Nelson, Lisa D. v. Sandoz Pharmaceutica

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 00-4062 and 01-1824
LISA D. NELSON and DAVID A. NELSON,
Plaintiffs-Appellants,
v.
SANDOZ PHARMACEUTICALS CORPORATION,
Defendant-Appellee.
Appeals from the United States District Court
for the Northern District of Indiana, South Bend Division.
No. 99 C 371--Robert L. Miller, Jr., Judge.
ARGUED SEPTEMBER 24, 2001--DECIDED April 29, 2002
Before POSNER, RIPPLE and KANNE, Circuit
Judges.
RIPPLE, Circuit Judge. On April 11,
1990, shortly after the birth of her
first child, Lisa Nelson, at the age of
twenty-five, suffered a debilitating
stroke that impaired the left side of her
body. At the time of her stroke, Mrs.
Nelson had a prescription for, and was
using, the drug Parlodel. Approximately
five years after suffering the stroke,
Mrs. Nelson and her husband, David,
(collectively, "the Nelsons") filed this
action against Sandoz Pharmaceuticals
Corporation ("Sandoz")--the manufacturer
of Parlodel. They alleged that the
prescription drug had precipitated Mrs.
Nelson’s stroke. The district court
entered summary judgment for Sandoz,
concluding that the Nelsons had failed to
file their action within the applicable
statute of limitations period. The
district court also rejected the Nelsons’
contention that Sandoz should be
equitably estopped from asserting the
statute of limitations as a defense to
the action because of alleged
misrepresentations it made to Mrs.
Nelson’s physician. For the reasons set
forth in the following opinion, we affirm
in part and reverse in part the judgment
of the district court, and we remand this
case for further proceedings.
I
BACKGROUND
A. Facts
At a hospital located in Wabash,
Indiana, Mrs. Nelson, an Indiana
resident, gave birth to her first child
on March 21, 1990. In the days following
the delivery, a physician prescribed the
drug Parlodel for Mrs. Nelson. This
medication is designed to suppress
lactation in postpartum women. Sandoz
Pharmaceuticals, a Delaware corporation,
manufactured Parlodel and marketed the
product to various individuals, including
physicians in Indiana.
On April 5, 1990, Mrs. Nelson began her
regimen of Parlodel therapy, which
consisted of a 2.5 milligram dose of the
medication taken twice a day for fourteen
consecutive days. Although her
consumption of the medication coincided
with the onset of nausea and headaches,
Mrs. Nelson continued to follow the
prescription. On approximately the
seventh day of the Parlodel regimen, Mrs.
Nelson collapsed; her husband discovered
her lying unconscious on the floor of
their home. At a local hospital,
physicians treated Mrs. Nelson and
concluded that, at the age of twenty-
five, she had suffered a severe stroke.
During Mrs. Nelson’s hospitalization,
Dr. Matthew Sprunger, a treating
physician, learned that Mrs. Nelson had
taken Parlodel and initially suggested a
possible correlation between the
medication and his patient’s condition.
Specifically, in Mrs. Nelson’s progress
report, Dr. Sprunger noted, "Had been on
Parlodel for lactation suppression. Some
case reports in the literature of
postpartum cardiac and vascular insults
in [patients] on Parlodel. [Question or
question of] relationship in this case.
Will [check] literature."/1 Vol. VI,
Ex.A. Investigating his theory, Dr.
Sprunger turned to the Physicians’ Desk
Reference ("the PDR")--a medical
reference that provides information
concerning the uses and side effects of
numerous prescription drugs. Under its
entry for Parlodel, the PDR indicated
that incidents of stroke had been
reported among individuals who used the
medication. In particular, the reference
noted that "[s]erious adverse reactions
reported include . . . 15 cases of stroke
. . . . An unremitting and progressively
severe headache, sometimes accompanied by
visual disturbance, often preceded by
hours to days, many cases of seizure
and/or stroke." Vol. V, R.43, Ex.H.
However, the PDR, cautioned that "[t]he
relationship of these adverse reactions
to Parlodel . . . administration has not
been established." Id.
Dr. Sprunger next consulted Elaine
Thomas, the Sandoz sales representative
for the Fort Wayne, Indiana area. Dr.
Sprunger informed Ms. Thomas that he
sought information from Sandoz concerning
a possible link between Parlodel and the
occurrence of strokes in postpartum
women. During deposition testimony
regarding her conversation with Dr.
Sprunger, Ms. Thomas stated:
Basically, I told him that we were aware
of some episodes of stroke but that they
occurred more frequently in the
postpartum population than in the normal
population anyhow, and it was my
understanding that they didn’t occur any
more frequently with patients treated
with Parlodel than they did in the
postpartum population.
