Final Examination
Law 651: Economics and the Law

Prof. Avery Katz
University of Michigan Law School
Winter 1991

DIRECTIONS

1. This exam is due at the take-home proctor's desk at or before the conclusion of the examination period, at 5 PM on Friday, May 10. Please type your exam. (If you use a word processor, you are expected to take precautions, sufficient to allow you to meet the end-of-period deadline, against mechanical failure, accidental erasure, and similar misfortunes.)

2. The exam is open-book; you are free to consult any written materials, and you are strongly encouraged to have available for your use the assigned course materials and readings. You must provide complete citations for any source you use apart from the assigned readings.

3. Until the examination period is completed at 5 PM on the 10th, you may not communicate with any person about the contents of the exam or about course material relating to the exam, regardless of whether you have already turned it in.

4. There are two questions having equal weight in determining your grade. Each question has a 1500-word length limit. You may not use any leftover space from one question in answering the other. Answers exceeding the length limit will be penalized by reducing their score in proportion to the extent of the excess. I will assume for purposes of administering the limit that a typical double-spaced typed page with 1-inch margins contains about 300 standard English words when using 12-pitch type (12 words per line times 25 lines per page), or about 250 words when using 10-pitch type. Any attempts to use shorthand or nonstandard abbreviations, however, will be counted as if full words were used.

5. Please begin each essay on a new sheet of paper. Please write your exam ticket number at the top of each essay.


Good luck on the exam, and for those of you graduating at the end of the term, best wishes.

Question 1

Read the attached case, Johnson v. American Cyanamid Company, 239 Kan. 279, 718 P.2d 1318 (1986), and write an essay explaining how the economic analysis of law bears on the appropriate resolution of the case, and on cases involving similar fact patterns. You may find it helpful to indicate what additional facts, if any, would be relevant in this regard. You should also consider, to the extent you think appropriate and that space permits, issues that were present in the case though not raised on appeal (for instance, the plaintiff's claim against the defendant physician).


Question 2

Consider the following two passages. Then write an essay that discusses what influence, if any, that the economic approach is likely to have on legal thought and on the practice of law over the next generation. You are welcome in your essay to develop the issues raised in the two passages, or to raise related ideas of your own.

1] Duncan Kennedy, "Distributive and Paternalist Motives in Contract and Tort Law," 41 Maryland L. Rev. 563, 603-04 (1982):

"Once they have at least somewhat mastered the technical apparatus, people just love to argue for their favorite proposals on efficiency grounds. For years it was mainly a liberal fad, then it fell into favor with the conservatives, and the liberals are now trying to reappropriate it. Given a choice, almost everyone seems to prefer to cast a difficult rule change proposal in these terms rather in those of paternalism or redistribution. The paradox is that the standard objection to paternalism and distribution as motives is that they are intrinsically `subjective,' `uncertain,' and therefore political and controversial. What this means is that they evoke the unresolved conflicts between groups within civil society about who deserves how much and what is the nature of true consciousness [...] Why is it that the patent manipulability of efficiency arguments does not impair their attractiveness, while distributive and paternalist arguments, which are actually easier to grasp and to apply, seem excessively fuzzy?

"At least part of the answer, I think, is that the move to efficiency transposes a conflict between groups in civil society from the level of a dispute about justice and truth to a dispute about facts --- about probably unknowable social science data that no one will ever actually try to collect but which provides ample room for fanciful hypotheses.

"Such a transposition from one level to another makes everyone, just about, feel better about the dispute. The move from a conflict of interests or consciousnesses to a conflict about facts makes it seem --- quite falsely --- that the whole thing is less intense and less explosive. [...]

"It seems obvious to me, but maybe I'm just wrong, that efficiency is also attractive because it legitimates the pretensions to power of a particular subset of the ruling class --- the liberal and conservative analysts, most of whom are lawyers, economists, or `planners' by profession. Efficiency analysis, like many another mode of professional discourse, is an obscure mix of the normative and the merely descriptive; it requires training to master; it provides a basis for an internal hierarchy of the profession that crosscuts political alignments. Its high value in legitimating the outcomes of group conflict in `nonideological' terms is the basis for the professional group's claim to special rewards and a secure niche in the good graces of the ruling class as a whole."

