Melson, Adrian v. Bayer Corporation

In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 06-1427

IN RE

FACTOR VIII OR IX CONCENTRATE

BLOOD PRODUCTS LITIGATION

DOMENICO GULLONE, et al.,

Plaintiffs-Appellants,

v.

BAYER CORPORATION, et al.,

Defendants-Appellees.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

MDL No. 986; No. 1:03-CV-8928—John F. Grady, Judge.

____________

ARGUED SEPTEMBER 13, 2006—DECIDED MAY 4, 2007

____________

Before BAUER, WOOD, and WILLIAMS, Circuit Judges.

WOOD, Circuit Judge. In the early 1980s, the HIV/AIDS

epidemic burst onto the scene. Its seriousness could not

be overstated: AIDS ravaged the immune systems of its

victims and seemed to be inevitably fatal. Although

initially the disease seemed to target gay men, it soon

became apparent that it could strike anyone who was

exposed to it. According to a history of AIDS prepared by

the National Institutes of Health, “By the summer of

2 No. 06-1427

1982, scientists had convincing evidence that AIDS must

be caused by a blood-borne and sexually transmitted

virus.” See “In Their Own Words: NIH Researchers Recall

the Early Years of AIDS,” http://aidshistory.nih.gov/

tip_of_the_iceberg/index.html (visited April 5, 2007). One

group that proved to be especially vulnerable was hemo-

philiacs, who need frequent transfusions of blood factors

that cause clotting. Before 1985, when it became possible

to test donated blood to ensure that it was free of the AIDS

virus, close to half of all hemophiliacs became infected

with the virus. See Gina Kolata, Hemophilia and AIDS:

Silent Suffering, N.Y. TIMES, May 16, 1988.

The appeals now before us are the fourth in a series that

has arisen from litigation brought by hemophilic individu-

als who were infected with HIV or Hepatitis C virus (HCV)

by contaminated blood products known as Factor VIII and

Factor IX (“Factor Concentrates”). See also In re Factor

VIII or IX Concentrate Blood Prods. Litig., 159 F.3d 1016

(7th Cir. 1998) (enforcing a settlement); In the Matter of

Rhone-Poulenc Rorer Pharms., Inc., 138 F.3d 695 (7th Cir.

1998) (denying a petition for a writ of mandamus relat-

ing to the designation of expert witnesses for trial); In the

Matter of Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir.

1995) (reversing a partial class certification). Turning to

many federal courts around the United States, the plain-

tiffs sued a number of major drug companies (“the Drug

Companies”). These suits, which were consolidated by

the Judicial Panel on Multidistrict Litigation in the

Northern District of Illinois under the docket number

MDL-986, claimed that the defendant companies had

intentionally recruited urban homosexuals, prisoners, and

intravenous drug users to serve as blood donors, even

though they knew that these donors were at high risk of

carrying blood-borne diseases including the viruses that

cause AIDS and Hepatitis C. The Drug Companies alleg-

edly also failed to disclose the known risks of their prod-

No. 06-1427 3

ucts; failed to use available screening tests; failed to use

available treatments for killing the viruses in the plasma;

and continued to export non-heat-treated Factor Concen-

trates overseas after adopting safer methods for products

sold in the United States.

The cases brought by many of the plaintiffs are still

pending before the district court. Gullone v. Bayer Corp.,

however, was brought by a group from the United King-

dom, Italy, Germany, Israel, Argentina, and the State of

Nebraska. Finding that the United Kingdom would be

a more appropriate forum in which to handle the claims of

the U.K. plaintiffs, the district court granted a motion by

the Drug Companies to dismiss those claims on the ground

of forum non conveniens; it certified that ruling as final

and ready for appeal under FED. R. CIV. P. 54(b). Although

we find it a close call, largely because the district court

placed surprisingly little weight on the interest of Califor-

nia (the original forum) in this litigation and it may have

over-estimated the administrative difficulties in keeping

the case in the United States, we conclude in the end

that the court acted within its discretion when it dis-

missed the case. We therefore affirm.

I

As we noted earlier, litigation about Factor Concentrate

has been going on for some time; this case, along with its

companions in the MDL, belongs to the “second genera-

tion” group. The district court described the earlier, “first

generation” cases, in its opinion in order to provide the

background for its ruling in the Gullone litigation. We

include the highlights of that discussion here.

