Happel v. Walmart Stores, Inc.

In the

United States Court of Appeals

For the Seventh Circuit

No. 07-2264

H EIDI H APPEL and K ENT H APPEL,

Plaintiffs-Appellants,

v.

W ALMART S TORES, INC.,

a Delaware corporation,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 02 C 7771—James B. Moran, Judge.

A RGUED S EPTEMBER 9, 2008—D ECIDED A PRIL 19, 2010

Before F LAUM, W ILLIAMS, and S YKES, Circuit Judges.

W ILLIAMS, Circuit Judge. Heidi Happel was diagnosed

with Multiple Sclerosis in 1990. After the diagnosis, she

did not experience any symptoms of the disease until

August 1993, when a Walmart pharmacy negligently

filled—and Heidi ingested—a prescription with Toradol,

a medication to which Heidi was allergic. Heidi believed

that the medication, which triggered a severe reaction,

was the impetus for a rapid decline in her health,

2 No. 07-2264

so she and her husband, Kent, sued Walmart. After an

eight-day trial, a jury awarded the Happels $465,400

in compensatory damages. But the plaintiffs argue here

that the trial court made two significant errors that

reduced the total damage award. First, they contend that

the trial court should have allowed them to present

expert witness testimony to demonstrate that the

allergic reaction to the prescription drugs exacerbated

Heidi’s condition. Second, the court should not have

used a verdict form that allowed the jury to combine

damages for Heidi and Kent rather than providing

for separate awards. We agree with the trial court’s

decision to exclude the testimony of the plaintiffs’ experts

because the plaintiffs failed to properly disclose one in

violation of Federal Rule of Civil Procedure 26 and the

other’s expertise and methodology did not comply with

the Daubert standard. As to damages, we reverse and

remand for a new trial so that the Happels can seek

separate damage awards.

I. BACKGROUND

Heidi Happel experienced the first symptoms of

Multiple Sclerosis (“MS”) in 1984. At the time, a teenage

Heidi lost some of the vision in her left eye, for which

she received treatment from Dr. Peter Bringewald, a

neurologist specializing in optic neurology. Heidi con-

tinued to develop more MS symptoms over the years. In

1986, she suffered from numbness and fine motor prob-

lems, in 1987, tingling in her legs, and in 1990, depres-

sion. Although Dr. Bringewald ultimately diagnosed

Heidi with MS, between 1990 and 1993 she did not experi-

No. 07-2264 3

ence any MS symptoms other than a lingering asthma

condition.

On August 4, 1993, Heidi’s primary care physician

prescribed Toradol, an anti-inflammatory pain reliever,

to Heidi for her menstrual cramps.1 He called the pre-

scription in to the Walmart pharmacy in McHenry

County, Illinois, where Heidi usually filled prescriptions

for her asthma medication. Heidi was allergic to non-

steroidal anti-inflammatory drugs (“NSAIDs”), and it

was her practice to notify the pharmacist of this allergy

every time she had a prescription filled. On this par-

ticular day, however, Heidi was unable to go to the

pharmacy, so she asked her husband, Kent Happel, to

pick up the Toradol prescription. Before Kent arrived,

however, the pharmacist had already been warned

about Heidi’s allergy to NSAIDs—in the process of input-

ting the prescription into Walmart’s computer system

(which warns pharmacists of drug interactions by a

flashing screen), the pharmacist had received an elec-

tronic alert that Toradol was contraindicated.2 When

1

The Happels’ initial suit also asserted professional negligence

claims against Heidi’s primary care physician, Dr. Z. Ted

Lorenc, for prescribing Toradol. In March 1999, Dr. Lorenc

settled out of court with Heidi and Kent for $75,000 each, and

he was dismissed from the lawsuit.

2

The American Medical Association defines “contraindication”

as “[a] factor in a person’s condition that makes it inadvisable

to participate in a particular treatment, such as taking a

certain medication or undergoing surgery.” A MERICAN

(continued...)

4 No. 07-2264

Kent arrived, he also informed the pharmacist of Heidi’s

allergy.

Despite these warnings, the pharmacist filled Heidi’s

Toradol prescription. After Heidi ingested the drug,

she went into anaphylactic shock. She was rushed to

Northern Illinois Medical Center, where she was

intubated for 18 hours and placed on a ventilator. Al-

though she was released from the hospital the next day,

her health quickly began to deteriorate. She has suffered

memory loss, seizures, incontinence, depression, night-

mares, difficulty walking, and lack of sexual interest.

