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Barron v. Abbott Laboratories, Inc.

Court of Appeals of Missouri, Eastern District, Second Division

November 8, 2016

MIASIA BARRON, et al., Plaintiffs, and MADDISON SCHMIDT, Plaintiff/Respondent,
v.
ABBOTT LABORATORIES, INC., Defendant/Appellant.

         Appeal from the Circuit Court of the City of St. Louis Honorable Steven R. Ohmer

          SHERRI B. SULLIVAN, PJ

          Introduction

         Abbott Laboratories, Inc. (Appellant) appeals from the judgment of the trial court entered upon a jury verdict in favor of Minnesota resident Maddison Schmidt (Respondent), a minor, brought by her adoptive parents Gary and Tammy Schmidt as her Next Friends, [1] for personal injury. The jury awarded actual damages in the amount of $15, 000, 000 and punitive damages in the amount of $23, 000, 000. We affirm.

          Factual and Procedural Background

         This a personal injury case in which 24 plaintiffs, by their next friends, joined to bring a nine-count petition against Appellant, the manufacturer of the antiepileptic drug (AED) Depakote, for birth defects they suffered as a result of their biological mothers' being prescribed and ingesting the drug while they were in utero. The nine counts relate to Appellant's manufacture, sale, and marketing of Depakote and allege (1) strict products liability; (2) negligence; (3) gross negligence; (4) breach of implied warranty; (5) breach of express warranty; (6) misrepresentation by omission; (7) fraud and misrepresentation; (8) intentional infliction of emotional distress; and (9) negligent infliction of emotional distress. The petition specifically requests, in addition to compensatory damages, punitive damages.

         When Respondent's mother became pregnant with her, the label for Depakote[2] had a black box warning that stated:

VALPROATE CAN PRODUCE TERATOGENIC EFFECTS SUCH AS NEURAL TUBE DEFECTS (E.G., SPINA BIFIDA). ACCORDINGLY, THE USE OF DEPAKOTE TABLETS IN WOMEN OF CHILDBEARING POTENTIAL REQUIRES THAT THE BENEFITS OF ITS USE BE WEIGHED AGAINST THE RISK OF INJURY TO THE FETUS.

         During litigation, Appellant vigorously contested venue in the City of St. Louis and joinder of the plaintiffs not living in the City of St. Louis; sought severance of the non-City of St. Louis plaintiffs' claims and alleged forum non conveniens for the out-of-state plaintiffs;[3] filed motions, writs, removal to federal court; and sought judgment notwithstanding the verdict (JNOV), directed verdict (DV), remittitur, and a new trial. None of these efforts was successful for Appellant. This appeal follows.

          Points on Appeal

         In its first point, Appellant claims the trial court erred in denying its motion to transfer Respondent's claims to St. Louis County because St. Louis County was the only potentially proper Missouri venue for Respondent's claims under Section 508.010[4] in that Respondent was first injured outside of Missouri and Appellant's registered agent is located in St. Louis County.

         In its second point, Appellant asserts the trial court erred in denying its motion to sever Respondent's and the other plaintiffs' claims, because (a) the 24 plaintiffs' claims did not arise out of the same transaction, occurrence, or series of transactions or occurrences in that the plaintiffs' mothers were prescribed Depakote at different points in time by different physicians under different circumstances and plaintiffs alleged different injuries, and (b) because it was impossible to conduct a fair trial of all the plaintiffs' claims in that there were significant factual and legal differences between those claims.

         In its third point, Appellant maintains the trial court erred in denying its motions for DV and JNOV on Respondent's failure to warn claim because the Depakote label was adequate as a matter of Minnesota law in that the label (a) attracted the attention of those to whom it was directed, (b) explained the mechanism and mode of injury, and (c) explained how to safely use the product to avoid injury.

         In its fourth point, Appellant contends the trial court erred in denying its motions for DV and JNOV on Respondent's demand for punitive damages because Respondent did not present clear and convincing evidence Appellant deliberately disregarded the rights and safety of others in that Appellant warned prescribing physicians of Depakote's risk of spina bifida via a black box warning.

