Sidney Roginsky v. Richardson-Merrell, Inc.

In this diversity action1 Sidney Roginsky sought to recover compensatory and punitive damages for personal injuries, primarily cataracts, from taking at his home in Pennsylvania2 a drug, MER/29, developed by Richardson-Merrell Company for lowering blood cholesterol levels. Roginsky's was the first to be tried of some 75 similar cases now pending in the District Court for the Southern District of New York. Several hundred actions have been filed elsewhere, see Rheingold, Products Liability — The Ethical Drug Manufacturer's Liability, 18 Rutgers L.Rev. 947-48 n. 4 (1964), in at least three of which trial courts have rendered large judgments for the plaintiffs.3

Although other theories of liability for compensatory damages had been advanced in the complaint, plaintiff withdrew all except negligence and fraud upon the Food and Drug Administration (FDA). Defendant moved for a directed verdict on all claims for injury by cataract as unsupported by sufficient proof of causation and on the fraud and punitive damage claims as unsupported by the evidence; the motions were denied. The judge instructed the jury it must first determine the issue of causation; if it found for the plaintiff on that, it should then pass upon the other issues, which he explained in a charge to which defendant took no exception. He helpfully submitted six separate questions: (1) causation, (2) negligence, (3) fraud upon the FDA, (4) amount of compensatory damages, (5) liability for exemplary damages, and (6) the amount thereof. The jury gave affirmative answers to all the questions relating to liability and fixed compensatory damages at $17,500 and punitive damages at $100,000, which the judge later declined to eliminate or reduce, 254 F.Supp. 430 (1966). On appeal defendant contends that its motions for directed verdicts should have been granted; it argues also that evidence erroneously admitted, much of it in support of what it considers the unsubstantiated fraud count, could have prejudiced the jury's determination of the issues of negligence and of conduct warranting the award of punitive damages. It also raises other objections to the receipt of evidence and complains that the award of punitive damages, "unless restricted to fixed and measurable amounts," violates due process. We affirm the award of compensatory damages but find that the evidence was not sufficient to warrant submission of the punitive damage issue to the jury.

A summary of certain undisputed facts from this enormous record will be useful by way of introduction. MER/29 was developed in the late 1950's by The Wm. S. Merrell Company, a division of defendant, for the purpose of lowering blood cholesterol levels. At that time most physicians believed that a high level of cholesterol was a significant precursor of atherosclerosis, the leading single cause of death in the United States.

Before the drug was placed on the market there had been 246 experiments involving 3907 animals and it had been administered to over 2000 human patients under close clinical observation. Eighty per cent of these patients who had used the drug for 90 days or longer experienced a reduction of cholesterol levels averaging 20%. The only reported side effects were dermatitis of several different types, two reports of hair loss, some nausea and vomiting, one report of a drop in white blood cell count, two cases of vaginal bleeding or spotting, three cases of tearing or watering of the eyes, and one of blurred vision. In December 1959 many of the clinicians who had been administering the drug reported to a conference of eminent scientists and physicians held under defendant's auspices at Princeton, N. J.

In July 1959 defendant filed with the FDA a New Drug Application (NDA) for MER/29. The FDA cleared the drug for release in April 1960, subject to submission of approved labels. The label stated, under the heading "SIDE EF-facts," that "Isolated reports have been received of nausea, vomiting, temporary vaginal bleeding and dermatitis" and under the heading "CAUTION" a warning that "MER/29 has been shown to be entirely safe in the periods the drug has been studied, but long-term or lifetime effects are unknown. Periodic examination of patients on long-term MER/29 therapy is therefore necessary." Marketing began June 1. During the balance of 1960 over 100,000 persons used the drug, with no reports of cataracts.