Vol. VI, Ex.E, at 26. Although Ms. Thomas
provided Dr. Sprunger with literature
relating to this topic, neither
individual recalls the article’s author,
title or precise contents.
After conducting this investigation, Dr.
Sprunger concluded that a connection did
not exist between Mrs. Nelson’s stroke
and Parlodel, and he relayed this
determination to Mrs. Nelson’s family
practitioner. In Mrs. Nelson’s progress
report, Dr. Sprunger wrote: "Obstetrics,
see information on front of chart re:
Parlodel and strokes. As per Sandoz
information, negative correlation of
Parlodel and stroke. Will sign off." Vol.
VI, Ex.A. (emphasis in original). During
deposition testimony, Mr. Nelson
indicated that Dr. Sprunger also relayed
these findings to him.
The Nelsons also relate that they asked
a second physician, Mrs. Nelson’s
neurologist, if Parlodel induced the
stroke. According to the Nelsons, the
neurologist brushed aside this theory.
Soon after, Mrs. Nelson’s physicians dis
charged her from the hospital, and she
returned home.
In October 1992, Mrs. Nelson gave birth
to her second child. After the delivery,
Mrs. Nelson informed her nurse that she
would not take Parlodel. In particular,
on Mrs. Nelson’s chart, the nurse wrote
"states had ’stroke’ 3 [weeks] past due
last [pregnancy]. States won’t take
Parlodel." Vol. V, R.43, Ex.J. (emphasis
in original). Also in 1992, the Nelsons
contacted an attorney and inquired
whether Mrs. Nelson’s family practitioner
bore some responsibility for her earlier
stroke. The attorney informed them that
they lacked adequate information to
proceed with a case against this
physician.
Two years later, in August 1994, an
investigative news program aired by the
National Broadcasting Company ("NBC")
concerning the incidence of stroke among
postpartum women who had taken Parlodel.
Mrs. Nelson viewed this program. Later
that year, the FDA issued a notice of its
intent to withdraw its approval for the
use of Parlodel in the treatment of
postpartum lactation.
B. District Court Proceedings
1.
On December 26, 1995, invoking the
diversity jurisdiction of the district
court,/2 the Nelsons filed this
products liability action against Sandoz
in the United States District Court for
the District of New Jersey, alleging that
Parlodel had induced Mrs. Nelson’s
stroke./3 Faced with a flurry of
similar cases, the district court, for
purposes of discovery, consolidated the
Nelsons’ action with those of other
Parlodel plaintiffs. When this phase of
the litigation had concluded, the
Parlodel plaintiffs moved to continue the
consolidation of their cases for the
purpose of trial; the district court,
however, denied the motion. In response
to this ruling, Sandoz moved, pursuant to
28 U.S.C. sec. 1404(a), to transfer each
of the actions to the home district of
the specific plaintiff who had filed the
claim. The district court granted the
motion, eventually resulting in the
transfer of the Nelsons’ case to the
United States District Court for the
Northern District of Indiana./4
Once before the district court, Sandoz
moved for summary judgment, alleging that
the Nelsons had failed to file their
claims within the applicable statute of
limitations period./5 As a threshold
matter, Sandoz submitted that Indiana,
rather than New Jersey, substantive law
governed the litigation. Proceeding on
this theory, the pharmaceutical company
argued that, under Indiana law, the
Nelsons’ cause of action accrued in April
1990--the date of Mrs. Nelson’s stroke.
According to Sandoz, to have filed a
timely claim, the Nelsons should have
instituted any action relating to the
stroke by April 1992--the date Indiana’s
two-year statute of limitations period
for product liability suits would have
expired on these claims. Although
conceding that Indiana recognized the
discovery rule,/6 Sandoz submitted that
the Indiana courts applied the doctrine
sparingly and would not permit its
invocation in this case. Sandoz further
argued that, even if the discovery rule
applied, the Nelsons should have known of
their claims against the pharmaceutical
corporation as early as 1992.
In response, although the Nelsons
continued to urge the application of New
Jersey substantive law to their claims,
they also submitted that, under either
New Jersey or Indiana law, they had
instituted their suit in a timely manner.
Submitting that either state would apply
the discovery rule to their case, the
Nelsons argued that, under this doctrine,
their cause of action accrued on the date
of the NBC telecast. The Nelsons
submitted that, having learned of their
claims only in 1994, they filed this
action well within both states’ two-year
statute of limitations periods for
product liability suits. In the
alternative, the Nelsons submitted that,
based on Sandoz’ purported efforts to
conceal the link between its medication
and strokes, the pharmaceutical company
should be equitably estopped from
asserting the statute of limitations
defense.
2.
