Appendix — New York State Department of Health v. Andrulonis

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IN THE

Supreme Court of the United-Seales® |

October Term, 1990

NEW YORK STATE DEPARTMENT OF HEALTH,

Petitioner,

against

JOANNA ANDRULONIS, Individually and as Conservator of

the Property of JEROME ANDRULONIS; UNITED

STATES OF AMERICA; GLATT AIR TECHNIQUES, INC-:;

GLATT GmbH; WISCONSIN ALUMNI RESEARCH

FOUNDATION, INC.; WARF INSTITUTE, INC:

RALTECH SCIENTIFIC SERVICES, INC.; RALSTON

PURINA COMPANY; ELI LILLY AND COMPANY; and

JOHN L. THOMPSON AND SONS COMPANY,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE SECOND.-CIRCUIT

Appendix to Petition for a Writ of Certiorari

ROBERT ABRAMS

Attorney General of the State of New

York, Attorney for Petitioner

The Capitol

Albany, NY 12224

(518) 474-6697

O. PETER SHERWOOD

Solicitor General

PETER H. SCHIFF

Deputy Solicitor General

MICHAEL S. BusKUS

Assistant Attorney General

Of Counsel

Dated: May 31, 1991

THE REPORTER COMPANY, INC., Walton, NY 13856—800 252-7181—1991

(1064A—LC3-622)

LIT

Index to Appendix.

. Opinion of the United States Court of Appeals, Sec-

ond Circuit, Dated January 28, 1991..........

. Opinion of the United States District Court for the

Northern District of New York, Dated December

TEs ass eeu tnacek saehees -6e sae re oon

. Opinion of the United States District Court for the

Northern District of New York, Dated October 3,

Scat cada eee eked ce cian veined

. Order of the United States Court of Appeals for the

Second Circuit Denying Petition for Rehearing,

Perr er ep ererT rrr Tre

. Order of the United States Court of Appeals, Second

Circuit, Dated January 28, 1991. Issued as Man-

ee ick ccc cabeddawauny ne

. Amended Judgment of the United States District

Court for the Northern District of New York,

EOORNG EPOORENOT ED, TDS 2c ccc ccc ccc csevees

. Judgment of the United States District Court for the

Northern District of New York, Dated October

Page

Al

A46

A390

A399

A401

A403

Al

Opinion of the United States Court of Appeals,

Second Circuit, Dated January 28, 1991.

ANDRULONIS v. U.S.

Cite as 924 F.2d 1210 (2nd Cir. 1991)

Joanna ANDRULONIS, Individually and

as Conservator of the Property of Je-

rome Andrulonis, Plaintiffs—Appel-

lees/Cross—Appellants,

v.

UNIYVED STATES of America, Glatt Air

Techniques, Inc.; Glatt GmbH; Wis-

consin Alumni Research Foundation,

Inc.; Warf Institute, Inc.; Raltech Sci-

entific Services, Inc., Ralston Purina

Company; Eli Lilly and Company; and

John L. Thompson and Sons and Com-_

pany, Defendants,

United States of America,

Defendant-Appellant/Cross—Appellee.

UNITED STATES of America, Third-

Party Plaintiff-Appellee,

v.

NEW YORK STATE DEPARTMENT

OF HEALTH, Third-Party

Defendant~Appellant.

Nos. 61, 62 and 506, Dockets 89-6274,

90-6016 and 90-6028.

United States Court of Appeals,

Second Circuit.

Argued Sept. 11, 1990.

Decided Jan. 28, 1991.

A2

Bacteriologist who contracted rabies

while conducting laboratory experiment

with rabies viral strain brought personal

injury action along with wife against New

York Department of Health, federal

Government, and others. The United

States District Court for the Northern Dis-

trict of New York, Howard G. Munson, J.,

724 F.Supp. 1421, entered judgment for

bacteriologist. Cross appeals were taken.

The Court of Appeals, George C. Pratt,

Circuit Judge, held that: (1) failure of fed-

eral government scientist to warn bacteriol-

ogist of danger of working with rabies

viruses rendered Government liable; (2) re-

mand was required for redetermination of

allocation of settlement; and (3) award of

$2,417,238 for bacteriologist’s future custo-

dial care was not clearly erroneous.

Reversed in part and remanded and

affirmed.

Michael S. Buskus, Albany, N.Y., Asst.

Atty. Gen. of the State of N.Y. (Robert

Abrams, Atty. Gen. of the State of N.Y.,

Peter H. Schiff, Deputy Sol. Gen., Peter J.

Dooley, Asst. Atty. Gen., of counsel), Alba-

ny, N.Y., for third-party defendant-appel-

lant NYS Dept. of Health.

Wiliam G. Cole, Washington, D.C., Ap-

pellate Staff Atty., Civil Div., Dept. of Jus-

tice (Stuart M. Gerson, Asst. Atty. Gen.,

Dept. of Justice, Robert M. Greenspan,

Staff Atty., Civil Div., Frederick J. Scullin,

U.S. Atty. for the N.D.N.Y., of counsel),

Washington, D.C., for US.

A3

James D. Featherstonhaugh, Albany,

N.Y. (Roemer & Featherstonhaugh, John

R. Mineaux, of counsel), Albany, N.Y., for

plaintiffs-appellees/cross-appellants.

Before PRATT, MAHONEY and

WALKER, Circuit Judges.

GEORGE C. PRATT, Circuit Judge:

Jerome Andrulonis contracted the dis-

ease of rabies while conducting a labo-

ratory experiment with a rabies viral

strain. He became tragically ill and even-

tually suffered serious and permanent

brain damage, leaving him with the mental

capacity of a four-year-old. He also suf-

fered marked personality and behavioral

changes as a result of dementia secondary

to rabies encephalitis. Andrulonis’s mental

incapacity and emotional instability are per-

manent. The experiment, which was con-

ducted under the supervision of Dr. John

G. Debbie, a scientist employed by the New

York State Department of Health (“NYS-

DOH”), and observed by Dr. George M.

Baer, a federal government scientist, took

place in the state-operated Griffin Labora-

tories just outside Albany, New York.

Joanna Andrulonis, individually, and as

conservator of the property of Jerome An-

drulonis, her husband, brought this action

against the United States of America and a

number of nongovernmental defendants to

recover damages for the severe injuries

they have suffered because of the rabies.

A4

The claim against the United States was, of

course, brought under the Federal Tort

Claims Act, 28 U.S.C. §§ 1346, 2671-2680

(“FTCA” or “the act”). The United States

cross-claimed against the nongovernmental

defendants and filed a third-party com-

plaint for contribution against the State of

New York. See N.Y. Civ.Prac.L & R.

§§ 1401-1404. Before trial, the district

court dismissed Joanna Andrulonis’s indi-

vidual claims against the United States for

failure to timely file the administrative

claim required by the FTCA. Andrulonis

v. United States, No. 19-CV-847, slip op.

at 7 (N.D.N.Y. March 8, 1984); see 28

U.S.C. § 267Ka) and § 2401(b).

Before the end of trial, plaintiffs,

through a series of agreements, had settled

with all of the nongovernmental parties for

a total of $1,300,000. The settling parties

agreed that $225,000 would be paid in satis-

faction of the primary claims of Jerome

Andrulonis and that $1,075,000 wou!d be

paid in satisfaction of the derivative claims

of Joanna Andrulonis.

After a nonjury trial of the remaining

unresolved FTCA claims of plaintiff Je

rome Andrulonis against the United States

and the contribution claims of the United

States against NYSDOH, Judge Munson

found the government liable in negligence

for Jerome Andrulonis’s injuries and also

found NYSDOH liable to the government

on its contribution claim. In addition, con-

lilt aa

AS

sidering the relative culpabilities of the set-

tling private defendants, he found Eli Lilly

and Company and John L. Thompson &

Sons and Company responsible to the ex-

tent of 5 percent and exonerated the other

settling defendants. The court assessed

damages in the amount of $6,424,641, in-

cluding $2,417,238 for the future custodial

care of Jerome Andrulonis, and appor-

tioned them 30 percent to the United

States, 65 percent to NYSDOH, and 5 per-

cent to Lilly/Thompson. Andrulonis v.

United States, 724 F Supp. 1421 (N.D.N.Y.

1989).

Under section 15-108 of New York’s

General Obligations Law, the United States

was entitled, with respect to each settle

ment, to a setoff for the greater of ‘‘(a) the

amount stipulated in the settlement agree-

ment, (b) the consideration paid for the

release, or (c) the amount of the settling

defendant’s equitable share of the dam-

ages.” N.Y.Gen.Oblig.Law § 15-108. As

noted earlier, Jerome Andrulonis had been

allocated $225,000 of the proceeds of a

settlement agreement with the private de

fendants. Of this amount, Lilly/Thompson

paid $100,000 and the other settling private

defendants paid $125,000. Since defen-

dants Lilly/Thompson had settled for an

amount that was less than their equitable

share, the district court reduced the award

by 5 percent or $321,232, representing the

proportionate culpability found against Lil-

ly/Thompson. Since the district court

A6é

found no culpable conduct attributable to

the other settling defendants, it reduced

Jerome Andrulonis’s award by the actual

dollar amount paid to him by those defen-

dants—$125,000. This left the United

States primarily responsible to Jerome An-

drulonis for $5,978,409, subject to recover-

ing from the state 68.42 percent (“/sths) of

that amount, or $4,090,427, on its third-par-

ty contribution claim. N.Y¥.Civ.Prac.L. &

R. § 1402.

BACKGROUND

Given the complexity of this case, we

must delve with considerable detail into the

circumstances surrounding Andrulonis'’s ill-

ness and the experiment that caused it. It

is unfortunate that such a long and techni-

cal narrative must follow, but a full under-

standing of the district court’s decision can-

not be reached without careful considera-

tion of the virus used, the disease it causes,

and the methods of researching rabies used

at the time the tragedy occurred. The

following facts include those that the dis-

trict court found rabies experts reasonably

should have known about the disease.

Since the district court’s findings are not

clearly erroneous, we must accept them as

true. Fed.R.Civ.P. 52(a).

Jerome Andrulonis was a 34-year-old

senior bacteriologist employed to conduct

rabies research in NYSDOH’s Griffin Labo-

ratory under the supervision of Dr. John G.

A7

Debbie, a research scientist employed by

NYSDOH as head of the rabies labs at

Griffin. Dr. Debbie was persuaded to con-

duct rabies research by Dr. George M.

Baer, Chief of the Viral Zoonosis Branch

and Rabies Laboratory at the Center for

Disease Control (“CDC”), a division of the

United States Department of Health and

Human Services. The research being done

by Dr. Debbie and Andrulonis was part of

a joint effort by the NYSDOH and the

CDC to develop a technique for mass im-

munization of wildlife in the hope of eradi-

cating the incidence of rabies transmitted

to man.

To realize this goal, Dr. Debbie was

working on an ora! vaccine that could be

distributed to wildlife. Because the initial

virus strains tested by Dr. Debbie could not

withstand the destructive stomach acids of

some species, he decided, upon the advice

of Dr. Baer, to try a method called “enteric

coating.” Under this method, a pill, or

nonpareil, would be coated first with the

rabies virus, then a protective coating, and

finally, a shell that could withstand stom-

ach acids but would disintegrate in the

animal's intestines, allowing the virus to be

absorbed there. The virus would not cause

development of the disease, but would

cause the body to produce antibodies that

would protect the animal against subse-

quent exposures to the rabies virus.

Dr. Debbie contacted the coating depart-

ment at defendant WARF Institute, Inc.

(“WARF"”), which on March 30, 1976, sent a

A8

representative to demonstrate a coating

technique using a Uni-Glatt machine, man-

ufactured by defendant Glatt GmbH and

distributed by defendant Glatt Air Tech-

niques, Inc. (“the Glatt defendants”). The

Uni-Glatt machine operated by suspending

nonpareils in a column of upflowing air

confined in a tube. The suspended nonpar-

eils would then be coated with aerosolized

virus.

When the machine operated, the aerosol

itself could be seen inside the tube, al-

though any leakage into the atmosphere

was not visible to the unaided eye and left

no trace outside the machine. However,

nonpareils would occasionally leak out of

the machine into the lab environment, and

the final coating process created a visible

reddish dust that escaped from the machine

leaving the entire laboratory coated with

the reddish dust after each’run. During

the initial demonstration run, it became

apparent to everyone in the laboratory that

the machine was not airtight. Despite this,

the only precautions required of the Jab

workers were the wearing of a mask and

gloves, and the maintenance of a high level

of rabies antibodies in their blood systems

through periodic inoculations with a rabies

vaccine manufactured by defendant Eli Lil-

ly and Company and distributed by defen-

dant John L. Thompson & Sons and Compa-

ny (“Lilly/Thompson’”’).

Funding for the Uni-Glatt rabies experi-

ments was provided by the federal CDC.

In exchange, Dr. Debbie was to provide the

ea ee

A9

CDC with some of the coated nonpareils

prepared in the course of the Uni-Glatt

experiments. Beyond providing the fund-

ing, CDC officials made no attempt to di-

rect the day-today operations of the

project, to devise any protocol, or otherwise

to control the research efforts at Griffin.

Dr. Debbie used the Uni-Glatt in two

more experiments in July and September of

1976, both times using a rabies viral strain

prepared by Andrulonis with a titer of 6.

“Titer” is the term used to indicate a stan-

dardized measure of a substance’s ability

to produce a defined result. With respect

to the rabies virus, the titer measures the

ability to kill laboratory mice after intracer-

ebral injection of a solution containing that

virus. The titer is expressed exponentially.

During the July and September runs,

heat generated by the machine killed most

of the viral particles and reduced the titer

of the vaccine to 1, a level that produced

irregular serum antibody levels. To over-

come this problem, Dr. Debbie asked Dr.

Baer to prepare a viral strain with a higher

titer.

Dr. Baer, in keeping with CDC’s general

practice of preparing and supplying viral

strains to many private and state-operated

labs, prepared a relatively unknown viral

strain, ERA-BHK/21, with a titer of 8.1.

This was derived from a commercially

available ERA vaccine, but it had a much

higher concentration of viral particles and

was less susceptible to heat. While the

basic ERA vaccine had several known fa-

A10

vorable characteristics, the particular char-

acteristics of ERA-BHK/21 were relatively

unknown to most scientists in March of

1977, since it was several times removed

from the commercial ERA vaccine. ERA-

BHK/21 was created through a process

calied “passaging” that had the potential

for producing unpredictable changes in

characteristics. The handful of studies on

ERA-BHK/21 had reported mixed results

about pathogenicity, and no one knew with

certainty whether man was susceptible to

developing the disease of rabies as a result

of infection from this ERA-derived virus

strain. The CDC generally recommended,

as a precaution, that the virus be treated as

pathogenic to man.

Several other factors, in addition to un-

certainty about the characteristics of

ERA-BHK/21, complicated the situation.

People usually contract rabies through the

saliva of an infected animal during a bite.

Infection through aerosol exposure, the

route of infection in Andrulonis’s case, is

much more rare and was not even recog-

nized until the late 1950s or early 1960s.

Not all exposures lead to infection; not all

infections lead to the disease. Regardless

of the route of infection, the chances of

getting the disease after exposure are

closely related to the quantity of viral par-

ticles, or the dose, to which a person is

exposed. When the exposure is aerosol in

nature, the dose is probably the single most

important factor in determining whether

the virus will cause the disease.

All

In addition, the pathogenesis of the dis-

ease is very different between the airborne

and the bite routes. With a bite, the area

is bathed with blood, so if the bitten person

has been immunized, the antibodies in the

blood have an opportunity to neutralize the

virus before it can invade the central nerv-

ous system. In contrast, when airborne,

the virus hits olfactory nerves that are

exposed to the environment and that have

as their only protection the nasa] mucosa.

Ordinarily, olfactory nerves do not have

significant contact with antibodies in the

blood stream. Thus, even if a person has

been immunized, the antibodies do not have

a chance to come into contact with the

infected nerves, unless the vaccine is able

to produce antibodies in the mucosa.

In 1976-1977, when Andrulonis was ex-

posed to the virus, it was not known wheth-

er the Lilly vaccine he and the other lab

technicians were using could protect

against aerosol exposure. Lilly did not

conduct studies even after becoming aware

of the possibility of aerosol exposure, nor

did it warn users of the potential that its

vaccine might not protect against aerosol

exposures. In light of the meager then-ex-

isting knowledge about aerosol exposures

and vaccines, the district court found that

safe lab practices mandated avoidance of

all aerosol exposures and that virus-laden

aerosols should not even be created unless

absolutely necessary for the research goal,

and in those cases, the aerosols should be

physically contained using one of the readi-

ly-available containment systems.

Al2

On the evening of March 28, 1977, Dr.

Baer personally delivered the specially pre-

pared ERA-BHK/21 virus strain with a

titer of 8.1 to Dr. Debbie at Griffin. He

informed Dr. Debbie of the titer and Dr.

Debbie relayed this information to the oth-

er lab workers the next morning. No dis-

closure was made about how the strain was

prepared or how many times it was pas-

saged. No safety inspection was made of

the lab premises, but this was consistent

with ordinary CDC practice in similar cir-

cumstances.

The tragic experiment took place the

pext day, March 29th. With Dr. Baer ob-

serving, Dr. Debbie started the machine

and began circulating the nonpareils in the

glass tube. The aerosolization process us-

ing the ERA-BHK/21 virus lasted over an

hour, during which time both Dr. Debbie

and Andrulonis worked in close proximity

to the machine. The process required close

attention, and usi:s!ly Andrulonis or Dr.

Debbie sat near the machine and tapped

the glass tube with the handle of a screw-

driver to prevent nonpareils from sticking

together. Commonly, Andrulonis would

place his face within six to twelve inches of

the tube while tapping it, and would remain

that close to the machine for minutes at a

time throughout the run. Dr. Baer also

observed the process closely and, at times,

was within a foot of the machine.

Al3

Dr. Baer left on the evening of March

29th. Another coating run was done the

next day, but this time using a viral strain

prepared by Andrulonis that had a titer of

5.5.

The district court found on adequate, al-

beit disputed, evidence that Andrulonis had

contracted rabies during the March 29,

1977, experiment that Dr. Baer observed.

To begin with, Andrulonis’s only contact

with the virus was at work. On the job, it

was unlikely that he got rabies from rou-

tine procedures; more likely, he contracted

the disease from an “unusual” exposure.

