Petition — Haste v. American Home Products Corp.

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1978

vn. Y8S=-429

WILLIAM and MAXINE HASTE, Petitioners,

v.

AMERICAN HOME PRODUCTS, CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

ROBERT A. DUFTY

BADER & DUFTY

600 BOSTON BUILDING

828 - 17th STREET

DENVER, COLORADO 80202

and

PAMELA N. HULTIN,

OF COUNSEL

COUNSEL FOR PETITIONERS

August ll, 1978

INDEX Page

rr +. oS 6 «6 & «so % <6 2

OE ee ee ee 2

Questions Presented ......e.... 2

Statutory & Regulatory Provisions

eee ee, te 3

Statement of the case ......ee-. 4

as The Decision of the Tenth

Circuit Court of Appeals

Departs from the Accepted and

Usual Course of Judicial

Proceedings in Making a

Finding of Fact Unproven in

the Record and Unsupportable

as a Matter of Law. . . . « « « 8

Bi The Decision of the Tenth

Circuit is in Conflict with

the Decisions of Other

Circuits and 21 U.S.C. § 353

(b)(2) in that it Extends the

Prescription Drug Doctrine to

Situations Where the Drug is

not Dispensed Through a

WREOGGRARCIOR. «¢ 2 sc ts ttt tl 12

: P The Decision of the Tenth

Circuit is in Conflict with

the Decision of Other Circuits

and State Courts in Evaluating

What Constitutes Reasonable

Warning of Known Risks Where

Advertising is Directed to the

SE a see 21

ae ey a 26

Appem@in ». se see enesnevs'cie Ape i

Order of the United States Court of

Appeals Staying Mandate .... App. l

Order of the United States Court of

Appeals Denying Petition for Re-

hearing and Rehearing en banc . App. 3

Opinion and Order of the United

States Court of Appeals ... . App. 5

Judgment of the United States

District Court. . . « « « « « « App. 14

Memorandum Opinion of the United

States District Court regarding

damages ..... © © © e « ce App. 16

Memorandum Opinion of the United

States District Court regarding

liability on ees e ec & ¢ Oe

Text of 21 U.S.C. § 352. .... . App. 67

Text of 21 U.S.C. § 353. . ... . App. 70

Text of 21 C.F.R. § 202.1(e) . . . App. 72

Text of 21 C.F.R. § 202.1(e)(3). . App. 75

Text of 21 C.F.R. § 202.1(e)(3)

Ciiid ~. wo 0 0 ecee ec « « Ape 16

Text of 21 C.F.R. $ 202.1(e)(5). . App. 77

Text of 21 C.F.R. § 202.1(e)(6). . App. 79

Text of 21 C.F.R. § 202.1(e)(7). . App. 82

Text of 21 C.F.R. § 202.1(k) .. . App. 84

Text of 21 U.S.C. 201.105... App. 85

CITATIONS

CASES:

David v. Wyeth Laboratories, 399

(ii)

F.2d 121 (9th Cir. 1968). . 12, 6, 21

Incollingo v. Ewing, 444 Pa. 263,

283 A.2d 206 (S.Ct. of Pa.1971) .

Love v. Wolfe, 58 Cal. Rep. 42 (4d

Dist. Ct. of Appeals 1967). »

Reyes v. Wyeth Laboratories, 498

F.2d 1264 (5th Cir. 1974) . .. 12, 21

Singer v. Sterling Drug, Inc., 461

F.2d 288 (7th Cir. 1972). ... - 21

Sterling Drug v. Yarrow, 408 F.2d

ek eee | eee 2

Stevens v. Park Davis Co., 107 Cal.

Rep. 45, 507 P.2d 653 (S.Ct.

Serer. & & be S's 8 8k eae » 23

MISCELLANEOUS:

ae Gerce (6: 6 4 2.0 2s 6 6. a6 . &

21 C.F.R. § 201.105 4, 10

21 C.F.R. § 202.1(e) et seq. s 13, 2

21 C.F.R. § 202.1(e)(3), (e)(3)

(iii) » 22

21 C.F.R. § 202.1(e)(5) = a

21 C.F.R. § 202.1(e)(6) 11

21 C.F.R. § 202.1(e)(6)(i), (iii),

(iv), (vd, (xviii) 4

21 C.F.R. § 202.1(e)(7)(i), (vii),

(viii), (xi), (xii) 4

21 U.S.C. §352(£) »

21 U.S.C. §352(n) 3. 7, 10, 18, 21

21 U.S.C. §353(b) (1) » 10

21 U.S.C. §353(b)(2) Be Sa BB, 28

28 U.S.C. §1254(1) 2

(iii)

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1978

NO.

WILLIAM and MAXINE HASTE, Petitioners,

Vv.

AMERICAN HOME PRODUCTS, CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

The Petitioners, William and Maxine

Haste, respectfully pray that a Writ ot

Certiorari issue to review the judgment

and opinion of the United States Court

of Appeals for the Tenth Circuit entered

in this proceeding on June 14, 1978.

1.

OPINION BELOW

The opinion of the Court of Appeals

is designated for publication but has not

yet been published. The District Court

decisions from the District of Wyoming

were not published. All opinions appear

in the appendix attached hereto.

JURISDICTION

The judgment of the Court of Appeals

for the Tenth Circuit was entered on June

14, 1978, reversing the ruling in the

Memorandum Opinion of the District Court

for the District of Wyoming entered on

June 13, 1975, and thereby, the Order on

Damages entered by the District Court

for the District of Wyoming on August 9,

1976 and the judgment entered on August

33, i976. Rehearing before the United

States Court of Apeals for the Tenth

Circuit was denied on July 31, 1978.

This petition for a Writ of Certiorari

was filed within ninety (90) days of the

ruling entered June 14, 1978, This

Court's jurisdiction is invoked under 28

U.S.C., §1254(1).

QUESTIONS PRESENTED

a. Whether it is proper for the

Tenth Circuit to base its Appellate

2.

. .

ORL LORE ATI OT OT em

decision on a "finding of fact" by the

trial judge that Anaplaz is a

prescription drug where the trial opinion

notes that the judge accepts the argument

“albeit the record is short a_ few

elements of proof of a true prescription

drug."

Whether a prescription drug

which was not sold or ordered by a

veterinarian as a prescription drug is

still entitled to the exemptions under 21

U.S.C. §353(b)(2).

~ Whether the manufacturer of a

vaccine for animal use, advertised to the

public as "safe" and "incapable of

causing disease" and in which advertise-

ments no mention is made of adverse

effects, or side effects known to the

manufacturer as required by 21 U.S.C.

§ 352(n) and 21 C.F.R. § 202.1(e),

satisfies its duty to warn of dangerous

side effects by notifying veterinarians

of these adverse effects.

STATUTORY AND REGULATORY PROVISIONS

INVOLVED

Certain sections of the Food, Drug

and Cosmetic Act, Title 21 U.S.C.

§ 352(f), (nm), 21 U.S.C. § 353 (b)(1),

(b)(2).

Code of Federal Regulations, Title

zi, @G.ee. §202.1(e); 21 C.F.R §

202.1(e)(3); 21 C.F.R. §202.1(e)(3)(iii);

21 C.F.R. §202.1 (e)(5); 21 C.F.R. §

202.1(e)(6)(i), (iii), (iv), (v),

(aviiid: 2). Sek. § 202.1(e)(7)(i),

(vii), (viii), (xi), (xii);

21 C.F.R. §201.105

The text of the above are set out in

the Appendix.

STATEMENT OF THE CASE

This case was originally filed in

the district of Wyoming under diversity

of citizenship where the amount’. in

controversy exceeded Ten Thousand Dollars

($10,000.00) on July 31, 1973. Trial to

the Court was bifurcated by Judge Winner,

sitting specially in the District of

Wyoming, and the issue of liability was

decided favorably to petitioners by Judge

Winner on June 13, 1975. Trial on the

issue of damages was then had and a

Memorandum Opinion awarding Forty nine

thousand nine hundred ninety seven

dollars ($49,997.00) to petitioners was

filed on August 9, 1976, and judgment

entered thereon on August 11, 1976. The

petitioners then appealed the award of

damages to the Tenth Circuit Court of

Appeals and the defendant filed a Cross

4,

STi se Tasks

Appeal contending that liability was

erroneously imposed. The Court of

Appeals, On June 14, 1978, ruled in favor

of the Defendant's Cross Appeal finding

that liability could not attach.

The Hastes, petitioners here, bought

Anaplaz vaccine through their veterinar-

ians beginning in 1971. Anaplaz is a

vaccine manufactured by the respondent

corporation to prevent Anaplasmosis.

During the course of the development of

this vaccine, the defendants were warned

by the Department of Agriculture and

several independent imunogeneticists that

the vaccine was a probable cause of a

disease known as neonatal isoerythrolysis

(NI). This disease causes severe anemic

reactions of the calf if it suckles the

cow after birth and results in the death

of the calf unless it is immediately

removed after birth from the dam and

nursed artificially while the dam is

milked of colostrum,

The Hastes had read about Anaplaz

vaccine in advertisements appearing in

numerous cattlemen's magazines extolling

the virtues of Anaplaz vaccine with

language indicat/ng it was "safe", "in-

capable of causing disease" and _ that

there was no longer a need to run the

risks of Anaplasmosis. The Hastes in-

5.

noculated their entire herd of cross bred

Santa Gertrudis cattle as instructed by

the package insert, giving the final

booster shot in January of 1973,

After the final booster in the

calving season of 1973, the Haste cows

began to drop NI infected calves. During

the liability trial, Judge Winner found

that thirty two (32) calves died as a

result of NI proximately caused by the

Anaplaz vaccine. He also found that the

petitioners were forced to sell one hun-

dred ninety one (191) cows for slaughter,

since they would produce only NI calves

in the future due to the Anaplaz innocu-

lations. The entire Santa Gertrudis

upgrading program was lost although no

award was made for this loss.

Judge Winner decided the liability

issue in favor of petitioners, finding

that, notwithstanding the fact that

Anaplaz might be considered a prescrip-

tion drug, that it was not sold as one in

this case. The warnings given through

the Dear Doctor letters to the veteri-

narians were insufficient to overcome the

inducements placed directly to the public

through the cattlemen's magazines, and,

therefore, that the defendant was negli-

gent in failing to reasonably warn the

6.

the public of the adverse effects of

Anaplaz. He further found that there was

a breach of the warranties in the adver-

tisements.

At the trial the testimony of Dr.

Roberts indicated that he had not, and

did not, consider Anaplaz to be a

prescription drug. He testified that he

ordered it for the Hastes, even though he

did not think it was an appropriate

treatment. Judge Winner found the

warnings given by the veterinarians to

the Hastes to be inadequate and minimal.

However, in an ambiguous paragraph of his

decision appearing on page 42 of the

appendix, Judge Winner indicated that he

accepted the defendants argument that

Anaplaz was a prescription drug "albeit a

few elements of proof are missing." The

Court of Appeals ruled that the lower

court, having "acknowledged" that Anaplaz

was a prescription drug, must therefore

find the warnings given the veterinarians

Satisfied any duty to warn, since

prescription drugs are excepted from the

notice requirements of 2] U.S.C., §352(n)

by the "prescription drug doctrine." The

issue of the insufficiency of damages was

never reached by the Court of Appeals,

Since it was mooted by their decision on

liability.

Petitioners ask for a Writ of

Certiorari to review the decision of the

Court of Appeals regarding liability

Petitioners still assert that the damages

awarded were insufficient, and request

that this case be sent back to the Tenth

Circuit for determination of the

sufficience of the damages award. Should

the ultimate opinion be favorable to

Petitioners.

l. THE DECISION OF THE TENTH

CIRCUIT COURT OF APPEALS

DEPARTS FROM THE ACCEPTED

AND USUAL COURSE OF JUDI-

CIAL PROCEEDINGS IN MAKING

A FINDING OF FACT UNPROVEN

IN THE RECORD AND UNSUPPORT-

ABLE AS A MATTER OF LAW.

The opinion of the Court of Appeals

is based upon a finding that Judge Winner

“acknowledged that the drug was a 'pre-

scription drug'" and, therefore, the

respondent discharged its duty to warn

the Hastes, petitioners here, by the

warnings given to veterinarians (App. p.

ll). Unfortunately, Judge Winner's

opinion does not make a clear finding of

fact that Anaplaz was a _ prescription

drug. This is the language upon which

the Court of Appeals determines

that the trial Court "acknowledged" Ana-

plaz to be a prescription drug.

Moreover, for purposes of resolution

of this case, I accept defendants'

arguments that Anaplaz and its sale

should be treated as the sale of a

prescription drug, albeit the record

is short a few elements of proof of

a true prescription drug. (App. 42)

The trial opinion read as a whole was to

the effect that even if Anaplaz were a

prescription drug it was knowingly not

sold as a prescription drug and, there-

fore, the warnings given must be rea-

sonably calculated to reach and ade-

quately inform the public. Judge Win-

ner's "acceptance" of the defendant's

argument was not a finding of fact and

should not be sanctioned as one on the

basis of the record and law. Argument is

not evidence,

Procedurally, the burden placed upon

the Petitioners in this situation is un-

tenable. At the trial the burden of

proof of an affirmative defense rests on

the defendant. At the trial no substan-

tial evidence of any sort was presented

to prove that Anaplaz was considered a

prescription drug. The Court of Appeals

9.

has raised argument above proof.

Judge Winner found that Anaplaz was

not sold as a prescription drug and that

the respondent was well aware of that

fact. (See App. p. 53) The trial testi-

mony from the veterinarian who originally

ordered the Anaplaz, Dr. Roberts, was

that he did not order the Anaplaz through

a prescription as he did not believe it

was a prescription drug. Furthermore,

prescription drugs are defined under 21

U.S.C. §353(b)(1) as drugs “for use by

man." (see App. p. 70). Anaplaz was

never intended to be a human vaccine.