In January 1961, Merck & Co., which had borrowed a sample of MER/29 and then synthesized its own supply, reported that test animals had developed cataracts. Defendant, after sending a team to Merck's laboratory, decided to make a further experiment on animals selected by it but did not reveal the Merck report to the FDA or the medical profession. On February 1 it learned that a user in Los Angeles, one Lee Anticouni, had developed a cataract; the facts were never run down for reasons later developed, and neither the FDA nor the profession was informed. Meanwhile additional thousands of patients were using the drug, with benefit to cholesterol levels and for the moment without important reported adverse effects.

On defendant's rerun of the Merck experiment, its dogs developed cataracts in October, 1961. At the same time the Mayo Clinic reported cataracts in two, later three, patients who were using MER/29. The combined effect of these two incidents was to cause the defendant, on October 18, 1961, to request the FDA's permission to issue a warning letter to all physicians, such permission then being required by law, 25 F.R. 12595 (1960), 21 C.F.R. § 130.9 (1963 ed.). Believing defendant's proposed letter to be too weak, the FDA withheld permission and insisted on a much stronger one which was approved on November 27 and mailed on December 1 to every doctor in the country and also to defendant's salesmen. With additional reports of cataracts coming in from the field during the early months of 1962, defendant was on the point of holding a high-level intra-company conference to decide upon withdrawal of MER/29 when, about April 1, the Mayo Clinic reported cataracts in a six year old boy who had been given high dosages to counteract a severe case of excessive cholesterol unusual in a child. Early in April defendant decided to withdraw MER/29 from the market; this was done on April 17, 1962.

Plaintiff, then aged 60, began using MER/29 in February 1961. In June he noticed scaling, rashes and falling hair which he reported to his physician. These conditions became aggravated despite treatment; around the year-end he noted disturbing eye symptoms and stopped taking the drug. In about six months the skin and hair conditions disappeared but the eye ailment, later diagnosed as cataracts, became somewhat worse; however, it has not become sufficiently serious for him to have them removed.

Defendant's broadest contention is that a verdict should have been directed in its favor insofar as plaintiff sought damages for cataracts because of lack of adequate proof that these were induced by MER/29.4 Plaintiff relied on the testimony of a single physician, the chief of ophthalmology at the well-known Guthrie Clinic in the Robert Packer Hospital at Sayre, Pa. The physician testified that in November 1963 and various later dates he had found slight cataracts in both eyes and that he was of the opinion with a reasonable amount of medical certainty that these were caused by the taking of MER/29; he relied on "medical literature" and "conversations" that many persons who developed skin and hair changes like Roginsky's after taking MER/29 also developed cataracts.

Defendant claims this afforded too weak a basis for an opinion in view of the doctor's admission on cross-examination and the testimony of defendant's two experts that plaintiff's cataracts were in the deep cortex and nucleus of the lens where senile cataracts are most likely to develop, rather than nearer the surface where toxic cataracts usually manifest themselves. To this defendant added the testimony of its experts that the slow development of Roginsky's cataracts, which had been largely arrested at the time of trial, pointed to their being senile rather than toxic, and that his skin ailment had not been of the type that had generally preceded MER/29 induced cataracts. However, plaintiff's medical witness denied such universal distinctions between the manifestation of senile and toxic cataracts and between plaintiff's form of dermatitis and others, and the cross-examination of defendant's experts was not without effect. With all this supplemented by the abundant evidence that symptoms generally like Roginsky's had often been followed by toxic cataracts, the issue of causation was rightly left to the jury, even though on our own appraisal we might well find defendant's experts to be more convincing.

Defendant's next complaint is that an erroneous refusal to direct a verdict for it on the fraud count prejudiced the jury's consideration of the issues of negligence and of liability for punitive damages. While our holding that the evidence was insufficient to warrant submission of the issue of punitive damages moots the latter branch of defendant's complaint, the former remains; indeed its force is increased since one of plaintiff's arguments, that much of the evidence complained of was properly submitted to the jury on the punitive damages issue, falls by the wayside.

