E.D. et al v. Abbott Laboratories, Inc
Filing
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ORDER DENYING 8 Defendant's Motion to Dismiss. Signed by Judge Nancy J. Rosenstengel on 10/19/2016.(jmw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
E.D., a minor, by MARYANN
DOTEGOWSKI individually and as next
friend of E.D.,
Plaintiffs,
vs.
ABBOTT LABORATORIES, INC.,
Defendant.
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Case No. 16-CV-432-NJR-SCW
MEMORANDUM AND ORDER
ROSENSTENGEL, District Judge:
Before the Court is Defendant’s Motion to Dismiss filed on June 7, 2016. (Doc. 8).
For the reasons set forth below, the Motion to Dismiss is denied.
BACKGROUND
Plaintiff Maryann Dotegowski, individually and as next friend of plaintiff E.D.,
filed her original complaint pursuant to 28 U.S.C. § 1332 on April 18, 2016, alleging, inter
alia, that E.D. sustained birth defects from Maryann Dotegowski’s use of Defendant’s
prescription drug Depakote. (Doc. 1). Plaintiffs allege that Depakote is an inherently
dangerous drug and that Defendant knew or should have known of the dangerous
condition of its product but failed to adequately warn or instruct physicians and
consumers of the risks of the drug. Id. at 7.
Plaintiffs originally filed an action in the Superior Court of California, County of
Los Angeles, on July 29, 2010. (Doc. 8, at p. 4). The case was eventually transferred to the
Superior Court for the County of San Francisco. Id. After two years of discovery,
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Defendant moved for summary judgment or, in the alternative, summary adjudication. 1
Id. at 5. Defendant asserted, inter alia, that the claims were barred by the relevant
California statute of limitation. Id. In response, Plaintiffs asserted that Ms. Dotegowski
did not become aware of the actual cause of the injury until much later in time and
therefore the “discovery rule” tolled the statute of limitation. (Doc. 8-8. at p. 3). With the
exception of the failure to warn theory, Plaintiffs withdrew all other claims. Id. at 2-3.
The California court granted summary adjudication as to any claims abandoned or
withdrawn by Plaintiffs. Id. at 3.
The court ultimately found that a triable issue remained concerning the discovery
rule and accordingly, denied Defendant’s Motion for Summary Judgment. (Doc. 8, at p.
5). Defendant then moved to bifurcate the statute of limitation issue from the merits of
the case. Id. Over Plaintiffs’ objection, the California court granted the motion to
bifurcate. Before the “mini-trial” on the statute of limitation issue, however, Plaintiffs
provided supplemental briefing to the trial judge, which resulted in a finding that a
different California statute of limitation applied to the claim. 2 (Doc. 9-5, at p. 10). Before
any further proceedings occurred, the appellate court approved Defendant’s writ of
review and requested briefing from the parties concerning which statute should apply.
(Doc. 8-11). Before a decision was issued, the parties stipulated that the statute of
limitation without the tolling provision should apply in the case. See id. Thereafter, the
1
California Civil Procedure distinguishes a party’s motion asserting that an entire action has no merit,
“summary judgment,” from a party’s motion asserting that one or more claims have no merit, “summary
adjudication.” Cal. Civ. Proc. Code § 437c (a)(1); (f)(1).
The material difference between the two statutes of limitation concerned the tolling provision. The
statute Defendants asserted as controlling did not contain a tolling provision for minors, whereas the
statute asserted by Plaintiffs contained a tolling provision similar to the relevant Illinois statute of
limitation discussed below. (Doc. 9-1).
2
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court reset the bifurcated trial, and the parties submitted a single question to the jury, as
set forth below:
Before July 29, 2004, did Maryann Dotegowski discover, or know of facts
that would have caused a reasonable person to suspect, that E.D. had
suffered harm that was caused by someone’s wrongful conduct. (Doc. 9, at
p.2).
After a week-long trial, the jury resolved this question in the affirmative, thereby
extinguishing Plaintiffs use of the discovery rule to toll the statute of limitation. (Doc. 8,
at p. 7). On September 1, 2015, the Superior court entered the Judgment on Jury Verdict.
(Doc. 8-16). The Judgment noted that the jury verdict in favor of Defendant concerned
the single procedural question regarding the statute of limitation and that all other
claims in the First Amended Complaint were disposed of via summary adjudication in
favor of Defendant. (Doc. 8-16, at pp. 2-4).
Plaintiffs filed their Complaint with this Court on April 18, 2016, alleging
diversity of citizenship as the basis for the Court’s subject matter jurisdiction. (Doc. 1).