2] Bruce Ackerman, Reconstructing American Law (1984), pp. 46-47, 53, 57-59:

"...Coase is doing nothing less than inviting us to transform the opening words of every legal conversation, words that inevitably shape all that comes afterward. What is at stake is a radical revision of that peroration lawyers call, with charming disingenuousness, the `statement of the facts.'...

"...Rather than beginning with the moment at which the actors get into some form of obvious trouble, Coasean assumptions force the lawyer to start his story at a much earlier point in time: when the parties might have reorganized their activities in a way that could have avoided the trouble entirely...

"The deeper and broader the Coasean penetration into legal conversation, the less the theorem will seem a disturbing novelty, and the more it will seem a familiar tool of factual analysis. And in the law at least, familiarity breeds the very reverse of contempt. As soon as lawyers are convinced that arguing about transaction costs may win cases, they can be relied upon to complexify the new conceptual apparatus in any way that will suit their clients's interest. Over time, it will become increasingly clear that the varieties of transactional failure are almost infinite and that the profession must develop an elaborate set of categories if it hopes to complete the Coasean prologue in a way that is equal to the wide range of transactional structures revealed by the stream of cases. [...] When held up to the light of the Coasean model, our real world will come to seem a place full of pervasive transactional problems with many names: `free ride,' `moral hazard,' `bounded rationality,' `nonconvex supply and demand curves,' `imperfections in capital markets,' and so forth, each requiring systematic attention in the analysis of one or another market failure.

"This new form of factual analysis, moreover, provides a powerful impetus for legal generalizations of a kind quite alien to our Realist predecessors. As the complexifying Coasean states his version of the facts in more and more cases, it becomes ever clearer that different branches of the law treat similar market failures in very different ways. `Nuisance,' `products liability,' and `fault,' for example, now seem different common law labels for handling a complex set of interrelated problems organized by the existence of a complex variety of externalities and related market failures. Since lawyers are taught that like cases should be treated alike, this perception of factual similarity generates a cognitive drive for a new synthesis. Hasn't the time come to think the externality question through in a systematic way, reconstructing the law to deal responsively with the facts that the new analysis reveals to view?"

EMIL E. JOHNSON, Appellee, v. AMERICAN CYANAMID COMPANY and LEDERLE LABORATORIES, et al., Appellants

Supreme Court of Kansas
239 Kan. 279; 718 P.2d 1318
May 19, 1986

OPINION: McFARLAND, J.: Emil E. Johnson brought this personal injury action alleging he had contracted poliomyelitis as a result of his infant daughter having been vaccinated by defendant physician, Vernon Branson, utilizing Orimune, or oral polio vaccine manufactured by Lederle Laboratories (a division of defendant American Cyanamid Company). Henceforth in the opinion, the manufacturer of the vaccine will be referred to as American Cyanamid. The jury was instructed on comparison of fault as between the two defendants (no issue of fault was submitted as to the plaintiff). The jury assessed 100% of fault against defendant American Cyanamid and awarded $2,000,000.00 actual damages and $8,000,000.00 punitive damages. American Cyanamid appeals from the judgment against it but specifically does not appeal from the jury's finding of zero fault on the part of defendant Branson.


FACTS RELATIVE TO PLAINTIFF'S ILLNESS

On September 26, 1975, plaintiff took his infant daughter Laurie to the child's pediatrician, Dr. Vernon Branson, where Orimune, an oral polio vaccine manufactured by American Cyanamid, was administered to her. The sequence of polio vaccination was completed by additional administration of the same vaccine by the same physician on November 24, 1975, and January 14, 1976. In December of 1975 plaintiff became ill and was admitted to the University of Kansas Medical Center on December 9 where his illness was diagnosed as bulbar paralytic poliomyelitis. Plaintiff contends he is totally disabled as a result of the disease. At trial, it was contested whether or not Laurie's vaccination program was the cause of plaintiff's illness, but this is not an issue on appeal.

HISTORY OF POLIO VACCINES

By virtue of the nature of claims of liability asserted against American Cyanamid, much of the evidence at trial concerned the history of the disease poliomyelitis and efforts to control the disease, namely, the development of vaccines and the federal government's efforts to vaccinate the public. Polio was first identified as a disease in the 19th century. Its occurrence became more frequent in the 1952 and it claimed 57,897 victims in the United States alone. The federal government and private medical research facilities commenced an all-out effort to conquer the dreaded killer and crippler of so many children and adults. A major breakthrough occurred when Dr. Jonas Salk developed a killed or "inactivated" polio vaccine. This vaccine must be administered by injection. By 1955 the Salk vaccine was being distributed extensively in the United States and new cases of polio were reduced to less than 5,000 per year by 1959. In the late 1950's a new polio vaccine was developed by Dr. Albert Sabin and was widely tested in Europe. The Sabin vaccine is a live polio vaccine which contains greatly weakened or attenuated polio virus. The Sabin vaccine must be given orally.

