Daubert in Action: A Simulation and Discussion

Honorable Barbara M. G. Lynn, Judge, United States District Court
     for the Northern District of Texas, Dallas, Texas
Eric V. Moye, Esq., Vial, Hamilton, Koch & Knox L.L.P., Dallas, Texas
Larry S. Stewart, Esq., Stewart Tilghman Fox & Bianchi, P.A., Miami, Florida
Moderator: Ellen S. Pryor, Southern Methodist University

 

Participants:

The Judge:
Honorable Barbara M. G. Lynn, Judge, United States District Court for the Northern District of Texas, Dallas, Texas

The Plaintiff's Lawyer:
Larry S. Stewart, Esq., Stewart Tilghman Fox & Bianchi, P.A., Miami, Florida

The Defense Lawyer:
Eric V. Moye, Esq., Vial, Hamilton, Koch & Knox L.L.P., Dallas, Texas

Moderator:
Ellen S. Pryor, Professor of Law and University Distinguished Teaching Professor, Southern Methodist University Dedman School of Law, Dallas, Texas

This set of materials includes the following:

1.    Short Bios of Participants
2.    The Sardol Case: Background Assumptions and Facts
3.    Report of Dr. Andrea Freund (plaintiff's expert)
4.    Report of Dr. Michael Carpenter (defendant's expert)
5.    Summary of current state law relating to Daubert, Frye, or other approaches to expert evidence
6.    Current version of proposed Comment c to section 28 of Restatement (Third) Torts:
       Liability for Physical Harm (Basic Principles)
7.    Shifting gears: An expert report in a business tort case

 

1.     Short Bios of Participants

The Honorable Barbara M. G. Lynn is United States District Judge for the Northern District of Texas. Judge Lynn received her B.A., with highest distinction, from the University of Virginia and her J.D. from Southern Methodist University School of Law, where she graduated summa cum laude and first in her class. She joined Carrington, Coleman, Sloman & Blumenthal, L.L.P. upon graduation from law school, and was a partner in the firm from 1983 until 1999, when she was named to the bench. Judge Lynn has chaired the ABA Section of Litigation, served as President of the Dallas Association of Young Lawyers, and served as chair of the Board of Directors of the Dallas Bar Association. She is a member of the American College of Trial Lawyers. In 1998, she was named by the National Law Journal as one of the 50 most influential women attorneys in the United States.

Larry S. Stewart, Esq., concentrates his practice in the area of representing plaintiffs in defective products cases and medical malpractice contexts; his cases over the past 40 years have also included defamation, and business torts. He is a former president of the Association of Trial Lawyers of America (ATLA), is a member of the American College of Trial Lawyers, sits on the Board of Overseers for the Rand Institute for Civil Justice, and is an Advisor on the Restatement (Third) Torts. From October 2001 to October 2002, he served as President and CEO of Trial Lawyers Care, Inc., the national pro bono program for victims of the 9-11 terrorist attacks.

Eric Moye, a 1979 graduate of Harvard Law School, served as a state district judge in Dallas Texas after being appointed to that position by then-Governor Ann Richards. His practice now covers a wide range of commercial litigation matters. He was a member of the founding board of the Dispute Mediation Service of Dallas. He has taught classes at Southern Methodist University, and for the past ten years has served on the Guest Faculty of the Trial Advocacy Workshop at Harvard Law School.

 

2.     The Sardol Case: Background Assumptions and Facts

Assumptions:

 

Background Facts (Uncontested unless otherwise indicated):

Janis Weaver gave birth to a baby girl at 8:47 a.m. on July 24, 1993. Because Janis had decided not to breast-feed her baby, she received 3 separate 2.5 mg. tablet of Sardol (a drug then used to suppress lactation post-partum) at the appropriate interval. On July 25, Janis suddenly screamed, grew rigid, and then suffered a respiratory arrest, lapsing into a coma. She was pronounced dead at 3:30 p.m. on July 28, 1993.

The autopsy reported that the probable cause of the death was intercerebral hemorrhage resulting from a blood vessel rupture in her brain.

The plaintiffs sued Sizer, the manufacturer of Sardol, on July 16, 1996.

The active chemical ingredient of Sardol is bromocriptine, which is an ergot alkoloid. The general family of ergot alkoloids has a hypertensive effect.

In 1984 (four years after first approving the drug as a lactation suppressant), the FDA reported that "the labeling of Sardol is being revised to reflect reports of postpartum hypertension, seizures, and cerebrovascular accidents." (FDA Drug Bulletin, vol. 14, no. 1, at 3-4). The FDA explained that it had received seven reports of hypertension alone, seven reports of seizures, and three cases of cerebrovascular accidents (including one fatality). Because approximately 500,000 women had used Sardol to suppress postpartum lactation, however, the significance of those reports was difficult to assess. The FDA expressly acknowledged, in 1984, that "[a] cause and effect relationship has not been established." Id.

Sizer eventually modified the Sardol package insert to include information about these cases. However, the company noted that hypertension, seizures, strokes, and myocardial infarctions regularly occur in postpartum women who are not treated with the active ingredients in Sardol. Thus, Sizer maintained, "the number of cases reported to Sizer is less that one would expect even in the absence of any drug effect." (Letter from Sardol's Executive Director of Sales, Aug. 20, 1987).

Over the next few years, the FDA continued to receive reports of adverse reactions to Sardol. Sizer commissioned a study by Epidemiologic Resources, Inc., regarding the relationship between Sardol and strokes and seizures. Although this study did not find a causal connection between Sardol and strokes and seizures, the FDA concluded that the study failed to allay concerns regarding the drug's association with seizures and involved too few individuals to adequately characterize the risk of stroke.