The complaint raises “the same claim[] against the same party.”3 (Doc. 9, at pp. 6; 1). The
current dispute before the Court concerns whether the California Court’s prior
judgment, based of the California statute of limitation, precludes Plaintiffs from
litigating their claim in the Southern District of Illinois.
In additional to the original claims raised in the state court complaint, Plaintiffs’ federal complaint raised
two additional legal theories. In their Response to Defendant’s Motion to Dismiss, however, Plaintiffs
affirmatively withdrew all claims with the exception of the allegation concerning Defendants’ “failure to
warn.” (Doc. 9, at p. 1 n.1.) Accordingly, those claims are no longer before the Court.
3
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DISCUSSION
Federal courts must apply the statutes of limitation of the state in which they sit
when diversity of citizenship is the only basis for subject matter jurisdiction. Reinke v.
Boden, 45 F.3d 166, 170 (7th Cir. 1995). The Illinois statute of limitation for a minor is
automatically tolled until two years after she reaches the age of eighteen. See Parks v.
Kownacki, 193 Ill. 2d 164, 176, (2000) (citing 735 Ill. Comp. Stat. Ann. 5/13-211). As
plaintiff E.D. is still a minor, it is undisputed that the Illinois statute of limitation does
not bar the current claim. (Docs. 8-10). Rather, Defendant asserts that res judicata and the
doctrine of judicial estoppel preclude the current action. (Doc. 8).
Concerning res judicata, 28 U.S.C. § 1738 provides that “a federal court must give
the judgment of a state court the same effect that it would have in the courts of the state
of rendition.” Reinke v. Boden, 45 F.3d 166, 169 (7th Cir. 1995) (citing the same). The key
question therefore is what effect California intends from a judgment based on the
running of the statute of limitation. Traditionally, statutes of limitation fall into one of
two categories: ones that are an integral part of the cause of action and ones that are
considered procedural in nature. Reinke v. Boden, 45 F.3d 166, 169 (7th Cir. 1995). When
the limitation period lapses in the first category, the resulting judgment is considered
“on the merits.” Conversely, in the second category, the expiration of the limitation
period only extinguishes the possibility of recovery in a particular forum. Id.
The California statute of limitation is considered procedural in nature and falls
squarely into the second category. Lackner v. LaCroix, 25 Cal. 3d 747, 751 (1979)
(“Termination of an action by a statute of limitations defense must be deemed a technical
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or procedural as distinguished from a substantive termination.”); Koch v. Rodlin
Enterprises, 223 Cal. App. 3d 1591, 1596, 273 Cal. Rptr. 438, 441 (Ct. App. 1990)
(“Termination of an action by a statute of limitations is deemed a technical or
procedural, rather than a substantive, termination.”); Mid-Century Uns. Co. v. Superior
Court, 138 Cal.App.4th 769, 776 (Cal. Ct. App. 2006) (“[T]he purpose served by dismissal
on limitations grounds is in no way dependent on nor reflective of the merits-or lack
thereof-in the underlying action.”); see Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1319
(9th Cir. 1998) (“California has emphasized the fact that the statute of limitations is a
kind of procedural bar, and not one which relates to the merits of the case.”)
Consequently, while the effect of the “judgment” based on the California statute
of limitation may have extinguished any remedy in the California forum, it does not
preclude Plaintiffs from filing their case in a separate forum where the statute of
limitation has not expired. Defendant appears to recognize as much in its Motion to
Dismiss:
Ms. Dotegowski’s changed testimony made clear that Plaintiffs sued
McKesson to prevent Abbott from removing their case. Had a jury in a
California federal court rejected Plaintiffs’ claims, their re-filed Complaint
would have run headlong into the Supreme Court’s unambiguous
statement that a dismissal on statute of limitations grounds is a judgment
on the merits. (Doc. 8, at p. 5, n.5) (internal citation and quotation omitted).
The Defendant’s lamentation of the “tactics” employed by Plaintiffs to stay out of federal
court inherently recognizes the non-preclusive effect of a California state court judgment
on this Court. Indeed, there would be no need to draw this Court’s attention to the
preclusive effects of judgments rendered in other federal courts unless the defense
recognized the guidance of the Seventh Circuit and the procedural nature of California’s
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statute of limitation. See Reinke v. Boden, 45 F.3d 166, 169 (7th Cir. 1995).
In Reinke v. Boden, a claim terminated by a Minnesota state court judgment based
on the statute of limitation was refiled in the federal district court sitting in Illinois. Id.