Although the Salk vaccine had greatly reduced the incidence of polio, the disease remained a significant health threat and pressure was mounting for a federally funded immunization program to bring the disease under control and, it was hoped, eliminate it. By 1961, the bitter controversy was in full bloom as to which of the two types of vaccines -- Sabin or Salk -- should be the weapon used in the battle against the disease. At that time only the Salk vaccine was being produced in this country although the Sabin vaccine had been used very successfully in Europe. The American Medical Association urged, in 1961, the use of the Sabin vaccine. The federal government solicited American drug firms to produce the Sabin vaccine. United States manufacturers of the Salk vaccine opposed the introduction of the Sabin vaccine. Three manufacturers agreed to manufacture the Sabin vaccine (including American Cyanamid). The Sabin vaccine rapidly replaced the Salk vaccine in the United States and no Salk vaccine has been manufactured in this country since 1968. American Cyanamid is the only United States firm manufacturing polio vaccine at the present time and it manufacturers the Sabin type.

In the last twenty-five years the Sabin v. Salk controversy has rolled on unabated. The minority Salk supporters, spearheaded mainly by Dr. Salk himself, have never ceased to advocate the superiority of the Salk vaccine in the numerous forums involving federal public health officials. The Sabin supporters include all major public and private health organizations and assert Sabin is the vaccine of choice. There are advantages to the Sabin vaccine. It is administered orally -- usually on a sugar cube to individuals old enough to eat sugar cubes. The Salk vaccine can only be injected through a needle. The injections are time-consuming and require individual administration by trained medical personnel. Further, injections are less well received by poorly educated persons and resistance thereto is stronger. Additionally, there is substantial medical evidence that the immunity induced by the Sabin vaccine is longer lasting and does not require boosters as may be necessary with the Salk vaccine.

Ironically, the very cause of the longer-lasting immunity of the Sabin vaccine gives rise to the major drawback of this vaccine. The Sabin vaccine must be given orally, as the weakened virus gives immunity by proliferating in the intestines, thereby triggering the body's immune system. For reasons unknown, occasionally, but on a rather predictable ratio of incidence, the virus reproduced in the intestinal tract is a virulent virus, not the weakened Sabin virus. When this occurs, the individual receiving the virus, and persons in close contact with such individual, may acquire polio as a result of the vaccination. This unfortunate event occurs some five to ten times each year in the United States. This risk from the Sabin vaccine has been there from the beginning of its usage. It is a known risk and has been argued at every phase in the long-standing Salk-Sabin controversy.

The very ability of the Sabin vaccine to infest others is, in the broad public health view, a plus factor. Unlike the Salk vaccine, the Sabin vaccine can vaccinate persons in contact with vaccinated persons because the intestines secrete the virus. Usually, the virus so secreted is the same weakened type as was used in the vaccine. Hence, such individuals are vaccinated without actual medical vaccinations. From a public health standpoint, more people can be so vaccinated than could otherwise be reached. Kansas requires polio vaccination before children are admitted to elementary school or state licensed child care centers or preschools.

Being fully informed of this known risk, the federal government approved the Sabin vaccine and purchased large quantities of it for its mass public immunization program. The decision was made that the Sabin vaccine would be the weapon utilized to fight the serious public health problem of polio. The program has been so successful in reducing the incidence of "wild" polio that an individual in the United States now has about the same risk of contracting "wild" polio as he or she does of contracting polio through vaccination or contact with a vaccinee. Virtually all of the Western world utilizes the Sabin vaccine over the Salk vaccine in its public health programs. Finland, by virtue of a recent polio outbreak which included some individuals previously immunized by the Salk vaccine, is now using the Sabin vaccine in its public health program.