Of his four possible exposures between

March of 1976 and March of 1977, compel-

ling evidence points to the March 29, 1977,

experiment as the cause of his illness,

which first appeared in Apri of 1977. As

to the other exposures, in March, July and

September of 1976, a six-month incubation

period is within the realm of possibility, but

the average is 20-60 aays. Only 14 per-

cent of the incidents of rabies have an

incubation period greater than 90 days re-

gardless of the method of exposure. Since

this was an aerosol exposure, the incuba-

tion period was more likely to be shorter

than longer.

Another unusual aspect of the March

29th experiment was its use of the most

highly concentrated virus with a titer of

8.1. This means there were 100 times

more viral particles than a 6.0 titer and 400

times more viral particles than a 5.5 titer.

Al4

Further, the viral strain used in the March

29th experiment was more resistant to the

heat generated by the machine. Finally,

the district court accepted the opinion testi-

mony of various experts ‘ho stated with a

reasonable degree of medical and scientific

certainty that Andrulonis contracted the

disease of rabies as a result of exposuré in

the March 29th experiment.

The district court found the government

liable under New York law on three inde-

pendent theories of negligence: supplier’s

duty to warn, non-negligent creation of a

hazard, and negligent entrustment. The

government challenges each of these hold-

ings. The district court also held that the

discretionary function exception of the Fed-

eral Tort Claims Act was inapplicable to

this case, and both the government and

NYSDOH appeal from this holding.

In addition, the government and NYS-

DOH appeal from the district court’s ap-

proval of the allocation of settlement pro-

ceeds; NYSDOH appeals the district

court’s apportionment of damages; and fi-

nally, Jerome Andrulonis cross-appeals

from the court’s determination of the cost

of future custodial care.

Al5

DISCUSSION

We first turn to the question of whether

the discretionary function exception pro-

tects the government from suit in these

circumstances. If the exception were to

apply in this case, it would bar this action

against the government, and we could dis-

miss the complaint on that ground alone.

However, since we determine that the ex-

ception is inapplicable here, we must then

discuss the question of whether New York

law imposes liability on the government

under the circumstances of this case. Of

the three theories relied on by the district

court, we determine that the failure to fur-

nish an adequate warning is sufficient to

hold the government liable, so we need not

reach the merits of the other two theorics.

We next will address the questions of

whether the settlement proceeds were

properly allocated between Joanna 1! Je-

rome Andrulonis, and whether the district

court properly apportioned the percentages

of responsibility between the federal

government and the state. Finally, we wili

discuss the plaintiff's cross-appeal on

whether the district court correctly calcu-—

lated his damages for future custodial care.

A. Discretionary Function Exception

[1] Initially, we take up whether this

action was barred by the discretionary

function exception to the FTCA. The tort

Al6

claims act generally authorizes suits

against the United States for damages

for injury or loss of property, or personal

injury or death caused by the negligent

or wrongful act or omission of any em-

ployee of the Government while acting

within the scope of his office or employ-

ment, under circumstances where the

United States, if a private person, would

be liable to the claimant in accordance

with the law of the place where the act

or omission occurred.

28 U.S.C. § 1346(b). The act further pro-

vides that the United States shall be liable

with respect to tort claims “in the same

manner and to the same extent as a private

individual under like circumstances.” 28

U.S.C. § 2674. —

Although the act waives the sovereign

immunity of the United States, it does not

do so in all respects. Congress carefully

excepted several important classes of tort

claims from the act’s broad waiver of im-

munity. Of particular relevance here, sec-

tion 2680(a) provides that the act shall not

apply to

[a]Jny claim based upon * * * the exer-

cise or performance or the failure to ex-

ercise or perform a discretionary func-

tion or duty on the part of a federal

agency or an employee of the Govern-

ment, whether or not the discretion in-

volved be abused.

28 U.S.C. § 268Qa). ‘The discretionary

function exception ° * * marks the bound-

Al7

ary between Congress’ willingness to im-

pose tort liability upon the United States

and its desire to protect certain governmen-

tal activities from expocure to suit by pm-

vate indivivuals.” Uniied States v. S.A.

Linpresu De Viacao Acrea Rio Grandense

(Varig Airlines), 467 U.S. 797, 808, 104

S.Ct. 2755, 2761-2762, 81 L.Ed.2d 660 re-

hearing denied, 468 U.S. 1226, 105 S.Ct.

26, 82 L.Ed.2d 919 (1984).

The Supreme Court in Dalehite v. Unit-

ed States, 346 U.S. 15, 27-28, 73 S.Ct. 956,

963-964, 97 L.Ed. 1427 (1055), as:Jyzed the

legislative history of the act and concluded

that its waiver of sovereign immunity was

inapplicable to “acts of a governmental na-

ture or function.” The basis for the excep-

tion was congress’s wish “to prevent judi-

cial ‘second-guessing’ of legislative and ad-

ministrative decisions grounded in social,

economic, and political policy through the

medium of an action in tort.” Varig Air-

lines, 467 U.S. at 814, 104 S.Ct. at 2764-

2765. The foundation for this exception is

protection of “the principles embodied in

the separation of powers doctrine by keep-

ing the judiciary from deciding questions

consigned to the executive and legislative

branches of the government.” Caban v.

United States, 671 F.2d 1230, 1233 (2d

Cir.1982).

By barring tort liability for activities that

require the alleged tortfeasor to consider

and weigh competing policies in arriving

at his decision, this test protects courts

from “involve{ment] in making ... deci-

sion{s] entrusted to other branches of the

government,” and especially from ques-

tions involving “not negligence but social

wisdom, not due care but political practi-

Al8

cability, not reasonableness but economic

expediency”.

Id. (citations omitted). Congress thus

sought to assure that tort liability would

not “seriously handicap efficient govern-

ment operations.” United States v. Mun-

tz, 374 U.S. 150, 163, 83 S.Ct. 1850, 1858, 10

L.Ed.2d 805 (1963).

Determining whether specific conduct is

protected by the discretionary function ex-

ception to the FTCA is sometimes difficult.

The act itself contains no definition of the

types of discretionary functions within the

exception. “The principal difficulty is sim-

ply that all federal employees exercise a

certain amount of discretion in the dis-

charge of their responsibilities.” Caban,

671 F.2d at 1232.

[2] To determine whether conduct falls

within the exception, we must focus on

“the nature of the conduct, rather than the

status of the actor,” Varig Airlines, 467

U.S. at 813, 104 S.Ct. at 2764, and use a

two-step process to examine the challenged

conduct. See Berkovitz v. United States,

486 U.S. 531, 536, 108 S.Ct. 1954, 1958-

1959, 100 L.Ed.2d 531 (1988); In re Joint

E. & So. District Asbestos Litigation, 891

F.2d 31, 36 (2d Cir.1989). First, we must

consider whether the conduct was a matter

of choice for the acting employee, and if so,

we must then determine whether the em-

ployee’s actions involved public policy con-

siderations. Asbestos Litigation, 891 F.2d

at 36.

{3} As to the first step, the Supreme

Court has determined that “conduct cannot

Al9

be discretionary unless it involves an ele

ment of judgment or choice.” Berkovitz,

486 U.S. at 536, 108 S.Ct. at 1958-1959.

Thus, when a federal statute, regulation, or

policy specifically dictates a course of ac-

tion for an employee to follow, the employ-

ee has no option but to adhere to the di

rective. Jd. If the employee can make no

choice, then there can be no discretion for

the exception to protect. Jd No such

directive was applicable to Dr. Baer in this

case; at the critical points in these events

he had the power to choose his actions.

But this does not end the inquiry. As we

have noted, to qualify for the exception,

Dr. Baer’s critical choices had to involve

policy considerations, and here they did

not. The Berkovitz Court stated that

‘{t]he exception, properly construed, ° ° °

protects only governmental actions and de-

cisions based on considerations of public

policy.” Jd. at 537, 108 S.Ct. at 1959. If

an action leaves “room for policy judgment

and decision there is discretion.” Dalehite,

346 U.S. at 36, 73 S.Ct. at 968.

In Indian Towing Co. v. United States,

350 U.S. 61, 76 S.Ct. 122, 100 L.Ed. 48

(1955), the Court distinguished between an

initial government decision to build a light-

house and subsequent actions to maintain

the lighthouse. The initial decision to un-

dertake and maintain a lighthouse service

was a discretionary judgment; however,

the failure to adequately maintain the light-

house in good condition, since it did not

involve any permissible exercise of policy

judgment, subjected the government to suit

under the FTCA. /d. at 69, 76 S.Ct at

126-127; see also Berkouvtz, 486 US. at

538 n. 3, 108 S.Ct. at 1959 n. 3.

A20

Similarly, in Caban, we determined that

the adoption of a regulation by the INS

was discretionary but a wrongful detention

by an INS employee was not discretionary.

Caban, 671 F.2d at 1233. See also Cara-

ballo v. United States, 820 F.2d 19, 21-22

(2d Cir.1987) (initial decision to patrol a

national park was discretionary, but the

manner in which decision was executed was

not discretionary); Eklof Marine Corp. v.

United States, 762 F.2d 200, 204-05 (2d

Cir.1985) (initial decision to provide naviga-

tional aid by marking obstructions was dis-

cretionary, but the precise manner of mark-

ing an obstruction did not implicate policy

and was not a discretionary act).

The government tries to distinguish this

line of cases in two ways. First, it con-

tends that the /nditan Towing approach is

inapplicable because the government here

did not decide upon a particular safety

measure and then negligently implement

its decision. The government would thus

restrict /ndian Towing to cases involving a

decision to provide safety measures. We

decline to limit Jndian Towing so narrow-

ly. We think that case rested not so much

on the government’s decision to install a

safety device, a lighthouse, but on its negli-

gent maintenance of the lighthouse and the

fact that decisions to maintain the light-

house did not implicate policy considera-

tions. In /ndian Towing, only the initial

decision to install the lighthouse was dis-

cretionary.

A21

[4] Sometimes, even the execution of a

policy decision is subject to protection by

the discretionary function exception; this

occurs when the steps in the execution

process also require policy judgments. For

example, in Varig Airlines, the Court not

only found that the Federal Aviation Ad-

ministration’s implementation of a program

for compliance review was discretionary,

but it also found that the acts of the FAA

employees who executed the program were

protected, because those employees ‘‘were

specifically empowered to make policy

judgments regarding the degree of confi

dence that might reasonably be placed in a

given manufacturer, the need to maximize

compliance with FAA regulations, and the

efficient allocation of agency resources.”

Varig Airlines, 467 U.S. at 820, 104 S.Ct.

at 2767-68. However, in Caban, we deter-

mined that even if regulations and statutes

appear to vest immigration officials with

broad discretion, where the language goes

only to the standard cf care by which gov-

ernmental employees’ behavior is to be

judged, the language does not convert the

discharge of prescribed responsibilities into

decisions which involve a choice between

competing policy considerations. Cabdan,

671 F.2d at 1233. In short, the key inquiry

is whether the decisions, be they initial

decisions or implementation decisions, were

necessarily susceptible to policy analysis.

Asbestos Litigation, 891 F.2d at 37; Unit-

ed States Fidelity 2 Guar. Co. v. United

States, 837 F.2d 116, 121 (8d Cir.), cert.

denied, 487 U.S. 1235, 108 S.Ct. 2902, 101

L.Ed.2d 935 (1988).

A22

In this case, the government’s decisions

te encourage rabies research, provide fund-

ing for the research, and provide NYSDOH

with the virus were all decisions that impli-

cated policy considerations and therefore

were protected by the discretionary func-

tion exception. The same is not true, how-

ever, with Dr. Baer’s alleged failure to

warn of the extreme dangers presented by

the particular circumstances of the March

29th experiment which Dr. Baer failed to

interrupt. The situation simply did not

lend itself to policy balancing, not is there

any indication that Dr. Baer considered the

policy implications or the pros and cons of

allowing the experiment to proceed. Once

he became aware of the risks, Dr. Baer

was obligated to give warning. His is pre-

cisely the type of negligent omission for

which congress waived the government's

sovereign immunity in order to provide re-

dress to citizens for the torts of govern-

ment actors.

The government relies on Dalehite to

support its contention that even mundane

decisions necessary to execute a policy deci-

sion are entitled to protection under the

discretionary function exception. Dalehite

involved a tragic explosion of fertilizer that

had been manufactured and shipped at the

instigation and under the supervision of the

government. The Supreme Court held that

even those actions that were necessary in

the execution of a policy decision were enti

tled to protection under the discretionary

function exception. Dalehite, 346 US. at

VX

A23

36, 73 S.Ct. at 968. Dalehite is distinguish-

able, however, because the Court could not

find there any specific instance of negli-

gence by an employee. The accident was

“a complex result of the interacting factors

of mass, heat, pressure and composition,”

id. at 42, 73 S.Ct. at 971, and no single

action was identified as the cause of the

accident. Liability of the government thus

could only have been based on the larger

policy decision to manufacture and store

the fertilizer.

The government suggests that a similar

inability to pinpoint the precise source

should prevent liability in this case, be-

cause this accident, too, was the result of

complex processes. The district court,

however, was able to penetrate the com-

plex facts of this case and determine that

Jerome Andrulonis’s illness resulted, at

least in part, from Dr. Baer’s failure to

warn of the potentially disastrous conse-

quences of the March 29th experiment he

was observing. This was a nondiscretion-

ary negligent omission that did not impli-

cate any balancing of policy factors. The

district court’s findings on this point are

not clearly erroneous, and the government

is therefore not entitled to protection from

suit under the discretionary function excep-

tion.

A24

B. Supplier’s Duty to Warn

The district court found the government

liable on three independent theories of tort

liability. We need discuss only the suppli-

er’s duty to warn, because it is sufficient to

affirm on the liability issue.

Under the FTCA, the law of the state

where the tort occurred applies. 28 U.S.C.

§ 1346(b); Hatahley v. United States, 351

U.S. 173, 182, 76 S.Ct. 745, 752, 100 L.Ed.

1065 (1956); Montellier v. United States,

315 F.2d 180, 185 (2d Cir.1963). Because

most of the acts or omissions of Dr. Baer

occurred in New York, the substantive !aw

of New York governs this case.

[5,6] Under established New York law,

a supplier of a product which the supplier

knows or should know is dangerous if used

in the usual and expected manner has a

duty to adequately warn users of the prod-

uct of the danger unless the danger is

obvious or well-known. Young v. Elmira

Transit Miz, Inc., 52 A.D.2d 202, 204-05,

383 N.Y.S.2d 729, 731 (4th Dept.1976) (Car-

damone, J.) (citing Restatement (Second) of

Torts § 388); Billiar v. Minnesota Mining

and Mfg. Co., 623 F.2d 240, 243 (2d Cir.

1980). See also Schumacher v. Richards

Shear Co., Inc., 59 N.Y.2d 239, 246-47, 464

N.Y.S.2d 437, 441, 451 N.E.2d 195 (1983).

Breach of this duty can lead to liability in

negligence.

A25

The government initially argues that a

supplier's duty to warn is inapplicable to

this case because the doctrine should be

limited to a commercial context; that pure-

ly scientific activities should be exempt

from the rigors of traditional tort law; that

the risk-spreading rationale underlying im-

position of this duty should not be applica-

ble because the government is not an in-

come-producing entity; and that imposing

liability in this situation would tend to cur-

tail scientific research, and restrict the flow

of information and exchange of knowledge

which are vital for producing health-related

benefits.

Although we are sympathetic to the

government's policy arguments, they sim-

ply are not supported by the applicable law.

In the first place, the FTCA specifically

provides for the imposition of liability on

the federal! government as if it were a

private person. The fact that the govern-

ment does not generate income and is not

considered a commercial entity is irrelevant

in light of congress’s decision that govern-

mental immunity is waived in certain cir-

cumstances if government employees com-

- mit torts.

{7} Furthermore, we agree with the dis-

trict court that New York does not require

a commercial transaction as a prerequisite

to liability for breach of a duty to warn.

Restatement (Second) of Torts § 405;

Pease v. Sinclair Refining Co., 104 F.2d

183, 186 (2d Cir.1939) (applying New York

A26

law). In addition, and contrary to the

government’s contention, there is probably

no entity better able to spread the risk of

scientific research than the government,

which has the biggest “customer” base of

all—taxpayers. Finally, in a_ situation

where our entire population may benefit

from eradication of rabies, it is not unrea-

sonable to have the potential beneficiaries

share the cost of an unfortunate incident

occurring in the search for an effective

method for vaccination against this lethal

disease.

Although the imposition of a duty to

warn of potential hazardous consequences

may, as the government argues, tend to

chill the collegial atmosphere of the scien-

tific community, we think that the benefits

of imposing such a duty, at least in the

highly unusual circumstances of this case,

far outweigh any potentially chilling ef-

fects. All scientists should assure that rea-

sonable and appropriate safety precautions

are taken in the lab. Laboratory staffs

should not have to bear the financial bur-

dens in addition to the personal risks that

accompany the quest for scientific advance-

ment. If identifiable negligence does oc-

cur, its economic consequences need not be

excused as necessary for the benefit of

science, no matter how noble the goals of

the supervising scientists.

[8] The government also contends that

even if the imposition of a supplier's duty

to warn is the appropriate legal standard,

A27

Dr. Baer satisfied this duty by informing

Dr. Debbie of the extremely high concen-

tration of the virus. The distrct court

found that at the time Dr. Baer gave the

warning, it was sufficient merely to advise

Dr. Debbie that the viral strain was highly

concentrated; given what Dr. Baer knew at

that time, the warning was proportionate

to the risk. However, the district court

also found that when Dr. Baer actually

observed the experiment, he should have

realized the extreme danger created by us-

ing his ERA~BHK/21 virus in a leaky aero-

solizing machine and should have immedi-

ately supplemented his warning. The

government argues that requiring Dr. Baer

to supplement the warning just because he

was a rabies expert and he decided to stay

at Griffin to observe the experiment is in-

correct.

{9,10} Under the applicable New York

law, we disagree. In Cover v. Cohen, 61

N.Y.2d 261, 274-75, 473 N.Y.S.2d 378, 385,

461 N.E.2d 864 (1984), the New York Court

of Appeals determined that a manufacturer

or retailer may incur liability for failing to

warn of newly discovered dangers in the

use of a product that come to his attention

after manufacture or sale. These dangers

may be discovered through advancements

in the state of the art, with which the

manufacturer is expected to stay abreast,

or through being made aware of later acci-

dents involving dangers in the product, of

which warning should be given to users.

