Full opinion text
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER MATSCH, District Judge. These twelve civil actions were consolidated for trial to the court because all of the plaintiffs claim that they suffered injuries from the use of the same product, manufactured and marketed by the defendant, the Daikon Shield intrauterine contraceptive device. These claims are brought within the jurisdiction provided by 28 U.S.C. § 1332, and the law of Colorado is applicable in all of these cases. EARLY PRODUCT HISTORY The Daikon Shield device was designed by the joint efforts of Dr. Hugh James Davis and Mr. Irwin S. Lerner. Dr. Davis is a physician who, at all relevant times, was an associate professor at Johns Hopkins University School of Medicine, serving as director of its family planning clinic since 1963. Dr. Davis practiced obstetrics and gynecology (“OB/GYN”) in the clinic at Johns Hopkins and also served some private patients there, although he was never board certified in that specialty. He did experimental work with intrauterine devices at Johns Hopkins Hospital from about 1963 to 1967 under various grant programs. He began discussions with Mr. Lerner in 1967, and, on June 10, 1968, they entered into an agreement by which Dr. Davis would be compensated for his help in the development and testing by Lerner Laboratories of an experimental intrauterine device which became the Daikon Shield, and would undertake a program of testing the device to determine its safety and reliability. Essentially, Dr. Davis was to receive 5% of sales. The' Daikon Shield is an oval shaped plastic device, slightly larger than a dime, with fin-type projections on each side. It was designed to conform to the shape of the uterine cavity and the projections were added to improve resistance to expulsion and to cause the device to be fundal seeking with normal uterine movements. A tailstring was tied to the bottom of the Shield by a knotted loop as an indicator of proper placement of the device and as a means for removal of the Shield. When this IUD was placed properly in the uterus, the tailstring projected through the cervix and into the vagina. A locator knot was tied at a point where it could be seen by the physician and felt by the patient as an assurance that placement was proper. Because the removal of the Daikon Shield required greater force than other IUDs, the string had to be stronger, and this was accomplished by the use of multiple strands of suture material encased by a nylon sheath open at both ends. Dr. Davis began inserting Daikon Shields into women at the Johns Hopkins clinic beginning in August, 1968, and he collected data concerning 640 women for a one-year period up to September, 1969. Dr. Davis authored two publications reporting the experience of those women. One appeared in Excerpta Medica and another was a two-page article appearing in the American Journal of Obstetrics and Gynecology in February, 1970. In those articles, Dr. Davis reported a pregnancy rate of 1.1%, and he was very enthusiastic about the Shield device. Dr. Thad Earl, M.D., was a physician with a general practice in Defiance, Ohio, with approximately 70% of his practice in obstetrics and gynecology. He was not board certified in that medical specialty. He read a newspaper article about the Daikon Shield and went to Baltimore to consult with Dr. Davis about it. As a result, Dr. Earl became very enthusiastic about using this device and purchased some 48 of them from Mr. Lerner at his business in Greenwich, Connecticut. Dr. Earl took the Shields to his office in Defiance and inserted them in his patients, including his wife. .Dr. Earl was very careful with follow-up on his patients and took endometrial biopsies. The biopsy tissue was then examined by a pathologist. These studies were understood by Dr. Earl as confirming his view that the Daikon Shield was effective because it evoked an inflammatory response in the endometrial tissue. By the Spring of 1970, Mr. Lerner, Dr. Davis, and a lawyer, named Robert Cohn, formed the Daikon Corporation as a Connecticut corporation for the purpose of manufacturing and marketing the Daikon Shield. In April, 1970, Dr. Earl purchased a 7V2% interest in the Daikon Corporation for $50,000, and with that purchase, Dr. Earl became the company’s medical director. A.H. Robins Company, Inc. (“Robins”) is a well-established pharmaceutical company which had no experience in the contraceptive products market before June,- 1970. There was no OB/GYN on the defendant’s staff in any department. Dr. Frederick Clark, Jr. is a physician who was Medical Director of A.H. Robins Company, appointed in 1964, although he did not always function in that capacity. He was made Assistant Vice-President in September, 1971, and Vice-President on September 1, 1973. In May, 1970, Dr. Earl had contact with a representative from Robins, and discussion of a sale of the Daikon Shield to Robins followed. Robins did very little to investigate this device before proceeding with the purchase negotiations. Dr. Clark read the Dr. Davis article in the February, 1970 issue of American Journal of Obstetrics and Gynecology. Dr. Clark, Roy Smith and Ed Davis from Robins went to see Dr. Thad Earl in Defiance, Ohio, and looked at six to ten case records provided by Dr. Earl. Dr. Clark then made a trip to see Dr. Hugh Davis on June 8, 1970, and wrote a memorandum in which he reported that Dr. Davis had data for the first 14 months, from September, 1968 through November, 1969, covering 832 insertions with 26 pregnancies. That apparent difference from the reported pregnancy rate of 1.1% did not generate any concern at Robins. The sale to Robins took place on June 12, 1970 for a purchase price of $750,000 plus a 10% royalty. Additionally, Dr. Davis was given a consulting contract by Robins for three years at $20,000 per year, which contract was later extended for another two years, to 1975. Dr. Earl suggested that Robins finance an endometrial biopsy study, but that was not done because of a reluctance to incur the costs and the lack of a definite methodology. Dr. Earl became a consultant for Robins by an agreement dated June 20, 1970, for three years at a retainer of $30,-000 per year. In that role, Dr. Earl attended many meetings of medical groups as a spokesman for the Daikon Shield. He exhibited a film and talked with doctors in a Robins booth set up at such meetings. Dr. Earl used the Dr. Davis paper from the American Journal of Obstetrics and Gynecology at these meetings, and distributed many reprints of that article. Dr. Clark developed a project plan for the use of doctors as clinical investigators of the Shield and, after Robins’ purchase, Dr. Chremos was Robins’ employee charged with supervising these clinical investigations because he had experience with such work with other Robins products. Dr. Chremos made a visit to Dr. Hugh Davis on February 3, 1971, at his office at Johns Hopkins Hospital. After their talk, Dr. Chremos recommended that Dr. Davis not be used as a clinical investigator because of the possible bias resulting from his being a participant in the invention and development of the device. He did not make a recommendation that the company discontinue the use of Dr. Davis’ article. Robins made plans for other testing of the Daikon Shield in anticipation of the need for it if IUDs became subject to government regulation. That possibility was then being considered by the Food and Drug