* * * * * * *


DISCUSSION OF LIABILITY OF MANUFACTURER

One might well wonder why it is necessary to set forth the history of the development of polio vaccines in this opinion. Over American Cyanamid's objection, the Sabin-type vaccine, itself, was put on trial. Much of the evidence introduced herein could well bear the caption Salk v. Sabin. One of plaintiff's expert witnesses, Dr. Darrell Salk (son of the originator of the killed virus type of vaccine), testified the Salk-type vaccine was a far better product and the Sabin-type vaccine had no place in the health program of the United States. Time and again in this trial, the inference was made the manufacturing any Sabin-type vaccine was wrongful and the direct result of some nefarious conspiracy between the federal government and American Cyanamid to cripple and kill Americans. American Cyanamid was forced to defend the efficacy of the Sabin-type vaccine and introduce evidence of its overall superiority to the Salk-type vaccine. Faced with the type of evidence that was permitted to be introduced, American Cyanamid requested that, at least, the United States government should be made a phantom party for comparison of fault purposes (the request was denied).

The Sabin-type vaccine was the vaccine of choice recommended by all major health organizations in the United States in 1975. Its production by American Cyanamid was the result of the federal government's solicitation of the firm to manufacture the Sabin vaccine which public health authorities believed, based on a vast array of scientific literature, was necessary to combat a major health problem. The seed strains of virus utilized in the manufacture of the vaccine by American Cyanamid are supplied by the federal government and the vaccine's manufacture is closely monitored by the federal government.

Plaintiff acquired contact polio from his child, the vaccinee. The fact that this type of occurrence would happen on an extremely infrequent, but rather predictable, ratio was known from the time Sabin-type vaccines were introduced. The remote risk of contact polio is inherent in the Sabin-type vaccine and cannot be eliminated. The risk could not be altered by a change in the manufacturing process. The phenomenon of contact polio was not newly discovered information acquired by American Cyanamid and hidden from public view. [...] Plaintiff seeks to impose liability, in the first instance, on what is, in essence, a design defect theory. That is, that the Salk-type vaccine (a killed virus vaccine) is a better product and American Cyanamid should be held liable for producing a Sabin-type vaccine (live virus vaccine) rather than the Salk-type vaccine. Plaintiff is seeking to impose strict liability in tort based upon design defect (the inadequate warning claim of liability will be discussed later). Section 402A of the Restatement (Second) of Torts (1963) states:


402A. Special Liability of Seller of Product for Physical Harm to User or Consumer

"(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

(a) the Seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

"(2) The rule stated in Subsection (1) applies although

(a) the seller has exercised all possible care in the preparation and sale of his product, and

(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller."

Comment k to
402A is significant to the issue before us:

"k. Unavoidably unsafe products. There are some products which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use. These are especially common in the field of drugs. An outstanding example is the vaccine for the Pasteur treatment of rabies, which not uncommonly leads to very serious and damaging consequences when it is injected. Since the disease itself invariably leads to a dreadful death, both the marketing and the use of the vaccine are fully justified, notwithstanding the unavoidable high degree of risk which they involve. Such a product, properly prepared, and accompanied by proper directions and warning, is not defective, nor it is unreasonably dangerous. The same is true of many other drugs, vaccines, and the like, many of which for this very reason cannot legally be sold except to physicians, or under the prescription of a physician. It is also true in particular of many new or experimental drugs as to which, because of lack of time and opportunity for sufficient medical experience, there can be no assurance of safety, or perhaps even of purity of ingredients, but such experience as there is justifies the marketing and use of the drug notwithstanding a medically recognizable risk. The seller of such products, again with the qualification that they are properly prepared and marketed, and proper warning is given, where the situation calls for it, is not to be held to strict liability for unfortunate consequences attending their use, merely because he has undertaken to supply the public with an apparently useful and desirable product, attended with a known but apparently reasonable risk." (Emphasis supplied.)

Orimune, the Sabin-type vaccine, is an "unavoidably unsafe product" that is an "apparently useful and desirable product, attended with a known but apparently reasonable risk" as a matter of law. Public policy requires that the mere manufacture of the vaccine not be actionable on the ground of design defect. The trial judge should have heard the evidence on this issue outside the presence of the jury and made the determination thereon. There is no claim that the vaccine administered to plaintiff's child was improperly manufactured or that a defective product was delivered. The vaccine was properly prepared and marketed and was exactly what it was intended to be. As a matter of law there is no manufacturing or design defect in the product at issue herein.

This leaves the only possible liability in the adequacy of the warning provided by the manufacturer.