After considering the parties’
positions, the district court entered
summary judgment for Sandoz. The court
concluded that the Nelsons failed to file
their action within the applicable
statute of limitations period. The
district court first acknowledged that,
because this case had been transferred
from the District of New Jersey, that
state’s choice-of-law rules determined
the law, including the applicable statute
of limitations, that ought govern the
litigation. The district court therefore
applied New Jersey’s government interest
analysis approach to choice-of-law
matters to this case. According to the
district court, with respect to the
discovery rule, a conflict existed
between Indiana and New Jersey law.
Indiana limited the doctrine to a
discrete range of actions in which a
"’foreign substance was introduced into
the plaintiff’s body long before any
injury or resultant disease became manifest.’"
Mem. Op. at 7 (quoting Covalt v. Carey-
Canada, Inc., 543 N.E.2d 382, 384 (Ind.
1989)). New Jersey, by contrast, allowed
plaintiffs to invoke the discovery rule
in all tort cases. Having determined that
Indiana and New Jersey had different
discovery rules, the district court,
relying on New Jersey choice-of-law
methodology, set about determining which
state had an interest in the application
of its own law. It noted that Mrs. Nelson
was injured in Indiana, the state in
which the Parlodel had been prescribed
and ingested. The drug had been
manufactured in New Jersey, the
headquarters of Sandoz. Turning to the
governmental policies of each state, the
district court then concluded that the
purpose of Indiana’s statute of
limitations was to "place a temporal
limit upon liability for a product’s
defects." Mem. Op. at 8 (quoting Johnson
v. Kemper Indus., Inc., 677 N.E.2d 531,
536 (Ind. Ct. App. 1997)). By contrast,
continued the court, New Jersey’s
approach, embodied in its broader
discovery rule, "’is to avoid harsh
results that otherwise would flow from
mechanical application of a statute of limitations.’"
Mem. Op. at 8 (quoting Mancuso v.
Neckles, 747 A.2d 255, 256 (N.J. 2000)).
This more general rule was designed to
prevent unfairness to plaintiffs who
might otherwise be time-barred without
ever learning that they had a cause of
action. Noting that Sandoz’ corporate
presence in New Jersey was the only
relevant contact that the state had with
the case, the district court determined
that this contact with New Jersey was
insufficient to give the state an
interest in the application of its own
law. The state’s contact with the
litigation was simply unrelated to the
policies of its law. Sandoz’ presence in
the state has nothing to do, concluded
the court, with the purpose of New
Jersey’s discovery rule which is aimed at
providing a plaintiff with additional
protection from unfairness. The district
court concluded that Indiana’s statute of
limitations applied to the Nelsons’
claims.
Relying on its narrow interpretation of
the Indiana discovery rule, the district
court then concluded that the Nelsons’
action did not fall within the narrow
spectrum of cases in which the Indiana
discovery rule applied. According to the
district court, the Nelsons’ cause of
action accrued when Mrs. Nelson suffered
her injury--1990. Because the statute of
limitations expired in 1992, the Nelsons’
claims were time-barred. In addition, the
district court rejected the Nelsons’
contention that Sandoz should be
equitably estopped from asserting the
statute of limitations as a defense to
their action. In this regard, the
district court concluded that the Nelsons
had failed to present evidence that
Sandoz had concealed intentionally
information that was necessary for the
Nelsons to bring their claims in a timely
fashion.
II
DISCUSSION
We review de novo the district court’s
grant of summary judgment. See Thomas v.
Pearle Vision, Inc., 251 F.3d 1132, 1136
(7th Cir. 2001). Summary judgment is
appropriate "if the pleadings,
depositions, answers to interrogatories,
and admissions on file, together with
affidavits, if any, show that there is no
genuine issue as to any material fact and
that the moving party is entitled to a
judgment as a matter of law." Fed. R.
Civ. P. 56(c); see Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986). Our
function is not to weigh the evidence but
merely to determine if "there is a
genuine issue for trial." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249
(1986). In performing this task, we must
construe all facts and draw all
reasonable inferences in the light most
favorable to the nonmoving party. See id.
at 255.
A. Choice of Law
As a threshold matter, we must resolve
the choice-of-law issue in this case--
whether Indiana’s or New Jersey’s statute
of limitations and accompanying discovery
rule govern the Nelsons’ claims. The
Nelsons contend that, in conducting its
choice-of-law analysis, the district
court construed too narrowly the ambit of
the Indiana discovery rule, thereby
tainting its choice-of-law analysis and
leading to the erroneous application of
Indiana substantive law to their claims.
Although conceding that a
misinterpretation of the Indiana
discovery rule occurred, Sandoz contends
that the district court nevertheless
concluded correctly that Indiana law
applies to the Nelsons’ claims.
