St. Louis University v. United States

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
ST. LOUIS UNIVERSITY, a corporation, 
Plaintiff-Appellant,
v.
UNITED STATES OF AMERICA,
Defendant-Appellee.  No. 99-2227
and
AMERICAN CYANAMID COMPANY,
Party in Interest.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
J. Frederick Motz, Chief District Judge.
(CA-95-3639-JFM)
Argued: November 2, 2000
Decided: March 1, 2001
Before NIEMEYER, LUTTIG, and TRAXLER, Circuit Judges.
Reversed and remanded by unpublished opinion. Judge Traxler wrote
the majority opinion, in which Judge Luttig joined. Judge Niemeyer
wrote a dissenting opinion.
COUNSEL
ARGUED: Marc Simon Moller, KREINDLER & KREINDLER,
New York, New York, for Appellant. Mary McElroy Leach, Senior
2 ST. LOUIS UNIVERSITY v. UNITED STATES
Trial Counsel, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee. ON BRIEF: Henry Gluckstern, Spe-
cial Counsel, KREINDLER & KREINDLER, New York, New York;
Rex Carr, CARR, KOREIN, TILLERY, KUNIN, MONTROY &
GLASS, East St. Louis, Illinois; Stanley P. Kops, Philadelphia, Penn-
sylvania; Mark R. Dunn, HERZOG, CREBS & MCGHEE, L.L.P.,
St. Louis, Missouri, for Appellant. David W. Ogden, Acting Assistant
Attorney General, Lynne A. Battaglia, United States Attorney, Jeffrey
Axelrad, Director, Torts Branch, Civil Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
TRAXLER, Circuit Judge:
After an adverse jury verdict in a Missouri state court case involv-
ing a recipient of Orimune, an oral polio vaccine, St. Louis University
("SLU") brought this contribution action against the United States
government. SLU contended that the government’s improper approval
of certain "seeds" of the polio vaccine was the cause of the state-court
plaintiff’s injuries and that the government was therefore required to
contribute to the payment of the Missouri verdict. The district court
first ruled that SLU was collaterally estopped from denying certain
facts necessarily decided by the jury in the Missouri action. The dis-
trict court thereafter granted summary judgment in favor of the gov-
ernment, concluding that SLU failed to present any evidence tending
to show that any fault on the part of the government caused the injury
to the state court plaintiff. SLU appeals. We reverse and remand for
further proceedings.
I. BACKGROUND
A. The State Court Action
In 1978, three-month-old Danny Callahan received a dose of Ori-
mune, an oral vaccine containing an attenuated strain of a live polio
ST. LOUIS UNIVERSITY v. UNITED STATES 3
virus. Approximately one month later, Danny developed a perirectal
abscess that was treated by employees of Cardinal Glennon Hospital
and SLU. The abscess was not drained and no culture was taken to
determine if the infection was caused by gram positive or gram nega-
tive bacteria. Danny was given an antibiotic that was effective only
on gram positive bacteria. After several days, Danny’s condition had
not improved, and his mother noticed that his legs appeared to be
"floppy." His parents took him back to the hospital, where the abscess
was incised and drained. Cultures of the abscess revealed four types
of gram negative bacteria, and Danny was given an antibiotic that was
effective against those organisms. Although the abscess improved,
Danny’s legs and left arm remained paralyzed. Type III polio virus
(the type in the vaccine dose he had received) was isolated in Danny’s
stool, and, although some experts disagree, it appears that Danny suf-
fers from vaccine-associated polio.
The Callahans filed a medical malpractice action against SLU, Car-
dinal Glennon, and American Cyanamid Company, parent company
of the manufacturer of the vaccine. At the time of trial, only SLU and
Cardinal Glennon remained as defendants. The Callahans’ expert wit-
nesses testified that Danny’s paralysis was caused by the negligence
of SLU and Cardinal Glennon in failing to treat the abscess properly
when Danny was first brought to the hospital. According to the
experts, the improper treatment allowed endotoxins to be released,
which suppressed Danny’s immune system. Because Danny’s
immune system was compromised, the attenuated polio virus con-
tained in the vaccine was able to replicate fast enough to overcome
his suppressed immune system, resulting in poliomyelitis. The Calla-
hans’ experts testified that if the abscess had been treated properly
from the outset, the endotoxins would not have been released, his
immune system would not have been suppressed, and he would not
have contracted polio.