In Wooderson v. Ortho Pharmaceutical Corp., 235 Kan. 387, previously cited, this court discusses the duty to warn relative to drugs. As in the case before us, the drug in Wooderson was sold to a physician who, in turn, prescribed/administered the drug to the patient. As recognized in Wooderson, under such circumstances the "learned intermediary" concept comes into play. The manufacturer's duty is to adequately warn the physician of a known risk.

In determining warning issues, the test is reasonableness. To impose liability on a manufacturer, the plaintiff mush show negligence on the part of the manufacturer. In Kearl v. Lederle Laboratories, 172 Cal.App.3d 812, 218 Cal.Rptr. 453 (1985) (a case also involving Orimune but where the vaccine was administered through a clinic rather than a learned intermediary), the applicable rules were stated as follows:

"As an initial matter we question the commonly assumed and often asserted proposition that in products liability cases failure to warn or inadequacy of a warning may be a basis for imposition of strict liability. A review of the cases discloses that the analysis called for in this situation is not based on strict liability, but negligence.

"As noted above (ante, p. 822) the characteristic that distinguishes strict liability from negligence is proof of actual or constructive knowledge of risk: In a negligence action we focus on the defendant's conduct and require plaintiff to show defendant acted unreasonably in light of a known or constructively known risk. In strict liability actions, on the other hand, we focus not on the reasonableness of a defendant's conduct but on the product, and we either ignore the question of a manufacturer's actual or constructive knowledge of risk (as in a 'consumer expectations' design defect case) or we in effect impute to the manufacturer defendant current scientific knowledge of the risk caused by his product (as in a risk/benefit design defect balancing case). [...] But in all warning cases -- even if the plaintiff or the court claims to analyze failure to warn or inadequacy of warning in the context of a strict products liability claim -- the tests actually applied condition imposition of liability on the defendant's having actually or constructively known of the risk that triggers the warning. [...]


Was the warning adequate as a matter of law? That is, was it a reasonable warning by a manufacturer to a learned intermediary? Was the manufacturer negligent in the warning supplied?

The warning provided herein states:

"ADVERSE REACTIONS

"Individual patients have at times attributed symptoms or conditions to the vaccine by reason of time relationship, but these in general have been minor and apparently unrelated.

"Expert opinion is in agreement that the administration of live oral poliovirus vaccines is generally an effective and safe method of protecting populations against the natural disease. Paralytic disease following the ingestion of live poliovirus vaccines has been reported in individuals receiving the vaccine, and in some instances, in persons who were in close contact with subjects who had been given live oral poliovirus vaccine. Fortunately, such occurrences are rare, but considering the epidemiological evidence developed with respect to the total group of 'vaccine related cases' it is believed by some that at least some of the cases were caused by the vaccine.

"The estimated risk of vaccine-induced paralytic disease occurring in vaccinees or those in close contact with vaccinees is extremely low. A total of approximately 30 of such cases were reported for the 8 year period covering 1963 to 1970, during which time about 147,000,000 doses of the vaccine were distributed nationally. Even though this risk is low, it should always be a source of consideration." (Emphasis supplied.)

The warning obviously warns that in rare instances a person in close contact with a vaccinee may develop polio. This is exactly what happened to the plaintiff herein. This, then, is not a failure to warn question, but rather a question of the adequacy of the warning. Wooderson v. Ortho Pharmaceutical Corp., 235 Kan. 387, previously cited, although couched in terms of an "adequacy of warning" issue, actually involves a failure to warn, as the injury received by plaintiff was not included in the warning.

Plaintiff contends the first paragraph of the warning waters down the total warning. We do not believe so. It deals with what patients have reported rather than scientific fact. If a lay person takes a drug or receives a vaccine and two days later is suffering from an abscessed tooth, an attack of appendicitis, or whatever, he or she tends to link the two occurrences as cause and effect regardless of any medical connection. The paragraph leaves in the possibility some minor side effects reported by patients might be medically possible.

The balance of the warning clearly states the scientific fact that some persons in close contact with vaccinees may develop a paralytic disease from such contact. It is unnecessary to describe to a physician what paralytic disease is and the seriousness of it. The warning then states the chances of this happening are "extremely low." The figures of 30 cases in a particular eight-year period during which time 147,000,000 doses were distributed are included. These figures are consistent with those provided in 1972 by the Public Health Service, and the Advisory Committee on Immunization Practices and were current in 1975 when the vaccine herein was administered. Plaintiff did not challenge these figures directly, but his expert (Dr. Salk) stated they did not take into account the number of unused doses and the number of already vaccinated persons receiving new vaccinations. No figures for such categories are available so Dr. Salk estimated what percentage he thought should be deducted from the stated figures to get down to the actual risk. Assorted risk factors were testified to, such as .00002%, one in a million, etc. By any computation the risk was very low.

