Plaintiff-Appellant,
v.
HOFFMANN-LA ROCHE INC., and
ROCHE LABORATORIES INC.,
Defendants-Respondents.
_____________________________________
Argued October 6, 2005 Decided
Before Judges Wefing, Wecker and Graves
On appeal from the Superior Court of New
Jersey, Law Division, Essex County,
L-2971-03.
Brian J. Molloy argued the cause for
appellant (Wilentz, Goldman & Spitzer,
attorneys; Mr. Molloy of counsel; Jeffrey
J. Brookner and Mr. Molloy on the brief).
Paul W. Schmidt (Covington & Burling) of the
Washington, D.C. bar, admitted pro hac vice,
argued the cause for respondents (Gibbons,
Del Deo, Dolan, Griffinger & Vecchione,
attorneys; Michael R. Griffinger, Diane E.
Lifton, and Kristine V. Ryan, on the brief).
The opinion of the court was delivered by
WECKER, J.A.D.
This appeal from the dismissal of a products liability suit presents a choice
of law question: whether New Jersey or Michigan law governs plaintiff's failure-to-warn claim.
The appeal does not concern the adequacy of the warning itself, which is
not part of the record before us, but only the choice of law
to be applied.
Plaintiff, Robert Rowe, appeals from an order granting defendants' motion for summary judgment
and dismissing his failure-to-warn complaint against defendants Hoffmann-La Roche Inc. and Roche Laboratories
Inc. ("Roche"). The motion judge held that Michigan products liability law applied to
plaintiff's claims, and that because defendants' warning for the drug had received approval
by the United States Food and Drug Administration (FDA), defendants' warning was adequate
as a matter of law under Michigan's products liability statute, specifically, M.C.L. § 600.2946(5).
Plaintiff contends that a contrary provision of New Jersey's Products Liability Act, N.J.S.A.
2A:58C-1 to -11, applies, and that under New Jersey law, FDA approval provides
only a rebuttable presumption that the warning was adequate. N.J.S.A. 2A:58C-4. We conclude
that New Jersey products liability law respecting the effect of prior FDA approval
applies to plaintiff's claim. We therefore reverse.
Rowe, who was at all relevant times a Michigan resident, claims that as
a result of taking the prescription drug Accutane in 1997, when he was
sixteen years old, he became severely depressed and attempted suicide several times. Accutane
is an FDA-approved prescription drug for the treatment of severe recalcitrant nodular acne.
See footnote 1
Rowe's Michigan dermatologist prescribed Accutane for him in Michigan, where he purchased and
ingested the drug.
Defendants admit that their principal place of business is located in Nutley, New
Jersey, and that Hoffmann-La Roche Inc. is a New Jersey corporation.
See footnote 2
Almost the
entire Accutane manufacturing process is conducted at the Nutley site. Defendants label and
package Accutane in Nutley, where they maintain the Drug Regulatory Affairs unit, which
is responsible for communications with the FDA regarding Roche products, labeling, and warnings.
Roche Laboratories Inc. also maintains its United States Accutane sales and distribution facilities
in Nutley. In short, New Jersey is the exclusive location in the United
States for defendants' domestic operations relating to sales, distribution, drug safety, drug regulatory
affairs, and labeling of Accutane, as well as almost its entire manufacturing process.
Rowe's one-count amended complaint alleges that contrary to the New Jersey Products Liability
Act, defendants negligently, carelessly, and recklessly placed Accutane into the stream of commerce
by failing to timely and adequately warn him of the "dangers and adverse
health risks associated with Accutane/Roaccutane"
See footnote 3
and that defendants are liable to him for
failing to provide an adequate warning of the possible psychological side-effects of Accutane.
Rowe contends that defendants negligently failed to perform sufficient laboratory testing or obtain
sufficient test results regarding a link between Accutane use and patient depression and
suicide and that when defendants launched their Accutane marketing campaign, they knew that
some patients who had taken the drug had experienced severe depression and some
of those had even committed suicide. He contends that in March 1997, the
French government ordered defendants to strengthen their Accutane warning "to include suicide as
a possible side effect," and that Roche willfully failed to advise the FDA
of the suicide warning it was required to provide in France to avoid
imposition of a stronger warning requirement in the United States.
Defendants' answer to the amended complaint did not assert Michigan products liability law
as a defense. Nonetheless, defendants brought their motion for summary judgment on the
ground that plaintiff's claims were barred under Michigan law, specifically, M.C.L. § 600.2946(5). The
motion judge permitted (and subsequently adopted) that defense over plaintiff's objection. The judge's
decision to permit the defendants to move for summary judgment when Michigan law
was not pled as a defense was within her discretion. See Erny v.
Russo,
333 N.J. Super. 88, 96 (App. Div. 2000), rev'd on other grounds,
171 N.J. 86 (2002) (where the trial judge allowed the plaintiff to seek
application of New York law after the liability trial, we said, "[i]n view
of the broad discretion enjoyed by the trial court in such matters, we
refrain from disturbing that determination.")