          In its fifth point, Appellant argues the trial court committed cumulatively prejudicial evidentiary errors in (a) admitting an expert warning opinion which had not been disclosed prior to trial, (b) admitting evidence of marketing and promotional materials to which the prescribing physician was never exposed, and (c) admitting evidence of Appellant's financial condition during the compensatory damages phase of the trial.

         Discussion

         Venue, Joinder, and Severance

         Points I and II are discussed together because they are inextricably intertwined, particularly under the facts of this case.

         Venue and Joinder

         Appellant claims the only potentially proper Missouri venue for tort claims in which Respondent, as plaintiff, was first injured outside of Missouri is the county in which Appellant's registered agent is located, which is St. Louis County, citing Section 508.010.5. However, Respondent was joined with 23 other plaintiffs, two of which were first injured in the City of St. Louis, creating proper venue in the City of St. Louis pursuant to Section 508.010.4. Appellant claims the plaintiffs' claims were improperly joined and their claims should have been severed pursuant to Appellant's motion, which the trial court denied.

         Venue and joinder are intertwined in the law. The proper joinder of plaintiffs is relevant to the determination of venue under Section 508.010.[5] The issues of proper venue are contingent upon whether there is proper joinder of parties. State ex rel. Allen v. Barker, 581 S.W.2d 818, 824 (Mo. 1979).

         Section 508.010.4 provides:

Notwithstanding any other provision of law, in all actions in which there is any count alleging a tort and in which the plaintiff was first injured in the state of Missouri, venue shall be in the county where the plaintiff was first injured by the wrongful acts or negligent conduct alleged in the action.[6]

         In the instant case, Respondent alleged plaintiffs Jerricka Marshall and Jerrinee Marshall were first injured in the City of St. Louis when they were exposed to Depakote when their mother, Sheena Hill, ingested the drug at her home in the City of St. Louis. Section 508.010.14 provides: "A plaintiff is considered first injured where the trauma or exposure occurred rather than where symptoms are first manifested." Venue was thus proper as to these two plaintiffs in the City of St. Louis, and if the other plaintiffs were properly joined with them in their claims, then venue is proper to all of them under Section 508.010.4.

         Rule 52.05(a)[7] permits joinder in separate cases arising out of the same transaction, occurrences, or series of transactions or occurrences and if any question of law or fact common to all of them will arise in the action. Dally, 248 S.W.3d at 616. Rule 52.05(a) provides:

(a) Permissive Joinder. All persons may join in one action as plaintiffs if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the same transaction, occurrence or series of transactions or occurrences and if any question of law or fact common to all of them will arise in the action. … A plaintiff or defendant need not be interested in obtaining or defending against all the relief demanded. Judgment may be given for one or more of the plaintiffs according to their respective rights to relief, and against one or more defendants according to their respective liabilities.

(Emphasis added.) Rule 52.05(a) requires that the series of occurrences be related by a common question of law or fact, a requirement that is readily apparent here because of the common factual question as to the origin of the plaintiffs' injuries. Dally, 248 S.W.3d at 617.

          Here, the commonalities among the 24 plaintiffs are, first and foremost, each alleged birth defect injuries from the drug Depakote, which their mothers took by prescription during their pregnancies. The plaintiffs alleged Appellant is the only manufacturer, seller, and marketer of Depakote and, as such, was responsible for proper warnings about the potential side effects in the form of birth defects for the children of women taking Depakote while pregnant. The plaintiffs each made the same allegations in the petition regarding strict products liability, negligence, insufficient warning, breach of warranty, and infliction of distress regarding Depakote against one and the same defendant, Appellant. The plaintiffs asserted rights to relief against Appellant jointly and alleged facts which gave rise to common questions of law or fact for Appellant.

         This is a single defendant case. There are 24 plaintiffs. All 24 plaintiffs assert Appellant's drug, Depakote, caused their birth defects. As to each and every plaintiff, the petition pled:

[Appellant's] Depakote was defectively designed, inadequately tested, dangerous to humans and [the] unborn and lacked proper warnings as to the true danger associated with its use, and Plaintiffs suffered injury as a result of the mother's ingestion of Depakote.