The Happels sued Walmart in Illinois state court. After

protracted proceedings, the Illinois Supreme Court

held that Walmart owed a duty to warn Heidi or

her physician when presented with a contraindicated

prescription. See Happel v. Walmart Stores, Inc., 766 N.E.2d

1118 (Ill. 2002). Heidi and Kent voluntarily dismissed the

lawsuit and re-filed in the Circuit Court of Cook County.

Walmart then removed the case to federal court on the

basis of diversity jurisdiction. Heidi alleged negligence,

battery, and wilful and wanton misconduct, and Kent

asserted a loss of society claim. Walmart conceded negli-

gence in filling Heidi’s Toradol prescription.

Before trial, the Happels filed initial and amended

disclosures pursuant to Federal Rule of Civil Procedure

26. In both disclosures, they listed Dr. Bringewald under

2

(...continued)

M EDICAL A SSOCIATION C OMPLETE M EDICAL E NCYCLOPEDIA 404

(Jerrold B. Leikin & Martin S. Lipsky eds., 2003).

No. 07-2264 5

subsection (a)(1) as a person with discoverable informa-

tion, but did not disclose him as an expert or tender

his expert report which is required by subsection (a)(2).

Less than two months before trial, the Happels at-

tempted to list Dr. Bringewald as an expert witness in

their pre-trial order, seeking to elicit testimony that

psychological stress from the Toradol incident exacer-

bated Heidi’s MS. Walmart filed a motion in limine to

exclude Dr. Bringewald’s proffered expert testimony,

arguing that he had not been properly disclosed and

that his opinion was not reliable under Daubert v.

Merrill Dow Pharmaceuticals, 509 U.S. 579 (1993). The dis-

trict court granted Walmart’s motion, stating that

“[p]laintiffs’ attempt to elevate their treating doctors’

status by listing them as experts in the pre-trial motion,

without rendering the required expert reports to defen-

dant, fails as an attempt to subvert the requirements of

Rule 26(a)(2)(B).”

Walmart also successfully moved to exclude portions

of expert testimony from Dr. Alan Hirsch, a board-

certified neurologist. The district court found that

Dr. Hirsch was “not qualified to testify regarding Ms.

Happel’s MS, the exacerbation of her MS, or the causa-

tion of that exacerbation—anaphylactic reaction. Nor

[was] he qualified to testify regarding hypoxia, hyper-

capnia, hyperventilation, asthma, or lung problems.” The

court noted that Dr. Hirsch’s “experience with MS

patients was limited to those coming to him for treat-

ment of smell disorders or mouth pain” and also found

little support for his conclusions regarding the connec-

tion between stress and the exacerbation of MS.

6 No. 07-2264

During trial, the Happels submitted a proposed verdict

form that separated Heidi’s damages from Kent’s

damages, which the district court rejected. Instead, the

verdict form the court used only contained a single line

for compensatory damages to be awarded to the cou-

ple. The jury awarded the Happels $465,400 on the negli-

gence claim, but rejected the Happels’ other claim

for battery.3 Walmart moved to set off the judgment by

$150,000 because the Happels settled with Heidi’s primary

care physician for this amount before trial. The court

granted Walmart’s motion, and the Happels do not

appeal this order. The Happels filed a post-trial motion

for a new trial on damages, which the court denied.

And the Happels now appeal that specific ruling.

II. ANALYSIS

A. Physicians’ Causation Testimony Properly Excluded.

Federal Rule of Evidence 702 governs the admission of

expert testimony. It states, in relevant part, that “[i]f

scientific, technical or other specialized knowledge will

assist the trier of fact . . . a witness qualified as an expert

by knowledge, skill, experience, training or education,

may testify thereto in the form of an opinion . . . .” It also

3

The district court did not instruct the jury on Heidi’s claim

for wilful and wanton misconduct, so the jury did not

consider that claim. The plaintiffs challenged the district court’s

failure to provide this instruction in their post-trial motion,

but have not raised it as an issue on appeal.