Plaintiff contends that the warning was also inadequate because it failed to state that individuals who were not immune to the disease were at greater risk than those who were immune. It hardly takes a medical degree to know that a person immune to a virus cannot acquire the disease. Later warnings spelled this out, but this is not evidence of negligence.

Plaintiff also argues that the warning was inadequate because it did not provide information on alternate vaccines. No Salk-type vaccine was being manufactured in the United States in 1975. Although unclear, there was evidence that a Salk vaccine might have been available at that time through a Canadian source. Sabin-type vaccines were the vaccines of choice and recommended at the time (1975) by all major health organizations involved therein. The general consensus was that the Sabin-type vaccine was superior to the Salk-type vaccine. American Cyanamid had no special knowledge or new information tending to refute this. Further, this is not a case where the drug manufacturer attempted to water down the warning by direct contact with physicians intending to lull the physicians into believing the stated risk was less than the required warning indicated (see Wooderson v. Ortho Pharmaceutical Corp., 235 Kan. 387). The warning given herein had been approved by the Federal Drug Administration and was consistent with an overwhelming bulk of the current medical opinion.

We conclude that the trial court erred in denying American Cyanamid's motion for a directed verdict herein. As a matter of law, there was no submissible theory of liability on the part of American Cyanamid. It is certainly unfortunate that plaintiff was the one in a million (or whatever the remote risk actually is) who developed the dreaded disease from contact with his vaccinated child, but there is no legal basis for a claim of negligence by American Cyanamid. The judgment against American Cyanamid must be reversed.

As a result of the determination that it was error for the trial court to submit the issue of liability of American Cyanamid to the jury, all other issues raised by American Cyanamid need not be determined.

DISPOSITION

The sole remaining question is whether the reversal of the judgment against American Cyanamid ends the case or whether the case should be remanded for a new trial between plaintiff and defendant physician.

In Turnbull v. Byram, 235 Kan. 891, 684 P.2d 429 (1984), two vehicles collided at an intersection normally controlled by a traffic light. At the time of the accident the traffic signal was not operating. One driver (Turnbull) sued the other driver (Byram) for negligent operation of his vehicle and also sued the City of Hutchinson for negligence in its response to the inoperable traffic light. The jury assessed fault as follows: plaintiff driver -- 48%; defendant driver -- 17%; and defendant City -- 35%. On appeal this court determined the City was not negligent as a matter of law. This left the 35% fault assessed against the City dangling. If a new trial were not afforded the result would be to add the entire 35% to plaintiff's fault -- yet the jury had already determined each driver was partially at fault. Upon retrial the jury might well redistribute the dangling 35% between the two remaining parties. In remanding the case back for retrial between the remaining parties, this court held:

"Where the jury finds a party to an action negligent and the record on appeal discloses as a matter of law that party is not negligent, the negligence of the remaining parties to the action must be redetermined by the factfinder and the percentages of fault of the remaining parties reassigned on retrial." Syl. [P]2.

There is a crucial distinction between Turnbull and the case before us. In Turnbull each of the defendants appealed from the judgment and all issues relative to their respective liability were before this court. In the case before us now, only American Cyanamid appealed and its appeal was expressly limited to issues of plaintiff's judgment against it. As a note of explanation, American Cyanamid originally appealed from the entire verdict, but later specifically dismissed its appeal relative to the jury's finding that Dr. Branson had zero percentage of fault. There was no cross-appeal filed by the plaintiff herein. Does this court have any jurisdiction under these circumstances to remand the case for retrial of the issues between plaintiff and defendant Branson? We believe not. All issues between these two parties were fully litigated in the trial herein, and no party to the appeal claims any error in the trial of said issues.

The judgment against American Cyanamid is reversed.


DISSENT: PRAGER, J., dissenting: I respectfully dissent. By this decision, the majority has denied to the plaintiff his right to trial by jury and has substituted its judgment for that of the jury and the trial judge who heard the testimony of the witnesses and determined the case. I have no quarrel with the general principles of law stated in the majority opinion which govern the liability of drug manufacturer. [...]

