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Posted by Walt Stoll on November 19, 2002 at 09:27:30:

LEGAL MATTERS -- ELI LILLY AND THIMEROSAL: A Legal Document
Raises Shocking Questions About The Company's Research
On The Mercury Preservative In Vaccines. Because Of The
Homeland Security Bill, Eli Lilly May Get A Pass On Its Legal
Liability
http://www.redflagsweekly.com/legal/2002_nov18.html

Eli Lilly And Thimerosal

No. 15285*BH01

JOSEPH COUNTER and THERESA COUNTER, Individually and as Next
Friend of JOSEPH ALEXANDER COUNTER

Plaintiffs

v.

ABBOT LABORATORIES, et al. Defendants

IN THE DISTRICT COURT -- BRAZORIA COUNTY, TEXAS

23RD JUDICIAL DISTRICT

PLAINTIFFS' RESPONSE TO ELI LILLY AND COMPANY'S
SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT

WATERS & KRAUS, LLP
C. Andrew Waters
State Bar No. 20911450
F. Leighton Durham III
State Bar No. 24012569
3219 McKinney Ave., Ste 3000
Dallas, Texas 75204
214-357-6244
214-357-7252 facsimile

THE LAW OFFICES OF
SEAN TRACEY
SEAN PATRICK TRACEY
State Bar No. 20176500
1100 Louisiana, Ste. 3075
Houston, Texas 77002
713-650-6080
713-650-6086 facsimile

ATTORNEYS FOR
PLAINTIFFS

Table of Contents

Table of Contents ...............................................2

I. Introduction..................................................4

II. Lilly's No-Evidence Motion is Premature Because Adequate
Time for Discovery Has Not Passed and Lilly Has Not Provided
Discovery as Agreed..............................................5

III. Lilly Incorrectly Asserts that It Never Owed Jac Counter
a Duty of Care...................................................6

A. Facts Underlying Plaintiffs' Claims Against Lilly.............7

i. Eli Lilly in the 1920's and 1930's: The Search for Profitable
Drugs............................................................7

ii. 1927 - 1928: A New Product...................................8

iii. 1929 - 1930: A Successful Plot..............................8

iv. The 1930's: Confirmation of the Hazards of Thimerosal/Merthiolate
and Lilly's Promotion for Use as a Vaccine Preservative ........12

v. The 1940's: Additional Recognition of Potential Hazards,
Especially for Sensitive Persons................................14

vi. The 1950's: Lilly Begins to Market Thimerosal as a
"Non-Toxic" Product and Promotes the Product For Use in the
New Polio Vaccine...............................................16

vii. The 1960's: "Can We Really Say this Product is
Non-Toxic?".........................................................18

viii. The 1970's: Lilly Lies to the FDA in a Bid to Avoid
Regulation......................................................19

ix. 1976: One Example of Lilly's Efforts to Convince the Public
that Thimerosal is Safe.........................................20

x. The 1980's: The FDA Recommends a Ban of Thimerosal...........21

xi. 75 Years of Conduct Designed to Increase Profits, Without
Regard to Safety...............................................22

B. Standard for Determining Whether Lilly Owed Jac Counter a
Duty of Care...................................................22

C. Lilly Owed a Duty to Jac Counter............................23

D. Lilly is Also Liable for Fraud and Conspiracy...............28

IV. Conclusion and Prayer......................................30


COME NOW, plaintiffs and file this response to Eli Lilly and
Company's Supplemental Motion for Summary Judgment. Plaintiffs w
ould respectfully show the Court as follows.

I. Introduction

Joseph Alexander Counter ("Jac") suffers from autism caused by a
mercury-based preservative known as thimerosal, which was
intentionally and unnecessarily added to several pediatric
vaccines Jac received as an infant. Manufacturers used thimerosal
to package vaccines in multi-dose containers. Jac's parents, Joseph
and Theresa, brought this suit on Jac's behalf and in their individual
capacities, alleging that each defendant is liable for causing Jac's
injuries under theories of strict products liability, negligence,
misrepresentation, fraud, and conspiracy, among others.

In its motion for summary judgment, Eli Lilly and Company ("Lilly")
argues that it cannot be liable to plaintiffs under any theory because
it did not manufacture or distribute the particular thimerosal product
at issue. In essence, Lilly contends that it did not owe plaintiffs
a duty of care. As an initial matter, Lilly's motion is premature
because it has not fully answered plaintiffs' discovery requests
as it agreed to do in a Rule 11 agreement. As such, the Court
cannot address Lilly's motion until adequate time for discovery
has passed.

However, if the Court addresses Lilly's motion, it should be denied
because the basis for Lilly's motion is fundamentally flawed. Lilly's
liability does not arise from the manufacture or distribution of
thimerosal, but from its own activities in manipulating the medical
literature and concealing the dangers of thimerosal that proximately
caused Jac's autism. Because Lilly could easily foresee that its conduct
would endanger individuals injected with thimerosal, it owed a duty
under Texas law to children such as Jac to take reasonable precautions
to avoid such injuries. Lilly's conduct was also fraudulent, and its
conspiracy with others to hide the dangers of thimerosal makes Lilly
liable for Jac's injuries. Consequently, Lilly's motion for summary
judgment should be denied.


II. Lilly's No-Evidence Motion is Premature Because Adequate Time for
Discovery Has Not Passed and Lilly Has Not Provided Discovery as Agreed


First, Lilly's motion is premature because adequate time for discovery
has not yet passed. There is no dispute that discovery is not complete
because the discovery period does not end until January 24, 2003. The
rules of civil procedure make clear that a no evidence motion for summary
judgment is not properly brought under Rule 166a until after there has
been "adequate time for discovery." Tex. R. Civ. P. Rule 166a(i).
Further, the drafters of Rule 166a, in authoritative comments "intended
to inform the construction and application of the rule," specifically
instructed that:

A discovery period set by pretrial order should be adequate opportunity
for discovery unless there is a showing to the contrary, and ordinarily
a motion under paragraph (i) would be permitted after the period but
not before.