No. 07-2264 7

requires that: (1) the testimony must be based upon

sufficient facts or data; (2) it must be the product

of reliable principles and methods; and (3) the witness

must have applied the principles and methods reliably

to the facts of the case. Id. Rule 702 requires the district

court to perform a “gatekeeping” function before ad-

mitting expert scientific testimony in order to “ensure

that any and all scientific testimony or evidence ad-

mitted is not only relevant, but reliable.” Daubert v.

Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993).

Before considering whether the testimony “will assist the

trier of fact to understand or determine a fact in issue,” a

district court must make “a preliminary assessment of

whether the reasoning or methodology underlying the

testimony is scientifically valid.” Id. at 592-93. The

Supreme Court has identified the following factors as

pertinent to this inquiry: (1) whether the theory has

been tested; (2) whether the theory has been subjected to

peer review and publication; (3) the known or potential

rate of error; and (4) whether it has been generally

accepted within the relevant scientific community. Id.

at 593-94.

The Happels first argue that Dr. Bringewald’s experience

treating Heidi and other MS patients qualified him as

an expert under the Daubert test. 4 But the district court

excluded Dr. Bringewald as an expert witness because

the Happels had not properly disclosed him as an expert

4

Dr. Bringewald is a board-certified neuro-opthalmologist

and assistant professor of opthalmology, neurology, and

neurosurgery at the University of Texas.

8 No. 07-2264

nor rendered the required expert report. “We review de

novo whether the district court applied the appropriate

legal standard in making its decision to admit or exclude

expert testimony, and we review for abuse of discre-

tion the district court’s choice of factors to include

within that framework and its ultimate conclusions

regarding the admissibility of expert testimony.” Winters

v. Fru-Con, Inc., 498 F.3d 734, 742 (7th Cir. 2007) (citation

omitted).

Here, we do not reach the question of whether Dr.

Bringewald is qualified because of the more glaring

problem—the plaintiffs’ failure to disclose him as an

expert witness during pre-trial discovery. Rule 26(a)(2) of

the Federal Rules of Civil Procedure requires the propo-

nent of expert testimony to disclose the witness’s

identity, along with a written report that contains, among

other things, a “complete statement of all opinions the

witness will express and the basis and reasons for

them.” 5 The sanction for failure to comply with this rule

is the “automatic and mandatory” exclusion from trial

of the omitted evidence, “unless non-disclosure was

justified or harmless.” Hammel v. Eau Galle Cheese Factory,

5

Rule 26(a)(2)(B) provides in pertinent part:

Unless otherwise stipulated or ordered by the court,

this disclosure must be accompanied by a written

report—prepared and signed by the witness—if the

witness is one retained or specially employed to pro-

vide expert testimony in the case or one whose duties

as the party’s employee regularly involve giving

expert testimony. . . .

No. 07-2264 9

407 F.3d 852, 869 (7th Cir. 2005) (citation omitted). The

Happels do not challenge this ruling; they did not even

mention it in their opening brief. See Bodenstab v. County

of Cook, 569 F.3d 651, 658 (7th Cir. 2009) (holding that

appellant waived arguments that were not developed

until the reply brief). So we cannot find that the district

court abused its discretion in excluding Dr. Bringewald’s

opinion testimony.

As to Dr. Hirsch, the Happels argue that his academic

credentials and practical experience qualified him as an

expert on the effects of stress on MS.6 However, the

district court found that Dr. Hirsch’s opinion that psy-

chological and physical stress exacerbated Heidi’s MS

was unreliable because it lacked a sufficient basis. The

district court concluded that Dr. Hirsch’s qualifications

rendered him capable of testifying about Heidi’s “depres-

sion, headaches, psychiatric and psychological issues,

PTSD, seizures, and schematic brain functions” based on

his research and publications relating to those types of

issues. But Dr. Hirsch was not qualified to testify about

Heidi’s MS, the exacerbation of her MS, or other related

physical ailments because he had very limited experience

with MS patients (most of whom sought his expert-

ise specifically for the treatment of smell disorders or

6

Dr. Hirsch is board-certified in psychiatry (general and

specialized areas such as pain management, addiction, and

geriatric) and neurology, as well as an assistant professor in

the neurology and psychiatry departments at Rush-

Presbyterian-St. Luke’s Medical Center.

10 No. 07-2264

mouth pain) and the opinion was not supported by

relevant medical literature.

