A lawsuit filed on behalf of a 7-year-old girl whose grandmother took the drug diethylstilbesterol (DES) 20 years before the child was conceived is raising important questions about the liability of pharmaceutical companies.

Lawyers for Karen Enright last month asked the New York State Court of Appeals to consider whether she is a third-generation victim of DES, the anti-miscarriage drug banned by the federal government in 1971 after it was linked to an abnormally high cancer rate among daughters of the women who took it.

Karen Enright suffers from a severe case of cerebral palsy, a condition that her lawyers contend was caused by her grandmother's use of DES while she was pregnant with Karen's mother.

Her lawyers say that the drug damaged the reproductive organs of Karen's mother, thereby causing the child's injuries.

Enright's attorneys have asked the state's highest court for permission to take the case to trial. If the court agrees, legal experts say, the decision could set a precedent, paving the way for a flood of lawsuits brought by those claiming they were injured in the womb years after their relatives were exposed to a drug or chemical.

"The implications for the law are very, very great," said Jay P. Mayesh, a lawyer for the New York firm Stroock & Stroock & Lavan. The firm represents companies in product liability cases but is not involved in the Enright case. "It opens up the question of resolution of claims for a very, very wide time span."

Although pharmaceutical manufacturers have said that diethylstilbesterol does not cause cancer, they have paid millions of dollars in claims brought by thousands of DES daughters.

Officials of pharmaceutical companies involved in the Enright case -- Abbott Laboratories, Bristol-Myers Squibb Co., Merck & Co., Upjohn Co. and Eli Lilly -- declined to comment on the case.

Leonard L. Finz, one of the attorneys representing Karen Enright, also declined to be interviewed.

So far, third-generation cases have not been successful. A 1982 lawsuit filed in Minnesota on behalf of a third-generation DES victim was dismissed after the state supreme court split on the issue. That suit was filed on behalf of a boy who suffers from cerebral palsy and whose maternal grandmother also took DES.

"If the courts open the doors to a suit based on third-generation injuries, it can have a very serious economic consequence because of the numbers," said Victor Schwartz, a Washington lawyer who specializes in product liability cases.

More than 1,000 DES lawsuits are now pending nationwide, according to Aaron Levine, a Washington lawyer who heads the DES section for the American Trial Lawyer's Association. About 10 percent, or 100, involve so-called third-generation claims, Levine said.

Virtually all the third-generation cases involve children who, like Karen Enright, were not directly exposed to DES but whose grandmothers took DES, a synthetic estrogen invented in the 1930s.

Enright was born prematurely, her lawyers contend, because the DES her maternal grandmother took in 1959 damaged her mother's reproductive organs, thereby compromising her ability to carry her pregnancy to term.

Court documents show that at birth Karen Enright suffered from hyaline membrane disease, a lung ailment that commonly afflicts premature babies, and had suffered brain damage.

Several months later, her doctors diagnosed cerebral palsy, a disabling condition that Enright's lawyers contend is a result of her premature birth, caused by her grandmother's exposure to DES.

But many medical experts dispute this conclusion and question the link to DES. "I know of no valid scientific evidence for any third-generation DES effects," said Arthur Herbst, chairman of obstetrics and gynecology at the University of Chicago and founder of a national registry for DES daughters.

While there is evidence that exposure to DES can impair a woman's ability to carry a child, "to take off something as nebulous as that and say this is the reason that grandchildren are going to have a problem is very, very far-fetched," said Louis Burke, associate professor of obstetrics and gynecology at Harvard University.

Burke who has studied more than 2,500 DES daughters, said that they have about a fourfold risk of having a premature baby. "But if they are handled properly, most of these women have {healthy} babies," he said.

Only one of the third-generation cases involves the female child of a man whose mother took DES. In the 1970s, when cases of cancer among DES daughters were identified, some experts predicted that DES sons might also have reproductive problems, particularly infertility. "But that has not held up," said Harvard's Burke, who has discontinued his study of DES sons.

Last March, a Montgomery County man whose mother took DES sued the Eli Lilly Co. in U.S. District court in Washington. J. David Roberts claimed that his daughter's death from cancer was linked to his mother's use of DES while she was pregnant with him.

Roberts's daughter Amy died in 1989 at age 13; her doctor said the cause of death was clear-cell adenocarcinoma of the vagina, a cancer seen in DES daughters.

Lilly officials declined to comment on the case, which was withdrawn from federal court last fall by Roberts' lawyer, Aaron Levine.

Levine said he withdrew the lawsuit last year for "jurisdictional reasons" and intends to refile the case in Maryland; he said he is waiting to see what happens with the Enright case.

Adenocarcinoma is a rare tumor that strikes only about one in 1,000 women exposed to DES and is almost never found in children or teenagers, according to Herbst of the University of Chicago.

A study by Michigan State University researcher Bruce Walker linked DES exposure in mice to cancer in their grandchildren. But "there is no evidence that this occurs in humans," Walker said.

Other medical experts question whether Roberts died of adenocarcinoma.

Robert Kurman, professor of obstetrics and gynecology at the Johns Hopkins Medical Institutions in Baltimore was a consultant to Amy Roberts's doctor. Kurman examined slides from Roberts's tumor, reviewed the autopsy report and conducted special tests of her tumor. He said it appeared to him that she died of another form of cancer, known as malignant germ cell tumor of the vagina.

"I don't think that there is any connection to the DES," Kurman said.

"The likelihood of a member of a third generation developing a disease related to a medication that their grandmother took is feasible theoretically," said Harvard's Burke.

"But there is no evidence to suggest it yet."