The FDA further concluded that the possibility that Sardol might cause serious adverse reactions in some patients outweighed the limited benefits associated with its use. As a result, the FDA requested all manufacturers to remove the indication for lactation suppression from the Sardol label. Initially, Sizer refused to comply with the FDA's request, arguing that Sardol should not be used routinely but should be available in specific circumstances recommended by physicians. Not satisfied with this position, the FDA initiated formal procedures for withdrawing its prior approval for the labeling of Sardol. The FDA explained its position as follows:

The FDA now has new information suggesting that therapeutic use of bromocriptine for the prevention of physiological lactation may lead to serious adverse experiences, including death and paralysis, in a small but significant number of patients. Patients at high risk of experiencing these serious adverse experiences cannot be adequately predetermined. In light of the limited benefit of using bromocriptine for the prevention of lactation, and the effectiveness and lack of serious adverse effects of conservative treatments such as breast binding with or without mild analgesics, the risk that bromocriptine may cause a serious adverse effect in a postpartum woman is unacceptable.

Accordingly, the Director concludes that the potential risks associated with the use of bromocriptine for the prevention of physiological lactation outweigh its limited benefits and bromocriptine is no longer shown to be safe for use in preventing physiological lactation. 59 Fed.Reg. 43347, 43351 (Aug. 24, 1994).

Sizer then agreed to FDA's proposal to withdraw the indication for the suppression of postpartum lactation.

 

3.     Plaintiff's Expert Report

The following is the report prepared by the Plaintiff's expert, Dr. Andrea Freund, and produced to Defendant in the course of discovery. Exhibits and attachments are not included.

Report of Dr. Andrea Freund:

I received my M.D. degree from the University of Texas, Southwestern Medical School, in 1975. I am Board Certified in internal medicine and in the sub-specialities of endocrinology and metabolism and critical care medicine. From 1974 to 1985, I was affiliated with the Southwestern Medical School in the following capacities: Resident in Medicine; Associate in Medicine; Assistant Professor of Medicine, Division of Critical Care, and Pulmonary Medicine; and Director of the Medical Intensive Care Unit. Since 1985, I have maintained a private practice in the areas of internal medicine and endocrinology, but I have remained as Adjunct Associate Professor, Internal Medicine and Endocrinology, at Southwestern.

I have reviewed (1) Janis Weaver's medical records as provided to me by plaintiff's counsel (marked as Exhibit 1 to this report); (2) all the current medical literature regarding bromocriptine and other ergot alkaloids, (3) the documents provided to me by plaintiff's counsel relating to the FDA labeling process (Exhibit 2), and (4) marketing, promotional and research material provided to me by plaintiff's counsel and provided, in turn, to plaintiff's counsel by defendant, Sizer Drugs, Inc. (Sizer).

My conclusion, explained in this report, is that, in all reasonable medical probability, the ingestion of Sardol caused, in Janis Weaver, a vasoconstriction of the blood vessels and hypertension; this resulted in an intercerebral hemorrhage secondary to ergot-induced vasospasm resulting from a blood vessel rupture in her brain. This rupture was the cause of death. In my opinion, to a reasonable degree of medical certainty, Janis Weaver would not have died had she not been taking Sardol.

Several categories of evidence are the basis of this conclusion. These include: the known pharmacological and toxicological properties of Sardol; the studies that have been performed on the relationship between Sardol and vasoconstriction; case reports on adverse reactions to Sardol; and differential diagnosis.

As to pharmacology, Sardol is a dopamine agonist. In other words, the drug stimulates the release of dopamine, a neurotransmitter that is a well known vasoconstrictor. Conversely, Sardol is also a what we call a "dopamine-1 antagonist," meaning that the drug inhibits the effects of dopamine at specific "D-1" receptors. But activating the "D-1" dopamine receptors results in vasodilation. These toxicological effects of Sardol are well-known as a result of numerous animal studies that have been published in standard, peer-reviewed research journal. Thus, given that Sardol stimulates the release of dopamine and that it inhibits the D-1 dopamine receptors, in all scientific probability the drug causes vasoconstriction.

In addition, Sardol has a very long elimination half-life -about 50 hours. To put it another way, the drug remains in the system even after women take it in the hospital for the first few days following delivery. Thus, women who take the drug to suppress post-partum lactation could develop hypertension and vasospasm after their discharge from the hospital.

As to the relationship of Sardol to hypertension, three studies are of significance. In the first, which was commissioned by Sizer, Inc., nineteen percent of patients showed increases in blood pressure after taking Sardol. In the FDA's 1984 study, six out of seven patients who developed hypertension while on Sardol regained normal blood pressure after they stopped taking the drug. Finally, a study by Dr. Dee McKnight showed that, out of the group of women with pregnancy-induced hypertension, those taking Sardol had a higher incidence of post-partum hypertension than those women not taking it.

I also take note of the case reports showing many adverse reactions to Sardol that have been reported to the FDA, Sizer, or both. Among the reactions are hypertension, seizures, strokes, and myocardial infarction. I recognize that these reports are not by themselves scientific evidence of causation, but they are important to note along with the other evidence.

Differential diagnosis is the process of determining which of two or more diseases with similar symptoms is the one from which the patient is suffering; the process makes use of a systematic comparison and contrasting of the clinical findings. Definitions and outlines of the process of differential diagnosis appear in all standard medical texts, such as Stedman's. I compared symptoms of various conditions and therefore was able to rule out various bacteria as the likely cause of Janis Weaver's death; for instance, I ruled out pneumonia, uterine infection, and infectious meningitis. To be more specific, I found: (1) samples revealed no bacteria capable of causing disease, (2) there was evidence of a slight uterine infection in Janis Weaver, but this was inconsistent with the sort of infection that is usually the cause of a patient's death, and (3) infectious meningitis could be ruled out, given the existence of "pinpoint hemorrhages" in the meninges around Janis Weaver's brain.

I also ruled out eclampsia because this does not produce the kind of reaction that Janis Weaver suffered. There were also no facts or previous medical history to support a conclusion that her reaction was the result of other medications (whether prescription or over-the-counter); she had no pre-existing seizure or cerebral disorder.

Notably, Janis Weaver had 2 previous pregnancies and deliveries, both without any adverse incidents. She breast fed her first child, and did not breast feed her second; she did not take any lactation-suppressing drug after the second. Her blood pressure readings were normal during these first two pregnancies and in their post-partum periods. Janis Weaver did not have any predisposing factors in her medical history for cerebral hemorrhage, apart from a moderate smoking habit of about 14 cigarettes a day. She did not smoke during her pregnancies. There was no sign of any congenital defect at the site of the cerebral hemorrhage.