The preferred treatment for hemophilia, a hereditary

disease in which the protein that causes blood clotting

is missing, is intravenous injection of the necessary

4 No. 06-1427

protein. The protein used in these treatments is derived

from the plasma of donated blood. Using a process called

“fractionating,” the manufacturer can derive Factor

Concentrates from the plasma; the Factor Concentrates

are then sold for use by hemophiliacs. The principal four

defendants throughout these proceedings have been Baxter

Healthcare Corporation, Bayer Corporation, Alpha Thera-

peutic Corporation, and Armour Pharmaceutical Com-

pany; together, they produce practically all of the Factor

Concentrates used in the United States. If the donated

blood from which the Factor Concentrate is derived is

contaminated with HIV or HCV, then the resulting

concentrate may also be contaminated, unless it is sub-

jected to a heat treatment or other method of viral inacti-

vation. It is undisputed that some contaminated Factor

Concentrates were sold, and that this was the way in

which many hemophiliacs contracted AIDS or Hepatitis C.

The first generation lawsuits were brought against the

Drug Companies by hemophiliacs who had contracted

AIDS, their family members, and their personal represen-

tatives. The basic legal theory underlying these suits

was negligence. See In re Rhone-Poulenc Rorer, Inc., 51

F.3d at 1300. Most of those claims were resolved in 1997

through a settlement. See In re Factor VIII or IX Concen-

trate Blood Prods. Litig., 159 F.3d at 1020 (approving the

settlement). The “second generation” claims arose from

allegations of knowing misconduct directed specifically

toward victims outside the United States. The Gullone

case was filed in the Northern District of California on

June 3, 2003; many other suits on behalf of other foreign

victims, from many other countries, followed in the courts

of California, Florida, Illinois, and Texas. All of these

cases were collected in the same multi-district litigation

proceeding, MDL-986, that existed for the first-generation

cases.

At this point, the only forum non conveniens ruling

before us is the district court’s decision to sever the claims

No. 06-1427 5

of the U.K. plaintiffs and to dismiss those claims so that

they may be pursued in the courts of the United Kingdom.

The fact that the United Kingdom may—or may not—be

an adequate alternative forum obviously says nothing

about the adequacy of any other proposed country. Indeed,

because we review the district court’s forum non con-

veniens determination for abuse of discretion, see Piper

Aircraft Co. v. Reyno, 454 U.S. 235, 254 (1981), and the

relevant inquiry depends heavily on the particular facts

of the case, our discussion is not meant to suggest any-

thing about other such motions that may be brought in

these cases.

II

The Supreme Court recently revisited the topic of forum

non conveniens in Sinochem International Co. v. Malaysia

International Shipping Corp., 127 S.Ct. 1184 (2000), which

dealt with the question whether a district court may

dismiss on grounds of forum non conveniens without

first assuring that it has jurisdiction over the suit. In the

course of deciding that it is permissible to take up the

issue about the forum first, the Court reviewed the basic

contours of forum non conveniens:

A federal court has discretion to dismiss a case on the

ground of forum non conveniens when an alternative

forum has jurisdiction to hear [the] case, and . . . trial

in the chosen forum would establish . . . oppressive-

ness and vexation to a defendant . . . out of all propor-

tion to plaintiff ’s convenience, or . . . the chosen forum

[is] inappropriate because of considerations affecting

the court’s own administrative and legal problems.

Dismissal for forum non conveniens reflects a court’s

assessment of a range of considerations, most notably

the convenience to the parties and the practical

difficulties that can attend the adjudication of a

dispute in a certain locality. We have characterized

6 No. 06-1427

forum non conveniens as, essentially, a supervening

venue provision, permitting displacement of the

ordinary rules of venue when, in light of certain

conditions, the trial court thinks that jurisdiction

ought to be declined.

Sinochem, 127 S.Ct. at 1190.

The Court continues to recognize Gulf Oil Corp. v.

Gilbert, 330 U.S. 501 (1947), as the leading case recogniz-

ing and delineating the common-law doctrine of forum non

conveniens. See Quackenbush v. Allstate Ins. Co., 517 U.S.

706, 723 (1996); American Dredging Co. v. Miller, 510 U.S.

443, 447-49 (1994). In American Dredging, the Court

described the scope of the doctrine and repeated the

passage from Gulf Oil that describes what ought to

inform a district court’s decision:

An interest to be considered, and the one likely to be

most pressed, is the private interest of the litigant.

Important considerations are the relative ease of

access to sources of proof; availability of compulsory

process for attendance of unwilling, and the cost of

obtaining attendance of willing, witnesses; possibility

of view of premises, if view would be appropriate to

the action; and all other practical problems that make

trial of a case easy, expeditious and inexpensive. There

may also be questions as to the enforcibility [sic] of a

judgment if one is obtained . . . .