Plaintiff's further rejoinder, that any vice in the admission of evidence on the fraud counts was cured by the special verdict wherein the jury found defendant liable for negligence as well as for fraud, is likewise unacceptable. Defendant's objection is not that the jury lacked sufficient evidence to find negligence but that it may have acted on irrelevant evidence, since much material admitted on the fraud count dealt with sins of omission and commission that had no relation to plaintiff's injuries save in the sense, legally insufficient on a charge of negligence, that if defendant had done otherwise the FDA might not have released the drug at all.

Defendant asserts, and plaintiff does not dispute, that mere violation of the Food, Drug and Cosmetic Act does not give rise to a private claim — a point which, in view of the agreement of the parties, we do not decide. See Developments in the Law, The Federal Food, Drug, and Cosmetic Act, 67 Harv.L.Rev. 632, 722 (1954). Plaintiff relies instead on the principle that a fraud action will lie not only when the defendant practices his deceit directly on the plaintiff but also when he submits known false data to an intermediary who may be reasonably expected to pass it on, the classical case being the dispatch of financial statements to a credit agency. See Tindle v. Birkett, 171 N.Y. 520, 64 N.E. 210 (1902). Defendant counters that this principle applies only when the false information is to be passed on more or less as such, and not when it is to be used simply for an overall evaluation by a government agency whether the person submitting the data may put a product on the market. It argues on this basis that plaintiff should have been confined to introducing evidence of misinformation or failure to disclose information that might have affected the label or other communication whose form was subject to FDA approval. It contends also there was insufficient proof of reliance by the FDA on such false or incomplete data as were submitted, so that even "but-for" causation was not established.

One's liability generally for fraud has been said to extend only "to the persons or class of persons whom he intends or has reason to expect to act or to refrain from action in reliance upon the misrepresentation" and who in fact so rely, Restatement (Second), Torts § 531 (Tent. Draft No. 10, 1964), and in the specific case of information required to be filed by statute, to all persons who have justifiably relied thereon. Id. § 536. This would encompass a fraudulent misrepresentation to or concealment from the FDA affecting the approved label or from the patient's doctor if he is regarded as the plaintiff's agent, see Wechsler v. Hoffman-LaRoche, Inc., 198 Misc. 540, 99 N.Y.S.2d 588 (Sup.Ct. Bronx Co. 1950) (Rabin, J.). On the other hand to regard the FDA as "agent" for every person in the United States, as plaintiff urges, would be to use words as a substitute for substance. If we were forced to decide, we would say that a plaintiff does not make out a case of fraud simply by showing that if the facts had been fully stated, the FDA might not have released the drug.5 However, this is an area where the law is growing, see Prosser, Torts 717-19 (1964), and the question would become largely academic in new drug cases if an implied liability for violation of the Food, Drug and Cosmetic Act were to be recognized. Given our limited capacity as predictors of New York law, we would prefer to avoid decision of such a weighty and difficult issue, with wide ramifications as to other products, if we permissibly can.

We believe avoidance is justified because the proof of defendant's negligence, much of which is reviewed in section V of this opinion, was such that the jury's finding on that issue could not have been significantly influenced by admission of evidence on the fraud count. It seems to have been rather clear in this case from the outset that the real fight was about punitive damages, with causation and fraud important for their collateral effects on that issue, and not about negligence; indeed, we strongly suspect that if plaintiff had been willing to accept only compensatory damages, the action would never have had to be tried. The jury showed itself willing to find not only simple negligence but a good deal more; while the fraud evidence may well have affected the latter finding, it scarcely could have had an important effect on the former. We are most reluctant to put this plaintiff to another trial to recover compensatory damages which the jury was entirely warranted in giving; we shall therefore allow the judgment for compensatory damages to stand.

We thus come to the issue of punitive damages, an issue of extreme significance not only in monetary terms to this defendant in view of the hundreds of pending MER/29 actions and to the plaintiff as well, but from a longer range, to the entire pharmaceutical industry and to all present and potential users of drugs. Plaintiff, of course, does not claim that defendant intended to harm him; his contention is that defendant's negligence rose to such a level of irresponsibility or worse as to invite this extraordinary sanction.