Tex. R. Civ. P. Rule 166a, Comments (emphasis added).

In addition, Lilly has not yet provided vital discovery that it agreed
to produce in a Rule 11 agreement. Exhibit 1. Lilly alleges that there
is no evidence to support plaintiffs' allegations after 15 months of
discovery, but is still withholding the information plaintiffs would
need to respond to Lilly's motion. The length of time a case is pending
is irrelevant if the party moving for summary judgment is stonewalling
discovery.

Lastly, an adequate time for discovery should be determined "by the
nature of the cause of action" and "the nature of the evidence necessary
to controvert the no-evidence motion." Specialty Retailers, Inc. v. Fuqua,
29 S.W.3d 140, 145 (Tex. App.-Houston [14th Dist.] 2000, pet. denied).
The nature of this case involves highly complex factual issues and
requires discovery that will inquire into matters that occurred over
years and perhaps even decades. More discovery is needed, and Lilly
should comply with its agreements before the Court addresses whether
adequate evidence exists for plaintiffs' claims to reach a jury.


III. Lilly Incorrectly Asserts that It Never Owed Jac Counter a
Duty of Care

In the alternative, Lilly's motion for summary judgment should be
denied. Essentially, Lilly contends that it is entitled to summary
judgment because it never owed plaintiffs a duty of care. As described
below, Lilly purposefully and maliciously altered scientific literature
and hid the true dangers of thimerisol in vaccines with full knowledge
that children like Jac would suffer mercury poisoning. Lilly owed a
duty to exercise reasonable care in its conduct, but failed to do
so, proximately causing Jac Counter's autism. Consequently, Lilly's
motion for summary judgment must be denied.

A. Facts Underlying Plaintiffs' Claims Against Lilly

i. Eli Lilly in the 1920's and 1930's: The Search for Profitable Drugs

From the 1920's through the 1950's, and even much later, Eli Lilly,
first as vice-president and then as president of the company, was
directly involved with virtually all significant decisions related
to product development at Eli Lilly and Company. In the late 1920's
for example, during the time when Lilly's efforts led to the development
of merthiolate (Lilly's tradename for thimerosal), Eli Lilly regularly
called and chaired research committee meetings. "Each scientist had
his say directly to vice-president Lilly, who often made the necessary
decisions."

One of the decisions that Eli Lilly made was to establish fellowships
at various colleges and universities that were designed "to increase
the friendliness of the faculties of the various universities for our
house. Various members of our staff are now very welcome in most of
the medical centers." While the fellowship program began earlier in
the 1920's, Lilly arranged to have it expanded in 1928. However, the
company only wanted to provide funding through fellowships to scientists
who would toe the company line and be sensitive to its concerns:

He (Lilly) urged careful screening of university scientists to be sure
that the company was "dealing with a man or men of exceptional ability
and trustworthiness."

Morris Kharasch was apparently one of the men that Lilly felt could
be "trusted."

ii. 1927 - 1928: A New Product

Eli Lilly's involvement with the fellowship program paid early dividends
with its relationship with Dr. Morris Kharasch, first at the University
of Maryland and later at the University of Chicago. Kharasch can be
credited with inventing thimerosal, which he referred to as an "alkyl
mercuric sulfur compound" that had potential as an antiseptic and
antibacterial properties. On June 27, 1927, Kharasch, working in
collaboration with Lilly as a result of his fellowship, filed a patent
application for the alkyl mercuric sulfur compound, i.e. thimerosal.
Exhibit 3 (Exhibit ELI-503). Shortly thereafter, Lilly began to make
efforts to develop and market the new product. Exhibit 4 (Exhibit
ELI-392FF).
The product was about 50% ethylmercury.

iii. 1929 - 1930: A Successful Plot

By October 1929, Lilly recognized that thimerosal had the potential
to be a big seller. A decision was made to register thimerosal under
the tradename merthiolate; the company had already implemented a strategy
for testing and marketing the product.

In 1928, Dr. G.H.A. Clowes, Director of Research of the Eli Lilly Co.,
assigned Lilly scientists H.M. Powell and W.A. Jamieson the task of
completing animal toxicity studies in anticipation of plans to sell the
product for human use as an antiseptic and/or antibacterial agent. Exhibit 4
(Exhibit ELI-392FF). Powell and Jamieson performed a series of short-term
experiments on animals to ascertain what acute and immediate toxicity might
be observed. They made no effort to determine what injuries would results
from longer term or lower level exposures.

On July 24, 1930, Powell and Jamieson submitted their results for
publication
to The American Journal of Hygiene, and their article was published in
January 1931. Id. In one section of the published paper, Powell and
Jamieson noted:

Toxicity in man. Merthiolate has been injected intravenously into 22
persons in doses up to 50 cubic centimeters of 1% solution. . . The
toleration of such intravenous doses indicates a very low order of
toxicity of merthiolate for man. This information has been supplied
through the kindness of Dr. K.C. Smithburn of Indianapolis who has had
occasion to use merthiolate in a clinical way. Dr. Smithburn stated in
these cases 'beneficial effect of the drug was not definitely proven. It
did not appear, however, to have any deleterious action when used in
rather large doses intravenously when all the drug entered the vein.

Id. at page 306 (emphasis added). As discussed below, Powell and Jamieson's
statements and conclusions were cited repeatedly by Eli Lilly for the
proposition that thimerosal/merthiolate had a low potential toxicity if
injected into humans. Upon closer inspection, however, it is apparent that
Lilly scientists working with Smithburn deliberately manipulated and
distorted
the scientific process and purposefully corrupted the published scientific
literature concerning the toxicity of thimerosal.