After analyzing the statutes of limitation in both Minnesota and Illinois, the Seventh
Circuit ultimately found that neither state precluded the commencement of an action in
the district court in Illinois. The Court reasoned that while the “Minnesota Court of
Appeals [] noted that a statute of limitations dismissal amounts to a dismissal on the
merits,” that proclamation was limited to the intra-state effect. Id. at 172. Here, the plain
language of the California courts indicate that the state’s statute of limitation is
procedural in nature and judgments rendered on such a basis do not reach the merits of
the case.
Defendants try to distinguish the long line of California cases finding the statute
of limitation “procedural” in nature by emphasizing that a jury rendered a verdict in the
case. (Doc. 10, at p. 2) (“Despite all of their hand waving, Plaintiffs are unable to muster
any examples where a jury verdict was not deemed res judicata.”) The error in this
position stems from the assumption that a verdict, regardless of the underlying question
presented to the jury, renders the finding “on the merits.” At Defendant’s request, and
over the objections of Plaintiffs, the California trial was bifurcated into two phases
thereby expressly separating a decision on the “merits” from the question concerning the
statute of limitation. The consequence of Defendant’s decision was a verdict—and
therefore a judgment—that did not reach the merits of the claim.
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Defendants argue that under California law, a judgment based on the statute of
limitation is final unless additional facts or alternative statutes of limitation can be
pleaded to “rescue” the claim. (Doc. 8, at p. 3). In support of this position, Defendant
cites Perez v. Richard Roe 1, 146 Cal.App.4th 171, 185 (2006), and Sangster v. San Bernardino
Cty. Sheriff Dep’t, No. EDCV 12-02007-JAK OP, 2013 WL 2121917, at *4 (C.D. Cal. Apr. 16,
2013). Id. While such a sweeping declaration may be true for claims operating under the
same statute of limitation, neither case cited by Defendant discussed or involved
bringing claims in courts where the limitations periods had not run (what the Seventh
Circuit refers to as an “intersystem” situation). 4 See Reinke v. Boden, 45 F.3d 166, 172 (7th
Cir. 1995).
A similar logical defect exists within Defendant’s theory that the doctrine of
estoppel bars Plaintiffs’ claim. 5 (Doc. 8, at p. 13) (“As Plaintiffs stipulated to, California
courts have accepted, and Abbott relied on the principle that [the California statute of
limitation] governs their case….”) Defendant appears to be operating under the
assumption that the statute of limitation from the jurisdiction where a case is first filed
should thereafter be imported into any subsequent jurisdiction. The fact that Plaintiffs
stipulated in a California state court action that a California statute of limitation applied
4
Additionally, the holding in Perez v. Richard Roe was based upon “separation of powers” principles,
which are completely inapplicable to the case at hand. Perez v. Richard Roe 1, 146 Cal. App. 4th 171, 176
(2006).
The Seventh Circuit has set forth three factors to consider in assessing whether a claim should be barred
by judicial estoppel: (1) “a party’s later position must be clearly inconsistent with its earlier position;”
(2) “the party has succeeded in persuading a court to accept that party’s earlier position, so that judicial
acceptance of an inconsistent position in a later proceeding would create the perception that either the first
or second court was misled;” and (3) “the party seeking to assert an inconsistent position would derive an
unfair advantage or impose an unfair detriment on the opposing party if not estopped.” In re
Knight-Celotex, LLC, 695 F.3d 714, 721 (7th Cir. 2012) (internal citation and quotation omitted).
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“in this case” does not alter the appropriate statute of limitation this Court must apply,
i.e., Illinois. See Reinke v. Boden, 45 F.3d 166, 170 (7th Cir. 1995) (noting that federal courts
must apply the statutes of limitation of the state in which they sit when diversity of
citizenship is the only basis for subject matter jurisdiction.) Recognizing that a certain
procedural rule applied in one forum and then correctly asserting that a separate
procedural rule applies in the new jurisdiction is not inconsistent. Accordingly, the
application of judicial estoppel to bar Plaintiffs’ claim would be unjust.
CONCLUSION
This Court is required to give the judgment of a state court the same effect that it
would have in the courts of the state of rendition. California views judgments based on
the statutes of limitation as technical or procedural in nature. While claim preclusion is
therefore unavailable to Defendants, to the extent it proves relevant, this Court does
gives full effect to the prior verdict that “before July 29, 2004, Maryann Dotegowski
discover[ed], or [knew] of facts that would have caused a reasonable person to suspect,
that E.D. had suffered harm that was caused by someone’s wrongful conduct.” (Doc. 9,
at p. 2). For these reasons, Defendant’s Motion to Dismiss (Doc. 8) is DENIED.
IT IS SO ORDERED.
DATED: October 19, 2016
____________________________
NANCY J. ROSENSTENGEL
United States District Judge
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