SLU and Cardinal Glennon, however, presented evidence that
Danny’s paralysis was not connected to the abscess and that it was
caused by the attenuated polio virus in the vaccine mutating to a viru-
lent form after it had been ingested. They presented evidence showing
that in the 1980s approximately one in four hundred thousand people
receiving Orimune developed polio. Their experts also testified that
the Callahans’ theory that endotoxins suppress the immune system
4 ST. LOUIS UNIVERSITY v. UNITED STATES
making a host more susceptible to vaccine-induced poliomyelitis was
not supported by any known research.
The jury returned a $16 million verdict against SLU and Cardinal
Glennon. After the trial, Cardinal Glennon entered into a settlement
agreement with the Callahans. SLU appealed, and the jury’s verdict
was affirmed by the Missouri Supreme Court sitting en banc. See Cal-
lahan v. Cardinal Glennon Hosp., 863 S.W.2d 852 (1993) (en banc).
B. In re Sabin
While the Callahan case was winding its way through the Missouri
court system, multi-district Orimune cases filed against the United
States government under the Federal Tort Claims Act were trans-
ferred to the District of Maryland for resolution of the common legal
and factual questions. See In re Sabin Oral Polio Vaccine Prod. Liab.
Litig., 774 F. Supp. 952 (D. Md. 1991); In re Sabin Oral Polio Vac-
cine Prod. Liab. Litig., 763 F. Supp. 811 (D. Md. 1991); In re Sabin
Oral Polio Vaccine Prod. Liab. Litig., 743 F. Supp. 410 (D. Md.
1990).
The plaintiffs in the In re Sabin cases contracted polio after receiv-
ing a Type III Orimune vaccine or after coming into contact with a
recipient of the Type III vaccine. They sued the government, alleging,
inter alia, that the National Institute of Health’s Division of Biologic
Standards negligently issued a license to Lederle Laboratories (a sub-
sidiary of American Cyanamid) to manufacture the vaccine and
improperly approved vaccine that did not meet the "neurovirulence"
standards set forth in the governing regulations. The district court ulti-
mately concluded that the government violated the governing regula-
tions and was negligent in approving certain vaccine "seeds" and the
release of lots derived therefrom and that its negligence was a proxi-
mate cause of the injuries suffered by the plaintiffs, who received or
were exposed to vaccines from lots derived from the improperly
approved seeds. See 774 F. Supp. at 957-58; 763 F. Supp. at 821-25.
The district court’s Sabin opinions were affirmed by this Court on
appeal. See In re Sabin Oral Polio Vaccine Prod. Liab. Litig., 984
F.2d 124 (4th Cir. 1993) (per curiam). The Orimune vaccine received
by Danny Callahan was derived from one of the vaccine seeds that
ST. LOUIS UNIVERSITY v. UNITED STATES 5
the In re Sabin cases concluded were improperly approved by the
government.
C. The Contribution Action
After the Missouri Supreme Court affirmed the Callahan verdict,
SLU filed this contribution action against the United States. In its
complaint, SLU alleged that Danny Callahan’s polio was caused by
the government’s failings identified in the In re Sabin cases, specifi-
cally the government’s approval of excessively neurovirulent vaccine
seeds.
The government moved for partial summary judgment on the
ground that SLU was barred by collateral estoppel from relitigating
the Callahan jury’s conclusion that SLU’s malpractice caused
Danny’s polio. The district court granted the motion, concluding that
SLU was prohibited from relitigating the following facts that the court
believed the Callahan jury necessarily found in order to reach its ver-
dict against SLU: (1) that SLU breached the applicable standard of
care when treating Danny’s abscess; (2) that Danny’s immune system
would not have been suppressed but for SLU’s inadequate treatment
of the abscess; (3) that, but for the suppressed state of Danny’s
immune system, the live polio virus contained in the vaccine would
not have been able to replicate fast enough to cause polio; and (4)
that, but for SLU’s negligence, Danny would not be paralyzed.
