Opinion ID: 772184
Heading Depth: 3
Heading Rank: 2

Heading: Second Generation Claims

Text: 44 The district court held that the injury-in-fact trigger set forth in American Home Products governed the Excess Insurers' obligations. The sole appellate challenge to that legal ruling is the estoppel argument rejected above. The Excess Insurers do, however, appeal the district court's preclusion of evidence bearing on when DES injury-in-fact actually occurs in the second generation. Over the Excess Insurers' objections, the court granted Squibb's pre-trial motion to preclude the taking of evidence concerning . . . whether there is any causal connection between the drug diethylstilbestrol (DES) and the injuries alleged in the underlying tort actions, and instructed the jury on its verdict form that, it is not disputed here that cancer and cancer-related injuries ascribed to DES take place on exposure to DES and continuously during the period beginning five years prior to diagnosis. The district court acknowledged that the Excess Insurers agreed to that stipulation in the verdict form only because the disputed evidentiary ruling dictated that result. 45 The Excess Insurers now argue: 1) that the district court improperly precluded them from presenting evidence disputing that injury-in-fact occurred during the relevant policy periods for squamous cell cancer and for the ovarian, breast and testicular forms of cancer; and 2) that the verdict form's instruction was error. We review the district court's evidentiary ruling for abuse of discretion, see Barrett v. Orange County Human Rights Comm'n, 194 F.3d 341, 346 (2d Cir. 1999), finding reversible error only if the ruling affects a party's substantial rights, see Schering Corp. v. Pfizer Inc., 189 F.3d 218, 224 (2d Cir. 1999). The instructions for a verdict form are reviewed de novo; we find an instruction erroneous if it misleads the jury as to the correct legal standard or does not adequately inform the jury on the law, but we reverse on that basis only if a party was prejudiced by the error. Anderson v. Branen, 17 F.3d 552, 556 (2d Cir. 1994). 46 Squibb argues preliminarily that the Excess Insurers waived these arguments by entering into the stipulation that formed the basis of the verdict form instruction and by failing to object when the verdict form was given to the jury. We disagree. When the Excess Insurers entered into the stipulation, the district court expressly acknowledged their objection to the evidentiary ruling and recited that they had preserved their right to appeal that ruling notwithstanding the stipulation. On the last day of trial the district court received an offer of the proof that the Excess Insurers would have presented but for the evidentiary ruling. When Squibb objected, the district court once again acknowledged that the Excess Insurers had preserved their right to appeal, ruling that the offer of proof would be permitted so the Court of Appeals [would] know[] all the things that I kept [the Excess Insurers] from proving to [the] jury. The record thus is clear that the Excess Insurers preserved their right to appeal the evidentiary ruling, and that the verdict form instruction was a corollary of that ruling. In light of previous objections, the Excess Insurers' failure to repeat their objection when the verdict form was explained to the jury does not constitute waiver. See City of St. Louis v. Praprotnik, 485 U.S. 112, 119-121, 99 L. Ed. 2d 107, 108 S. Ct. 915 (1998) (finding no waiver where same legal issue was raised by motions and jury instruction, and party repeatedly objected to rulings on motions but did not object to jury charge); 9A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure 2553, at 411 (2d ed. 1995 & 1997 Supp.) (no need to reiterate objection at time of jury charge if the party's position previously has been made clear to the trial judge and it is plain that a further objection would be unavailing). 47 As to the merits, the Excess Insurers do not contest that DES can cause all of the cancers alleged in the underlying bodily injury claims. The Excess Insurers also concede that with respect to most of these cancers, which stem from mutations that began in utero upon exposure to DES, the medical evidence they proffered would have confirmed the district court's assumption that injury occurred at exposure. However, with respect to squamous cell cancer and the ovarian, breast and testicular types of cancer, the Excess Insurers proffered expert testimony that the onset of disease was delayed until after puberty and that no physical event associated with exposure to DES in utero had any bearing on the subsequent development of the cancer . . . . The Excess Insurers argue that this evidentiary proffer refutes the district court's instruction that for these cancers injury occurs at exposure and continuously thereafter. 48 Evaluating their contention requires an understanding of whether Squibb may recover for these specific second-generation claims. Not surprisingly, the Excess Insurers also challenge Squibb's recovery for these claims. They argue that Squibb offered no evidence showing that these injuries occurred at the point of exposure to DES in utero, and instead relied on the district court's allegedly erroneous evidentiary ruling. While this argument could be construed as a challenge to the sufficiency of the evidence, the Excess Insurers did not move for judgment as a matter of law at the close of Squibb's case and thus cannot raise a sufficiency argument on appeal. See Fed. R. Civ. P. 51. We therefore construe this argument to say that the errors the district court allegedly made were not harmless. 