As a preliminary determination, the motion judge correctly found an actual conflict between
Michigan law and New Jersey law on the viability of a failure-to-warn claim
with respect to FDA-approved warnings. New Jersey law creates a rebuttal presumption that
a drug warning is adequate if it was approved by the FDA:
In any product liability action the manufacturer or seller shall not be liable
for harm caused by a failure to warn if the product contains an
adequate warning or instruction or, in the case of dangers a manufacturer or
seller discovers or reasonably should discover after the product leaves its control, if
the manufacturer or seller provides an adequate warning or instruction. An adequate warning
or instruction is one that a reasonably prudent person in the same or
similar circumstances would have provided with respect to the danger and that communicates
adequate information on the dangers and safe use of the product, taking into
account the characteristics of, and the ordinary knowledge common to, the persons by
whom the product is intended to be used, or in the case of
prescription drugs, taking into account the characteristics of, and the ordinary knowledge common
to, the prescribing physician. If the warning or instruction given in connection with
a drug or device or food or food additive has been approved or
prescribed by the federal Food and Drug Administration under the "Federal Food, Drug,
and Cosmetic Act," or the "Public Health Service Act," a rebuttable presumption shall
arise that the warning or instruction is adequate.
[N.J.S.A. 2A:58C-4 (internal citations omitted) (emphasis added).]
Thus the presumption under New Jersey law, while strong, is not conclusive. See,
e.g., Perez v. Wyeth Labs., Inc.,
161 N.J. 1, 24 (1999).
By contrast, an FDA-approved warning is adequate, that is, by definition "not defective"
under Michigan law, which effectively provides absolute immunity to a drug manufacturer in
a failure-to-warn case.
In a product liability action against a manufacturer or seller, a product that
is a drug is not defective or unreasonably dangerous, and the manufacturer or
seller is not liable, if the drug was approved for safety and efficacy
by the United States [F]ood and [D]rug [A]dministration, and the drug and its
labeling were in compliance with the United States [F]ood and [D]rug [A]dministration's approval
at the time the drug left the control of the manufacturer or seller.
[M.C.L. § 600.2946(5).
See footnote 4
]
The motion judge found that the goal of the New Jersey law is
to "insure a high standard of care attaches to the . . .
drugs that are produced . . . in New Jersey and distributed from
New Jersey," whereas the goals underlying the Michigan law are "to encourage drug
companies to market their products in Michigan so that their products are available
to Michigan residents," and "to create predictable standards of due care for drug
manufacturers who do business within Michigan."
The issue presented is entirely a question of law. On appeal, de novo
review is therefore appropriate. Manalapan Realty v. Manalapan Twp. Comm.,
140 N.J. 366,
378 (1995) ("A trial court's interpretation of the law and the legal consequences
that flow from established facts are not entitled to any special deference."). As
the forum state, New Jersey's choice-of-law rules apply. Fu v. Fu,
160 N.J. 108, 117 (1999) (considering the dual interests of deterrence and compensation supported the
application of New York law, which allowed vicarious liability against a motor vehicle's
owner, rather than New Jersey law, which did not). The choice-of-law analysis here
is governed by the analytical framework set forth in Gantes v. Kason Corp.,
145 N.J. 478 (1996), and Erny v. Estate of Merola,
171 N.J. 86
(2002). The dispute is how that analysis applies to the facts before us.
Whereas tort claims at one time were almost universally governed by the law
of the place of injury, that approach was abandoned long ago. Mellk v.
Sarahson,
49 N.J. 226, 228-29 (1967).
Where a foreign state has no real interest in having its law applied
to a particular right or liability of parties to an event which occurred
within its borders, a mechanical application of a disability or immunity imposed by
lex loci delicti may work an unjust result having no relation to the
purposes and policies behind the foreign law.
[Ibid.]
The Supreme Court has adopted a more flexible, governmental interest analysis in addressing
choice-of-law issues, expressly holding that "[c]hoice-of-law determinations are made on an issue-by-issue basis,
with each issue receiving separate analysis." Erny, supra, 171 N.J. at 94 (New
Jersey's law of comparative negligence but New York's law of joint and several
liability applied, based on each state's interest in the application of its law).
The law that applies is the law of the state with the greatest
interest in the specific issue on which the laws conflict. E.g., Gantes, supra,
145 N.J. at 484 (Georgia had no interest in enforcing its statute of
repose to protect a New Jersey manufacturer, and New Jersey's interest in deterring
dangerous manufacturing within the state supported applying New Jersey's statute of limitations); Veazey
v. Doremus,
103 N.J. 244, 247 (1986) (where Florida husband and wife were
involved in an automobile accident in New Jersey, Florida's interspousal immunity law applied;
despite having abrogated interspousal immunity, New Jersey had no interest that outweighed Florida's
interest in applying its law). The law of one jurisdiction may apply to
a particular issue and the law of another jurisdiction may apply to a
different issue in the same case. Erny, supra, 171 N.J. at 95. As
is evident in New Jersey cases involving conflicts of laws, governmental-interest analysis neither
favors nor disfavors the law of the forum; there is clearly no automatic
preference for applying the law of the forum.
The first step in resolving a potential conflict of laws issue is to
determine whether an actual conflict exists. Fu, supra, 160 N.J. at 118; Gantes,
supra, 145 N.J. at 484-85. Clearly such a conflict exists here, for whether
plaintiff's case withstands summary judgment depends upon which state's law applies. See, e.g.,
Gantes, supra, 145 N.J. at 484-85 (finding an "obvious and direct conflict" between
Georgia's ten-year statute of repose and New Jersey's two-year statute of limitations where
plaintiff's action would have been barred under the Georgia statute).