The conclusions set out in this report make use of the methodology for assessing causation generally employed by experts in the fields of internal medicine and endocrinology and, for that matter, other medical sub-specialties. This methodology includes using toxicological evidence; scientific principles, professional publications, animal studies, differential diagnoses, and case reports.

Respectfully submitted,

Dr. Andrea Freund

 

4.     Report of Defendant's Expert

The following is the report prepared by the Defendant's expert, Dr. Michael Carpenter, and produced to Plaintiff in the course of discovery. Exhibits and attachments are not included

Report of Dr. Michael Carpenter, M.D.

I received my M.D. degree from the University of Utah in 1975, and from 1975 to 1984 was an Associate in Medicine and then Assistant Professor of Medicine at Duke University Medical Center, in the Divisions of Allergy, Critical Care, and Pulmonary Medicine. I also served as Director of the Intensive Care Unit from 1984 to 1985. I now serve as Associate Professor of Pulmonary and Critical Care Medicine at University of Utah Medical Center. From 1985 until now, I have been associated with the University of Utah Medical Center in the following positions: Attending Physician in the Hypertension and Clinical Pharmacology Division; Attending Physician in Critical Care; and, as stated above, Associate Professor. I have been an invited reviewer for a number of articles for different medical journals, and am Board Certified in internal medicine as well as the subspecialties of endoctrinology and critical care medicine.

In preparation for this report, I have reviewed Dr. Andrea Freund's report, Janis Weaver's medical records, the medical literature regarding bromocriptine and other ergot alkaloids, documents relating to the FDA labeling process and marketing and research material provided by Sizer Drugs, Inc.

In my opinion, the available, reliable scientific evidence does not support a causal connection between Sardol and vasoconstriction, hypertension, strokes, and resulting secondary effects such as cerebral hemorrhaging. Thus, in my opinion, there is no causal connection between Janis Weaver's ingestion of Sardol and her death.

First, the case reports relating to adverse medical events in patients who took Sardol are simply a doctor's account of a particular patient's reaction to a drug or other stimulus, along with the doctor's description of other surrounding events or factors that the doctor deems relevant. Case reports often lack analysis; doctors who write them are in many different practice fields; the reports often omit relevant facts about the patient; they often do not attempt rigorously to screen out alternative causes of the patient's condition. At most, then, the case reports show a temporal connection between the ingestion of Sardol and the adverse resported results. This temporal connection is not enough by itself to serve as scientifically or medically acceptable proof of causation.

Second, the same criticisms just noted about the case reports on Sardol would be applicable to any of the published articles that rely to any substantial degree on the case studies. These articles cannot supply analysis that cures the original defects or problems with the underlying case studies.

Third, it is estimated that millions of women have taken Sardol for suppression of lactation. The case resports of adverse effects are quite modest compared to what we would expect if, indeed, Sardol had a causal connection with hypertension, vasoconstriction, stroke, etc.

Fourth, there is strong epidemiological evidence that pregnancy itself is a strong risk factor for stroke.

Fifth, the active chemical ingredient of Sardol is bromocriptine, which is an ergot alkoloid. But it differs chemically from other ergot alkaloids. Hence, the mere fact that it is an ergot alkaloid does not mean that it has the effect-as does the general family-of causing vasoconstriction. In addition, the mere fact that Sardol acts on serotonin and dopamine receptors does not establish that Sardol itself, as opposed to some other agent that triggers either the release of these neurotransmitters or some other physiological mechanism, causes vasoconstriction, hypertension, and stroke.

Sixth, as to the animal studies, it is generally acknowledged that studies on small animals cannot always be reliably extrapolated to conclusions about human effects. Human effects can vary from animal studies in light of differences in absorption, metabolism, and other factors. In addition, the animal studies involving Sardol have not included pregnant animals or post-partum animals.

Seventh, the plaintiff in this case has not produced any evidence that takes the form of a cohort or incidence study.

The plaintiff's expert, Dr. Andrea Freund, engaged in a differential diagnosis. This refers to the process by which a physician " 'rule[s] in' all scientifically plausible causes of the plaintiff's injury. The physician then 'rules out' the least plausible causes of injury until the most likely cause remains." The remaining cause is the expert's conclusion. In conducting a differential diagnosis, physicians often use case reports.

Here, Dr. Freund reviewed Janis Weaver's medical history and medical records, excluding other causes of her stroke, and then attributing the stroke to Sardol. Dr. Freund relied in part on case reports, both those filed with the FDA and those published in the professional literature. With regard to differential diagnoses, this method, in my opinion, is only as scientifically reliable as the information that goes into the diagnosis. Because the case reports on which Dr. Freund relied (as well as other factors that went into the differential diagnosis) are flawed in the ways noted earlier in my report, I do not consider Dr. Freund's differential diagnosis to be scientifically reliable.

Respectfully submitted,

Michael Carpenter, M.D.

 

5.     Current State Law Relating to the Standards for Admissibility of Expert Testimony

The following footnote, taken from an Oklahoma Supreme Court decision in February 2003, summarizes current state law relating to Daubert, Frye, and other approaches to the admissibility of expert evidence. See Christian v. Gray, 65 P.3d 591, 595 n.2 (Oklahoma 2003).

FN2. One writer has stated that forty-six states have adopted Rule 702, thirty-three states have adopted Daubert, and several have not yet considered whether to adopt Daubert. See Note, The Movement From Frye to Daubert: Where Do the States Stand? , 38 Jurimetrics J. 201, 208- 09 (1998).

