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Jamie Gannon and Rebecca Gannon, Individually and As Husband and Wife v. American Home Products

August 15, 2012

JAMIE GANNON AND REBECCA GANNON, INDIVIDUALLY AND AS HUSBAND AND WIFE, PLAINTIFFS-RESPONDENTS,
v.
AMERICAN HOME PRODUCTS, INC., DEFENDANT, AND AMERICAN CYANAMID COMPANY, LEDERLE LABORATORIES AND WYETH-LEDERLE VACCINES, DEFENDANTS-APPELLANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 414 N.J. Super. 507 (2010).

The opinion of the court was delivered by: Justice Hoens

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interest of brevity, portions of any opinion may not have been summarized.)

Jamie Gannon and Rebecca Gannon v. American Products, Inc., et al.

(A-80-10) (066899)

Argued November 7, 2011 -- Decided August 15, 2012

HOENS, J., writing for a majority of the Court.

This appeal presents the Court with three essential questions. First, the Court is called upon to decide whether federal or state law principles of collateral estoppel govern the analysis of the preclusive effect to be given to a judgment rendered by the United States District Court. Second, the Court considers whether plaintiffs were afforded a full and fair opportunity to litigate the issues of general and specific causation in the federal court proceeding sufficient to entitle the judgment of that court to preclusive effect. Third, the Court addresses whether the Appellate Division appropriately applied the equitable considerations found in the Restatement (Second) of Judgments (1982) to permit plaintiffs' claim to proceed when traditional collateral estoppel principles would preclude it.

Plaintiff Jamie Gannon was born in 1973. He received five doses of polio vaccine between 1973 and 1976. In November 2000, he was diagnosed with medulloblastoma, a cancerous brain tumor. Contending that there was a link between that particular type of tumor and a simian viral contaminant found in polio vaccines that is known as SV40, Jamie and Rebecca Gannon, his wife, pursued various forms of relief in both federal and state courts. In the federal court action, plaintiffs sought relief from the United States pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-80, contending that the federal government was negligent in permitting the polio vaccine to be sold to the public. Plaintiffs' federal action was dismissed following a partial bench trial, based on the government's motion for judgment on partial findings. That judgment was affirmed by the United States Court of Appeals for the Third Circuit.

In the state court action, plaintiffs raised product liability claims against defendants, asserting that they were the entities that had manufactured or distributed the polio vaccine given to Jamie. Plaintiffs claim that the vaccine was manufactured by Lederle Laboratories. They find support for this contention in a document kept by Jamie's mother on which the dates of the doses were recorded. That document was a preprinted form identified as an Immunization and Health Record that bore the name and corporate logo of Lederle Laboratories. The form included a column denoting "Active Immunizations" where a number of possible childhood vaccines were listed. The form includes a series of dates that were handwritten in five boxes immediately to the right of this line, signifying the dates on which the polio vaccine was administered to Jamie. Defendants maintained that the form was merely a promotional item given to pediatricians so that they could pass it along to the parents of their patients.

The trial court granted summary judgment in favor of defendants, R. 4:46-2, basing its decision on two grounds. First, the trial court concluded that plaintiffs lacked sufficient evidence to prove the identity of the manufacturer of the polio vaccine that Jamie was given. Second, the trial court concluded that plaintiffs were collaterally estopped from bringing the cause of action based on the prior judgment entered in federal court. The Appellate Division, in a published opinion, reversed both aspects of the trial court's judgment. The panel first concluded that the trial court had utilized an incorrect standard in evaluating the sufficiency of the product identification evidence because it failed to afford plaintiffs the benefit of the inferences to which they were entitled as the non-moving parties in the context of a summary judgment motion. The panel then concluded that there were equitable considerations that militated against granting collateral estoppel effect to the judgment of the federal court, including the status of discovery in the state court matter and the pendency of similar state court litigation involving other plaintiffs. The panel reversed the trial court's grant of summary judgment and remanded the matter for further proceedings.

The Supreme Court granted defendants' petition for certification.

HELD: Federal principles must govern the preclusive effect of a federal judgment. For collateral estoppel purposes, plaintiffs were afforded a full and fair opportunity to be heard on the essential claims of their dispute. The appellate panel erred in concluding that equitable considerations demand that plaintiffs be permitted to have their claims heard again.