Because a true conflict exists, we must identify the governmental policies underlying each
state's law and consider whether and to what extent those policies are implicated
in this litigation. Veazey, supra, 103 N.J. at 248. A state's law will
be applied only if doing so "will advance the policies that the law
was intended to promote." Pfizer v. Employers Ins. of Wausau,
154 N.J. 187,
198 (1998). "If a state's contacts are not related to the policies underlying
its law, then that state does not possess an interest in having its
law apply." Veazey, supra, 103 N.J. at 248. Thus "the qualitative, not the
quantitative, nature of a state's contacts ultimately determines whether its law should apply."
Ibid.
Sections 6, 145, and 146 of the Restatement inform our analysis of the
competing interests in tort cases. See, e.g., Erny, supra, 171 N.J. at 95-97,
101-03; Fu, supra, 160 N.J. at 119-25. New Jersey's governmental-interest analysis has incorporated
in substantial measure the approach of the Restatement (Second) of Conflict of Laws
(1971) (Restatement). See Fu, supra, 160 N.J. at 119; Heavner v. Uniroyal, Inc.,
63 N.J. 130 (1973); Mellk, supra, 49 N.J. at 234. With respect to
tort claims, such as those before us, the Restatement recommends that the law
of the state which has the "most significant relationship to the occurrence and
the parties under the principles stated in § 6 should apply." Restatement § 145(1). The
five key factors in determining which state that is, under § 6, have been
summarized as: "(1) the interests of interstate comity; (2) the interests of the
parties; (3) the interests underlying the field of tort law; (4) the interests
of judicial administration; and (5) the competing interests of the states." Fu, supra,
160 N.J. at 122. "[T]he initial focus should be on what policies the
legislature or court intended to protect by having [the] law apply to wholly
domestic concerns, and then, whether these concerns will be furthered in applying [the]
law to the multi-state situation." Erny, supra, 171 N.J. at 101-02 (internal quotation
marks and citation omitted). Of those five factors, the most important is "the
competing interests of the states." Id. at 101.
As to interstate comity, "a court must determine whether application of a competing
state's law would frustrate the policies of other interested states." Id. at 102
(internal quotation marks and citation omitted). When a court determines the interests underlying
tort law generally, it "must consider the degree to which deterrence and compensation,
the fundamental goals of tort law, would be furthered by the application of
a state's local law." Ibid. (internal quotation marks and citation omitted). And "[b]ecause
every tort rule, to some extent, is designed both to deter and to
compensate, it is necessary to evaluate on a case-by-case basis the relative weight
of those underlying purposes with respect to a specific rule." Ibid. (internal quotation
marks and citation omitted).
The remaining two factors listed in Fu are less important in the choice-of-law
determination. Erny, supra, 171 N.J. at 102. "The interests of judicial administration afford
courts a chance to consider the practicality of applying a specific law in
a given situation; however, to the extent that factor conflicts with a strong
state policy, the factor yields." Ibid. (internal quotation marks and citation omitted). And
the parties' interests, being result-driven, are not a factor separate from each state's
policy interests. See ibid.
We now consider the respective interests of Michigan and New Jersey in having
their laws respecting the effect of FDA-approval apply here, keeping in mind "deterrence
and compensation, the fundamental goals of tort law." Erny, supra, 171 N.J. at
102. To apply the general principles of conflicts law set forth in § 6
of the Restatement, a court should consider: (1) where the injury occurred; (2)
where the conduct causing the injury occurred; (3) the parties' respective domiciles, residences,
nationalities, places of incorporation, and principal places of business; and (4) the place,
if any, where the parties' relationship is centered. Restatement § 145(2); Erny, supra, 171
N.J. at 103.
Unlike many tort cases, where the blameworthy conduct and the injury occur in
the same state, here the cited conduct of the defendants with respect to
the Accutane warning occurred largely in New Jersey, whereas the injury, which could
have occurred anywhere in the world, occurred in Michigan. "[T]he place where a
product manufactured [in New Jersey] ultimately comes to rest and causes injury is
a matter of pure fortuity." Gantes, 145 N.J. at 493 (citation and internal
quotation marks omitted). Thus although place of injury is a significant factor in
many tort actions, it does not warrant undue weight in product liability cases.
See Erny, supra, 171 N.J. at 103.
Comment (f) to § 6 of the Restatement addresses a hypothetical situation similar
to what we face here:
The content of the relevant local law rule of a state may be
significant in determining whether this state is the state with the dominant interest.
So, for example, application of a state's statute or common law rule which
would absolve the defendant from liability could hardly be justified on the basis
of this state's interest in the welfare of the injured plaintiff.
Similarly, comment (e) to § 146 of the Restatement is relevant to our analysis:
[I]f the relevant local law rule of the state where the injury occurred
would impose absolute liability upon the defendant, it is probable that this state
is seeking by means of this rule to insure compensation for the injured
person. If so, the interests of this state would be furthered by having
its rule applied. If, on the other hand, the defendant would enjoy a
special immunity for his conduct under the local law of the state of
injury, it is not clear that the interests of this state would be
furthered by application of its rule. The purpose of such a rule is
presumably to encourage persons to engage in the particular conduct within the state.
But in the situation here considered the defendant's conduct took place in another
state and hence might be thought not to come within the purpose of
the rule of the state of injury.
[Emphasis added].
Here, virtually all of Rowe's contacts relevant to his treatment with the drug
Accutane obviously occurred in Michigan. But defendants' conduct, which is the object of
Rowe's complaint, occurred almost entirely in New Jersey. Governmental interest analysis requires courts
to consider, in the interest of interstate comity, whether application of one state's
law will further or frustrate the policies underlying the law of any other
state whose interests are implicated by the litigation. Fu, 160 N.J. at 122,
125. The law of a jurisdiction other than that of the place of
injury will apply when another jurisdiction has a dominant interest in the application
of its law and the policy of the state where the injury occurred
is not frustrated thereby. Erny, supra, 171 N.J. at 103; Restatement § 145, comment
e and § 146, comment c.
