United States: Court Gives Non-Resident Pharmaceutical Claimants "Asylum," Notwithstanding Lack of Relief Under Law of Plaintiff’s Home State

See Rowe v. Hoffmann-La Roche, 892 A.2d 694 (N.J. Super. Ct. App. Div. 2006).

In light of the recent holding in International Union v. Merck, 894 A.2d 1136 (N.J. Super. Ct. App. Div. 2006), supra at 7, one has to wonder what New Jersey pharmaceutical companies (and similarly situated others) make of their chosen corporate home. Rowe, in effect an open invitation to forum shopping for non-residents against New Jersey-based companies, can only add to the worry and wonder.

In Rowe, New Jersey’s Appellate Division reversed a trial court’s cogent choice-of-law analysis and dismissal of a Michigan man’s action for damages based on claims that "he became severely depressed and attempted suicide several times" after taking Accutane (a drug used in the treatment of severe acne) years earlier. Id. at 698. Michigan products liability law -- which the trial court applied in granting summary judgment -- provides that drug warnings approved by the FDA, like those issued by defendant in respect of Accutane, are adequate as a matter of law, and as such immunizes drug manufacturers against failure-to-warn claims like the one filed by Mr. Rowe. Id. at 700. New Jersey law, on the other hand, provided that FDA approval created "only a rebuttable presumption" of warning adequacy. Id. at 698.

On the basis that New Jersey was defendant’s principal place of business (and place of incorporation), and that the state was the "exclusive location" for defendant’s "domestic operations" pertaining to the manufacture, sale, distribution, and labeling of Accutane, the Appellate Division reversed, holding "that New Jersey products liability law respecting the effect of prior FDA approval applies to plaintiff’s claim." Id. at 698-699.

Writing for the majority, Judge Wecker held that the New Jersey Supreme Court had adopted a "flexible, government interest analysis" for choice-of-law questions. While conceding that the alleged consequences of plaintiff’s Accutane use were visited upon him in Michigan, the court ultimately gave greater weight to the fact that all the relevant testing and manufacturing of Accutane had taken place in New Jersey, tipping the balance in favor of New Jersey law -- notwithstanding the lack of available relief under the law of plaintiff’s home state.

Citing Gantes v. Kason Corp., 145 N.J. 478 (1996), the court "rejected the argument that New Jersey did not have an interest in exposing its domestic manufacturers to liability when the law of the state of injury would not hold them liable," noting that New Jersey’s highest court had "described New Jersey’s strong policy interest in deterring the manufacture of unsafe products within its borders as neither discriminatory nor unnecessarily burdensome." Rowe, 891 A.2d at 704.

Turning to Michigan’s interests in applying its immunity law, the court inferred that the Michigan law was likely intended "to protect Michigan businesses," and finding "no reason to think it was concerned about the business climate in New Jersey or elsewhere," id. at 705-706, the majority concluded that application of "Michigan’s immunity statute would be contrary to New Jersey’s interest." Id. at 707. In effect blinding itself to reality, Rowe declared:

Id. at 708.

In a stinging dissent, Judge Welfing noted (tongue firmly in cheek) that "New Jersey courts are, for whatever reason, the site of much mass-tort litigation," adding:

Id. at 711.