What Powell and Jamieson deliberately failed to include in their published
article was the fact that the results of K.C. Smithburn's "clinical" use of
thimerosal were flawed and actually indicated that thimerosal is toxic when
injected into humans. Lilly asked Smithburn to conduct research from late
1929
until mid to late 1930 at its clinical research laboratory at the
Indianapolis
City Hospital, which was a perfect place for the company to test its
products,
or potential products, on patients. Working closely with Lilly personnel,
including Powell, Smithburn was involved with experimental research related
to
an outbreak of meningococcical meningitis in November 1929. By the time the
epidemic ended in April 1930, over 144 persons had been hospitalized, and
treated at the Lilly labs, for meningitis. See Exhibit 5 (Exhibit ELI-500).

During the outbreak, Dr. Smithburn, at the request of Lilly, injected the
meningitis patients with thimerosal/merthiolate in a series of experiments
to determine if it might serve as a possible treatment for the disease.
The experiments also served a second purpose, i.e. as a basis for reaching
a conclusion that thimerosal was non-toxic.

Lilly attempted to disguise its involvement with these human experiments,
presumably for two reasons. First, Lilly wanted readers of the Powell and
Jamieson study to believe that the subjects were healthy and therefore
that conclusions of non-toxicity were accurate. Second, Lilly knew that
the series of human experiments were unethical by their very nature.
Lilly chose Dr. Smithburn to perform the actual injections, rather than
a Lilly doctor, effectively allowing Lilly to distance itself from its
use of human guinea pigs.

In September 1930, Smithburn published an article in the journal of the
American Medical Association entitled "Meningococcic Meningitis, A Clinical
Study of 144 Epidemic Cases," in which he described his observations during
the human experiments of thimerosal on meningitis victims. Exhibit 5
(Exhibit ELI-500). The 144 cases were simply described as cases "from the
Lilly laboratories for clinical research, Indianapolis City Hospital."
Smithburn provided details concerning the epidemic:

The present epidemic of meningitis in Indianapolis began in November 1929.
This report includes cases admitted to the Indianapolis City Hospital
between November 11, 1929 and April 1, 1930. One patient was received in
November, 52 in December, 22 in January, 44 in February and 25 in March.

While Smithburn did not reveal a specific business relationship with Lilly,
it is apparent that H.M. Powell, who had been working on the animal studies,
assisted Smithburn by making bacteriologic and serologic studies, with the
assistance also of F.G. Jones. Both Jones and Powell were identified as
"from the biologic department of the Lilly research laboratories." Under
the circumstances, it is apparent that Powell must have known that the
Smithburn subjects were suffering from meningitis at the time they were
experimentally injected with thimerosal. However, this fact is never
mentioned in the published Jamieson/Powell study. It is a critical
omission that allowed Jamieson and Powell to conclude that "toleration
of such intravenous doses indicates a very low order of toxicity of
merthiolate for man."

In his article, Smithburn wrote that "the treatment has remained essentially
the same throughout the epidemic." He described the use of thimerosal as
an experimental effort to treat the disease. Specifically, he stated that
"Intravenous administration of an antiseptic solution was tried and found
wanting despite the in vitro activity of the agent." Smithburn also reported
that efforts were made to combat infection resulting from positive
nasopharyngal
cultures. Eventually, Smithburn and the Lilly scientists came up with a
procedure to address this source of infection, applying ephedrine sulphate
in each nostril followed by merthiolate (1 part per 4000 strength) twice
daily. Smithburn noted that after the institution of this therapy no
nasopharyngal cultures were positive. However, Smithburn also noted that
the treatment was "symptomatic," Id., leading to immediate concerns within
Eli Lilly as to the potential toxicity of thimerosal/merthiolate and the
injuries it could cause.

An interoffice memorandum dated April 24, 1930 was received by
Harley W. Rhodehamal, the Director of Research Development, warning
of concerns within the company that the product could cause injury and
should not be sold in a stronger version, i.e. 1 part per 1000, or 1 part
per 2000. Exhibit 7 (Exhibit ELI-204). The memo, from Charles J. Lynn, one
of the Directors at Lilly, related concerns about "our experience with the
merthiolate solution. . ." Lynn felt that a stronger version of merthiolate
posed an even riskier proposition:

Can we expect to have the stronger ointment and jelly used without the
complaint which attended the use of the solution in the same strengths? . .
.
Our experience with the solution ought to serve as a warning and certainly
in the face of that warning we ought not to advocate the use of the stronger
products without some pretty definite evidence that we will not repeat our
solution experience.

Lynn's concerns were probably related to the toxic effects observed by
Smithburn and confirmed in his article, but Lynn may also have known that
Jamieson and Powell planned to publish a fraudulent article designed to
misrepresent the safety of the product. Despite Lynn's warnings, Lilly
eventually went on to sell the solution in the 1:2000 and 1:1000 strengths.
Exhibit 8 (Exhibit ELI-201). There is no indication that Lynn's concerns
were
ever addressed with additional testing.

iv. The 1930's: Confirmation of the Hazards of Thimerosal/Merthiolate and
Lilly's Promotion for Use as a Vaccine Preservative

On August 18, 1931, Kharasch filed a new patent application in an effort
to stabilize merthiolate due to its tendency to acquire "certain burning
qualities." Exhibit 9 (Exhibit ELI-504). Those efforts were apparently
unsuccessful, for Kharasch and Lilly later applied for a third patent
for "organo-mercuri-sulfur compound." Exhibit 10 (Exhibit ELI-505) That
patent application again noted the problems repeated earlier by Lynn
and Smithburn:

Certain antiseptic and bactericidal . . . compounds, which . . . tend
to form disassociation products and thereby both tend to decompose and
to lose their effectiveness as antiseptic germicides and tend to develop
certain medicinally undesirable properties."