1. The proper analytical framework for testing the collateral estoppel effect of federal judgments is governed by reference to federal rather than to state law principles. In this case, the Appellate Division looked to general choice of law principles, believing that it should determine whether there was a conflict between state and federal law relating to collateral estoppel. The panel's reasoning was flawed. To the extent that the Appellate Division determined that it could rely on choice of law principles to decide an issue already settled by this Court or that it could therefore use state law principles of collateral estoppel to evaluate the effect to which a federal court's judgment was entitled, it erred. Our courts are constrained by the federal court framework and are not permitted to adopt a broader test as they might be inclined to think appropriate when evaluating state law principles. Thus, for purposes of evaluating the collateral estoppel effect that our courts must accord to the prior judgment in this matter, the appropriate source of authority is found in the controlling decisions of the United States Court of Appeals for the Third Circuit. To the extent that the appellate panel effectively applied a different articulation of the rules governing collateral estoppel, its approach was in error. (pp. 20-24)

2. The Court finds plaintiffs' argument that they were deprived of a full and fair opportunity to litigate the question of causation in the federal district court to be without merit. First, the determination that the federal district court made in the Tort Claims Act proceedings relating to the safety of the oral polio vaccine was based on the motion for judgment on partial findings filed on behalf of defendant, the United States. See Fed. R. Civ. P. 52(c). An integral part of the analysis that the federal district court is required to undertake in deciding whether to grant a motion for judgment pursuant to Rule 52(c) is whether the parties have been given an opportunity to fully and fairly present the question that is being decided. The question for the court was simply whether the contaminated vaccine could have caused cancer in humans and, specifically, whether it did cause the particular cancer that plaintiff Jamie Gannon had. The federal district court specifically considered whether plaintiffs had been afforded a full and fair opportunity to litigate the issues of causation and concluded that they had. The Third Circuit agreed. The Court therefore concludes that, for collateral estoppel purposes, plaintiffs were afforded a full and fair opportunity to be heard on the essential claims of their dispute. (pp. 25-28)

3. The appellate panel's reasoning demonstrates a fundamental misunderstanding of collateral estoppel principles in general and of the limited role to be played in that analysis by the equitable considerations found in the Restatement (Second) of Judgments (1982). Whether proceeding against the United States under the Federal Tort Claims Act or proceeding against the pharmaceutical defendants in state court, plaintiffs were required to prove that SV40 causes cancer in humans and that it caused plaintiff Jamie Gannon's cancer in particular. The federal courts imposed no greater burden on plaintiffs in that regard than they would face in the state court litigation. Nonetheless, the appellate panel expanded the narrow parameters of "compelling circumstances" to permit plaintiffs to do that which collateral estoppel forbids. The mere speculation that, given a second chance, plaintiffs might be able to make a better record by presenting additional evidence cannot equate with "compelling circumstances" in the face of a full and fair opportunity to litigate the precise issue in the federal proceeding. Plaintiffs were afforded a full and fair opportunity to be heard on the essential claims of their dispute. Their assertion that they should be heard anew or that other plaintiffs with similar claims might have other evidence is not a sufficient ground on which to conclude that the imposition of collateral estoppel principles is so unfair that equity demands that they be permitted to have their claims heard again. (pp. 28-38)

The judgment of the Appellate Division is REVERSED.

JUDGE WEFING (temporarily assigned) filed a separate dissenting opinion, stating that plaintiffs are entitled to create a record as to what special circumstances are present that may make it "inequitable or inappropriate" to apply collateral estoppel, and that an appellate court is not an appropriate forum in which to create such a record.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, and PATTERSON join in JUSTICE HOENS's opinion. JUDGE WEFING (temporarily assigned) filed a separate, dissenting opinion.

Argued November 7, 2011

JUSTICE HOENS delivered the opinion of the Court. Plaintiffs Jamie and Rebecca Gannon, asserting that plaintiff Jamie Gannon developed a form of brain cancer because of a series of polio vaccines he was given as a child, pursued various forms of relief in both federal and state courts. In the federal court action, they sought relief from the United States pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-80, contending that the federal government was negligent in permitting the polio vaccine to be sold to the public. Plaintiffs' federal action was dismissed following a partial bench trial, based on the government's motion for judgment on partial findings, Fed. R. Civ. P. 52(c); see Gannon

v. United States, 571 F. Supp. 2d 615, 616, 641 (E.D. Pa. 2007), and that judgment was affirmed by the United States Court of Appeals for the Third Circuit, see Gannon v. United States, 292 Fed. Appx. 170, 175 (3d Cir. 2008).