To resolve this question, we turn to New
Jersey’s choice-of-law principles./7 In
adjudicating choice-of-law issues, New
Jersey employs a two-part governmental
interest test that "seeks to apply the
law of the state with the greatest
interests in governing the specific issue
in the underlying litigation." Fu v. Fu,
733 A.2d 1133, 1138 (N.J. 1999). Under
this approach, we first must assess
whether an actual conflict exists between
the competing state laws--"a
determination that is made on an issue-
by-issue basis." Gantes v. Kason Corp.,
679 A.2d 106, 109 (N.J. 1996). If the
difference between the state laws is
illusory and no conflict exists, our
inquiry ends and we apply the law of the
forum state. However, if an actual
conflict exists, we must move to the
second step of the analysis and "identify
the governmental policies underlying the
law of each state and how those policies
are affected by each state’s contacts to
the litigation and to the parties."
Gantes, 679 A.2d at 109. After conducting
this inquiry, the court applies to the
claims before it the substantive law of
the state with greatest interest in the
litigation.
1.
Employing the methodology set forth in
the New Jersey cases, we first must
determine whether an actual conflict
exists between the statutes of
limitations and accompanying discovery
rules of New Jersey and Indiana. As both
parties acknowledge, Indiana and New
Jersey have identical two-year statutes
of limitations for product liability
suits. The crucial inquiry, then, is
whether the states’ discovery rules
diverge, thereby creating an actual
conflict-of-law.
In many respects, the Indiana and New
Jersey discovery rules bear a striking
similarity to each other. Certainly, the
basic verbal formulations are very
similar. Under Indiana law, the discovery
rule provides that the statute of limita
tions begins to run on a cause of action
when "the plaintiff knew or, in the
exercise of ordinary diligence, could
have discovered that an injury had been
sustained as a result of the tortious act
of another." Horn v. A.O. Smith Corp., 50
F.3d 1365, 1369 (7th Cir. 1995); Wehling
v. Citizens Nat’l Bank, 586 N.E.2d 840,
843 (Ind. 1992); Doe v. United Methodist
Church, 673 N.E.2d 839, 844 (Ind. Ct.
App. 1996). Differing little in terms of
phraseology from its Indiana counterpart,
the New Jersey discovery rule states that
"a cause of action will be held not to
accrue until the injured party discovers,
or by the exercise of reasonable
diligence and intelligence should have
discovered that he may have a basis for
an actionable claim." Martinez v. Cooper
Hosp.-Univ. Med. Ctr., 747 A.2d 266, 270
(N.J. 2000) (quoting Lopez v. Swyer, 300
A.2d 563, 565 (N.J. 1973)). Moreover,
neither state constrains application of
its discovery rule to a limited spectrum
of cases; rather, a plaintiff may invoke
the rule in numerous types of tort
actions. Compare Wehling v. Citizens
Nat’l Bank, 586 N.E.2d 840, 843 (Ind.
1992) (recognizing that Indiana discovery
rule applies to all tort claims), with
County of Morris v. Fauver, 707 A.2d 958,
972 (N.J. 1998) (listing spectrum of
cases in which discovery rule is
available). Although the precise events
that trigger the statute of limitations
for discovery rule purposes will vary
from case to case, both states have
developed similar principles that guide
this fact-intensive inquiry. For
instance, as a general rule, neither
state requires a plaintiff to know, to a
medical or legal certainty, the cause of
his injuries before his cause of action
will accrue under the discovery
rule.Compare Evenson v. Osmose Wood
Preserving Co. of Am., Inc., 899 F.2d
701, 705 (7th Cir. 1990) ("Events short
of a doctor’s diagnosis can provide a
plaintiff with evidence of a reasonable
possibility that another’s act or product
caused his injuries.") with Lapka v.
Porter Hayden Co., 745 A.2d 525, 530
(N.J. 2000) ("We impute discovery if the
plaintiff is aware of facts that would
alert a reasonable person to the
possibility of an actionable claim;
medical or legal certainty is not
required.").
However, despite these similarities, we
may not ignore one pertinent difference
between the states’ discovery rules. The
New Jersey courts consider the discovery
doctrine "at its root . . . a rule of
equity." Lapka, 525 A.2d at 532. More
precisely, the New Jersey courts do not
limit their inquiry merely to assessing
whether a party knew or should have known
of his cause of action. Rather, the
equitable underpinnings of the discovery
rule mandate that the court "consider
elements of fairness pertaining to all
parties, not just to those asserting the
benefit of the [discovery] rule." Id. In
essence, New Jersey courts engage in a
balancing test that seeks to identify,
evaluate and weigh the equitable claims
of the opposing parties./8 See Lopez v.
Swyer, 300 A.2d 563, 567 (N.J. 1973).