Factors of public interest also have [a] place in apply-

ing the doctrine. Administrative difficulties follow

for courts when litigation is piled up in congested

centers instead of being handled at its origin. Jury

duty is a burden that ought not to be imposed upon the

people of a community which has no relation to the

litigation. In cases which touch the affairs of many

persons, there is reason for holding the trial in their

view and reach rather than in remote parts of the

No. 06-1427 7

country where they can learn of it by report only.

There is a local interest in having localized controver-

sies decided at home. There is an appropriateness, too,

in having the trial of a diversity case in a forum that

is at home with the state law that must govern the

case, rather than having a court in some other forum

untangle problems in conflict of laws, and in law

foreign to itself.

510 U.S. at 447-49 (quoting Gulf Oil, 330 U.S. at 508-09).

Piper Aircraft added two additional points that are

important here. The first one was repeated in Sinochem:

when the plaintiff has sued in his or her home forum,

there is a strong presumption in favor of that choice. See

Piper Aircraft, 454 U.S. at 255-56 (citing Koster v.

Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)).

Under those circumstances, “A defendant invoking forum

non conveniens . . . bears a heavy burden in opposing the

plaintiff ’s chosen forum.” Sinochem, 127 S.Ct. at 1191.

Conversely, if the plaintiff is suing far from home, it is

less reasonable to assume that the forum is a con-

venient one and therefore “the presumption in the plain-

tiff ’s favor ‘applies with less force. . . .’ ” Id. (quoting Piper

Aircraft, 454 U.S. at 266). Put the other way, the risk that

the chosen forum really has little connection to the litiga-

tion is greater. We do not understand this as any kind of

bias against foreign plaintiffs. That would be incon-

sistent with many treaties the United States has signed

as well as with the general principle that our courts are

open to all who seek legitimately to use them. It is instead

a practical observation about convenience. A citizen of

Texas who decided to sue in the federal court in Alaska

might face an equally skeptical court, which might con-

clude that convenience requires a change in venue under

the federal statutory counterpart to forum non conveniens,

28 U.S.C. § 1404(a).

8 No. 06-1427

The other important point Piper Aircraft made was that

a dismissal based on forum non conveniens that is other-

wise appropriate should not ordinarily be rejected just

because it would lead to a change in applicable law

unfavorable to the plaintiff. 454 U.S. at 247, 254. Only

if “the remedy provided by the alternative forum is so

clearly inadequate or unsatisfactory that it is no remedy

at all” should the unfavorable change be given substan-

tial—or even dispositive—weight. Id. at 254.

With these principles in mind, we are now ready to turn

to the district court’s decision to dismiss the claims of the

U.K. plaintiffs here, based on its evaluation of the relative

convenience of the United States and the United Kingdom

as potential fora for this litigation. As we noted earlier, the

standard of review is a deferential one: we may reverse

only if we conclude that the district court abused its

discretion.

III

The plaintiffs’ principal argument is that the court erred

when it found that the United Kingdom is an adequate

alternative forum for this case. The British courts fall

short, they argue, because (as they put it) “the U.K. legal

system strictly adheres to the ‘but for’ principles of causa-

tion and does not acknowledge market share or its vari-

ants that are available in the U.S.” They acknowledge that

a recent decision of the House of Lords, which sits as the

highest court in the United Kingdom, has muddied the

waters on that absolute proposition. See Fairchild v.

Glenhaven Funeral Servs., Ltd., (2003) 1 A.C. 32 (H.L.).

In Fairchild, the Law Lords found that a plaintiff was

entitled to recover in an asbestos case even though he

could not identify which of his several employers may

have exposed him to the asbestos fiber that caused his

eventual mesothelioma. Plaintiffs here are pessimistic,

No. 06-1427 9

however, that the U.K. courts would extend the holding

in Fairchild to their situation.