Administration and some members of Congress. In January, 1971, Robins began dual campaigns, both testing and marketing a modified Shield. Although the parties dispute the matter, it is this court’s view that the modifications made to the Daikon Shield by Robins are not changes of significance to the issues in these cases. Robins made the Daikon Shield in two sizes. The standard size was for use in multiparous patients and a smaller size was recommended for use in nulliparous women. The Earl consultation agreement with Robins ended in June, 1972. Dr. Earl left Defiance, Ohio and moved to Lordsburg, New Mexico at the end of June, 1972, because of personal medical problems. After a few months there, he moved to Sierra Vista, Arizona. On June 23, 1972, shortly before leaving Defiance, and after his consultation agreement had expired, Dr. Earl wrote a letter which is in evidence as Plaintiffs’ Exhibit 530. That letter was addressed to John Burke at Robins, and refers to the last two meetings Dr. Earl attended: the American Academy of Obstetricians and Gynecologists at Chicago, and the AMA meeting in San Francisco. Dr. Earl reported several discussions with physicians who reported problems with the use of the Daikon Shield, including higher pregnancy rates in certain areas, difficulty with removal, difficulty with insertions and an increase of infections in nulligravida women. Dr. Earl outlined how he responded to those problems by emphasizing the importance of the proper technique for insertion, assuring high fundal placement. It was not until the third paragraph of page three of the letter that Dr. Earl wrote the following paragraph- which has become very much emphasized by the plaintiffs in these cases: The next situation I have found is with women becoming pregnant and if the Shield is left in place the women abort at 3V2 to 5 months and become septic. I am advising physicians that the device should be removed as soon as a diagnosis of pregnancy is made. Numerous physicians have noted this. In my six pregnancies, I removed one and she carried full term, the rest all aborted and became septic. I therefore feel it is hazardous to leave the device in and I advise that it be removed. I realize that this is a small statistic but I feel we should correlate this data with other investigators across the country, because most men are experiencing the same problem. Plaintiffs’ Exhibit 530. Dr. Earl closed the letter with the information that he was going to Lordsburg, New Mexico on June 26. No one from Robins contacted him to follow up on the contents of his letter. MANUFACTURING AND MARKETING HISTORY The defendant began production of the Shield at its Chapstick Division in June, 1971. Before that, Lerner Laboratories had made the Shields for Robins’ marketing. This product was produced at Chapstick because the assembly was a hand-assembly, and Chapstick had employees who were experienced hand-assemblers. The initial project coordinator for Robins when it acquired the Daikon Shield was Mr. R.W. Nickless. Mr. Nickless wrote an orientation report on the product, dated June 29, 1970, for distribution throughout many departments of the Robins Company. In that memorandum, Mr. Nickless described the background of the Daikon Shield and the production methods utilized by the Daikon Corporation under the supervision of Mr. Lerner. In that memorandum, Mr. Nickless included the following summary statement: The string or “tail” situation needs a careful review since the present “tail” is reported (by Mr. Lerner) to have a “wicking” tendency. Plaintiffs’ Exhibit 91. The tailstring on the device became the subject of interest at Robins in the summer of 1971 for two reasons. First, Chapstick reported production problems because of stiffness and a tendency of the string to break during the tying operation. Second, there were adverse reaction reports of penile trauma from contact with the string during intercourse. Wayne Crowder, a worker in the quality assurance department at Chapstick, tried boiling the string to make it softer, and suggested blunting the end of the string by beading it through exposure to flame. In a memorandum dated July 28, 1971, discussing the matter of stiffness, Mr. Crowder questioned the value of the sheath, indicating that he understood its purpose was to keep the interior of the string dry “and thus thwart bacterial growth.” He pointed out that the string has two exposed cut ends and when exposed to water can become wet inside. He reported in the memorandum that this can be demonstrated by immersing one end of the string in a beaker of water and, after standing overnight, small droplets of water can be milked out of the other end. Mr. Crowder concluded his memorandum with the following paragraph: Unless the sheath has some function other than the one given by Mr. Lerner — to keep the inside of the string dry — it would seem that a braided nylon string might serve equally well as the sheathed string and avoid the problem associated with stiffness. Plaintiffs’ Exhibit 325. Dr. Ellen Preston, a staff physician for Robins, is an M.D. with a Masters in Public Health, but without any training or experience in OB/GYN. She became the product monitor for the Shield in February or March of 1971. Her responsibilities included reviewing adverse reaction reports received at Robins. On August 9, 1971, Dr. Ellen Preston wrote a memorandum to Dr. Fred Clark advising that Mr. Daniel French, executive vice-president of Chapstick, had called her about production problems with the string, noting that it had been shown that the open ends of the string will wick water, and suggesting that if that is so, the ends will wick body fluids containing bacteria. Dr. Clark’s response was a somewhat petulant letter of August 20, 1971, to Mr. Daniel French. The following two paragraphs of that letter are important to the issues in these cases: Because of the unique and novel (to AHR) features, and because of the multiplicity of people involved, this product has been “handled in the usual” (new chemical product) manner in few if any ways. For instance, your assumption that the “Medical Department”, rather than the Quality Assurance Group would have cognizance over the production problems and specifications of the Shield (string) is an example of the confusion which exists. Your statement that you have written Mr. Morton requesting that he use his influence “to stir up a little activity in the Medical Department” falls on somewhat sensitive ears because the “Medical Department” has for some time been very aware of the need to either: inform all involved parties to communicate directly with the group reasonably expected to have cognizance over a matter (I’d normally assume, in your case, with Dr. Klioze) or establish a special multidisciplinary team (with one Head) to concentrate on all matters relating to the Shield and its needed improvements. Hopefully, steps in one of these directions can be taken very shortly. Yes, the Medical Department does agree that the Daikon Shield is not a sacred cow and that some systematic and agreed-on changes can and should be made. While I agree that the Medical Department can contribute to these, it alone does not possess the resources to adequately evaluate all of the suggestions nor to effect all of the steps leading to newer models. Normally, the Medical Department does not “get into” matters of raw material supply, quality assurance evaluations or production