New Jersey punitive damages analysis ignores established precedent

Since 2008 New Jersey law has effectively granted pharmaceutical manufacturers immunity from punitive damages claims. While New Jersey state courts continue to recognise and enforce that immunity, some recent federal court rulings have refused to follow New Jersey law, creating unnecessary inconsistency and uncertainty with respect to how the state's punitive damages law should be applied.

New Jersey's punitive damages law -

Under New Jersey statute, punitive damages may not be awarded against a prescription drug or medical device manufacturer if the product that caused the plaintiff's harm received pre-market approval by the Food and Drug Administration (FDA. The statute provides an exception where the manufacturer knowingly withheld or misrepresented information required to be submitted under FDA regulations. However, in McDarby v Merck & Co, Inc a New Jersey appellate court held that the exception was preempted by federal law because "policing fraud on the FDA through a tort action could interfere with how the FDA might wish to police that kind of fraud itself". Therefore, McDarby combines with New Jersey statute essentially to create complete immunity for manufacturers of FDA-approved drugs.

Originally published in International Law Office on January 23, 2014.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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