Exhibit 10 (Exhibit ELI-505) (emphasis added).

By 1935, Lilly was selling merthiolate for topical antiseptic use, but
significant efforts were ongoing to find other ways to sell the product,
and by so doing to enhance Lilly's profits. In fact, by the 1930's,
merthiolate had quickly become one of Lilly's most important products.
However, Lilly researchers remained under constant pressure to develop
new products, or to expand markets for established products such as
merthiolate.

While publicly adopting the "non-toxic" conclusions from the Jamieson
and Powell 1930 publication, within the company it was recognized and
understood that thimerosal/merthiolate remained a toxic substance that
could have potentially harmful effects. However, promoting the product
as "non-toxic by injection" was critical for promoting merthiolate use
in vaccines as a preservative.

In 1935, Lilly received another article published in the American Journal
of Hygiene entitled "The Bactericidal and Antiseptic Action of Preservatives
Frequently Used in Biological Products, and the Effect of These
Preservatives
on the Potency of the Products." Exhibit 11 (Exhibit ELI-392S). The article
noted Jamieson and Powell's conclusions regarding non-toxicity, and
commented
that Jamieson and Powell had specifically promoted merthiolate as an
efficient
preservative in diphtheria toxoid vaccinations:

[Thimerosal] had been used on [Jamieson and Powell's] recommendation, in
this laboratory since 1931, in a dilution of 1-10,000 in diphtheria toxoid
preparations. These preparations were found to be sterile when tested in
bulk.
The question therefore arose as to whether this preservative could be
used with equal success in other types of biological products.

Exhibit 5 (Exhibit ELI-392S), at page 261.

Jamieson and Powell clearly recommended the use of merthiolate/thimerosal
as a vaccine preservative. This was undoubtedly a way of expanding the
market for merthiolate into a new arena, i.e. vaccines. This was done
despite the knowledge that the product was toxic and despite knowledge
that the Smithburn experimental studies were fatally (albeit secretly)
flawed.

v. The 1940's: Additional Recognition of Potential Hazards, Especially
for Sensitive Persons

In 1941, the Lilly staff received an article entitled "Chemotherapy of
Bacterial Endocarditis." The article advised Lilly scientists that
merthiolate should never be given more frequently than once in 10 days
due to its toxicity and potential hazards. Exhibit 12 (Exhibit ELI-392P(2)).
Lilly also sold large amounts of merthiolate to the United States government
for use in the war effort from 1941-1945. "Merthiolate was an army standard
issue and 22 tank cars of the popular antiseptic were dispatched from (the)
McCarty Street (plant) during the war." Due to military regulations, and as
a result of the toxicity of the ethylmercury preservative, Lilly was
required
to label the product "POISON." The "POISON" language was only added to
cartons
of products in certain instances, as when required by the government, and
Lilly continued to fail to warn about known hazards of the product for its
non-military sales and for sales related to vaccines. Exhibit 13 (Exhibit
ELI-228).

By 1943, Lilly also marketed a merthiolate ophthalmic ointment, as Lilly
continued to expand its efforts to sell the product for new purposes. Lilly
received an article recommending that the eye product not be used unless
*"it has been previously demonstrated that the patient is not sensitive to
the ointment." The article also recommended "that the package should be
labeled to warn the customer that such [sensitivity] tests should be made
previous to the use of merthiolate ophthalmic ointment in or around the
eye."
Exhibit 14 (Exhibit ELI-392D). Receipt of this information confirmed Lilly's
knowledge that thimerosal could be more hazardous to some members of the
population that might be more sensitive or susceptible to its toxic effects.
Despite that knowledge, on July 27, 1944, an internal memorandum confirmed
the company's intention to double the strength of the merthiolate product
from 1:2000 to 1:1000. Exhibit 15 (Exhibit ELI-201).

Throughout the remainder of the decade, Lilly received significant
additional
information concerning the greater susceptibility to injury for a small
percentage of persons. In 1946, the company became aware, by virtue of
receiving another scientific article, that sensitivity to thimerosal was
capable of causing "a disabling dermatologic complication." Exhibit 16
(Exhibit ELI-392L). The knowledge that their product could cause disabling
injury was quickly followed by additional published scientific opinions
expressing specific concerns about the dangers of injecting merthiolate.
In 1947, the Lilly scientists received an article entitled "The Sensitizing
Factor in Merthiolate." Exhibit 17 (Exhibit ELI-392M). The article noted:

No eruptions or reactions have been observed or reported to merthiolate
internally, but it may be dangerous to inject a serum containing merthiolate
into a patient sensitive to merthiolate.


Id., at page 213. Shortly thereafter, Lilly received another article noting
that merthiolate was a commonly used preservative and stating that:

It would seem important to determine whether harm would result following
[merthiolate's] subcutaneous or intravenous injection in skin sensitive
individuals.


Exhibit 18 (Exhibit ELI-392i).

By this time, Lilly was well aware that its product was being used as a
preservative for vaccines and was being injected into human beings,
including
infants. Lilly had received numerous articles by 1950 that discussed
potential harm from injecting merthiolate into humans, but continued to
rely upon the fraudulent 1930 Jamieson and Powell study, with its
misrepresentation of the Smithburn experiments. Unfortunately, Lilly's
intentional conduct, in failing to properly test the product and advise
the public about its hazards, was to continue for decades.

vi. The 1950's: Lilly Begins to Market Thimerosal as a "Non-Toxic"
Product and Promotes the Product For Use in the New Polio Vaccine

In 1950, Lilly received another article that reviewed merthiolate and
other mercurials in an effort to determine potential toxicity as well as
effectiveness. Research had continued in this area and in 1950 it was
apparent that mercury products like merthiolate had significant toxicity
and could cause damage to human tissue cells:

In the last decade, interest in various in vivo types of tests has indicated
that the mercurials are ineffective in vivo and may be more toxic for
tissue cells than bacterial cells.