The remedy has a long history. Its first articulation in England came in a case of illegal entry. The jury was held justified in going beyond "the small injury done to the plaintiff" because of the desirability of taking account of "a most daring public attack made upon the liberty of the subject" through entry and imprisonment pursuant to "a nameless warrant." Huckle v. Money, 2 Will.K.B. 206, 95 Eng.Rep. 768 (1763). See also Wilkes v. Wood, Lofft 1, 18, 19, 98 Eng. Rep. 489, 498-99 (C.P.1763). Later decisions reflect a variety of rationales: redressing affronts to personal feelings not susceptible of measurement, cf. Tullidge v. Wade, 3 Wils.K.B. 18, 95 Eng. Rep. 909 (1769), financing the cost of deserving litigation where only small compensatory damages can be expected, diverting the plaintiff's desire for revenge into peaceful channels, and serving as punishment for and deterrence from socially disapproved conduct.6 "Typical of the torts for which such damages may be awarded are assault and battery, libel and slander, deceit, seduction, alienation of affections, malicious prosecution, and intentional interferences with property such as trespass, private nuisance, and conversion." Prosser, Torts § 2 at 10-11 (1964). What strikes one is not merely that these torts are intentional but that usually there is but a single victim; a punitive recovery by him ends the matter, except for such additional liability as may be provided by the criminal law.

There is no doubt, however, that the remedy has been extended to cases where, although the defendant did not intend to harm the plaintiff, he showed "such a conscious and deliberate disregard of the interests of others that his conduct may be called willful or wanton." Prosser, Torts § 2 at 10 (1964). Such an extension was altogether natural: from a moral standpoint there is not too much difference between the driver who heads his car into a plaintiff and the driver who takes the wheel knowing himself to be so drunk that he probably will hit someone and not caring whether he does or not; and it is as important to deter the latter type of conduct as the former. But such cases still resemble those first considered in an important respect — a high probability that the number of plaintiffs will be few and that they will join, or can be forced to join, in a single trial.7

The legal difficulties engendered by claims for punitive damages on the part of hundreds of plaintiffs are staggering. If all recovered punitive damages in the amount here awarded these would run into tens of millions, as contrasted with the maximum criminal penalty of "imprisonment for not more than three years, or a fine of not more than $10,000, or both such imprisonment and fine", 21 U.S.C. § 333(b), for each violation of the Food, Drug and Cosmetic Act with intent to defraud or mislead.8 We have the gravest difficulty in perceiving how claims for punitive damages in such a multiplicity of actions throughout the nation can be so administered as to avoid overkill. Judge Croake did all that he could here, instructing the jury that it "may consider the potentially wide effect of the actions of the corporation and, on the other hand, * * * the potential number of actions similar to this one to which that wide effect may render the defendant subject."9 Yet it is hard to see what even the most intelligent jury would do with this, being inherently unable to know what punitive damages, if any, other juries in other states may award other plaintiffs in actions yet untried. We know of no principle whereby the first punitive award exhausts all claims for punitive damages and would thus preclude future judgments;10 if there is, Toole's judgment in California, see fn. 3, which plaintiff's brief tells us came earlier, would bar Roginsky's. Neither does it seem either fair or practicable to limit punitive recoveries to an indeterminate number of first-comers, leaving it to some unascertained court to cry, "Hold, enough,"11 in the hope that others would follow. While jurisprudes might comprehend why Toole in California should walk off with $250,000 more than a compensatory recovery and Roginsky in the Southern District of New York and Mrs. Ostopowitz in Westchester County with $100,000, most laymen and some judges would have some difficulty in understanding why presumably equally worthy plaintiffs in the other 75 cases before Judge Croake or elsewhere in the country should get less or none. And, whatever the right result may be in strict theory, we think it somewhat unrealistic to expect a judge, say in New Mexico, to tell a jury that their fellow townsman should get very little by way of punitive damages because Toole in California and Roginsky and Mrs. Ostopowitz in New York had stripped that cupboard bare, even assuming the defendant would want such a charge, and still more unrealistic to expect that the jury would follow such an instruction or that, if they didn't, the judge would reduce the award below what had become the going rate. There is more to be said for drastic judicial control of the amount of punitive awards so as to keep the prospective total within some manageable bounds. This would require, for example, a reduction of the instant $100,000 award to something in the $5000-$10,000 range, still leaving defendant exposed to several million dollars of exemplary damages. We perceive nothing in the New York decisions that would prevent our reducing a punitive damage award because of the large number of suits arising out of the same conduct by the defendant.12 But there is equally nothing to indicate that New York would follow such a course, and a state otherwise willing to impose such self-denying limits might be disinclined to do so until assured that others would follow suit.