         Missouri law clearly allows for the joinder of unrelated plaintiffs who allege injury from the same conduct of the same defendant. See Kelley v. National Lead Co., 210 S.W.2d 728, 729 (Mo.App. 1948); Saeger v. Lakeland Development Co., 350 S.W.2d 820, 822 (Mo.App. 1961). Plaintiffs, as joined, asserted claims against Appellant for the same conduct, containing common questions of fact and law concerning what information Appellant possessed concerning Depakote's harmful effects, what information Appellant elected to disclose to physicians and patients about those harmful effects, and what information Appellant was required by law to disclose about those effects.

          All of the substantive pleadings are common. The petition outlined 14 paragraphs of common factual claims regarding Appellant's knowledge and warning failures. Of the 113 paragraphs in the petition, all but the 24 that describe the individual plaintiffs apply to every plaintiff's case. On the face of the pleadings, these cases are properly joined.

         The differences among the 24 plaintiffs in this case alleged by Appellant are (1) they come from 13 different states; (2) they vary in age, with the oldest being born in 1992 and the youngest in 2010, and thus were exposed to Depakote at varying times; (3) the mothers were prescribed Depakote by different physicians under different circumstances; and (4) the plaintiffs allege varying injuries. These differences are insignificant and inconsequential in substance when compared with the commonalities. Furthermore, Appellant's argument suggests the Court should look solely from the perspective of the particular circumstances of each plaintiff's mother's use of Depakote as constituting the relevant "transactions" and not from the perspective of Appellant's nationwide promulgation and marketing of Depakote. Here, plaintiffs have shown significant substantive commonalities directly related to the central issue in this case, Appellant's negligent dissemination of its drug Depakote.

         The fact Depakote was prescribed to the plaintiffs by different physicians is not controlling on the question of joinder. Nor are the claimed differences in the Depakote-induced birth defects sustained by the plaintiffs the issue here. See Mosley v. General Motors Corp., 497 F.2d 1330, 1334 (8th Cir. 1974) ("The fact that each plaintiff may have suffered different effects ...is immaterial for the purposes of determining the common question of law or fact."). The differing ages and home states of the plaintiffs have no bearing on the commonality of their claims or the relevant transaction by Appellant.

          Joinder is clearly proper here because the plaintiffs' reasonably related claims arise out of the same transaction, occurrence, or series of transactions or occurrences, and because questions of law and fact are shared among each plaintiff's causes of action against Appellant. See Section 507.040.1; Rule 52.05(a); State ex rel. Allen v. Barker, 581 S.W.2d 818, 826 (Mo.banc 1979); Dally, 248 S.W.3d at 617; Saeger, 350 S.W.2d at 821; Kelley, 210 S.W.2d at 729. Appellant's arguments that the claims bear some differences do nothing to disprove the commonalities, and it is the commonalities that permit joinder.

         Appellant filed petitions for extraordinary writs in this Court and in the Missouri Supreme Court asserting venue was improper in this case. Appellant's successive petitions for extraordinary writs were denied. Both this Court and the Supreme Court heard Appellant's arguments supporting its position that venue was improper in this case after the issue was fully briefed by both sides in the writ proceedings in both courts. This Court and the Supreme Court individually denied Appellant's petitions, rejecting its improper venue argument. Herein again on direct appeal, we still find no merit in Appellant's contention venue was improper in this case. We find the plaintiffs and their claims were properly joined and thus venue in the City of St. Louis was proper for Respondent.

         Severance

         The decision of whether to allow severance of claims is within the sound discretion of the trial court, and we will not disturb the ruling of the court absent an abuse of discretion. Guess v. Escobar, 26 S.W.3d 235, 239 (Mo.App. W.D. 2000). A discretionary ruling is presumed correct, and an abuse of discretion only occurs where we find the ruling is clearly against the logic of the circumstances and so arbitrary and unreasonable that it shocks the sense of justice. State ex rel. Sago v. O'Brien, 827 S.W.2d 754, 755 (Mo.App. E.D. 1992). In considering whether the trial court abused its discretion by refusing to sever, we must keep in mind that the policy of the law is to try all issues arising out of the same occurrence or series of occurrences together. Bhagvandoss v. Beiersdorf, Inc., 723 S.W.2d 392, 395 (Mo.banc 1987).