Exhibit 19 (Exhibit ELI-392R).

In that same year, Lilly received an article from the prestigious New York
Academy of Sciences entitled "Mercurials as Antiseptics." In the plainest
language possible, the New York Academy of Sciences advised Lilly its
merthiolate product was hazardous:

[Merthiolate] is toxic when injected parenterally and therefore cannot
be used in chemotherapy.

Exhibit 20 (Exhibit ELI-392T).

In 1960, despite repeated warnings and information concerning the toxicity
of thimerosal, including scientifically based conclusions that certain
persons were more likely to be injured due to their susceptibility,
Eli Lilly made a decision to begin promoting the product as "non-toxic"
in an apparent effort to increase sales. Exhibit 21 (Exhibit ELI-99).

In the 1950's, Lilly also continued its efforts to promote thimerosal for
use in various vaccines, including Dr. Jonas Salk's polio vaccine. In an
article entitled "The Preservation of Poliomyelitis Vaccine With Stabilized
Merthiolate," six Lilly scientists (including H.M. Powell) extolled the
virtues of merthiolate and announced that they had "solved the problem
of the apparent incompatibility of merthiolate and poliomyelitis vaccine."
Exhibit 22 (Exhibit ELI-404A) at page 9.

Trivalent poliomyelitis vaccine produced in monkey kidney tissue culture
may be satisfactorily preserved with merthiolate if the trisodium salt of
ethylene diamine tetra-asetic acid is added.

Thus, in the 1950's, as in the 1930's, Lilly continued its efforts to
promote merthiolate/thimerosal as the preservative of choice for new
vaccines as they were added to an ever-growing list.

vii. The 1960's: "Can We Really Say this Product is Non-Toxic?"

On August 16, 1961, Lilly personnel noted in an interoffice
memorandum that "under government regulations, certain warning
statements were to be added to our labeling for over-the-counter
items." Exhibit 23 (Exhibit ELI-29). Lilly's failure to respond to
the new government regulations was entirely consistent with its
previous failure to address known hazards and the decision made in
1960 to label thimerosal products as "non-toxic." Exhibit 21
(Exhibit ELI-99). Lilly's established pattern and practice of
deliberately ignoring health concerns and misleading the public
concerning the toxicity of merthiolate was to continue throughout
the decade.

In 1963, Lilly received more information indicating that injection
of merthiolate in vaccines could cause injury and that testing
should be completed:

There is another point of practical significance: does the parenteral
injection of merthiolate-containing fluids cause disturbances in
merthiolate-sensitive patients?

It is known that persons that are contact sensitive to a drug may
tolerate the same medications internally, but it seems advisable to
use a preservative other than merthiolate for injections in merthiolate-
sensitive people.

Exhibit 24 (Exhibit ELI-392H).

Despite its increasing knowledge and understanding of the potential
for danger, Lilly made a conscious decision to continue to label
its packages of merthiolate as "non-toxic." Exhibit 25 (Exhibit ELI-73);
Exhibit 26 (ELI-69).

In August of 1967, a Dr. Jansen confirmed Lilly's understanding of the
inappropriateness of labeling thimerosal "non-toxic" and requested "that
they delete the "non-toxic" which appears on the front panel." Exhibit 27
(Exhibit ELI-68). On August 29, Lilly changed the draft label, removing
the "non-toxic" language and substituting "non-irritating to body tissues."
The marketing department, in response to the concerns of the medical
department, still wished to advertise the product as "non-irritating to
skin tissues," even though Lilly was fully aware that thimerosal had been
shown to be irritating, toxic and to cause cell damage. Exhibit 28 (Exhibit
ELI-67).

viii. The 1970's: Lilly Lies to the FDA in a Bid to Avoid Regulation

In 1972, Lilly received an article that confirmed that its product, used as
a
preservative in vaccines, caused 6 deaths from mercury poisoning. Exhibit 29
(Exhibit ELI-392K(1)). "The symptoms and clinical course of the 6 patients
suggests subacute mercury poisoning."

Shortly thereafter, the FDA required Lilly to provide all the information at
its disposal concerning the potential toxicity of thimerosal. Lilly reported
to
the FDA, in a February 14, 1973 letter, that "as with other chemicals of its
generation, information relating to safety and efficacy of thimerosal in
animal
models is sparse." Exhibit 30 (Exhibit ELI-392). But Lilly went further,
advising
the FDA that the product was non-toxic and cited the fraudulent Jamieson and
Powell study of 1930 as its supporting scientific evidence. Exhibit 31
(Exhibit
ELI-392QQ). Despite its knowledge to the contrary, Lilly continued to use
the incomplete Powell and Jamieson version of the Lilly/Smithburn experiment
to support its conclusions that the product was safe and "non-toxic."

ix. 1976: One Example of Lilly's Efforts to Convince the Public that
Thimerosal
is Safe.

On April 27, 1976, Lilly's Manager of Industrial Sales, W. Orbaugh,
responded
to a letter from Rexall Drug Company in St. Louis, Missouri. Rexall Drug
had been concerned about the potential hazards of merthiolate/thimerosal
and had requested, pursuant to the trademark/marketing agreement maintained
with Lilly, permission to place the following warning on the product:

Frequent or prolonged use or application to large areas may cause mercury
poisoning.

Exhibit 32 (Exhibit ELI-412E).