Although multiple punitive awards running into the hundreds may not add up to a denial of due process, nevertheless if we were sitting as the highest court of New York we would wish to consider very seriously whether awarding punitive damages with respect to the negligent — even highly negligent — manufacture and sale of a drug governed by federal food and drug requirements, especially in the light of the strengthening of these by the 1962 amendments, 76 Stat. 780 (1962), and the present vigorous attitude toward enforcement, would not do more harm than good. A manufacturer distributing a drug to many thousands of users under government regulation scarcely requires this additional measure for manifesting social disapproval and assuring deterrence. Criminal penalties and heavy compensatory damages, recoverable under some circumstances even without proof of negligence, should sufficiently meet these objectives, see Note, supra note 6, 41 N. Y.U.L.Rev. at 1171, and the other factors cited as justifying punitive awards are lacking.13 Many awards of compensatory damages doubtless contain something of a punitive element, and more would do so if a separate award for exemplary damages were eliminated. Even though products liability insurance blunts the deterrent effect of compensatory coverage under such policies is often awards to a considerable extent, the total limited, bad experience is usually reflected in future rates, and insurance affords no protection to the damage to reputation among physicians and pharmacists which an instance like the present must inevitably produce. On the other hand, the apparent impracticability of imposing an effective ceiling on punitive awards in hundreds of suits in different courts may result in an aggregate which, when piled on large compensatory damages, could reach catastrophic amounts. If liability policies can protect against this risk as several courts have held,14 the cost of providing this probably needless deterrence, not only to the few manufacturers from whom punitive damages for highly negligent conduct are sought but to the thousands from whom it never will be, is passed on to the consuming public; if they cannot, as is held by other courts and recommended by most commentators, a sufficiently egregious error as to one product can end the business life of a concern that has wrought much good in the past and might otherwise have continued to do so in the future, with many innocent stockholders suffering extinction of their investments for a single management sin.

However, the New York cases afford no basis for our predicting that the Court of Appeals would adopt a rule disallowing punitive damages in a case such as this, and the Erie doctrine wisely prevents our engaging in such extensive law-making on local tort liability, a subject which the people of New York have entrusted to their legislature and, within appropriate limits, to their own courts, not to us. Our task is the more modest one of assessing the sufficiency of the evidence within the framework of New York decisions on the award of punitive damages for recklessness.15 As to this, we are convinced that the consequences of imposing punitive damages in a case like the present are so serious that the New York Court of Appeals would subject the proof to particularly careful scrutiny.16