49 Notably, however, the Excess Insurers concede that the second generation claimants' only DES exposure was in utero, and that DES ultimately contributes to the development of these cancers after puberty and (in the case of some cancers) after the initiation of sexual activity. For instance, the appellate briefs of the Excess Insurers state: 50 --it was undisputed that cancer occurs through a 'multi-step' process during which cells accumulate a series of genetic mutations in sequence over time, usually many years. 51 -- Since DES is eliminated from the body of the mother and the fetus within days, the drug has a direct physiological effect on the fetus only during the short period of exposure to the drug in utero. Thus, to the extent that DES causes or contributes to the development of any form of cancer, including squamous cell cancer, it does so by causing a genetic mutation in utero. (citations omitted). 52 Despite these concessions, the Excess Insurers argue that their experts, if permitted to testify, would have established that there was no physical effect in utero, and hence no injury-in-fact. 53 This argument depends on a line drawn between (i) causation and (ii) harmful effect, which (the Excess Insurers argue) is alone sufficient to trigger coverage. This distinction between causation and effect finds support in American Home Products. See American Home Prods., 748 F.2d at 764 (Since a cause normally precedes its effect, it is plain that an injury could occur during the policy period although the exposure that caused it preceded that period.). However, American Home Products also concluded that the policies plainly give coverage for injury that occurred during the policy period and was caused by exposure to AHP products [including DES]. Id. at 765 (emphasis added); see also Stonewall Ins. Co. v. Asbestos Claims Mgmt. Corp., 73 F.3d 1178, 1194 (2d Cir. 1995)(Our inquiry as to how New York would answer the triggering inquiry begins with American Home Products . . . where we noted that under New York law, coverage is based upon the occurrence of an injury-in-fact during the policy period.). 54 Injury-in-fact is not manifestation -- the coverage theory that depends on detectable symptoms. Nothing in American Home Products precludes a finding -- like that made by the jury -- that injury-in-fact encompasses the initial onset of an injury however delayed its symptomatic effects may be. The application of injury-in-fact analysis to progressive diseases permits triggering at various points when evidence shows injury to have occurred. Stonewall, 73 F.3d at 1195. For asbestosis, for instance, one of these points can be the latency period, during which time the disease develops undetected. See id. at 1198. 55 We conclude that injury-in-fact can also include, in appropriate circumstances, the inevitable pre-disposition to illness or disability as a result of cell mutation caused by DES. It is undisputed by the parties that second generation claimants, as a result of exposure to DES in utero, develop the cancers at issue as part of their normal human development and experience, and will in fact contract one or more of these cancers if only they survive to puberty and become sexually active. 56 The Excess Insurers argue that there was no injury-in-fact during their policy periods precisely because the second generation claimants were in utero or in swaddling clothes during the relevant policy periods and, depending on other contingencies and life choices, might not live to maturity or become sexually active. We disagree. 57 This is not a case of a risk or predisposition that is heightened or discounted by other contingencies, choices and influences. The mutation here is a present injury because it triggers cancer without intermediate contingencies other than maturity and sexual activity, events that are not properly characterized as intervening contingencies sufficient to refute the idea of present injury. Puberty is not certain, but it cannot be viewed as an intervening contingency because nowadays and in this country it is only somewhat less certain than ultimate death. Sexual activity entails choice (as the Excess Insurers argue), but a condition that forecloses or limits that choice, let alone a condition that offers the choice between sexual abstinence and a potentially fatal disease, is already an injury-in-fact. For some of these reasons, the Supreme Court has held that reproduction is a major life activity, and that a health impairment that limits that activity constitutes a disability. See Bragdon v. Abbott, 524 U.S. 624, 637-42, 141 L. Ed. 2d 540, 118 S. Ct. 2196 (1998). The mutation at issue is functionally equivalent to the implant of a time bomb with a short and reliable fuse. 58 Because we interpret injury-in-fact to encompass a genetic mutation in utero that causes a predisposition to cancer unavoidable except by death before puberty or by permanent sexual abstinence, we find that the district court did not err in precluding the Excess Insurers from offering additional evidence of the impact of later contingencies on the development of the cancers at issue. Their proposed proof either threatened to reopen the question of causation, a question they had conceded, or was irrelevant because it raised only the question of whether a further injury-in-fact occurred. The district court therefore did not abuse its discretion in excluding such evidence, and its instruction on the jury verdict form did not relieve Squibb from its burden of proof.