Animal drugs can be required to be sold

pursuant to prescription if they fall

within the descriptive criteria set out

in 21 C.F.R. §201.105 (See App. p.85) No

evidence that those criteria were applic-

able to Anaplaz was presented at trial.

(Such a prescription only exempts the

manufacturer from compliance with 21

U.S.C. §352(f£) related to listing direc-

tions for use and not from the adverti-

sing requirements of 21 U.S.C. §352(n),

however.) Furthermore, individuals are

normally presumed to have acted within

the law and if Anaplaz were a prescrip-

tion drug, then the advertisements admit-

ted into evidence and mentioned in the

trial Court (App. pp. 35, 37, 38) and

Appellate decisions (App. 7) would have

10.

been in violation of the "brief summary"

requirements of 21 C.F.R. §202.1(e), 21

C.F.R. § 202.1(e)(3), ai G.F.R.. 8

202.1(e)(3) (iii), 21 C.F.R. §202.1(e)(5)

and 21] C.F.R. § 202.1(e)(6). (See

Appendix beginning p. 72) The Court of

Appeals decision agrees that the adverti-

sing was laudatory and contained no

warnings whatsoever regarding the

Department of Agriculture statement, po-

tential danger or the results of any of

the testing indicating NI side effects

known by the respondent prior to its ad-

vertising campaing. Only if Anaplaz were

not a prescription drug would the respon-

dents be acting within the requirements

of the regulations.

The trial Court's decision readily

admits that proof was lacking and the law

itself indicates that veterinary drugs in

general are not "prescription drugs".

The court of Appeals has erroneously

raised an “assumption for purposes of

argument" to the level of a "finding of

fact. "This interpretation of Judge Win-

ner's opinion requires that petitioner's

appeal a favorable ruling, based upon

what appears to be sound legal analysis,

in order to protect against appelate dis-

approval of the legal reasoning and con-

struction of the ambiguous "acceptance"

as a "finding of fact." It ignores the

Za.

necessity of evidentiary proof and by

implication creates a veterinary "pre-

scription drug" in contradiction to stat-

ute and code section.

The opinion of the Tenth Circuit

creates an unsupportable finding of fact

from a small part of Judge Winner's deci-

sion. It has denied the Petitioners a

fair and impartial determination of the

facts in their case. This Court should

grant Certiorari to review the unusual

procedure and the factual determination

made by the Appelate Court.

2. THE DECISION OF THE TENTH CIR-

CUIT IS IN CONFLICT WITH THE

DECISIONS OF OTHER CIRCUITS

AND 21 U.S.C. §353(b)(2) IN

THAT IT EXTENDS THE PRESCRIP-

TION DRUG DOCTRINE TO SITUA-

TIONS WHERE THE DRUG IS NOT

DISPENSED THROUGH A PRESCRIP-

TION.

The Tenth Circuit decision creates a

far more liberal “prescription drug doc-

trine" than is described in 21 U.S.C. §

353(b)(2) (see App. p.71) or applied in

the Ninth and Fifth Circuits. See Davis

v. Wyeth Laboratories, 399 F2d 121 (9th

Cir. 1968) and Reyes v. Wyeth Laborator-

jes, 498 F2d 1264 (Sth Cir. 1974).

12.

This new doctrine is based upon what the

Tenth Circuit terms a "typicai™ prescrip-

tion drug sale. (See App. p.12) Judge

Winner's trial opinion found that the

sale of Anaplaz, even if it were a pre-

scription drug, was certainly not "typi-

cal" in view of the direct advertising

campaign. (See App. pp.42, 44, 45)

The Hastes wer e in uced to purchase

Anaplaz by a substantial sales promotion

directed to the lay public and evidenced

by advertisements in over forty cattle-

men's magazines. No mention of contrain-

dications, adverse effects or risks was

made in the laudatory descriptions of the

benefits of using Anaplaz in these adver-

tisements. (See Apellate Dec. App. pp. 6

& 7 and Trial Opinion, App. p.p. 35, 38)

If Anaplaz were a prescription drug then

it was not advertised as one as required

by the regulations regarding a fair pre-

sentation in brief summary in all adver-

tisements of prescription drugs of known

adverse effects, contraindications'. or

other risks of use. (See 21 C.F.R. §

202.1(e) et seq. at App. p. 72) In none

of the "prescription drug doctrine" cases

cited by the Court of Appeals was direct

advertising, not in compliance with the

regulations, employed by the manufacturer

to induce consumers to order the product.

(See Appellate Dec app. p. 13)

i3.

While Judge Winner did not mention

the trial testimony of Dr. Roberts in

his opinion it obviously played a part in

his determination of this case. It

appears in the appendix filed in the

Court of Appeals beginning at page 126

and reads as follows.

DR. ROBERTS: The first Anaplaz

vaccine that they purchased from me

was picked up and charged to them on

November 20, 1971.

MR. HIRST: That was the other

occasion you talked to them about

it?

A... Tes, oat.

THE COURT: Was a prescription

given for this vaccine on that day

by you? Did you write a prescrip-

tion for it?

THE WITNESS: No. it is not

required to write a prescription for

it.

MR. HIRST: What the Judge

wants to know is: How did you get

the vaccine?

THE WITNESS: Ordered it from Fort

14.

Dodge.

THE WITNESS: I have copies

here of the invoices.

MR. HIRST: If the Court

please: May I approach the bench?

THE COURT: Yes. I just

wanted to be sure that he didn't

regard it as a prescription drug.

MR. HIRST: That he what?

THE COURT: That he does not

regard it as a prescriptien drug.

And I gather you do not, is that

right?

THE WITNESS: It is for --

THE COURT: Do you feel the

drug can be sold by you as a licen-

sed veterinarian without having you

write a prescription for it, or do

you feel that you must write a pre-

scription for it? All I want to

know is your view in the matter.

THE WITNESS: No, I don't feel

that I have to write a prescription

i3.

to sell this product.

In cases where drugs, denominated as

prescription drugs, are not sold as pre-

sciption drugs the Ninth and Fifth Cir-

cuits have ruled that the manufacturer

must provide the ultimate consumer with

adequate information so that he may make

an informed decision as to whether to use

the drug or not.

In a polio vaccine case where the

manufacturer was held liable for the po-

lio contracted by the plaintiff, the

Ninth Circuit Court of Appeals stated:

Here, however, although the drug was

denominated a prescription drug, it

was not dispensed as such. It was

dispensed to all comers at _ mass

clinics without an _ individualized

balancing by a physician of the

risks involved. In such cases (as

in the case of over-the-counter

sales of nonpre- scription drugs)

warning by the manufacturer to its

immediate purchaser will not suf-

fice...in such cases, it is’ the

responsibil- ity of the manufacturer

to see that warnings reach the con-

sumer, either by giving warning it-

self or by obligating the purchaser

to give warning. Davis v Wyeth

16.

Laboratories, 399 F.2d 121 (9th

Cir. 1968)

While the facts of the Davis case

are distinguishable from those here, the

policy is the same. If the drug is not

dispensed by filling or refilling a pre-

scription, warning must be given to the

consumer directly by the most reasonable

means available to adequately inform the

user of the risks.

It is apparent that the trial court

found that Anaplaz was not sold as a pre-

scription drug and that the defendant was

well aware of that fact. (See, Trial

Opinion, App. pp. 35, 42, 44, 53) In a

Fifth Circuit case involving the Sabin

oral polio vaccine which, though denomi-

nated a prescription drug, was not dis-

pensed as one the Court stated:

Thus, as in the case of patent drugs

sold over the counter without pre-

scription, the manufacturer of a

prescription drug who knows or has

reson to know that it will not be

dispensed as such a drug must_ pro-

vide the consumer with adequate _ in-

formation so that he can balance

the risks and benefits of a given

medication himself. (emphsasis

added.) Reyes v. Wyeth Laboratories

17.

498 F.2d 1264 (5th Cir.

1974).

The Appellate Court as well as the

Trial Court in this case recognized that

the warnings given to the Hastes were

inadequate and minimal. Certainly, they

were insufficient to allow them to

balance the risks and benefits of a given

medication. (See Appellate Opinion App.

11; Trial Opinion App. pp.38, 39, 65.)

Judge Winner's trial opinion

specifically finds that the

...defendant knew or had reason to

know that Anaplaz would not be ad-

ministered as a prescription drug.

It had a duty to warn foreseeable

users, and that duty was for a

clear,explicit warning in the soli-

citations leading to the sale-not

in a package insert after the soli-

cited sale had been accomplished.

(See Trial Court Memorandum, App.

pp. 53-54.)

The statutory codification of the

"prescription drug doctrine" is found

under 21 U.S.C., §353 (b)(2), which ex-

empts any drug from, among other things,

certain requirements of warning in adver-

tising that are required by 21] U.S.C.

18.

§ 352(n) if the drug is "dispensed by

filling or refilling a written or oral

prescription of a practitioner..." (See

Appendix pp.70 & 68) Since Dr. Roberts

did not order Anaplaz pursuant to a

prescription the doctrine should not

apply. However the Court of Appeals held

that:

The trial court was in error in

holding that the contents of the

advertisements of Anaplaz in the

various livestock publications

are controlling on the warning is-

sue, and thus override the prac-

tical considerations which arise

from the requirement that the con-

sumer purchase the vaccine only

from veterinarians, and override

the established ‘prescription drug'

doctrine. Court of Appeals Decision

Appendix p.p. 11-12)

This language extends the "prescrip-

tion drug doctrine" to situations where

the lay consumer determines what medica-

tion he needs based upon the insufficient

and false information supplied in adver-

tisements and then seeks out a practi-

tioner who will consent to order the drug

requested without prescribing it. Norm-

ally a patient can make a determination

of whether to follow the practitioner's

19.

advice. It is not "typical" to tell the

practitioner what the medication should

be and then order it from him. The

decision of the Court of Appeals ignores

the realities of veterinary drug

marketing. The drugs are sold through

veterinarians, not druggists at’ the

corner pharmacy. Judge Winner found that

Dr. Roberts received a "tidy profit" from

the sale of the Anaplaz to the Hastes.

(See App. p. 38). The normal sale of a

prescription drug does not, and should

not, result in a_= profit to the

prescribing physician.

The prescription drug doctrine was

developed since the practioner would

normally be the person who assess_ the

medical risks of the use of a drug in

light of the expert knowledge he has of

the values and drawbacks in a certain

situation. In such cases, where the

practitioner makes the initial choice as

to whether to use or not to use a drug,

reasonable notification to the

practitioner of side effects and risks is

sufficient to protect the public. A

"prescription" implies an expert

determination of the efficacy and need of

a particular patient for a particular

medication. Where no prescription is

used to order a drug then the manufac~

turer has a duty to reasonably notify the

20.

user of known risks since the anticipated

professional intervention is’ eroded.

(see Singer v. Sterling Drug,Inc., 461

F.2d 288 (7th Cir. 1972); Davis v. Wyeth

Laboratories, 399 F.2d 121 (9th Cir.

1968) Reyes __v. Wyeth Laboratories,

498 F.2d 1264 (5th Cir 1974.)

In view of the fact that Anaplaz was

not sold as a prescription drug, the

"prescription drug doctrine" should not

apply to protect the manufacturer. This

case should be reviewed to prevent a mis-

interpretatin of 21 U.S.C. §%53(b)(2) and

to prevent a conflict with the policies

and decisions of other circuits.

3. THE DECISION OF THE TENTH CIR-

CUIT IS IN CONFLICT WITH THE

DECISION OF OTHER CIRCUITS

AND STATE COURTS IN EVALUATING

WHAT CONSTITUTES REASONABLE

WARNING OF KNOWN RISKS WHERE

ADVERTISING IS DIRECTED TO THE

PUBLIC.

The Food, Drug and Cosmetic Act

352(n) and the regulations under 21

C.F.R. § 202.1(e) require that

manufacturers include certain minimal

truths related to side effects in their

advertising. These requirements’ are

essential to protect the public’ from

21.

exactly the situation that occurred in

this case. The decision of the Tenth

Circuit condones the manufacturer's

practice of false or insufficient adver-

tising to the lay public, avoiding any

mention of risks in contravention of the

regulatory requirements, and places the

burden on the practitioner to correct the

falsehoods and fraudulent statements made

in the advertisements. This cannot be a

proper result. (See Appendix starting

ae Pe

Reasonable warning under the circum-

stances of the individual case has been a

requirement of the "prescription drug

doctrine". In Love v. Wolfe, 58 Cal.

Rep. 42(4d Dist. Ct. of Appeals 1967),

the California Court of Appeals noted

that failure to warn and over promotion

were factual questions to be submitted to

the jury with the following language:

Action designed to stimulate the use

of a potentially dangerous product

must be considered in testing the

adequacy of a warning as to when

and how the product should not be

used, (emphasis added) Love v.

Wolfe, 58 Cal. Rep.at 220.

Other cases indicate that the custom

and practice of a manufacturer in “over--

22.

promoting" its product must be considered

in testing the reasonableness of a

warning in view of the circumstances

Surrounding the sale of a product. See

Incollingo v. Ewing, 444 Pa. 263, 283

A.2d 206 (S.Ct. of Pa. 1971) and Stevens

v. Park Davis & Co., 107 Cal. Rep. 45,

507 P.2d 653 (S.ct. 1973).

Judge Winner correctly cited and

followed Sterling Drug v. Yarrow, 408

F.2d 978 (8th Cir. 1563) for the proposi-

tion that a warning must be reasonable

under the circumstances,

We conclude that where a drug is

manufactured without negligence

but is unreasonably dangerous if a

reasonable warning of a side ef-

fect is not given, that the manu-

facture: may be held liable for the

injury resulting from the failure

to give a warning reasonable under

the circumstances. (emphasis added)

(Sterlin Drug v. Yarrow, 408 F.2d

at 993

Judge Winner's decision follows the

“over-promotion" line of cases and re-

quires reasonableness of the warning in

the following language of his opinion:

23.