The parties' circumstances and the issues before us here are similar in critical
aspects to those the Court addressed in Gantes. There the choice-of-law issue was
whether the New Jersey statute of limitations or the Georgia statute of repose
would apply to plaintiff's products liability claim. Id. at 482. The plaintiff's decedent
died as a result of being injured on her job in Georgia by
a machine manufactured by the defendant in New Jersey. The decedent's estate filed
suit against the manufacturer of the machine in New Jersey within New Jersey's
two-year statute of limitations on personal injury claims. But the machine had been
manufactured thirteen years before plaintiff's accident, and the defendant invoked Georgia's ten-year statute
of repose, which applied to products liability claims against manufacturers.
The Court noted that the "goal of deterrence, acknowledged generally to be part
of tort law, is especially important in the field of products-liability law." Gantes,
supra, 145 N.J. at 489-90. The Court concluded:
[T]his State has a strong interest in encouraging the manufacture and distribution of
safe products for the public and, conversely, in deterring the manufacture and distribution
of unsafe products within the state. That interest is furthered through the recognition
of claims and the imposition of liability based on principles of strict products-liability
law.
[Id. at 490].
Further discussing the deterrence goal, the Court described the development of products liability
law in New Jersey:
[T]his State's judiciary has been in the vanguard of the development of a
responsive and progressive products liability law and has led the country in its
ideological commitment to the protection of consumers and concomitant consequence of inducing those
who place products into the stream of commerce to act with social responsibility
. . . the development of products liability law in New Jersey and
the consequent imposition of strict liability on manufacturers has been a powerful force
perhaps the most powerful force in effecting, over the last two and a
half decades, product safety and social responsibility by industry.
[Ibid. (internal quotation marks and citations omitted)].
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. Id. at 491. The Court described
New Jersey's strong policy interest in deterring the manufacture of unsafe products within
its borders as neither discriminatory nor unnecessarily burdensome. Gantes, supra, 145 N.J. at
491. The Court also rejected arguments that a decision to apply New Jersey
law to the plaintiff's claims would breed forum-shopping and increase litigation, needlessly adding
to the heavy caseloads already burdening New Jersey courts. Id. at 492. Specifically,
as to the forum-shopping concerns, Justice Handler wrote for the Court: "[T]he policy
against forum-shopping is intended to ensure that New Jersey courts are not burdened
with cases that have only slender ties to New Jersey." Ibid. (internal quotation
marks and citation omitted). Plaintiff's suit was "materially connected to New Jersey by
the fact that the allegedly defective product was manufactured in and then shipped
from" New Jersey. Ibid.
The Court concluded that New Jersey's substantial deterrence interest would be furthered by
the application of its statute of limitations, and concerns over injuring domestic manufacturers,
forum-shopping, and increased litigation in New Jersey courts did not outweigh that deterrence
interest. Id. at 492-93. On the other hand, Georgia had no interest in
the application of its statute of repose, because application of its statute would
not further any of the legislature's purposes in enacting the statute, and the
application of the New Jersey statute would not frustrate any Georgia policy interest.
Id. at 494. In choosing the appropriate law to apply, the Court focused
on the purpose of the Georgia Legislature in enacting its statute of repose:
to stabilize insurance underwriting for Georgia businesses and to keep stale claims out
of Georgia courts. Id. at 493. The Court held that New Jersey's statute
of limitations applied because the defendant was a New Jersey corporation that had
manufactured the product in New Jersey and because of New Jersey's "strong interest
in encouraging the manufacture and distribution of safe products . . . and,
conversely, in deterring the manufacture and distribution of unsafe products within the state."
Id. at 490. Those interests would be served by applying New Jersey law,
whereas Georgia's interest in its statute of repose would neither be furthered by
applying Georgia law nor frustrated by applying New Jersey law. Id. at 494-95.
New Jersey's statute of limitations therefore applied to the plaintiff's claims. Gantes, supra,
145 N.J. at 498-99.
We must, however, consider Michigan's interest in applying its immunity law before we
can fairly balance each state's interest in having its own law apply. We
have found little guidance in Michigan case law respecting the Michigan Legislature's intent
in enacting M.C.L. § 600.2946(5). In Ammend v. BioPort, Inc.,
322 F. Supp.2d 848, 876 (W.D. Mich. 2004), Michigan's interest in the application of its statute
was implicitly assumed to be protection of Michigan drug manufacturers. In Ammend, several
out-of-state plaintiffs, who alleged injuries resulting from an injection of anthrax vaccine, sued
BioPort, the vaccine's Michigan-based drug-manufacturer. Id. at 852-53. The plaintiffs urged the court
to apply the products liability laws of their respective domiciles rather than M.C.L.
§ 600.2946(5). Id. at 875-76. Utilizing a governmental-interest choice-of-law analysis, the federal district court
held that the Michigan statute applied:
Michigan's interest in applying its law to this case strongly outweighs the
interests of any foreign states. All Defendants . . . are Michigan residents
with principal places of operation in Michigan. The anthrax vaccine . . .
was produced in Michigan. Moreover, the Michigan legislature has expressly recognized Michigan's interest
in regulating drug product manufacturers by enacting a drug product liability immunity statute,
M.C.L. § 600.2946(5). Therefore, Michigan law, including the drug product liability immunity statute, controls
in this case.
