Spoliation — Sanctions, Adverse Inference Instruction Denied — Variety of Other Curative Measures Imposed (Illustrative of What Proposed Rule 37(e) Might Contemplate)

Decker v. GE Healthcare Inc., 2014 U.S. App. LEXIS 20049 (6th Cir. Oct. 20, 2014):

In 2005, in connection with a magnetic resonance imaging procedure ("MRI"), Paul Decker received a dose of Omniscan, a gadolinium-based contrast agent manufactured by GE Healthcare [*2]  Inc. and GE Healthcare AS ("GEHC"). After taking Omniscan, Mr. Decker developed Nephrogenic Systemic Fibrosis ("NSF"). In 2012, Karen and Paul Decker sued GEHC in the Northern District of Ohio, lodging a host of Ohio products liability claims and other tort claims. The Deckers' case forms a part of a multidistrict litigation ("MDL"), managed by Judge Polster. Prior to the Deckers' case, hundreds of similar cases in the MDL involving GEHC had been settled. This case did not settle and was the first case in the MDL to go to trial. The jury returned a verdict in favor of the Deckers on their failure-to-warn claim, awarding $5 million in damages. GEHC moved for a new trial, which the district court denied. On appeal, GEHC makes a number of disparate arguments against rulings that the district court made applicable to all MDL cases as well as rulings specific to the instant case. GEHC alleges that a new trial is warranted because the district court judge (1) should have recused himself from the trial and its motion for a new trial, (2) made several erroneous evidentiary rulings, which were applicable to all MDL cases, (3) erroneously denied GEHC's motion for a new trial because insufficient [*3]  evidence supported the jury's verdict regarding the causation element of the Deckers' failure-to-warn claim, and (4) erroneously failed to issue two proposed jury instructions. We affirm.

I.

Gadolinium-based contrast agents ("GBCA") are one type of contrast agent used to enhance the quality of images generated in MRIs. There are currently five different GBCAs approved by the FDA for use in MRI procedures in the United States. Omniscan, which is manufactured by GEHC, is one such GBCA. GBCAs, however, can be toxic to patients with impaired kidney function. ***

In September 2005, Paul Decker, a patient with end-stage renal disease ("ESRD"), underwent an MRI at Riverside Radiology Associates. In connection with the procedure, Mr. Decker received a single dose of Omniscan. Mr. Decker's kidneys were impaired when he received the dose of Omniscan, and sometime thereafter he developed NSF.

In February 2012, Paul and Karen Decker sued GEHC in the United States District Court for the Northern District of [*6]  Ohio, alleging claims under the Ohio Products Liability Act, section  [**4]  2307.71 et seq. of the Ohio Revised Code, for manufacturing defect, design defect, failure to warn, nonconformance with representations, negligence, breach of express warranty, breach of implied warranty, misrepresentation, fraud, and loss of consortium. The Deckers' case forms part of an MDL established in 2008--In re Gadolinium Based Contrast Agents Product Liability Litigation, (MDL No. 1909) (N.D. Ohio)--which was assigned to Judge Dan Polster, who has managed the MDL since 2008. Hundreds of similar cases in the MDL involving GEHC had been settled, including a block of 25 cases involving the same attorneys as in the instant case. Despite multiple attempts at mediation and the active involvement of Judge Polster, the parties in this case did not reach a settlement.

***The parties argued over the admissibility of expert testimony on these issues, and the district court addressed those arguments for all MDL cases in two extensive rulings.

First, it was undisputed that Omniscan triggered NSF in ESRD patients; however, the causal mechanism by which Omniscan triggered NSF was disputed. The PSC sought to introduce expert testimony "that Omniscan most likely causes NSF in renally impaired patients when, due to various processes (for example, transmetalation), the gadolinium becomes dechelated, dissociated, released or freed from the ligand to which it is bound . . . [and that t]his dechelation exposes tissue to labile, toxic gadolinium which rapidly bonds elsewhere in the body [*8]  and begins the fibrotic process leading to NSF." In short, the PSC proffered expert testimony on the "free gadolinium theory" of the likely causal mechanism of NSF, which is the prevailing theory of NSF causation in the scientific community. By contrast, GEHC sought to introduce the  [**5]  testimony of Benjamin Newton that chelated GBCAs may trigger the fibrotic process leading to NSF. The implication of Newton's hypothesis was that the chelated gadolinium in Omniscan and other GBCAs causes NSF and, thus, Omniscan was no more likely to cause NSF than any other GBCA. Proof of the causal mechanism was disputed because, while adverse health effects from "free gadolinium" were foreseeable, adverse health effects from chelated gadolinium were not.