A28

Although a product may be reasonably

safe when manufactured and sold and in-

volve no then-known risks of which warn-

ing need be given, risks thereafter revealed

by user operation and brought to the atten-

tion of the manufacturer or vendor may

impose upon either or both an additional

duty to warn. Id. at 275, 473 N.Y.S.2d at

385, 461 N.E.2d 864. The type of notice

that will trigger a manufacturer’s post-de-

livery duty to warn is a function of the

degree of danger involved and the number

of instances reported, id, and these are

questions of fact. Jd. at 276, 473 N.Y.S.2d

at 385, 461 N.E.2d 864.

In this case, Judge Munson determined

that Dr. Baer, while observing the expen-

ment in the lab, should have known of the

dangers involved and that he had sufficient

notice to trigger a duty to provide addition-

al warning. Dr. Baer was observing an

experiment with the extremely potent ra-

bies virus he had supplied being used in a

leaky machine in a way that couk! poten-

tially cause great harm to those present in

the lab. In these circumstances, he should

have realized the risks and warned against

continuing the experiment without addition-

al precautions.

Judge Munson based his conclusion on

several subordinate findings: (1) whenever

aerosols were used at the CDC labs in

Georgia, a laminar flow containment sys-

tem was also used; (2) Dr. Baer knew that

safe lab practice required containment; (3)

Dr. Debbie told Dr. Baer about the red

A29

dust that had escaped from the Uni-Glatt

machine during the third run of the experi-

ments; (4) Dr. Baer saw nonpareils escape

from the machine; (5) Dr. Baer saw Dr.

Debbie patch the machine with electrical

tape; (6) photographs of the machine

showed that it did not appear to be airtight;

and (7) Dr. Baer saw that the machine had

to be assembled by hand in the laboratory

for each experiment. Judge Munson also

found that Dr. Baer’s testimony, denying

his knowledge of the Uni-Glatt’s leak,

lacked credibility.

When Dr. Baer saw that the Uni-Glatt

was not airtight, he should have immediate-

ly alerted Dr. Debbie and the lab staff,

including Andrulonis, of the hazards posed

by the way the ERA-BHK/21 virus was to

be used; his failure to do so was, under

New York law, a breach of duty to those in

the lab, including Andrulonis.

Finally, the government argues that even

if the case is properly a duty-to-warn ac-

tion, and even if Dr. Baer’s single prelimi-

nary warning was inadequate, the govern-

ment still cannot be liable, because the case

falls within the “knowledgeable user’’ ex-

ception. This argument focuses on proxi-

mate cause, which is a necessary predicate

to finding liability. Sheehan v. City of

New Yorn, 40 N.Y.2d 496, 501, 387 N.Y.

S.2d 92, 95, 354 N.E.2d 832 (1976).

{11] In duty to warn cases, New York

recognizes two circumstances that would

preclude a finding of proximate cause: ob-

viousness and the knowledgeable user.

A30

Proximate cause cannot be found when the

dangers are obvious or well-known. Lan-

caster Silo & Block v. Northern Propane

Gas, 75 A.D.2d 55, 427 N.Y.S.2d 1009, 1015

(4th Dept.1980). Nor can it be found with

a knowledgeable user, one who is actually

aware of the dangerous nature of the prod-

uct supplied. Belling v. Haugh’s Pools

Lid., 126 A.D.2d 958, 959, 511 N.Y.S.2d

732, 733 (4th Dept.), appeal denied, 70

N.Y.2d 602, 518 N.Y.S.2d 1024, 512 N.E.2d

550 (1987). Although the government re

lies here solely on the knowledgeable user

doctrine, loosely referred to as the “knowl-

edgeable user exception”, a brief look at

“obviousness” is necessary to understand

why the government’s argument fails.

{12,13} If a danger is obvious, there is

no duty to warn against it. Kerr v.

Koemm, 557 F.Supp. 283, 287 (S.D.N.Y.

1983). The Restatement (Second) of Torts

§ 388 and comment (k) state that a duty to

inform users of a danger exists if the sup-

plier of a product has no reason to expect

that the user will discover its condition and

realize the danger involved. See also Lan-

caster Silo, 427 N.Y.S.2d at 1015; Young,

383 N.Y.S.2d at 731; Kerr, 557 F.Supp. at

287. This inquiry into the obviousness of

the danger depends not upon actual knowl-

edge of the user, but upon whether the

danger was sufficiently obvious that it

would be unreasonable to impose a duty to

warn on the manufacturer. Kerr, 557

F.Supp. at 287. Thus, the focus of the

A31

“obviousness” inquiry is upon the objective

reasonableness of the supplier's judgment

about whether users will perceive the dan-

ger. Id. The danger must be so apparent

or so clearly within common knowledge

that a user would appreciate the danger to

the same extent that a warning would pro-

vide. Belling, 511 N.Y.S.2d at 733. The

district court held that the danger here was

not obvious because Dr. Baer actually wit-

nessed the experiment and should have im-

mediately recognized that neither Dr. Deb

bie nor Andrulonis realized the hazards

they were facing. On appeal the govern-

ment does not challenge that conclusion.

{14} In contrast, the “knowledgeable

user exception”, on which the government

does rely, involves a_ subjective test:

whether the particular user was aware of

the danger. McDaniel v. Williams, 23

A.D.2d 729, 257 N.Y.S.2d 702 (1st Dept.

1965); Rosebrock v. General Electric Co.,

236 N.Y. 227, 140 N.E. 571 (1923); Kerv,

557 F.Supp. at 287. Its rationale is that

knowledge is equivalent to prior notice.

Billiar, 623 F.2d at 243. Where the plain-

tiff knows of a danger, a warning cannot

increase his awareness of its presence,

Kerr, 557 F.Supp. at 286, and where a

warning would not have prevented the

harm, a failure to warn cannot be the prox-

imate cause of the injury. Torrogrossa v.

Towmotor Co., 44 N.Y.2d 709, 711, 405

N.Y.S.2d 448, 449, 376 N.E.2d 920 (1978);

Billiar, 623 F.2d at 243.

A32

[15] In this case, the district court de-

termined that Dr. Debbie did not have ac-

tual knowledge of the specific danger in

the March 29th experiment. Of course, it

determined that Dr. Baer did not have actu-

al knowledge of the specific danger either.

Thus, the question becomes whether the

knowledgeable user exception applies

where the knowledge of both supplier and

user is imputed, not actual. The govern-

ment suggests that the exception should

apply here, because the district court found

that the state was more than twice as

culpable as the federal government, and

that Dr. Debbie’s “failure to appreciate the

hazard to which he was exposing his work-

ers seems more unreasonable than Dr.

Baer’s failure to recognize the same haz-

ard.” Andrulonis, 724 F.Supp. at 1508.

[16,17] While attractive, the govern-

ment’s argument is not dispositive, because

the knowledgeable user exception applies

only where the user is actually aware of

the precise danger involved. Belling, 511

N.Y.S.2d at 733; Kerr, 557 F.Supp. at 287.

A supplier's duty to warn, on the other

hand, arises if he knows or should know of

the danger; actual knowledge of the pre-

cise danger is not required to hold the

supplier liable. Schumacher, 59 N.Y.2d at

248, 464 N.Y.S.2d at 441, 451 N.E.2d 195;

Young, 383 N.Y.S.2d at 731. Here, the

district court determined that the user had

no actual knowledge of the precise danger,

but both the supplier, Dr. Baer, and the

user, Dr. Debbie, were charged with imput-

A33

ed knowledge. In these circumstances, the

government, through Dr. Baer’s breach of

his duty to warn, is liable to Andrulonis for

his injuries.

Since we find that the duty-to-warn theo-

ry supplies a sufficient basis to establish

the government's liability and to affirm

that part of the district court’s judgment,

we need not address the district court’s

further reliance on the other two theories

of liability.

C. Allocation of Settlement Proceeds

(18) Before the end of trial, the Andru-

lonises and the non-governmental defen-

dants entered into a series of settlement

agreements resulting in a total settlement

of $1.3 million. The settling parties agreed

to allocate $225,000 to Jerome Andrulonis

and $1,075,000 to Joanna Andrulonis. Any

settlement funds allocated to Joanna An-

drulonis, whose claims against the govern-

ment were dismissed for failure to timely

file an administrative claim, could not be

used to reduce the final award of damages

to Jerome Andrulonis as provided under

section 15-108 of New York’s General Obli-

gations Law. The government and NYS-

DOH now challenge this allocation and the

district court’s approval of it as being con-

trary to the policy underlying that section.

Section 15-108 of New York’s General

Obligations Law provides an incentive to

settle and attempts to define the effect of a

settlement on collateral rights and liabili-

A34

ties in future litigation. Section 15-108(a)

provides in relevant part:

Effect of release of or covenant not to

sue tortfeasors. When a release * ° ° is

given to one of two or more persons

liable or claimed to be liable in tort for

the same injury, or the same wrongful

death, it does not discharge any of the

other tortfeasors from liability for the

injury or wrongful death unless its terms

expressly so provide, but it reduces the

claim of the releasor against the other

tortfeasors to the extent of any amount

stipulated by the release or the covenant,

or in the amount of the consideration

paid for it, or in the amount of the re-

leased tortfeasor’s equitable share of the

damages under article fourteen of the

civil practice law and rules, whichever is

the greatest.

The “right of set-off” provided by subdivi-

sion (a) “is intended to avoid a result in

which the non-settling tortfeasors bear

more than their equitable share of the

plaintiff's damages.” Lambert Houses Re-

development Co. v. HRH Equity Corp.,

117 A.D.2d 227, 232-33, 502 N.Y.S.2d 433,

436 (1st Dept.1986). The government and

the state contend thet th: apportionment of

settlement proceeds in the case at bar un-

dermines this purpose. They claim that

the Andrulonises intentionally allocated

most of the settlement proceeds to Joanna

Andrulonis in order to minimize any right

A35

of setoff that might arise from trial of

Jerome Andrulonis’s remaining claims. Fi-

nally, they argue that the court should not

have accepted the settling parties’ decision,

but should have independently allocated

_ the settlement funds to reflect the relative

injuries suffered by Jerome and Joanna

Andrulonis.

In Hill v. St. Clare’s Hospital, 67 N.Y.2d

72, TT, 499 N.Y.S.2d 904, 907, 490 N.E.2d

823 (1986), the injured party and his wife,

as derivative claimant, entered into a settle

ment with the original tortfeasors, but con-

tinued their claim against subsequent tort-

feasors for aggravation of the original inju-

ries. Their general release contained ro

reservation of rights and no allocation of

damages as between plaintiffs or as be

tween the successive injuries. Jd. Al-

though the court focused primarily on the

problem of allocating settlement proceeds

between original injuries and aggravated

injuries for purposes of setoff against the

subsequent tortfeasors, its analysis is help

ful in determining a proper apportionment

between two plaintiffs.

The court stated that “[t]o the extent

that the injured party and the original tort-

feasor are permitted to stipulate the

amount by which the liability of the succes-

sive tort-feasor is to be reduced by the

original tort-feasor’s payment, intent re

mains a factor, but the amount stipulated

must also be shown to have been arrived at

in good faith.” Jd. at 84-85, 499 N.Y.S.2d

A36

at 912, 490 N.E.2d 823. The court deter-

mined that the finder of fact, in making a

decision as to attribution of the settlement

payment, should “consider the statement

as to allocation, if any, * ° ° contained in

the settlement documents and the gravity

of the respective injuries and determine

whether the amount allocated by the par-

ties was arrived at in good faith.” Jd at

86, 499 N.Y.S.2d at 912, 490 N.E.2d 823

(emphasis added).

In Casey v. State, 119 A.D.2d 363, 507

N.Y.S.2d 159 (2d Dept.1986), the plaintiffs

sued three alleged tortfeasors for wrongful

death and for conscious pain and suffering.

Before trial, a settlement was reached with

two of the defendants, but neither release

separately allocated the proceeds to the

wrongful death and the pain and suffering

causes of action. Instead, the Surrogate’s

Couft made the allocation decision. The

court held that any settlement sum, even

though allocated by the parties or by a

decree of the Surrogate’s Court, must, for

the purpose of a subsequent setoff, be ap-

portioned at the trial; and it is the obli-

gation of the finder of fact, after hearing

the evidence, to make such an apportion-

ment. /d. 507 N.Y.S.2d at 162, A nonset-

tling party is not bound by any agreement

as to allocation made without its know!l-

edge or consent. /d 507 N.Y.S.2d at 162.

Therefore, the self-created apportionment

proffered by the claimants and approved

by the Surrogate was not binding on the

trial court. /d

me

A37

In Casey, the court was concerned that

the defendant state would be responsible

for the bulk of a wrongful death award

because the claimants’ proposed allocation

would have resulted in $175,000 cf the set-

tlement being allocated to a “potentially

nonexistent pain and suffering cause of

action”, thereby unfairly reducing the set-

off in the wrongful death action and leav-

ing the state with none of the benefits of

section 15-108. Jd. Thus, the court, per

Justice, now District Judge, Arthur Spatt,

stated: “We are dealing with two separate

and distinct causes of action. The State is

entitled to a true setoff based on the merits

of the respective causes of action. This

apportionment [of the earlier settlement]

must be predicated on the evidence ad-

duced at the trial with regard to the mone-

tary value of each cause of action.” /d.

Similarly, in Merrill v. State of New

York, 110 Misc.2d 260, 442 N.Y.S.2d 352

(1981), affd, 89 A.D.2d 802, 453 N.Y.S.2d

383, 384 (4th Dept.1982), where plaintiffs

had earlier settled with one of the joint,

tortfeasors for a gross unallocated amount

in a case involving separate claims for per-

sonal injuries and loss of services, the trial

court held that the proper way to apportion

the settlement proceeds was in proportion

to the damages found to have been sus-

tained by the respective claimants. See

also Hager v. Hutchins, 91 Misc.2d 402,

398 N.Y.S.2d 316 (1977) (trial court con-

fronted with a settlement with several de-

fendants for an unallocated sum in a case

A38

involving causes of action for wrongful

death and conscious pain and suffering

held that a prior order of the Supreme

Court which had approved the compromise

of the claims against the settling defen-

dants and allocated the proceeds entirely to

the wrongful death cause of action was not

binding on the trial court).

The district court in this case assessed

the reasonableness of the apportionment of

the settlement monies and ultimately ap

proved the allocation. It rejected the

government’s suggestion that Hill and Ca-

sey required that for setoff purposes, the

apportionment of a settlement fund must in

every instance approximate the relative in-

juries of the plaintiffs. Instead, the dis-

trict court conducted a good faith analysis

to determine whether the amounts allocat-

ed to Jerome Andrulonis and Joanna An-

drulonis could be approved. First, it asked

whether the amount set aside for Jerome

Andrulonis was a reasonable approxima-

tion of the settling defendants’ equitable

share of his total damages, and second, .

whether the amount set aside for Joanna

Anarulonis was unreasonably excessive in

light of the damages she actually suffered.

The district court found that the amount

allocated to Jerome Andrulonis did not

grossly underestimate the settling parties’

equitable share of the damages he suf-

fered. Although Judge Munson noted a

significant discrepancy between Lil

ly/Thompson’s settlement amount and its

a eee ee

A39

equitable share of Jerome Andrulonis’s

damages, he considered all the settling de-

fendants as a group and determined that

the total amount Jerome Andrulonis re

ceived did not so grossly deviate from the

amount ultimately allocated to those defen-

dants as to raise an inference of bad faith.

Judge Munson then turned to Joanna

Andrulonis’s portion of the settlement pro-

ceeds. In determining whether the total

amount she received was a good faith as-

sessment of the value of her claims, he

applied the standard used to review a jury

damage award—whether the award was so

excessive as to “shock the judicial con-

science”. See Martell v. Boardwalk En-

terprises, Inc., 748 F.2d 740, 750 (2d Cir.

1984). The district judge felt this was the

appropriate standard because a settlement

precluded a right to a jury trial. Sensing

no shock and looking to other damage

awards in loss of consortium actions, the

district judge concluded that the apportion-

ment of settlement monies was made in

good faith.

The district judge relied in part on the

facts that Joanna Andrulonis was procedur-

ally barred from any recovery against the

government or the state, and that any

amount she received from settling her

claims with the private defendants repre-

sented the entirety of the damages she will

recover. Thus, the nongovernmental de

fendants would bear the entire cost of the

damages suffered by Joanna Andrulonis,

A40

including that portion for which the United

States and the NYSDOH would otherwise

be responsible, but neither the government

nor the state would be required to contrib-

ute.

We disagree with that analysis. Judge

Munson approved the settling parties’ allo-

cation of settlement proceeds after deter-

mining whether it was “reasonable.” New

York law, however, requires the trial court

to make an independent determination of

what the proper apportionment of settle

ment proceeds should be, based on the

monetary value of each cause of action.

See Casey, 507 N.Y.S.2d at 163. Thus, the

trial court should have made its allocation

decision de novo, and not just reviewed the

parties’ chosen apportionment for reason-

ableness.

{19} In addition, while the fact that

Joanna Andrulonis had no claim against

either the government or the state may

have influenced the parties in deciding

whether or not to settle, it is not conclusive

under New York law of the amount that

can be allocated to Joanna Andrulonis upon

a subsequent setoff. If Joanna Andrulonis

had timely filed an administrative claim she

also could have recovered damages from

the government, and it may be unfortunate

that she will not be able to recover from

the governmental tortfeasors; but New

York does not permit the parties’ private

agreements to decrease the amount of the

settlement to be offset against the non-set-

oot wcimilall

ee eee

A41

tling defendants. The district court’s point

that only the settling defendants are pay-

ing for Joanna Andrulonis’s injuries is in-

correct, since the government and the state

are, through the corresponding reduction in

the setoff on Jerome Andrulonis’s claim,

being required to carry a significant por-

tion of her award.

{20} Settling parties may not structure

the apportionment to avoid a later setoff by

a nonsettling defendant; to hold otherwise

would permit them to circumvent the policy

underlying section 15-108. The district

court recognized that this is precisely what

the Andrulonises had tried to do, but it felt

that New York law did not prohibit such a

result. We disagree. As shown above, the

New York cases establish that the parties’

settlement agreement, even when con-

firmed by a court order, does not bind a

trial court in determining the proper alloca-

tion of settlement proceeds for purposes of

setoff. That allocation must follow from a

comparison by the trial court of the injuries

of the settling plaintiffs. We therefore

remand to the district court with a direction

to independently evaluate the relative inju-

ries of the settling plaintiffs and to reduce

the damages to be awarded to Jerome An-

drulonis by the amount of the settlement

thus allocated to him.