[Ibid.]
We infer that Michigan's purpose in enacting M.C.L § 600.2946(5), as part of a
comprehensive tort reform bill, see House Legislative Analysis Section on Sen. B. 344
(First Analysis), June 8, 1995, may have been to protect Michigan businesses. The
amended bills passed by the Michigan House and Senate, which included M.C.L. § 600.2946(5),
also included provisions modifying joint and several liability, restricting non-economic damages, and adding
defenses to products liability cases. Senate Fiscal Agency Analysis, Sen. B. 344, H.B.
4508 (Revised Enrolled Analysis), January 11, 1996. The bills were supported by several
Michigan business and manufacturing associations, but opposed by the Michigan Consumer Federation. See
House Legislative Analysis Section on Sen. B. 344, p.12, supra. Assuming the Michigan
Legislature was concerned about the business climate in Michigan, there is no reason
to think it was concerned about the business climate in New Jersey or
elsewhere. While defendants contend that the Michigan Legislature did not intend its statute
to be limited to domestic manufacturers, state laws normally do not operate outside
their boundaries. See BMW of N. Am. v. Gore,
517 U.S. 559, 572
n.16,
116 S. Ct. 1589, 1597 n.16,
134 L. Ed. 2d 809, 824
n.16 (1996) ("Laws have no force of themselves beyond the jurisdiction of the
State which enacts them, and can have extra-territorial effect only by the comity
of other States") (Internal quotation marks and citation omitted).
Unlike BioPort, neither Hoffmann-La Roche Inc. nor Roche Laboratories Inc. are Michigan drug
manufacturers. It is difficult to see how Michigan's interest in protecting Michigan drug
manufacturers would be furthered by applying its immunity statute to this case. Likewise,
it is difficult to see that Michigan has any interest in protecting out-of-state
manufacturers like defendants here. The motion judge's finding that the primary purpose of
the Michigan statute is to increase drug availability in Michigan is unsupported by
the record. If in fact there was a shortage of drugs in Michigan
at the time the statute was enacted, no evidence of such a shortage
appears in the record before us. We know of no instance, and none
has been cited to us, when a drug manufacturer has withheld distribution or
sales of its product on account of any state's products liability law.
See footnote 5
Moreover, we must consider the impact that application of Michigan's immunity law would
have upon New Jersey's interest in applying the rebuttable presumption of N.J.S.A. 2A:58C-4.
Rowe cites what he describes as the New Jersey Supreme Court's "deep long-standing
reluctance to cede control of drug regulation to the FDA," citing as examples,
Perez, supra, 161 N.J. at 21-25; Feldman v. Lederle Labs.,
125 N.J. 117
(1991), cert. denied,
505 U.S. 1219,
112 S. Ct. 3027,
120 L. Ed. 2d 898 (1992); Feldman v. Lederle Labs.,
97 N.J. 429, 446 (1984).
See footnote 6
It
is well within our common knowledge that the drug industry has a major
presence in New Jersey, a fact that adds to New Jersey's interest in
applying its liability law to failure-to-warn claims respecting FDA-approved drugs manufactured in the
state.
Even if the Michigan Legislature intended its immunity provision to apply to drug
manufacturers outside its borders, as our dissenting colleague suggests, we agree with Rowe
that to apply Michigan's immunity statute here would be contrary to New Jersey's
interest expressed in the enactment of N.J.S.A. 2A:58C-4 as part of the Products
Liability Act.
In enacting the Products Liability Act, the New Jersey Legislature balanced the competing
interests of the consumer and the manufacturer and determined the appropriate level of
protection each should be afforded. See N.J.S.A. 2A:58C-4. The Legislature determined that FDA
approval of a drug's safety and its labeling should be a significant factor,
indeed, that it would create a prima facie defense to any claim against
the manufacturer based upon allegedly insufficient warnings. See id. By creating a rebuttable
presumption, the Legislature provided a strong but not absolute defense, declining to immunize
drug manufacturers and allowing a plaintiff who could present sufficient evidence of an
inadequate or incomplete warning to prevail.
See footnote 7
Ibid. It is not for us to
engage in our own balancing of those interests or to tip the scales
in favor of New Jersey drug manufacturers any more than the Legislature intended.
The Supreme Court's reasoning in Gantes with respect to New Jersey's interest in
allowing a non-resident plaintiff's products liability claim to be heard on its merits
rather than barred by a statute of repose applies as well to the
bar that the Michigan immunity statute would impose if applied to plaintiff's complaint
here. The Supreme Court's resolution of the competing arguments in Gantes weighs heavily
in favor of applying New Jersey's rebuttable presumption and not Michigan's immunity law
to the FDA-approved Accutane warning challenged by Rowe in this case.
In choosing which of the two states' laws to apply, the motion judge
relied substantially on Deemer v. Silk City Textile Mach. Co.,
193 N.J. Super. 643 (App. Div. 1984), to conclude that applying New Jersey law in this
case would "frustrat[e] . . . the aim of the Michigan Legislature." In
Gantes, the Court distinguished Deemer, not on the basis of the conflicting laws
being substantive rather than procedural in nature, but because in Deemer, this court
found that applying New Jersey law to permit a suit filed by "the
North Carolina resident against a manufacturer that was no longer in New Jersey
would actually frustrate the policies of North Carolina's workers' compensation laws, [whereas] [n]o
Georgia law is frustrated by the application of New Jersey's statute of limitations
to allow the action to proceed in this State." Gantes, 145 N.J. at
494-95 (internal quotation marks and citation omitted). Similarly, we conclude that Michigan's immunity
provision will not be frustrated by the application of New Jersey's rebuttable presumption
to allow Rowe's claim to proceed here.