Lilly responded aggressively, and immediately, ordering Rexall not to add
the warning and purposefully misstating the potential hazards of a product
it knew to be toxic:

We object to the connection of our trademark with the unjustified alarm and
concern on the part of the user which the statement is likely to cause.

We are not aware of any instance of 'mercury poisoning' after decades of
marketing this product. This is because the mercury in the product is
organically bound ethylmercury and has a completely non-toxic nature,
not methylmercury.

Exhibit 32 (Exhibit ELI-412E).

In keeping with its continuing disinformation campaign, Lilly, in the
1980's Physicians Desk Reference, again claimed that the product was
"relatively non-toxic", a statement that it had known to be a lie for
over 45 years. Exhibit 33 (Exhibit ELI-502).

x. The 1980's: The FDA Recommends a Ban of Thimerosal

On January 5, 1982, the Food and Drug Administration published its advance
notice of proposed rule making regarding thimerosal. Their scientific panel'
s
opinions and recommendations were the culmination of 5 years of research
concerning the potential hazards and safety of thimerosal. The panel
concluded that:

At the cellular level, thimerosal has been found to be more toxic for
human epithelial cells in vitro than mercuric chloride, mercuric nitrate,
and merbromim (mercurochrome).

Exhibit 34 (Exhibit ELI-512). The FDA specifically found that thimerosal
was significantly more toxic for living tissue than it was for the
bacteria it was supposed to kill:

It was found to be 35.3 times more toxic for embryonic chick heart tissue
than for staphylococcus areus.

Id.

The FDA scientific panel's conclusions were clear and unequivocal,
focusing on thimerosal's potential for cell damage and its significant
toxicity:

The Panel concludes that thimerosal is not safe for [over-the-counter]
topical use because of its potential for cell damage if applied to broken
skin and its allergy potential.

Id.

It is worth noting that the FDA's conclusions were published in the
Federal Register. Eli Lilly was specifically identified as a party of
interest due to its involvement with thimerosal. Id., 47 FR, at 436.

xi. 75-Years of Conduct Designed to Increase Profits, Without Regard
to Safety

Without Lilly's funding of the original Kharasch work through its fellowship
program in the 1920's, its successful efforts to corrupt the medical
literature and its extensive promotion and marketing of thimerosal as a
vaccine preservative, the product would have never been used in that
capacity. The actions of Lilly officers, in concert with Morris Kharasch
and K.C. Smithburn, and directed by Eli Lilly himself, were all carefully
designed to enhance the marketability of its product and promote sales
and profits, without any regard whatsoever for the potential health
effects and injuries that it knew would probably result.

As a result, Lilly continues, even at this late date, to profit from its
sordid history with a product that it knew it should never have placed
in the stream of commerce. Exhibit ELI-501 is an internal memorandum,
dated December 16, 1999 that confirms Lilly's licensing agreements that
will earn income from the marketing and sale of thimerosal in 40 nations
throughout the third world for many years into the future. Exhibit 35.

While the product has finally been banned in the United States, Lilly
continues to benefit from its malicious and calculated efforts to
promote the product that began in the 1920's.

Standard for Determining Whether Lilly Owed Jac Counter a Duty of Care

Whether Lilly owed a duty to plaintiffs is a question of law. Joseph E.
Seagram & Sons, Inc. v. McGuire, 814 S.W.2d 385, 387 (Tex. 1991). Texas
courts apply the risk-utility balancing test to decide whether a common
law duty exists. Reed v. Scott Fetzer Co., 990 S.W.2d 732, 736 (Tex. 1998);
Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990).
In applying the risk-utility test, the Court must balance the risk,
foreseeability, and likelihood of injury against the social utility of
the actor's conduct, the magnitude of the burden of guarding against the
injury, and the consequences of placing the burden on the defendant.
Smith Kline Beecham Corp. v. Doe, 903 S.W.2d 347, 353 (Tex. 1995);
Bird v. W.C.W., 868 S.W.2d 767, 769 (Tex. 1994). The most important
factor to be considered is foreseeability. El Chico Corp. v. Poole,
732 S.W.2d 306, 311 (Tex. 1987).

C. Lilly Owed a Duty to Jac Counter

Lilly's allegation that it never owed plaintiffs a duty of care could
not be more inaccurate. It is a basic principle of negligence law that
everyone has a duty to exercise reasonable care to avoid a foreseeable
risk of harm to others. El Chico Corp., 732 S.W.2d at 311-12. As such,
Lilly had a duty to refrain from affirmatively distorting published medical
literature and deceiving health regulators and physicians, because doing
so created a foreseeable and unreasonable risk that infants would be
injected with thimerosal, causing many to suffer from mercury poisoning.
Because Jac, and many others like him, experienced injuries that mirrored
the concealed results from Lilly's own studies, their injuries were
necessarily foreseeable. Lilly may argue that it could not foresee that
pediatricians would rely on its misrepresentations decades later, but
Lilly itself relied on the Smithburn study for decades and touted it
repeatedly as proof that thimerosal is non-toxic. Furthermore, Lilly
never disclosed that Smithburn actually observed a toxic reaction in
at least one person injected with thimerosal. In fact, Lilly never
took any action to remedy its malfeasance.

Moreover, there is no social utility in permitting a company to callously
disregard the well being of children so that it can maximize profits
through misinformation and deceit. If anything, social values and
policy considerations require that companies like Lilly be held
financially responsible for the injuries they cause by altering the
results of studies that doctors and health regulators rely on in
evaluating the safety of a particular drug or its components. Requiring
Lilly to refrain from affirmatively deceiving governmental agencies,
physicians, and consumers is no more onerous than Lilly's existing duty
to behave as a reasonable, responsible corporate citizen.