A42

D. Apportionment of Culpability be- |

tween the Government and NYSDOH

{21} The district court, pursuant to

N.Y.C.P.L.R. §§ 1401-1404 governing con-

tribution claims, found the government re-

sponsible for 30 percent of the damages

suffered by Jerome Andrulonis and NYS-

DOH responsible for 65 percent. NYS-

DOH appeals this apportionment and con-

tends that the court erred in finding it

responsible for more of the damages than

the government. Relying on the notion

that culpability is correlated with duty,

which in this case happened to depend on

the expertise of the actor, NYSDOH ar-

gues that the percentages of fault must be

reassessed to reflect the federal govern-

ment’s greater responsibility in causing Je-

rome Andrulonis’s illness. NYSDOH ar-

gues that the district court’s finding that

Dr. Baer was the preeminent expert in the

field of rabies mandates that the govern-

ment, having greater expertise, should be

charged with a greater share of the dam-

ages.

We disagree. NYSDOH is correct in as-

serting that New York law holds experts to

a higher standard of care. See Restate-

ment (Second) of Torts § 289, comment m;

Toth v. Community Hospital at Glen

Cove, 22 N.Y.2d 255, 263, 292 N.Y.S.2d 440,

447-48, 239 N.E.2d 368 (1968) (holding spe-

cialists accountable to a higher standard

ge ee et drdet

A43

than general practitioners); Hope v. Fall

Brook Coal Co., 3 A.D. 70, 75, 38 N.Y-S.

1040, 1043 (4th Dept.1893) (duty of care is

measured against knowledge and expertise

of the participants). However, NYSDOH

confuses application of the appropriate

standard of care in defining the minimal

level of duty that may be owed to another,

with the entirely different process of

weighing the expertise of an actor in deter-

mining his portion of damages. In essence,

NYSDOH urges that the percentages of

damages apportioned must be directly re-

lated to the relative levels of expertise of

the defendants. New York law does not

require such a restrictive approach.

[22] The district court’s apportionment

of damages, like other findings of fact, is

subject to the clearly erroneous standard of

review. Fed.R.Civ.P. 52(a). The district |

court relied on Dr. Baer’s expertise in con-

cluding that he had a duty to warn and, |

thus, in holding the government liable to

Jerome Andrulonis. Turning to the degree

of the state’s culpability for purposes of

contribution, the court had before it evi-

- dence of Dr. Debbie’s expertise with the

rabies virus, his prior experience with the

Uni-Glatt machine, his intimate knowledge

of conditions at the Griffin laboratory, and

his role as supervisor of the laboratory

with the attendant responsibilities. Bal-

ancing all the circumstances of the case,

Judge Munson found Dr. Debbie’s failure

to appreciate the hazards of using the

leaky machine in this series of rabies ex-

A44

periments to be more culpable than Dr.

Baer’s single tragic lapse. Since his find-

ings are not clearly erroneous, we affirm

his apportionment of damages under N.Y.

C.P.L.R. § 1402.

E. Damages for Future Custodial Care

{23} The district court awarded Jerome

Andrulonis $2,417,238 for his future custo-

dial care, relying on an assumption of con-

tinued care within the home. Jerome An-

drulonis cross-appeals from this part of the

judgment, claiming that the damage figure

must be based on care in a neurological

facility, since it is uncertain whether Joan-

na can continue to care for Jerome in her

home indefinitely into the future. He asks

that the damages for future custodial care

be increased to $6,841,925.

This argument is without merit. The

district court estimated future custodial

care on the basis of 24-hour care with

three shifts of nursing aides in his home

for the rest of his life. Although profes-

sional nurses were not considered neces-

sary for Jerome’s daily care, the district

court used the salary for professional nurs-

es because no one else was willing to do

the job at a lower cost. In addition, the

district court also determined that Jerome

would function best in the home environ-

ment where he could live in a predictable

structure provided by his family. Since the

plaintiff presented no evidence as to when,

if ever, institutional care would replace the

A45

completely supervised home care presently

being provided for Jerome, the district

court was not clearly erroneous in the

} amount it awarded for future custodial

; care.

CONCLUSION

We reverse that portion of the judgment

of the district court that calculated the

> setoff under New York’s General Obli-

k gations Law § 15-108 from the parties’s

| own allocation of settlement proceeds and

remand on that issue for further proceed-

ings consistent with this opinion. In all

» other respects the judgment is affirmed.

. ~

Se are

A46

Opinion of the United States District Court for the

Northern District of New York, Dated November 15,

1989.

ANDRULONIS v. U.S.

Cite as 724 F.Supp. 1421 (N.D.N.Y. 1989)

Joanna ANDRULONIS, Individually,

and as Conservator of the Property

of Jerome Andrulonis, Plaintiffs,

Vv.

UNITED STATES of America; Glatt Air

Techniques, Inc.; Glatt GmbH; Wis-

consin Alumni Research Foundation,

Inc.; WARF Institute, Inc.; Raltech

Scientific Services, Inc.; Ralston Puri-

na Company; Eli Lilly and Company;

and John L. Thompson and Sons and

Company, Defendants.

UNITED STATES of America,

Third-Party Plaintiff,

v.

NEW YORK STATE DEPARTMENT

OF HEALTH, Third-Party

Defendant.

No. 79-CV-847.

United States District Court,

N.D. New York.

Oct. 17, 1989.

As Amended Dec. 15, 1989.

+ aes

A47

Researcher who contracted rabies

brought personal injury action, along with

his wife, against New York State Depart-

ment of Health, federal Government, and

others. Following settlement with the oth-

er defendants, the District Court, Munson,

J., held that: (1) employee of Center for

Disease Control was negligent; (2) employ-

ee of New York State Department of

Health who was directing the experiment

was negligent; (3) negligence was proxi-

mate cause of injuries suffered; (4) failure

of vaccine manufacturer to warn of possi-

ble ineffectiveness of vaccine against air-

borne transmission of rabies rendered prod-

uct defective; (5) United States was 30% at

fault, NYSDOH was 60% at fault, and drug

manufacturer was 5% at fault; and (6) ap-

portionment of settlement between claims

of researcher and claims of his wife was

not unreasonable.

Ordered accordingly.

A48

Roemer and Featherstonhaugh, Albany,

N.Y. (James D. Featherstonhaugh and

John R. Mineaux, of counsel), for plaintiffs.

Dept. of Justice, Civ. Div., Torts Branch,

Washington, D.C. (Leon Taranto and An-

thony R. Sherr, Trial Attys., of counsel),

and Frederick J. Scullin, Jr., U.S. Atty.,

N.D.N.Y., Albany, N.Y. (William Fanciullo,

Asst. U.S. Atty., of counsel), for U:S.

Robert Abrams, Atty. Gen., State of

N.Y., Albany, N.Y. (Kevan J. Acton and

Robert Seigfried, Asst. Attys. Gen., of

counsel), for defendant New York State

Dept. of Health.

Anderson Russel! Kill & Olick, P.C., New

York City (R. Mark Keenan, of counsel),

and Paul F. Donahue Associates, Albany,

N.Y. (Alvin 0. Sabo, of counsel), for defen-

dant Glatt GmbH.

Carter, Conboy, Bardwell, Case and

Blackmore, Albany, N.Y. (Philip J. Danah-

er, of counsel), for defendant Wisconsin

Alumni Research Foundation.

McNamee, Lochner, Titus & Williams,

Albany, N.Y. (Earl H. Gallup, Jr., of coun-

sel), for defendants Raltech Scientific Ser-

vices, Inc. and Ralston Purina Co.

Maynard, O’Connor & Smith, Schenecta-

dy, N.Y. (Richard Gershon, of counsel), for

defendant-WARF Institute, Inc.

ee peas RAE ay peaches wei

BNR iihitiie weenie rnnrionrs inst * ws

A49

Ainsworth, Sullivan, Tracy and Knauf,

Albany, N.Y. (Thomas. F. Tracy, Frank J.

Warner, Jr. and Margaret Comard Lynch,

of counsel), for defendants Eli Lilly and Co.

and John L. Thompson & Sons & Co.

Galef & Jacobs, New York City (Christo-

pher M. Houlihan, of counsel), for defen-

dant Glatt Air Techniques, Inc.

MEMORANDUM-DECISION

AND ORDER

MUNSON, District Judge.

On March 29, 1977 the rabies virus invad-

ed the body of plaintiff Jerome Andrulonis

during an experiment conducted by his em-

ployer, the New York State Department of

Health (“NYSDOH” or “the State”). The

experiment was a part of the State’s effort

to develop a method for immunizing wild-

life from the disease the virus causes.

Shortly after being exposed to the virus, -

Andrulonis contracted the disease of ra-

bies, and his central nervous system was

ravaged. He survived the disease, thus

becoming one of only three individuals in

human history to do so, but the neurologic

damage he suffered as a result of his ill-

ness left Andrulonis without the cognitive

ability to appreciate this distinction.

a - RELY ER aS TA

ASO

On December 20, 1979 this action was

commenced on behalf of Jerome Andrulon-

is and his wife, Joanna, against the United

States of America (“United States” or “the

Government”) under the Federal Tort

Claims Act (“FTCA” or “the Act’), 28

U.S.C. §§ 1346, 2671-2680, and against var-

ious non-governmental defendants, over

whom jurisdiction was predicated on diver-

sity of citizenship or the pendant party

doctrine. An amended complaint adding

additional non-governmental defendants

was filed on October 9, 1981. Plaintiffs’

claims sounded in negligence, strict prod-

ucts liability, and breach of warranty. The

United States made cross-claims against

the non-governmental defendants and filed

a third-party complaint against NYSDOH,

seeking contribution. See N.Y 4.P.LS.

§§ 1401-1404 (McKinney 1976). Subse-

quently, the court dismissed Joanna Andru-

lonis’ derivative claims against the United

States for failure to timely file an adminis:

trative claim, as required by the terms of

the FTCA. Andrulonis v. United States,

No. 79-CV-847, slip op. at 7 (N.D.N.Y.

March 8, 1984); see 28 U.S.C. § 2675(a);

see also id. § 2401(b).' A trial on the re-

maining claims was conducted from Febru-

ary 18, 1987 until March 19, 1987. Before

the end of the trial, plaintiffs entered into

settlement agreements with all of the non-

governmental parties,’ leaving unresolved

the FTCA claims of plaintiff Jerome An-

drulonis against the United States and the

contribution claims made by the Govern-

ment. This memorandum-decision consti-

In addition, plaintiffs’ claims against one of

the non-governmental defendants, Dale Wur-

ster, was dismissed for lack of in personam

jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2),

Andrulonis v. United States, slip op. at 2 (N.D.

N.Y. October 1, 1982), and the third-party

claims of certain of the non-governmental de-

fendants against NYSDOH employees John G.

Debbie and Robert H. Huffaker were dismissed

on eleventh amendment grounds. Andrulonis v.

United States, slip op. at 5 (N.D.N.Y. September

24, 1984).

The terms of these settlement agreements are

summarized infra, at note 655. Pursuant to

these agreements, plaintiff Jerome Andrulonis,

through his Conservator, Joanna Andrulonis.

discontinued his claims against the non-govern-

mental parties in exchange for payments total-

ling $225,000. Plaintiff Joanna Andrulonis dis-

continued her derivative claims against the non-

governmental defendants for the consideration

of $1,075,000. The United States has challenged

the allocation of settlement monies for the pur-

pose of determining its “right of set-off’ under

N.Y.Gen.Oblig.Law § 15-108 (McKinney 1978).

This challenge is addressed in the text infra, at

1527-1528.

AS2

tutes the court’s findings of fact and con-

clusions of law concerning the remaining

claims.2 See Fed.R.Civ.P. 52(a).

I. INTRODUCTION

In some ways, the case of Jerome Andru-

lonis is aberrational. Andrulonis is be-

lieved to be the only person to contract the

disease of rabies who prior to any exposure

to live rabies virus had developed through

vaccination a significant level of rabies an-

tibodies in his blood stream. He is one of

only two individuals in this century known

to be infected after being exposed to the

rabies virus in a laboratory setting. As

3. The court's factual findings are presented in

narrative form. While certain important credi-

bility issues are expressly discussed in this

memorandum-decision, for the most part the

court does not attempt to address each and

every conflict in testimony present in the

record. Unless the context suggests otherwise,

any citation to the testimony of a witness indi-

cates that the court accepts that portion of that

witness’ testimony as credible and tacitly rejects

contrary testimony. On a number of occasions

during the trial the court reserved decision on

objections to questions posed by counsel and

allowed the witnesses to whom the questions

were directed to answer. Most of the testimony

elicited by the contested questions was not con-

sidered by the court, and the evidentiary objec-

tions that were made to testimony the court has

disregarded will not be resolved. In making its

findings in the course of this opinion, the court

will address any unresolved objections to ques-

tions that elicited proof that was considered by

the court.

A53

will be seen, he is one of only four individu-

als in human history believed to have con-

tracted the disease internasaily, through

what is referred to as the “aerosol route”

or the “airborne route” of infection.!

Nonetheless, upon examination of what

was known about the transmission of the

virus by the researchers involved with the

experiment of March 29, 1977, wnat was

considered safe and reasonable laboratory

practice in the relevant scientific communi-

ty at that time, and the manner in which

the March 29, 1977 experiment was per-

formed, it can only be concluded that An-

drulonis’ development of the rabies disease

was the foreseeable and avoidable result of

negligence on the part of the researchers

involved with the project.

Because a lengthy narrative is to follow,

a brief summary may give some context to

the matters discussed. In March 1977 Je-

Trial Transcript (“Tr.”) at 1031-32 (Testimony

of Dr. Michael A.W. Hattwick); Tr. at 736 (Testi-

mony of Dr. James R. Tillotson); United States

Department of Health, Education, and Welfare.

“Rabies in a Laboratory Worker—New York.”

26 Morbidity and Mortality Weekly Report 183,

184 (1977) (admitted into evidence as Plaintiffs’

Exhibit (“Exh.”) 151 and hereinafter referred to

as “Rabies in New York Laboratory Worker”):

United States Department of Health, Education,

and Welfare, “Follow-up on Rabies—New

York,” 26 Morbidity and Mortality Weekly Re-

port 249, 249 (1977) (admitted into evidence as

Exh. 79 and hereinafter referred to as “Follow-

up on Rabies”).

Se en ee

AS4

rome Andrulonis was a thirty-four year old

senior bacteriologist employed by NYS-

DOH who was primarily involved with re-

search conducted in the rabies laboratory

at the State’s Griffin Laboratory (‘Grif-

fin”), located near Albany, New York. Be-

cause he was constantly exposed to the

rabies virus in his work, he had been im-

munized against the disease of rabies

through the administration of a commercial

vaccine manufactured by defendant Eli Lil-

ly and Company (“Lilly”) and distributed

by defendant John L. Thompson and Sons

and Company (“Thompson & Sons”). Peri-

odically, Andrulonis received booster shots

of the Lilly vaccine, which induced the cre-

ation of antibodies to the rabies virus in the

blood stream (‘serum antibodies”). The

effectiveness of the Lilly vaccine was de-

pendent on whether the rabies virus, once

transmitted to an immunized individual,

came into contact with serum antibodies

before entering his central nervous system.

In the typical case where the virus is trans-

mitted to an individual by animal bite, the

site of the bite wound is covered in the

victim’s blood, and the antibodies that had

been created in the blood stream by the

vaccine would have the opportunity to kill

the invading virus. In the rare case where

the virus is transmitted through the air and

inhaled by the victim, however, the Lilly

vaccine is probably ineffective. The olfac-

tory nerves within an individual's nasal

cavity are exposed to the air. If live rabies

A5S5

virus comes into contact with an individu-

al’s olfactory nerve and infects it, the virus

could travel the short distance from the

olfactory nerve to the victim's brain with-

out ever coming into significant contact

with serum antibodies.

At the time Andrulonis was exposed to

the virus that ultimately caused his illness,

he was attempting to coat sugar nonpar-

eils > with a solution containing live rabies

virus. The coating process was accom-

plished through the use of a machine rec.

ommended by defendant WARF Institute.

Inc. (““‘WARF’’).6 The machine, known as

the ‘‘Uni-Glatt,” suspended the sugar non-

pareils in a stream of upflowing air vhile

various solutions were sprayed onto them.

The Uni-Glatt Machine was manufactured

by defendant Glatt GmbH and distributed

in the United States by defendant Glatt Air

Techniques, Inc., and employed an air sus-

pension process that had been developed by

Dale Wurster. The process created “aero-

5. Throughout the trial, the nonpareils were al-

ternatively referred to as “pareils.”

6. Originally, WARF was the wholly owned sub-

sidiary of a Wisconsin corporation known as

the Wisconsin Alumni Research Foundation

(“Foundation”), a named defendant in this case.

Foundation sold its stock in WARF to defendant

Ralston Purina Company in late 1979, and

WARF changed its name to Raltech Scientific

Services, Inc., also a named defendant in this

case.

A56

sols,” which are suspensions of microscopic

solid or liquid particles in air or gas. The

Uni-Glatt machine was not airtight, and

when the solution containing live rabies

virus was sprayed onto the nonpareils, aer-

osolized virus escaped from the Uni-Glatt

and into the atmosphere of the rabies labo-

ratory at Griffin. The virus was inhaled by

Andrulonis, apparently infected one of his

olfactory nerves, and then multiplied and

travelled from his olfactory nerve to his

brain, causing severe and permanent dam-

age.

The experiment in question was conduct-

ed under the supervision of Dr. John G.

