Judge Presiding over Risperdal Litigation Issues Decision on Choice of Law

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Last week, the coordinating judge for the Risperdal mass tort litigation released an opinion explaining why punitive damages claims are barred in the nearly 1,500 cases consolidated in the Philadelphia Court of Common Pleas.  Plaintiffs alleged that drug manufacturer Johnson & Johnson failed to provide proper warnings regarding Risperdal’s ability to cause gynecomastia (enlarged breasts) in young males.  Plaintiffs also alleged that the company and its subsidiaries sought to maximize profits from Risperdal by suppressing unfavorable tests results, ghostwriting peer-reviewed journal articles that touted the drug’s benefits, and engaging in other questionable promotional tactics.  In February 2014, Johnson & Johnson moved for partial summary judgment on the issue of punitive damages, arguing that New Jersey law—not Pennsylvania law—applies to this litigation.  In his recent opinion, Judge Arnold New acknowledged that there is a true conflict between New Jersey law and Pennsylvania law as to the issue of punitive damages in pharmaceutical products liability cases.  The New Jersey Products Liability Act prohibits the imposition of punitive damages in such cases if the product was approved by the FDA, while Pennsylvania law allows recovery.  Judge New then determined that New Jersey has a greater interest in the application of its law because it is the place where (1) the alleged punitive conduct occurred, (2) Johnson & Johnson is incorporated and has its principal place of business, and (3) all FDA correspondence with the company was sent.  In addition, although the decisions concerning the development, marketing, and labeling of Risperdal were communicated to staff members at meetings and presentations in Pennsylvania, these decisions were made in New Jersey where the various directors and supervisors worked.  Because New Jersey law applies, the Risperdal plaintiffs cannot seek punitive damages, which are only available when manufacturers withhold drug information from the FDA—not from the medical community at large.

Of note, Judge New’s opinion does not address a May 2015 decision in which the Eastern District of Pennsylvania reached the opposite conclusion with respect to Johnson & Johnson’s request to apply New Jersey law instead of the law of Alabama.  Applying Pennsylvania choice of law rules in the Tylenol MDL, Judge Lawrence Stengel held that although Johnson & Johnson is incorporated and maintains its principal place of business in New Jersey and many of the corporate decisions about how to market, test, and regulate Tylenol appear to have been made in New Jersey, Alabama has the most significant contacts related to the action: “The decedent purchased Tylenol in Alabama, [] ingested Tylenol in Alabama, [] was treated for injuries allegedly related to Tylenol in Alabama, and died in Alabama.  She received warnings about Tylenol in Alabama and presumably viewed advertising about Tylenol in Alabama.  The parties’ consumer relationship was based in Alabama.  These contacts outweigh the defendants’ contacts to New Jersey and Pennsylvania.”

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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