In essence, the district court’s collateral estoppel ruling prevented
SLU from arguing that it was not negligent at all or that any negli-
gence on its part did not contribute to Danny’s polio, but the ruling
allowed SLU to proceed on any theory consistent with the Callahan
verdict. Thus, after the collateral estoppel order, SLU could still pre-
vail on its contribution claim against the government if it could estab-
lish that an immunosuppressed child would not have contracted polio
from a vaccine that complied with all regulatory requirements.
After the collateral estoppel ruling, the parties engaged in eighteen
months of discovery. The government then moved for summary judg-
ment on the ground that SLU could not prove that the government’s
negligence caused Danny’s polio. The district court reviewed the evi-
dence submitted by SLU and concluded that it was insufficient, given
6 ST. LOUIS UNIVERSITY v. UNITED STATES
the Callahan findings, to establish a causal connection between the
government’s negligence and Danny’s injuries. The court explained
that SLU’s experts
continue to be of the view that, the verdict in the Callahan
case notwithstanding, Callahan’s system had not been
immunosuppressed. That view is central to their evaluation
of the medical evidence and cannot be separated from their
opinion that Callahan’s paralysis was caused by the
neurovirulence of the vaccine. Therefore, to permit their
opinions to be admitted into evidence would undermine the
collateral estoppel ruling I have made.
. . . [N]one of SLU’s experts have expressed an opinion
that, if Callahan had been given a vaccine that satisfied the
neurovirulence requirements of the applicable regulations,
he would not have contracted polio . . . . SLU asserts that
it "never tendered these witnesses as experts on neuroviru-
lence." SLU goes on to say that "the whole purpose of their
testimony was to show that Danny Callahan was a paralytic
poliomyelitis case from Type III vaccine, and that immunos-
uppression played a de minimis role." As such, the testi-
mony is insufficient to meet SLU’s burden of proof as to
causation since SLU’s theory of liability against the govern-
ment necessarily rests upon the implicit premise that an
immunosuppressed child (as Callahan must be assumed to
have been) would not have contracted polio but for the
alleged excessive neurovirulence of the vaccine adminis-
tered to him.
Appendix at 89-90. The district court therefore granted summary
judgment to the government on SLU’s contribution claim. SLU
appeals, contending that the district court’s collateral estoppel ruling
was incorrect under Missouri law and that it produced sufficient evi-
dence of causation to avoid summary judgment.
II. COLLATERAL ESTOPPEL
SLU’s primary argument is that under Missouri law, the Callahan
judgment does not have collateral estoppel effect in this contribution
ST. LOUIS UNIVERSITY v. UNITED STATES 7
action. When considering the preclusive effect in federal court of a
state-court judgment, federal courts must apply the law of the state
rendering the judgment. See 28 U.S.C.A. § 1738 (West 1994); Mar-
rese v. American Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380
(1985). In rare cases, a federal court can refuse to give preclusive
effect to a state-court judgment that would be given such effect under
state law. However, if the judgment would not be given preclusive
effect under the law of the rendering state, a federal court cannot give
it preclusive effect. See Marrese, 470 U.S. at 382-83; Meindl v.
Genesys Pacific Tech., Inc. (In re Genesys Data Tech., Inc.), 204 F.3d
124, 128 (4th Cir. 2000). Accordingly, we must determine the preclu-
sive effect that Missouri courts would give the Callahan judgment in
a contribution action.
Under Missouri law, collateral estoppel, or issue preclusion, pre-
cludes a party from re-litigating a previously decided issue if: (1) the
issue decided in the prior adjudication is identical to the issue as to
which collateral estoppel is sought in the present adjudication; (2) the
prior adjudication was a final judgment on the merits; (3) the party
against whom collateral estoppel is to be applied was a party or in
privity with a party in the prior adjudication; and (4) the party against
whom collateral estoppel is being asserted had a full and fair opportu-
nity to litigate the issue in the prior suit. See In re Caranchini, 956
S.W.2d 910, 912-13 (Mo. 1997) (en banc); Oates v. Safeco Ins. Co.
of America, 583 S.W.2d 713, 719 (Mo. 1979) (en banc). While res
judicata extends to issues that could have been decided, collateral
estoppel applies only to issues that "were ‘necessarily and unambigu-
ously decided.’" Green v. Montgomery Ward & Co., 775 S.W.2d 162,
164 (Mo. Ct. App. 1989) (citation omitted).