In addition to the Oklahoma Court of Criminal Appeals, we have found courts in eighteen states that currently have adopted Daubert. See, e.g., Turner v. State, 746 So.2d 355, 358-360 (Ala.1998); State v. Coon, 974 P.2d 386, 389-391 (Alaska 1999); Farm Bureau Mut. Ins. Co. of Ark., Inc. v. Foote, 341 Ark. 105, 14 S.W.3d 512, 519-520 (2000); State v. Porter, 241 Conn. 57, 698 A.2d 739 (1997); M.G. Bancorp., Inc. v. Le Beau, 737 A.2d 513, 522 (Del.1999); Rogers v. Commonwealth, 86 S.W.3d 29, 42 (Ky.2002); Independent Fire Ins. Co. v. Sunbeam Corp. , 1999- 2181, 755 So.2d 226, 235 (La.2000); State v. Cline, (1996), 275 Mont. 46, 909 P.2d 1171, 1177; Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862, 876-877 (2001); State v. Alberico, 116 N.M. 156, 861 P.2d 192, 203 (1993); State v. Goode, 341 N.C. 513, 461 S.E.2d 631, 639 (1995); State v. Sampson, 167 Or.App. 489, 6 P.3d 543, 551 n. 9, rev. den. , 331 Or. 361, 19 P.3d 354 (2000), Raimbeault v. Takeuchi Mfg. (U.S.), Ltd. , 772 A.2d 1056, 1061 (R.I.2001); Boomsma v. Dakota, Minnesota & Eastern R.R. Corp., 2002 SD 106, 651 N.W.2d 238, 247, citing, State v. Hofer, 512 N.W.2d 482, 484 (S.D.1994); E.I. duPont de Nemours and Co. v. Robinson, 923 S.W.2d 549, 556 (Tex.1995); State v. Streich, 163 Vt. 331, 658 A.2d 38, 46 (1995); Wilt v. Buracker, 191 W.Va. 39, 443 S.E.2d 196 (1993), cert. Denied, 511 U.S. 1129, 114 S.Ct. 2137, 128 L.Ed.2d 867 (1994); Bunting v. Jamieson, 984 P.2d 467 (Wyo.1999). New Hampshire recently adopted Daubert in Baker Valley Lumber, Inc. v. Ingersoll-Rand Co. , --- N.H. ----, 813 A.2d 409 (2002).

Courts in an additional eight states have stated that Daubert is instructive for application of the relevant state statute. State v. Vliet, 95 Hawai'i 94, 19 P.3d 42, 53 (2001), (Hawaii has neither accepted or rejected Daubert, but because the Hawaii statute is patterned on the federal rule construction of that rule by the federal courts is instructive); Hyppolite v. State, 774 N.E.2d 584, (Ind.App.2002), ("although not binding upon the determination of the state evidentiary law issues, the federal evidence law of Daubert and its progeny is helpful to the bench and bar in applying the Indiana Rule of Evidence"); In re Detention of Holtz, 653 N.W.2d 613, 615-616 (Iowa App.2002),("trial courts are not required to apply the analysis set forth in Daubert ... in considering the admission of expert testimony ... [but] trial courts may find it helpful in complex cases to use one or more of the relevant Daubert considerations in assessing the reliability of expert testimony"), quoting, Leaf v. Goodyear Tire & Rubber Co. , 590 N.W.2d 525, 532 (Iowa 1999), (adopting a limited application of Daubert); Commonwealth v. Lanigan, 419 Mass. 15, 641 N.E.2d 1342, 1349 (Mass.1994), (accepted the basic reasoning of Daubert ); State v. Stevens, 78 S.W.3d 817, 832-834 (a trial court may consider the factors listed in Daubert ) McDaniel v. CSX Transportation, Inc. , 955 S.W.2d 257 (Tenn.1997), (declined to expressly adopt, but allowed trial court to consider, Daubert ). Courts in Ohio and Maine have used Daubert. Miller v. Bike Athletic Co., 80 Ohio St.3d 607, 687 N.E.2d 735, 741-742 (1998); State v. MacDonald, 718 A.2d 195, 198-199 (Me.1998). Colorado has cited to Daubert for the proposition that in application of Colorado's statute the evidence must be both reliable and relevant, and that a trial court may consider the factors listed in Daubert. People v. Shreck, 22 P.3d 68, 77 (Colo.2001).

Courts in seven states apply the Frye or a modified Frye test. Rickgauer v. Sarkar, 804 So.2d 502, 504 (Fla.App.2001), (Florida courts still apply the Frye test in determining the admissibility of scientific evidence, as the Florida Supreme Court has declined to apply Daubert ); Goeb v. Tharaldson, 615 N.W.2d 800, 814 (Minn.2000), (modified Frye standard used and Daubert rejected); Kansas City Southern Ry. Co., Inc. v. Johnson, 798 So.2d 374, 382 (Miss.2001), (uses Frye test and has not adopted Daubert ); State v. Free, 351 N.J.Super. 203, 798 A.2d 83, 93 (App.Div.2002), (state jurisprudence is consistent with Frye and not Daubert); People v. Johnston, 273 A.D.2d 514, 709 N.Y.S.2d 230, 236, lv. denied, 95 N.Y.2d 935, 721 N.Y.S.2d 612, 744 N.E.2d 148 (Frye applied); State v. Copeland, 130 Wash.2d 244, 922 P.2d 1304, 1314-315 (1996), (Frye test applied and declined to adopt Daubert); Armstrong v. City of Wichita, 21 Kan.App.2d 750, 907 P.2d 923, 929 (1996), (Daubert not applied and Frye applied). An additional two state courts have declined to adopt Daubert. Carnell v. Barker Management, Inc., 137 Idaho 322, 48 P.3d 651, 656-657; Krause Inc. v. Little, 34 P.3d 566, 569 (Nev.2001).

Pennsylvania continues to apply the Frye test, Commonwealth, Dept. of General Services v. United States Mineral Products Co. , 809 A.2d 1000, 1021 n. 5 (Pa.Cmwlth.2002), but it has not yet considered whether it should be replaced by Daubert. Commonwealth v. Davies, 811 A.2d 600, 604 n. 2 (Pa.Super.2002), citing, Commonwealth v. Crews, 536 Pa. 508, 640 A.2d 395, 400 n. 2 (1994).