problems, except as these relate to clinical product complaints. Plaintiffs’ Exhibit 337. These internal memoranda about problems with the tailstring were written at a time when Robins had a great concern about a critical supply situation — a failure to produce enough Shields to fill all of the orders from the salesmen who were being very successful with the marketing plan. Accordingly, suggestions about the possibility of changing the string were rejected in September, 1971, because Robins did not want to slow down production at a time of increasing demand for the product. Mr. Kenneth Moore, whose education and prior experience was in pharmacy, became the project manager for the Daikon Shield on October 1, 1971, and served in that capacity to October 1, 1973. In that role, he was responsible for distributing information throughout the company. In preparing himself, Mr. Moore reviewed all of the available information about the product, including the Wayne Crowder memorandum of July 28, 1971. Mr. Moore discussed the tailstring with Mr. Lerner on October 11, 1971, and Mr. Lerner told Mr. Moore that a braided string of nylon and dacron had been tested and rejected because it was found to support bacterial growth in the interstices. Mr. Moore wrote a memorandum about his talk with Mr. Lerner and included a statement that according to Mr. Lerner, the specifications, particularly for shield strength and string strength, had been established on a strictly empirical basis. Mr. Moore also took a trip to Chapstick on October 20, 1971,- to discuss the production problems with the string. He learned that some of the problems resulted from a lack of quality control at the German company which was manufacturing and supplying the string material. John Burke was the man responsible for the sales department at Robins beginning in 1970. He had started with Robins as a salesman calling on physicians, a “detail-man,” in 1952. Mr. Burke had gone to Defiance, Ohio to meet with Dr. Earl in the fall of 1970. Because Robins had no previous experience in marketing IUDs or any other contraceptive products, a preliminary market study was done by the Marketing Research Department in August, 1970. In that study, (Plaintiffs’ Exhibit 104), it was pointed out that while most contraceptive methods are selected by the patient after consultation with a physician, the physicians reported that about one-half of IUD insertions result from patient requests. It was also observed that while women apparently learn something about IUDs from written material, most information is obtained from conversations with other women. Among the marketing recommendations made in that study was advice that sales to physicians who do not routinely do pelvic examinations, such as general practitioners and osteopaths, can constitute risky, business because an IUD in the hands of a physician who is not familiar with reproductive anatomy is almost certain to lead to problems. Also, the study indicated that physicians tend to use a single type of IUD with which they have gained experience and that it is difficult to change them to another. Burke devised a marketing strategy and brought 15 district managers to Richmond, Virginia, in September, 1970, for an intensive orientation course. A promotional film using Dr. Earl was included in the marketing plan. There was an estimate that 150,000 units would be available for surgical supply dealers in December, and that back-up stock would be produced at a rate of 5,000 to 6,000 units per day. First year sales were estimated to reach at least 500,000 units in the first 12 months. Dr. Earl was used in the training orientation and meetings were held in December, 1970, at Richmond and in Dallas, for orientation of the regional, divisional and district managers. A lay publication plan was also put into effect, for the subtle promotion of the Shield through articles published in such magazines as Women’s Day, Cosmopolitan, Family Circle and in articles distributed to newspapers. The marketing strategy was very successful. First year sales exceeded 1 million units, producing revenue of 3.5 million dollars. In a promotional memorandum in the spring of 1972, detailmen were urged to increase their efforts by contacting GP’s as well as OB/GYN’s. Dr. Chremos established a plan for a prospective clinical study of women using the Daikon Shield in October, 1970. It came to be known as the Ten Investigator Prospective Study. Robins’ primary purpose was to develop data in anticipation of governmental regulatory requirements for IUDs — a development which Robins then expected to occur in the near future. Dr. Chremos thought there was a need to follow 2,000 women for at least 2 years. The study did not develop reliable data. It was flawed in both conception and execution. Robins lost interest in it when the threat of governmental controls disappeared. The medical literature available prior to the defendant’s marketing efforts included reports of higher than anticipated pregnancy rates for other IUD devices (some greater than 2.7%), reports of perforations with IUDs and reports of pelvic inflammatory disease and uterine infections associated with the use of IUDs. Pelvic inflammatory disease (“PID”) is a non-specific phrase used to describe infections of the upper genital tract. The most common symptoms of such infections are lower abdominal pain, fever, adnexal tenderness on examination, adnexal masses and vaginal discharge. There also were reports of septic abortions with other IUDs before Robins began marketing the Daikon Shield. Septic abortion describes a condition in which a pregnant woman becomes infected and the infection kills the fetus which is then expelled in a spontaneous abortion. Despite this literature, Robins’ monitoring program was essentially a passive one, simply collecting adverse reaction reports as they came in, and making bland, noncommittal responses. Kenneth Moore attended a meeting of the American Association of Planned Parenthood Physicians in April, 1972. At that meeting, Dr. Hugh Davis presented a paper on the experience with the small size Daikon Shield in nulliparous patients, and there were other presentations about the Shield. A memorandum prepared by Mr. Moore, dated April 17, 1972, referred to a speaker, Dr. Michael S. Burnhill, on the subject of endometrial infection, including his statement of an impression that intrauterine devices caused progressive endometritis resulting in the development of tuboovarian abscesses. Mr. Moore discounted that presentation, and praised Dr. Davis for putting Dr. Burnhill “down hard” for a statement that it was a well-known fact that certain types of tails caused PID. Dr. Davis had countered by saying that such tails were of the braided or woven variety, that this had been known since the days of the IUD pioneer, Grafenberg, and that there were no problems in the use of either a monofilament string or a sheath-covered string. As previously mentioned, the consultant who had been the spokesman for Robins at numerous medical meetings, Dr. Earl, sent the letter of June 23, 1972, addressed to John Burke (Plaintiffs’ Exhibit 530), but Robins made no attempt to evaluate the significance of what Dr. Earl was reporting. The letter was not a report of mid-trimester septic abortion because it specifically refers to women who experienced an abortion and “became septic.” It did, however, advise of the importance of correlating data with other investigators