Proceeding on a parallel track, plaintiffs sought relief in our state courts. In the state court action, they raised product liability claims against defendants American Home Products, Inc., American Cyanamid Company, Lederle Laboratories, and Wyeth-Lederle Vaccines, which they asserted were the entities that had manufactured or distributed the polio vaccine given to plaintiff Jamie Gannon. In the state court litigation, the trial court granted summary judgment in favor of defendants, R. 4:46-2, basing its decision on two grounds. First, the trial court concluded that plaintiffs lacked sufficient evidence to prove the identity of the manufacturer of the polio vaccine that plaintiff Jamie Gannon was given. Second, the trial court concluded that plaintiffs were collaterally estopped from bringing the cause of action based on the prior judgment entered in federal court.

The Appellate Division, in a published opinion, reversed both aspects of the trial court's judgment and remanded the matter for further discovery and for trial. Gannon v. Am. Home Prods., Inc., 414 N.J. Super. 507, 511 (App. Div. 2010). The panel first concluded that the trial court had utilized an incorrect standard in evaluating the sufficiency of the product identification evidence because it failed to afford plaintiffs the benefit of the inferences to which they were entitled as the non-moving parties in the context of a summary judgment motion. Id. at 516-18. The panel then concluded that there were equitable considerations that militated against granting collateral estoppel effect to the judgment of the federal court, including the status of discovery in the state court matter and the pendency of similar state court litigation involving other plaintiffs. Id. at 526-30. For both of those reasons, the panel reversed the trial court's grant of summary judgment and remanded the matter for further proceedings.

Because we conclude that the Appellate Division's collateral estoppel analysis was in error, we reverse. Inasmuch as that conclusion resolves this matter, we do not address the arguments of the parties concerning the panel's product identification discussion.

I.

The facts relevant to this dispute can be summarized succinctly. Plaintiff Jamie Gannon was born in 1973. When he was a child, his mother took him to be seen by Dr. Frank Bender, a pediatrician who practiced in Upper Darby, Pennsylvania. It is undisputed that plaintiff received five doses of polio vaccine on specific dates between 1973 and 1976. The identity of the manufacturer of the vaccine, however, was disputed and was the focus of significant discovery in the state court litigation.

Plaintiff asserts that the vaccine was manufactured by defendant Lederle Laboratories. He finds support for this contention in a document kept by his mother on which the dates of the doses were recorded. That document was a preprinted form, identified as an Immunization and Health Record, that bore the name and corporate logo of Lederle Laboratories. The form included a column denoting "Active Immunizations" where a number of possible childhood vaccines were listed. Among them there was a line for "Poliomyelitis Vaccine: Poliovirus Vaccine, Live, Oral, Sabin Strains, ORIMUNE® Trivalent." Defendants do not dispute that ORIMUNE® was a proprietary product manufactured by Lederle Laboratories.*fn1 The form includes a series of dates that were handwritten in five boxes immediately to the right of this line, signifying the dates on which the polio vaccine was administered to plaintiff.

In response, defendants offered evidence in support of their assertion that the form was distributed as a promotional item by Lederle Laboratories and that it "w[as] not intended to be a doctor's official vaccination record." Gannon, supra, 414 N.J. Super. at 515. They point out that the form included spaces for many immunizations to be recorded, including several, such as mumps and measles vaccines, that Lederle Laboratories did not manufacture. They further contend that the purpose of the form can be seen from printed language found directly above the corporate name and logo, which is obviously directed to a child's parent. That language advises, for example, "keep this immunization and health record . . . it will be useful at school registration time [or] when traveling," and it further advises that "if you move, show it to your new physician so that he may know of past immunizations."

Defendants relied on testimony from David Standiford, the company's former district sales manager for the region where plaintiff's pediatrician practiced, who testified that the form was merely a promotional item given to pediatricians so that they could pass it along to the parents of their patients. Moreover, according to Standiford, he urged his sales representatives to distribute the forms "whether the particular doctor purchased Lederle products" or not.

Standiford also stated that by the time plaintiff had filed his lawsuit and commenced discovery,*fn2 both Dr. Bender and his office manager had died and their office files could not be located. In addition, he demonstrated that the company's sales representative who had called on that office was also deceased. Dr. Bender's nurse, consistent with the assertions made by Lederle Laboratories, certified that the document plaintiff relied upon to identify Lederle Laboratories was not part of the doctor's office records, but was a place where the office manager would record the vaccinations that had been given so that the child's parents could present it to school officials. She could not identify the manufacturer of the vaccine actually administered to plaintiff based upon the document alone and had no recollection of which manufacturer supplied the vaccines to the office.