The parties are in substantial agreement on one point — that New York does not impose punitive damages on a corporation unless, as charged by Judge Croake, "the officers or directors, that is, the management" of the company or the relevant division "either authorized, participated in, consented to or, after discovery, ratified the conduct" giving rise to such damages. Cleghorn v. New York Cent. & H. R. R. R., 56 N.Y. 44, 47-48 (1874); Wright v. Glen Falls, S. H. & Ft. E. St. R. R., 24 A.D. 617, 48 N.Y.S. 1026 (3d Dept. 1898); Rowe v. Brooklyn Heights R. R., 71 A.D. 474, 75 N.Y.S. 893, 894 (2d Dept. 1902); Walker v. Lord & Taylor, 236 App.Div. 111, 258 N.Y.S. 96 (1st Dept. 1932).17 New York, in other words, adheres to the "complicity rule," holding the corporate master liable for punitive damages "only when superior officers either order, participate in, or ratify outrageous conduct." See Morris, supra, note 6, 21 Ohio St.L.J. at 221.18

The New York courts have used a variety of phrases to describe the "moral culpability," Walker v. Sheldon, 10 N.Y.2d 401, 404-405, 223 N.Y.S. 2d 488, 491, 179 N.E.2d 497 (1961), which will support punitive damages for nonintentional torts.19 In Caldwell v. New Jersey Steamboat Co., 47 N.Y. 282, 296 (1872), the Court of Appeals spoke of "utter recklessness." Later it said the conduct "must be reckless and of a criminal nature, and clearly established." Cleghorn v. New York Cent. & H. R. R. R., 56 N.Y. 44, 48 (1874). It has also used such terms as "wanton or malicious, or gross and outrageous," Powers v. Manhattan Ry., 120 N.Y. 178, 182, 24 N.E. 295, 296 (1890), and "conscious indifference to the effect of his acts." Gostkowski v. Roman Catholic Church of the Sacred Hearts, 262 N.Y. 320, 323, 186 N.E. 798, 799 (1933). Very recently the Third Department has spoken of action "`committed recklessly or wantonly, i. e., without regard to the rights of the plaintiff, or of people in general,'" Soucy v. Greyhound Corp., 27 A. D.2d 112, 113, 276 N.Y.S.2d 173, 175 (3d Dept. 1967), quoting Magagnos v. Brooklyn Heights R. R., 128 App.Div. 182, 112 N.Y.S. 637, 638 (2d Dept. 1908). In an earlier decision that court had held that "culpable negligence" was not enough to warrant punitive damages. Noonan v. Luther, 119 App.Div. 701, 104 N.Y.S. 684 (3d Dept. 1907). What comes through from a study of these and many other New York decisions is that the recklessness that will give rise to punitive damages must be close to criminality, see 14 N.Y.Jur., Damages § 181 p. 41, and that, like criminal conduct, it must be "clearly established."20 It therefore seems appropriate to look to the latest authoritative New York definition of recklessness, that expressed by the legislature in the Revised Penal Law, McKinney's Consol.Laws, c. 40, § 15.05, subd, 3:

"A person acts recklessly with respect to a result * * * when he is aware of and consciously disregards a substantial and unjustifiable risk that such result will occur or that such circumstance exists. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of conduct that a reasonable person would observe in the situation."

Obviously this definition would be met if a manufacturer placed a drug on the market without any test program, a practice now rendered unlawful by federal legislation, or when its management knew the program had disclosed dangers of serious mischance or was incomplete in some material respect. Sufficient proof would also be furnished if, after the drug had been placed on the market, the manufacturer was shown to have become aware of danger and to have done nothing, deliberately closing its eyes. On the other hand, error in failing to make what hindsight demonstrates to have been the proper response — even "gross" error — is not enough to warrant submission of punitive damages to the jury. Cf. De Marasse v. Wolf, 140 N.Y. S.2d 235 (Sup.Queens Co.1955).

The judge properly did not restrict the plaintiff to evidence showing that defendant should have been aware that MER/29 was cataractogenic, since this other evidence tended to show the defendant's overall attitude toward the drug including its danger to the eyes. See Voltz v. Blackmar, 64 N.Y. 440, 445 (1876). However, the presence of the fraud count led to the reception of a great deal of evidence that was not properly cognizable on the issue of punitive damages because it was insufficiently connected with the management. If the fraud count should have been dismissed, as we tend to think, submitting this evidence to the jury would call for a new trial as to punitive damages.21 But we need not decide this point, because of our holding that there was insufficient evidence of management misconduct submitted to the jury to justify a verdict of punitive damages. An attempt to analyze every item of evidence relied on by plaintiff would prolong this opinion to a length even more inordinate than it has assumed; we limit ourselves to the evidence deemed most significant and helpful to the plaintiff.

