Novartis wins motion to apply New Jersey punitive damages law in M.D. Fla.

03/27/13

FL

M.D. Fla. -- United States District Court for the Middle District of Florida

Complex Litigation

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On March 26, 2012, Novartis Pharmaceuticals Corporation secured dismissal of a punitive damages demand, extending a string of cases in the Aredia®/Zometa® litigation in which courts have held that (1) New Jersey law governs punitive damages by out-of-state plaintiffs against New Jersey-based Novartis and (2) New Jersey law precludes punitive damages.  Guenther v. Novartis Pharm. Corp., No. 6:08-cv-00456-Orl-31-DAB, 2013 WL 1225391 (M.D. Fla. Mar. 26, 2013); see also, e.g., Zimmerman v. Novartis Pharm. Corp., 889 F. Supp. 2d 757 (D. Md. 2012).

The case was filed in Florida so Florida choice-of-law rules applied.  The court first held that different states’ laws might apply to different issues under the principle of depeçage.  The court stated that though “the word depeçage is a stranger to Florida law, the concept it represents is not.”  Applying Florida’s significant relationship test, the court examined the two states with a potential interest in the matter: Florida (the plaintiff’s home state, and where the relevant medical treatment occurred) and New Jersey (where Novartis is headquartered).  The court then expressly adopted the reasoning of Zimmerman in concluding that New Jersey law governs the issue of punitive damages.  As noted in Zimmerman, plaintiff’s location at the time of treatment was “simply fortuitous” with regard to the punitive damages demand, which turned on Novartis’s alleged conduct in New Jersey in labeling and marketing its drug and interacting with FDA. 

New Jersey allows punitive damages in pharmaceutical cases only when the plaintiff shows that the manufacturer “knowingly withheld or misrepresented” relevant information to the FDA.  In McDarby v. Merck & Co., 949 A.2d 223 (N.J. Super. Ct. App. Div. 2008), an intermediate appellate court held that this exception was preempted by the U.S. Supreme Court’s decision in Buckman v. Plaintiff’s Legal Committee.  Once again adopting the Zimmerman court’s analysis, the Guenther court agreed:

[S]imply put, Plaintiff’s claim for punitive damages requires a state fact finder to determine what was required to be submitted to the FDA, whether it was submitted to the FDA and, whether the FDA would have made a different approval decision had it been provided with the correct or missing information.  Plaintiff's claim thus requires a fact finder to make these types of determinations as a matter of state law even though federal law makes such determinations the exclusive province of the FDA. 

The Guenther court concluded the order by stating that “Section 2A:58C-5(c), of the New Jersey statutes is preempted by the FDCA, and Plaintiffs[’] claim for punitive damages will therefore be stricken.”

In opposing Novartis’s motion, plaintiffs relied heavily on a ruling issued recently in another Middle District of Florida Zometa® lawsuit, Chiles v. Novartis Pharm. Corp., holding that plaintiffs’ punitive damages demand was not barred by New Jersey law and preemption principles, but the Guenther court was not persuaded by the Chiles ruling.  In Chiles, the jury issued a modest compensatory damages award based on a strict liability theory but found that Novartis was not negligent, and the jury also rejected plaintiffs’ effort to recover punitive damages.  Post-trial motions are not yet due in the Chiles case. 

In addition to obtaining more than 100 dismissals in Aredia® and/or Zometa® cases pre-trial during motions practice or in discovery, nine cases have proceeded to trial from the federal and state consolidated Aredia®/Zometa® litigation.  Novartis has won five of these nine cases, winning four of the past seven cases: Hogan v. Novartis Pharm. Corp., No. 06-cv-0260 (E.D.N.Y. May 26, 2011), aff’d, No. 11-2648-cv, 2012 WL 3711349 (2d Cir. Aug. 29, 2012); Brodie v. Novartis Pharm. Corp., No. 4:10-cv-138-HEA (E.D. Mo. Feb. 1, 2012); Kyle  v. Novartis Pharm. Corp., No. 1:06-cv-35-R (W.D. Ky. Feb. 2, 2012); and Brown v. Novartis Pharm. Corp., No. 7:08-cv-00130 (E.D.N.C. Sept. 21, 2012) (voluntary dismissal by plaintiff after 3 days of trial).  In Baldwin v. Novartis Pharm. Corp., No. 2:06-cv-4049-MJW (W.D. Mo. Apr. 9, 2012), the jury returned only $225,000.00 in compensatory damages while rejecting entirely plaintiff’s claim for punitive damages.  InChiles v. Novartis Pharm. Corp., No. 3:06-cv-96-HLA-JBT, the jury returned only $250,000.00 in compensatory damages, while rejecting entirely plaintiff’s claim for punitive damages.  Novartis also won the first bellwether trial arising from the New Jersey state court consolidated Aredia®/Zometa® litigation:Bessemer v. Novartis Pharm. Corp., No. MID-L-1835-08-MT (N.J. Super. Ct. Law Div. Oct. 22, 2010). Bessemer was affirmed by the New Jersey Appellate Division: Bessemer v. Novartis Pharm. Corp., No. A-2069-10T1, 2012 WL 2120777 (N.J. Super. Ct. App. Div. June 13, 2012).

Novartis is represented in the Guenther case by Firm partners Eric G. Lasker and Heather A. Pigman.

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