Rule 66.02 governs severance of claims:
The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues.

         Neither convenience, the avoidance of prejudice, or judicial economy would be served by severance of the plaintiffs' claims against Appellant. This case involves a single defendant's manufacture, design, sale and marketing of a single pharmaceutical drug. Appellant does not cite any Missouri law or controlling precedent in support of its argument the plaintiffs' claims should be severed because trying multiple plaintiffs' claims creates a risk of confusion and the improper consideration of collective evidence by the jury. Any alleged risk in that regard can be prevented by properly instructing the jury. Appellant has failed to show joinder of the plaintiffs' cases contravenes judicial economy or causes it an undue burden as the sole defendant.

         We find that the trial court's denial of Appellant's motion to sever is not against the logic of the circumstances, and, therefore, the trial court did not abuse its discretion in denying the motion for severance. Based on the foregoing, Points I and II are denied.

         Failure to Warn

         In its third point, Appellant maintains the trial court erred in denying its motions for DV and JNOV on Respondent's failure to warn claim because the Depakote label was adequate as a matter of Minnesota law in that the label (a) attracted the attention of those to whom it was directed, (b) explained the mechanism and mode of injury, and (c) explained how to safely use the product to avoid injury.

         To determine whether a DV or JNOV should have been granted, this Court applies essentially the same standard. Keveney v. Mo. Military Acad., 304 S.W.3d 98, 104 (Mo.banc 2010). To determine whether the evidence was sufficient to support the jury's verdict, an appellate court views the evidence in the light most favorable to the verdict and gives the plaintiff the benefit of all reasonable inferences. Id., Moore v. Ford Motor Co., 332 S.W.3d 749, 756 (Mo.banc 2011). Conflicting evidence and inferences are disregarded. Keveney, 304 S.W.3d at 104. The jury's verdict will be reversed only if there is a complete absence of probative facts to support the jury's conclusion. Id.

         Minnesota Law

         The parties do not dispute Minnesota law applies here and Minnesota, like Missouri, follows the "learned intermediary doctrine" in prescription drug cases. A physician acts as a "learned intermediary" between the drug manufacturer and the patient and any warning given to the physician is deemed a warning to the patient. Kirsch v. Picker Intern., Inc., 753 F.2d 670, 671 (8th Cir. 1985). In cases involving manufacturers of prescription drugs, the manufacturer has "'a duty to properly warn the doctor of the dangers involved and it is incumbent upon the manufacturer to bring the warning home to the doctor.'" Doe v. Alpha Therapeutic Corp., 3 S.W.3d 404, 419 (Mo.App. E.D. 1999), quoting Krug v. Sterling Drug, Inc., 416 S.W.2d 143, 146 (Mo.1967). Under the learned intermediary doctrine, the manufacturer has no duty to warn the lay public or patients regarding prescription drugs, but only prescribing physicians. Mulder v. Parke Davis & Co., 181 N.W.2d 882, 885 n.1 (Minn. 1970).

          Under Minnesota law, "broadly speaking, a failure to warn claim has three elements: '(1) whether there exists a duty to warn about the risk in question; (2) whether the warning given was inadequate; and (3) whether the lack of a warning was a cause of plaintiff's injuries.'" Huggins v. Stryker Corp., 932 F.Supp.2d 972, 986 (D. Minn. 2013), quoting Seefeld v. Crown, Cork & Seal Co., 779 F.Supp. 461, 464 (D. Minn.1991) (citing Balder v. Haley, 399 N.W.2d 77, 81 (Minn. 1987)). Appellant does not dispute it had a duty to warn Dr. Jacoby or that its drug Depakote caused the injuries suffered by Respondent. Rather, Appellant maintains its warning was sufficient. Thus, the only element at issue here is whether the warning given was adequate.