Courts in Illinois, Missouri, and North Dakota have not yet considered the issue. Donaldson v. Central Illinois Public Service Co., 199 Ill.2d 63, 262 Ill.Dec. 854, 767 N.E.2d 314, n. 1, 325, (2002); Long v. Missouri Delta Medical Center, 33 S.W.3d 629, 643 (Mo.App.2001); Hamilton v. Oppen, 2002 N.D. 185, ¶ 20, n. 2, 653 N.W.2d 678, 685.

Utah uses a test similar to Daubert. State v. Crosby, 927 P.2d 638, 641-642 (Utah 1996). South Carolina applies neither a Frye or Daubert test. State v. Council, 335 S.C. 1, 515 S.E.2d 508, 517-518 (1999), cert. denied, 528 U.S. 1050, 120 S.Ct. 588, 145 L.Ed.2d 489 (1999). Georgia has not adopted the federal rule and Daubert has thus not been adopted. Norfolk Southern Railway Co. v. Baker, 237 Ga.App. 292, 514 S.E.2d 448, 451 (1999).

Arizona declined to adopt the Daubert test in Logerquist v. McVey, 196 Ariz. 470, 1 P.3d 113 (Ariz.2000). An Arizona appellate court has opined that Logerquist endorsed California's distinction between medical evidence and scientific evidence, and that a special rule for admissibility applied to the latter and not the former. State ex rel. Romley v. Fields, 201 Ariz. 321, 35 P.3d 82, 88 (Ariz.App.2001). California uses the Kelly test for admitting novel scientific evidence. People v. Soto, (1999) 21 Cal.4th 512, 88 Cal.Rptr.2d 34, 981 P.2d 958, n. 2, 960, 962, citing, People v. Kelly, (1976) 17 Cal.3d 24, 30, 130 Cal.Rptr. 144, 549 P.2d 1240.

 

6.     Draft Comment c to section 28 of Restatement (Third) Torts: Liability for Physical Harm (Basic Principles) (current as of 5/19/03)

The following is the text of draft Comment c to section 28 of the Restatement (Third) Torts: Liability for Physical Harm (Basic Principles). The panel participants thought that inclusion of this very recently drafted material would dovetail nicely with the motions before the judge.

Section 28 relates to the requirement of factual causation. At the annual ALI meeting in May 2003, the Reporters (Professors Mike Green and William Powers) agreed to several proposed changes to the text of the comment. What follows is the most current version, with those changes included. Thank you to Professor Mike Green for providing his most recent version.

Comment c. Toxic substances and disease

(1) Introduction. Cases involving toxic substances often pose difficult problems of proof of factual causation. These problems can also arise in cases involving activities that may cause disease, such as continued repetitive motion. Sometimes it is difficult to prove which defendant was connected to the toxic agent, see Comment o, or whether an adequate warning would have prevented the plaintiff's harm. See Comment b. The special problem in these cases, however, is proving the connection between a substance and development of a specific disease. In all of these cases, the requirement to prove factual causation remains the same; the plaintiff must prove it by a preponderance of the evidence, and the standards for factual causation set forth in §§ 26-27 (Tentative Draft No. 2, 2002) continue to apply.

In most traumatic-injury cases, the plaintiff can prove the causal role of the defendant's tortious conduct by observation, based upon reasonable inferences drawn from everyday experience and a close temporal and spatial connection between that conduct and the harm. Often, no other potential causes of injury exist. When a passenger in an automobile collision suffers a broken limb, potential causal explanations other than the collision are easily ruled out; common experience reveals that the forces generated in a serious automobile collision are capable of causing a fracture. By contrast, the causes of some diseases, especially those with significant latency periods, are generally much less well understood. Even known causes for certain diseases may explain only a fraction of the incidence of such diseases, with the remainder due to unknown causes. Causal agents are often identified in group (epidemiologic) studies that reveal an increase in disease incidence among a group exposed to the agent compared to a group not exposed. Biological mechanisms for disease development - i.e., a series of causally-linked physiological changes from exposure to disease developments are frequently complicated and difficult to observe. Science continues to develop a better understanding of the biological steps in the development of diseases, but current knowledge in this respect is considerably more modest than for traumatic injury. As a consequence, courts in toxic-substances cases often must assess various alternative methods proffered with regard to factual causation.

Over the past several decades, courts have devoted a great deal of energy to the issue of causation in toxic-tort cases. Causation is a question of fact normally left to the jury, unless reasonable minds cannot differ. Appellate or trial-court review of jury findings affects the allocation of power between judges and juries. Until about the early 1980s, a qualified expert witness's opinion that a toxic agent was a factual cause of the plaintiff's disease was treated as sufficient evidence. A few celebrated cases and case congregations, such as the Agent Orange and Bendectin litigations, led some courts to distrust juries' ability to resolve cases based on conflicting general expert-opinion evidence. Courts began to scrutinize the scientific evidence employed and to examine carefully the bases for an expert's opinion on factual causation. Some courts then tried to develop bright-line rules based on science for adequate proof of factual causation. The high water mark for this overreliance on scientific thresholds occurred in the Bendectin litigation when one court announced a blanket rule that a plaintiff could not make out a sufficient case without statistically significant epidemiologic evidence.

These courts may be relying on a view that "science" presents an "objective" method of establishing that, in all cases, reasonable minds cannot differ on the issue of factual causation. Such a view is incorrect. First, scientific standards for the sufficiency of evidence to establish a proposition may be inappropriate for the law, which itself must decide the minimum amount of evidence permitting a reasonable (and therefore permissible) inference as opposed to speculation that is not permitted. See Comment b (Tentative Draft No. 2, 2002). Second, scientists report that an evaluation of data and scientific evidence to determine whether an inference of causation is appropriate requires judgment and interpretation. Scientists are subject to their own value judgments and preexisting biases that may affect their view of a body of evidence. There are instances in which although one scientist or group of scientists comes to one conclusion about factual causation, they recognize that another group that comes to a contrary conclusion might still be "reasonable." Judgments about causation may also be affected by the comparative costs of errors, as when caution counsels in favor of declaring an uncertain agent toxic because the potential harm it may cause if toxic is so much greater than the benefit foregone if it were permitted to be introduced. Courts, thus, should be cautious about adopting specific "scientific" principles, taken out of context, to formulate bright-line legal rules or conclude that reasonable minds cannot differ about factual causation.