In November 2000, plaintiff Jamie Gannon was diagnosed with medulloblastoma, a cancerous brain tumor. Contending that there was a link between that particular type of tumor and a simian viral contaminant found in polio vaccines that is known as SV40, plaintiffs commenced their federal and state court litigation. Before the state action could be fully adjudicated, the federal action was dismissed based on a motion by the United States for Our evaluation of the arguments raised on appeal requires that we address first the questions that were considered by the court in the federal litigation, following which we address the issues presented in the state court matter.

A.

The Federal Claim

Critical to our consideration of the matters raised on appeal is an explanation of the federal court proceedings in which plaintiffs were involved. Plaintiffs sued the United States in the United States District Court for the Eastern District of Pennsylvania, asserting claims arising pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680, that related to the governmental approvals of the vaccines for marketing. In that action, plaintiffs asserted that Lederle Laboratories failed to comply with the applicable standards imposed by the Food and Drug Act, 42 U.S.C. § 262(d), when its polio vaccine was manufactured and distributed.

In order to prevail on the federal claims, plaintiffs were required to prove that the United States had negligently licensed the oral polio vaccine and had improperly permitted it to be released to the public when it had not been manufactured in compliance with existing regulations governing its manufacture and testing. See generally Campagna v. Am. Cyanamid Co., 337 N.J. Super. 530, 534-39 (App. Div. 2001) (describing history of approval for marketing relating to ORIMUNE® polio vaccine). The focus of the claims against the United States was plaintiffs' assertion that the oral polio vaccine manufactured and distributed by Lederle Laboratories was contaminated with SV40. In the federal litigation, therefore, plaintiffs were required to prove both general causation, meaning that SV40 causes cancer in humans, and specific causation, meaning that SV40 caused plaintiff Jamie Gannon's medulloblastoma.

In that context, plaintiffs presented proofs that were tried before a federal judge in the Eastern District of Pennsylvania. That proceeding began with a Daubert*fn3 challenge to plaintiffs' expert, Dr. Adi Gazdar, who was called by plaintiffs to testify about both general and specific causation.

For the convenience of the parties, the trial court elected to combine the Daubert hearing, concerning the admissibility of Dr. Gazdar's testimony, with its consideration of all of the testimony relating to the disputed issues about causation. As a result, the court heard Dr. Gazdar's complete testimony, followed by testimony from three experts called by the United States who opined on the subject of general and specific causation. Gannon, supra, 571 F. Supp. 2d at 616. At the close of that testimony, the court denied the Daubert motion, concluding that Dr. Gazdar's testimony met the test established in Daubert for admissibility. Id. at 617.

The United States then moved for judgment in its favor based on the causation evidence that the court had received, relying on Fed. R. Civ. P. 52(c). That Rule permits the court to enter judgment if "a party has been fully heard on an issue and the court finds against the party on that issue," and if a favorable finding on that issue is necessary to maintain a claim or defense. Ibid. In granting the Rule 52(c) motion for judgment, the trial court issued extensive findings of fact concerning the evidence that the parties had adduced on the questions of general and specific causation. See Gannon, supra, 571 F. Supp. 2d at 621-38.

Based on those findings of fact, the court reached three conclusions of law that are germane to the matter now before this Court. First, the court specifically rejected plaintiffs' argument that there was additional expert evidence that might have supported their causation arguments, concluding that "[p]laintiffs were fully heard on the causation issues." Id. at 640. Second, the court concluded that "[p]laintiffs have failed to demonstrate, by a preponderance of the evidence, that SV40 causes cancer, let alone medulloblastoma, in humans." Ibid. Third, the court concluded that "[p]laintiffs also have failed to demonstrate by a preponderance of the evidence that SV40 caused Mr. Gannon's medulloblastoma." Ibid.

Plaintiffs appealed from that judgment, challenging all three of the trial court's conclusions. In affirming the judgment of the trial court, the United States Court of Appeals for the Third Circuit rejected plaintiffs' attacks on the adequacy of the proceedings and the sufficiency of the evidence. See Gannon, supra, 292 Fed. Appx. at 173-75.

First, the Third Circuit agreed with the trial court that plaintiffs had been fully heard on the causation issues. Id. at 173-74. Because the other expert witnesses that plaintiffs contended that they would have called, if permitted, only would have addressed the claim that the vaccine was contaminated, the court concluded that they could not have offered the epidemiological ...


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