Simply put, under New Jersey law, if
invocation of the discovery rule would
produce an inequity, such as prejudicing
the defendant’s ability to defend the
claim, a plaintiff may not receive the
benefit of the doctrine./9 See, e.g.,
Mancuso v. Neckles, 747 A.2d 255, 262
(N.J. 2000) (considering whether
defendant would be prejudiced by
application of the discovery rule).
On the basis of our study of the case
law of both jurisdictions, we must
conclude that an actual conflict exists
between New Jersey and Indiana law; the
two states employ different analytical
approaches to the application of the
discovery rule. Before permitting a
plaintiff to invoke the discovery rule,
New Jersey relies on what it terms
equitable principles to assess the
prejudice a defendant may incur in
defending against a stale claim. New
Jersey’s use of these equitable
considerations differentiates its
discovery rule from that of Indiana.
Although we acknowledge that the
divergence between the two rules is
subtle, it is sufficiently significant to
be characterized for choice-of-law
purposes as an actual conflict.
2.
Confronted with an actual conflict
between state laws, New Jersey choice-of-
law methodology requires that we now
consider each state’s interest in
enforcement of its rule. See Gantes, 679
A.2d at 109. In performing this task, we
must "identify the governmental policies
underlying the law of each state and how
those policies are affected by each
state’s contacts to the litigation and to
the parties." Veazey v. Doremus, 510 A.2d
1187, 1189 (N.J. 1986). The law of the
state with the greatest interest in the
litigation will control.
Focusing solely on the issue before us,
we conclude that, in this instance, New
Jersey would apply the Indiana discovery
rule to the Nelsons’ claims. The policies
underlying the Indiana discovery rule
closely align with that state’s contact
to, and interest in, the litigation and
the parties. Specifically, the Indiana
discovery rule "is based on the reasoning
that it is inconsistent with our system
of jurisprudence to require a claimant to
bring his cause of action in a limited
period in which, even with due diligence,
he could not be aware a cause of action
exists." UNR-Rohn, Inc. v. Summit Bank of
Clinton County, 687 N.E.2d 235, 240 (Ind.
Ct. App. 1997) (quoting Barnes v. A.H.
Robins Co., Inc., 476 N.E.2d 84, 86 (Ind.
1985)). Because the rule seeks to
insulate Indiana citizens from the harsh
effects of mechanical application of the
statute of limitations, Indiana possesses
a significant interest in enforcing its
discovery rule to its own citizens,
including the Nelsons. Moreover, the drug
that allegedly caused the injury was
administered and consumed within Indiana
borders, providing the state with another
significant stake in this litigation. Cf.
Henry v. Richardson-Merrell, Inc., 508
F.2d 28, 38 (3d Cir. 1975). We are
mindful that New Jersey’s interest in
this case is far from negligible. New
Jersey holds an interest in deterring
tortious conduct of entities such as
Sandoz that operate principally within
the state’s borders. See, e.g., Gantes,
679 A.2d at 115. However, as its state
courts note, the "linchpin of the [New
Jersey] discovery rule is the unfairness
of barring claims of unknowing parties."
Caravaggio v. D’Agostini, 765 A.2d 182,
186 (N.J. 2001). The policy underlying
the New Jersey discovery rule does not
align precisely with that state’s
interests in this litigation.
Accordingly, we conclude that Indiana
law--its statute of limitations and
accompanying discovery rule--applies to
the Nelsons’ claims./10
B.
Having concluded that the Indiana
discovery rule applies to this case, we
must assess whether the Nelsons filed
their claim within the applicable statute
of limitations period.
As we previously noted, Indiana requires
a plaintiff to commence her product
liability suit "within two years after
the cause of action accrues." Ind. Code
sec. 33-1-1.5-5 (recodified at Ind. Code
sec. 34-20-3-1). However, recognizing
ambiguity in the meaning of "accrues,"
Indiana courts have provided substance to
this word through application of the
discovery rule. See Degussa Corp. v.
Mullens, 744 N.E.2d 407, 410 (Ind. 2001).
Under Indiana law, the statute of
limitations "begins to run from the date
that the plaintiff knew or should have
discovered that she suffered an injury or
impingement, and that it was caused by
the product or act of another."/11
Degussa Corp., 744 N.E.2d at 410.
As the Indiana courts recognize, the
date upon which a plaintiff "discovered
facts which, in the exercise of ordinary
diligence, should lead to the discovery
of [causation] and resulting injury, is
often a question of fact." Van Dusen v.
Stotts, 712 N.E.2d 491, 499 (Ind. 1999).