This Comment is necessarily general. It addresses how methods of proof for traumatic injuries and for diseases may differ. Toxic-substance cases often involve statistical and group-based scientific studies that courts seldom confronted when the Restatement Second of Torts was published. Toxic agents and the diseases they cause differ, and methods of proof may vary accordingly. The law continues to evolve as courts are confronted with a variety of different circumstances related to different toxic substances, different disease, and the varieties of available evidence.

Scientific methods may advance in the future to better facilitate causation determinations for individuals, thereby obviating the need for statistically-based group studies. While such techniques are largely unavailable today, dramatic advances in microbiology, genetics, and related fields have been made. These developments may produce new forms of evidence to which courts will adapt legal treatment of proof of causation.

Proof of causation often involves the admissibility of expert-witness opinions. Admissibility is governed by the law of evidence, and nothing in this Comment addresses that law. However, admissibility cannot be determined without reference to the substantive law. Moreover, courts may be required to examine scientific evidence when it is offered to prove agent-disease causation. That examination may occur either in the admissibility determination or in determining whether the evidence is sufficient to meet the burden of production. These usually are separate issues and are subject to different legal standards. Courts, however, sometimes conflate these issues in the process of determining whether there is an adequate basis for an expert's opinion. When courts collapse the sufficiency determination into the question of the admissibility of an expert's testimony no subsequent inquiry into sufficiency is necessary, and the appropriate weight to give to an expert's opinion once deemed admissible is for the factfinder. The requirement of causation, the elements of agent-disease causation that are sometimes required when group studies are employed as proof, and the sufficiency of the evidence to meet the burden of production on causation are matters of substantive tort law, and they are addressed in the Restatement.

Most causation issues are resolved under the "but-for" standard for factual cause. See § 26 (Tentative Draft No. 2, 2002). The plaintiff must prove by a preponderance of the evidence that, but for the defendant's tortious conduct with respect to the toxic substance, the plaintiff would not have suffered harm. When group-based statistical evidence is proffered in a case, this means that the substance must be capable of causing the disease ("general causation") and that the substance must have caused the plaintiff's disease ("specific causation"). In other cases, when group-based evidence is unavailable or inconclusive, and other forms of evidence are used, the general and specific causation issues may merge into a single inquiry. In any case, plaintiff's exposure to the toxic agent must be established.

Thus, courts often address "exposure," "general causation," and "specific causation." Nevertheless, these items are not "elements" of a plaintiff's cause of action, and in some cases may not require separate proof. So long as the plaintiff introduces admissible and sufficient evidence of factual causation the burden of production is satisfied. A court in a particular case may conclude that reasonable minds cannot differ about proof of factual causation under the general test because reasonable minds cannot differ on whether the plaintiff was exposed to the agent, whether the agent is generally capable of causing the disease, or whether the agent caused the plaintiff's disease in the specific case. These categories function as devices to organize a court's analysis, not as formal elements of the cause of action.

(2) Exposure to the agent. In evaluating factual causation, one issue that may arise is whether the plaintiff was exposed to the substance. Three primary means of exposure to toxic substances include inhalation, absorption, and ingestion, but others exist, such as injection or a fetus's transplacental exposure to agents in the mother's body. Often the method of exposure is critical to the type or extent of risk.

Exposure is frequently disputed in occupational-disease cases and hazardous-waste cases, while it is less often an issue in pharmaceutical cases. Proof of exposure may entail relatively straightforward historical facts, such as the presence of asbestos at the plaintiff's workplace or whether the plaintiff took a prescribed drug, or it may require complicated scientific evidence, such as dispersion modeling to determine how and where the substance was transported. The latter form of evidence is often required in airborne- or groundwater-pollution cases. The intensity and duration of exposure (the "dose") affects the magnitude of the risks posed and the likelihood of causation.

(3) General causation. "General causation" exists when a substance is capable of causing a given disease. The concept developed because a prominent form of scientific methodology investigates causation on a group basis and therefore addresses whether an agent causes an increased incidence of disease in the group being studied. These studies proceed by comparing the incidence of disease in a group that has been exposed to the agent with the incidence of disease in a group of unexposed persons. The latter group's disease, thus, is attributable to causes other than the agent being studied. Traumatic-injury cases, by contrast, do not require this form of evidence because other causes that might explain the injury are absent, and we have a reasonably good understanding of the causal mechanisms involved from trauma to injury.

Occasionally, biological-mechanism evidence is sufficiently developed to prove general causation. More frequently, however, the evidence consists of scientific studies comparing the incidence of disease in groups of individuals (epidemiologic evidence) or animals (toxicologic evidence) with different levels of exposure. When a study finds a difference in the incidence of disease in the exposed and unexposed groups, an "association" exists between exposure and disease. Another type of epidemiologic study compares the extent of exposure among those with and without the disease. These studies seek to identify potentially causal substances at the aggregate population level - by finding a higher incidence of a disease in a group exposed to the substance (an "association").

Even when epidemiologic studies find an association between a substance and a disease, further analysis is necessary before a causal conclusion can be drawn. Scientists first systematically gather all of the studies that have been conducted and that are relevant to the causal question being investigated. When multiple studies exist, they are synthesized, either qualitatively in a review or quantitatively with a method known as meta-analysis. However, reasons may exist for disregarding or giving less weight to one or more of the available studies. If an association is found, epidemiologists use a number of factors (commonly known as the "Hill guidelines") for evaluating whether that association is causal or spurious. A spurious association may be the result of study errors - such as biases (scientists use "bias" to mean a source of error rather than as a predisposition to testify or decide a matter in an improper way) and uncorrected confounding factors (alternative causes that are responsible for the association, rather than the agent under study) - or sampling error (the result of small numbers of subjects and random chance). Similarly, a study may incorrectly fail to find an association that exists, because of study errors, especially when the disease is rare and an insufficient number of subjects exist to reveal any relationship. Epidemiologists use statistical methods to estimate the range of error that sampling error could produce; assessing the existence and impact of biases and uncorrected confounding is usually qualitative.

