Ohio court dismisses punitive damages claims in two Aredia®/Zometa® cases.

04/21/14

OH

S.D. Ohio -- United States District Court for the Southern District of Ohio

Complex Litigation

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On April 21, 2014, Novartis Pharmaceuticals Corporation secured dismissal of punitive damages demands in Williams ex rel Bowles v. Novartis Pharm. Corp. and Sheffer v. Novartis Pharm. Corp., with the Southern District of Ohio court “join[ing] the vast majority of other courts in holding that New Jersey law governs the question of punitive damages” and finding that “New Jersey’s statutory exception for a claim based on ‘fraud-on-the-FDA’ is impliedly preempted.  Williams v. Novartis Pharm. Corp., No. 3:12-cv-00145 (S.D. Ohio Apr. 21, 2014), Sheffer v. Novartis Pharm. Corp., No. 3:12-cv-00238 (S.D. Ohio Apr. 21, 2014); see also, e.g., Krause v. Novartis Pharm. Corp, 926 F, Supp. 2d 1306 (N.D. Fla. 2013); Mathews v. Novartis Pharm. Corp., 953 F. Supp. 2d 811, 815-16 (S.D. Ohio 2013); Guenther v. Novartis Pharm. Corp., No. 6:08-cv-456, 2013 WL 1225391, at *2 (M.D. Fla. Mar. 27, 2013).

These cases were filed by Ohio residents Barbara Bowles and Shirley and Scott Sheffer in the District of Columbia, and so District of Columbia choice-of-law rules applied.  The parties agreed that Ohio law would govern liability and compensatory damages, but disagreed as to which state’s law to apply to the question of punitive damages.  The court first examined whether there was a true conflict in the law between Ohio and New Jersey punitive damages law, which both contain an exception allowing for punitive damages in cases of “fraud-on-the-FDA.” Courts in both states have found these exceptions to be impliedly preempted by the Federal Food, Drug, and Cosmetics Act, with the New Jersey law “broadly prohibit[ing] an award of punitive damages if the drug is FDA-approved.”  Order at 6.  The court rejected plaintiffs’ argument that Novartis did not meet the Ohio statute’s requirements to bar punitive damages, finding that “[t]he Court is not obligated to dig through the record to determine whether there is a genuine issue of material fact therein.”   Order at 7.  Further, it held that even if they had pointed to specific evidence, plaintiffs’ allegations “are akin to claims of ‘fraud-on-the-FDA,’ and would be impliedly preempted.”  Order at 7.

The court nevertheless assumed arguendo that punitive damages would be available under Ohio law, and thus a true conflict existed between Ohio and N.J.  Applying the District of Columbia’s governmental interests test, the court examined the two states with a potential interest in the matter:  Ohio (the plaintiffs’ home states, and where the relevant medical treatment occurred) and New Jersey (where Novartis is headquartered).  The court found that it must “give greater weight to ‘the place where the conduct causing the injury occurred,’” Order at 9, and that the “vast majority of courts that have addressed this issue in other cases involving Aredia and Zometa have concluded that New Jersey has the most significant relationship to the punitive damages claims.”  Order at 9; see also id. at 13-14 (citing cases). 

The court explicitly rejected a recent ruling by a Western District of Pennsylvania court that the location of the plaintiff’s treatment applied to punitive damages under the District of Columbia’s governmental interest test, finding that when a plaintiff seeks punitive damages in a failure to warn products liability case, “the focus, for purposes of a choice-of-law analysis, needs to be on the place where the defendant’s alleged corporate misconduct occurred.”  Order at 12.  The court next found that Ohio’s policy considerations are satisfied because its residents could be adequately compensated by the application of Ohio law to the issue of liability.  Finally, the court found that Ohio’s interest in punishing corporate conduct is “outweighed by the interest of the state where the alleged misconduct occurred” and that “Novartis has a justified expectation that New Jersey law will govern the question of whether punitive damages are warranted for its conduct within that state.”  Order at 13-14.

For these reasons, the court concluded that “[b]ecause Aredia and Zometa are FDA-approved drugs, and because New Jersey’s statutory exception for a claim based on ‘fraud-on-the-FDA’ is impliedly preempted, Plaintiffs cannot recover punitive damages.”  Order at 14.

Novartis is represented in these matters by Firm partners Frank Leone and Robert E. Johnston.

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