Appeal from the United States District Court for the Northern District of California. D.C. No. CV-88-04703-TEH. Thelton E. Henderson, Chief District Judge, Presiding.
Before: Donald P. Lay,*fn* Procter Hug, Jr., and Mary M. Schroeder, Circuit Judges. Opinion by Judge Hug.
In this diversity action, Mariann Hopkins sued Dow
Corning Corporation to recover for injuries suffered as a result of two sets of breast implants manufactured by Dow, which she received in breast reconstruction surgeries in 1977 and 1986. The jury found Dow liable for Hopkins' injuries and awarded Hopkins $840,000 in compensatory damages and $6.5 million in punitive damages. Dow appeals.
Dow contends that the district court erred in determining that Hopkins' claims were not barred by the applicable statute of limitations. Dow challenges the district court's determination that the evidence presented at trial was sufficient to support a finding of fraud and further challenges the court's decision to admit the plaintiff's expert testimony on the issue of causation. Finally, Dow challenges the amount of both the compensatory and the punitive damages awards.
The district court's jurisdiction was based upon 28 U.S.C. § 1332(a)(1). We exercise jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291. We affirm.
On October 4, 1976, plaintiff Mariann Hopkins underwent a bilateral subcutaneous mastectomy for severe fibrocystic disease at St. Mary's Hospital in San Francisco, California. Dr. Karl Bollinger performed the surgery. During the operation, Dr. Bollinger performed reconstructive surgery on plaintiff's breasts utilizing silicone gel implants manufactured by defendant Dow Corning.
Due to subsequent complications, Dr. Bollinger removed the left implant in November, 1976. In June, 1977, Dr. Bollinger inserted a replacement implant in the left breast and replaced the right breast implant in order to achieve symmetry. These implants were also manufactured by the defendant.
In March, 1979, Dr. Stephen Gospe diagnosed plaintiff with mixed connective tissue disease ("MCTD"). MCTD is a rheumatoligical disorder which includes symptoms such as extreme fatigue, weakness, muscle aches and pains, arthralgia, myalgia and arthritis. There is no known cure for this disease.
In January, 1986, plaintiff contacted Dr. Bollinger about further complications from her breast implants. Plaintiff underwent surgery in February to correct the problem. At that time, Dr. Bollinger discovered the implants had ruptured; during the four-hour operation, he proceeded to remove silicone gel that had escaped from the implant. The ruptured implants were sent to Dow for analysis. Several months later, Dow responded to Dr. Bollinger that "examination and testing of both envelopes found no evidence to indicate that any of the damage was manufacture related." Dr. Bollinger informed plaintiff of these results.
None of plaintiff's physicians informed her that the ruptured implant could be responsible for the connective tissue disease from which she suffered. In December, 1987, plaintiff learned from her mother that a possible connection between the ruptured implants and the immune disorder might exist. Shortly thereafter, plaintiff inquired of her physician, Dr. Pelfini, if a possible causal link existed. Dr. Pelfini informed plaintiff that he had never heard of such a connection. In January, 1988, plaintiff visited another of her treating physicians, Dr. Gospe, and inquired the same of him. Dr. Gospe was also unable to provide information regarding a possible causal connection. Plaintiff filed her complaint on December 1, 1988, alleging fraud, strict products liability and breach of express and implied warranties, and requesting compensatory and punitive damages.
The case was bifurcated so that issues regarding liability would be determined first, and if needed, a second trial on damages would be held. The liability phase of the trial began on October 29, 1991. The evidence presented at trial indicated that Dow rushed development of the silicone gel implants, failed to adequately test the implants, and ignored knowledge of adverse health consequences associated with the implants. Plaintiff presented evidence that Dow created a Mammary Task Force charged with getting the new gel implant to market in less than five months. Even after a task force member presented his concerns about "a possible gel bleed situation" Dow ignored proposed design modifications that would reduce the likelihood of leakage. The record indicates that Dow instructed salesmen to wash the implants with "soap and water" in the nearest rest room, and to "dry with hand towels as the implants become oily after being handled and [bleed] on the velvet in the showcase."
The evidence further indicated that in addition to the evidence of silicone leakage, Dow implants experienced a high rate of rupture. Despite proposals by one task force member to implement a "multiple dip" method as a means of ensuring greater uniformity in the envelope, and thereby less likelihood of rupture, Dow adopted the single dip method because it was "easier" and "cheaper." After an incident in which two of the new gel implants "broke during augmentation surgery for the TV taped demonstrations," Thomas Talcott, a Dow engineer, inquired of key Dow employees, "When will we learn at Dow Corning that making a product 'just good enough' almost always leads to products that are 'not quite good enough?'"
There was also evidence that no research concerning the long-term health effects had been conducted. The longest study to address possible adverse health effects of the implants took place over only 80 days and revealed evidence of inflammatory immune response caused by the gel. Dow continued to market these implants until 1987, without the benefit of a lifetime study to demonstrate the safety of its product.
Other evidence at trial indicated that Dow had knowledge of the harmful effects of silicone on the human body. Dow obtained results of a study in which four dogs received silicone gel implants that resembled the implants that Dow was then marketing. The results demonstrated that after six months, the implants appeared to be functioning properly, but that after two years, inflammation surrounding the implants demonstrated the existence of an immune reaction. Dow did not publicly release the results of this research for several years, and when it did ultimately release the results, Dow omitted the negative findings and implied that the implants were safe.
Based on these facts, the jury returned a special verdict finding the defendant liable on all plaintiff's theories, including strict liability, breach of warranty, and fraud. The second trial, pertaining to the amount of damages, began on December 11, 1991. The jury awarded plaintiff $840,000 in compensatory damages and $6.5 million in punitive damages. The district court denied Dow's motion for a directed verdict. The district court also denied Dow's motions for judgment notwithstanding the verdicts and, alternatively, a new trial. Dow appealed.
II. STATUTE OF LIMITATIONS
Dow contends that Hopkins' strict liability and breach of warranty claims are barred by California's one-year statute of limitations for personal injury claims. Hopkins asserts that her claims were timely because they ...