Whether an inference of causation based on an association is appropriate is a matter of informed judgment, not scientific inquiry, as is a judgment whether a study that finds no association is exonerative or inconclusive. No algorithm exists for applying the Hill guidelines to determine whether an association truly reflects a causal relationship or is spurious. Because the methodology involves assessing multiple unranked factors, some of which may be more or less appropriate with regard to a specific causal assessment, judgment is required. For example, one of the Hill factors calls for an assessment of other scientific evidence that bears on the causal relationship under consideration. In some cases, there may be a substantial body of other evidence, while in other cases there may be little. The saliency of other evidence of causation often entails considerable judgment. Thus, in some cases, reasonable scientists can come to differing conclusions on whether a body of epidemiologic data justifies an inference of causation vel non. Similarly, reasonable scientists may, in some instances, disagree on whether the absence of an association is exonerative of the agent or is merely inconclusive.

Usually, other and unknown individual factors (causes) must concur with exposure to the agent for an individual to contract the disease. Group studies do not provide a basis for determining which individuals in a group suffer disease from exposure to the agent and which do not. More importantly, whenever other chemical, physical, or biological agents can produce the disease, group studies cannot distinguish which individual's disease was caused by exposure to a particular agent and which individual's disease was caused by another agent. So long as tort law adjudicates claims on an individual basis, specific causation requires attention even when general causation is established through the use of group studies.

Occasionally, courts have suggested or implied that a plaintiff cannot meet the burden of production on causation without epidemiologic evidence. Those cases often confronted a substantial body of epidemiologic evidence introduced by the defendant that tended to exonerate the agent as causal. Circumstances in individual cases, however, are sufficiently varied that almost all courts employ a more flexible approach to proof of causation - except in those cases with a substantial body of exonerative epidemiologic evidence. Epidemiologic studies are expensive and can take considerable time to design, conduct, and publish. For disease processes with long latency periods, valid studies cannot be performed until the disease has manifested itself. As a consequence, some plaintiffs may be forced to litigate long before epidemiologic research is available. Indeed, sometimes epidemiologic evidence is impossible to obtain, which may explain why neither the plaintiff nor the defendant is able to proffer supportive epidemiology. Thus, most courts have appropriately declined to impose a threshold requirement that a plaintiff always must prove causation with epidemiologic evidence, and, in some cases (as explained below), the evidence bearing on specific causation may be sufficient to pretermit the need to assess general causation.

(4) Specific causation. "Specific causation" exists when exposure to an agent caused a particular plaintiff's disease. Sometimes proof of specific causation is easy and collapses into proof of general causation, as when there are no alternative causal agents for a disease, and the disease is said to be a "signature" of the substance. In other cases, however, specific causation remains an issue even though general causation is established.

Scientists who conduct group studies do not examine specific causation in their research. No scientific methodology exists for assessing specific causation for an individual based on group studies. Nevertheless, courts have reasoned from the preponderance-of-the-evidence standard to determine the sufficiency of scientific evidence on specific causation when group-based studies are involved. Properly understood and applied, this analytical framework provides a reasonable basis for determining specific causation in the absence of more particularistic evidence about the cause of plaintiff's disease.

Courts generally hold that the evidence is sufficient to satisfy the burden of production and permit submission of specific causation to a jury when a group study finds that exposure to the agent causes an incidence in the exposed group that is more than twice the incidence in the unexposed group (i.e., a relative risk greater than two). In such a case, the factfinder may find that it is more likely than not that the substance caused the particular plaintiff's disease. The propriety of this "doubling" reasoning depends on group studies identifying a genuine causal relationship and a reasonably reliable measure of the increased risk. Courts appropriately have permitted expert witnesses to testify to specific causation based on the logic of the effect of a doubling of the risk, and other considerations explained below that modify the probability of causation for a particular individual.

Additional considerations affect the propriety of determining the probability of specific causation based on the outcome of a group-based study. Depending on the state of the evidence about these additional matters, they may bear either on the sufficiency determination by the court or be relevant to the jury's determination. Thus, the extent to which the group study outcome reflects the increased risk to the plaintiff depends on the plaintiff's similarity to those included in the group study. Relevant differences include whether: (a) the plaintiff was exposed to a comparable dose; (b) the plaintiff was not differentially exposed to other potential causes of the disease; and (c) the plaintiff has individual characteristics that might also bear on the risk of disease, such as age, gender, or general health, comparable to those in the study group.

The likelihood that an agent caused an individual's disease may be refined when there are independent, alternative known causes of the disease. The underlying premise is that each of these known causes is independently responsible for some proportion of the disease in a given population. Eliminating one or more of these as a possible cause for a specific plaintiff's disease increases the probability that the agent in question was responsible for that plaintiff's disease. Courts frequently refer to the elimination of other known causes for a plaintiff by employing the medical terminology of "differential diagnosis." The logic is sound, but the terminology and attribution are not. Assessing whether other causes can be ruled out (or in) as potential causes of a plaintiff's disease can provide probative evidence of specific causation. This technique is more accurately described as a "differential etiology." It is most useful when the causes of a substantial proportion of the disease are known. Then, the presence (or absence) of these causes for the specific plaintiff affects the probability that the agent in question caused the plaintiff's illness. When the causes of a disease are largely unknown, however, differential etiology is of little assistance. Evidence about biological mechanisms may also alter the likelihood that exposure to the substance caused plaintiff's disease, either by ruling out other known causes or by explaining why the suspected agent is a more likely cause of the disease than others.