The government contends that application of these rather unre-
markable principles of Missouri law demonstrates the correctness of
the district court’s ruling. According to the government, the relevant
issues in this contribution action and the Callahan action—SLU’s
responsibility for Danny Callahan’s injuries—are identical; the Calla-
han verdict, which was affirmed on appeal, is clearly a final judg-
ment; SLU was a party to the Callahan action; and SLU had a full
and fair opportunity in that case to litigate the issue of its responsibil-
ity for Danny’s injuries. The government therefore contends that the
district court properly gave collateral estoppel effect to the Callahan
8 ST. LOUIS UNIVERSITY v. UNITED STATES
judgment. We disagree. Under Missouri law, the primary issue in a
contribution action is the relative degree of fault as between joint tort-
feasors. A judgment in the underlying action, even if both tortfeasors
are defendants in that action, typically resolves only the question of
each tortfeasor’s liability as to the plaintiff; the claims of the codefen-
dants as to each other generally are not resolved. Accordingly, under
Missouri law, "a prior judgment is not conclusive in a subsequent
action between co-defendants in the prior action unless the co-
defendants occupied adversary positions in the prior action and actu-
ally litigated therein the issue of their liability as between themselves
as well as their liability to the injured party." City of St. Joseph v.
Kaw Valley Tunneling, Inc., 660 S.W.2d 26, 32 (Mo. Ct. App. 1983)
(emphasis added). In a typical case, then, a judgment against co-
defendants establishes
nothing but their joint liability to the plaintiff. Which of the
defendants should pay the entire debt, or what proportion
each should pay in case each is partly liable, is still unad-
judicated; but a judgment against two joint debtors prevents
either from denying the existence and obligation of the debt,
though he may still prove by any competent evidence in his
power that the whole burden of the obligation should be
borne by the other.
Missouri Dist. Tel. Co. v. Southwestern Bell Tel. Co., 93 S.W.2d 19,
23 (Mo. 1936) (en banc) (emphasis added) (internal quotation marks
omitted)); see also Stifel v. Butcher, 487 S.W.2d 24, 33 (Mo. 1972)
("[A] judgment against defendants, if there are no issues between
them, do[es] not bind them as against each other.").
The same analysis applies in cases where the plaintiff did not name
all joint tortfeasors as defendants. The defendant against whom a
judgment has been rendered may bring a separate contribution action
against other joint tortfeasors, even though those tortfeasors were not
named by the plaintiff in the prior action or brought into the prior
action by the named defendant, and the prior judgment is not binding
in the contribution action. See Safeway Stores, Inc. v. City of Ray-
town, 633 S.W.2d 727, 732 (Mo. 1982) (en banc) (holding that "no
determination adverse to the [contribution defendants’] interests is
made by the original judgment," and that the contribution plaintiff,
ST. LOUIS UNIVERSITY v. UNITED STATES 9
who was the defendant held liable in the prior action, "may not
recover from any [contribution defendant] more than its proportionate
amount of liability based upon its relative fault, if any" (emphasis
added)).
Here, while SLU’s liability to Danny Callahan was fully and fairly
litigated in the Missouri state court action, the United States govern-
ment was not a party to that action, and the issue of liability as
between SLU and the government simply was not litigated in that
case. Certainly, SLU presented evidence in the state court action tend-
ing to show that Danny’s paralysis was caused by the polio vaccine,
and not any negligence on SLU’s part. That, however, does not
amount to a full and fair litigation of the questions central to this con-
tribution claim—whether the government negligently approved the
vaccine, whether the government’s negligence was a concurring cause
of Danny’s injuries, and if the government’s negligence did cause
Danny’s injuries, the extent to which the government should be
responsible for the Callahan verdict. Thus, the issues in this contribu-
tion action are not identical to those in the state court action, and the
critical issues in this case have yet to be fully and fairly litigated by
the proper parties. The requirements under Missouri law for the appli-
cation of collateral estoppel therefore have not been satisfied. Because
Missouri courts would not give collateral estoppel effect in a contri-
bution action to the Callahan judgment, the district court erred by
giving collateral estoppel effect to the judgment.1
III. SUMMARY JUDGMENT
The district court’s summary judgment order was the result, in
large part, of its prior collateral estoppel order. The court granted
summary judgment against SLU after determining that SLU failed to
present sufficient evidence of causation under any theory consistent
with the factual assumption, compelled by its collateral estoppel rul-
ing, that Danny Callahan would not have contracted polio but for his
suppressed immune system, which was caused by SLU’s negligence.
