsylvania,*fn7 which held, on the basis of Mack Trucks, that the "borrowing statute" applies "only upon satisfaction of two contingencies: (1) the cause of action must arise in another state; and (2) the cause of action must be totally barred by the law of that state. Under the Mack Truck analysis," the district court concluded, "satisfaction of the first contingency is determined by finding where the cause of action arose, and the determination is to be governed by Pennsylvania law."*fn8
The crux of the justification offered for this construction of Mack Trucks is the assertion that we determined when the cause of action arose in that case by references to Pennsylvania law. But, as the most recent decision addressing this issue points out, "Mack Trucks relied not only on Pennsylvania cases but also on cases from other jurisdictions."*fn9 Nor was there any suggestion in Mack Trucks that Florida would have commenced the running of the statute of limitations at a time different from when Pennsylvania would have. Inasmuch as Mack Trucks did not even discuss this issue, we do not find that decision controlling here.
We are persuaded, rather, that the apparent purpose of the Pennsylvania "borrowing statute" requires us to look to the law of the state where the cause of action arose to determine not only the prescribed period of limitations but also the point at which the statute begins to run. By its terms, the "borrowing statute" bars a plaintiff from suing in Pennsylvania "when (the) cause of action has been fully barred by the laws of the state . . . in which it arose . . .." In our view, the essential question posed under the "borrowing statute" is whether the action in question is precluded by the laws of the state in which it accrued, and the answer to that question also must be based on the law of the state in which the claim arose. To do otherwise might well revive an action which is "fully barred by the laws" of another state. Accordingly, because the McKennas' cause of action arose in Ohio, we must look to Ohio law to determine when Ohio's statute of limitations commenced to run. And the question for decision, then, is whether Ohio's statute of limitations commenced to run prior to the date Mrs. McKenna knew, or reasonably should have discovered, that her injuries were caused by Ortho-Novum.*fn10
Given that Ohio law governs the question for decision, the task remains to determine what the pertinent Ohio law is and then to apply it to this controversy. The question of how a federal court is to ascertain and apply state decisional law to a particular case has provoked considerable comment from courts and commentators alike.*fn11 As some have noted, the concept that a federal court must determine state law is somewhat misleading inasmuch as it implies the existence of a readily accessible and easily understood body of state law.*fn12 On the contrary, the law of a state is frequently "dynamic rather than static,"*fn13 and consists of a working body of rules, which find expression in a number of sources. It is this working body of rules to which a federal court must look in order to ascertain the state law that governs in a particular case.
In those few instances in which the highest state court has recently spoken to the precise question at issue in a particular setting, the duty of the federal court to determine and apply state law is easily met. After all, "(t)he State's highest court is the best authority on its own law."*fn14 The problem of ascertainment arises when, as here, the highest state court has not yet authoritatively addressed the critical issue. Recent opinions of this Court make clear that our disposition of such cases must be governed by a prediction of how the state's highest court would decide were it confronted with the problem.*fn15 Although some have characterized this assignment as speculative or crystal-ball gazing, nonetheless it is a task which we may not decline.
An accurate forecast of Ohio's law, as it would be expressed by its highest court, requires an examination of all relevant sources of that state's law in order to isolate those factors that would inform its decision. The primary source that must be analyzed of course, is the decisional law of the Ohio Supreme Court. In the absence of authority directly on point, decisions by that court in analogous cases provide useful indications of the court's probable disposition of a particular question of law. It is important to note, however, that our prediction "cannot be the product of a mere recitation of previously decided cases."*fn16 In determining state law, a federal tribunal should be careful to avoid the "danger" of giving "a state court decision a more binding effect than would a court of that state under similar circumstances."*fn17 Rather, relevant state precedents must be scrutinized with an eye toward the broad policies that informed those adjudications, and to the doctrinal trends which they evince.*fn18
Considered dicta by the state's highest court may also provide a federal court with reliable indicia of how the state tribunal might rule on a particular question.*fn19 Because the highest state court "enjoys some latitude of decision in ascertaining the law applicable to a particular dispute even where there may be dicta in point,"*fn20 however, a federal court should be circumspect in surrendering its own judgment concerning what the state law is on account of dicta. As Professor Charles Alan Wright has written, "much depends on the character of the dictum."*fn21 Of somewhat less importance to a prognostication of what the highest state court will do are decisions of lower state courts and other federal courts. Such decisions should be accorded "proper regard" of course, but not conclusive effect.*fn22 Thus, the Supreme Court has held that although the decision of a lower state court "should be "attributed some weight . . . the decision (is) not controlling . . . ' where the highest court of the State has not spoken on the point. . . . Thus, under some conditions, federal authority may not be bound even by an intermediate state appellate court ruling."*fn23 Additionally, federal courts may consider scholarly treatises,*fn24 the Restatement of Law,*fn25 and germane law review articles*fn26 particularly, it seems, of schools within the state whose law is to be predicted.*fn27
In sum, a federal court attempting to forecast state law must consider relevant state precedents, analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would decide the issue at hand. The rule of Erie calls on us to apply state law and not, as the dissent notes, "to participate in an effort to change it"*fn28 merely because we doubt its soundness. At the same time, however, blind adherence to state precedents "without evaluating the decision(s) in the light of other relevant data as to what the state law is, will result in injustice and a perversion of the state law which the federal court sets out to apply."*fn29 As this Court has declared:*fn30
A diversity litigant should not be drawn to the federal forum by the prospect of a more favorable outcome than he could expect in the state courts. But neither should he be penalized for his choice of the federal court by being deprived of the flexibility that a state court could reasonably be expected to show.