Debbie, a reSearch scientist employed by

NYSDOH. Also present during the experi-

ment was Dr. George M. Baer, Chief of the

Viral Zoonosis Branch and Rabies Labo-

ratory at the Center for Disease Control

(“CDC”), who conducted most of his work

in the CDC's laboratories in Atlanta and

Lawrenceville, Georgia. The CDC is a part

of the United States Department of Health

and Human Services, and in March 1977

was a subunit of the Department of

Health, Education, and Welfare. The ex-

periment was conducted in furtherance of a

joint effort by scientists at NYSDOH and

the CDC to develop a method for the mass

immunization of wildlife from rabies. Dur-

ing the course of this effort, Debbie re-

quested Baer to prepare a solution of high-

ly concentrated rabies virus for experimen-

tal use in the Uni-Glatt machine. The vi-

rus “strain” Baer prepared at the CDC's

A5S7

laboratory in Lawrenceville in response to

this request was supplied to Debbie on

March 28, 1977 and used in the Uni-Glatt

machine the next day. At the time of the

March 29, 1977 experiment, it was not

known whether the virus Baer supplied

was “pathogenic,” that is, capable of caus-

ing disease in man. The court wil! find

that during the course of the March 29

experiment, Andrulonis was exposed to an

aerosol containing the virus Baer had pre-

pared and as a result of this exposure

contracted the disease of rabies.

Plaintiffs allege that the laboratory con-

ditions under which the experiment was

conducted at Griffin were unsafe, that Dr.

Baer should have known this, and that

Baer’s failure to stop the experiment be-

fore Jerome Andrulonis was exposed to an

aerosol containing rabies virus constituted

negligence that was the direct and proxi-

mate cause of the injuries Andrulonis suf-

fered. Plaintiffs also argue that Baer act-

ed carelessly in supplying a highly concen-

trated virus strain to the comparatively

inexperienced researchers at NYSDOH. It

is asserted that Baer negligently failed to

warn Dr. Debbie of the inherent dangers

associated with the virus strain he provided

and to which Andrulonis was exposed.

Plaintiffs also maintain that the Govern-

ment is liable because Dr. Baer and Dr.

William G. Winkler, Chief of the Viral Zoo-

noses Section of the CDC’s Viral Disease

Division, negligently made representations

A58

that induced WARF to recommend the use

of the Uni-Glatt machine in experimental

situations for which the machine was not

suited. Finally, plaintiffs introduced evi-

dence suggesting that the March 29, 1977

experiment was a part of a “joint venture”

involving CDC and NYSDOH, and conse-

quently that the United States is jointly

and severally liable for any negligent acts

on the part of NYSDOH employees, includ-

ing Dr. Debbie. The Government denies

any negligence on the part of its employ-

ees, and urges that the injuries plaintiff

Jerome Andrulonis suffered were the re-

sult of his own negligence or the negligent

acts of employees of the State or the non-

governmental parties.

II. BACKGROUND

Unless the context indicates otherwise,

this section of the opinion summarizes

facts that reasonably should have been

known as of March 29, 1977 by scientists

who ventured beyond routine laboratory

procedures involving the rabies virus and

proceeded into the conception and supervi-

sion of experimental research projects in-

volving that virus. Specifically, Drs. Deb-

bie, Baer, and Winkler, whose conduct or

representations are relevant to the claims

made in this lawsuit, are charged with

knowledge of the principles and theories

discussed in the pages that follow, as well

as familiarity with the research upon which

those principles and theories were based.

7.

A59

In 1976 and 1977, these men were either

members, or engaged in research projects

that should only have been undertaken by

members, of a select group referred to at

trial as the “community of rabies experts,”

which in the United States numbered be-

tween twenty-five and fifty scientists.’

Whether Jerome Andrulonis reasonably

should have been aware of the body of

In 1976 and 1977, a small group of roughly

twenty-five to fifty scientists were actively in-

volved in serious research concerning the rabies

virus in the United States. Tr. at 1251 (Testimo-

ny of Dr. H Fred Clark). Baer and Winkler

were members of this core group. Tr. at 1251

(Clark); Tr. at 1397-98 (Testimony of Dr. Rob-

ert E. Shope). Beyond this group of rabies

experts was a larger group of people who did

diagnostic work or were more indirectly in-

volved with the study of the rabies virus and the

disease it causes. Tr. at 1251 (Clark). Some

question as to Dr. Debbie's status in the rabies

field in 1977 exists. Before 1970, Debbie was

not involved in non-diagnostic rabies research.

See Tr. at 97-98 (Testimony of Dr. John G.

Debbie). Although he had a reputation as an

excellent diagnostician, by 1977 Debbie's experi.

ence in rabies research was still comparatively

limited. Tr. at 1412 (Shope). Notwithstanding

this, Debbie testified that he was familiar with

most of the studies discussed in the text. See,

e.g., Tr. at 255-59, 390-91, 414-15, 438 (Debbie).

More importantly, much of the research he con-

ducted at Griffin, including the experiments

with the Uni-Glatt machine, was of the kind

properly undertaken only by those who were

members of the core group of rabies experts,

and the court will charge him with the knowl-

edge that reasonably should be possessed by

members of that elite group. See, eg. Tr. at

1288-90 (Clark).

a

A60

scientific knowledge discussed in this mem-

orandum-decision is more problematical,

and this issue will be discussed separately.®

For the most part, the scientific literature

that is cited by the court in this section

predates the March 29, 1977 Uni-Glatt ex-

periment, and the testimony cited concerns

knowledge available to the relevant scien-

tific community of rabies experts before

that date.

A. The Nature of the Rabies Virus

Rabies is an acute infectious disease of

the central nervous system that imperils a

wide range of mammal species, including

man. Historically rabies has been one of

man’s most dreaded diseases, no doubt be-

cause of its dramatic symptoms and the

severe neurologic effects associated with it.

The Greeks called rabies Lyssa or Lytta

which meant madness. The disease in

man was described as hydrophobia in

which the sick person is tormented at the

same time with thirst and the fear of

water. The Latin word “rabies’’ comes

from an old Sanskrit word rabhas which

translated means ‘‘to do violence.’ The

German word tollwut originates with the

Indogermanic Dhvar, to damage, and

8. See text. infra at 1504-1508

A6él

wut from middle German wuct which is

rage. The French word for rage is de

rived from the noun robere, to be mad.°

As Jerome Andrulonis noted in his Mas-

ter’s Dissertation, ‘“[e]ven today, the mere

mention of this affliction is sufficient to

strike terror into the hearts of the general

public, for facts and folklore have blended

to obscure any true understanding of this

deadly malady.” '

9. J. Steele, “History of Rabies,” 1 The Natural

History of Rabies at 1 (G. Baer, ed., 1975). The

Vatural History of Rabies, a two volume refer-

ence book. was admitted into evidence as Exh.

112 and will hereinafter be referred to as Natu-

ral History. This treatise was edited by Dr.

George Baer of the CDC, one of the principals in

the series of events leading to Andrulonis’ con.

traction of the disease of rabies. The treatise,

which is cited often in this opinion, was publish-

ed before the events material to this lawsuit

occurred. Dr. James H. Steele's chapter in Nat-

ural History will hereinafter be referred to as

“History of Rabies.”

10. J. Andrulonis, “ERA Rabies Grown in PK-15

Tissue Culture” at 1 (May 1973) (admitted into

evidence as Government's Exhibit (“Exh.”) G-

121 and hereinafter referred to as “Andrulonis

Dissertation”)

A62

The disease of rabies can develop in an

animal after the introduction of the rabies

virus into the body of that animal. The

rabies virus is an “etiologic agent,” in oth-

er words, it is an organism capable of caus-

ing disease. Infection by the rabies virus

in nature usually occurs through the saliva

of another infected animal during a bite.

Although infrequent, the virus can also be

transmitted through the milk of an infected

animal or, in rare cases, internasally, if an

animal is exposed to an aerosol containing

the rabies virus.'' Not every person or

animal who comes into physical contact

with an environment containing live rabies

virus (“exposure” to the virus) has the live

virus introduced into his or her body (“‘in-

fection”), and not every person or animal

infected with the rabies virus subsequently

develops the disease of rabies."

11. Tr. at 968 (Hattwick).

12. See M. Hattwick & M. Gregg, “The Disease in

Man,” 2 Natural History at 281-85 (hereinafter

“The Disease in Man”). As used in this memo-

randum-decision, “disease” will refer to the de-

velopment of clinical symptoms or sickness as-

sociated with the rabies virus’ invasion of the

central nervous system. See td. at 282. Those

symptoms are summarized in the text, infra at

1437-1438.

A63

A virus is a microscopic organism con-

sisting of genetic material '* surrounded by

a protective protein shell. A virus can

reproduce only within a living host cell.'*

The rabies virus is a neurotropic virus, or a

virus that proliferates primarily in nervous

tissue, although it also has an affinity for

certain other tissues of a host that it has

infected, including the tissue comprising

the salivary and adrenal glands and the

epithelial (surface) tissue of the lungs,

bladder and urinary tract.'> In the com-

mon case where the rabies virus is trans-

mitted to a previously uninfected animal

through the saliva of an infected animal

during a bite, the rabies virus is introduced

into the cells of the bitten animal’s mus-

cles, connective tissue, or nerves at the site

of the bite." Once introduced, the virus

may fail to multiply, or may multiply with-

in an infected cell at the location of the bite

but not leave that cell, or may spread to

Th. > '

13. The genetic material is ribonucleic acid

(RNA).

14. Tr. at 976 (Hattwick).

1S. Exh. G-125C at 133 (Deposition of Charles V.

Trimarchi).

16. G. Baer, “Pathogenesis to the Central Nerv-

ous System,” | Natural History at 182 (herein-

after “Pathogenesis”).

A64

other cells locally but fail to invade the

infected animal’s central nervous system."

If any of these contingencies occur, sick-

ness will not develop. On the other hand,

if the virus reproduces at the site of infec-

tion, leaves that site and invades the vic-

tim’s central nervous system, it will pro-

duce the disease of rabies in the infected

animal.'®

A common progression characterizes

those cases where the disease of rabies

develops in an animal or man after infec-

tion. At the site of exposure and infection,

the virus goes through an incubation period

lasting from ten days to several months,’?

and then invades nearby nervous tissue.

The virus begins to travel along connected

nerves until it reaches the central nervous

system. The reproduction of the virus

within the central nervous system can

cause myelitis (inflammation of the spinal

cord) or encephalitis (inflammation of the

brain). As the animal becomes ill as a

result of viral replication in the brain, the

virus travels down nerve cells into the

mouth and enters the diseased animal’s sa-

liva. Frequently, the infected animal will

17. “Pathogenesis,” supra note 16, at 182.

18. “Pathogenesis,” supra note 16, at 182.

19. “Pathogenesis,” supra note 16, at 192; Tr. at

970 (Hattwick).

A65

become aggressive or violent because of

the encephalitic changes caused by the vi-

rus, and this effect will often coincide with

the entry of the virus into the animal’s

saliva. The virus is transmitted to other

animal hosts when an agitated rabid anima!

bites an uninfected animal, introducing sali-

va containing the deadly virus into the bit-

ten animal.”

When rabies virus is introduced into the

muscle tissue of an animal as a result of

the bite of a rabid animal, the virus has

entered by the intramuscular route of in-

fection. The term “route of infection’ re-

fers to the manner in which the virus en-

ters the body of an animal. For example,

researchers can introduce the virus into a

laboratory animal by the “parenteral

route” if they inject the virus into the

animal intramuscularly, intravenously, or

subcutaneously (beneath the skin). In

cases of infection by the parenteral route,

researchers draw distinctions based on the

proximity of the site of the parenteral inva-

sion to the animal’s central nervous sys-

tem. In the laboratory, rabies virus can be

introduced into an animal by the “intracere-

bral route,” which is accomplished by injec-

tion of a solution containing virus directly

into an animal’s brain. Most importantly

20. “Pathogenesis,” supra note 16, at 182-92: Tr.

at 968 (Hattwick).

A66

for the purposes of this lawsuit, rabies

virus can infect an animal through the “‘air-

borne route” (alternatively called the

“aerosol route’) when the animal inhales

aerosol suspensions containing rabies vi-

rus.

The chances that the disease of rabies

will develop in an infected animal are close-

ly related to the quantity of viral parti-

cles?! to which the animal is exposed.**

This is true regardless of the route of

infection.2 With respect to the aerosol

route of exposure, the “dose” or quantity

of aerosolized viral particles to which an

animal is exposed is the most important

factor in determining whether a rabies vi-

rus will likely cause disease in the animal

as a result of this exposure.*4

21. A viral particle, or virion, is a single, com-

plete agent comprised of genetic material and 3

protein shell.

22. Tr. at 1856-57 (Testimony of Dr. William G.

Winkler); Tr. at 1403, 1412, 1451-52 (Shope);

see also Tr. at 1396-97 (Shope) (discussing aero-

sol exposures).

23. See Tr. at 1856-57 (Winkler) (indicating that

rabies generally is a dose-related disease); Tr. at

1396-97 (Shope) (discussing aerosols).

24. See text, infra at 1447-1448.

A67

As a species, man is not particularly sus-

ceptible to contracting the disease of ra-

bies.** Nonetheless, between 1958 and

1972 there were an average of 709 reported

cases of human rabies per year worldwide

(virtually all of which resulted in death),

and it is believed that this total significant-

ly underestimates the number of human

25. “The Disease in Man,” supra note 12, at 287-

88. The likelihood that the disease of rabies

will develop in a human being following an

exposure to the rabies virus varies with the

route of exposure and the quantity of virus to

which the person is exposed. In cases where a

man is exposed to the virus by the bite of an

infected animal, the risk that disease will result

is dependent on the species of the animal re-

sponsible for the human exposure and the loca-

tion and severity of the bite. “The Disease in

Man,” supra, at 284. Even with the most seri-

Ous exposures, the probability of developing the

disease of rabies is less than one hundred per-

cent. /d. at 287-88. The chances that an other-

wise untreated human being will die as a result

of a severe bite by a rabid dog to the fingers or

hand has been estimated to be fifteen percent:

the mortality rate when a rabid dog bites a

human in the trunk or legs through torn cloth-

ing has been estimated to be three percent. /d.

at 286; Tr. at 2149 (Testimony of Dr. George M.

Baer).

A68

cases worldwide.2° The rabies virus is ordi-

narily transmitted to humans through the

bites of wild and domestic animals. Expo-

sure through rabid cats and dogs is still

very prevalent throughout the world, al-

though such exposure has been largely

minimized in the United States in the past

three decades as a result of effective ani-

mal control programs and strong policies

favoring the vaccination of domestic ani-

mals. As a consequence of this develop-

ment, the number of cases in which hu-

mans contracted the disease of rabies in

this country decreased from an average of

more than forty a year in the 1940s to an

average of less than two a year in the

1960s.27_ The most recent cases of human

rabies in this country for the most part

have been attributable to the bites of bats,

skunks, or raccoons.”

26. “The Disease in Man,” supra note 12, at 287.

A World Health Organization survey conducted

for the year 1981 which accounted for under

reporting estimated that 20,482 human deaths

world-wide were attributable to the disease of

rabies during that year, ninety-eight percent of

those deaths occurring in Asia. See Tr. at 2274

(Baer).

27. “The Disease in Man,” supra note 12, at 287.

28. Tr. at 969-70 (Hattwick).

A69

The disease of rabies in man can be

divided into five stages.*® The first stage

is the incubation period, which can last

from ten days to several months, depend-

ing on the intensity of exposure and the

quantity of virus to which the victim has

been exposed.® The average incubation

period is twenty to sixty days.*! During

this initial stage, the infected individual

shows no signs of illness, and is usually

perfectly well apart from symptoms related

to the healing of any wound resulting from

an animal bite.%?

The incubation period ends when the vic-

tim experiences the first Symptoms of sick-

ness and the disease enters the prodrome

Stage. This stage usually lasts between

one and five days, and the infected individ-

ual suffers from nonspecific flu-like symp-

29. See Tr. at 970-75 (Hattwick): Tr. at 696-97

(Tillotson)

30. Tr. at 970-71 (Hattwick). The intensity of an

exposure is dependent in part on the duration of

the exposure, the route ot exposure, and the

proximity of the exposure to the central nervous

System. See Tr. at 1064 (Hattwick): “The Dis-

¢ase in Man,” supra note 12, at 289

31. “The Disease in Man.” Supra note 12, at 289

32. “The Disease in Man.” Supra note 12, ai 290:

Tr. at 970 (Hattwick).

A70

toms such as malaise, headache, fever, and

fatigue. In cases involving animal bites,

pain or numbness at the wound area is not

uncommon. The victim may also exhibit

anxiety, nervousness, agitation, or irritabil-

ity.

Shortly after the onset of prodromal

symptoms, the disease will enter the acute

neurologic stage and produce the unusual

symptoms that are suggestive of the dis-

ease of rabies. At this point, the virus has

entered the infected individual’s brain and

is multiplying. Intermittent hyperactivity

and violence is common at this stage, and

the victim typically suffers periods of ag-

jtation, thrashing, running, biting, scream-

ing, or ecrying.** Hyperventilation, exces-

sive salivation, and convulsions usually

characterize this stage.** Between hyper-

active episodes, the victim is lucid, though

often anxious. Difficulties with automatic

functions—breathing, swallowing, and sali-

vating, for example—commonly arise. In-

deed, attempts to drink water often will

result in severe, painful spasms of the

33. “The Disease in Man,” supra note 12, at 290:

Tr. at 971 Hattwick); Tr. at 696 (Tillotson).

34. “The Disease in Man,” supra note 12, at 290;

Tr. at 971-72 (Hattwick).

35. The periods of hyperactivity are not dramatic

in between five and twenty percent of reported

cases of human rabies. Instead. paralytic symp-

toms predominate. “The Disease in Man,” su-

pra note 12, at 291.

A71

pharynx and larynx, causing choking and

gagging. The victim might develop hydro-

phobia, a psychic reaction to the sight of

liquids causing spasms often resulting in

strangulation. Historically, the fact that

those who contract the disease of rabies

develop great thirst but fear water was one

of the most dreaded side-effects of the

disease. Today this effect can be avoided

by the performance of tracheostomies.**

If the victim does not die abruptly of

suffocation or heart failure during the

acute neurologic phase, paralysis gradually

sets in. The victim becomes increasingly

disoriented and confused, falls into a stu-

por, and ultimately slips into a coma.”

The acute neurologic phase persists for be-

tween two and ten days, ending with the

onset of coma. Historically, most victims

of the disease have died at this stage, prob-

ably because of a cessation of breathing,

although cardiac irregularities and spasms

can occur.*® If the victim survives, the

coma phase can last for a few hours or for

several months. At about this point in

time, the virus is no longer damaging the

victim, but a legion of potentially fatal com-

plications can develop. Among those is an

increase in intracranial pressure, cerebral

36. “The Disease in Man,” supra note 12, at 290-

91; Tr. at 971-73 (Hattwick).