One of the earliest and most inflammatory items was this: As part of the New Drug Application submitted to the FDA, defendant reported on a 16 month study of three pairs of monkeys, one of each pair being given the drug and the other being a control. The plan was to start the dosage at two and a half times the anticipated human dose, and then to raise it first to five and then to ten times. The experiment had been conducted by a toxicologist, Smith, who had left the company's employ before reporting on it; the write-up by his successor, Dr. King, contained numerous errors — none, however, shown to have been known to management — and one thing that was much worse. A laboratory technician testified to an occasion when she had submitted a final graph of the weights of the monkeys to a Dr. Van Maanen who directed her to increase the weight shown for one monkey whose weight had dropped 25% and to show weights for others for two weeks after they had in fact been autopsied; after complaining to Dr. King, her immediate supervisor, she made the changes. But Dr. Van Maanen, Merrell's Director of Biological Science, was also a subordinate who reported to the vice president and research director, Dr. Werner, and there was not the slightest evidence that the latter or any higher authority knew of his dictating this change in the observed data.22 Equally irrelevant to the issue of punitive damages was another error by Dr. King in reporting an experiment on female rats, all of which were shown to have died under exceptionally heavy dosage. Here also there was no proof of management complicity, nor was there any showing that Dr. King's error was deliberate. Moreover, it has not been clearly shown that either of these misreports was truly material.

The next episode relates to a study of 90 rats ending February 1960, of which thirty received ten times the recommended human dose, thirty received five times, and thirty served as a control, with a third of each to be autopsied in three, six and twelve months respectively. At the first autopsy corneal opacities (not cataracts, which are lenticular opacities) were observed in eight out of the twenty drugged rats. This was known to Getman, president and general manager of the Merrell Division, and was reported to the FDA. Dr. Murray, assistant to the Vice President in charge of Research, wrote the FDA that a consultant had advised that such corneal changes were common in laboratory rats and he believed them to be inflammatory. The record affords no basis for believing this was not the company's sincere opinion. Later there was an increased incidence of cataracts in the drugged rats as well as in some of the control rats; the former was not reported although the latter was, but there is no evidence that management was aware of this failure.

Dr. King also failed to report either to management or the FDA the development of cataracts in two dogs on a three month study ending February 1960, as to which he also modified his description of other abnormalities. Again there is no evidence that management was aware of this; furthermore, the whole study was worthless since the dogs were contaminated by distemper and viral hepatitis, and when it was rerun with sound dogs, no opacities were observed.

Plaintiff makes much of a memorandum dated May 17, 1960, shortly before MER/29 was put on the market, between two company vice-presidents with copies to still higher officers, concerning an analog which had been developed in the course of experimentation. Seizing on a phrase which suggested the desirability of having the analog "available as a substitute in the event Mer-29 gets into trouble," plaintiff argues this supports an inference that defendant put MER/29 on the market knowing that it would get into trouble, at the very time when a better product was in hand. But plaintiff takes the phrase quite out of context. The fact is that the letter discusses the company's general policy on licensing its drugs to other manufacturers and the application of this policy to the MER/29 analog. It says that animal work performed to date "indicates some question as to the toxicity of the analog in the lower animals (just as MER-29 itself does), but the work with the analog indicates it may be even better than MER-29. Although a lot more animal work would have to be done to tie down better the question of toxicity, action of the product, etc., this could be done. * * * In view of the tremendous importance of MER-29 and this analog, it probably will be decided that Merrell should follow through with the additional animal work and the clinical work on this analog in order to prove out its relative inferiority or superiority and thus have it available as a substitute in the event MER-29 gets into trouble, or perhaps introduced later as an improved product." The memorandum goes on to discuss various pros and cons of licensing an analog not thoroughly tested to another pharmaceutical manufacturer who would do the work. We find no basis for the sinister inference plaintiff would draw; the picture is rather of a company reasonably satisfied that it had a good product despite some known "toxicity in the lower animals" and considering what to do with another that might or might not prove better.

