U.S. District Judge Mark. R. Hornak has ruled that Pennsylvania product liability law permitting unlimited punitive damages controls three suits alleging Novartis Pharmaceutical’s bone drug, Zometa, caused jaw injuries. Judge Hornak denied the drugmaker’s attempt to apply New Jersey law, ruling that Pennsylvania law applied to the suits. Novartis had argued that New Jersey, home to its U.S. headquarters, had the more significant relationship to the punitive damages issue since it was the site of the alleged corporate misconduct.
The New Jersey Products Liability Act law contains a punitive-damages cap of $350,000 or five times the compensatory award, whichever is greater. The New Jersey law also precludes punitive damages for FDA-approved products without evidence that the manufacturer knowingly misled the government on information relevant to the alleged injuries. Pennsylvania law imposes no such restrictions on punitive awards. The Plaintiffs are former Zometa users, or their spouses, who filed suit based on these claims; strict liability, negligent manufacture; failure to warn and breach of warranty. The users allegedly developed osteonecrosis of the jaw (ONJ) after taking the drug while undergoing cancer treatment.
Two of the three suits at issue in the court’s ruling were filed in federal court in Washington, D.C., and were first sent to a Tennessee multidistrict litigation and then to Pennsylvania. The users in these two cases first ingested Zometa in Pennsylvania. Under Washington’s choice-of-law protocols, Pennsylvania met the four-factor test for applying its law to the suits, according to Judge Hornak’s order. He said that the site of the alleged injury generally determines the controlling state law, adding that the relevant injurious conduct occurred not in New Jersey, where Novartis created Zometa’s labeling, packaging and marketing materials, but in Pennsylvania, where it allegedly misinformed physicians about the drug’s side effects through inadequate warning labels. The court’s order reads in part:
The plaintiffs and their doctors allegedly failed to receive adequate warnings in Pennsylvania, plaintiffs were prescribed the drug in Pennsylvania, and were infused with the drug in Pennsylvania. [Novartis] did conduct research regarding Zometa and make decisions on Zometa marketing, labeling, and packaging in New Jersey. However, the place where the defendant engaged in certain conduct is of less significance in situations where a potential defendant might choose to conduct his activities in a state whose tort rules are favorable.
Judge Hornak said while he “respects” New Jersey’s interest in punishing and deterring dangerous corporate conduct on its own terms, he was swayed by Pennsylvania’s “substantial” interest in regulating pharmaceutical manufacturers that affirmatively market their products to Pennsylvania doctors, on that point. He wrote:
Pennsylvania maintains an interest in its own punitive damages law, which is intended to protect its citizens from defective products and to encourage manufacturers, wherever headquartered, to produce safe products. When those products are systematically introduced into Pennsylvania, Pennsylvania has a legitimate and substantial interest in applying its punitive damages law.
The choice of law for a third suit, first brought in New York, according to the order, hinged on the location of the “last event necessary” to establish Novartis’ liability. Judge Hornk said this “plainly occurred” in Pennsylvania. Judge Hornk wrote:
The allegations on which plaintiffs ground their punitive damages claims range well beyond [Novartis’] boardroom in New Jersey; they include claims that NPC marketed and sold Zometa to them in Pennsylvania, and failed to properly warn them there, while knowing of Zometa’s potentially devastating side effects.
Novartis recently failed to convince the U.S. Supreme Court to review its argument that state punitive damages awards encroach on the regulatory authority of the U.S. Food and Drug Administration and are therefore uniformly preempted. The Plaintiffs in the three lawsuits are represented by Joseph F. Butcher and Daniel E. Krauth, who are with the Pennsylvania law firm Zimmer Kunz; John Julian Vecchione of Valad & Vecchione, located in Fairfax, Va.; and Daniel A. Osborn with The Osborn Law firm based in New York City.
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