37. “The Disease in Man,” supra note 12, at 291.

38. Tr. at 974-75 (Hattwick); “The Disease in

Man,” supra note 12, at 29}.

A72

edema (an excessive accumulation of fluid

in the brain substance), and internal hydro-

cephalus (an accumulation of cerebrospinal

fluid in the brain).2® Post-mortem studies

of victims of the disease often reveal sub-

stantial damage to the brain matter caused

by rabies encephalitis.”

The above-described neurologic effects of

the rabies virus on an infected individual

are so severe that the disease of rabies is

almost always fatal. In all of human histo-

ry, only three individuals have survived the

coma stage to enter the fifth stage of the

rabies disease, the recovery stage. One of

those individuals is Jerome Andrulonis.

B. Modern Rabies Research and the Ef-

forts to Control the Disease in Man

Although man’s awareness of the disease

of rabies dates to antiquity,*! most scien-

tific knowledge concerning the disease and

the etiologic agent that causes it has been

acquired within the last century. The roots

of modern scientific research concerning

39. Tr. at 97475 (Hattwick); “The Disease in

Man,” supra note 12, at 291, 292-94.

40. Tr. at 867-68 (Testimony of Dr. Lawrence D.

Rodichok).

41. “History of Rabies,” supra note 9, at 1.

A73

rabies can be traced to the work of Louis

Pasteur in the late nineteenth century.‘

In Pasteur’s tirne, dogs caused most hu-

man rabies deaths in the world, and thus

Pasteur’s initial work with rabies focused

on the development of a vaccine for domes-

tic dogs which would prevent the disease in

that species by stimulating an active im-

mune response to the agent that caused

it.43 Early in the course of his work, Past-

eur observed that dogs which recovered

42. Before Pasteur’s work in the 1880s, it had

been demonstrated through crude and some.

what doubtful experiments that the disease of

rabies could be transmitted by the saliva of an

infected animal, and some investigators suspect-

ed that rabies was a disease of the nervous

system. “History of Rabies,” supra note 9, at

11-12. Scientists were unaware, however, that

the causal agent was a living organism, much

less how that organism caused the extreme

physiologica! effects associated with the disease.

/d. at 11. Pasteur theorized that the disease was

caused by “a microbe of infinite smallness,” L.

Pasteur & M. Chamberland, “Nouvelle commu-

nication sur la rage,” 98 C.R. Acad. Sci. (Paris)

457 (1884) (quoted in “History of Rabies,” supra

note 9, at 20), and he was the first investigator

to demonstrate that “the central nervous system

. (is) particularly concerned and active in the

development of the disease.” “Pathogenesis,”

supra note 16, at 181 (quoting L. Pasteur, et al.,

92 C.R. Acad. Sci. 1259 (Paris) (1881)).

43. See R. Sikes, “Canine and Feline Vaccines—

Past and Present,” 2 Natural History at 177

(hereinafter “Canine and Feline Vaccines”).

A74

from early symptoms of rabies after inocu-

lation of liquid solutions (‘‘suspensions’’)

containing infected central nervous system

tissue into the blood stream were immune

to later inoculations. He also concluded

that the injection of small amounts of “in-

fective material” —it was not known that a

virus caused rabies at the time—would not

produce immunity.- The problem was find-

ing a way to inject “infective material” into

an animal sufficient to yield an immune

response without producing disease. Past-

eur’s solution was to “attenuate” the “‘in-

fective material” before injecting it into the

animal to be immunized. “Attenuation”

will be discussed in greater detail below.

By 1885, Pasteur had reported success in

developing immune responses in experl-

mental dogs after injecting them with a

series of inoculations of suspensions of an

attenuated rabies virus strain.® That

same year, Pasteur relented to the pleas of

44. “History of Rabies,” supra note 9, at 19-21.

45. “History of Rabies,” supra note 9, at 20-21.

The series of shots began with a non-pathogenic

suspension of material taken from the spinal

cords of rabbits infected with the rabies virus.

The solution in each succeeding inoculation was

progressively more pathogenic. H Clark, T.

Wiktor, & H. Koprowski, “Human Vaccination

Against Rabies,” 2 Natural History at 341-43

(hereinafter “Human Vaccination’).

A75

the mother of a young boy who had been

bitten by a rabid dog numerous times and

administered a series of injections of the

solution he had developed for dogs to the

boy. The boy never developed rabies, and

as a result of this apparent success Past-

eur’s work became so influential that it

defined in large part the direction of mod-

ern rabies research well into the second

half of the twentieth century. Many of the

techniques used by Pasteur in his early

work persisted in modern rabies investiga-

tion through 1976 and 1977, the time period

in which the events most relevant to this

lawsuit transpired, and discussion of these

techniques will give context to terms used

throughout the remainder of this opinion.‘

l. The “Passaging” of Virus

In his efforts to develop a canine vaccine,

Pasteur was the first rabies investigator to

utilize a laboratory procedure known as

“passaging”’ in order to adapt the etiologic

agent that caused the disease of rabies (the

rabies virus) to animal species other than

the dog. After a certain number of “pas-

Sages,” a virus, through a process of natu-

ral selection, can become “virulent” (ex-

tremely pathogenic) for the host for which

46. See “Human Vaccination,” supra note 45, at

342; “History of Rabies,” supra note 9, at 19.

A76

it is adapted. However, if a solution con-

taining the passaged virus is injected into

an animal with a cell structure different

than that of the animal species for which

the virus has been adapted, it is possible

that the passaged virus will lack the capaci-

ty to cause disease in that animal.‘7 None-

theless, in some cases a suspension of pas-

saged virus in an animal for which the

virus has not been adapted will act as an

antigen, a substance capable of inducing

the animal’s immune system to produce

antibodies to the rabies virus.’ An anti-

body is a protein with a structure such that

it interacts only with either the antigen

that induced its creation in the first place

or an antigen closely related to the induc-

ing antigen. If a passaged virus is capable

of spurring - creation of antibodies,

those antibodies once produced will be

present to neutralize any rabies virus to

which the immunized animal is subsequent-

ly exposed in the wild.’

47. See Tr. at 1256-57 (Clark); Tr. at 2155

(Baer); Dorland’s illustrated Medical Dictionary

138 (27th ed. 1988) (defining “attenuation”).

48. See Tr. at 1798 (Winkler).

49. Exh. G-125G at 19-22 ‘Deposition of Dr

Franklin B. Peck); Dorland's Illustrated Medical

Dictionary 88 (27th ed. 1988) (defining “anti-

body"); see also Tr. at 976 (Hattwick).

A77

Basically, a “passage” is a defined period

of growth for a virus through replication

and mutation within a particular cell sys-

tem. An animal, an embryonated egg, or a

tissue culture is infected with a solution

containing a given concentration of viral

particles. The virus is allowed to incubate

under certain conditions for a specified pe-

riod of days, during which time the virus

will multiply and mutate randomly. Pre-

sumably, viral particles well-adapted to the

host animal or tissue culture will replicate

more readily than viral particles that might

be better adapted to other species or cell

systems during the short-term evolution

that takes place during the passage. A

virus that multiplies more readily will also

mutate more frequently. After a specified

period of days has elapsed, live rabies virus

will be “harvested” from the animal or

tissue culture within which it was grown.°°

Under modern laboratory practice, passag-

ing often transpires in tissue culture main-

tained in test tubes and bottles, and “har-

vesting” constitutes the removal of liquid

containing live viral particles from the cells

of the tissue culture. This liquid contain-

ing viral particles is called a ‘‘supernate.”’ *!

Through passaging, rabies investigators

seek to develop a “modified live virus ra-

50. Tr. at 1254-36 (Clark); Tr. at 2343-45 (Baer).

51. Tr. at 2343-44 (Baer).

aE a ee

A78

bies strain” with certain predictabie quali-

ties. A “modified live virus’ is any virus

strain that has been altered through some

laboratory process such as passaging and

possesses certain constant, identified char-

acteristics.”

In developing his vaccine. Pasteur isolat-

ed rabies “street” virus (the virus as it

occurs in the wild) from the brain of a rabid

cow in 1882. The street virus was injected

intracerebrally into a rabbit, and after a

certain amount of time had elapsed the

virus was harvested. The harvested virus

was then itself injected intracerebrally into

another rabbit. This process was repeated

until the virus had been passaged in rabbits

ninety times. The resulting virus strain

§2. Tr. at 980-81 (Hattwick). Although different

“strains” of rabies virus are distinguishable de

pending on the animal from which the virus is

initially isolated or the animal or cell system

through which the virus is subsequently pas-

saged, see Tr. at 523-24 (Deposition of Dr Mel.

sin K. Abelseth), all strains cross-react in serum-

neutralizing tests, discussed in the text, infra at

1442-1443. See H Clark & T. Wiktor, “Rabies

Virus.” in Strains of Human Viruses 177, 178

(Majer & Plotkin, eds. 1972) (admitted into evi-

dence as one of a packet of documents constitut.

ing Exh. G-137 and hereinafter referred to as

“Rabies Virus Strains’). Thus, the various ra-

bies virus strains are generally considered of the

same “serotype.” inducing the same specific im-

mune response in an animal infected by any of

the various rabies virus strains. /d

$3. “Human Vaccination,” supra note 45, at 343,

“History of Rabies,” supra note 9, at 20.

A79

was more pathogenic to rabbits than street

virus, and had a fairly constant incubation

period of six to seven days when injected

intracerebrally into rabbits. This virus

Strain proved to be less pathogenic than

Street virus for dogs, however, and it was

repeatedly demonstrated in the laboratory

that dogs inoculated with a series of injec-

tions of suspensions containing the virus

Strain not only did not develop disease but

resisted disease after subsequent infection

with a strain of rabies virus virulent to

dogs (a so-called ‘‘challenge’’).5

The modified live virus strain Pasteur

developed was a “fixed virus” with respect

to rabbits but an “attenuated virus” with

respect to dogs. A virus is deemed “fixed”

for a particular species when it has a fairly

specific incubation period—which is ordi-

narily comparatively short—and is always

lethal to that species.*5 The characteristics

54. Tr. at 1257 (Clark), “Canine and Feline Vac

cines,” supra note 43, at 177; “Human Vaccina-

tion,” supra note 45, at 343.

55. Tr. at 1796-97 (Winkler): Tr. at 882 (Deposi-

tion of Dr. William G Winkler).

——————— ee

A80

of a fixed virus are more predictable than

those of a street virus. A virus is “‘atten-

uated” for a certain species if it is less

pathogenic for that species than street vi-

rus when introduced into an animal by a

specified route.*’ Almost invariably, when

scientists attempt to attenuate a live virus

for a particular species, it is done in an

attempt to develop a vaccine 2gainst rabies

for that species.*

A rabies vaccine is a suspension of either

attenuated live rabies viral particles (a

“modified live rabies virus vaccine’’) or in-

activated rabies viral particles (a ‘killed

virus vaccine’) which is administered to an

animal host in order to stimulate an im-

mune response in that host without induc-

56. Tr. at 1797 (Winkler). The two most com-

mon examples of fixed viruses used by modern

rabies researchers are the PV virus and the

Challenge Virus Standard (CVS virus). The PV

virus is derived from the original virus strain

developed by Pasteur. It is maintained by the

Division of Biologic Standards of the National

Institute of Health and is used for vaccine pro-

duction. The CV® virus is derived from the

original Pasteur strain by further passage in

mouse brain. It is the uniform challenge virus

used in rabies investigations. See Tr. at 1799

(Winkler).

57. Tr. at 1798 (Winkler); Tr. at 1253 (Clark);

Tr. at 978-90 (Hattwick); Tr. at 634 (Abelseth

Deposition).

58. Tr. at 1798 (Winkler); Tr. at 978-79 (Hat

wick).

A8l

ing disease.*® Strictly speaking, the term

“vaccine” is properly used to describe a

specific suspension that has been licensed

for use as a vaccine for a particular spe-

cies. It is important to note that a virus

strain, particularly an attenuated live virus

Strain, that has been tested and appr: ed

for use as a vaccine for one animal srecies

may be pathogenic if introduced into anoth-

er species.*' Moreover, a4 virus strain that

has been shown to be a safe and effective

vaccine when introduced into an animal by

a specified route may prove to be pathogen-

ic when introduced into the same animal by

a different route. This is not surprising

given the process by which a live virus is

attenuated in order to make a vaccine: to

make the virus non-pathogenic for one spe-

cies, the virus is made to thrive in a cell

culture different than that of the species

for which the vaccine was developed. As

a general rule, only by conducting labo-

$9. See Tr. at 976, 980-81 (Hattwick); Tr. at 2041

(Richardson); Dorland’s [ilustrated Medical Dic-

tionary 1431 (27th ed. 1988) (defining “vac-

cine”).

60. Tr. at 981 (Hattwick).

61. Tr. at 979-80 (Hattwick).

62. Tr. at 979-80 (Hattwick); Tr. at 1256 (Clark).

63. Tr. at 1256 (Clark).

A82

ratory tests in which a particular modified

live virus strain is introduced into a particu-

lar species by a specified route can it be

reliably determined whether that virus

strain is attenuated for the species in ques-

tion when infected by the virus through the

route specified.™

2. Control of Human Rabies in the Unit-

ed States: The Mass Immunization

of Canines and the Lilly Vaccine

The immunization method developed by

Pasteur required multiple inoculations, and

was never adopted for the mass immuniza-

tion of dogs. It was not until the early

1920s that 2 practical one-dose vaccine for

dogs was developed in Japan. The virus

strain used in the vaccine had been fixed

for rabbits and then inactivated,® a process

by which the biological activity of the virus

is destroyed either through exposure to

heat, chemicals, or ultraviolet irradiation.”

64. See Tr. at 1854 (Winkler).

65. E. Tierkel, “Control of Urban Rabies,” 2 Nat-

ural History at 190 (hereinafter “Urban Rabies”);

“Canine and Feline Vaccines,” supra note 43, at

177-78.

66. “Canine and Feline Vaccines,” supra note 43,

at 178.

67. See “Human Vaccination,” supra note 45, at

345-47 (discussing some of the methods that

have been used to either partially or completely

inactivate rabies virus).

A83

Although this vaccine proved effective in

controlling rabies in dogs in Japan and was

used in other countries, use of the vaccine

in the United States was sporadic. In the

late 1920s, it was discovered that some lots

of that vaccine contained live virus, and

thereafter different methods of inactivation

were tested. In the course of these tests,

it was found that inactivation rendered

many lots of vaccine ineffective in stimulat-

ing an immune response in animals. Since

there was no reliable way to determine the

antigenic efficacy of a particular vaccine

lot before it was used, efforts to implement

an effective mass immunization programs

were frustrated.®

The obstacle to mass immunization posed

by the inability to pre-determine vaccine

efficacy was overcome in the 1940s with

the development of reliable standardized

tests for both the evaluation of vaccine

potency and an animal’s immune response

to the administration of a vaccine.” These

tests, known as “titrations,” are used to

yield a standardized number called a “ti-

ter.” In essence, “titer” is a term that is

68. “Canine and Feline Vaccines,” supra note 43,

at 178; “Urban Rabies,” supra note 65, at 190.

69. “Canine and Feline Vaccines,” supra note 43,

at 179.

70. See Canine and Feline Vaccines,” supra note

43, at 179; “Urban Rabies,” supra note 65, at

190.

A84

used to indicate a measure of a substance’s

ability to cause some defined result. By

assigning a titer to a particular solution

containing a virus, for example, research-

ers can compare that virus solution to oth-

er solutions containing the same virus with

respect to the ability to cause the result

contemplated.

When rabies researchers measure the

“titer” of a rabies virus strain, they are

measuring the ability of that virus strain to

kill laboratory mice after intracerebral in-

jection of a solution containing that virus

strain.’! The titer of a rabies virus strain

is measured in units of “50% mouse intra-

cerebral lethal doses per .03 milliliters

(MICLD-50/.03 ml),” a reference to the

number of dilutions of the virus strain that

could be injected intracerebrally into a

group of mice in .03 milliliter suspensions

and induce disease in fifty percent of the

mice injected.*? A virus strain with a high

71. Tr. at 547 (Abelseth Deposition); Tr. at 408

(Debbie). Laboratory mice have been chosen as

the standard species for titration because of

their acute susceptibility to neurotropic viruses

such as the rabies virus and their ready avail-

ability to research laboratories. J. Thomas,

“The Serum Neutralization, Indirect Fluorescent

Antibody, and Rapid Fluorescent Focus Inhibi-

tion Tests.” 1 Natural History at 420 (hereinafter

“Serologic Tests”); “History of Rabies,” supra

note 9, at 26.

72. See Tr. at 317-18 (Debbie).

A85

titer has a greater capacity to kill mice

than a virus strain with a low titer.”> The

titer is commonly expressed exponentially,

with a base number of ten raised to a

certain power. For example, a virus strain

could have a titer of ten raised to the

power of 3.5 MICLD-50/.03 ml. The ‘‘com-

mon logarithm” of the titer represented by

the foregoing mathematical expression is

3.5. For the remainder of this memoran-

dum-decision, the titer of a virus strain will

be expressed by reference to its commen

logarithm.

Rabies investigators also measure an ani-

mal’s immune response to a vaccine by

reference to the term ‘“‘titer.” Here, “ti-

ter’’ is a measurement of neutralizing anti-

bodies in an immunized animal's blood

stream.’”4 Blood serum isolated from a

blood sample of the immunized animal is

added to a solution containing the chal-

lenge virus standard (“CVS”), a fixed stan-

dardized rabies virus strain with constant

characteristics derived from the original

Pasteur virus. This mixture is incubated

and then inoculated into mice. The mea-

Sure of antibodies in the blood serum is

determined by evaluating their ability to

73. Tr. at 547 (Abelseth Deposition).

74. Tr. at 977 (Hattwick); see “Serologic Tests,”

supra note 71, at 420-23.

A86

neutralize the viral particles present in the

CVS strain and prevent mouse deaths. Se-

rum neutralizing antibody titer is usually

expressed as a ratio, such as 1:9. The

higher the second number in the ratio, the

greater the amount of viral particles that

can be neutralized by the immunized ani-

mal’s serum antibodies.” Hereafter in this

opinion, references to “titer” allude to the

measure of the ability of a rabies virus

strain to kill laboratory mice, while the

phrase “antibody titer” will be used to re-

fer to the level of neutralizing antibodies in

an animal’s blood stream.