Similar duties are recognized throughout the Restatement (Second) of
Torts. For instance, section 291 of the Restatement provides:

Where an act is one which a reasonable man would recognize as involving
a risk of harm to another, the risk is unreasonable and the act is negligent
if the risk is of such magnitude as to outweigh what the law regards as
the utility of the act or of the particular manner in which it is done.

Restatement (Second) of Torts 291. In the present circumstance,
absolutely no social utility was created by Lilly's conduct, but its risk
to children was enormous. Thimerosal is merely a preservative that was never
used to cure a disease or illness. Only Lilly and the other companies that
manufactured and used thimerosal for multi-dose packaging benefited from
Lilly's deceit. Moreover, Lilly could have easily foreseen that doctors and
health regulators would rely on its misrepresentations to the detriment of
every child injected with a thimerosal-containing vaccine. In other words,
Lilly's conduct was devoid of any redeeming social value and fraught with
recognizable risk to infants.

Even more directly on point, 302 of the Restatement provides that:

A negligent act or omission may be one which involves an unreasonable
risk of harm to another through either:

(a) the continuous operation of a force started or continued by the act
or omission, or

(b) the foreseeable action of the other, a third person, an animal, or
a force of nature.

Restatement (Second) of Torts 302. Under this section a person is liable
for setting into motion a force, the continuous operation of which,
ultimately
injures another. Id. cmt. c. For example, a person would be liable for
damages caused by a fire set on his own property that spreads to another's
land and causes damage. Id. ill. 1. A person is also liable for damages if
his conduct creates a situation that is harmless if left to itself but is
capable of being made dangerous by the foreseeable acts of others. Id. cmt.
d.

In this case, Lilly "started a fire" by affirmatively misrepresenting the
results of the Smithburn study. The continued operation of that act, and
Lilly's continued reliance on the false information, ultimately led to the
widespread use of thimerosal in vaccines, which caused mercury poisoning
in children like Jac. Moreover, even if Lilly's conduct was harmless, Lilly
should have recognized that the other vaccine manufacturers would rely on
the Smithburn study to justify the use of thimerosal in childhood vaccines,
creating the specific danger that injured Jac. Id. cmt. d.

Finally, the same duty plaintiffs seek to impose on Lilly is recognized
in Restatement 303. That section states:

An act is negligent if the actor intends it to affect, or realizes or
should realize that it is likely to affect, the conduct of another, a third
person, or an animal in such a manner as to create an unreasonable risk of
harm to the other.

Restatement (Second) of Torts 303. The example provided with this section
is directly analogous to the present case. If a candy company enters a float
in a parade, from which an employee throws candy into the crowd, the candy
company would be liable for injuries caused to a small boy trampled by
members of the crowd rushing to gather up the candy. Id. ill. 1. Here,
Lilly had every reason to recognize that other vaccine manufacturers would
rely on the falsified results of the Smithburn study and Lilly's continuing
misrepresentations (despite their own knowledge of the dangers of
thimerosal)
to produce thimerosal-containing vaccines. Therefore, Lilly should be
liable
to the children injured by products sold in reliance on its
misrepresentations.

Lilly relies on Firestone Steel Prod. Co. v. Barajas, 927 S.W.2d 608 (Tex.
1996),
for its contention that one company is not liable for injuries caused by
products
manufactured by another company. Reliance on this case, however demonstrates
the
fundamental flaw in Lilly's analysis. Barajas was a wrongful death case in
which
the plaintiffs sued Firestone for negligence, strict products liability, and
conspiracy for the fatal injuries Jimmy Barajas suffered when a tire he was
changing exploded. General Tire company made the tire, which was mounted on
a wheel manufactured by Kelsey-Hayes Company. Plaintiff sued Firestone
alleging
that the Kelsey-Hayes wheel was a "15 degree bead seat taper wheel design"
and
that Firestone had originally developed that wheel design. The evidence,
however, showed that Kelsey-Hayes substantially modified Firestone's
original
design and that Firestone had no connection to the accident other than its
original design. Id. at 611. Based on these facts, the court held that
Firestone did not owe Jimmy Barajas a duty because "under traditional
notions
of products liability, the plaintiff must prove the defendant supplied the
product that caused the injury." Id. at 614, 616 (emphasis added).

The present case is distinguishable from Barajas on the simple basis that
Lilly's conduct contributed to cause Jac's injuries, whereas the plaintiffs
in Barajas could not point to any conduct by Firestone that contributed to
cause Mr. Barajas' death. Plaintiffs are not seeking to hold Lilly
responsible
simply because Lilly designed and manufactured a product similar to the one
that caused Jac's injuries. Instead, plaintiffs seek to hold Lilly
responsible
for its own acts and omissions that it could reasonably foresee would cause
the exact injuries that Jac suffered.

Plaintiffs concede that Lilly cannot be liable under a strict products
liability
theory because Lilly did not manufacture or distribute the thimerosal that
was injected into Jac. Houston Lighting & Power Co. v. Reynolds, 765 S.W.2d
784,
785 (Tex. 1988). However, Lilly remains liable to plaintiffs for the
foreseeable
harm caused by its own conduct. "In products liability actions, Texas law
clearly
distinguishes between negligence claims based on conduct and strict
liability
claims based on products." Oasis Oil Corp. v. Koch Refining Co., 60 S.W.3d
248,
252-53 (Tex. App.-Corpus Christi 2001, pet. denied). As the Supreme Court
has
repeatedly noted, negligence claims look to the actor's conduct while strict
liability actions focus on the condition of the product. Grinnell, 951
S.W.2d at
437; Caterpillar, Inc. v. Shears, 911 S.W.2d 379, 384-85 (Tex.1995). As
such,
Lilly cannot escape responsibility entirely just because it cannot be held
liable under a theory of strict liability.