Although Deemer was distinguished without being expressly overruled in Gantes, its continued vitality
has been questioned. See Eugene F. Scoles et al., Conflict of Laws 920
(4th ed. 2004) (concluding that Deemer "is at least implicitly overruled by Gantes
v. Kason Corp. . . . .").
Gantes is noteworthy for favoring a foreign victim at the expense of a
local manufacturer. Of course, Gantes did so not for the sake of protecting
the victim, but rather in pursuance of the forum's policy of deterring the
manufacture of substandard products within its territory.
[Scoles, Conflict of Laws, 920].
Even if Deemer is still good law, this case is not analogous to
Deemer, where we applied North Carolina law because to apply New Jersey law
there would have frustrated the purpose of the North Carolina law. See Deemer,
supra, 193 N.J. Super. at 651.
We perceive no purpose underlying the Michigan statute that would be furthered by
its application to Rowe's claims, nor any goal that would be frustrated by
applying New Jersey law. Nor do we see any danger that applying New
Jersey law in this case will lead to an influx of drug failure-to-warn
cases brought by non-residents of New Jersey. The motion judge's concern implicitly assumes
that many consumers of New Jersey-manufactured drugs live in states with immunity statutes
similar to the Michigan statute. But our research has not disclosed a similar
immunity statute in any other state. And a partial immunity, by way of
what has been called "the government standards defense," is the law in only
a minority of jurisdictions. David G. Owen, Special Defenses in Modern Products Liability
Law,
70 Mo. L. Rev. 1, 13 (2005).
Many populous states either limit the defense to a rebuttable presumption of adequacy
for an FDA-approved warning, or treat FDA-approval as one factor in determining a
warning's adequacy.
See footnote 8
E.g., Wells v. Ortho Pharm. Corp.,
788 F.2d 741, 746 (11th
Cir.) (applying Georgia law), cert. denied,
479 U.S. 950,
107 S. Ct. 437,
93 L. Ed.2d 386 (1986); Cartwright v. Pfizer, Inc.,
369 F. Supp. 2d 876, 882-86 (E.D. Tex. 2005); Kociemba v. G.D. Searle & Co.,
680 F. Supp. 1293, 1299 (D. Minn. 1988); Carlin v. Superior Court,
920 P.2d 1347, 1353 n.4 (Cal. 1996); Toner v. Lederle Labs.,
732 P.2d 297, 311
n.12 (Idaho 1987); Malek v. Lederle Labs.,
466 N.E.2d 1038, 1039-40 (Ill.
App. Ct. 1984); Bell v. Lollar,
791 N.E.2d 849, 854 (Ind. Ct.
App. 2003); Savina v. Sterling Drug, Inc.,
795 P.2d 915, 931 (Kan. 1990);
MacDonald v. Ortho Pharm. Corp.,
475 N.E.2d 65, 70-71 (Mass.), cert. denied,
474 U.S. 920,
106 S. Ct. 250,
88 L. Ed.2d 258 (1985);
Edwards v. Basel Pharm.,
933 P.2d 298, 302-03 (Okla. 1997); Kurer v. Parke,
Davis & Co.,
679 N.W.2d 867, 874-75 (Wis. Ct. App. 2004).
We have also considered the compensation aspect of governmental interest analysis in this
tort case, and we perceive no Michigan interest in depriving its resident of
recovery. We might view plaintiff's home state interest differently if we were confronted
with a conflict of laws related to plaintiff's own role in causing the
injury, such as laws of contributory or comparative negligence. Such a conflict would
implicate the deterrence aspect of tort law as it relates both to plaintiff
and defendant. No such conflict is raised by this appeal.
We see little chance that our courts will become a haven for products
liability suits against drug manufacturers if plaintiff succeeds on the choice-of-law issue. As
we noted above, the Supreme Court expressly rejected such reasoning in Gantes, where
those same concerns were found not to outweigh New Jersey's strong interest in
deterring the manufacture of unsafe products within its borders. Gantes, supra, 145 N.J.
at 492-93.
We also reject the suggestion that Gantes applies solely to issues of so-called
procedural law, like statutes of limitations, and not to choice-of-law issues concerning which
state's substantive law should apply.
Whether Georgia's statute of repose must be applied as a constituent part of
its substantive tort law depends not on its characterization as substantive law but
on the issue-specific analysis that governs choice-of-law determinations and on whether the contacts
that Georgia has with the parties and the litigation create a governmental interest
that requires the application of its statute of repose to settle that issue.
[Id. at 495 (emphasis added)].
In sum, the quality of New Jersey's contacts in this case, when combined
with its strong governmental interest in deterring the manufacture of unsafe products within
its borders, substantially outweighs the countervailing Michigan contacts and governmental interests in application
of the Michigan statute.
See footnote 9
Both deterrence and compensation are interests more likely to
be served in this case by application of New Jersey law than Michigan
law. New Jersey law therefore applies to plaintiff's products liability failure-to-warn claim.
We need not separately address Rowe's negligence claim, which is subsumed in his
products liability claim. See, e.g., Becker v. Baron Bros.,
138 N.J. 145, 152-53
(1994); Green v.