and that advice was not followed. The information was not properly processed and relayed to appropriate personnel within the Robins organization. Moreover, lacking any prior experience with OB/GYN, those persons, including Dr. Ellen Preston, did not appreciate the importance of carefully monitoring all of the signs and symptoms experienced by the women who were wearing this experimental device. In October, 1972, Dr. Ellen Preston received a report from a detailman who attended a meeting of District 5 of the American College of OB/GYN in Indianapolis, Indiana, who informed that among the physicians visiting the booth, the negative comments concerning the Daikon Shield outnumbered the positive comments. Those negative comments included complaints of high pregnancy rates, acute pelvic inflammatory infections, perforations, increased ectopic pregnancies, irregular menstrual periods, post-insertion absence of menstrual period, and others. The established routine for handling adverse reaction reports at Robins was to make a rather bland reply to the physician or other source generally emphasizing the importance of following the protocol for insertions, and then to make periodic summaries of the reports. There was no systematic effort to evaluate the possible significance of these reports or to transmit them to the physicians involved in the Ten Investigator Prospective Study. In March, 1972, the project manager, Kenneth Moore, asked the analytical research group to find a suitable substitute for the tailstring material. No substitute was found. By 1973, Robins had knowledge that there had been some problems with string breakage, according to reports from the field, and that such breaks occurred around the second' knot, suggesting the possibility that the nylon was losing its integrity after several months in situ. String breakage also presented the possibility of spillage of bacteria from inside the string. Dr. Howard Tatum is a retired OB/GYN who taught at medical schools in Oregon and Louisiana before he became associated with the Population Council, a non-profit organization which provides information concerning contraception, family planning and population mechanics. His primary work for the council has been in the development of new contraceptive modalities and he is the inventor of a “T” platform for use as the central component of an IUD which was in competition with the Daikon Shield. Dr. Tatum conducted some experiments on the wicking possibilities of the Shield tailstring in 1974. He wrote the results in an article which was published with some errors in it. Dr. Tatum expressed the opinion that the Shield tailstring structures provide a route of ascent of bacteria from the vagina which are then harbored in the string and may be released through breaks in the sheath or from the end of the string inside the uterus. Dr. Robert Tankersley, Jr. has a Masters degree in bacteriology and a Ph.D. in medical microbiology. He is not a physician. He headed a section at Robins which applied microbiological research techniques in developing tests for product safety. No one in his group carried out any bacteriological safety studies on the Daikon Shield tailstring from the time the device was purchased in June, 1970, to the time that it was removed from the market in June, 1974. No one at Robins gave him the wicking theory for analysis, and the first that he was involved with bacteriological testing was in August, 1974, after Dr. Tatum’s test results had been reported to Robins, but before they appeared in the medical literature. Dr. Tankersley went to New York to see Dr. Tatum in August, and discussed his results. Dr. Tankersley was critical of Dr. Tatum’s work because of the methods which he used. Dr. Tankersley directed some tailstring microbiological tests. Dr. Tankersley’s results show some ascension of bacteria up the string under different conditions, and indications that the transport reaches a maximum height and then recedes. That is in conflict with Dr. Tatum’s view that it continues to ascend. Dr. Tankersley did not find any essential difference between the Daikon Shield string and the monofilament strings. He did fluid-to-air studies and fluid-to-fluid studies. In the fluid-to-fluid test, there was one sample indicating that bacteria may be transported throughout the length of the Daikon Shield tailstring. There were definite methodological flaws in the testing done at Dr. Tankersley’s direction. On May 8, 1974, Dr. Frederick Clark, as Medical Director for Robins, issued a “Dear Doctor” letter on the subject of second trimester septic abortion with the Daikon Shield. (Plaintiffs’ Exhibit 849). In that letter, Dr. Clark said that since marketing the Daikon Shield late in 1970, Robins had become aware of 36 cases of septic abortion in patients purportedly wearing the Daikon Shield, and that 4 such cases resulted in maternal fatalities. The letter also reported that an estimated 2,200,000 Daikon Shields had been in use and that the company intended to explore every reasonable approach to determine if any unique relationship existed between the Daikon Shield and septic abortion. The letter recommended that in the management of patients with Daikon Shields, the device should be removed as soon as pregnancy is confirmed if removal could be accomplished by traction with the string. If not, serious consideration should be given to offering a therapeutic abortion, and if that is refused, the patient should be warned of the possible risk of continuing the pregnancy. If the pregnancy is continued, Robins recommended following the patient very closely for early signs of potential severe complications. Additionally, the company suggested that any patient to be considered for the Daikon Shield should be advised prior to the procedure that a therapeutic abortion may be recommended in the event of an accidental pregnancy. On June 11, 1974, Robins, through Dr. Clark, presented a statement on the subject of septic spontaneous abortion and the Daikon Shield to the Food and Drug Administration, acting through an OB/GYN device panel (Plaintiffs’ Exhibit 858), and in that document, included the following statement: It is generally accepted that the contraceptive action of IUDs results at least in part from the inflammatory response induced, and that the duration of exposure to the IUD is an important factor in this response. Golditch has suggested that in some patients this progressive endometrial response may decrease local resistance to bacterial insult and encourage the gradual development of pelvic inflammatory disease. This pre-existing local pelvic infection could then become a factor in the occurrence of septic abortion. As Golditch has stated, it is very hard to determine the true incidence of pelvic infection related to an IUD, but he suggests that it may be higher than that generally thought. On June 28,1974, Robins voluntarily suspended domestic distribution and sale of the Daikon Shield in response to a request by the Food and Drug Administration. Thereafter, without acceding to the FDA’s authority or entitlement to request such information, Robins participated in proceedings concerning the Daikon Shield and, on August 8, 1975, it announced that it would not remarket the Daikon Shield. On September 25, 1980, Dr. Fletcher Owen, Jr., the then director of medical services for Robins, issued a “Dear Doctor” letter which in its entirety reads as follows: Subject: Recommendation that the Daikon Shield be removed from asymptomatic patients Dear Doctor: Domestic distribution of the Daikon Shield by the A.H. Robins Company was discontinued in June 1974. Subsequently, we have concurred with the majority of medical opinion relative to IUDs in suggesting that women who continued to use the Daikon Shield without problems or difficulties need not have it removed. At the same time we have followed the medical literature regarding, among other possible IUD associated complications, the relative risk of pelvic inflammatory disease among IUD-users compared to non-users and, lately, the relationship, if any, between duration of IUD use and pelvic infection. The medical literature does not establish a firm relationship between the duration of use of inert IUDs and an increased risk of pelvic infection generally; but a relationship has been suggested by recent literature, particularly when the causative organism is Actinomyces israelii. Cases of pelvic actinomycosis which cannot be explained on the basis of direct extension from the gastrointestinal tract have been observed most commonly among long-term IUD users. Actinomyces israelii is an anaerobic, gram-positive bacterium which forms mycelia that may fragment into bacillary and coccoid forms. The organism is difficult to culture. Identification is most often made on the basis of immunofluorescence, special stains, or a finding of typical “sulfur granules” in the involved tissues. Pelvic actinomycosis is usually insidious in onset and clinical symptoms may be absent until a pelvic mass is noted on examination. By this time, advanced disease of the tubes, ovaries or uterus may be present. The infection has been reported in users of a variety of IUD types. Recent reports have indicated that the problem can be minimized by replacing inert IUDs at periodic intervals, generally not exceeding three years. [Schmidt, W.A., et al. “Actinomycosis and intrauterine contraceptive devices — The clinicopathologic entity” Diagnostic GYN and OB II (3) 165-177 (Fall) 1980 (in press); Duguid, H.L.D.; Parratt, D.; Traynor, R. “Actinomyceslike organisms in cervical smears from women using intrauterine contraceptive devices” Br.Med.J. 281 (6239) 534-37 (Aug. 23) 1980.] Since any present users of the Daikon Shield are in the long-term use category, we now recommend removal of this IUD from any of your patients who continue to use it, even though they may not be experiencing any pelvic symptoms at this time. We further suggest that the removed IUD and adherent material be submitted to a clinical pathology laboratory for examination for organisms consistent with actinomycetes. If present, the patient should be carefully followed and, where clinically indicated, appropriate therapy administered. Plaintiffs’ Exhibit 1287. That letter was received in evidence in this case for the limited purpose of showing that Robins acknowledged medical literature in which there was a reported association between pelvic actinomycosis and long-term IUD use. LABELING HISTORY Pharmaceutical companies market their products through physicians as intermediaries with the users. Accordingly, important product information is distributed through package inserts and physician file cards. The product information about the Daikon Shield is important to the issues in these cases. The 1970 package insert issued by the Daikon Corporation contained the following information under the heading “Removal”: There is a tendency for all intra-uterine devices to accumulate small deposits of calcium on the surface and for the strength of the materials to become compromised in time. At the end of two years replacement with a fresh Daikon Shield is recommended. In that package insert, under “Recommended Protocol,” there was this: Recent reports from clinical investigators strongly recommend adjunctive use of a spermacidle foam, jelly or cream to enhance contraceptive effectiveness during the first three months after insertion of the Daikon Shield. Plaintiffs’ Exhibit 18. The first package insert from Robins was September, 1970, and it referred to “lowest pregnancy rate 1.1%.” Mention was made of the construction from flexible, resilient plastic that readily conforms to the shape of the uterine cavity and bends and gives with uterine contractions. Under the heading “Overall Superiority to the Pill” was the following: The Shield provides safe, sure, sensible contraception. It prevents pregnancy without producing any general effects on the body, blood or brain, and cannot cause weight gain, depression, or headache. Furthermore, it does not disrupt normal menstrual periods or alter hormonal balance. Plaintiffs’ Exhibit 118. The first Robins package insert did not include the recommendation for the use of adjunctive spermacidle foam. In November, 1971, in a physician file card, the defendant did include a caution that: Clinical experience indicates that the risk, of accidental pregnancy with IUD’s is higher during the first two or three menstrual cycles following insertion. Therefore, many authorities recommend the use of a supplemental contraceptive method during this interval. Plaintiffs’ Exhibit 379. The July, 1972 labelling included the following paragraph under the word “Action”: While the exact mode of action by which IUD’s prevent pregnancy is not completely understood, many authorities believe the IUD acts as a foreign body, inducing a local inflammatory reaction. This reaction causes alterations in the uterine milieu which are unfavorable to conception. Clinical data on the Daikon Shield indicates that it prevents pregnancy in approximately 98% of patients. Then, under “Clinical Data,” the following pregnancy rates were given under the names of four investigators: Davis: 1.1% Earl: 0.5% Ostergard: 1.1% Gabrielson: 1.9% Under “Warnings,” there were two new matters. A warning of a relatively low level of radiopacity and, “Reports indicate that a Daikon Shield not in its high fundal position may not provide anticipated contraceptive effect.” Also, under “Precautions,” there was reference to the risk of accidental pregnancy during the first two or three menstrual cycles, and the recommendation of the use of a supplemental contraceptive method, such as spermacidal foam or gel. There was also a statement that the need for removal or replacement is dictated largely by patient tolerance. Under “Adverse Effects,” was included the word “Infection.” Also, there were specific insertion instructions with the following under the word “Important”: The contraceptive effectiveness of the Daikon Shield depends on its proper placement high in the uterine fundus. In order to achieve this, specific insertion instructions are recommended. Please, follow these instructions on the next four pages carefully! There was also the recommendation that the patient be instructed to check for the presence of the string, particularly after each period and for reexamination by the physician after the first menses, at six month intervals thereafter, and at any other time that the patient has reason to suspect that the Daikon Shield is not in proper position. Plaintiffs’ Exhibit 542. In the October, 1973 physician file card, there was a summary of clinical study data “analyzed by the life table method” from published articles. There was also the statement, “Event rates for the Daikon Shield and all other IUDs vary between insertors for reasons which have not been positively identified.” The