Where a product creates a danger that cannot be eliminated, but its utility is so great that it should be manufactured without subjecting the manufacturer to strict liability, it may be marketed provided the user is made aware of the danger and is given the opportunity to make an informed decision whether to expose himself or herself to it. This principle is universally applied by the courts in such situations. The liability of the manufacturer in such cases is not based upon strict liability but is based upon the negligent failure to provide an adequate warning to an injured user of the product.

The law requires that the warning be communicated to the user of the product who may be injured by the use of the product. In situations where a product is sold and delivered to a treating physician, who then administers the product to the patient, the law requires that the manufacturer of the drug provide information and a sufficient warning to the physician who in turn is required to advise the patient or user of the drug of its dangers so that the ultimate user may make an informed decision whether to expose himself or herself to it. In the present case, the evidence is undisputed that the defendant, Dr. Vernon L. Branson, the treating physician, never at any time conveyed to the plaintiff, Emil E. Johnson, any warning whatsoever that the user of Orimune by Mr. Johnson's daughter could transmit paralytic polio either to the child or to Mr. Johnson as the parent and custodian of the child. Both Dr. Branson and Mr. Johnson testified without equivocation that no warning was ever given by the doctor to Johnson.

The evidence was likewise undisputed that some information about the drug and a warning were given by the defendants, American Cyanamid Company and Lederle Laboratories, to Dr. Branson. The primary issue presented to the jury was whether or not the warning was adequate to inform Dr. Branson of the nature of the drug, its dangers, and the possibility of using less dangerous alternatives.

In determining this case, this court must first consider the nature and scope of the warning requirement in mass inoculation cases. In this regard, the cases generally agree that an adequate warning in mass inoculation cases requires that vaccinees be directly informed in clear and simply terms by the drug manufacturer of (1) the reasonably foreseeable risk inherent in the product; (2) reasonable available alternative products and the reasonably foreseeable risks posed by such alternatives; and perhaps -- in appropriate cases -- (3) the reasonably foreseeable results of remaining untreated. [...]

One of the defendants' experts, Dr. Vincent L. Fulginiti, testified by deposition that, as early as 1960, the manufacturers of the live polio vaccine knew that a certain number of people would get paralytic polio by coming in contact with a recipient of Orimune. In the present case, the vaccine was administered to plaintiff's daughter in 1975, fifteen years after the defendants became fully aware that the administration of Orimune could cause paralytic polio either to the user or to a person in close contact with a user. Would a reasonable person reading paragraph two of the insert warning given in this case reach that conclusion from the subdued language used in paragraph two?

Dr. Branson was called as a witness. He testified without equivocation that the 1975 insert involved in this case did not tell him enough. He testified that he would have liked to have known as a practicing physician that Lederle was expecting a certain number of contacts to get polio from the vaccine he was giving to his babies. If he had known about it, he would have passed the information on to Emil Johnson. He did not consider the warning adequate, because it was not made clear that the vaccine would cause paralytic disease. Dr. Branson testified that, since he has learned about the use of IPV [Salk] vaccine, he has used it is his practice, and, if Lederle had told him about IPV vaccine in 1975, he would have done so then. Dr. Branson, a competent Kansas physician, clearly testified that the warning provided by the defendants was inadequate. Why has the majority rejected his testimony as a matter of law? [...]

I respectfully question how the four-person majority can hold, from the evidence in this case, that no reasonable person could conclude that the warning failed to meet the standard required by law for the protection of the American people. In my judgment, a legitimate fact issue was presented in the case which was for the jury to determine. [...]

I also dissent from the decision of the majority that, although defendants American Cyanamid Company and Lederle Laboratories are not liable as a matter of law, the verdict of the jury that the defendant physician, Dr. Vernon L. Branson, was without fault should be permitted to stand, with the result that the plaintiff Johnson is completely denied any remedy in the case. [...] Today the plaintiff, Emil E. Johnson, a Kansas farmer, is totally incapacitated as a result of the effect of the Orimune administered to his daughter. It is unfair to deny him any remedy whatsoever simply because this court has held that the jury was not properly instructed in the case. If this case must be reversed, justice and reason require that a new trial be granted Mr. Johnson against the defendant Dr. Vernon L. Branson.

Herd, J., and Lockett, J., join the foregoing dissenting opinion.