Dahl v. Hem Pharmaceuticals Corp.
7 F.3d 1399 (1993)
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Rule of Law:
Performance of a requested act, such as participating in a medical study, constitutes sufficient consideration to form a binding unilateral contract, even if the performing party was free to withdraw at any time prior to completion.
Facts:
- Dahl and seventeen other patients with chronic fatigue syndrome enrolled in a clinical trial for an experimental drug named Ampligen, manufactured by HEM Pharmaceuticals.
- The trial was a 'double-blind' study where some patients received Ampligen and others a placebo, with neither doctors nor patients knowing who received which.
- All patients signed consent forms which included a conditional promise from HEM to provide one year of Ampligen at no charge after the study if statistical analysis showed it was effective compared to the placebo.
- To participate, patients had to accept the risks of an experimental drug, forgo other treatments, and submit to uncomfortable and intrusive testing procedures over the course of a year.
- The patients completed their participation in the double-blind phase of the study.
- The FDA denied HEM's application to make Ampligen widely available due to safety concerns but permitted an 'open label' study to continue for existing trial participants.
- After the double-blind phase concluded, HEM ceased providing Ampligen to the patients, despite its promise in the consent forms.
Procedural Posture:
- Dahl and seventeen other patients sued HEM Pharmaceuticals in a federal district court, seeking an injunction to compel HEM to provide Ampligen.
- The district court granted a preliminary injunction, ordering HEM to provide the drug to the patients for twelve months.
- When HEM failed to comply, the district court held it in civil contempt.
- HEM appealed the district court's preliminary injunction order to the U.S. Court of Appeals for the Ninth Circuit.
- One patient, Graham, filed a cross-appeal, arguing the injunction should not have been limited to twelve months.
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Issue:
Does a patient's participation in an experimental drug study, from which they are free to withdraw at any time, constitute sufficient consideration to form a binding unilateral contract when the drug manufacturer promises to provide a year's supply of the drug upon completion of the study?
Opinions:
Majority - Kleinfeld, Circuit Judge
Yes. A patient's full participation in an experimental drug study constitutes sufficient consideration to form a binding unilateral contract. HEM's argument that there was no consideration because the patients were free to withdraw is without merit. The arrangement was a classic unilateral contract where HEM made an offer: 'if you submit to our experiment, we will give you a year’s supply of Ampligen at no charge.' The patients accepted this offer not with a return promise, but by their performance—submitting to the injections and intrusive testing. Once they completed the performance by finishing the double-blind study, a binding contract was formed. Citing foundational contract law principles from cases like Hamer v. Sidway and the Brooklyn Bridge hypothetical, the court found that mutuality of promises was unnecessary because HEM sought and obtained the patients' actual performance. The court also rejected HEM's primary jurisdiction argument, finding that the injunction did not usurp the FDA's authority because the FDA had explicitly permitted the continuation of an 'open label' study for these patients, which the injunction merely enforced.
Analysis:
This case serves as a modern affirmation of the classic unilateral contract doctrine, applying it within the context of clinical drug trials. It clarifies that subjecting oneself to the risks, discomfort, and limitations of a medical experiment constitutes a legal detriment sufficient for consideration, even when participation is technically voluntary. The ruling establishes an important precedent for pharmaceutical companies, confirming that conditional promises made in consent forms can create legally enforceable obligations to trial participants. Furthermore, the court's handling of the primary jurisdiction argument demonstrates that courts will not defer to a regulatory agency where their ruling does not directly contradict the agency's specific orders or sphere of authority.