pregnancy event rate was given as varying from 0.5 to 5.1 for different lengths of use. Under “Contraindications,” there was added: Acute or subacute pelvic inflammatory disease. Acute cervicitis. Known or suspected cervical or uterine neoplasia. History of infected abortion or postpartum endrometritis within previous six weeks. Recent history of abnormal uterine bleeding. Then, under “Warnings,” there appeared the following: Severe sepsis with fatal outcome, most often associated with spontaneous abortion following pregnancy with a Daikon Shield in situ has been reported. In view of this, serious consideration should be given to removing the device when the diagnosis of pregnancy is made with a Daikon Shield in situ. Also, under “Warnings”: The proportion of pregnancies which terminate in spontaneous abortion is considerably higher in the presence of IUD’s. Under “Adverse Effects,” there was this statement: Major adverse effects include excessive bleeding, pelvic inflammatory disease, and embedment. Then, after “Less Serious effects,” there was the following: Septic abortion has been reported. Latent infections may be aggravated by an IUD. Defendant’s Exhibit Y-10. Robins published patient information sheets in 1970, 1971 and 1972. In the September, 1970 issue there are these questions and answers which seem most pertinent: How does an IUD prevent pregnancy? The device is thought to prevent pregnancy by causing the egg to dissolve and pass away just as it does normally every month during mensturation. Are the IUD’s safe? Many leading authorities believe they are the safest method of effective contraception available today. Unlike the Pill, they do not produce generalized side effects, such as headaches, blood clots, depression, breast tenderness, hair loss, weight gain, decreased sexual desire, etc. Is the Shield as effective as the Pill in preventing pregnancies? The pregnancy rates with the modern pills and the modern IUD are similar. The Shield prevents 99% of pregnancies, as do most oral contraceptives. How soon will the Daikon Shield be effective? Immediately after insertion. How long can I wear the Shield? Women have worn IUD’s for 5 years or longer, but many authorities recommend changing to a new one after 2 years. Also included under a list of advantages was this statement: Safe Protection: IUD’s are being used by millions of women throughout the world and have demonstrated outstanding medical safety. In the presence of the IUD, the lining of the womb undergoes a slight change sufficient to prevent pregnancy. That is all. The IUD produces no widespread effects on the body systems. Plaintiffs’ Exhibit 117. In the October, 1972 patient information sheet, in answer to the question, How does the Daikon Shield prevent pregnancy?, there is this quote: Exactly how the Daikon Shield or any IUD prevents pregnancy is not completely known. Current medical opinion suggests that the IUD changes the womb in such a way that either the egg is not fertilized by the sperm or if it is, the fertilized egg cannot implant itself in the wall of the womb. Available evidence indicates that IUD’s do not act by causing abortion. Then on the question, How effective is the Daikon Shield?: Medical studies on thousands of women indicate that the Daikon Shield is approximately 98% effective in preventing pregnancy. In a few isolated studies, pregnancy rates of more than 2% have been reported. Then, the question, If I should become pregnant with the Daikon Shield, will the baby be harmed?: When pregnancy does occur, the bag of water pushes the IUD to one side and the developing baby is not really touching the device at all. There is no evidence that the frequency of abnormal births is any greater among women wearing IUD’s than among women not wearing IUD’s. Plaintiffs’ Exhibit 590. The objective of Robins to make and sell the maximum number of Daikon Shields was most clearly expressed in an eight-page advertisement for medical journals which was labeled as a “Progress Report” in which the company boasted that in less than two years the Daikon Shield had become the contraceptive method of choice for many private physicians and family planning organizations. In that “Progress Report,” Robins asked the question “Who are candidates for the Daikon Shield?” and gave the following answer: The applications of the Daikon Shield are so universal that they cut across all socio-economic lines. They include all women who are not sufficiently motivated to take the Pill, ranging from the clinic patient to the busy mother-career woman who has so many activities and interests that taking a pill simply slips her mind. They also include your patient who is so disorganized she can’t seem to get anything done on schedule. A prime candidate is the young nullip who will settle for nothing less than the most modern, trouble-free method of birth control. For her the Daikon Shield is the logical IUD because it is also available in the smaller, nulliparous size. In fact, the Shield is the only IUD which has been anatomically engineered to fit the smaller uterine cavity of the nulliparous woman. Other IUD’s have proved unsatisfactory because the patient cannot tolerate them. In addition to involuntary expulsions, severe cramping and bleeding has necessitated their removal for medical and personal reasons. Already more than 300,000 of the nulliparous size Shields have been sold. Other candidates for the Shield include that large segment of women who cannot tolerate oral contraceptives, especially on a long-term basis because of the troublesome side effects. Some of these are patients whom you believe should be taken off the Pill; others may have asked you to substitute another method of birth control. Again, the Daikon Shield is the contraceptive method of choice because it has no general effects on the body, blood, or brain. It cannot alter hormonal balance — cause depression, headache, weight gain, or fluid retention. Sustained menstrual irregularities are rare. The modern woman also wants to be liberated from troublesome birth control devices such as the diaphragm. A few women can’t use a diaphragm; many dislike the procedure of having to insert and remove it. Some may worry over whether or not it is in place. Not only is the Daikon Shield a more effective contraceptive method than the diaphragm, condom, creams, foams, and jellies, but there is nothing to do before or after sexual relations. Neither partner is aware of its presence. In no way does it interfere with recommended feminine hygiene practices. With the Daikon Shield the patient can throw away her calendars, charts, and dispensers. No longer must she remember to take along her medication when she goes on a trip. She makes just one decision — to have the Daikon Shield inserted. From this moment on, she is protected 24 hours a day. Plaintiffs’ Exhibit 576. DETERMINING LIABILITY These cases are governed by Colorado law. Each plaintiff seeks relief under multiple claims. These are: (1) product liability under Restatement (Second) of Torts § 402A, (2) negligence in design and testing, (3) negligent failure to warn, (4) strict liability for product misrepresentation under Restatement (Second) of Torts § 402B, (5) fraud, (6) fraudulent concealment, (7) breach of express warranties, (8) breach of implied warranty of merchantability and fitness for a particular use, and (9) conspiracy. Each of the plaintiffs has included a claim for punitive damages under