I think that based on the state of

scientific knowledge when plaintiffs

purchased the Anaplaz, and _ had

plaintiffs not been presold on its

use by the advertising literature,

the warning is borderline, but it

might be sufficient. ... The “Dear

Doctor" letters played down the

relationship between Anaplaz and NI,

and the literature and most partic~

ularly the package inserts say that,

“evidence suggests a breeding dispo-

sition exists with 75% of the known

cases existing in Charolais or Char-

olais crosses." (Plaintiffs were

raising Santa Gertrudis). At best,

the package insert warning is skimpy

even for _a drug sold as a true

prescription drug not advertised

directly to the public. With the

sales job the defendant did on the

cattlemen who were the ultimate

purchasers, the warning is entirely

inadequate, and the defendant is

liable for failure to adequately

warn of the danger of NI. ... I

think that the direct sales effort

(even though the product was

channeled through veterinarians)

imposed on defendant a duty to warn

the ultimate consumer be- fore he

spent his money on the _ purchase.

Defendant's duty was to warn fully

24.

and fairly of risks

likely to be encountered as shown

by all of the scientific knowledge

- not just that shown by knowledge

culled, slanted and carefully

selected by defendant. (Trial

Memorandum App. pp. 42-43,44. )

The Tenth Circuit decision invokes

the "prescription drug doctrine" to pro-

tect the manufacturer of a veterinary

product which is advertised directly to

the public as "safe" and “incapable of

causing disease" from any liability when

disease results. Under the facts, even

as set out by the Tenth Circuit, a manu-

facturer is free to publish lies to the

public and protect itself from liability

by sending "Dear Doctor" letters to vet-

erinarians.

In view of the statutory and regula-

tory requirements of truth in the adver-

tising as well as revelation of known

side effects and the case law relating to

reasonableness and adequacy of warning

under the circumstances of the individual

case the Tenth Circuit Court of Appeals'

decision should be reviewed to adequately

consider the question of what constitutes

a reasonable warning in situations where

there is direct advertising to’ the

public.

a2.

CONCLUSION

The decision of the Court of Appeals

should be reviewed by this Court to cor-

rect an unusual and improper "finding of

fact" on the part of the Tenth Circuit

Court of Appeals. Furthermore, the Court

of Appeals decision should be reviewed to

clarify the parameters of the

“prescription drug doctrine’ when

advertising is channeled directly to the

public related to the sale of potentially

dangerous drugs. Without clarifications

from the Supreme Court, the decisions of

the circuits will be in conflict and the

statutory language will be clouded.

Robert A. Dufty

BADER & DUFTY

600 Boston Building

828 - 17th Street

Denver, Colorado 80202

and

Pamela N. Hultin

of Counsel

Counsel for Petitioner

September 8, 1978

26.

APPENDIX

AUGUST TERM - AUGUST 14, 1978

Before Honorable Oliver Seth, )

Honorable Robert H. McWilliams, )

Honorable James K. Logan, )

Circuit Judges. )

) NO.

) 76-

WILLIAM HASTE and MAXINE ) 2015

HASTE, )

)

Plaintiffs-Appellants, )

Vs. )

)

AMERICAN HOME PRODUCTS CORPOR-_ )

ATION, )

)

)

Defendant~Appellee.

This matter comes on for considera-

tion of appellants' motion for stay of

mandate in the captioned cause pending

application to the Supreme Court for

certiorari.

Upon consideration whereof, it is ordered

that the mandate shall be stayed until

September 13, 1978, pending certiorari

App. l

and that if on or before that date there

is filed with the Clerk of the Court of

Appeals a notice from the Clerk of the

Supreme Court of the United States that

appellants have timely filed a petition

for writ of certiorari in the Supreme

Court, the stay shall continue until

final disposition by the Supreme Court.

Howard K. Phillips, Clerk

App. 2

MAY TERM - JULY 31, 1978

Before Honorable Oliver Seth, Chief Judge

Honorable William J. Holloway, Jr.,

Circuit Judge

Honorable Robert H. McWilliams, Circuit

Judge

Honorable James E. Barrett, Circuit Judge

Honorable William E. Doyle, Circuit

Judge

Honorable Monroe G. McKay, Circuit Judge

Honorable James K. Logan, Circuit Judge

WILLIAM HASTE and MAXINE HASTE, )

)

Plaintiffs-Appellants)

and Cross~-Appellees, )No. 76-

) 2015

vs. )

No. 76-

AMERICAN HOME PRODUCTS ) 2016

CORPORATION, )

)

Defendant-Appellee )

and Cross Appellant. )

This matter comes on for considera-

tion of the petition for rehearing with

suggestion for rehearing en banc filed by

appellants and cross-appellees, William

Haste and Maxine Haste.

App. 3

Upon consideration whereof, the

petition for rehearing is denied by Chief

Judge Seth, and Circuit Judges McWilliams

and Logan.

The petition for rehearing having

been denied by the panel to whom the case

was argued and submitted, and no member

of the panel nor judge in regular active

service on the Court having requested

that the Court be polled on rehearing en

banc, Rule 35, Federal Rules of Appellate

Procedure, the petition for rehearing is

denied.

Howard K. Phillips, Clerk

App. 4

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

Nos. 76-2015-16

WILLIAM HASTE and MAXINE )

HASTE, )

Plaintiffs, Appellants, )Appeal From

and Cross-Appelles, )The United

)States

Vv. District

)Court For

AMERICAN HOME PRODUCTS )The

CORPORATION, District of

)Wy oming

Defendant, Appellee, )(D.C.#Civil

and Cross-Appellant. )5899)

Pamela N. Hultin, of Bader & Dufty,

Denver, Colorado, for Appellants.

Glenn Parker, of Hirst & Applegate,

App. 5

Cheyenne, Wyoming for Appellee.

Before SETH, Chief Judge,McWILLIAMS and

LOGAN, Circuit Judges.

SETH, Chief Judge.

This is a products liability case on

appeal from a judgment after trial with-

out a jury in which the defendant-ap-

pellee, American Home Products Corpora-

tion, a manufacturer of an animal vaccine

called Anaplaz, was held liable to

plaintiffs-appellants, William and Maxine

Haste. The plaintiffs appeal an award of

$49,997.00 as inadequate damages. The

defendant-cross-appellant maintains that

no substantial evidence of causation was

presented, and improper standards were

applied in determining liability.

Mr. & Mrs. Haste are experienced

cattle ranchers in Park County, Wyoming,

in the business of breeding cattle. It

was their intention to upgrade their herd

by eventually producing a purebred, top

quality herd of Santa Gertrudis cattle.

App. 5(a)

In an effort to so upgrade the herd, they

purchased a number of cattle which they

later found to have a disease called ana-

plasmosis.

The defendant is a manufacturer of

the vaccine Anaplaz. It was through the

defendant's advertising that the plain-

tiffs first learned of Anaplaz as a pos-

sible means to control anaplasmosis. As

a result of the loss of a number of cat-

tle from anaplasmosis, the plaintiffs

discussed the use of Anaplaz with their

veterinarians as a means to prevent any

further outbreaks of the disease. The

interest in Anaplaz was prompted, accord-

ing to Mr. Haste's testimony, because it

had been advertised in livestock maga-

zines as the only safe and economic

measure available to assist a rancher in

preventing anaplasmosis. The advertising

campaign for Anaplaz was both extensive

and self-laudatory.

In 1970, American Home Products was

aware of possible side effects the use of

Anaplaz might have on newborn calves. A

release by the United States Department

of Agriculture on December 29, 1969,

makes clear that there was at least some

uncertainty as to the hazardous nature of

Anaplaz. It said in part: "Vaccinating

brood cows with anaplasmosis’ vaccine

App. 6

Sometimes may cause fatal side effects in

calves."

The dispute arises over the asserted

duty of defendant to reasonably inform the

public of the possibly dangerous’ side

effects the administration of Anaplaz might

have on cattle. The evidence shows

instances where package inserts for Anaplaz

were amended to include a warning of a

possibility of neonatal isoerythrolysis (NI)

in calves through the use of Anaplaz, and a

notice that it could be used only on order

of a licensed veterin arian. Letters were

also sent to veterinarians in effect

informing them of the risk of NI. The

advertising material, however, did _ not

notify the ultimate purchaser of any risk.

In fact, certain advertisements made the

following statements:

"Vaccination with Anaplaz has met

trial by fire iu five years of

field use. . . with a coordinated

effort, a successful breakthrough

was finally made, resulting in a

safe, practical and effective vac-

cine. . . five years of Anaplaz

field use has shown there's no

longer any reason for running the

risks of suffering the ravages of

anaplasmosis."

App. 7

Defendant points out that there was at

least one instance of NI in plaintiffs' cattle

which had not been vaccinated with Anaplaz.

The trial court, however, found that

thirty-one calves were lost as a proximate

result of the Anaplaz vaccination. Damages

were also awarded for the diminution in value

of 151 brood cows. Plaintiffs-appellants

request this court to order either additur, or

remand to the trial court to redetermine the

amount of damages as to the remainder of the

unaccounted-for brood cows. They also argue

that damages for the upgrading program should

not have been excluded because evidence was

presented that except for the incidence of NI,

plaintiffs would have been capable of

Producing a herd of purebred Santa Gertrudis

cattle suitable for sale as breeders.

The trial judge based his conclusions as

to liability on the degree to which defendant

misrepresented, in ads directed to cattle

ranchers, its knowledge of the hazardous side

effects the vaccine might have on newborn

calves. As pointed out by the trial court, in

Maxted v. Pacific Car & Foundry Co., 527 P.2d

832 (Wyo.), the Wyoming Supreme Court refused

to apply strict liability in a products lia-

bility case. Bruce v. Martin-Marietta Corp.,

544 F.2d 442 (10th Cir.); Colorado Serum

Co., v. Arp, 504 P.2d 801 (Wyo.).

The basic question on appeal is’ the

App. 8

extent and nature of the required warning to

be given by Defendant. The trial judge

acknowledged that the drug was a "prescription

drug." The Anaplaz vaccine was only available

from veterinarians, and plaintiffs obtained

the dosages here concered from their

veterinarians. In this aspect of the case, it

makes no difference whether the drug was

compounded by the defendant or by a

pharmacist. Since it is a prescription drug,

the doctrines applicable thereto must _ be

applied, and the trial court was in error in

not so doing.

The record establishes that the maker of

the vaccine had warned the veterinarians of

the NI danger by what are referred to as "Dear

Doctor" letters. The veterinarians apparently

were also aware cf such possible side effects

from other sources. The containers for the

vaccine had a clear warning in red to read the

circular enclosed in the _ package. This

warning on the outside said in part: "Do not

use until isert leaflet has been” read,

understood and explained to the owner." This

enclosed leaflet, in turn, stated clearly that

it had been reported that the use of Anaplaz

may be associated with the occurence of NI.

It also said, "Field Evidence suggests the

vaccination of brood cows with Anaplaz can be

a calculated risk and the protective benefits

of vaccination should be weighed against the

possible risk of neonatal isoerythrolysis."

App. 9

The warnings to the veterinarians by the

defendant were established, and were adequate

under the prescription drug doctrines.

The trial court in its mem:candum said:

"With their cattle having anaplasmosis,

and having become interested in Ana-

plaz through defendant's advertising,

in the spring of 1971, plaintiffs con-

sulted Dr. Virgil Humphreys, a veterin-

arian in Worland, Wyoming, and they

asked him about Anaplaz."

Dr. Humphreys, according to the trial court's

memorandum, gave minimal warnings as to the

risks, and recommended the use of Anaplaz. He

told plaintiffs that he had used it on his own

livestock. The plaintiffs did not buy any

vaccine then. They testified, however, that

they relied on the advice of Dr. Humphreys.

Some time later, in October of 1971,

plaintiffs went to the veterinarian, Dr.

Roberts, another of their "regular" veterin-

arians. They apparently talked with him some

two hours. He did not recommend the use of

Anaplaz. They visited him a second time. The

trial judge found no adequate warning by Dr.

Roberts directly relating to NI. Dr. Roberts,

according to plaintiffs’ brief, ". . . testi-

fied for the Defendant and he indicated that

he would not recommend Anaplaz because of the

App. 10

danger of N.I. caused by the vaccine." Appar-

ently on the second visit to Dr. Roberts, they

told him in substance that they would rely on

Dr. Humphreys’ "faith in the vaccine", and

wanted it. Mrs. Haste testified that Dr.

Roberts had said that if it were "he," he

would not use the vaccine. Mr.Haste testified

he had read the leaflet in the box of vaccine

and understood it. This was the vaccine they

had Dr. Roberts order for them apparently on

their second visit with him.

The plaintiffs also went to a _ third

veterinarian, Dr. Lester, and purchased from

him booster shots in January of 1973.

The trial judge considered and evaluated

the warnings given plaintiffs by the veterin-

arians, and found them minimal. However, the

record shows that the veterinarians were well

aware of the risks. They had adequate advice

as to the risks from the defendant. These

were the "warnings" which are the significant

ones for prescription drugs, and thus control-

ling here. There were no fact questiois as to

these warnings.

The trial court was in error in holding

that the contents of the advertisements of

Anaplaz in the various livestock publications

are controlling on the warning issue, and thus

override the practical considerations which

arise from the requirement that the consumer

App. ll

purchase the vaccine only from veterinarians,

and override the established "prescription

drug" doctrines.