In addition to his lack of experience in treating patients

with MS, Dr. Hirsch offered no experimental, statistical,

or other scientific data to support his theory that stress

from anaphylactic shock exacerbated Heidi’s MS. Some

physicians rely on treatises, medical tests, and laboratory

findings to reach their causation conclusions, while

others conduct a differential diagnosis 7 to rule out the

least plausible causes of illness. See Hollander v. Sandoz

Pharm. Corp., 289 F.3d 1193, 1209 (10th Cir. 2002). However,

Dr. Hirsch does not cite any of these methodologies

in his attempt to demonstrate the causal relationship

between stress and MS; rather, he relies solely on his

past experience and the temporal proximity of Heidi’s

allergic reaction and recurring MS symptoms. This does

not an expert opinion make. To the extent that Dr. Hirsch

does rely on medical literature to support his theory,

the articles to which he cites stop short of reaching the

same conclusion. Indeed, one of the articles directly

contradicts his theory, stating “the association between

stressful life experiences and changes in immune func-

tion do not establish a causal link between stress, im-

mune function, and disease.” See Huss v. Gayden, 571 F.3d

442, 459 (5th Cir. 2009) (“It is axiomatic that causation

7

Differential diagnosis is “the determination of which of two

or more diseases with similar symptoms is the one from

which the patient is suffering, by a systematic comparison and

contrasting of the clinical findings.” S TEDMAN ’S M EDICAL

D ICTIONARY 110620 (27th ed. 2000).

No. 07-2264 11

testimony is inadmissible if an expert relies upon studies

for publications, the authors of which were themselves

unwilling to conclude that causation had been proven.”).

At best, Dr. Hirsch’s testimony would have amounted

to an “inspired hunch,” and the district court certainly

did not abuse its discretion in excluding it. Rosen v. Ciba-

Geigy Corp., 78 F.3d 316, 319 (7th Cir. 1996).

B. Ambiguous Jury Instructions and Verdict Form.

The plaintiffs argue that the district court erred by

using a verdict form that failed to separate Heidi’s dam-

ages from Kent’s damages, and that as a result, they

were prejudiced and are entitled to a new trial on dam-

ages. We agree.

The denial of a motion for a new trial is reviewed for

an abuse of discretion, Moore ex rel. Estate of Grady v.

Tuelja, 546 F.3d 423, 427 (7th Cir. 2008), and we will not

set aside a verdict unless a party suffered prejudice

from the assigned error, see Fed. R. Civ. P. 61. In their

complaint, the plaintiffs asserted separate causes of

action. Heidi’s claims were for negligence, wilful and

wanton misconduct, and battery, while Kent’s only

claim was for loss of society. The district court grouped

the negligence and loss of society claims for purposes of

the jury instructions and the verdict form. With respect

to the negligence claim, the district court instructed the

jury as follows:

On the negligence count, you must fix the amount

of money which will reasonably and fairly com-

12 No. 07-2264

pensate them for any of the following elements of

damages proved by the evidence to have resulted

from the negligence of the defendant, taking into

consideration the nature, extent and duration of

the injury.

• The reasonable expense of necessary

medical care, treatment, and services

received and the present cash value of

the reasonable expenses of medical care,

treatment and services reasonably

certain to be received in the future;

• The loss of a normal life experienced and

reasonably certain to be experienced in

the future;

• The pain and suffering experienced and

reasonably certain to be experienced in

the future;

• The emotional distress experienced and

reasonably certain to be experienced in

the future;

• The value of salaries and benefits lost;

• The loss of society and companionship

experienced by Kent Happel and the loss

of society and companionship that is

reasonably certain to be deprived of [sic]

in the future;

• The value of the loss of services of his

wife experienced by Kent Happel.

No. 07-2264 13

Whether any of these elements of damages has

been proved by the evidence is for you to deter-

mine. . . . If you find that both Plaintiffs are entitled

to recover, you will assess the damages of each

separately and return a verdict in separate amount

for each.

The plaintiffs proposed a verdict form that separated the

jury’s damage awards as to Heidi and Kent and provided

spaces for further itemization of the damages. Rejecting

that proposed verdict form, the court used a form that

contained only one line for damages: “We, the jury, find

for the plaintiffs, Heidi Happel and Kent Happel, on

the count of negligence and fix their compensatory dam-

ages at $ ______.”