This brings us to the receipt of the report from Merck & Co. in January 1961 as to cataracts in dogs which we mentioned at the outset. Since this, to our minds, was the first information reaching management which might indicate that MER/29 could have such serious side effects as to make it unsafe despite its beneficial qualities, the officers' action must be severely scrutinized.

Defendant's immediate response was to send Dr. Werner, its research vice-president, Dr. Van Maanen and Dr. King to the Merck laboratory. The decision made on their return was to rerun the experiment. On its face this was not heedless or reckless conduct;23 on the contrary, to have accepted the Merck report as conclusive would have been irresponsible. Apart from the possibility of chemical differences in the Merck synthesized drug, a point on which defendant heavily relies but to which plaintiff effectively responds that Merrell did not ask for a sample,24 significance of the Merck results was called in question by the dogs' being beagles, which are known to be cataract prone, and defendant's suspicion of inbreeding which would have further invalidated the results.

Indeed, the serious criticism is not over what defendant did but what it failed to do — notify the FDA, the medical profession, or both. Plaintiff does not contend that FDA regulations required defendant to report the Merck results, the requirements then being limited to reporting results of experiments done in the manufacturer's own laboratory or by an investigator who had been furnished the drug. See 21 C.F.R. § 130.4(c) (1963 ed.). The claim is rather that, even though there is no direct proof that such notification was considered and rejected, its logic was so apparent as to permit an inference that defendant didn't want the FDA to know of the Merck results for fear it might order the warning accompanying the drug to be stiffened or the drug withdrawn, and didn't want physicians to know for fear they would be unduly frightened. Assuming a jury could find that this was so and that defendant was motivated by commercial considerations as well as by a desire to benefit potential victims of atherosclerosis and granting that management knew its own experiments had disclosed corneal opacities in rats, we fail to see how this meets the definition of reckless indifference to human life or health. The question on that score is not what defendant feared the FDA or doctors would do but what it feared MER/29 would do. Here the Merck report, with the infirmities we have noted, had to be set against the belief of defendant's management, erroneous only in one minor respect, that no cataracts had ever been reported in the 4000 animals previously tested including monkeys, which are closer than dogs to humans, in the 2000 patients under clinical observation for many months, or in the 100,000 patients who had used the drug for varying periods since its release in June 1960. We cannot see how these circumstances would warrant allowing a jury to find that Getman and Werner, the two principal decision-makers on this matter, who continued to use MER/29 themselves, consciously disregarded a substantial and unjustifiable risk of which they were aware.

Neither do we think the scale is tipped by the Anticouni incident, which followed shortly thereafter. Dr. McMaster, associate director of medical research for the Merrell Division, had first heard of Anticouni in May 1960 from a Los Angles cardiologist, one of the clinicians who had been administering the drug on an experimental basis. The cardiologist then reported that Anticouni had exhibited very severe dermatitis which he was unable to evaluate due to the patient's taking, in addition to MER/29 at twice the recommended dose, several other drugs, one of which has since been removed from the market because of its production of toxic side effects including severe dermatitis. McMaster asked for the records and offered to provide funds for further investigation; on several later occasions he repeated the former request but without result. On February 1, 1961, the cardiologist called Dr. McMaster to report that Anticouni had left his care and was said to have developed cataracts and to be consulting other physicians and attorneys. McMaster again asked for the cardiologist's files but did not receive them. He did nothing more until June when, on a trip to Los Angeles, he examined the files but was not enlightened,