For all of these reasons, any judicial requirement that plaintiffs must show a threshold increase in risk or a doubling in incidence in a group study in order to satisfy the burden of proof of specific causation is usually inappropriate. So long as there is adequate evidence of general causation, courts should permit the parties to attempt to show, based on the sorts of evidence described above, whether the plaintiff's disease was more likely than not caused by the agent. Depending on the other factors detailed above, an increase of the incidence of disease less than a doubling may be sufficient to support a finding of causation, while in another case, even an increased incidence greater than two may not be sufficient. When the sufficiency of the evidence to meet the burden of production is at issue, courts should consider all of the evidence that bears on the matters discussed above and determine whether, in light of the general standard for sufficiency discussed in Comment b, the evidence would permit a reasonable jury to find that plaintiff's disease more probably than not was caused by exposure to the agent.

In most instances, differential etiology is not an appropriate technique for proving general causation. Nevertheless, in some limited circumstances courts have found that plaintiffs met their burden of proof of agent-disease causation without separate proof of general causation. Factors such as a good biological-mechanism explanation of how the agent could have caused the plaintiff's disease, a differential etiology ruling out other known causes, a reasonable explanation for the lack of general causation evidence (and no contrary evidence of an absence of general causation), a short latency period and acute response, and the appropriate disease response to dechallenge (removal from exposure) and rechallenge (re-exposure) to the agent, if combined and consistent, provide a persuasive basis for excusing the plaintiff from providing other proof of general causation.

7. Shifting gears: An expert report in a business tort case

These materials now close with something very different: the testimony of a plaintiff's expert on factual cause in a business torts context. Our panelists might or might not have time to discuss their thoughts about the Daubert standards as applied to this type of expert. In any event, it seemed worth including something outside the "hard" sciences, especially because the "softer sciences" (such as economics, market valuation, calculation of business damages) have become more frequent subjects of Daubert challenges. In this case, the expert has been named as a testifying expert in a business tort lawsuit. The plaintiff (SecureMind) is a well-financed internet "startup" business with a new product for addressing internet credit card payment security. The defendant is a large competitor that was trying to develop (but had not yet developed) a competing product. The defendant allegedly interfered with the plaintiff's likely consummation of several sales, and allegedly disparaged the plaintiff's product in unlawful ways. This expert's testimony is the proof that the plaintiff intends to present to establish a "but-for" connection between the defendant's conduct and at least some of the decline in the fortunes of the plaintiff's product.

Affidavit of Patrick Wellik, C.P.A., C.F.A.

I am a certified financial analyst. I have more than 15 years of experience as an investment analyst. My recent focus has been internet payment technologies and internet payment security. My role is to advise investors about where to direct their investments. This includes, among other things, evaluating industry and stock market trends, evaluating strategic business models, and valuing businesses.

My prior experience includes working as an investment research analyst for Lloyds Ltd., Citicorp, AIG Global Investments. I have been a frequent speaker at American Banker conferences. A list of publications is attached.

When assessing an company's expected performance from an investment analyst perspective, including SecureMind's expected performance, I employ a standard and widely accepted methodology. Specifically:

An initial step is to determine the sort of market in which the company operates. For SecureMind, this is the market for internet payment security. This market is not a mature market, but rather an emerging market. SecureMind operated in an emerging growth market-namely, the market for secure internet payments. The market for secure internet payments was "white hot" in 1999. This market segment was attracting millions of dollars in private venture capital, and the stocks of public companies were increasing rapidly. It is clear that the capital markets viewed this market segment as attractive to investors.

The focus of inquiry in valuing companies in an emerging growth market is the future potential of the company: does the company have the potential to drive change in its market and produce future revenues? Historical profits and revenues are not the primary factor in valuing companies in an emerging growth market, as they would be in a mature or above-average growth market.

To assess future potential, I identified other companies operating in the secure internet payments market as potential comparables. These companies were as follows: Company A, Company B, Company C, Company D, Company F. I then evaluated the fundamental factors that are correlated with future potential:

- management's reputation for past success
- the quality of the business model
- the nature of the technology
- the company's marketing strategy

Based on my evaluation of SecureMind's fundamentals, I concluded that SecureMind had the potential to drive change in the market for secure internet payments. Company management had a great reputation for prior business success - notably [Company X and Company Y, both giant successes in applying technology to transportation and marketing]. The market demand for security and privacy for Internet payments was huge. The SecureMind business model was excellent because it provided incentives for all the parties involved: consumers, banks, and Internet merchants. The technology was simple. The marketing strategy was commonly accepted. In light of this, I concluded that SecureMind should have performed as well as the comparable companies.

The defendant's criticism - that SecureMind is not comparable to these companies because they had revenues and earnings while SecureMind did not - is wrong for three reasons:

(1) As noted above, the inquiry is whether the company has the potential to drive change in its market and produce future revenues.

(2) My conclusion that SecureMind's stock should have performed comparably to these companies is a statement of relative - not absolute - stock performance. In other words, I am not opining, as the defendant seems to suggest, that SecureMind's market capitalization would have been the same as the other companies. Rather, my opinion is that SecureMind's stock price should have performed at least as well as the stocks of these other companies. In other words, if the stocks of these other companies increased "x" percent, then SecureMind's stock price should have increased at least the same percentage as well. This is consistent with the manner in which investors behave - investors that wanted to invest (make an investment "bet") in the secure internet payments market segment in 1999 would have invested in all of these companies. The rising tide of these investment flows should have increased the market capitalizations of these companies.

(3) There are numerous examples of companies with negligible revenues that obtained significant market valuations. For example, Company T had no revenues from its home banking business in 1996. It went public that year and achieved a market capitalization of $500 million - keeping in mind that this was before the "white hot" market of the Internet.

For the above reasons, then, I conclude that SecureMind's stock should have performed comparably to the other companies noted above. Yet, within 2 weeks after the [defendant's activities that form the basis of this tort suit for commercial disparagement and tortious interference with prospective contract], the SecureMind stock "uncoupled" from the trajectory of the comparables and began performing much more poorly. In my opinion, no other market development or investment factors can explain this adequately; rather, the defendant's attack on SecureMind was the cause of the "decoupling" and the downward pressure on the stock. Undergirding this opinion is, again, the nature of this emerging market, which was highly information-sensitive, given the dearth of information in the market. Thus, the [tortious] acts of the defendants had a causal effect in this environment.

Respectfully submitted,

Patrick Wellick