In determining whether the verdict form is confusing,

we must consider it in light of the instructions given, see

United States v. Hines, 728 F.2d 421, 427 (10th Cir. 1984),

and we construe jury instructions “in their entirety and

not in artificial isolation,” United States v. Westmoreland,

122 F.3d 431, 434 (7th Cir. 1997), reviewing “whether the

jury was misled in any way and whether it had under-

standing of the issues and its duty to determine those

issues,” Tikalsky v. City of Chicago, 687 F.2d 175, 181 (7th

Cir. 1982) (citation omitted). Considered together, the

jury instructions and the verdict form were ambiguous.

The district court’s instructions to the jury improperly

subsumed Kent’s loss of society claim within Heidi’s

negligence claim and did not clearly explain to the jury

that the plaintiffs had individually asserted unique

claims. Although the loss of society instructions

14 No. 07-2264

specifically referred to Kent, they were at the end of a

general negligence instruction which never explained

which damages were unique to Heidi’s claim.

Even if this ambiguity could have been clarified by the

court’s instruction that the jury return separate verdicts

for each plaintiff, it conflicted with the verdict form’s

single line for a total damage amount. The verdict form

gives us no insight as to how the jury allocated the dam-

ages among Heidi’s and Kent’s claims. And contrary to

Walmart’s assertions that the Happels’ marital status

makes a division of damages unnecessary for purposes

of distributing the jury award, Illinois courts have

rejected the argument that settlement amounts should

be combined for the purposes of set-off simply because

the plaintiffs are a family unit. See, e.g., Johnson v. Belleville

Radiologists, Ltd., 581 N.E.2d 750, 757 (Ill. App. 1991) (in

case where a husband and wife sued hospital and

doctors for medical malpractice and settled with two

defendants before trial, trial court properly refused to

set off total settlement against nonsettling defendants’

judgment because Illinois has not adopted a bright-line

rule requiring total set-off when plaintiffs are family

unit). Therefore, we conclude that any finding by the

jury in which both Heidi and Kent were entitled to dam-

ages could be challenged because the jury instructions

and verdict form were ambiguous. As a result, it is impos-

sible to determine the proper set-off allocation. And it

was error to give the instruction and utilize the verdict

form.

Next, we turn to whether the plaintiffs suffered

prejudice from the combined award. Before trial, both

No. 07-2264 15

Kent and Heidi settled with Heidi’s primary care

physician for $75,000 each, and the district court set off

the total of their settlements, $150,000, from the jury’s

damage award of $465,400. But the set-off amount

assumes that the jury awarded more than $75,000 to both

Kent and Heidi. If, for instance, the jury believed that

Kent was only entitled to $5,000 in damages and al-

located the remaining $460,400 to Heidi, then Kent’s and

Heidi’s set-off amounts would have been $5,000 and

$75,000 respectively. That would result in a total set-off

of $80,000, which is $70,000 less than the amount the

district court had calculated. In other words, if either

Kent’s or Heidi’s portion of the damage award is less

than $75,000, then the appropriate set-off would be less

than the $150,000 set by the district court. And the

Happels would have been left with more of the award

to take home. Clearly, the Happels were prejudiced by

the use of a verdict form that may have resulted in a

lower damage award.8

8

Although this case presents a unique set of facts, the potential

prejudice caused by an ambiguous verdict has warranted a

reversal in other contexts. In CGB Occupational Therapy, Inc. v.

RHA Health Services, Inc., for example, the verdict form did not

allow the jury to differentiate between two contracts that were

the subject of a tortious interference claim when the jury

awarded punitive damages. 357 F.3d 375, 390 (3d Cir. 2004). The

court, on appeal, found that the defendant did not tortiously

interfere with one of the contracts, and because the verdict form

did not indicate how the jury allocated punitive damages

between the two allegedly tortious acts, the Third Circuit

remanded for a new trial on punitive damages. Id.

16 No. 07-2264

Finally, we reject Walmart’s argument that the Happels

did not appeal the set-off order and cannot use their

challenge to the verdict form to do so. We do not

believe the Happels’ reference to the set-off in identi-

fying the prejudice of an ambiguous verdict can be con-

strued as a challenge to the set-off order. If the jury’s

allocation of damages on remand does warrant a recal-

culation of the set-off amount, the district court has

broad discretion to vacate its previous order. See Fed. R.

Civ. P. 60(b).

III. CONCLUSION

For these reasons, we R EVERSE the judgment of the

district court and R EMAND for a new trial on damages.

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