The record shows the typical "prescrip-

tion drug" sequence of events: The Hastes had

livestock exposed to anaplasmosis from new

stock they had brought into the herd; they

became interested in Anaplaz from the ads in

the livestock magazines; they consulted their

"regular" veterinarians (two of them) before

making a decision as to what to do; they

received typical medical advice; they balanced

the risks; they decided to have the Anaplaz

ordered by Dr. Roberts (a veterinarian was the

only source); they received it from him; they

read and understood the leaflets, and used it.

Their veterinarians were knowledgeable on the

problem, and were well advised by defendant as

to the risks. In this chain or sequence of

events, the defendant discharged its duty to

plaintiffs by the warnings to the

veterinarians.

The oral polio vaccine cases against

Wyeth, Reyes v. Wyeth Laboratories, 498 F.2d

1264 (Sth Cir.), and Davis v. Wyeth Labora-

tories, Inc., 399 F.2d 121 (9th Cir.), are not

contrary to the conclusion here reached. They

concern prescription drugs where a warning to

the doctor is usually sufficient, but they

also concern situations where the drug was

administered to large groups, and the indi-

App. 12

vidual had no contact with a doctor whatso-

ever. There the courts held in substance that

the warning on the label must be sufficient to

discharge the maker's duty. Iustead this

Situation is determined by such cases as

Johnston v. Upjohn Co., 442 S.W.2d 93 (Mo.);

Stevens v. Parke, Davis & Co., 507 P.2d 653

(Cal.), and Mulder v. Parke Davis & Co., 181

N.W. 2d 882 (Minn.). We have instead of the

polio cases a direct "patient" doctor consul-

tation and advice as to a prescription drug.

The judgment appealed from by defendant

must be, and is, set aside with directions to

enter judgment for defendants.

App. 13

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF WYOMING

a

WILLIAM HASTE and

MAXINE HASTE,

Plaintiffs,

No. 5899 Civil

)

)

)

)

)

vs. )

)

AMERICAN HOME PRODUCTS )

CORPORATION, )

)

Defendant. )

JUDGMENT

The above-entitled cause having been

tried to the Court, and the court having duly

rendered its Memorandum Opinion, and pursuant

to such opinion and to the provisions of Rule

58 of the Federal Rules of Civil Procedure,

NOW THEREFORE IT IS

ORDERED AND ADJUDGED that the plaintiffs

recover of and from the defendant the sum of

$49,997.00, together with interest as provided

by law; it is

FURTHER ORDERED that the plaintiff have

App. 14

its costs of action expended herein, to be

taxed by the clerk.

Dated this llth day of August, 1976.

A. Marvin Helart

Clerk, U.S. District Court

App. 15

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF WYOMING

Civil Action No. 5899

WILLIAM HASTE and )

MAXINE HASTE, )

Plaintiffs, )

) MEMORANDUM

vs. ) OPINION

)

AMERICAN HOME PRODUCTS _)

CORPORATION, )

)

Defendant. )

The liability trial in this case pre-

sented problems galore, but the headaches

which arose in the damage trial are far more

difficult. The ctief problems stem from the

fact that manifestly plaintiffs were hurt,

but, except for the stipulated damages, how

much they were hurt is difficult to dig out of

the contradictory record. Wyoming law is

clear that plaintiffs must prove their damage

to a reasonable degree of certainty. Reeder

Flying Service v. Crompton, (1970) 470 P.2d

281. With equal clarity, it is settled that

damages cannot be awarded on the basis of sym-

pathy, although everyone admits that plain-

tiffs are deserving of sympathy. I cautioned

App. 16

counsel at the time of trial that plaintiffs

were required to prove their damages, and as

the case progressed, plaintiffs' damage

theories twisted and turned, but’ finally

plaintiffs affirmed that they’ relied on

Exhibits 124 and 125. Plaintiffs' post trial

brief seems to me to retreat from this state-

ment made during trial, but nevertheless, I

try to make findings as to all of the damage

contentions on the record made.

The only easy amounts are those which

were stipulated, and I at once get them out of

the way and find that plaintiffs are entitled

to recover the stipulated amounts:

Costs of vaccine $1,511.00

Supplies and Vet fees 2,000.00

Extra outside labor 459.00

Extra Haste labor 1,326.00

$5,296.00

Undoubtedly, plaintiffs are entitled to

recover for the cows and calves proven to have

been injured or to have died as a result of

the use of defendant's product. The legal

principle is simple and well established, but

the trouble comes with the proof or lack

thereof as to how many animals were injured

and how many died as a proximate result of the

vaccinations. Plaintiffs - testimony~ at

various stages of the proceedings is inter-

nally conflicting, and, although plaintiffs

App. 17

have testified that the herd record books are

complete and accurate, their dmage testimony

doesn't tie to the record books. Animals

which died from the vaccinations must _ be

valued as of the date of death; damages for

animals injured have to be awarded on a value

before and a value after basis. "After" means

value immediately after the injury; not years

later. These principles are well settled, and

they are damage principles applied in Wyoming.

Meredith GMC, Inc., v. Garner, (Wyo.) 328 P.2d

371. The testimony as to the value of the

dead cows is all over the lot, and there

really isn't any credible evidence of a before

and after value. Indeed, it is difficult to

figure out how anyone could testify knowledge-

ably to values such as this. I recognize and

sympathize with the problems of proof faced by

plaintiffs, but I agree with defendant's posi-

tion stated in its post-trial brief:

"In considering the damage to the cows

vaccinated and later in considering

allowable damages for N.I. calves, an

election must be made. Plaintiffs can't

recover damages both for damage to cows

because they might or do have N.I.

calves and also recover for the 1974

and 1975 N.I. calves from such damaged

cows. They must take the difference

in before and after the value of the

cows in 1973, plus the value of the

App. 18

calves lost in 1973, plus the value of

their own 1973 extra labor but no loss

after 1973 for their own labor and N.I.

calves; OR

"They alternatively can recover the pro-

ven value of all of their own excra

labor plus the value of all N.I. calves

lost whenever lost and they must forego

claiming duplicate damages for permanent

damage to the cows."

Plaintiffs' penchant for asking double

and triple damages isn't limited to claims for

damage to the herd. They want cumulative

payments for, (a) the extra labor of Haste and

his wife in caring for the sick calves, (b)

the cost of labor hired to do work Haste

couldn't do because he was caring for the sick

calves, (c) the value of the crop which

allegedly wasn't grown because plaintiff was

busy with the sick calves, (d) and the alleged

loss of income from custom work which couldn't

be performed because plaintiff was taking care

of the calves. Sympathy doesn't permit

stacking damages this way.

The damage problem is not simplified by

the fact that most of the allegedly injured

animals were not sold within a reasonable time

after the vaccinations when a sale would, of

course, give me a shot at finding a correct

before and after value. Instead, plaintiffs

App. 19

want damages for what they say [but have

failed to prove] is the lessened value of fu-

ture calves born to the retained cows, and the

lessened value of the cows later sold, albeit

much of those lessened values resulted from

market fluctuations. Again, as I see it,

plaintiffs want to improperly magnify damages,

and they want damages not allowed by the law.

There are conflicts throughout the testi-

mony, and, having expressed my thoughts as to

damage theories, I find:

The total Haste herd in question was 207

animals, 191 of which were sold and 16 of

which were retained. Plaintiffs presented

valuation testimony by Mrs. Kimball and plain-

tiff. Defendants relied on Dr. Lloyd, Bean

and Charlesworth and on the actual records.

Value at the time of loss and not at some

prior or later time is controlling. Rock

Mountain Packing Co. v. Branney, (Wyo.) 393

P.2d 131. Applying this rule, I find that the

amount of damages to the brood cows of the

Haste herd was:

73 cows suffered a diminution in value of $100

$7,300.00

29 cows suffered a diminution in value of $125

3,625.00

40 cows suffered a diminution in value of $150

6,000.00

9 cows suffered a diminution in value of $200

1,800.00

$18,725.00

App. 20

Defendant argues that because there is

no known market for new born calves, there can

be no recovery. There isn't a very active

market for bridges either, but if someone's

bridge is destroyed due to negligence, the

wrongdoer isn't home free because of the lack

of a market. I reject defendant's argument

that plaintiff's can't recover for the calves

because there isn't an active market for new

born animals. The lack of a market doesn't

prevent the award of damages, but it surely

doesn't help in calculating an amount which is

fair. Once more, there is a tremendous spread

in the testimony, and I am sure that all a

court can do is try to reach a rough

approximation of justice. I find that 31

calves were lost as a proximate result of the

vaccinations and that:

5 calves were worth $250 each $1,250.00

12 calves were worth $400 each 4,800.00

13 calves were worth $700 each 9,100.00

l calf was worth $900 900.00

$16,050.00

Plaintiffs are entitled to recover for

their extra labor, but, as I have mentioned,

they are only entitled to recover once, and I

reject all claims for loss of crop, purchase

of feed and loss of custom work. These claims

duplicate the claim for extra work; they are

speculative and they were not proven. It is

App. 21

understandable that there are no records of

the long hours spent under emergency

conditions, and I am sure that it is difficult

for anyone to understand why there can be no

recovery for emotional trauma and _ mental

suffering. I am not sure that the law is

right in refusing consideration of these

damage factors where the damage is to property

instead of to the person, but that is the law

and I cannot change it. Any awared I make for

extra labor is one based largely on judgment

rather than on clear evidence which I can

analyze. I have searched the record in an

effort to be more precise, but precision isn't

there. I find that the reasonable value of

the extra work plaintiffs were required to

perform was $5,000.00. Defendant argues that

if plaintiffs are awarded permanent damage to

their herd [and they have been] they are not

entitled to recover for any extra labor

performed during 1974. I understand the

reasoning behind this argument, but I do not

accept it. The extra labor was performed as

a proximate result of the defendant's wrong,

and to say that because plaintiffs tried to

salvage their herd they shouldn't be paid for

the extra work required of them strikes me as

sophistry.

There are no other Santa Gertrudis cattle

in Wyoming, and plaintiffs are entitled to

recover transportation charges. The amount of

these is not in serious dispute, and I find

App. 22

transportation charges to which plaintiffs are

entitled amount to $3,676.00.

Plaintiffs are also entitled to

reasonable travel expenses incurred or which

would be incurred in replacing the iost or

damaged animals. Records of such costs are

missing. Defendant has estimated that

$1,115.00 is a reasonable amount, and it

probably is. I round this to $1,250.00, and

allow this amount as part of the damage to the

herd.

Plaintiffs urge that an allowance should

be made for a loss in the overall value of the

herd due to interruption in the upgrading pro-

gram. There are two answers to this conten-

tion. The first is that the proof of loss in

value was just too skimpy to permit an award.

The second is that damage theory assumes a fi-

nancial ability to immediately replace. Here,

the plaintiffs did not have those means, but

under the law as I understand it, I am re-

quired to assume that they did. For both of

these reasons, I award no damages for the

loss, if any, to the upgrading program. In

summary, then, I find and conclude that plain-

tiffs are entitled to recover from defendant:

The amounts stipulated to

by the parties $ 5,296.00

Diminution in the value

of the herd 18,725.00

App. 23

Value of the calves 16,050.00

Value of extra labor 5,000.00

Travel expenses 1,250.00

Freight 3,676.00

$49,997.00

In accordance with the provisions of Rule 58,

the Clerk shall forthwith enter judgment in

favor of plaintiffs and against defendants for

$49,997.00, together with interest and costs

as provided by law.

Dated this 9th day of August, 1976.

Fred M. Winner

United States District

Judge

App. 24

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF WYOMING

WILLIAM HASTE and

MAXINE HASTE,

]

]

]

Plaintiffs, ]

] CIVIL ACTION

vs. ] NO. 5899

]

AMERICAN HOME PRODUCTS ‘|

CORPORATION, ]

]

Defendant. ]

]

Elmer J. Scott, Attorney at law, Worland,

Wyoming,Herbert R. Bennett and Keith Ferguson,

Attorneys at law, Fort Dodge, lowa, for Plain-

tiffs; Hirst, Applegate & Dray by Byron Hirst,

Attorney at law, Cheyenne,Wyoming, and Lewis

Perkiss, Attorney at law, New York, New York,

for Defendant.

MEMORANDUM OPINION

WINNER, Judge

This memorandum opinion contains’ the

App. 25

findings of fact and conclusions of law re-

quired by Rule 52. The citizenship of the

parties is diverse, and the amount in contro-

versy exceeds $10,000, exclusive of interest

and costs. The Court has jurisdiction under

28 U.S.C. §1332. Trial of the case has been

bifurcated to first determine the question of

liability, and, if liability be found, damages

are to be ascertained in later trial. There

were sharp conflicts in the testimony, but I

find the facts to be as _ hereinafter set

forth.

William and Maxine Haste are Wyoming

cattle ranchers. They purchased 45 head of

cattle with calves from an area which, unknown

to them, was a region in which the dread dis-

ease, anaplasmosis, was prevalent, and, in

1970, they lost 28 head of cattle to that dis-

ease. Plaintiffs feared contamination and

loss of much of their herd, although it is

probable that once they suffered their initial

loss, future losses would have been small.

Defendant is a leading manufacturer of

vaccines and medicines for animals. It adver-

tises widely among the owners of domestic ani-

mals as well as among veterinarians. It is a

company which is highly respected, and which

was known to and was trusted, and relied upon,

by plaintiffs. Among the products developed

and promoted by defendant is the vaccine,

Anaplaz, which is seemingly the only vaccine

App. 26

offered for the control of anaplasmosis.

Plaintiffs first learned of Anaplaz from de-

fendant's advertising which was directed to

the general public.

As to the disease anaplasmosis, the

United States Department of Agriculture has

reported:

"Anaplasmosis is one of the most costly

diseases of beef cattle in this country.