In support of its conclusion that Ohio's statutes of limitation bar the McKennas' actions, the district court relied, as does the dissent here, primarily on Wyler v. Tripi,*fn31 decided nine years ago by the Ohio Supreme Court. The central dispute in that case concerned the date on which a cause of action for medical malpractice accrued. Expressly following the rule announced in a series of prior decisions,*fn32 Wyler held that the cause of action came into existence at the latest, at the time the physician-patient relationship terminated, and not when the plaintiff discovered the injury.
The "termination of treatment" concept was developed very early in Ohio law*fn33 as an exception to the traditional rule that statutes of limitation commenced to run at the time an individual sustained injury as the result of the tortious act of another.*fn34 It was designed, as the Wyler court observed, "to avoid the harsh results of the traditional rule"*fn35 by tolling the applicable statute of limitations until the conclusion of the physician-patient relationship. Although this doctrine represents a "marked departure from the general rule," it "affords little relief in cases where the injury is one which requires a long developmental period before becoming dangerous and discoverable."*fn36 In such cases, the termination exception extends the period before the statute of limitations begins to run, "but does so by a factor which bears no logical relationship to the injury incurred."*fn37
It was this kind of issue with which the Ohio Supreme Court was confronted in Wyler. The plaintiff there alleged that improper treatment by her physician ultimately resulted in the manifestation of asceptic necrosis, necessitating the replacement of her hip and the subsequent removal of her leg. Because the plaintiff failed to discover the alleged negligence within a year after she left the care of her physician, application of either the traditional rule or the "termination of treatment" exception would not prevent what the Wyler majority itself termed "the unconscionable result that the injured party's right to recovery can be barred by the statute of limitations before (s)he is even aware of its existence."*fn38 Troubled by this result, the Ohio court examined the laws of various jurisdictions and the growing trend away from the traditional rule and towards adoption of the discovery rule. According to this approach, the statute of limitations does not begin to run until the plaintiff actually discovers, or with due diligence should have discovered, the negligence alleged.
Although the court's examination of the cases persuaded it that "there is much to recommend the adoption of the discovery rule,"*fn39 a bare majority nonetheless "reluctantly conclud(ed)" that "the courts of Ohio should not decree such an adoption."*fn40 The sole justification for refusing to adopt the discovery rule was that such action should be left to the legislature. The court was "convinced that to (adopt the discovery rule) would place (it) in the obvious and untenable position of having not only legislated, but of having done so directly in the face of a clear and opposite legislative intent."*fn41 Referring to the legislature's failure to adopt the discovery rule by legislation, the court concluded: "In consideration of the obvious and repeated disinclination of the General Assembly to amend its malpractice statute of limitations, we are compelled to adhere to our former decisions on the question and refrain from judicially adopting that which has so clearly been legislatively rejected."*fn42
Notwithstanding this extensive pronouncement of the court's position, this same court during the following year employed the discovery rule in Melnyk v. Cleveland Clinic.*fn43 The plaintiff there alleged that a physician employed by the Clinic had negligently left a metallic forceps and a nonabsorbent sponge in his abdomen. Even though the plaintiff failed to discover the negligence until more than one year after he left the care of the physician, the Ohio Supreme Court refused to bar his action, and held that the applicable one-year statute of limitations was tolled "until such time as the patient discovers, or by exercise of reasonable diligence should have discovered, the negligent act."*fn44
Although the Melnyk court took great pains, as does the dissent in this case, to distinguish Melnyk from Wyler on the ground that the former did not involve the "problems faced in the defense of a "stale' claim for medical malpractice,"*fn45 the distinction, as a recent commentator on Ohio law has argued, "in essence is an artificial one."*fn46 Indeed, Wyler expressly took note of the fact that courts adopting the discovery doctrine viewed it "as being entirely consistent with the policy of the statute of limitations to prevent "stale claims.' "*fn47 The holding of Wyler declining to adopt the discovery rule depended not at all on the policy of discouraging stale claims, but solely upon the court's reluctance to contravene what it then believed to be the policy of the state legislature. By embracing the discovery rule in Melnyk, therefore, the Ohio Supreme Court "completely abandoned the rationale which served as the basis and justification for the Wyler decision, namely, that of legislative prerogative in this area."*fn48