Admittedly, the Barajas court also stated while considering the Barajases
negligence claims that "Firestone conclusively showed that it did not
design,
manufacture or sell the wheel in question. Accordingly Firestone did not owe
a
duty to the Barajases." Id. at 615. However, the court was not faced with a
situation such as this case where the defendant's conduct is directly
attributable
to plaintiff's injury. Here, Lilly's actions were a substantial contributing
factor
to Jac's injuries, in addition to the inherent danger of the thimerosal
products.
Therefore, unlike in Barajas, Lilly's own conduct was a direct and proximate
cause of plaintiff's injuries, which would not have occurred had Lilly met
its
duty of care. Consequently, Lilly is responsible for Jac's injuries and its
motion for summary judgment should be denied.

D. Lilly is Also Liable for Fraud and Conspiracy

Lilly also argues it never owed a duty under which it could be liable to
plaintiffs for fraud or conspiracy. However, Texas common law fraud
recognizes
that a party's duty to refrain from injuring people through false statements
extends to all individuals who the party has "reason to expect" will rely on
the misinformation to their detriment. In Ernst & Young, L.L.P. v. Pac. Mut.
Life Ins. Co., 51 S.W.3d 573 (Tex. 2001), the Texas Supreme Court held that
to prevail on a fraud claim, a plaintiff must prove that:

(1) the defendant made a material misrepresentation that was false;

(2) it knew that the representation was false or made it recklessly as a
positive assertion without any knowledge of its truth;

(3) it intended to induce plaintiff to act upon the misrepresentation; and

(4) plaintiff actually and justifiable relied upon the representation and
thereby suffered injury.

Id. at 577. To show that a party intended to induce a plaintiff to act on
the misrepresentation, the Supreme Court held that the plaintiff need only
show that the defendant had reason to expect that the plaintiff will act in
reliance upon the misrepresentation. Id. at 579-80.

Here, Lilly knowingly and recklessly made false material representations to
the FDA, physicians, consumers, and the general public regarding the toxic
hazards of thimerosal. See supra III.A. In actual and justifiable reliance
on Lilly's misrepresentations, plaintiffs allowed Jac to be injected with
an unreasonable and dangerous amount of mercury, which had devastating
effects on Jac. Also, Lilly had every "reason to expect" that its
misrepresentations would be relied on by doctors, drug companies, and
eventually plaintiffs and their pediatricians. In fact, Lilly relied on
the same misrepresentations to deceive the public. Therefore, Lilly owed
a duty to plaintiffs and can be liable for fraud.

Finally, plaintiffs contend that Lilly, in combination with Smithburn,
Kharasch and others, knowingly agreed to conceal the dangers of thimerosal
from doctors, patients, health officials, and others relying on the peer
reviewed medical and scientific literature. These conspirators took steps
toward that goal manipulating the scientific literature and by intentionally
concealing vital information regarding the health risks associated with
childhood vaccines containing thimerosal. As discussed above, Lilly even
defrauded the federal government in furtherance of this conspiracy by
relying
on Powell and Jamieson's article to defend thimerosal before the FDA. See
supra III.A.viii. Because Lilly, along with all of the other defendants,
knowingly participated in the ongoing ruse regarding the safety of
thimerosal
and took affirmative steps to ensure the true dangers of thimerosal were
never
discovered, Lilly was part of a conspiracy for which it should be held
liable.
Tilton v. Marshall, 925 S.W.2d 672, 680-81 (Tex. 1996).

IV. Conclusion and Prayer

Initially, Lilly's motion for summary judgment should not be addressed
because
discovery has not been completed and Lilly has not fully answered plaintiffs
'
discovery requests as it agreed to do. However, if the Court considers the
merits of Lilly's motion, it is clear that Lilly owed Jac Counter a duty to
refrain from affirmatively distorting the scientific literature and hiding
the toxic effects of thimerosal. Lilly's conduct breached that duty and
proximately caused Jac's illness. Therefore, Lilly owed Jac a duty of care,
and is liable for the injuries it caused under negligence, fraud,
misrepresentation, and conspiracy theories.

WHEREFORE, PREMISES CONSIDERED, plaintiffs respectfully request that the
Court deny Lilly's motion for summary judgment. Plaintiffs also request
that the Court grant them all other relief to which they may be entitled.

Respectfully submitted,
WATERS & KRAUS LLP

_______________________
C. ANDREW WATERS
State Bar No. 20911450
F. LEIGHTON DURHAM III
State Bar No. 24012569
3219 McKinney Ave., Ste. 3000
Dallas, Texas 75204
214-357-6244
214-357-7252 facsimile

THE LAW OFFICES OF
SEAN TRACEY
SEAN PATRICK TRACEY
State Bar No. 20176500
1100 Louisiana, Ste. 3075
Houston, Texas 77002
713-650-6080
713-650-6086 facsimile

ATTORNEYS FOR PLAINTIFFS

CERTIFICATE OF SERVICE

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing response to Eli Lilly and
Company's Supplemental Motion for Summary Judgment was served on all counsel
of record on August 30, 2002 via certified mail, return receipt requested.

________________________

F. Leighton Durham III


________________________________________________________________________
________________________________________________________________________

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Re: Immunizations risks. Archive in immunizations.

Posted by
steve on November 20, 2002 at 14:42:14:

In Reply to: Immunizations risks. Archive in immunizations. posted by Walt Stoll on November 19, 2002 at 09:27:30:

Thanks, Walt. This is a major issue. Everyone should contact their representatives and tell them to vote nay on this issue. It seems to me that a pharmaceuticl company that is not held libel for any damages their vaccines could incur is very foolish. It could definately make manufacturing more lax and open up foreign manufacturing. That's a pretty scary thought.
Peace
steve

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