Some 50,000 to 100,000 cattle die of

anaplasmosis each year. Death loss

where the disease is introduced into a

herd will average 10 percent and may

reach as high as 50 percent. Annual

loss is estimated at $100 million due to

livestock deaths and decrease in beef

and milk production."

Anaplaz is extremely effective in con-

trolling anaplasmosis, and indeed, it seems to

have controlled the disease in the Haste herd.

Plaintiffs make no complaint as to the effec-

tiveness of Anaplaz in controlling anaplas-

mosis. What they do complain about is the

alleged side effects of Anaplaz. They say

that the vaccine caused neonatal isoerythroly-

sis, which, happily, the parties and persons

in the industry customarily refer to as "NI",

and that is the way I shall refer to the dis-

ease throughout this opinion. An accepted

definition of NI which plaintiffs say caused

App. 27

the loss of part of their calf crop as a prox-

imate result of the Anaplaz vaccinations is:

"The presence of a pathological condi-

tion in neonatal calves, resulting in

anemia, icterus, illness or death due

to the presence of red cell antibodies

which attach to and destroy the calf's

red cells or interfere with their func-

tioning."

It has been theorized that this compli-

cated blood disease is caused by the incompat-

ibility of the antibodies received from the

females and the antigens received from the

males in the red blood cells of the infant

animal. Although the disease was recognized

and known to exist in other species, NI was

first reported in bovines in about 1968, and,

to this day, not a great deal is known about

the disease. However, it cannot be disputed

that some of plaintiffs' calves died from NI

after their herd was vaccinated with Anaplaz.

At this point, I digress to briefly

trace the developmental history of Anaplaz.

It was first produced in 1965, and it has been

licensed by the United States Department of

Agriculture in accordance with the provisions

of 21 U.S.C. § 151, et seq and regulations

issued by the Department of Agriculture, 9

C.F.8. i0i, st see. In fact a series of

licenses have been issued by the Department of

App. 28

Agriculture, and all contain language, "Dis-

tribution of this product shall be restricted

to veterinarians," or "This product shall be

restricted to use under the direction of a

veterinarian." The containers of the Anaplaz

purchased by plaintiffs bore the Department of

Agriculture approved label:

"Do not use until insert leaflet has been

read, understood, and explained to the

owner.

“Warning: Restricted by the U.S. Depart-

ment of Agriculture to use by or on the

order of a licensed veterinarian."

The enclosed leaflet, which plaintiffs

read hastily before vaccinating their cattle

Says:

“Anaplasmosis Vaccine

"Inactivated - Desiccated

Anaplaz

"For use in healthy cattle as an aid

in prevention of clinical symptoms

of bovine anaplasmosis caused by

Anaplasma marginale.

"No U.S. standard of potency. This

product has been potency tested as

specified in Fort Dodge Laboratories

production manual.

App. 29

"Composition. Anaplaz is composed

of A. marginale organisms. It is

concentrated, inactivated and lyoph-

ilized. A specially prepared adju-

vant is used for reconstitution to

facilitate absorption of the vaccine

at a proper rate so as to elicit the

maximum antigenic response.

"General Information. It is impor-

tant to vaccinate cattle twice, at

not less than four-week intervals,

with the second injection preceding

the beginning of the insect vector

season by at least two weeks.

Preliminary results indicate that

complement fixation antibodies may

be expected to persist in vaccinated

cattle for 1 to 4 months after the

second injection. A 2 cc. booster

dose should be given annually or at

any time when epidemic conditions

exist or exposure is anticipated.

"Laboratory and field studies indi-

cate that two injections at not less

than four-week intervals’ prevent

clinical illness and death from ana-

plasmosis during subsequent vector

season. The ‘carrier’ state may oc-

cur in vaccinated cattle upon subse-

quent exposure to infection. How-

ever, clinical symptoms of anaplas-

App. 30

mosis, erythrocyte infection and

anemia in such cattle is absent or

minimal.

“Administration and Dosage. Sterile

adjuvant diluent is supplied with

each vial of Anaplaz. To restore to

a liquid state, aseptically withdraw

the tneire diluent contents into a

clean sterile syringe and inject

directly in the vialof vaccine.

Shake until thoroughly dissolved.

Inject 2 cc. of the reconstituted

vaccine subcutaneously in the neck

or behind the shoulder using a

separate sterile needle for each

individual animal. Repeat in not

less than 4 weeks. To avoid

economic loss from injection site

trimout, or possible unwholesomeness

of meat, do not slaughter vaccinates

for food within 60 days.

"Caution. Store in dark at 35° to

a> ° fF, Shake vigorously after

reconstitution to effect complete

solution. Use entire contents with-

out delay after restoration. In

case of anaplylactoid reaction ad-

minister epinephrine.

“Warning. Restricted by the U.S.

Department of Agriculture to use by

App. 31

or on the order of a licensed veter-

inarian.

"It has been reported that the use

of Anaplaz may be associated in some

manner with the occurence of neona-

tal isoerythrolysis (NI) in off-

spring of vaccinates. Anaplaz may

be a contributing factor to NI, al-

though other mechanisms for this

condition are known to exist in

other species. NI is an anemic syn-

drome of healthy newborn calves.

The onset of this disease is sudden

after the intake of colostrum, with

death of the affected calves usually

occurring by the fourth day.

"Field evidence suggests the vaccine

of brood cows with Anaplaz can be a

calculated risk and the protective

benefits of vaccination should be

weighed against the posible risk of

neonatal isoerythrolysis, which has

been reported in 44 herds resulting

in the death of 240calves. These

losses occurred late in 1968 and the

1969 season with the vaccine having

been used since 1965. Although not

proven, it is theorized that Anaplaz

may sensitize the dam _ against

erythrocyte antigens the offspring

inherits from the sire. Evidence

App. 32

Suggests a breed _ predisposition

exists with 75% of the known cases

existing in Charolais or Charolais

crosses.

"If NI is suspected ur observed, af-

fected calves should be removed from

the dam, placed on a nurse cow and

given blood transfusions and corti-

costeroid therapy. Additional sup-

portive treatment should be used as

indicated. As an aid in the preven-

tion of neonatal isoerythrolysis in

offspring of vaccinates, it may be

advisable to withhold colostrum from

newborns for the first 36 hours.

During this time newborns should be

placed on a non-related nurse cow or

given synthetic milk. After the

36-hour withholding period calves

may nurse their dams providing have

been milked out during this time.

This colustrum withholding procedure

is not withou its risks as the calf

is thus deprived of the disease pro-

tective benefits of colostrum.

"Consult your veterinarian for fur-

ther advise."

[So reads the fine print package

insert defendant says gives crystal

clear warning to a Wyoming cowman

App. 33

as to the hazards which may result

from Anaplaz vaccinations. ]

Defendant urges that Anaplaz is a

prescription drug, and that it is entitled to

any benefits it can derive from cases holding

manufacturers harmless where the _ product

involved is a prescription drug. Defendant

points to a letter from Dr. Garlick,(1) and in

its brief defendant says:

"Tt is eminently clear from Dr. Garlick's

letter and from the scientific, expert

testimony adduced at the trial, that

Anaplaz is a very complicated and com-

plex product the understanding of which

requires special training, knowledge and

expertise that is beyond the layman.

In the hands of the public this vaccine

would be extremely unsafe with a great

potentiality for harm.”

(1) Dr. Garlick is Chairman of the Depart

ment of Laboratory Medicine at the Medi-

cal University of South Carolina. He

was Chief Staff Veterinarian, Viral and

Parasitic Cattle Disease, Animal Disease

Eradication Division, Agricultural Re-

search Service, U.S. Department of Agri-

culture in 1965 at the time licensing of

Anaplaz was considered.

App. 34

Thus, defendant's argument that Anaplaz

is to be regarded as a prescription drug is

not an unmixed blessing to it in light of its

sales efforts aimed directly at cattlemen

which will be discussed presently. I have

already mentioned that plaintiffs first

learned about Anaplaz from an advertisement in

one of the more than 40 publications in which

defendant advertised and promoted the

product. (2) A review of the advertising

addressed to cattlemen and the public at large

demonstrates that defendant did not even hint

at any side effects of Anaplaz and that the

sales literature would lead any cattleman to

think that Anaplaz was a vaccine which could

be used without any risk whatsoever.

Understandably, and justifiably,the

advertising is laudatory of Anaplaz, but, in

addition to the broad commendatory language,

published advertisements say, for example:

"So vaccinations not only protects your

cow herd, but your profits from two

calf crops as well. With ease, safety,

and economy."

""Anaplaz' is an inactivated vaccine,

incapable of producing disease. It has

(2) Answers to plaintiff's interrogatory

No. 40,

App. 35

been scientifically researched, de-

veloped and tested by controlled pro-

cedures under toth laboratory and actual

field conditions. Extensive trials have

been conducted in herds on widely separ-

ated farms and ranches."

The "Dear Doctor" letters recognized the

risk of NI, but the material directed to the

ultimate purchaser gave no clue that there was

any risk. The advertising literature did not

mention a release by the United States Depart-

ment of Agriculture dated December 29, 1969,

which said, inter alia:

"Vaccinating brood cows with anaplasmosis

vaccine sometimes may cause fatal side-

effects in calves, the U.S. Department

of Agriculture cautioned today.

"Two components of USDA's Agricultural

Research Service, the Veterinary Biolo-

gics Division and the Animal Health Di-

vision, have just completed a field in-

vestigation of 23 herds in Texas, Louis-

iana, and Georgia, in which early calf

losses were recently reported. The Fed-

eral investigators found evidence in

about half of these herds that isohemo-

lytic anemia (nonfunctioning of red

blood cells caused by immune reaction)

was involved, with anaplasmosis vaccine

as a possible contributing factor. In

App. 36

these herds, calf loss averaged

about 10 percent, investigators say.

The ARS men confirmed earlier

reports that most of the affected

calves were Charolais or Charolais

crosses, although they noted a few

cases in other breeds."

With their cattle having

anaplasmosis, and having become interest-

ed in Anaplaz through defendant's adver-

tising, in the spring of 1971, plaintiffs

consulted Dr. Virgil Humphreys, a veter-

inarian in Worland, Wyoming, and they

asked him about Anaplaz. He advised them

that the risks were minimal; that any

Side effects typically showed up in

Charolais cattle, but cattle, but that he

vaccinated his own Charolais with

Anaplaz. He recommended that plaintiffs

vaccinate with Anaplaz, and he gave them

a throw-away type brochure on Anaplaz

Supplied by defendant [Exhibit 23 (1).)

This brochure, which plaintiffs studied

much more carefully than they did the

package insert contained in their pur-

chased packages of Anaplaz, praises the

product and urges its use as a completely

safe vaccine. The brochure stresses the

ready availability of Anaplaz. It says:

"Mostly, today's losses are needless

~- because they can be effectively

App. 37

prevented by Anaplaz vaccine, “

readily available from your

veterinarian.”

Plaintiffs were assured in the bro-

chure that, "Vaccination with Anaplaz has

met ‘trial by fire’ in five years of

field use," and that, "With coordinated

effort, a successful breakthrough was

finally made, resulting in a safe, prac-

tical and effective vaccine." The bro-

chure told plaintiffs that, "Five years

of Anaplaz field use has shown there's no

longer any reason for running the risks

or suffering the ravages of anaplasom-

ois.” They were not told that one

calculated risk which they might want to

consider as a reason not to use Anaplaz

was the risk of NI.

It was not until October, 1971, that

plaintiffs went to Dr. Roberts, another

veterinarian, who did not recommend the

use of Anaplaz, but he did not mention

any risk of NI. The evidence is sharply

conflicting on the extent and detail of

the advice given plaintiffs by Dr.

Roberts, but I find that it was minimal.

In any event, he had no reluctance in or-

ordering the vaccine for plaintiffs [at a

tidy profit to himself] when plaintiffs

again visited him a few weeks later, and

he delivered the vaccine to plaintiffs

App. 38

after it arrived. I accept plaintiffs’

testimony as to the extent of Or.

Roberts' warning, and I do not think that

his warning was of a nature to place a

reasonable cattleman on notice of real-

istic risk from use of anaplaz.

Plaintiffs purchased the required

"booster shot" of Anaplaz from a third

veterinarian, Dr. Lester, and he gave

plaintiffs no warning of risk of NI. The

vaccinations were administered by plain-

tiffs, and the final "booster shot" was

given in January, 1973. Plaintiffs

charge that from 20 to 40 of their cattle

came down with NI and died as a proximate

result of the Anaplaz vaccinations.

The opinion testimony is diametric

as to causation. The product is new, and

perhaps further scientific study and

research will prove defendant's experts

to be right, but as the trier of fact,

and based upon the expert testimony so

saying, I find that the Anaplaz vaccina-

tions of plaintiffs' herd was the proxi-

mate cause of ths NI later discovered in

those cattle. ‘4 This finding of

(3) In so finding, I am not unaware of

evidence tending to show that one

cow diagnosed as having NI was not

vaccinated with Anaplaz, but I think

App 39.

proximate cause is, of course, essential

if plaintiffs are to recover on any of

their theories which are, strict liabil-

ity, negligence, breach of warranty and

[by post trial amendment] violation of

federal statute.

I start with mention of plaintiffs’

claim for strict liability as defined by

Sec. 402-A of the Restatement of Torts.

In this rapidly expanding field, it

appears that more than 40 states have

incorporated the principles of Sec. 402-A

of the Restatement of Torts into their

law, but Wyoming has not. Within the

past year, an invitation to accept as

part of Wyoming law the strict liability

doctrine of Sec. 40l1-A was rejected by

the Wyoming Supreme Court. Maxted v.