Generally, though, the plaintiff’s
suspicion, standing alone, about the
source of her injury is insufficient to
trigger the onset of the limitations
period. See Evenson, 899 F.2d at 705; Van
Dusen, 712 N.E.2d at 499. In contrast,
the limitations period will begin to run
when a physician suggests there is a
"reasonable possibility, if not a
probability" that a specific product
caused the plaintiff’s injury. Degussa
Corp., 744 N.E.2d at 411; Van Dusen, 712
N.E.2d at 499. In this latter case, a
reasonable individual, exercising
ordinary diligence, would pursue the lead
and procure "additional medical or legal
advice needed to resolve any remaining
uncertainty or confusion regarding the
cause of his or her injuries." Degussa
Corp., 744 N.E.2d at 411. The Indiana
courts have cautioned that "’events short
of a doctor’s diagnosis can provide a
plaintiff with evidence of a reasonable
possibility’ that another’s product
caused his or her injuries." Id. at 411
(quoting Evenson, 899 F.2d at 705).
We conclude that, based on the record
before us, the district court
inappropriately entered summary judgment
for Sandoz based on the statute of
limitations defense. Although the Nelsons
had the burden of establishing, in
replying to Sandoz’ motion for summary
judgment, that the discovery rule ought
to apply, they certainly have
demonstrated that Sandoz cannot prevail
on its motion for summary judgment.
Foremost, Sandoz is incorrect when it
states that, aside from a single
discussion with the neurologist, the
Nelsons failed to identify a conversation
in which a physician dismissed "the
possibility that Parlodel caused her
stroke." Appellee’s Br. at 10 n.2.
Although Dr. Sprunger initially suggested
a possible link between the drug and
strokes, he no longer held this tentative
view after further inquiry. Indeed, he
stated in Mrs. Nelson’s medical records
that "[a]s per Sandoz information,
negative correlation of Parlodel and
stroke. Will sign off." Vol. VI, Ex.A
(emphasis in original). According to
deposition testimony adduced during
discovery, Dr. Sprunger relayed these
findings to the Nelsons. In particular,
Mr. Nelson testified that: "Lisa talked
to [Dr.] Sprunger and he said there may
be a connection to the drug. And then he-
-he said there wasn’t--when we left,
there was no--they didn’t know what it
was. They had brushed that off, so we
didn’t think anything else about it."
Vol. VI, Ex.D, at 165. According to the
Nelsons, when they asked a second
physician, the neurologist, about a
possible link between the drug and Mrs.
Nelson’s injuries, he "shoved it off to
the side like [there was] no connection
whatsoever." Vol. VI, Ex.D, at 157. The
neurologist indicated that "he didn’t
know [the cause] for sure and he said
we’ll maybe never know for sure." Vol.
VI, Ex.D, at 165. Moreover, as we noted
earlier, based on information from Sandoz
and the PDR, Dr. Sprunger stated in Mrs.
Nelson’s medical file: "negative
correlation of Parlodel and stroke." Vol.
VI, Ex.A (emphasis in original). Although
Sandoz suggests that the Nelsons should
have heeded an earlier note from Dr.
Sprunger in Mrs. Nelson’s medical records
suggesting a link between the drug and
strokes, it simply ignores Dr. Sprunger’s
later entry disavowing this causation
theory. Indeed, Sandoz has failed to
proffer any reason why this later entry
in the medical file would not have been
available to the Nelsons.
Beyond the PDR entry for Parlodel and
Sandoz’ erroneous construction of the
record, Sandoz makes no other serious
effort to demonstrate that the Nelsons
were alerted to a reasonable possibility
or probability that Parlodel may have
induced Mrs. Nelson’s stroke and thus
triggered the statute of limitations
period prior to 1994. Sandoz does submit
that Mrs. Nelson’s refusal to take
Parlodel in 1992 indicates that she knew
or should have known of her potential
cause of action against Sandoz at that
time. In making medical choices, however,
an individual is free to act on mere
suspicion or excessive caution;
suspicions and hunches do not constitute
knowledge concerning causality of injury.
See Degussa Corp., 744 N.E.2d at 411.
C.
Finally, we turn to the Nelsons’
contention that, under the doctrine of
fraudulent concealment, Sandoz should be
equitably estopped from asserting the
statute of limitations defense in this
action. More precisely, the Nelsons
contend that Sandoz, through its sales
representative Ms. Thomas, provided Dr.
Sprunger with false and misleading
information designed to forestall their
investigation into a possible link
between Parlodel and seizures. The
district court rejected this position,
concluding that the record contained
insufficient information to support the
allegation of fraudulent concealment. We
agree.
Under the doctrine of fraudulent
concealment, a defendant is equitably
estopped from asserting the statute of
limitations defense when, through
deception, that party has "concealed from
the plaintiff material facts thereby pre
venting the plaintiff from discovering a
potential cause of action." Fager v.
Hundt, 610 N.E.2d 246, 251 (Ind. 1993).