Gen. Motors Corp.,
310 N.J. Super. 507, 517 (App. Div.), certif. denied,
156 N.J. 381 (1998).
Reversed and remanded for further proceedings consistent with this opinion.
_____________________________________
WEFING, P.J.A.D., dissenting.
Plaintiff is a Michigan resident who was treated by a Michigan physician. He
received from that physician a prescription for Accutane. The prescription was filled in
the State of Michigan, and plaintiff consumed the medication in Michigan. My colleagues
have, nonetheless, concluded that plaintiff's cause of action is governed by New Jersey
product liability law, specifically N.J.S.A. 2A:58C-4, which creates a rebuttable presumption that a
drug warning that has been approved by the Food and Drug Administration is
adequate, rather than Michigan's statute, which exempts a drug manufacturer from liability if
the drug and its labeling have been approved by the Food and Drug
Administration. I am unable to agree and thus dissent; I would affirm the
trial court's order before us on appeal.
I have no fundamental quarrel with the legal principles set forth by Judge
Wecker in her discussion of the proper methodology to address choice of law
issues, and there is no necessity to repeat them here. My disagreement springs
from the manner in which my colleagues apply those principles to the question
before us.
Specifically, my colleagues conclude that application of New Jersey law furthers the fundamental
goals of tort law-- deterrence and compensation--without frustrating Michigan's interest in having its
law apply to claims asserted by its citizens for injuries that occurred in
that state. Such a conclusion, in my view, does not accord sufficient weight
to the policy judgment reached by the Michigan Legislature when it enacted subsection
(5) of M.C.L. §600.2946.
I do not share my colleagues' inference that the purpose of the Michigan
Legislature in adopting this legislation was restricted to the protection of Michigan businesses,
specifically Michigan drug manufacturers. Rather, as they note, this provision was but one
part of a comprehensive tort reform bill passed by the Michigan Legislature that
addressed a variety of topics, including joint and several liability, expert testimony, and
limitations on damages for non-economic losses.
In my judgment, the legislative history that has been presented to us speaks
of a wider concern than a parochial desire to protect local pharmaceutical manufacturers.
In the opening Rationale to the Fiscal Analysis prepared by the Senate Fiscal
Agency, for instance, the Agency refers to a number of factors, including "reduced
capacity of firms to compete internationally, curtailed innovation, reduced funding for research, higher
consumer costs, and unaffordable or unavailable casualty insurance." Senate Fiscal Agency Analysis, Sen.
B. 344, H.B. 4508 (Revised Enrolled Analysis), January 11, 1996. The United State
Court of Appeals for the Sixth Circuit recognized these concerns as motivating this
legislation. Garcia v. Wyeth-Ayerst Labs.,
385 F.3d 961, 967 (6th Cir. 2004) (stating
"it appears that the Michigan legislature was concerned that unlimited liability for drug
manufacturers would threaten the financial viability of many enterprises and could add substantially
to the cost and unavailability of many drugs").
Such concerns have been noted by others. Schwartz, Regulatory Standards and Products Liability:
Striking the Right Balance Between the Two, 30 U. Mich. J.L. Reform 431,
457 (1997) (recognizing "the adverse impacts of tort liability on pharmaceutical research and
development"); Viscusi, Rowland, Dorfman and Walsh, Deterring Inefficient Pharmaceutical Litigation: An Economic Rationale
for the FDA Regulatory Compliance Defense, 24 Seton Hall L. Rev. 1437, 1470-73
(1994) (noting "[a]lthough many courts invoked the strict liability rationale that the imposition
of liability would encourage a safer vaccine, the prospect of multi-million dollar verdicts
instead induced manufacturers to abandon the vaccine market altogether . . . .
the increasing cost of vaccines is a factor in the declining immunization rates
in the United States").
One may disagree with the policy choice made by the Michigan Legislature in
selecting a method to deal with these concerns (a choice upheld by the
Michigan Supreme Court in Taylor v. SmithKline Beecham Corp.,
658 N.W.2d 127
(Mich. 2003)), but that choice lay within the purview of that legislature. Stupak
v. Hoffman[n]-La Roche, Inc.,
287 F. Supp.2d 968 (E.D. Wis. 2003) (applying
Wisconsin law to the claim of Michigan resident who was treated by a
Wisconsin dermatologist and received a prescription for Accutane; after noting the differences between
the policies of Wisconsin and Michigan, the court posited "It is not for
this court to say which policy better serves justice and the public interest.
That determination is entrusted to the legislatures of the respective states . .
.").
In my judgment, if the actions of the Michigan Legislature sprang from concern
about the effect of litigation on the availability and cost of prescription medications
for its citizens, application of New Jersey law to this matter serves to
frustrate the aim of that Legislature. The costs of this litigation do not
remain within New Jersey but have an impact and a consequence upon citizens
elsewhere.
Several other factors inform my analysis. The goals of tort law are, as
has been noted, compensation and deterrence. In deciding whether the law of Michigan
or New Jersey applies to this matter, it is appropriate to weigh the
governmental interests of each state in terms of furthering those interests. I am
unable to perceive what governmental interest New Jersey has in seeking to assure
compensation for a Michigan resident when the Michigan Legislature has determined that compensation
is not available.