C.R.S. § 13-21-102. Colorado has adopted the doctrine of enterprise liability for defective products articulated in Restatement (Second) of Torts § 402A (1965). Hiigel v. General Motors Corp., 190 Colo. 57, 544 P.2d 983 (1975). Under that doctrine the manufacturer or seller of a product is liable for injury to a user of that product if the product was defective and because of the defect it was unreasonably dangerous to the user. The very essence of the doctrine of strict liability for defective products is that people ought to be able to rely on their reasonable expectations about a product. The Colorado Supreme Court succinctly summarized the law in the following paragraph in Jackson v. Harsco Corp., 673 P.2d 363 (Colo.1983): We adopted the doctrine of strict liability as stated in Restatement (Second) of Torts, 402A. Hiigel v. General Motors Corp., 190 Colo. 57, 544 P.2d 983 (1975). Products liability under section 402A does not rest upon negligence principles, but rather is premised on the concept of enterprise liability for casting a defective product into the stream of commerce. Kinard v. Coats Co., Inc., 37 Colo.App. 555, 553 P.2d 835 (1976); Klemme, The Enterprise Liability Theory of Torts, 47 U.Colo.L.Rev. 153 (1975). Thus, the focus is upon the nature of the product, and the consumer’s reasonable expectations with regard to that product, rather than on the conduct either of the manufacturer or of the person injured because of the product. Bradford v. Bendix-Westinghouse Automotive Air Brake Co., 33 Colo.App. 99, 517 P.2d 406 (1973). Strict liability is applicable to an otherwise properly manufactured product if its design renders it unreasonably dangerous. Union Supply Co. v. Pust, 196 Colo. 162, 583 P.2d 276 (1978). Id. at 365-366. A product may be defective because of its design, the way it is manufactured or the way in which it is sold to the user. The Daikon Shield was a defective product because of a combination of reasons which concern all three of these bases for liability as a defective product. In considering whether the Daikon Shield was a defective product, it is appropriate to consider the issues of manufacture, design, warnings and directions for use in combination. In the dispute over the Daikon Shield, what is unknown is far more significant than what is known. It is undisputed in the evidence that medical science has been unable to explain and prove why any IUD is effective in preventing conception. The most prevalent theory is that the body’s natural defense of an inflammatory response to a foreign object in the uterus is the effective mechanism. That hypothesis was adopted as the central consideration in the design of the IUDs which have been considered in this trial. The Daikon Shield was designed to inflame the endometrial tissue to a greater extent than other IUDs by increasing the area of surface contact and by ensuring placement in the broad area of the fundus through the expected action of the lateral fins. The design was also constructed to resist expulsion. To be unreasonably dangerous a product must be dangerous to an extent beyond that which would be contemplated by the ordinary user, with the ordinary knowledge as to its characteristics common to the community. Restatement (Second) of Torts § 402A comment i. If a product is dangerous and the danger is one not generally known, the manufacturer is required to give warnings, if he has knowledge of the danger, or by the application of reasonable, developed human skill and foresight should have knowledge, of the presence of the danger. Restatement (Second) of Torts § 402A comment j. The defect in the Daikon Shield is that when it was being manufactured and sold by Robins, the company did not know what health hazards might be inherent in the apparently increased effectiveness of this product over other IUDs as it appeared in Dr. Davis’ paper. Yet, Robins not only failed to disclose its lack of knowledge; it affirmatively asserted that the Shield was safe. The Daikon Shield is unreasonably dangerous because Robins could have learned about and warned of such dangers with the application of the reasonable skill and foresight expected of an established pharmaceutical company. With adequate testing, controlled studies and cautious marketing, Robins could have discovered the increased risks which have been shown to be inherent in the Daikon Shield’s unique new design. Robins bought the Daikon Shield without any prior experience in the field of contraception and without an OB/GYN on its medical staff. Whatever may have been the state of knowledge within the medical profession about IUDs at that time, Robins had no awareness of it. Additionally, Robins made no effort to acquire such knowledge. The defendant relied entirely on Dr. Earl Davis, who had not only the pride of invention, but also a personal incentive to bias his judgment and whose limited study was based on data concerning only 640 women for a one-year period. The evidence is clear that Robins rushed to mass marketing of the Daikon Shield without adequate information about the potential risks associated with its use, and without making a reasonable effort to acquire such information and control such risks. Robins’ only corporate effort at testing, the Ten Investigator Prospective Study, was undertaken without an adequate design of protocol in distribution of the product, in requirements for physician follow-up with the patient and in the techniques for reporting and interpreting the results. There are risks associated with the use of contraceptive methods and products. There is, of course, a risk of pregnancy, which itself presents some danger of morbidity and mortality, as well as possible adverse economic and social effects. In addition to the risk of failure, some forms of contraception involve other health hazards. The pill has been associated with an increased risk of cerebral thrombosis and breast tumors. IUDs, generically, are associated with a higher incidence of pelvic inflammatory disease. The defendant has sought to avoid liability in these cases by reliance on comment k to the Restatement (Second) of Torts § 402A (1965). Comment k provides an affirmative defense for products which are incapable of being made safe, where the social utility in the use of the product is sufficient to justify the risk. Belle Bonfils Memorial Blood Bank v. Hansen, 665 P.2d 118 (Colo.1983). The determination of social justification is not a matter for the court to decide as a question of policy. It is sufficient that relevant segments of society have made that value judgment. What the law requires is that the decision to use the product be made with sufficient information to arrive at the conclusion after an appropriate risk-benefit analysis. Accordingly, to rely on comment k, a manufacturer must show that the product was properly prepared, and properly marketed, accompanied by appropriate warnings and directions for use. Id. The defendant has not made that showing at this trial. Comment k gives this defendant no comfort because Robins failed to take reasonable steps to control both known and unknown risks. It neither properly prepared nor properly marketed the Daikon Shield. In this court’s view, it would have been reasonable to limit distribution of the Daikon Shield to OB/GYNs, and to caution those specialists to use it only in patients who practiced good hygiene and with whom there was a sufficient physician-patient relationship to ensure