Pacific Car & Foundry Company (1974) 527

P. 2d 832. As a visiting judge, I shy

away from predicting the future course of

Wyoming law, and I think that I can do so

because I generally accept the statement

in defendant's brief:

that the preponderance’ of the

evidence shows the causal connection

between Anaplaz and NI. That

connection is surely not established

beyond a reasonable doubt, but I

think that the civil case test of

preponderance of the evidence is

met.

App 40.

"To recover on either _ strict

liability, negligence or breach of

implied warranty, the Plaintiffs

must prove that Anaplaz caused the

alleged damages [I have so found]

and that the vaccine was defective

in that it was either impure or

lacked an appropriate warning.

There is no substantive legal dis-

tinction to be made among the three

theories as related to this action."

As was said in Davis v. Wyeth

Laboratories, Inc. (1968) 9 Cir. 399 F.

2g igi: ‘“*?

"We find no error in the District

Court's choice to present the case

to the jury on warranty rather than

on strict liability in tort. The

law as emerging is tending toward

the latter treatment but under

either approach the elements remain

the same. The difference is largely

one of terminology.”

(4) Judge Merrill's discussion of

balancing of interests and the duty

for full warning in drug cases is

deserving of careful study.

App 41.

Moreover, for purposes of resolution

of this case, I accept defendant's argu-

ments that Anaplaz and its sale should be

treated as the sale of a prescription

drug, albeit the record is short a few

elements of proof of a true prescription

drug. I accept this argument with the

caveat that when defendant advertises

directly to the cattleman and and when

the cattleman is the object of a concen-

trated sales pitch, there is a duty to

warn the rancher of potential risks in

the advertising and sales material which

promote the sale of the product. It

won't do to entice the cattleman to

purchase Anaplaz with’ glowing’ sales

literature and then to warn him with a

package insert after he has spent several

hundred dollars on the purchase. it . is

true that defendant sent out some "Dear

Doctor" letters, and that Anaplaz could

be purchased only through veterinarians

who presumably received the letters. My

thinking as to the effectiveness of those

letters are expressed by Chief Judge

Nichol in Yarrow v. Sterling Drug, Inc.

(1967) D.c. S.D. 263 F. Supp. 159, and

by Judge Becker in his affirmance of the

case, Sterling Drug, Inc. v. Yarrow

(1969) 8 Cir. 408 F. 2d 978. I think

that based on the state of scientific

knowledge when plaintiffs purchased the

Anaplaz, and had plaintiffs not been

App. 42

pre-sold on its use by the advertising

literature, the warning is borderline,

but it might be sufficient. I say this

even though I think that defendant had

access to much more knowledge and liter-

ature than it is willing to admit which

suggested that Anaplaz caused NI. _ Illus-

trative, are articles by Dr. Richard

Dennis and Mark F. Young, as well as an

Arkansas State Veterinarian publication,

and, of course, the Department of Agri-

culture release. The "Dear Doctor" let-

ters play down the relationship between

Anaplaz and NI, and the literature and

most particularly the package insert says

that, "Evidence suggests a breed disposi-

tion exists with 75% of the known cases

existing in Charolais oor Charolais

crosses." [Plaintiffs were raising Santa

Gertrudis.] At best, the package insert

warning is skimpy even for a drug sold as

a true prescription drug not advertised

directly to the public. With the sales

job defendant did on the cattlemen who

were the ultimate purchasers, the warning

is entirely inadequate, and defendant is

liable for failure to adequately warn of

the danger of NI. It is to be remembered

that, as said in defendant's brief,

Anaplaz is a product which "in the hands

of the public ... would be extremely

unsafe with a great potential for harm."

I think that the direct sales effort

App. 43

[even though the product was channeled

through veterinarians] imposed on defen-

dant a duty to warn the ultimate consumer

before he spent his money’ on_ the

purchase. Defendant's duty was to warn

fully and fairly of risks likely to be

encountered as shown by all of the scien-

tific knowledge -- not just that shown by

knowledge culled, slanted and carefully

selected by defendant. Imposing such a

duty is not unfair. A manufacturer has a

business decision to make in circum

stances such as these. It can merchan-

dise only through trained doctors or

veterinarians without direct sales appeal

to the public. Or, in the intertests of

increasing sales, the manufacturer can

argue the merits of its product to the

public, thus creating a public demand for

purchase through the merchandising chain

of veterinarians or doctors. If the

manufactuer, in the exercise of its

business judgment, elects the latter

course, it picks up a duty to warn the

public in all advertising literature of

any risks. Here we have a proprietary

vaccine; not something compounded by a

pharmicist on prescription. We have a

proprietary vaccine vigorously promoted

by defendant with sales efforts concen-

trated on the purchasing public. Liabil-

ity cannot be avoided under these circum-

stances by tucking a warning in _ the

App. 44

age to be seen for the first time after

the order is placed and delivery of the

order is made.

Faced with almost 300 pages of

briefs, I make no effort to discuss the

countless cases cited and quoted by coun-

sel. This is not to say that the cases

do not bear on the issued and the prob-

lems. They do, but time and space do not

permit an analysis or discussion of more

than a select few of the authorities.

Plaintiffs seek recovery on express

and implied warranties of Jitness.

Wyoming has adopted the Uniform Commer-

cial Code, and privity is not required to

permit recovery on a warranty theory.

See, Wyoming statutes, 34-2-318. Plain-

tiffs here relied on defendant and relied

on the efficaciousness of Anaplaz to

treat anaplasmosis without harmful side

effects. Although I have found that de-

fendant knew or should have known of the

risks involved in the use of Anaplaz, as

is said in 63 Am. Jur. 2d, Products

Liability 97: ~~ a?

"A general warranty is deemed to

cover all defects within its scope

whether known to the manufacturer or

seller or not, and this is true

regardless of whether the warranty

App. 45

is express or implied. In other

words, the seller's knowledge of the

falsity of the warranty is not an

essential element of his liability

for breach of the warranty."

In Colorado Serum Company v. Arp

(1972) 504 P. 2d 801, the Wyoming Supreme

Court upheld an award for the death of

pigs resulting from their vaccination

with hog cholera manufactured by defen-

dant and purchased by plaintiff through

ordinary commercial channels. The ele-

ments required for recovery on a warranty

theory were said to be:

"We agree with defendant in its

statement in the brief that plain-

tiffs tried their case on the theory

of breached express and _ implied

warranties; and we think they were

entitled to elect so to do under §§

34-2-213 and 34-2-318, W.S. 1957,

1971 Cum. Supp. Perhaps the pivotal

argument of defendants in the appeal

is that plaintiffs in order to

prevail must show first that there

was a defective product, second how

it was defective, and third that the

defendant was responsible for the

defect under Wyoming law. In so

arguing counsel is insistent that

the absence of the allegedly defec-

App. 46

ive product does not excuse the

necessity of proving the defect and

its nature. True, the above

mentioned three factors must be

proved; but there would seem to be

no requirement that the allegedly

defective product must be presented

in evidence and shown by analysis to

be ipso facto defective. Such proof

is permissible by circumstantial

evident’. s ¢ is + 4 ee ee

"In the present litigation although

the evidence was circumstantial, it

was sufficient to justify the

court's holding that:

"'The preponderance of evidence

proves that one or both of the bot-

tles of Colorado Serum Company's Hog

Cholera Vaccine which plaintiffs

purchased on august 3, 1966, was

defective as a result of manufacture

in that one or both of the bottles

contained live Hog Cholea Virus;

that the defect in the product con-

stituted a breach of defendant's

implied warranty of merchantability,

implied warranty of fitness for a

particular purpose, and its express

warranty that the product was incap-

able of inducing disease; and

* * * was the direct and proximate

App. 47

cause of plaintiff's loss of their

swine herd and of their subseuent

damage.'"

I have found no very helpful Wyoming

case on the duty of a manufacturer-seller

to warn a prospective purchaser concern-

ing a product which "in the hands of the

public . . . would be extremely unsafe

with a great potential for harm," but a

general discussion of the duty to warn

appears in 63 Am. Jur. 2d, Products

Liability, §42 et seq. More importantly,

in connection with my finding and con-

clusion that the duty to warn increases

with the manufacturer's direct’ sales

efforts directed to the public, two cases

quoted and relied upon by defendant are

to be noted. Defendant argues that the

cases are exculpatory. I think that they

are inculpatory under the facts of this

case. Both cases had to do with Sabin

orai polio vaccine and its general bene-

ficial results, and both held Wyeth

Laboratories liable.

The first is Davis v. Wyeth

iaboratories, Inc. (1968) 9 Cir. 399 F.

2d 121. The case should be read in its

entirety for its full impact, but, brief-

ly, the Surgeon General recommended the

use of the vaccine and said that risk

was “less than 1 case per million doses."

App. 48

Warnings were given to the medical so-

cieties of this small risk, but at West

Yellowstone where plaintiff obtained the

oral vaccine, it was provided by a phar-

macist. Defendant was being paid only

25€ per dose, yet it was held liable for

failure to direct a warning to the one in

a million ultimate consumer who contract-

ed polio from the oral vaccine. the case

holds:

"We conclude that the facts of this

case imposed on the manufacturer a

duty to warn the consumer (or make

adequate provision for his being

warned) as to the risks involved,

and that failure to meet this duty

rendered the drug unfit in the sense

that it was thereby rendered

unreasonably dangerous. Strict

liability, then, attached to its

sale in absence of warning.

"Appellee contends that its duty to

warn was inet by Franklin's disclos-

ures to the medical society. It

points out that its only direct sale

of vaccine was to the medical so-

ciety and that it was the society's

judgment and not appellee's to pro-

ceed with the clinics.

App. 49

"Ordinarily in the case of

prescription drugs warning to _ the

prescribing physician is sufficient.

In such cases the choice involved is

essentially a medical one involving

an assessment of medical risks in

the light of the physician's know-

ledge of his patient's needs and

susceptibilities. Further it is

difficult under such circumstances

for the manufacturer, by label or

direct communication, to reach the

consumer with a warning. A warning

to the medical profession is in such

cases the only effective means by

which a warning could help’ the

patient.

"Here, however, although the drug

was denominated a prescription drug

it was not dispensed as_ such. It

was dispensed to all comers at mass

clinics without an _ individualized

balancing by a _physician or _ the

risks involved. In such cases (as

in the case of over-the-counter

sales of nonprescription drugs)

warning by the manufacturer to its

immediate purchaser will not

suffice. The decision (that on

balance and in the public interest

the personal risk to the individual

was worth taking) may well have been

App 50.

that of the medical society and not

that of appellee. But just as the

responsibility for choice is not

one that the manufacturer can as-

sume for all comers, neither is it

one that he can allow his immediate

purchaser to assume. In__ such

cases, then, it is the responsibi-

lity of the manufacturer to. see

that warnings reach the consumer,

either by giving warning itself or

by obligating the purchaser to give

warning. Here appellee knew that

warnings were not reaching the con-

sumer. Apellee had taken an active

part in setting up the mass immuni-

zation clinic program for the soci-

ety and well knew that the program

did not make any such provision,

either in advertising prior to the

clinics or at the clinics’ them-

selves. On the contrary, it at-

tempted to assure all members of

the community that they should take

the vaccine.

"We conclude that appellee did not

meet its duty to warn.

"This duty does not impose an unrea-

sonable burden on the manufacturer.

When drugs are sold over the counter

to all comers warnings normally can

App. 51

be given by proper. labeling. Such

method of giving warning was_ not

available here, since the vaccine

came in bottles never seen by the

consumer. But other means of com-

munication such as advertisements,

posters, releases to be read _ and

Signed by recipients of the vaccine,

or oral warnings were clearly

available and could easily have been

undertaken or prescribed by appel-

lee.

"For these reasons we hold that it

was error to fail to instruct’ the

jury, either in warranty or in tort,

that appellee was strictly liable if

its drug caused appellant to con-

tract polio and if appellant's

taking of the drug was without know-

ledge of risk."

Reyes v. Wyeth Laboratories (1974) 5 Cir.

498 F. 2d 1264, is an able opinion by Judge

Wisdom which follows Davis, supra. Reyes was

solely a Sec. 402-A case, but the reasoning is

applicable whether or not Wyoming decides to

go along with the Restatement of Torts on

strict liability. The court recognized the

prescription drug exception to liability,

commented that Sabin oral vaccine is licensed

for sale only as a prescription drug, but

noted that it was not administered as_ such.

App. 52

It was said:

“Thus, as in the case of patent drugs

sold over the counter’ without

prescription, the manufacturer of a

prescription drug who knows or has

reason to know that it will not be

dispensed as such a drug must pro-

vide the consumer with adequate in-

formation so that he can balance the

risks and benefits of a given medi-

cation himself. Moreover, just as

the manufacturer cannot make this

choice for its ultimate consumers,

it cannot allow its imediate pur-

chaser to choose for them. In sum,

then, the manufacturer is required

to warn the ultimate consumer, or to

see that he is warned. ..

"Wyeth knew or had reason to know

that the vaccine would not be admin-

istered as a prescription drug, and

therefore was required to warn fore-

seeable users, or see that the Texas

Department of Health warned them."

Here, too, defendant knew or had reason

to know that Anaplaz would not be administered

as a prescription drug. It had a duty to warn

foreseeable users, and that duty was for a

clear, explicit warning in the solicitations

leading to the sale -- not just in a package

App. 53

insert after the solicited sale had _ been

accomplished.

Curiously, in the very long briefs,

neither party makes mention of the cases which

worry me the most in light of the evidence

that only a very small percentage of cattle

vaccinated with Anaplaz become afflicted with

NI. Since the cases are from the Tenth Cir-

cuit, they will be discussed.

