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Sandoz Pharmaceuticals Corp. v. Gunderson10/21/2005
AFFIRMING IN PART, VACATING IN PART, AND REMANDING
BEFORE: KNOPF AND TACKETT, JUDGES; ROSENBLUM, SENIOR JUDGE.
On September 28, 1993, Mary Margaret Gunderson gave birth by Caesarean section to her and her husband's, Ronald Gunderson's, second child. Tragically, seven days later, Mary died. Mary's estate blamed her death on the medication, Parlodel(r), which Mary had taken to suppress postpartum lactation. The estate, represented by Ronald, and Mary's two children, Nicholas and Wesley Gunderson, sued Parlodel's(r) manufacturer, Sandoz Pharmaceuticals Corporation, and Mary's obstetrician, Lyman Armstrong, M.D., in Jefferson Circuit Court under theories of products liability and medical malpractice. The case came to trial in February and March 2004, and resulted in a judgment for the plaintiffs of more than nineteen million dollars. The estate was awarded compensatory damages for the loss of Mary's services and earning power in the amount of $1,848,263.00, and Nicholas and Wesley were awarded compensatory damages of $3,000,000.00 apiece for the loss of their mother's consortium. These compensatory awards were apportioned 90% to Sandoz and 10% to Armstrong. Sandoz was also found liable for $11,250,000.00 in punitive damages. Sandoz and Armstrong now appeal. They both contend that the trial court abused its discretion by failing to exclude unreliable expert causation testimony as required by Daubert v. Merrell Dow Pharmaceuticals, Inc. and Mitchell v. Commonwealth. Both appellants also claim to have been entitled to directed verdicts on the issues of strict products liability and medical negligence, respectively. They both challenge certain evidentiary rulings. And Sandoz alleges errors with respect to the award of punitive damages including a claim that the jury was improperly instructed. Except for this last claim, we reject all of the appellants' contentions. Because we agree with Sandoz, however, that the punitive damages instruction was fatally flawed, we must vacate the award of punitive damages and remand the matter for additional proceedings.
BACKGROUND
The Food and Drug Administration (FDA) originally approved the use of Parlodel(r) for the prevention of postpartum lactation (PPL) in 1980. By 1983, reports of adverse reactions, including seizures, strokes, and heart attacks, led the FDA to request that Sandoz place a warning of the adverse experiences on its labeling. Sandoz initially resisted the request, but in 1984, and again in 1987, it agreed to make labeling changes, and in conjunction with the 1987 changes it agreed to notify doctors by letter of the potential hazards of using Parlodel(r) for lactation suppression.
Sandoz also undertook a comprehensive study of the drug. The study, carried out by Epidemiology Resources, Inc. (ERI) and published in 1988, did not conclusively show a relationship between Parlodel(r) and either stroke or seizure, but because of flaws in the study and its small size, the FDA determined that it did not allay concerns about those potential hazards. Because of different but also serious concerns with respect to other lactation suppressing drugs, the FDA's Fertility and Maternal Health Drugs Advisory Committee recommended that no drug, including Parlodel(r), be routinely used to suppress lactation. Agreeing with the committee's recommendation, the FDA in 1989 informally requested that all manufacturers voluntarily withdraw the lactation suppression indication from their drug products. Again, Sandoz resisted the request until 1994 when, in the face of FDA proceedings to withdraw approval for the indication, Sandoz voluntarily withdrew the Parlodel(r) indication for the prevention of lactation. Approximately ten
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