New Jersey Court Says NJ Punitive Damages Law to Apply in Products Liability Suit Filed by Virginia Resident

November 18, 2011

Judge Jessica Mayer granted the motion of defendant Novartis Pharmaceuticals Corporation (“NPC”) to apply New Jersey punitive damages law in a pharmaceutical products liability lawsuit filed in New Jersey state court by a Virginia resident for personal injuries allegedly caused by Zometa, an FDA-approved medication typically prescribed by oncologists to patients whose cancer has metastasized to bone.  Irby v. Novartis Pharm. Corp., No. MID-L-1815-08 (N.J. Super. Ct. Nov. 18, 2011).  Plaintiff and NPC, which has its principal place of business in New Jersey, agreed that Virginia law governs plaintiff’s negligence and other claims.  NPC contended that New Jersey law governs plaintiff’s demand for punitive damages, however, while plaintiff argued in favor of Virginia punitive damages law.

Judge Mayer acknowledged a conflict between the two jurisdictions’ laws, stating that Virginia permits punitive damages and that punitive damages in New Jersey cases involving FDA-approved pharmaceuticals are preempted by the Federal Food Drug and Cosmetic Act. Id. at 6. Given this conflict between Virginia and New Jersey law as to the availability of punitive damages, Judge Mayer conducted a choice-of-law analysis regarding the issue, based on the “significant relationship test” of New Jersey’s choice-of-law rules. Id. at 4-5.

Although there is a presumption that the law of the place of injury governs, Judge Mayer considered several factors and held that NPC overcame this presumption because New Jersey has a more significant relationship than Virginia to the issue of punitive damages.  She concluded that the location of plaintiff’s injury was “‘fortuitous’ because the place of injury bears little relation to [NPC’s] alleged punitive conduct,” given that “NPC is headquartered in New Jersey,” that “Zometa® was widely distributed throughout the United States,” and that “nothing in NPC’s sales, marketing, or distribution practices suggests that the alleged injury was more likely to occur in Virginia than in any other state.”  Id. at 7. The next factor, the location of the conduct allegedly causing the injury, also favored New Jersey because the conduct at issue for the punitive damages analysis allegedly originated from NPC’s headquarters in New Jersey.  Id. at 8-9.  In reaching this conclusion, Judge Mayer rejected plaintiff’s arguments that the relevant conduct occurred in Switzerland. Id. at 9 & n.4.  Judge Mayer also held that the relationship between plaintiff and NPC was centered on NPC’s activities in New Jersey because plaintiff’s claims “stem from [NPC’s] New Jersey business activities.”  Id. at 10.  Although plaintiff argued that applying Virginia’s punitive damages law would not offend interstate comity, Judge Mayer disagreed.  She held that “punitive damages are generally intended to regulate conduct within the bounds of an interested state” and that, based on her finding that the alleged misconduct occurred in New Jersey, “interstate comity would be least offended by the application of New Jersey law to the issue of punitive damages.” Id. at 12. Citing a prior ruling by Judge Mayer herself and rulings by federal courts in other Zometa lawsuits, Judge Mayer stated that, “[i]n light of the numbers of courts that have ruled for NPC on this issue, this court disagrees with Plaintiff’s assertion that [NPC] has been ‘largely unsuccessful’ on this issue.” Id. at 17.