As we have just concluded, however, the district court erred in giving
collateral estoppel effect in this contribution action to the Callahan
1
Our conclusion makes it unnecessary to consider SLU’s other chal-
lenges to the collateral estoppel ruling.
10 ST. LOUIS UNIVERSITY v. UNITED STATES
judgment. And as we explain below, this error requires that we
reverse the grant of summary judgment against SLU.
Under Missouri law, SLU cannot in a contribution action disclaim
all negligence on its part in connection with Danny’s injuries. None-
theless, in its contribution claim against the government, SLU
remains free to prove the extent which its negligence, as compared to
that of the government, caused Danny’s injuries. Cf. Missouri Dist.
Tel., 93 S.W.2d at 23 ("[A] judgment against two joint debtors pre-
vents either from denying the existence and obligation of the debt,
though he may still prove by any competent evidence in his power
that the whole burden of the obligation should be borne by the
other.") (internal quotation marks omitted)); Stephenson v. McClure,
606 S.W.2d 208, 213 (Mo. Ct. App. 1980) ("It is a well-recognized
rule that one seeking contribution as a joint tortfeasor must allege that
he was a joint tortfeasor."). And as an analysis of Uelk v. Directory
Distributing Associates, Inc., 803 S.W.2d 632 (Mo. Ct. App. 1991),
will demonstrate, SLU’s theories of recovery in this action cannot be
limited to those consistent with the findings implicit in the Callahan
judgment.
In Uelk, the plaintiff was injured when he slipped and fell in the
rain on metal stairs outside a building owned by McKee, managed by
West, and leased to Directory Distributing Associates ("DDA"). The
plaintiff sued McKee, West, and DDA. McKee and West filed cross-
claims for contribution and indemnification against DDA. DDA also
filed an indemnification cross-claim, asserting that McKee was
responsible under the lease for maintaining the stairs. At trial, evi-
dence was presented establishing that the stairs were slippery when
wet, and that metal stairs are even more slippery without paint. There
was also evidence that DDA knew the stairs were slippery when wet
and that on the day the plaintiff was injured DDA failed to follow its
usual practice of posting a sign warning about the slippery stairs. See
Uelk, 803 S.W.2d at 633-34.
The instructions to the jury allowed it to return a verdict for the
plaintiff only if the jury determined that the stairs were not reasonably
safe because they were "‘slippery and lacked adequate paint cover.’"
Id. at 634. The jury found all involved to be partially responsible for
the plaintiff’s injuries, apportioning forty percent of the fault to DDA,
ST. LOUIS UNIVERSITY v. UNITED STATES 11
thirty percent to West, ten percent to McKee, and twenty percent to
the plaintiff. See id.
After the jury’s verdict, the cross-claims were submitted to the trial
court for an independent determination of liability. Without making
any findings of fact to explain its ruling, the trial court granted the
contribution claim of McKee and West and denied DDA’s claim, thus
shifting to DDA full responsibility for the jury’s verdict. DDA
appealed, arguing that the jury found that the stairs were not properly
maintained and that the verdict should be binding in the contribution
action. DDA thus argued that the trial court erred by holding it
responsible for the full amount of the jury’s verict. See id. at 634. The
Missouri Court of Appeals rejected DDA’s argument and affirmed.