As a general rule, if the titer of a partic-

ular virus strain is increased by some labo-

ratory procedure, the pathogenicity of that

virus strain is increased for species for

which it has not been attenuated.’”* It ap-

pears that the most important factor deter-

mining the magnitude of the titer of a

suspension of a modified live virus strain is

the quantity and concentration of viral par-

75. “Serologic Tests,” supra note 71, at 422-23.

76. Tr. at 1126 (Deposition of Dr. George M.

Baer). This is not an absolute rule; the patho-

genicity of a virus strain can vary from species

to species, and “titer” measures the relative pa-

thogenicity of a virus strain only with respect to

mice. Tr. at 408 (Debbie); Tr. at 587-88 (Abel-

seth Deposition).

—

A87

ticles in the suspension.” The titer of a

particular virus strain can be increased ei-

ther by passaging or by concentration.”8

By passaging a virus strain in animals,

embryonated eggs, or cell cultures, the vi-

rus replicates within the vehicle chosen for

passaging, thus increasing the quantity of

virus obtained.”? By concentrating a virus

strain through one of a variety of available

laboratory techniques, live viral particles

are condensed into a smaller volume of

77. See Tr. at 1856-57 (Winkler) (indicating that

the titer of a virus strain is directly reiated to

the “dose” or quantity of viral particles con-

tained within a given volume of virus). The

measure of a virus strain’s titer, however, is not

completely dependent on the concentration of

the viral particles it contains. Titer is a mea-

surement of a virus strain’s pathogenicity in

mice, see Tr. at 408 (Debbie), and a high titer

measurement of a virus strain conceivably

could indicate that that strain is particularly

well adapted to mice, and not that it is more

concentrated than a lower titer virus.

78. See generally Exh. G-i25C at 379-83 (Trimar-

chi Deposition); T. Wiktor & H Clark, “Growth

of Rabies Virus in Cell Culture,” 1 Natural Hisro-

ry at 155-77 (hereinafter “Growth in Cell Cul-

ture”); L. Schneider, “Concentration and Purifi-

cation,” 1 Natural History at 125-38 (hereinafter

“Concentration and Purification”).

79. Tr. at 1811 (Winkler); see “Growth in Cell

Culture,” supra note 78, at 171-73.

A88

virus solution.£® Passaging a virus strain

results in a changed virus strain that can

be more pathogenic for a particular species

either because of the mutations that the

virus underwent during passaging, or be-

cause of an increase in the number of viral

particles in a given volume of a suspension

of the virus strain.*! Concentration of a

virus strain will not result in viral replica-

tions and mutations,*? but does increase the

number of viral particles in a given volume

of a suspension. Because the pathogenici-

ty of a rabies virus exposure is dose-relat-

ed, concentration can also increase the pa-

thogenicity of a virus strain.”

After the development of a reliable and

convenient means of pre-testing the anti-

genic efficacy of a particular vaccine lot, a

demonstrably effective mass canine immu-

nization program was carried out in the

United States for the first time. The pro-

gram, instituted in Memphis, Tennessee in

1948, combined mass vaccination of dogs

and strict animal control measures.** In

80. Tr. at 1413 (Shope).

81. Tr. at 1255-57 (Clark); see also Tr. at 1793-94

(Winkler).

82. See Tr. at 2115-16 (Baer).

83. Tr. at 1856-57 (Winkler); Tr. at 1413

(Shope).

84. “Urban Rabies,” supra note 65, at 191.

A89

the two decades that followed, similar pro-

grams were instituted throughout the Unit-

ed States, severely limiting the incidence of

rabies in domestic dogs.** With the control

of rabies in domestic dogs, reports of the

disease in humans in this country dropped

to near zero.%

Just as the control of rabies in dogs

markedly reduced the incidence of human

exposure to the rabies virus in the United

States, significant improvements were

made in the vaccines available for the treat-

ment of those humans who were exposed

to the virus. Until the 1950s, the vaccines

developed for human use were variations

of the Pasteur vaccine that originally had

been intended for use in dogs and later

adapted for human immunization.*7 The

Pasteur vaccine had been developed

through viral passages in the brains of

living rabbits, and the modified live rabies

virus strain that resulted was suspended in

85. “Urban Rabies,” supra rote 65, at 193-96.

86. “History of Rabies,” supra note 9, at 27-28;

Tr. at 2137 (Baer).

87. “Human Vaccination,” supra note 45, at 343-

47.

A90

solutions of the spinal cords of rabbits.**

The administration of any vaccine contain-

ing adult animal nervous tissue presents a

risk of inducing allergic reactions resulting

in neuroparalytic disorders.®* In an effort

to avoid this serious side-effect, defendant

Lilly developed a vaccine in the 1950s that

did not contain the nervous tissue of adult

animals.”

The duck embryo vaccine (‘““DEV” or

“the Lilly vaccine’) was produced by pas-

saging the CVS fixed virus strain in seven-

day-old embryonated duck eggs, a process

which yielded a high-titer supernate upon

harvest.2! The virus was inactivated and

prepared for use as 2 vaccine. Similar to

the original Pasteur vaccine, DEV was to

be administered in a series of fourteen to

twenty-one inoculations, and when it was

licensed and first distributed in 1957, it was

intended exclusively for post-exposure

88. “Human Vaccination,” supra note 45, at 343.

Live rabies virus was contained in the vaccine

Pasteur originally used in a human. Scientists

subsequently utilized methods for the partial or

complete inactivation of the virus in vaccines

used for human immunization. /d. at 346-47.

89. “Human Vaccination,” supra note 45, at 347,

356-60; “History of Rabies,” supra note 9, at 25.

90. “Human Vaccination,” supra note 45, at 348.

91. Tr. at 565-46 (Abelseth Deposition); Exh. G-

125G at 172 (Peck Deposition); “Human Vacci-

nation,” supra note 45, at 348.

AQ91

treatment.” In the mid-1960s, defendant

Lilly amended the package insert that was

routinely distributed with the lots of the

vaccine it manufactured and recommended

it for pre-exposure use for “high-risk” indi-

viduals.** Among those considered “high-

risk’ were veterinarians, spelunkers, and

laboratory personnel working with rabies

virus.** It was common practice by the

early 1970s for scientists and laboratory

technicians engaging in rabies research to

maintain a minimum level of serum anti-

bodies through periodic inoculations with

the Lilly vaccine.

92. “Human Vaccination,” supra note 45, at 348;

Exh. G-125G at 25, 89 (Peck Deposition). Post-

exposure treatment with the Lilly vaccine was

considered feasible because the rabies virus gen-

erally has a fairly long incubation period when

introduced parenterally. The theory was that

serum antibodies could be created by intensive

post-€xposure inoculations with DEV and neu-

tralize the rabies virus already present before

that virus entered the victim's central nervous

system, causing disease. Exh. G-125G at 21-25

(Peck Deposition); “Human Vaccination,” su-

pra, at 341.

93. Exh. G-125G at 53-54 (Peck Deposition); see

also Exh. 87A (Package insert supplied by Lilly

for Rabies Vaccine, USP (Duck Embryo) Dried

Killed Virus for the Prevention of Rabies (as

revised November 14, 1975)).

94. Exh. 87A (Lilly package insert).

A92

Although other non-nervous tissue vac-

cines were available for use in man, DEV

was the vaccine of choice for human use in

the United States from the late 1950s until

1980.9 When the Lilly vaccine was being

tested for safety and effectiveness before

it was licensed, defendant Lilly focused on

whether DEV would provide protection

against disease in the event of human expo-

sure to the rabies virus through a bite or

scratch wound or a pre-existing abrasion

after contact with the saliva of an infected

animal (hereinafter collectively referred to

as the “bite route” of exposure). At the

time, the bite route was the only known

means of transmitting the virus in nature,”

and thus the protectiveness of the Lilly

vaccine against development of the disease

of rabies after infection through a non-bite

route was not investigated.* Specifically,

no tests concerning the effectiveness of

DEV against aerosol exposures to the ra-

bies virus were conducted.”

95. Tr. at 1057 (Hattwick); Tr. at 419 (Debbie).

96. Exh. G-125G at 24-25 (Peck Deposition).

97. See W. Winkler, “Airborne Rabies,” 2 Natural

History at 115-17 (hereinafter “Airborne Ra-

bies”); Tr. at 1237-38 (Clark).

98. Exh. G-125G at 25 (Peck Deposition).

99. Exh. G-125G at 31 (Peck Deposition).

A93

C. The Airborne Transmission of

the Rabies Virus

The belief that the rabies virus was

transmitted in nature only through the in-

troduction of the saliva of an infected ani-

mal into a bite wound or open lesion of

another animal persisted until the late

1950s or early 1960s.'% This opinion had

endured in the scientific community despite

scattered reports in the early medical liter-

ature indicating that animals could acquire

the disease of rabies by inhaling the vi-

rus.'*! In the late 1950s, scientists began

100. “Airborne Rabies,” supra note 97, at 115-17;

Tr. at 1237-38 (Clark).

101. In a leading early treatise on the disease of

rabies, it was reported that two humans who

had not been bitten or scratched died from the

disease after feeling the “hot breath” of a rabid

wolf on their faces. “Airborne Rabies,” supra

note 97, at 115 (citing V. Babes, Traité de la rage

(1912)). Possibly because these cases predated

modern research methods, little significance

was attached to them. In 1938, two researchers

exposed laboratory rodents to mechanically gen-

erated “mists” containing rabies virus particles,

and some of the rodents were infected. “Air-

borne Rabies,” supra, at 115 (citing P. Remling-

er & J. Bailly, 24 Buil.Acad.Nat.Med. (Paris)

72-74 (1938)). In 1940, Dr. Albert Sabin, an

American scientist, inoculated laboratory mice

intranasally with a fixed rabies virus with a titer

of approximately 6 or 7, causing infection in

practically all of the mice so exposed. Sabin

found in those experiments that the virus initial-

ly invaded the olfactory regions of the brain and

then disseminated throughout the rest of the

brain. Tr. at 1237-38 (Clark). Apparently, it

was not believed that the results obtained in the

laboratory in these two sets of experiments re-

vealed anything about the transmission of the

rabies virus in the wild.

A94

to question the assumption that direct con-

tact with the saliva of an infected animal

was necessary in order for the rabies virus

to be transmitted to another animal.

1. The Discovery that Animals Can be

Infected after Exposure to Aerosols

Containing Rabies Virus

In 1956, a thirty-eight year old public

health worker contracted the disease of

rabies soon after being exposed to the at-

mosphere of various bat caves in the south-

western region of the United States. One

of the caves this worker had entered was

the Frio Cave in Uvalde County, Texas,

which was known to shelter rabid bats.

While the public health worker had worked

with the rabies virus on occasion in a labo-

ratory setting, there was no clear evidence

that he had been exposed to the virus ei-

ther by animal bite or laboratory acci-

dent.'? In 1959, a mining engineer who

was examining guano deposits in various

bat caves in the Southwest developed the

disease. Before his death, the engineer

102. Tr. at 1238 (Clark); “Airborne Rabies,” su-

pra noie 97, at 116. The worker handled a

number of ‘bats in Frio Cave while wearing

gloves, and he had an area of chronic dermatitis

on his neck. Thus, it was possible that the

rabies virus invaded through a lesion on the

worker's neck. D. Constantine, “Rabies Trans-

mission by Air in Bat Caves,” Pub. Health Serv.

Publ. No. 1617 (CDC) at 1 (June 1967) (admitted

into evidence as Exh. 152 and hereinafter re-

ferred to as the “Constantine Report”).

tt

A9S5

insisted that he had not been bitten or

scratched by a bat or other animal. This

individual had also explored Frio Cave, and

thus was exposed to the atmosphere of a

cave housing rabid bats.' The deaths of

these two men suggested that it was possi-

ble that an unknown method of rabies virus

transmission existed.'* A rumber of field

studies and laboratory experiments fol-

lowed. The most important of these was a

series of experiments conducted on behalf

of the CDC under the direction of Dr. Den-

ny G. Constantine in which various mam-

mals were exposed to the atmosphere of

Frio Cave.!%

Frio Cave is a large multi-chambered cav-

ern which provides shelter for three species

of bats. Most numerous are the Mexican

free-tailed bats, whose numbers varied sea-

103. Tr. at 1238 (Clark); “Airborne Rabies,” su-

pra note 97, at 116. A co-worker reported that

the engineer had a small bleeding scratch

wound when he emerged from Frio Cave. See

G. Humphrey, G. Kemp, & E. Wood, “A Fatal

Case of Rabies in a Woman Bitten by an Insecti-

vorous Bat,” 75 Pub. Health Rep. 317, 324

(1960) (admitted into evidence as one of a pack-

et of documents constituting Exh. G-137 and

hereinafter referred to as “Insectivorous Bat”).

104. Constantine Report, supra note 102, at 1.

105. Tr. at 1239 (Clark); “Airborne Rabies,” su-

pra note 97, at 116.

A96

sonally from between two and upwards of

twenty million. Millions of bats, primari-

ly lactating females and their suckling,

flightless young, were present in just one

chamber of the cave (the “nursery cham-

ber”) from June until early August. Most

of Constantine’s work was conducted in

this chamber.’ The bats in the nursery

chamber clung to a ceiling that ranged

from four to ten feet in height. The con-

centration of bats in the nursery chamber

varied from three hundred to four hundred

per square foot.'® The ventilation in the

chamber was poor, and a continual rain of

saliva, urine, and feces fell from the bats to

the ground.'”

In July 1960, thirteen carnivores confined

in mesh cages were placed in the nursery

chamber, where they remained for a period

of seven days. A number of rodents were

placed in the same chamber for lesser peri-

ods of time. While none of the rodents

contracted rabies, four of the carnivores

106. Constantine Report, supra note 102, at |.

107. See W. Winkler, “Airborne Rabies Virus Iso

lation,” 4 Bull. Wildlife Disease Assoc. 37, 37

(1968) (admitted into evidence as one of a pack-

et of documents constituting Exh. G-137 and

hereinafter referred to as “Airborne Isolation’).

108. Tr. at 2247-48 (Baer).

109. Tr. at 2249 (Baer); see also “Airborne Ra-

bies,” supra note 97, at 117.

A97

were killed by the disease.''® Although

Constantine could not rule out the possibili-

ty that the animals were bitten through

their mesh cages by diseased bats or other

animals present in the nursery,''! the sug-

gestion that the caged animals contracted

rabies as a result of exposure to rabies

viral particles suspended in the atmosphere

of Frio Cave was strong.!!?

In experiments conducted in Frio Cave in

July 1961, elaborate steps were taken to

assure that some of the animals exposed to

the atmosphere of the nursery chamber

would not be subject to other exposures

from animal bites or arthropods.''3 These

animals—four coyotes and four grey fox-

es—were confined in the chamber between

110. Constantine Repori, Supra note 102, at 12,

18, 42.

111. Constaatine Report, supra note 102, at 12:

Tr. at 1239-40 (Clark).

112. Dr. William G. Winkler went so far as to

State that “(t]he transmission of rabies virus by

non-bite route was demonstrated” by the July

1960 experiment. “Airborne Isolation,” supra

note 107, at 37.

113. For example, the animals were confined in

sealed cages with especially fine, reinforced

mesh at either end to allow air to filter through,

and moats of glycerine-soaked spun glass pad-

ding were constructed just inside the exposed

mesh at each end of the cages to prevent tiny

crawling arthropods from invading the cages.

Constantine Repon, supra note 102, at 13.

A98

twenty-four and thirty days. All subse-

quently died of rabies."* From these and

other experiments conducted at Frio, Con-

stantine concluded that it was “apparent

that transmission of rabies virus from free-

tailed bats to other animals occurs by

air.”

Constantine’s experiments were conduct-

ed in poorly ventilated caves that contained

an unusually large number of bats.''® Any

intimation that the airborne transmission of

the rabies virus was limited to the unique

environment of Frio Cave, however, was

quickly dispelled. In 1967, a spontaneous

outbreak of rabies occurred in the labo-

ratory animal colony of the United States

Public Health Services’s Southwest Rabies

Investigation Station at Las Cruces, New

Mexico. Caged foxes, coyotes, and opos-

sums which were never exposed to direct

physical contact with a rabid animal began

dying of rabies. Over a little less than ten

months, sixty-four animals died, and thirty-

nine of those animals had never been inten-

tionally exposed to the rabies virus by re

searchers.''? After an extensive investiga-

114. Constantine Report, supra note 102, at 18.

115. Constantine Report, supra note 102, at 26.

116. “Airborne Rabies,” supra note 97, at 117.

117. W. Winkler, E. Baker, & C. Hopkins, “An

Outbreak of Non-Bite Transmitted Rabies in a

Laboratory Animal Colony,” 95 Amer. J. Epi-

dem. 267, 267-68 (1972) (admitted into evidence

as one of a packet of documents constituting

Exh. G-137 and hereinafter referred to as “Non-

Bite Transmitted Rabies”); “Airborne Rabies,”

supra note 97, at 118; Tr. at 1244 (Clark).

A99

tion led by Dr. William G. Winkler of the

CDC, it was concluded that the outbreak

was most likely attributable to the airborne

transmission of the rabies virus.'!® Ani-

mals that had been exposed to rabies virus

in experiments were moved in and out of a

room where animals that had not been ex-

posed were housed, and infective virus was

probably circulating in that room during

the period of the outbreak. It was believed

that the aerosols were generated either by

the exposed animals themselves or as a

result of a cage cleaning procedure that

utilized a high-pressure spray.!!9

In 1973, the death of a fifty-six year old

veterinarian underscored the potentia! haz-

ard aerosols containing rabies virus posed

to laboratory workers. The victim had no

known animal bite exposures prior to fall-

ing ill, and no lesions on his body were

observed during an autopsy performed af-

ter his death.'*© The veterinarian was an

employee of a commerci?! laboratory in

118. “Non-Bite Transmitted Rabies,” supra note

117, at 276.

119. “Non-Bite Transmitted Rabies,” supra note

117, at 275.

120. W. Winkler, et al., “Airborne Rabies Trans-

mission in a Laboratory Worker,” 226 J.Amer.

Med.Assn. 1219, 1220 (1973) (admitted into evi-

dence as one of a packet of documents constitut-

ing Exh. G-137 and hereinafter referred to as

“Laboratory Worker”).