Melnyk's implicit rejection of the Wyler rationale that only the state legislature may properly decide whether to apply the discovery rule appears well justified. As evidence of the alleged intent of the legislature to eschew the discovery rule, Wyler referred to the legislature's failure to enact legislation modifying the court's prior decisions that interpreted the statute of limitations for medical malpractice.*fn49 Legislative inaction, however, "is a weak reed upon which to lean in determining legislative intent."*fn50 A statute of limitations is a product of legislation, but it is the judiciary's task to interpret and enforce such an enactment. The Ohio statute in question here is phrased in general terms and requires only that an action for bodily injury "shall be brought within two years after the cause thereof arose."*fn51 The legislature left unresolved when a cause of action arises and when the statute commences to run. And, in Ohio, these kinds of determinations have always been the product of "judicial interpretation, not legislative promulgation."*fn52 Consequently, application of the discovery rule to the facts of this case in no way intrudes on the authority of the state legislature. Indeed, Ohio's selection of the termination exception represented not only a marked departure from the traditional rule, but also a judicial determination as to when a cause of action accrues. Melnyk's choice of the discovery rule, at least in the absence of an expression by the legislature prohibiting such an adoption, therefore appears fully compatible with the court's responsibility to ascertain and comply with legislative intention.*fn53
Moreover, the Ohio Supreme Court in Melnyk distinguished its decision in Wyler as speaking only to the question of when a cause of action arises, and not to the determination whether the running of the statute of limitations is, for some reason, tolled.*fn54 It then proceeded to hold that the running of the statute of limitations on Melnyk's cause of action was tolled until such time as he discovered, or by the exercise of reasonable diligence should have discovered, the negligent act, even though his cause of action accrued, under Wyler, at the termination of the patient-physician relationship. On this analysis, the holding in Wyler determines only when the McKennas' cause of action accrued; it is inapposite to the question whether the action was tolled until such time as the McKennas could know how Mrs. McKenna's injuries occurred.
It is claimed, nonetheless, that "Melnyk does not overrule Wyler," but "merely carves out a very specific and narrow exception"*fn55 to the termination rule when, as in that case, surgical instruments are left in a patient's body. For this reason, the dissent would not apply the discovery rule to the circumstances of this case. In its view, we are improperly modifying a "decadent" and "unenlightened" doctrine of state law simply because we disagree with it. On the contrary, however, we fully recognize our responsibility to accurately apply the pertinent Ohio law. Indeed, we do not dispute that federal courts must faithfully adhere to state substantive law in non-federal matters. But, as commentators have emphasized, such adherence should be wise and discerning. This Court has noted only recently that "while a federal diversity court must not fashion a wholly independent federal standard with which to determine matters of substantive right, it likewise must not conceive of its role as applying the state decisional law to the case at hand in a narrow and mechanical fashion."*fn56 Rather, a federal court must "be sensitive to the doctrinal trends of the state whose law it applies, and the policies which inform the prior adjudications by the state courts."*fn57
In our view, the Ohio Supreme Court's decision in Melnyk not only abandoned the sole justification proffered for its opposition in Wyler to the adoption of the discovery rule, but also manifested a recognition that this approach alone avoids the harsh and inequitable results of applying the traditional rule in such cases. "Certainly a federal court sitting in diversity should not mechanically follow precedent and blindly apply principles of stare decisis when it appears that the corresponding state court would adjust its common law to meet changing conditions."*fn58 A fair scrutiny of the relevant Ohio precedents, with an eye toward the principles and policies underlying them, strongly indicates that the Ohio Supreme Court would extend the discovery rule set forth in Melnyk to include the type of personal injury action present here.
The task of a federal court sitting in diversity is often difficult, for it must forsake its own expertise and assume that of the foreign state. Required as we are to predict how the Ohio Supreme Court would decide the present case, however, we believe that the Court would hold that the applicable statutes of limitation in this case were tolled until the McKennas knew, or by the exercise of reasonable diligence should have discovered, the cause of Mrs. McKenna's injuries. Accordingly, we reverse the judgment of the district court, and remand for further proceedings consistent with this opinion.