The court explained that "the verdict of the jury in the trial on [the
plaintiff’s] petition was not binding on the trial court in resolving the
issues presented by the counterclaims," id., and that "a judgment in
favor of a plaintiff ordinarily does not determine the relative rights or
liabilities of codefendants unless their hostile or conflicting claims are
actually brought into issue by pleadings and are litigated and deter-
mined," id. at 635 (internal quotations omitted). Because the trial
judge was not bound by the jury’s verdict when he resolved the coun-
terclaims, the appellate court had no difficulty affirming the trial
court’s decision to grant the cross-claim of McKee and West:
[T]he trial court could have found that the cause of the fall
was totally [DDA’s] fault due to [its] failure to warn of the
slippery condition of the steps and that the steps were ade-
quately painted. There was evidence introduced at trial that
the stairs were structurally sound and that respondent West
had just painted them a few months prior to the accident.
The fact that the jury discounted this evidence in its verdict
for [the plaintiff] did not require the trial court to do the
same in determining the merits of the counterclaims.
Id. at 635 (emphasis added).
Applying these principles to the case at bar, it is clear that, even
though the Callahan jury rejected SLU’s defense and instead con-
cluded that SLU’s negligence caused Danny to contract polio, SLU
12 ST. LOUIS UNIVERSITY v. UNITED STATES
may, consistent with Missouri law, attempt to prove that its negli-
gence was a de minimis cause and that the government’s negligence
in approving the vaccine was the primary cause of Danny’s injuries.
SLU is not limited to causation theories predicated on the Callahan
jury’s implicit conclusion that Danny would not have contracted polio
but for SLU’s negligence which resulted in the suppression of his
immune system.
As the government acknowledges in its brief, the district court lim-
ited SLU during discovery to causation theories consistent with its
ruling as to the collateral estoppel effect of the Callahan judgment,
and the district court premised its order granting summary judgment
on SLU’s failure to present evidence of causation consistent with its
collateral estoppel ruling. Given our conclusion that the district court
erred by giving collateral estoppel effect to the Callahan judgment,
we must also reverse the district court’s grant of summary judgment
to allow SLU an opportunity to develop other appropriate theories of
causation.
Moreover, SLU alleged in its contribution complaint that the gov-
ernment’s actions contributed to the damages suffered by Danny Cal-
lahan. SLU presented the testimony of Dr. Robert Baltimore, who
stated that, in his opinion, an excessively neurovirulent vaccine would
produce more severe paralysis than would a vaccine that complied
with all regulatory requirements. This testimony is sufficient, without
regard to the effect of the district court’s collateral estoppel order, to
create a question of fact as to whether the government’s negligence
increased the damages suffered by Danny. The district court, there-
fore, erred by granting summary judgment to the government.2
2
SLU also argues that the causation question is resolved by the opin-
ions of the district court and this court in In re Sabin, contending that the
government stipulated that it would not relitigate in this case the issues
resolved in In re Sabin and that the government is collaterally estopped
from relitigating the Sabin issues. As to the former contention, we note
that because no such "stipulation" by the government is included in the
appendix, we are in no position to evaluate the merits of this argument.
As to the latter contention, we question whether it is a correct statement
of the governing law. See United States v. Mendoza, 464 U.S. 154, 162-
63 (1984) ("[N]onmutual offensive collateral estoppel simply does not
ST. LOUIS UNIVERSITY v. UNITED STATES 13
IV. CONCLUSION
Accordingly, for the foregoing reasons, the district court’s collat-
eral estoppel and summary judgment orders are reversed and the
action is remanded for further proceedings consistent with this opin-
ion.
REVERSED AND REMANDED
NIEMEYER, Circuit Judge, dissenting:
Because I would conclude that St. Louis University failed to pre-
sent sufficient evidence of causation, I respectfully dissent.
apply against the government in such a way as to preclude relitigation of
issues such as those involved in this case. The conduct of government lit-
igation in the courts of the United States is sufficiently different from the
conduct of private civil litigation . . . so that what might otherwise be
economy interests underlying a broad application of collateral estoppel
are outweighed by the constraints which peculiarly affect the govern-
ment."). Nonetheless, given the basis of our decision today, we need not
determine whether the In re Sabin cases have any collateral estoppel
effect against the government.