Merrill v. Beaute Vues Corporation (1956)

10 Cir. 235 F. 2d 893, is a case in which

plaintiff claif™?®d injury from the use of a

permanent wave product. After jury verdict in

plaintiff's favor, the court entered judgement

for defendant under its finding that, "even if

plaintiff was injured by the use of defen-

dant's product, she was not a member of a

class expected to be affected by the use of

the product and her injury constituted an iso-

lated instance of injury to an unusually sus-~-

ceptible individual." The Court of Appeals

affirmed. The Court stressed that the only

evidence of the harmful effect of the solution

was a 10-year old article by a doctor who was

not called as a witness, and it said:

"Whether Dr. Cotter would have the

same opinions and fears now that he

did almost ten years ago, we do not

know for he was not called as a wit-

ness. If this product is inherenty

App. 54

dangerous and injurious to the mil-

lions who now use it, surely some

qualified witness would have been

present to so testify and reliance

on a magazine article published

almost ten years before to establish

that fact would not have been neces-

éary.”

Judge Pickett's opinion continues:

"Although there was no direct evi-

dence tending to show that’ the

plaintff was allergic to defendants'

product or that her injury consti-

tuted an isolated injury to an unu-

sually susceptible individual, the

undusiputed evidence is that with

the exception of two cases referred

to in the Robson-Cameron article,

the injury to plaintiff's optic

nerve is the only one reported out

of five hundred milion users of the

product. This in itself is suffi-

cient to sustain the court's finding

on this subject. We are satisfied

that considering all the facts and

circumstances the issue was raised

and the findings necessary. We

therefore have the question as to

whether a manufacturer who places a

product on the market, knowing that

on this subject. We are satisfied

App. 55

that considering all the facts and

circumstances the issue was raised

and the findings necessary. we

therefore have the ques*ion as to

whether a manufacturer who places a

product on the market, knowing that

some unknown few, not in an identi-

fiable class which could be effec-

tively warned, may suffer allergic

reactions or other isolated injuries

not common to the ordinary or normal

person, must respond in damages.

Although there is authority to the

contrary, we think the prevailing

and better rule is that the injured

persons in such cases cannot pre-

vail. The reason generally given

for the rule is that the injury is

caused by allergy or the unusual

susceptibility of the person and not

the product. The essence of these

decisions is that a reasonable per-

son could not foresee the pur-

chaser's condition and could not an-

ticipate the harmful consequences.

In the case at bar, as in similar

cases, the plaintiff herself did not

know that a usually harmless product

could cause injury to her optic

nerve. Until after the filing of

the complaing, the defendants had no

knowledge of like injuries’ to

App. 56

others, and then only two were re-

ported. Under the circumstances, a

warning would have been wholly inef-

fective.

"Neither do we think that the defen-

dants are liable to plaintiff on an

implied or express warranty. War-

ranties do not extend to injuries

caused by peculiar idiosyncrasies or

physical condition of a user which

are not reasonably foreseeable. The

rule as to negligence insuch cases

applies to warranties."

Judge Murrah concurred specially on the

ground that plaintiff in Beaute Vues was an

isolated individual, not a member of a class.

He said:

"But where the proof shows. that

‘some', or even a ‘small propor-

tion', will be injuriously affected

by the use of a manufacturer's pro-

duct, some courts have recognized

the duty to wran of the known or im-

puted dangers at the risk of liabi-

lity. See Bianchi v. Denholm &

McKay Co., 302 Mass. 469, 19 N.E. 2d

697, 121 A.L.R. 460; Zirpola v. Adam

Hat Stores, 122 N.J.L. 21, 4 A. 2d

App. 57

73; Reynolds v. Sun Ray Drug Co.,

135 N.J.L. 475, 52 A. 2d 666.

"The difficulty lies in the failure

of the law to recognize the allergic

or unusually susceptible plaintiff

as a class of people to whom a manu-

facturer owes a legal duty to warn a

potential dangers. Once the aller-

gic plaintiff is rcogniozed as one

of a class of ‘some’ people, the

consequent legal duty becomes too

plain for doubt. Science and medi-

cine have now recognized the aller-

gic and hyper-sensitive as a defi-

nite class of people, presenting

physicological and biochemical prob-

lems arising out of the use of and

contact with the products of ad-

vanced chemistry. See Cooke, Aller-

gy in Theory and Practice; Feinberg,

Allergy in Practice. If the law is

to keep apace of the socialistic

problems wrought by science = and

technology, it is high time for the

courts to also recognize the aller-

gic or unusually susceptible as mem-

bers of a legally indentifiable

class, to whom the law will extend

its protection in warranty and in

tort, and not as isolated indivi-

duals of whom the law takes no

account."

App. 58

a

Distinguishing Beaute Vues from this case

are these facts:

(1) The live testimony missing in Beaute

Vues is here present.

(2) Factual information available to

American Home Products gave it far more warn-

ing of danger than did the information avail-

able to Beaute Vues.

(3) There is an identifiable class of

cattle which get NI from Anaplaz -- the case

does not involve an isolated individual cow.

(4) American Home Products admits that

Anaplaz is a dangerous product in the hands of

the public.

(5) American Home Products recognizes a

duty to warn in its "Dear Doctor" letters, but

it gave no warning to the consuming public.

In Ray v. J.C. Penney Company (1959) 10

Cir. 274 F. 2d 519, plaintiff had an allergic

reaction to a pair of gloves purchased from

Penney's. A jury verdict in defendant's favor

was affirmed and the following instruction was

approved:

"The most serious question arises

with respect to the court's instruc-

tion Number 6, in which the court

App. 59

able

Penney Company, and, presumably, the

instructed the jury that,

“"¥eu are instructed that

warranties do not extend to

injuries caused by peculiar

idiosyncrasies or physical

condition of a user which are

not reasonably foreseeable.

"'The law requires a person to

reasonably guard against prob-

abilities, not possibilities,

and one who sells a product on

the market, knowing taht some

unknown few, not in an identi-

fiable class which could be

effectively warned, may suffer

allergic reactions or other

isolated injuries not common

to ordinary or normal persons,

need not respond in damages.

""Tf you find that the plain-

tiff's injury was an isolated

instance to an unusually sus-~-

ceptible individual then you

must find for the defendant.

to Beaute Vues

All except the first distinction applic

apply to Ray v.

PF

found that Ray was an isolated individual.

App. 60

jury

Tayar v. Roux Laboratories, Inc. (1972)

10 Cir. reversed a trial court award to plain-

tiff for injuries sustained by her attribut-

able to use of a hair rinse manufactured by

defendant. Judge Barrett said:

"The manufacturer of a product has a duty

to warn consumers of potential dangers

from the product when it knows or should

know they exist. Roux alleges that no

evidence was introduced which showed that

it knew its products would injure the

user or that any particular ingredients

in the products were dangerous. Until

Tayar's injuries, Roux believed that its

rinse products were harmless.

"Tayar alleges that Roux was negligent in

not attaching warning labels to its pvro-

ducts advising consumers to wear rubber

gloves during application. There were no

warning labels on the Roux products Tayar

used when she was injured. There is no

evidence indicating how many people were

sensitive to the product who might be

damaged by its use. Tayar's condition is

the only incident of injury reported.

The record is devoid of substantial

evidence that Roux knew the dangerous

character of its products. prior to

Tayar's injuries and complaint. It was

not, accordingly, required to warn con-

sumers until Tayar was injured.

App 6l.

"Roux alleges that Tayar's injury was the

result of an idiosyncratic allergic re-

action which precludes recovery. Damages

for injuries is denied when the use of a

product is safe for the vast majority of

consumers. Merrill v. Beaute Vues Cor-

poration, 235 F. 2d 893 (10th Cir. 1956).

When a manufacturer places a product on

the market, knowing that a few, not in an

identifiable class, may suffer allergic

reactions not common to the normal person,

the injured party cannot recover. Merrill

v. Beaute Vues Corporation, supra. The

rule is based on the proposition that an

injury may be caused by an allergy or un-

usual susceptibility which the manufactur-

er cannot reasonably foresee in relation

to the use of its product. The manufact-

urer is not, under these circumstances,

liable for the purchaser's condition or

obligated to anticipate the harmful conse-

quences.

‘Warranties do not extend to injuries

caused by peculiar idiosyncracies or

physical condition of a user which

are not reasonably foreseeable. The

rule as to negligence in such cases

applies to warranties.’ 235 F. 2d at

898.

"See also Ray v. J. C. Penney Company, 274

App 62.

F, 2d 519 (10th Cir. 1959).

"Roux's rinse products were universally

used and accepted as harmless. No evi-

dence was introduced to show that anyone

other than Tayar suffered an adverse reac-

tion from the use of the products. She

had an allergic or an idiosyncratic reac-

tion which caused her to be unusually sus-

ceptible to agents which are normally safe

for use by the public. In these circum-

stances the manufacturer is not liable for

damages."

Although I concede that some of the

language in Tayar, read out of context, may

give some solace to defendant here, I think

that the case is subject to the same distinc-

tions to be aplied to the other two Tenth

Circuit cases, and, most importantly, defendant

here admits the dangerous nature of Anaplaz.

This leaves then as plaintiffs' only other

claim their post trial claim of a right to re-

cover for a violation of federal statute. This

claim must rest on White v. Rose (1957) 10 Cir.

241 F. 2d 94. I admit that for 18 years I have

thought that Judge Breitenstein's trial court

Opinion and Judge Hill's dissent in the case

were right, and I plead guilty to any charge

that my belief that the case is inapplicable

App 63.

may be the result of still tender scar tissue

resulting from my loss of the case. Neverthe-

less, I do not think that the federal statutes

create what amounts to an insurer's liability

as the majority in White v. Rose held was

created by the Colorado statutes. For that

reason, I conclude that plaintiffs cannot

recover on their federal statutory claims.

I have considered, but I completely reject

the defenses of contributory negligence and

assumption of risk. My rejection of these

defenses is on a factual basis, because I be-

lieve that under proper circumstances’ the

defenses do _ apply, >) but the proof

fails to establish either defense in this case,

from the facts I have found I think that there

is no proof that plaintiffs did anything a

reasonably prudent person would do, when

prompted by considerations which ordinarily

regulate the conduct of human affairs. I do

not think that the proof establishes’ that

plaintiffs failed to use ordinary care under

the circumstances in the management of their

(5) See, Murphy v. Petrolane-Wyoming Gas

Service (1970) Wyo. 468 F. 2d 969,

Continental Motors Corp. v. Joly (1971)

Wyo. 483 P. 2d 244, and Parker v. Heasler

Plumbing and Heating Co. (1964) Wyo. 388

P. 2d 516.

App 64.

property and affairs. Certainly, they did not

assume the risk, because they didn't know and

understand the risk.

Lastly, I reject plaintiffs' claim for

punitive damages. The proof does not justify

the award of any such damages. Defendant did

not intentionally cause injury to plaintiffs’

cattle. Defendant's acts were not willful or

wanton. Defendant was not guilty of malice.

Defendant's motives were to benefit the cattle

industry, and the overall results of the use of

Anaplaz are extremely beneficial to that indus-

try. The proof in this case does not even

approach proof of bad faith on defendant's

part. The case is purely and simply one in

which it must be decided who is to bear the

risk of loss under the unfortunate circum-

stances presented when, as I have held, an

inadequate and improper warning was given by

defendant. This is no case for the award of

punitive damages -- the proof falls far short

of the proof required to justify punishment of

defendant. The case is one in which the ques-

tions of defendant's liability for compensatory

damages is very, very close, and as review of

the cases demonstrates, and especially a review

of the Tenth Circuit cases, the question of

defendant's liability for any damages is one on

which reasonable minds may differ.

To summarize what I have held: I hazard

no guess as to whether Wyoming will embrace the

App 65.

doctrine of strict liability under Sec. 402-A

of the Restatement of Torts; I hold that plain-

tiffs have established a right to recover

damages under their alternative theories of

breach of warranty and negligent failure to

warn; that they have established no right to

recover on the basis of violation of federal

statute; that plaintiffs were not guilty of

contributory negligence; that they did not

assume the risk, and that the case is not one

in which punitive damages should be awarded.

Counsel are requested to advise me by

letter as to the time frame within which they

wish to try the damage issue and of the esti-

mated amount of time which should be reserved

for that trial.

Dated at Denver, Colorado, this 13th day

of June, 1975.

United States District Judge

App 66.

21 U.S.C. § 352. Misbranded drugs and

devices

A drug or device shall be deemed to be

misbranded -

Directions for use and warnings on label

(f) Unless its labeling bears (1) adequate

directions for use; and (2) such adequate war-

nings against use in those pathological condi-

tions or by children where its use may be

dangerous to health, or against unsafe dosage

or methods or duration of administration or

application, im such manner and form, as are

necessary for the protection of users: Pro-

vided, That where any requirement of clause (1)

of this subsection, as applied to any drug or

device, is not necessary for the protection of

the public health, the Secretary shall pro-

mulgate regulations exempting such drug or

device from such requirement.

Health-endangering when used as prescribed

(j) If it is dangerous to health when used

in the dosage, or with the frequency or dura-

tion prescribed, recommended, or suggested in

the labeling thereof.

App 67.

<9

Prescription drug advertisements: established

name; quantitative formula; side effects,

contraindications, and effectiveness; prior

approval; false advertising; labeling

(n) In the case of any prescription drug

distributed or offered for sale in any State,

unless the manufacturer, packer, or distributor

thereof includes in all advertisements and

other descriptive printed matter issued or

caused to be issued by the manufacturer,

packer, or distributor with respect to that

drug a true statement of (1) the established

mame as defined in subsection (e) of this

section, printed prominently and in type at

least half as large as that used for any trade

or brand name thereof, (2) the formula showing

quantitatively each ingredient of such drug to

the extent required for labels under subsection

(e) of this section, and (3) such _ other

information in brief summary relating to side

effects, contraindications and effectiveness as

shall be required in regulations which shall be

issued by the Secretary in accordance with the

procedure specified in section 37l(e) of this

title: Provided, That (A) except’ in

extraordinary circumstances, no_ regulation

issued under this subsection shall require

prior approval by the Secretary of the content

of any advertisement, and (B) no advertisement

of a prescription drug, published after the

effective date of regulations issued under this

subsection applicable to advertisements of

prescription drugs, shall, with respect to the

App 68.

matters specified in this subsection or covered

by such regulations, be subject to the provi-

sions of section 52 to 57 of Title 15. This

subsection (n) shall not be applicable to any

printed matter which the Secretary determines

to be labeling as defined in section 321(m) of

this title.