To invoke the doctrine, the plaintiff
must demonstrate that "the wrongdoer was
not simply silent but committed
affirmative acts designed to conceal the
cause of action." Horn, 50 F.3d at 1372
(citations to Indiana law omitted). The
affirmative acts must generally rise to
the level of some "trick or contrivance
intended by the defrauder to exclude
suspicion and prevent inquiry." Ludwig v.
Ford Motor Co., 510 N.E.2d 691, 697 (Ind.
App. Ct. 1987). Moreover, the plaintiff
must have reasonably relied on the
deceptive statements. See Doe v. United
Methodist Church, 673 N.E.2d 839, 845
(Ind. Ct. App. 1996).
During deposition testimony, Dr.
Sprunger stated that he based his
conclusion concerning the lack of a link
between Parlodel and strokes on "the PDR,
and there was an article that was
provided to me by the Sandoz rep here in
Fort Wayne." Vol. VI, Ex.B, at 9. Neither
Dr. Sprunger nor Ms. Thomas, the Sandoz
sales representative, is able to recall
the article’s author, contents or title.
Absent this information, it would be
impossible for a juror to conclude that
the document contained information
designed to mislead intentionally Dr.
Sprunger and ultimately the Nelsons.
Although the Nelsons have contended at
various times in this litigation that the
article could be identified by a process
of elimination, a claim of fraudulent
concealment may not rest on such
speculative grounds.
In addition, the Nelsons posit that Ms.
Thomas, in her conversation with Dr.
Sprunger, made statements designed to
mislead the physician. In particular, Ms.
Thomas stated that:
Basically, I told [Dr. Sprunger] that we
were aware of some episodes of stroke but
that they occurred more frequently in the
postpartum population than in the normal
population anyhow, and it was my
understanding that they didn’t occur any
more frequently with patients treated
with Parlodel than they did in the
postpartum population.
Vol. VI, Ex.E, at 26. The Nelsons contend
that an internal memorandum from Sandoz
demonstrates the falsity of this
assertion. In particular, the memorandum
provides that "at this time, [1993,] we
have no hard data to demonstrate that
there is not an increased risk of stroke
. . . in Parlodel users." Vol. VII,
Ex.821, at 5. Put in other terms, the
document simply indicates that the
company cannot state definitively whether
a link exists between its product and
seizures. This statement does not render
Ms. Thomas’ assertions false or
deceptive. Accordingly, the district
court properly entered summary judgment
on this portion of the Nelsons’ claims.
Conclusion
Indiana’s statute of limitations and
discovery rule govern the Nelsons’
claims. We, however, conclude that the
district court inappropriately entered
summary judgment for Sandoz based on the
statute of limitations defense. We agree
with the district court that summary
judgment remains appropriate on the
Nelsons’ claim of fraudulent concealment.
Accordingly, the judgment of the district
court is affirmed in part, reversed in
part and the case is remanded for further
proceedings. The Nelsons may recover the
costs of this appeal.
AFFIRMED IN PART
REVERSED IN PART AND REMANDED
FOOTNOTES
/1 Dr. Sprunger now can neither recall nor locate
through research the medical literature that he
referenced in this note.
/2 The Nelsons are citizens of the state of Indiana.
Sandoz is a Delaware Corporation with its princi-
ple place of business in New Jersey. The amount
in controversy in this action exceeds $75,000.
/3 Among the various counts of her complaint, Mrs.
Nelson alleged theories of strict liability,
negligence, breach of implied and express warran-
ties, fraud, fraud by concealment, negligent mis-
representation, civil conspiracy and concert of
action. In addition, Mr. Nelson alleged loss of
consortium.
/4 The Nelsons’ case was transferred initially,
albeit erroneously, to an improper venue--the
United States District Court for the Southern
District of Indiana. The error was corrected, and
the case was moved to the appropriate district
court.
/5 Before Sandoz filed for summary judgment, Mrs.
Nelson stipulated to the dismissal with prejudice
of the counts of breach of implied and express
warranties, civil conspiracy and concert of
action that she had alleged against Sandoz.
/6 In general terms, the discovery rule states that
a cause of action accrues for purposes of the
statute of limitations only when the plaintiff
knew or reasonably should have known of his
injury and its cause.
/7 Under Klaxon Co. v. Stentor Electric Manufactur-
ing Co., 313 U.S. 487, 496-97 (1941), a federal
court sitting in diversity applies the choice-of-
law principles of the state in which it sits. The
Nelsons originally filed this diversity action in
the United States District Court for the District
of New Jersey. Under Klaxon, the federal district
court in New Jersey would have applied New Jersey
choice-of-law principles to resolve the apparent
conflict between New Jersey and Indiana substan-
tive law. The transfer of the Nelsons’ case from
this initial forum to the United States District
Court for the Northern District of Indiana did
nothing to alter the applicability of New Jer-
sey’s choice-of-law principles to this matter.
