Monday, February 10, 2014

Settlement in NuvaRing and the demise of product liability law in New Jersey


Updated 2/22/2014

In a landmark 1984 decision Feldman v. Lederle Laboratories the New Jersey Supreme Court affirmed a fundamental proposition:  "drug manufacturers have a duty to warn of dangers of which they know or should have known on the basis of reasonably obtainable or available knowledge."

A decade letter the New Jersey Product Liability Act addressed the problem of how to determine if that standard had been met.  The PLA provides that warnings that comply with FDA  requirements are entitled to a presumption of reasonableness.  In Perez v. Wyeth Laboratories (1999) the Court recognized a duty owing directly to the public by drug manufacturers who advertise directly to the public.  Justice Daniel O'Hern (who thought the new Product Liability Restatement was calculated to weaken consumer protection) sought  to emphasize the consumer protectiveness of New Jersey product liability law which had been the standard bearer since 1960's Henningsen v. Bloomfield Motors.   The Act, in O'Hern's view had essentially codified New Jersey strict product liability law without emasculating the courts ability to adapt to changed conditions - sch as the explosion of direct-to-consumer advertising and the demise of the "father knows best" model of health care delivery.  But O'Hern offered the prediction that cases that "[f]or all practical purposes, absent deliberate concealment or nondisclosure of after-acquired knowledge of harmful effects, compliance with FDA standards should be virtually dispositive of such claims. By definition, the advertising will have been "fairly balanced.""  

The natural reading of New Jersey strict product liability law is that liability flowed from  "deliberate concealment OR non-disclosure of after-acquired knowledge" that rendered the drug "not reasonably safe".  But the lack of an adjective before "non-disclosure" was a chink in the armor that emboldened drug company lawyers to argue that the  "Perez exception" was limited to "deliberate" concealment or intentional "non-disclosure of after acquired knowledge".  Thus was read into O'Hern's dicta a regulatory compliance defense.  Even actual knowledge of danger no longer triggered a duty to warn in this new defense perspective.  Feldman, they would effectively argue, had been silently overruled by Perez.  A plaintiff must now show fraud or other aggravated conduct.

The proofs in the Vioxx case McDarby v. Merck  (2008) revealed a company that systematically downplayed risks in order to maximize sales.  "Substantial evidence" overcame the statutory presumption, the court held in an opinion by Judge Edith Payne.  That became "the McDarby exception".  Paired with the "Perez exception" to the default immunity rule in the next assault on the Lederle  the duty to inform was eviscerated by trial judge (and former med-mal defense attorney) Jami Happas in  Bailey v. Wyeth  an estrogen therapy drug case decided in 2008.   Gone was the focus on whether the product - a carcinogenic hormone - was "reasonably safe".  The focus was now on the  company's conduct toward the FDA.  Only "intentional misconduct" could overcome the statutory presumption, Happas held.  Affirming in a 2011 summary opinion penned by Edith Payne the Appellate Division embraced the Happas opinion and ordered it to be published - entrenching it as binding appellate precedent. 

The state's Supreme Court denied cert.  Thus does a proud tradition die - without serious - or any - discussion of the consequences of such a decision.  Happas embedded  the idea of a "super-presumption" in the law of a state which used to embrace strict liability.  Styled as an evidentiary ruling it is really a rule of substantive law  which shields pharma from liability for negligent failure to inform patients of newly recognized risks.  The statutory presumption was thus converted into a full-throated regulatory compliance defense - the Pharmaceutical Research and Manufacturers Association's holy grail.  The real battle is moved to the FDA - a quasi-captive agency whose limitations were demonstrated in the Institute of Medicine's report The Future of Drug Safety.   In Kendall v. Hoffman-La Roche, Inc., 209 N.J. 173(2012) the high court had rather casually embraced the "super-presumption" phrase that was the industry by-word

New Jersey plaintiffs' weakened position was demonstrated in the Nuvaring litigation.  There  Bailey compelled a grant of summary judgment dismissing the New Jersey plaintiffs while those of other states citizens survived.  Brian Martinotti, the Superior Court Judge who was managing the cases in New Jersey where Merck is headquartered, methodically reviewed the aw in the states of the "bellwether plaintiffs. .  His opinion exposed weaknesses in proofs - such as doctors who did not say that they would not have prescribed  the contraceptive device if they had known of the vascular risks.  But most importantly Martinotti was bound by the industry-protective  "super presumption" of adequacy of FDA approved warnings which had wiped out not only strict product liability but even negligent failure to warn as causes of action against FDA-regulated drug makers.

The New Jersey Supreme Court - long a beacon of product liability law has rather become a slough of despond.  The super-presumption eviscerates not only New Jersey's history of strict product liability, but erases even negligence liability.  With Chris Christie at the helm in New Jersey and three more Supreme Court vacancies on his plate the pilgrim's progress in New Jersey is likely to be stalled for a generation. - GWC

Nod Given To $100M Settlement of NuvaRing Litigation Against Merck | New Jersey Law Journal:

A New Jersey state judge on Friday signed off conditionally on a settlement that requires Merck & Co. to pay $100 million to settle mass litigation over its allegedly unsafe NuvaRing birth-control device.Superior Court Judge Brian Martinotti made the approval contingent on achieving a 95 percent participation rate by plaintiffs in about 3,800 filed and pending matters in New Jersey and Missouri federal courts.U.S. Judge Rodney Sippel in St. Louis also approved the deal on Friday.The product, a contraceptive vaginal ring that releases hormones, went on the market in 2001 after Organon—a Dutch company with its U.S. headquarters in Roseland—in 2001 obtained Food and Drug Administration approval.The company was acquired in 2007 by Schering-Plough Corp., which two years later was acquired by Merck.
The device allegedly causes blood clots in some women, leading to increased risk of potentially fatal health problems like heart attack, stroke, pulmonary embolism and myocardial infarction.In August 2008, federal lawsuits filed in New Jersey, Missouri and Georgia were centralized for multidistrict litigation in the Eastern District of Missouri. The New Jersey state court cases were centralized before Martinotti the following March.

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