App 69.

21 U.S.C. § 353. Exemptions in case of

drugs and devices - Regulations for goods to be

processed, labeled, or repacked elsewhere

Prescription by physician; exemption from

labeling and prescription requirements;

misbranded drugs; compliance with narcotic and

marihuana laws

(b)(1) A drug intended for use by man which-

(A) is a habit-forming drug t o wh ch

section 352(d) of this title applies; or

(B) because of its toxicity or other

potentiality for harmful effect, or the

method of its use, or the collateral

measures necessary to its use, is not safe

for use except under the supervision of a

practitioner licensed by law to administer

such drug; or

(C) is limited by an _ approved

application under section 355 of this

title to use under the professional super-

vision of a practitioner licensed by law

to administer such drug,

shall be dispensed only (i) upon a written pre-

scription of a practitioner licensed by law to

administer such drug, or (ii) upon an oral pre-

scription of such practitioner which is reduced

promptly to writing and filed by the pharma-

cist, or (iii) by refilling any such written or

oral prescription if such refilling is author-

ized by the prescriber either in the original

prescription or by oral order which is reduced

App 70.

—_— een ewe ee Se eee

promptly to writing and filed by the pharma-

cist. The act of dispensing a drug contrary to

the provisions of this paragraph shall be

deemed to be an act which results in the drug

being misbranded while held for sale.

(2) Any drug dispensed by filling or re-

filling a written or oral prescription of a

practitioner licensed by law to administer such

drug shall be exempt from the requirements of

section 352 of this title, except subsections

(a), (i) (2) and (3), (k), and (1) of said

section, and the packaging requirements of sub-

sections (g), (h), and (p) of said section, if

the drug bears a label containing the name and

address of the dispenser, the seial number and

date of the prescription or of its filling, the

name of the prescriber, and, if stated in the

prescription the name of the patient, and the

directions for use and cautionary statements,

if any, contained in such prescription. This

exemption shall not apply to any drug dispensed

in the course of the conduct of a business of

dispensing drugs pursuant to diagnosis by mail,

or to a drug dispensed in violation of para-

graph (1) of this subsection.

App 71.

21 C.F.R. § 202.1(e) "True statement of

information in brief summary relating to

side effects, contraindications, and

effectiveness:

(1) When required. All advertisements

for any prescription drug ("prescribtion drug"

as used in this section means drugs defined in

Section 503(b)(1) of the act and § 201.105,

applicable to drugs for use by man and veterin-

ary drugs, respectively), except advertisements

described in subparagraph (c)(2) of this sec-

tion shall present a true statement of infor-

mation in brief summary relating to side ef-

fects, contraindications (when used in this

section "side effects, contraindications"

include side efects, warnings, precautions, and

contraindications and include any such infor-

mation under such headings as cautions, special

considerations, important notes, etc.) and ef-

fectiveness. Advertisements broadcast through

media such as radio, television, or telephone

communications systems shall include’ infor-

mation relating to the major side effects and

contraindications of the advertised drugs in

the audio or audio and visual parts of the

presentation and unless adequate provision is

made for dissemination of the approved or

permitted package labeling in connection with

the broadest presentation shall contain a brief

summary of all necessary information related to

side effects and contraindications.

App 72.

(2) Exempt advertisements. The following

advertisements are exempt from the requirements

of paragraph (e)(1) of this section under the

conditions specified.

(i) Reminder advertisements. Reminder

advertisements if they contain only the pro-

prietary or trade name of a drug (which neces-

sitates declaring the established name, if any,

and furnishing the formula showing quantitavely

each ingredient of the drug to the extent re-

quired for labels) and, information relating to

dosage form, quantity of package contents,

price, the name and address of the manufac~

turer, packer, or distributor or other written,

printed, or graphic matter containing no rep-

resentation or suggestion relating to the

advertised drug: Provided, however, That if

the Commissioner finds that there is evidence

of significant incidence of fatalities or

serious damage associated with the use of a

particular prescription drug, he may notify the

manufacturer, packer, or distributor of the

drug by mail that this exemption does not apply

to such drug by reason of such finding: And

provided, however, That reminder advertisements

are not permitted for a drug for which an an-

nouncement has been published pursuant to re-

view of the labeling claims for the drug by the

National Academy of Sciences National Research

Council, Drug Efficacy Study Croup, and for

which no claim has been evaluated as higher

than "possibly effective". If the Commis-

App 73.

sioner finds the circumstances are such that a

reminder advertisement may be misleading to

prescribers of drugs subject to NAS-NRC evalua-

tion such advertisements will not be allowed

and the manufacturer, packer, or distributor

will be notified either in the publication of

the conclusions on the effectiveness of the

drug or by letter.

(ii) Advertisements of bulk-sale drugs.

Advertisements of bulk-same drugs that promote

sale of the drug in bulk packages in accordance

with the practice of the trade solely to be

processed, manufactured, labeled, or repackaged

in substantial quantities and that contain no

claims for the therapeutic safety or effective-

ness of the drug.

(iii) Advertisements of prescription-

compounding drugs. Advertisements of

prescription-compunding drugs that promote sale

of a drug for use as a prescription chemical or

other compound for use by registered pharma-

cists in compounding prescriptions if the drug

otherwise complies with the conditions for the

labeling exemption contained in § 201.120 and

the advertisement contains no claims for the

therapeutic safety of effectiveness of the

drug."

App 74.

21 CFR § 202.1(e)(3) "Scope of information to

be included; applicability to the entire

advertisement.

(i) The requirement of a true statement of

information relating to side effects, contra-

indications, and effectiveness applies to the

entire advertisement. Untrue or misleading

information in any part of the advertisement

will not be corrected by the inclusion in

another distinct part of the advertisement of

brief statement containing true information

relating to side effects, contraindications,

and effectiveness of the drug. If any part or

theme of the advertisement would make the ad-

vertisement false or misleading by reason of

the omission of appropriate qualification or

pertinent information, that part or theme shall

include the appropriate qualification or per-

tinent information, which may be concise if it

is supplemented by a prominent reference on

each page to the presence and location else-

where in the advertisement of a more complete

discussion of such qualification or infor-

mation."

App 75.

21 CFR § 202.1(e)(3) (iii)

"The information relating to side effects

and contraindications shall disclose each spe-

cific side effect and contraindication which

include side effects, warnings, precautions,

and contraindications and include any _ such

information under such headings and cautions,

special considerations, important notes, etc.;

subparagraph (e)(1) of this section) contained

in required, approved, or permitted labeling

for the advertised drug dosage form(s); Pro-

vided However; acl

(a) The side effects and contraindications

disclosed may be limited to those pertinent to

the indications for which the drug is recommen-

ded or suggested in the advertisement to the

extent that such limited disclosure has pre-

viously been approved or permitted in drug la-

beling conforming to the provisions of §§ 201.-

100 or 201.105; and

App 76.

21 CFR § 202.1(e)(5)

"True statement of information. An adver-

tisement does not satisfy the requirement that

it present a ‘true statement’ of information in

brief summary relating to side effects, contra-

indications, and effectiveness if:

(i) It is false or misleading with respect

to side effects, contraindications, or effec-

tiveness; or

(ii) It fails to present a fair balance

between information relating to side effects

and contraindications and information relating

to effectiveness of the drug in that the infor-

mation relating to effectiveness is presented

in greater scope, depth, or detail than is re-

quired by Section 502(n) of the act and this

information is not fairly balanced by a presen-

tation of a summary of true information rela-

ting to side effects and contraindications of

the drug; Provided, however, That no adver-

tisement shall be considered to be in violation

of this section if the presentation of true

information relating to side effects and con-

traindications is comparable in depth and

detail with the claims for effectiveness or

safety.

(iii) It fails to reveal facts material in

the light of its representations or material

App 77.

PSSae

with respect to consequences that may result

from the use of the drug as recommended or

suggested in the advertisement."

App 78.

21 CFR § 202.1(e)(6)

“Advertisements that are false, lacking in

fair balance, or otherwise misleading. An ad-~

vertisement for a prescription drug is false,

lacking in fair balance, or otherwise mislead-

ing, or otherwise violative of Section 502(n)

of the act, among other reasons, if it:

(i) Contains a representation or sugges-

tion, not approved or permitted for use in the

labeling, that a drug is better, more effec-

tive, useful in a broader range of conditions

or patients (as used in this section "patients"

means humans and in the case of veterinary

drugs, other animals), safer, has fewer, or

less incidence of, or less serious side effects

or contraindications than has been demonstrated

by substantial evidence or substantial clinical

experience (as described in paragraph (e)(4)

(iii)(b) and (c) of this section) whether or

not such representations are made by comparison

with other drugs or treatments, and whether or

not such a representation or suggestion is made

directly or through use of published or unpub-

lished literature, quotations, or other refer-

ences.

(iii) Contains favorable inforamtion or

opinions about a drug previously regarded as

valid but which have been rendered invalid by

contrary and more credible recent information,

App 79.

or contains literature references or quotations

that are significantly more favorable to the

drug than has been demonstrated by «.hstantial

evidence or substantial clinical ex,.: ience.

(iv) Contains a representation or sugges-

tion that a drug is safer than it has been

demonstrated to be by substantial evidence or

substantial clinical experience, by selective--

presentation of information from published ar-

ticles or other references that report no side

effects or minimal side effects with the drug

Or otherwise selects information from any

source in a way that makes a drug appear to be

safer than has been demonstrated.

(v) Presents information from a study in a

way that implies that the study represents lar-

ger or more general experence with the drug

than it actually does.

(xviii) uses headline, subheadline, or

pictoral or other graphic matter in a way that

is misleading.

Provided, however, That any provision of this

paragraph shall be waived with respect to a

specified advertisement as set forth in a

written communication from the Food and Drug

Administration on a petition for such a waiver

from a person who would be adversely affected

by the enforcement of such provision on the

basis of a showing that the advertisement is

App 80.

not false, lacking in fair balance, or

otherwise violative of Section (502)(n) of the

Act. A petition for such a waiver shall set

forth clearly and concisely the petitioner's

interest in the advertisement, the specific

provision of this paragraph from which a waiver

is sought, a complete copy of the

advertisement, and a showing that’ the

advertisement i not false, lacking in fair

balance, or otherwise misleading, or otherwise

violative of Section 502(n) of the act."

App 81.

21 CFR § 202.1(e)(7)

"Advertisement that may be false, lacking

in fair balance, or otherwise misleading. An

advertisement may be false, lacking in fair

balance, or otherwise misleading or otherwise

violative of Section 502(n) of the act if it:

(i) Contains favorable information or con-

clusions from a study that is inadequate in de-

sign, scope, or conduct to furnish significant

support for such information or conclusions.

(vii) Fails to provide sufficient emphasis

for the information relating to side effects

and contraindications, when such information is

contained in a distinct part of an advertise-

ment, because of repetition or other emphasis

in that part of the advertisement of claims for

effectiveness or safety of the drug.

(viii) Fails to present’ information

relating to side effects and contraindicat ions

with a prominence and readability reasonably

comparable with the presentation of information

relating to effectiveness of the drug, taking

into account all implementing factors such as

typography, layout, contrast, headlines, para-

graphing, white space, and any other techniques

apt to achieve emphasis.

App 82.

(xi) Fails to present on a page facing

another page (or on another full page) of an

advertisment on more than one page, information

relating to side effects and contraindications

when such information is in a distinct part of

the advertisement.

(xii) Fails to include on each page or

spread of an advertisement the information

relating to side effects and contraindications

or a prominent reference to its presence and

location when it is presented as a distinct

part of an advertisement.

App 83.

21 CFR § 202.1(k)

"An advertisement issued or caused to be

issued by the manufacturer, packer, or distri-

butor of the drug promoted by the advertisement

and which is not in compliance with Section

502(n) of the act and the applicable regula-

tions thereunder shall cause stocks of such

drug in possession of the person responsible

for issuing or causing t’2 issuance of the

advertisement, and stocks of the drug distri-

buted by such person and still in the channels

of commerce, to be misbranded under Section

502(n) of the act.

(1)(1) Advertisements subect to Section

502(n) of the act include advertisements in

published journals, magazines, other

periodicals, and newspapers, and advertisements

broadcast through media such as radio,

television, and telephone communication

Systems.

App 84.

21 USC 201.105 Veterinary Drugs

A drug intended for veterinary use which,

because of toxicity or other potentiality for

harmful effect, or the method of its use, is

not safe for animal use except under the super-

vision of a licensed veterinarian, and hence,

for which "adequate directions for use" cannot

be prepared, shall be exempt from § 502(f)(1)

of the act if all the following conditions are

met.

(b) label

(1) "Caution: Federal law restricts

to use by or on the order of a licensed veter-

inarian; and

(2) The recommended dosage

(3) Route of administration

(4) Quantity or proportion of each

active ingredient

(5) If for other than oral use, the

names of all inactive ingredients.

(6) An identifying lot or control

number from which it is possible to determine

the manufacturer's history.

(c)(1) Labeling on or within package bears

adequate information for use including indi-

cations, hazards, contra-side effects

(d) Any labeling whether or not in packing

- i.e. advertising.

(1) - including warnings.

App 85.