When a case is transferred from one federal
district court to another pursuant to 28 U.S.C.
sec. 1404, the choice-of-law principles of the
state in which the original district court sits--
in this case New Jersey--govern the case. See
Ferens v. John Deere Co., 494 U.S. 516 (1990);
Van Dusen v. Barrack, 376 U.S. 612 (1964); see
also Eckstein v. Balcor Film Investors, 8 F.3d
1121, 1126 (7th Cir. 1993). As such, we must
apply New Jersey’s choice-of-law rules to deter-
mine whether New Jersey or Indiana substantive
law governs the Nelsons’ claims.
/8 The factors that may be considered include, but
are not limited to:
the nature of the alleged injury, the availabili-
ty of witnesses and written evidence, the length
of time that has elapsed since the alleged wrong-
doing, whether the delay has been to any extent
deliberate or intentional, whether the delay may
be said to have peculiarly or unusually preju-
diced the defendant.
Lopez v. Swyer, 300 A.2d 563, 568 (N.J. 1973).
/9 We note one additional indicium of the equitable
component of the New Jersey discovery rule.
Specifically, the New Jersey Supreme Court has
stated: "It is true that the time of discovery is
a question of fact, and so could be left to a
jury. . . . The decision requires more than a
simple factual determination; it should be made
by a judge and by a judge conscious of the
equitable nature of the issue before him." Lopez
v. Swyer, 300 A.2d 563, 567 (N.J. 1973). Thus,
New Jersey delegates the discovery rule determi-
nation solely to a judge based largely on the
doctrine’s equitable nature. In contrast, Indiana
courts recognize that when application of the
statute of limitations rests upon questions of
fact, any factual dispute must be resolved by a
jury. See Fager v. Hundt, 610 N.E.2d 246, 253 n.5
(Ind. 1993); Wehling v. Citizens Nat’l Bank, 586
N.E.2d 840, 843 (Ind. 1992); Doe v. United Meth-
odist Church, 673 N.E.2d 839, 841 (Ind. Ct. App.
1996).
/10 Even if we are incorrect in our analysis of
either prong of our New Jersey choice-of-law
analysis, we believe that, ultimately, the appli-
cation of New Jersey law to this proceeding would
have rendered the same result as that of Indiana
law. Although New Jersey courts factor equitable
considerations in discovery rule cases, this
inquiry is limited largely to assessing whether
the plaintiff’s delay in filing the case has
prejudiced the defendant’s ability to defend
against the claim. See, e.g., Mancuso, 747 A.2d
at 262 (considering whether defendant would be
prejudiced by application of the discovery rule);
Martinez, 747 A.2d at 273 (noting that hospital
had not raised contention that application of
discovery rule would prejudice its case). In this
case, Sandoz has not alleged that it would be
prejudiced unfairly in its ability to defend
against the Nelsons’ claims should we permit them
to invoke the discovery rule.
/11 Sandoz submits that the Nelsons must demonstrate
that they conducted a diligent inquiry in order
to obtain the benefit of the discovery rule. See
Appellee’s Br. at 9. In support of this proposi-
tion, Sandoz relies on Autocephalous Greek-Ortho-
dox Church of Cyprus v. Goldberg & Feldman Fine
Arts, Inc., 917 F.2d 278, 288 (7th Cir. 1990),
which states that "[c]entral to both the discov-
ery rule and the doctrine of fraudulent conceal-
ment is the determination of the plaintiff’s
diligence in investigating the potential cause of
action." We believe that Sandoz construes Auto-
cephalous too broadly. Diligence does play a role
in the Indiana discovery rule but not to the
extent intimated by Sandoz. As the Indiana courts
have made clear in cases following Autocephalous,
when determining the applicability of the discov-
ery rule, they will consider what the plaintiff
should have uncovered in the exercise of ordinary
diligence. See, e.g., Degussa Corp., 744 N.E.2d
at 410-11 ("The question of when a plaintiff
alleging medical malpractice discovered facts
which, in the exercise of reasonable diligence,
should lead to the discovery of the medical
malpractice and resulting injury, is often a
question of fact.") (emphasis added); Van Dusen
v. Stotts, 712 N.E.2d 491, 499 (Ind. 1999)
(same); Doe v. United Methodist Church, 673
N.E.2d 839, 844 (Ind. Ct. App. 1996) ("[A] cause
of action accrues, and the statute of limitations
begins to run, when the plaintiff knew or, in the
exercise of ordinary diligence, could have dis-
covered that an injury had been sustained as a
result of the tortious act of another.") (empha-
sis added). This is the role diligence plays in
Indiana discovery rule cases.