The district court denied GEHC's motion to exclude the PSC's experts who advanced the "free gadolinium theory" of the likely causal mechanism of NSF. ***

Consistent with its free gadolinium theory of NSF causation, the PSC focused its early discovery efforts on demonstrating that GEHC knew that Omniscan was capable of releasing free gadolinium once ingested. The PSC deposed Robert Muller, a Belgian chemist and GEHC consultant. At his 2010 deposition, Muller produced a copy of an unpublished 1995 GEHC study that suggested that Omniscan did release significant amounts of free gadolinium. The PSC subsequently learned that [*13]  GEHC had this 1995 study but did not disclose it. The PSC filed a motion for sanctions under Federal Rule of Civil Procedure 37(b) and (c). After a sanctions proceeding, it was revealed that GEHC lost or destroyed some documents relating to Muller. The district court did not impose punitive sanctions or allow an "adverse inference and spoliation instruction." The district court, however, imposed the following remedies: (1) Muller's deposition was admitted in any MDL trial; (2) Muller's 1995 study report, along with other documents in the Haldorsen file in which the Muller report was located, was admitted in any MDL trial; (3) PSC experts were permitted to rely on and testify about the contents of the Muller report and the Haldorsen file; and (4) testimony from the sanctions hearing was admissible at trial.

GEHC moved for clarification of the order and requested that the district court reconsider its determination that testimony from the sanctions hearing was admissible at trial. In that motion, GEHC sought to exclude the deposition testimony of Patrick Murphy, GEHC's Rule 30(b)(6) witness. The district court provided that testimony from the sanctions hearing was admissible at trial only if relevant to proving a plaintiff's case. It further [*14]  suggested during a January 14, 2011 teleconference that counsel work out a stipulation to the operative facts of the destroyed and missing documents. The district court subsequently stated that if the parties could not reach an agreement over a stipulation, the court would permit introduction of the excerpts of Murphy's deposition testimony proposed by the plaintiffs, and should GEHC believe that these excerpts would not present an accurate picture of what occurred regarding the documents, GEHC could introduce additional evidence. Accordingly, the district court denied GEHC's motion to strike plaintiffs' designation of Murphy as a testifying witness.

***

GEHC also requested that the court instruct the jury on the facts the district court found at the conclusion of the sanctions proceedings in 2010 and January 2011. Specifically, GEHC requested that the court instruct the jury:

   You have heard testimony that some documents relating to gadolinium or Omniscan were lost or discarded. While the specific contents of these documents remain unknown, it is unlikely that the documents are essential to proving any of Plaintiffs' claims, or that their absence prejudices Plaintiffs.

Although the district court previously had held that excerpts of Murphy's deposition testimony that certain documents were produced and destroyed were [*18]  admissible, the court declined to issue GEHC's proposed instruction because an instruction "would be giving [the issue of the lost or discarded documents] a lot more importance than it has had in this trial."

***

Next, GEHC contends that a new trial is required because the district court failed to give two proposed jury instructions. "[T]o the extent the motion for new trial was based on the court's refusal to give a requested jury instruction, the refusal is reviewed for abuse of discretion." Cummins, 727 F.3d at 510 (citing Taylor v. TECO Barge Line, Inc., 517 F.3d 372, 387 (6th Cir. 2008)). "A district court's refusal to give a jury instruction constitutes reversible error if (1) the omitted instruction is a correct statement of the law, (2) the instruction is not substantially covered by other delivered charges, and (3) the failure to give the instruction impairs the requesting party's theory of the case." Id. (quoting Taylor, 517 F.3d at 387).

First, GEHC argues that the district court's refusal to give a limiting instruction with respect to the AERs--namely, that the AERs did not "prove that the [negative] reaction [described therein] was actually a side effect or caused by the drug administration"--unfairly  [**23]  prejudiced its defense. GEHC believes that, absent this limiting instruction, the jury likely considered the AERs for an improper purpose [*44]  as proof of causation. ***

Lastly, GEHC argues that the district court's refusal to issue an instruction regarding the lost or discarded documents warrants a new trial. Relatedly, GEHC contends that the district court erred in admitting evidence and argument of discovery conduct at trial.

Neither argument has merit. First, the district court's evidentiary ruling, which GEHC suggests requires a new trial, is reviewed for abuse of discretion. See Cummins, 727 F.3d at 510. The district court did not abuse its discretion in admitting Murphy's limited testimony as to missing or destroyed documents relating to Muller. In ruling this testimony admissible, the  [**24]  district court noted that it was curtailing Murphy's testimony [*46]  so as to permit the relevant fact that there were potentially gaps in the evidence without prejudicing GEHC:

The main discussion is that certain documents were destroyed and when they were destroyed and that's a fact, and [Murphy] is not saying who did it or why, why -- why it happened or what. None of that, none of that is simply coming in. Simply that the facts, the facts are correct. So it may be relevant here. So I'm allowing the excerpts.

Murphy's testimony was limited to the fact that the Muller report was produced late, a "four to five inch" stack of documents segregated from a file cabinet by Saebo was missing, and three additional documents, dealing with Muller, were destroyed.

The district court's refusal to issue a limiting instruction that the destroyed or missing documents were unlikely essential to proving any of the Deckers' claims is not an abuse of discretion. The court was careful not to overemphasize the importance of the fact that GEHC lost or destroyed documents relating to Muller's deposition and study, declining to give GEHC's proposed instruction because it "would be giving [the issue of the lost or discarded documents] a lot more importance than it has had in this [*47]  trial." The district court's failure to issue this instruction did not impair GEHC's theory of the failure-to-warn claim. See Cummins, 727 F.3d at 510.

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