The Penalty Game

by Searcy Denney Scarola Barnhart & Shipley
Contact

Johnson and Johnson (J&J) and its subsidiary Janssen Pharmaceuticals have been dealing with multiple lawsuits stemming from its drug Risperdal. Shortly after dodging a $1.2 billion judgment in Arkansas, J&J has returned its focus to the multidistrict litigation (MDL) currently pending in Pennsylvania. The company is now trying to shield itself from the punitive damages requested by approximately 375 plaintiffs in the MDL proceedings.

J&J has filed a motion for summary judgment claiming that a New Jersey law should be applied to the case in order to shield the company from these requested punitive damages. The law that J&J is citing is the New Jersey Products Liability Act, which limits product liability for any drug that is subject to premarket approval or licensure by the federal Food and Drug Administration. They are claiming that since J&J is headquartered in New Jersey, any potential punitive conduct would have taken place in that state, which means that this New Jersey law should apply.

The plaintiffs claim that this contention runs counter to J&J’s earlier position where it stated that the law of the state where Risperdal was prescribed, ingested, and marketed should control the issue of punitive damages. They also argue that since the company maintains offices in Pennsylvania, and because Janssen officials regularly met in the state to discuss marketing strategies, that Pennsylvania law should apply in the cases. This is important because Pennsylvania does not have a statute that would cap punitive damages like New Jersey.

This is not the first time this argument has been presented by a pharmaceutical company. In 2012, Novartis, also located in New Jersey, made the same argument. The decision will hinge on which state had a more “significant relationship” to the conduct. However, this test is notoriously discretionary and can go either way depending on what factors the court decides to look at. This is evidenced by the fact that a Pennsylvania court decided not to apply the New Jersey statute in the Novartis cases while a court in New York did. Based off of the prior Pennsylvania court ruling and J&J’s prior position on the issue, there is a good chance that the court in this case will dismiss the motion. Be that as it may, it is by no means a sure thing.

Because the test is discretionary, the court can really go either way on the decision to allow for punitive damages. However, for policy reasons, it would be an error for the court to apply the New Jersey statute to this case. It was mentioned earlier that Novartis along with J&J is located in New Jersey. This is not a coincidence. Laws in New Jersey are very favorable to pharmaceuticals. As a result, a large amount of companies are headquartered there. If the court decides to apply the New Jersey law merely because J&J is headquartered there, it will set a terrible precedent that other companies headquartered in New Jersey will likely use in future arguments over the application of punitive damages in products liability cases.

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.

© Searcy Denney Scarola Barnhart & Shipley | Attorney Advertising

Written by:

Searcy Denney Scarola Barnhart & Shipley
Contact
more
less

Searcy Denney Scarola Barnhart & Shipley on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.