The district court devoted considerable attention to the

question whether the U.K. courts are the kind of alterna-

tive forum the Supreme Court contemplates in its line of

forum non conveniens cases. It heard expert testimony

from experienced British lawyers, some of whom supported

the plaintiffs (for example, Professor Adrian Briggs and

Mark Mildred) and others (principally Nicholas Underhill)

who supported the Drug Companies. Underhill, who has

served as leading defense counsel in the two principal

product liability cases brought in the United Kingdom in

recent years—including a case brought by hemophiliacs

against public health authorities—opined that the English

courts would certainly entertain the cases and would be

likely to rely on a straightforward negligence theory. He

thought that it would be necessary for each plaintiff to

allege and prove which defendant’s concentrate was

responsible for his infection. Mildred, in contrast, was a

solicitor who coordinated the plaintiffs’ case in the

HIV litigation. Mildred acknowledged that it was

possible that the British courts might apply the Fairchild

exception to this case (and thus permit plaintiffs to re-

cover without identifying a particular manufacturer), but

he thought this was unlikely.

The district court looked carefully at Fairchild, in the

light of this expert testimony. Lord Bingham of Cornhill,

who delivered the lead speech, noted that in the case of

mesothelioma caused by inhalation of asbestos fiber,

“[ M]edical science cannot support the suggestion that any

of these possibilities [i.e., that the fiber triggering the

disease originated with manufacturer A or B] is to be

regarded as more probable than any other. There is no way

of identifying, even on a balance of probabilities, the

source of the fibre or fibres which initiated the genetic

process which culminated in the malignant tumour.”

10 No. 06-1427

1 A.C. at 43. The other Law Lords came to similar conclu-

sions, rejecting the conventional “but for” test of tortious

liability in the special circumstances of the case before

them.

The problem faced by the plaintiffs, in the district court’s

view, was identical. With the exception of one plaintiff

who apparently used nothing but the concentrate of one

fractionator, a hemophiliac infected with HIV or HCV has

no way of knowing either when he was infected or by

what particular infusion of concentrate. Over time,

hemophiliacs are likely to use more than one brand of

concentrate, depending on what their supplier has in stock.

Further complicating matters is the fact that the virus

may not be detectible in the blood of the infected person

until many years after the infusion that caused the

infection. The district court concluded that situation is

indistinguishable from the facts of Fairchild, and that

it was “very unlikely” that the courts of the United King-

dom would apply ordinary “but for” causation to the

Gullone case. Instead, it predicted, they would apply the

Fairchild exception to the causation element and pro-

ceed to adjudicate the claims.

This court held in Kamel v. Hill-Rom Co. that there

are two parts to the “alternative forum” inquiry: availabil-

ity and adequacy. 108 F.3d 799, 802 (7th Cir. 1997). Kamel

explained that “[a]n alternative forum is available if all

parties are amenable to process and are within the forum’s

jurisdiction. An alternative forum is adequate when the

parties will not be deprived of all remedies or treated

unfairly.” Id. at 803 (citation omitted). There is no ques-

tion that the U.K. courts are available; the Drug Compa-

nies are amenable to process there and the district court

conditioned its dismissal of the action on their agree-

ment to accept service in actions in the U.K. courts (and

to comply with several other obligations as well). The real

question is whether the court’s conclusion that the U.K.

No. 06-1427 11

courts offer an “adequate” alternative was within its

discretion. We think that it was. Piper Aircraft establishes

that the law in the United Kingdom need not be identical

to U.S. law, or even as favorable to plaintiffs as U.S. law

may be. The Fairchild decision demonstrates that the

highest court of the United Kingdom has, at least in one

setting, recognized the need to modify strict “but for” rules

in this kind of case. We do not know, of course, whether

the U.K. courts will apply Fairchild to the present case,

but that kind of certainty is not required (especially in

a common-law system like theirs). Lord Cornhill’s speech

in Fairchild recognized that the doctrine the Lords

adopted there would grow over time, saying that “[i]t

would be unrealistic to suppose that the principle here

affirmed will not over time be the subject of incremental

and analogical development. Cases seeking to develop

the principle must be decided when and as they arise.”

Fairchild, 1 A.C. at 68. Finally, the fact that the Fairchild

result has apparently been codified for purposes of asbes-

tos cases, see Compensation Act 2006, 2006 c. 29 (U.K.),

does not mean that the ordinary common-law process has

been foreclosed for other types of cases.