A100

Texas that was involved in the preparation

of various anti-viral vaccines. In preparing

an experimental lot of animal rabies vac-

cine, he used a common “kitchen-type”’

blender to homogenize goat brains that had

been infected with the CVS rabies virus

strain. The blender produced aerosols, and

it was hypothesized that the veterinarian

“inhaled substantial amounts of virus”

while transferring the homogenized goat

brains from the blender to other contain-

ers.'2!. The liquid homogenate in the blen-

der had a titer of 6.5.'** The veterinarian

had had no other known contact with the

rabies virus for a number of years before

his death, and he succumbed to the disease

of rabies shortly after this laboratory inci-

dent.'23 The veterinarian, who apparently

was not effectively immunized against ra-

bies,'24 was the first individual suspected to

121. “Laboratory Worker,” supra note 120, at

1219-20; Tr. at 1245 (Clark).

122. Tr. at 1005 (Hattwick); “Airborne Rabies,”

supra note 97, at 119.

123. Tr. at 1245 (Clark).

124. The veterinarian had been immunized

against the rabies virus thirteen years before his

death, but had not received booster shots after

the initial immunization. “Laboratory Worker,”

supra note 120, at 1220.

Al0l

have died as a result of an aerosol expo-

sure to a fixed strain of virus rather than a

wild or “street” strain.!25

2. The Pathogenesis of Airborne Rabies

Infection

The death of the Texas veterinarian pro-

vided dramatic evidence that the newly-dis-

covered route of infection could have im-

portant ramifications for laboratory work-

ers using rabies virus strains. Even before

this incident, however, there was some evi-

dence suggesting that aerosols containing _

rabies virus could pose a threat to man

different in kind than that presented by the

more common exposures through animal

bites or accidental injection in the labo-

ratory. Constantine advised that ‘‘the

term ‘susceptibility’ in reference to trans-

mission by air route may constitute a

marked departure from the term in its

usual connotation regarding rabies.” '7* At

the time Constantine prepared his report

summarizing his studies in Frio Cave, ‘‘{n]Jo

attempt [had] been made to determine the

actual virus invasion sites” in the two men

who were suspected to have died as a re-

sult of their exposure to the rabies virus in

Frio Cave in the 1950s.'*7 It was recog-

nized that a proper assessment of the dan-

125. “Laboratory Worker,” supra note 120, at

1219; Tr. at 1246 (Clark).

126. Constantine Report, supra note 102, at 26.

127. Constantine Report, supra note 102, at 28.

A102

ger which aerosols containing rabies virus

posed to man and other animals would re-

quire study of the means by which the

virus travelled through the body of an ani-

mal from the site of exposure to the site

where the virus causes fatal encephalitis—

that is to say, the “pathogenesis” of air-

borne rabies infection would have to be

studied. In the late 1960s and early 1970s,

experiments designed to reveal the patho-

genesis of airborne rabies were conduct-

ed. '28

Two important findings resulted from

this research. First, it was demonstrated

that an animal’s susceptibility to develop-

ing sickness as a result of an airborne

exposure to the rabies virus was closely

related to the amount of viral particles in

the aerosols to which that animal was ex-

posed.'?? Rabies has long been considered

a “dose-related” disease; in the case of

airborne exposures, it was concluded that

the quantity of viral particles to which an

animal was exposed was the most determi-

native factor governing the chances the

virus would infect that animal and cause

128. Tr. at 1246 (Clark).

129. V. Hronovsky & R. Benda, “Experimental

Inhalation Infection of Laboratory Rodents

with Rabies Virus,” 13 Acta Virol. 193 (1969)

(admitted into evidence as one of a packet of

documents constituting Exh. G-137 and herein-

after referred to as “Laboratory Rodents”).

A103

disease.'*° Second, important evidence was

collected concerning the path the virus

takes in invading an animal’s central nerv-

ous system after infection through the air-

borne route.

It was known that some viruses trans-

mitted through aerosol suspensions can

cause encephalitis in the animals they in-

fect after they are inhaled into the nasal

region by spreading along the olfactory

nerves and enter the olfactory bulb, the

region of the brain that controls an ani-

mal’s sense of smell. Other viruses repli-

cate in the lower respiratory tract and

lungs after being inhaled through the

mouth and nose before attacking the cen-

tral nervous system.'*! The results of ex-

periments conducted in the late 1960s and

early 1970s involving laboratory animals

such as mice, guinea pigs, and rabbits indi-

130. Tr. at 1248-49 (Clark) (discussing “Labo-

ratory Rodents,” supra note 129); Tr. at 1397

(Shope).

131. Apparently, the viruses of vesicular stomati-

tis, equine encephalomvyelitis, and St. Louis en-

cephalitis invade the olfactory nerves in the

nasal mucosa, whiie the viruses that cause pseu-

dorabies (a neurologic disease of farm and do-

mestic animals) and herpes invade a host

through other pathways. A. Sabin, J. Casals—Ar-

iet, & L. Webster, “Localization of Virus and

Lesions after Nasal Instillation of Rabies in

Mice,” 39 J. Bacteriology 67, 67 (admitted into

evidence as one of a packet of documents con-

stituting Exh. G-137).

A104

cated that when those animals were infect-

ed after an exposure to an airborne suspen-

sion of rabies virus, the olfactory region

was of primary importance in the spread of

the virus to the central nervous system.'*?

It was found that the virus attached itself

to the olfactory nerves of the exposed ani-

mals, reproduced there, and quickly spread

to the brains of those animals.'* It was

also concluded that while “{t}he partic-

ipation of lung tissue as the primary site of

virus multiplication in inhalation rabies can-

not be excluded[,] ... [the test findings]

132. See V. Hronovsky & R. Benda, “Deveilop-

ment of Inhalation Rabies Infection in Suckling

Guinea Pigs,” 13 Acta Virol. 198 (1969) (admit-

ted into evidence as one of a packet of doc-

uments constituting Exh. G-137 and hereinafter

referred to as “Suckling Guinea Pigs”); V. Hro-

novsky, “Immunofluorescence Study on the Pa-

thogenesis of Fixed Rabies Virus Respiratory

Infection in Suckling Mice,” 15 Acta Virol. 58

(1971) (admitted into evidence as one of a pack-

et of documents constituting Exh. G-1!37 and

hereinafter referred to as “Suckling Mice”); see

also H. Fischman & M. Schaeffer, “Pathogenesis

of Experimental Rabies as Revealed by Immu-

nofluorescence,” 177 Ann.N.Y.Acad.Sci. 78

(1971) (admitted into evidence as one of a pack-

et of documents constituting Exh. G-137 and

hereinafter referred to as “Pathogenesis of Ex-

perimental Rabies”); “Airborne Rabies,” supra

note 97, at 119-20; “Pathogenesis,” supra note

16, at 192-93.

133. “Suckling Guinea Pigs,” supra note 132, at

201; “Suckling Mice,” supra note 132, at 62: see

also “Pathogenesis of Experimenta! Rabies,” su-

pra note 132, at 94.

A105

suggest that the pulmonary route of virus

spread into the [central nervous system]

plays no important role in the pathogenesis

of rabies in experimental animals infected

by inhalation.” '** Results pointing to the

same conclusion were obtained regardless

of whether street or fixed viruses were

used.!35

These findings indicated that the patho-

genesis of rabies virus transmitted to man

through an aerosol exposure might be sig-

nificantly different than the pathogenesis

of the virus when transmitted through ani-

mal bites or scratches. As noted above,

the rabies virus proliferates primarily in

nervous tissue. When a human being is

exposed to the virus through the bite of an

infected animal, the muscles, connective tis-

sue and nervous tissue at the site of the

bite wound will be bathed in blood. If the

victim of the bite has been immunized

against rabies and as a result has devel-

oped rabies antibodies in his blood stream,

those antibodies would have the opportuni-

ty to neutralize the virus before it invaded

the victim’s central nervous system.'%6

134. “Suckling Guinea Pigs,” supra note 132, at

201. This conclusion was based on the observa-

tion that rabies viral particles often were not

found in the lower respiratory tract and lung

tissue until after the central nervous svstem was

involved in viral replication, and that findings

of virus in the pulmonary region were erratic

and quantitatively low.

135. See “Suckling Mice,” supra note 132, at 62.

136. Tr. at 1396 (Shope).

A106

This is not necessarily the case when an

individual is infected through the airborne

route. From studies relating to biological

warfare conducted by Dr. Arnold Wedum

at Fort Detrick, it was known that pre-ex-

isting antibodies circulating in the blood

stream might not provide protection

against aerosol exposure to some virus-

es.'57_ A human’s olfactory nerves at one

end rise out of the mucosal epithelium cells

that line the olfactory region inside the

nose and at the other extend directly into

the region of the brain known as the olfac-

tory bulb.'** The olfactory nerves are the

only nerves in a vertebrate animal such as

man that emanate directly from the brain

and are exposed to the air.'*? Because the

olfactory nerves are superficial structures,

the only protection they have against neu-

rotropic viruses in the environment to

which they are exposed is provided by the

nasal mucosa.'4® The olfactory nerves do

not ordinarily come into significant contact

with the blood stream, and thus a virus

infecting them would not come into contact

137. Exh. G-125H at 141 (Deposition of Dr. Rob-

ert H. Huffaker, February 2, 1983).

138. Tr. at 1395 (Shope); Tr. at 1838-39 (Wink-

ler).

139. Tr. at 1395 (Shope).

140. See Tr. at 1100-01 (Hattwick).

A107

with pre-existing antibodies circulating in

the blood stream.'*! Consequently, absent

the presence of a significant level of anti-

bodies in the mucosa, a virus that infects

the olfactory nerves can replicate and trav-

el the short distance to the afflicted individ-

ual’s brain unimpeded by neutralizing anti-

bodies.'#?

Some but not all vaccines produce anti-

bodies in surface membranes such as the

nasal mucosa as well as in the blood

stream.'#3 In 1976 and 1977, it was not

known whether the Lilly vaccine produced

surface antibodies in the nasal mucosa suf-

ficient to provide protection in the event of

an aerosol exposure to the rabies virus.'*

Defendant Lilly did not undertake investi-

gations concerning the effectiveness of

DEV against infection by the airborne

route at any point in the 1960s or 1970s,

even after reports surfaced concerning the

laboratory-related death of the veterinarian

in 1973,'#5 nor were such studies conducted

141. Tr. at 1396 (Shope).

142. Tr. at 1422-24 (Shope); see also Tr. at 1837-

41 (Winkler).

143. Tr. at 822 (Tillotson).

144. Tr. at 1030-31 (Hattwick); Tr. at 824 (Tillot-

son); Tr. at 1343 (Clark); Exh. G-125E at 66

(Deposition of Dr. Rajender Abraham); “Labo-

ratory Worker,” supra note 120, at 1221.

145. Exh. G-125F at 21 (Deposition of Dr. John

T. Anderson).

A108

by other researchers. Despite the uncer-

tainty concerning DEV’s effectiveness

against infection through the aerosol route,

the package insert distributed with DEV

was not amended at any time to alert users

that the vaccine might not protect against

disease in the event of such exposures.'*®

In light of the existing knowledge con-

cerning the peculiar vulnerability of the

olfactory nerves to infection and the lack of

knowledge concerning the effectiveness of

the Lilly vaccine in protecting against aero-

sol exposures to rabies virus, safe labo-

ratory practice in 1976 and 1977 mandated

the avoidance of such exposures. If possi-

ble, the creation of aerosols containing ra-

bies virus in the laboratory was to be avoid-

ed. If the creation of such aerosols was

necessary to the accomplishment of the

purposes of a particular study, safe labo-

ratory practice required that the aerosols

be physically contained.'47 The physical

“containment” of an aerosolized etiologic

agent is achieved through the use of one of

several metheds of separating the environ-

ment in which the aerosols are created

from the environment to which laboratory

workers are exposed. Many of these meth-

ods were technically feasible in 1976 and

146. Exh. G-i25F at 61 (Anderson Deposition);

see Exh. 87A (Lilly package insert).

147. Exh. G-125H at 33 (Huffaker Deposition,

February 1, 1983).

. A109

1977, and in fact were commonly employed.

The use of an apparatus known as a “lami-

nar flow containment hood” was probably

the most common method of “containing”’

an etiologic agent. This apparatus, as well

as other containment methods, will be dis-

cussed in greater detail below.

Ill. THE EXPERIMENTS WITH THE

UNI-GLATT MACHINE

This section of this memorandum-deci-

sion and order focuses on those aspects of

the research conducted by NYSDOH and

CDC scientists regarding wildlife immuni-

zation relevant to this lawsuit. The re-

search concerning the aerosol transmission

of the rabies virus was performed contem-

poraneously with studies directed at devel-

oping a rabies immunization program of an

unprecedented scale. With the substantial

reduction of the incidence of rabies in do-

mestic animals and man in the United

States in the 1950s and 1960s, the attention

of a number of rabies «xperts turned to the ©

control of the disease in wild animals and

commercial livestock. Among the animal

species particularly susceptible to acquiring

and passing on the disease of rabies are

foxes, coyotes, skunks, raccoons, and

A110

bats.'48 Whether eradication of the disease

of rabies can be accomplished ultimately

will turn on science’s ability to control the

spread of the rabies virus in these and

other species found in the wild.

A. Wildlife Immunization Research

In 1973, ~ report prepared by experts

under the auspices of the World Health

Organization (“WHO”) noted that the

“massive reduction” of those species re-

sponsible for the perpetuation of the rabies

disease within a given ecosystem through

extermination programs was “the only

method available for wildlife rabies con-

trol.” "49 Such population reduction pro-

grams are effective only in “suitable, limit-

ed areas,” '° and even where possible such

programs nave adverse environmental and

economic effects.'*! The WHO report not-

ed that immunization of wildlife was not

148. World Health Organization Technical Re-

port Series No. 523, WHO Expert Committee on

Rabies, Sixth Report, at 12 (Geneva 1973) (ad-

mitted into evidence as Lilly Exh. B, and herein-

after referred to as “WHO —_ Report’); Tr.

at 2060 (Baer).

149. WHO Expert Report, supra note 148, at 39;

see also J. Lewis, “Control of Rabies Among

Terrestrial Wildlife by Population Reduction,” 2

Natural History at 244 (hereinafter “Population

Reduction”).

150. WHO Expert Report, supra note 148, at 41.

151. “Population Reduction,” supra note 149, at

255-57.

Alll

then practicable, and recommended that

“(s]tudies in this direction should ... be

intensified.... Immunization could reduce

the susceptible host population to a point

where no further rabies spread is possi-

ble.’” 152

One of the earliest experiments concern-

ing wildlife immunization had been con-

ducted between 1961 and 1963 by Dr.

George M. Baer of the Center for Disease

Control. Baer performed these experi-

ments while he was a visiting epidemiolo-

gist at the New York State Department of

Health's Griffin Laboratory.'? Baer at-

tempted the oral vaccination of foxes by

shooting a fixed rabies virus strain into the

mouths of the animals with a mechanical

device." Six of the fourteen foxes vacci-

nated in this manner experienced rises in

serum neutralizing antibodies and survived

subsequent challenge with the CVS rabies

virus strain.'§ The encouraging results

obtained in this experiment and in others

152. WHO Expert Report, supra note 148, at 41.

153. Tr. at 1110 (Baer Deposition).

154. Tr. ~ 98 (Debbie); G. Baer, “Wildlife Vacci-

nation,” 2 Natural History at 261 (hereinafter

“Wildlife ‘Vecsianiion’ yf

155. “Wildlife Vaccination,” Supra note 154, at

263.

A112

conducted in the 1960s '* fueled discussion

of the possibility that non-domestic animals

could be immunized by consuming bait dis-

tributed in the wild that would contain live

rabies virus.'5? Baer himself became a vo-

cal advocate of this approach to rabies con-

trol.!58

Baer reasoned that if bait containing live

rabies virus strain were to be distributed in

the field safely and also be effective in

producing rabies antibodies in the animals

that consumed them, the virus strain used

would have to be highly attenuated with

respect to a wide range of animal species

while maintaining its immunizing capability

when highly diluted.'** Baer believed that

it was possible to develop such a strain by

156. See, e.g. Tr. 1790-91 (Winkler).

157. “Wildlife Vaccination,” supra note 154, at

262.

158. Tr. at 1227-28 (Clark).

159. “Wildlife Vaccination,” supra note 154, at

262; see also W. Winkler, J. Shaddock, & L.

Williams, “Oral Rabies Vaccine: Evaluation of

its Infectivity in Three Species of Rodents,” 104

Amer.J.Epidem. 294 (1976) (admitted into evi-

dence as one of a packet of documents constitut-

ing Exh. G-137).

A113

further modifying a licensed modified live

virus vaccine known as ERA.'®

The ERA commercial vaccine was de-

rived from the SAD virus strain, which had

been developed at the University of Toron-

to’s Connaught Laboratories (‘‘Con-

naught”).'"*§ The SAD virus strain had

been derived from street virus that had

been isolated from a rabid dog in Montgom-

ery, Alabama in 1935 by passaging it over

fifty times in the brains of mice.'® In the

early 1960s, scientists at Connaught pas-

saged the SAD virus strain an additional

four times in the brains of mice to make a

virus strain called SAD-4. Dr. Melvin K.

Abelseth and two other researchers at Con-

naught then passaged the SAD-4 virus

Strain twenty-five times in tissue culture

160. The designation “ERA” is an acronym repre.

senting the initials of the surnames of the scien-

lists who developed it. The iast names of those

scientisis were Ellen, Rocketwicki, and Abel-

seth. See Tr. at 1124 (Baer Deposition). Dr.

Melvin Abelseth was NYSDOH'’s Director of

Laboratories at the time Jerome Andrulonis

contracted the disease of rabies.

161. Tr. at 522 (Abelseth Deposition); Tr. at 1231

(Clark). “SAD” is an acronym for “Street-Ala-

bama-Dufferin,” representing respectively the

type of virus from which the strain was derived,

the state in which the “street” virus had been

isolated, and the division of Connaught Labora-

tories where the SAD strain was developed.

162. Tr. at 522 (Abelseth Deposition).

All4

taken from the kidneys of hamsters, ten

times in embryonated chicken eggs, and an

additional six times in tissue culture isolat-

ed from the kidneys of pigs.'® The virus

strain that resulted from this passage his-

tory was designa

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