In addition, I cannot conclude that applying Michigan law would frustrate New Jersey's
interest in deterrence. Pharmaceutical manufacturers do not supply different labels in different states,
depending upon the nature of that state's product liability law. A New Jersey
pharmaceutical manufacturer cannot rest secure based upon its knowledge that its labeling and
warnings have been approved by the FDA because our legislature has declined to
afford the pharmaceutical industry a blanket immunity based upon such FDA approval. Whatever
deterrence is created by N.J.S.A. 2A:58C-4's rebuttable presumption remains and is unaffected by
applying Michigan law to a Michigan claimant who was treated in Michigan.
Further, I note that New Jersey courts are, for whatever reason, the site
of much mass-tort litigation. The Mass Tort Information Center in NJCourtsonline.com, for example,
lists seven pending mass tort actions in New Jersey involving pharmaceuticals. New Jersey
should not become the asylum for claims asserted by citizens of another state
whose legislature has made a policy choice to immunize a particular defendant from
such litigation.
Finally, because, as I have noted, it is my judgment that application of
Michigan law to this matter does not frustrate New Jersey's interest in deterrence,
I do not read Gantes v. Kason Corp.,
145 N.J. 478 (1996), to
require affording plaintiff the benefit of New Jersey's rebuttable presumption.
Footnote: 1
Accutane is known generically as isotretinoin.
Footnote: 2
We have found these descriptions of the defendant entities on the website www.rocheusa.com:
Hoffmann-La Roche Inc. . . . . provides a wide range of medications
in the United States through its marketing and sales subsidiary, Roche Laboratories Inc.
Headquartered in Nutley, N.J., both companies are members of the Basel, Switzerland-based Roche
Group.
. . . .
The Roche Group incorporates all those companies that are wholly owned by Roche
Holding Ltd, . . . . based in Basel, Switzerland.
Footnote: 3
Accutane is sold under the name Roaccutane in certain other countries.
Footnote: 4
Two narrow exceptions were written into the Michigan statute as originally enacted:
This subsection does not apply if the defendant at any time before the
event that allegedly caused the injury does any of the following:
(a) Intentionally withholds from or misrepresents to the United States [F]ood and [D]rug
[A]dministration information concerning the drug that is required to be submitted under the
federal food, drug, and cosmetic act . . . and the drug would
not have been approved, or the United States [F]ood and [D]rug [A]dministration [sic]
would have withdrawn approval for the drug if the information were accurately submitted.
(b) Makes an illegal payment to an official or employee of the United
States food and drug administration [sic] for the purpose of securing or maintaining
approval of the drug.
[M.C.L. § 600.2946(5) (a) and (b)].
But those exceptions were declared unconstitutional, while the balance of the statute was
upheld. Garcia v. Wyeth-Ayerst Labs.,
385 F.3d 961, 967-68 (6th Cir. 2004).
The motion judge denied Rowe's request to reopen discovery to obtain evidence that
his claim could go forward under either of those exceptions. Rowe concedes on
appeal that he cannot now proceed on his fraud claim or continue his
appeal on his right to discovery thereon. He seeks, however, to preserve his
right "to reassert this issue" in the event that Garcia is "vacate[d], reverse[d],
or overrule[d]." Under the circumstances, we will not address that request, or the
underlying argument.
Footnote: 5
Although not mentioned by defendants, we recognize another potential rationale for the
Michigan law. By immunizing drug manufacturers who have received FDA approval for their
drug warnings from failure-to-warn claims, the Michigan Legislature may have intended to create
a more hospitable commercial atmosphere, to encourage drug manufacturers to locate in that
state, thereby creating jobs and related economic benefits. Clearly, however, such a goal
and thus Michigan's interest in applying its statute in this case is not
impeded by a ruling that rejects the application of Michigan's statute to these
out-of-state defendants. Indeed, quite the opposite interest can be inferred. For if we
limit application of Michigan's law to Michigan drug companies, that would, arguably, create
an incentive for New Jersey drug companies to relocate to Michigan.
Footnote: 6
For a discussion of the strength of New Jersey's statutory presumption, as
interpreted by Perez, see Dreier, Keefe & Katz, Current N.J. Products Liability &
Toxic Torts Law § 15.4 (2005).
Footnote: 7
Under Michigan's law, there appears to be no exception to the protection
afforded by FDA-approval, even when information about a drug's hazards becomes known after
approval and before further FDA action to modify the required warning or withdraw
the drug from the market. See M.C.L. § 600.2946(5). See generally Robert L. Rabin,
Symposium: Regulatory Compliance As A Defense to Products Liability: Keynote Paper: Reassessing Regulatory
Compliance,
88 Geo. L.J. 2049, 2077 (2000).
Footnote: 8
In a non-exhaustive search, we have identified nine states that either accord
an FDA-approved warning a rebuttable presumption of adequacy similar to New Jersey's, or
simply allow FDA-approval as a factor to be considered in determining the adequacy
of such warning. The population of those states, according to the 2000 United
States census, constitutes over 100 million people, more than one-third of the nation's
population. See U.S. Census Bureau, Annual Population Estimates 2000-2005, available at: http://www.census.gov/popest/states/tables/NST-EST2005-01.xls.
Footnote: 9
One commentator has theorized that when a conflict of laws question arises
in a tort case, the conduct-regulating law of the jurisdiction in which the
allegedly blameworthy conduct occurred (in products liability cases, likely the place of manufacture)
is generally applied. John T. Cross, The Conduct-Regulating Exception in Modern United States
Choice-Of-Law,
36 Creighton L. Rev. 425 (2003).
A-4522-03T3