         In general, a warning is adequate as a matter of Minnesota law when it: "(1) attract[s] the attention of those [to whom it is directed]; (2) explain[s] the mechanism and mode of injury; and (3) provide[s] instructions on ways to safely use the product to avoid injury." Gray v. Badger Mining Corp., 676 N.W.2d 268, 274 (Minn. 2004). Appellant maintains its warning about Depakote was adequate as a matter of Minnesota law because it was a black box warning, which Appellant maintains is considered the strongest and most significant way to stress a warning about a drug to a learned intermediary; its warning stated Depakote can cause neural tube defects, such as spina bifida, when used by pregnant women; and its warning indicated the only way to avoid the possibility of spina bifida from Depakote is to either avoid the use of Depakote during pregnancy or avoid getting pregnant while on Depakote.

         Appellant maintains it satisfied all three requirements for an adequate warning in this case, and thus the court should have directed a verdict in its favor or issued a JNOV. We disagree.

          Appellant's Warning Was Inadequate in Light of its Knowledge

         Appellant knew Depakote had an increased overall risk of birth defects versus its competitors and was significantly more dangerous for use in women of childbearing age. Yet, Appellant did not include this information in its warning. Rather, its warning in 1980 remained the same in 2002 despite outdated information, to-wit:

THERE ARE MULTIPLE REPORTS IN THE CLINICAL LITERATURE WHICH INDICATE THAT THE USE OF ANTIEPILEPTIC DRUGS DURING PREGNANCY RESULTS IN AN INCREASED INCIDENCE OF BIRTH DEFECTS IN THE OFFSPRING. ALTHOUGH DATA ARE MORE EXTENSIVE WITH RESPECT TO TRIMETHADIONE, PARAMETHADIONE, PHENYTOIN, AND PHENOBARBITOL, REPORTS INDICATE A POSSIBLE SIMILAR ASSOCIATION.

         Appellant knew of multiple studies concluding that (1) Depakote posed a higher risk of overall birth defects than its competitor AEDs, (2) the overall risk of birth defects was 10 percent or even greater, (3) the risk of spina bifida was significantly higher than the 1-2 percent stated in the label, and (4) the risk of spina bifida amounts to a twentyfold increased risk compared to the background rate in the general population. This information was conveyed at trial to the jury via expert witnesses on the subject and evidence demonstrating it was common knowledge in Appellant's industry - knowledge that was growing every year - that Depakote was by far the most dangerous AED on the market for causing birth defects.

         Appellant's Warning Was False and Misleading

         Contrary to what it knew to be true, Appellant's label falsely stated sufficient data to determine the incidence of birth defects was not available:

OTHER CONGENITAL ANOMALIES (EG, CRANIOFACIAL DEFECTS, CARDIOVASCULAR MALFORMATIONS AND ANOMALIES INVOLVING VARIOUS BODY SYSTEMS), COMPATIBLE AND INCOMPATIBLE WITH LIFE, HAVE BEEN REPORTED. SUFFICIENT DATA TO DETERMINE THE INCIDENCE OF THESE CONGENITAL ANOMALIES IS NOT AVAILABLE.

          Appellant was specifically advised that Depakote should not be prescribed to women of childbearing years unless all other alternatives had been tried and failed and Appellant was aware of scientific literature concluding the same. This information was not included in the warning to doctors.

         Appellant persists in its position it was enough that it just warned of the bottom line risk known since the early 1980s that Depakote could cause birth defects such as spina bifida. Appellant argues it did not have an added duty to warn that Depakote's overall risk for all birth defects was higher than that of all other AEDs on the market and therefore Depakote should be used in women of childbearing potential only if all other AEDs failed to control the woman's seizures.

         The fatal flaw in Appellant's argument is this is not an added duty. Rather, as research revealed and it came to light Depakote was the most dangerous drug for causing birth defects in comparison to other AEDS on the market, the jury found it reasonable that Appellant warn doctors of this fact about its own product, so doctors could make a truly informed decision about what AED to prescribe to their female patients of childbearing potential and only to prescribe Depakote if all others failed. However, Appellant's "2003 Psychiatry Sales & Marketing Tactical Execution Plan" actually stated its objective was "to maintain Depakote's position as a first-line agent for women with epilepsy, bipolar, and migraine." (Emphasis added.)

         Issues such as the adequacy of the warning, breach of duty and causation are for the jury's resolution. Balder, 399 N.W.2d at 81. The adequacy of the warning must be resolved by the factfinder. Kociemba ...


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