Federal court judge holds N.J. statute precludes punitive damages and “fraud” exception is preempted

07/31/18

FL

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

Complex Litigation

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A federal district court judge has precluded plaintiffs from seeking punitive damages at trial in a product liability case involving one of Novartis Pharmaceuticals Corporation’s cancer therapies.

On July 31, 2018, Judge Robin L. Rosenberg of the United States District Court for the Southern District of Florida issued an order holding that the “knowingly withheld or misrepresented information required to be submitted under the agency's regulations” exception to New Jersey Statute Ann. 2A:58C-5c, which generally precludes punitive damages in cases involving FDA-approved products, was preempted by Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (2001).  McWilliams v. Novartis AG, et al., No. 2:17-cv-14302-RLR (July 31, 2018).  The order was issued on plaintiffs’ motion for reconsideration of an earlier order barring punitive damages on the ground that New Jersey law applied to the issue of punitive damages (rather than Florida law).  McWilliams v. Novartis AG, et al., No. 2:17-cv-14302-RLR, slip op. (July 9, 2018).  In that order, the court found that plaintiffs had failed to raise the “knowingly withheld or misrepresented” exception to the New Jersey statue in opposition.  On reconsideration, the court granted plaintiffs’ request that their footnote addressing the exception be considered by the Court, but held that the exception was preempted under case law finding claims of fraud on the FDA to be preempted under federal law.  The court reaffirmed its prior ruling that punitive damages are unavailable at trial.

Judge Rosenberg’s decision is in accord with the great weight of authority nationwide on the question of preemption of the “knowingly withheld or misrepresented” exception to the New Jersey statute, including several other Florida federal court decisions that have considered the question.  See, e.g., Guenther v. Novartis Pharm. Corp., 8:06-cv-1787-24-TBM, 2014 WL 2722483, at *3–4 (M.D. Fla. June 16, 2014); Dopson-Troutt v. Novartis Pharm. Corp., No. 8:06-cv-1708-T-24-EAJ, 2013 WL 3808205, at *4–5 (M.D. Fla. July 22, 2013).  The court also recognized that the New Jersey Appellate Division of the Superior Court has found the exception preempted.  McDarby v. Merck & Co., Inc., 949 A.2d 223 (N.J. Super. App. Div. 2008).  As a result, punitive damages will not be available to the plaintiffs at trial.

Novartis is represented by Firm partners Robert E. Johnston and Andrew L. Reissaus.

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