As we noted earlier, Gulf Oil identified a number of

private-interest factors that should be considered in

connection with a motion to dismiss for forum non

conveniens: (1) relative ease of access to sources of proof;

(2) availability of compulsory process and costs for at-

tendance of witnesses; (3) possibility of view of premises,

if appropriate; and (4) other practical issues, including

ease of enforcement of any ultimate judgment. See Gulf

Oil, 330 U.S. at 508. Plaintiffs argue that there are

“extreme impediments” to their funding of the litigation,

if it were to proceed in the United Kingdom, largely

because the English legal system uses a “loser pays” rule

for attorneys fees and because compensatory damages

tend to be low. We do not see how the use of a different

12 No. 06-1427

fee-shifting rule for attorneys’ fees can weigh against

dismissal, however, in light of Piper Aircraft. Obviously

the English Rule is less favorable to plaintiffs whose

chances of losing are too great (which, for risk-averse

plaintiffs, might even be 30% or 40%), but we believe that

must be regarded as the kind of unfavorable difference in

legal system that carries little weight. In fact, the United

States stands almost alone in its approach toward attor-

neys’ fees, and so if we were to find that dismissal was

wrong for this reason, we would risk gutting the doctrine

of forum non conveniens entirely.

The district court was persuaded that the private-

interest factors tended to show that the United Kingdom

was the preferable forum. Although it thought that access

to discovery was not a factor favoring dismissal, the other

private interests—especially the ability of the defendants

to join as third-party defendants various non-U.S.

parties—supported its action. It found many of these

factors to be in balance, including access to evidence

and ease of discovery.

Turning to the public-interest factors, we begin with the

district court’s analysis of the administrative difficulties

that could arise in either forum. The court assumed

comparable congestion in the two legal systems, and then,

without much explanation, concluded that “the administra-

tive difficulties stemming from court congestion strongly

favor the U.K. forum.” In reaching that conclusion, it

appeared to give substantial weight to the fact that there

would be no jury trial in the United Kingdom, whereas

there would be a Seventh Amendment right to a jury in

the United States.

In our view, the fact that a plaintiff may exercise her

constitutional right to a jury trial is not something that

properly may weigh against keeping a case in the United

States. To the extent that court congestion matters, what

No. 06-1427 13

is important is the speed with which a case can come to

trial and be resolved. See Gates Learjet Corp. v. Jensen,

743 F.2d 1325, 1337 (9th Cir. 1984). In Gates Learjet, the

court held, “[T]he real issue is not whether a dis-

missal will reduce a court’s congestion but whether a trial

may be speedier in another court because of its less

crowded docket.” Id. In addition, the court noted that “[t]he

forum non conveniens doctrine should not be used as a

solution to court congestion; other remedies, such as

placing reasonable limitations on the amount of time

each side may have to present evidence, are more appro-

priate.” Id. Apart from administrative convenience, the

Gulf Oil decision also notes that jury duty ought not to

be imposed on the people of a community that has “no

relation” to the litigation. As we discuss in a moment,

however, California cannot be described that way. In our

view, the burdens of jury duty are closely linked with the

local interest in the litigation; they are not a separate

reason to reject a case. Once we remove the jury question

from the picture, the record is silent about the relative

administrative advantages or disadvantages of California

and the United Kingdom. We therefore regard this

factor as neutral.

The district court thought that the United Kingdom’s

interest in the Gullone litigation substantially out-

weighed that of California. It noted that the U.K. govern-

ment has shown considerable interest in the plight of

hemophiliacs who became infected with HIV and HCV.

There is also the obvious point that their medical care

will be furnished at home and that the human impact of

their illness will be felt first and foremost where they

live. On the other hand, plaintiffs point out that California

has an interest in the case because defendants Alpha,

Bayer, and Cutter are headquartered there; defendant

Bayer has its main manufacturing plant for Factor Con-

centrates there; and the plasma collection process took

14 No. 06-1427

place there. These are not trivial local interests. They

certainly do not make California a forum with “no relation”

to the litigation. In the end, a rational person might come

to either conclusion on this record: some might think that

the greater interest lies in the place where the companies

operated and allegedly committed the wrongs; others

might find a greater interest in the place where the

victims suffer from those wrongs and where the financial

impact of the consequences will fall. Put another way, the

record contains enough evidence to support the conclu-

sion that the citizens of the United Kingdom have a

greater interest in this controversy than those of the

Northern District of California. In light of the fact that the

plaintiffs have not sued in their home forum, and there-

fore that the presumption of convenience in their favor

“applies with less force,” Sinochem, 127 S.Ct. at 1191, we

see no reversible error in the district court’s conclusion

that the defendants met their burden here.

IV

The ruling on the Drug Companies’ motion for dismissal

on the basis of forum non conveniens easily could have

gone either way. We therefore cannot say that the court

abused its discretion when it concluded that the defen-

dants’ motion should be granted. The judgment of the

district court is AFFIRMED.

A true Copy:

Teste:

________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA-02-C-0072—5-4-07