adequate follow-up care. Not only did Robins not make those restrictions; it improperly marketed the Daikon Shield by actively promoting all physicians, including osteopaths, by providing the Daikon Shield in core city clinics where no follow-up care would be expected, and by seeking to create product demand among women through a lay publications campaign. Robins’ counsel have cited cases in which the courts have recognized that the need for a product may be so great, even in its experimental stage, that the lack of time and opportunity to develop sufficient clinical experience and medical evaluation to provide some assurance of safety should not inhibit the marketing and use of the product where such experience as there is justifies the taking of the unknown risks to obtain the known benefit. It is suggested that the Daikon Shield was such an important part of the armamentarium for contraception that such risks were justified. That argument would have more merit if the Daikon Shield had been the first IUD to be marketed in the United States. It was not. Its presumed contribution was that it was to be a better IUD because it was thought to be a more effective contraceptive. The appropriate phrasing of the risk-benefit question in this case is not whether IUDs generally should be used; it is whether the claimed few percentage points improvement in effectiveness of this new design of IUD was worth the chance that such improvement was at the cost of an increased risk of infection. Robins was negligent if it failed to do an act or acts which a reasonably prudent pharmaceutical company would do, or did acts which a reasonably prudent pharmaceutical company would not do, under the same or similar circumstances, to protect users of its product from bodily injury. Palmer v. A.H. Robins Co., 684 P.2d 187 (Colo.1984); Hamilton v. Hardy, 37 Colo. App. 375, 549 P.2d 1099 (1976), cert. denied, May 24, 1976. The Daikon Shield was different from the other IUDs available in the United States in 1970. Robins was negligent in the design, testing and manufacture of the Daikon Shield. The Daikon Shield was designed to increase the inflammatory response in the endometrial tissue by increasing the area of surface contact and by ensuring placement in the broad area of the fundus through the expected action of the lateral fins. The design was also intended to resist expulsion by the addition of the lateral projections which made removal more difficult than with other available IUDs. As a result, the tailstring of the Daikon Shield had to have greater strength which was the reason for using a sheathed multifilament string. That string became a harbor for infectors which overcame the reduced resistance to infection in some women. At the time that Robins purchased the Daikon Shield, and during the time that the defendant marketed that device, there was little medical literature concerning the long-term effect of IUD usage. All of the marketed devices were then relatively new to clinicians in the medical profession. When the Daikon Shield was being manufactured and sold by Robins, the defendant did not know what health hazards might be inherent in the apparently increased effectiveness of this product over other IUDs. If a manufacturer of a medical device knows or in the exercise of reasonable care should know that the use of its device may be harmful or injurious and such danger would not be obvious to a physician dispensing the device or counsel-ling or treating patients using it, then the manufacturer is obligated to use reasonable care to warn the medical profession of the danger, and it is negligent if it fails to do so. Such a claim of negligence is distinct from the plaintiffs’ claims based on the Restatement (Second) of Torts § 402A (1965). Hamilton v. Hardy, supra. Robins was negligent in its failure to warn adequately of the possible risks involved with use of the Daikon Shield and its failure to disclose its lack of knowledge. It can be said that the warnings and cautions given in Robins’ product information to the physicians was representative of what the defendant knew about its product at the time, but the warnings were insufficient because the defendant did not disclose the depth of its ignorance. A reasonably careful manufacturer of a new and untested device to be placed in the uterus would take precautions to alert physicians and women to be alert to any sign or symptom of any possible adverse reactions and to respond to reports of such reactions by testing for possible causal relationships. The medical profession was not made aware of Robins’ lack of knowledge about this new product which it was touting to them. It must be remembered that Robins had an established reputation as a pharmaceutical company familiar to the doctors. They could not reasonably be expected to assume that such a reputable company would be promoting the use of a medical device which should have been considered to be in an experimental state. In many respects, the story of the Daikon Shield is an illustration of the individual indifference which seems inherent in large bureaucratic organizations. The many intra-company documents which have been introduced into evidence at this trial show a pattern of passing only partial information among people in the marketing, medical and manufacturing departments without any central coordination. That has been illustrated best by Plaintiffs’ Exhibit 337 quoted at pages 1298 and 1299, supra. Indeed, if there were a dominant department it would appear to be the marketing group. The paramount corporate objective was to achieve market dominance in a product in which the defendant was a new competitor. That objective produced imperatives which flawed the company’s performance in all of the areas which could have made a difference. Colorado has adopted the doctrine of strict liability for misrepresentation of a product set out in section 402B of the Restatement (Second) of Torts, which provides: One engaged in the business of selling chattels who, by advertising, labels, or otherwise, makes to the public a misrepresentation of a material fact concerning the character or quality of a chattel sold by him is subject to liability for physical harm to a consumer of the chattel caused by justifiable reliance upon the misrepresentation, even though (a) it is not made fraudulently or negligently, and (b) the consumer has not bought the chattel from or entered into any contractual relation with the seller. The Colorado Supreme Court, in American Safety Equipment Corp. v. Winkler, 640 P.2d 216 (Colo.1982), explained the policy underlying section 402B liability: In our view, the rationale behind such a policy is most persuasive in our complex society where manufacturers offer apparently similar but, in reality, fundamentally different products. It is the manufacturer who, through the design and testing of his products, knows of their particular qualities and capabilities. A consumer, on the other hand, knows only the information he has been able to glean from the manufacturer’s marketing materials. Because of his superior knowledge, the manufacturer should not be permitted to avoid responsibility for his misrepresentations to the consumer, even though the misrepresentations were neither fraudulently nor negligently made. Further, imposing strict liability on manufacturers who misrepresent their products does not impose an undue burden. A manufacturer intends to reap economic b