When this blogger hears “negligent undertaking,” my mind does not automatically turn to products liability – but rather to pre-teen children. Pre-teen children are at the age where they are asked (actually required) to “undertake” more and more duties and responsibilities. But often these duties are undertaken in a rather haphazard or lackadaisical way that some might say rise to the level of negligence. Dishes with food left on them put back in the cabinet. Wet laundry left in the dryer for more than a day. And as for cleaning up after the dog, well enough said. And as one of the two arbiters of whether such pre-teens have failed to act in good faith, I admit to guilt in an expanding definition of what constitutes negligent undertaking. The New Jersey courts fortunately have stricter and more precise guidelines than mood and level of tolerance on any given day to guide them and those rules led them to dismiss plaintiff’s negligent undertaking claim in Nelson v. Biogen Inc., 2017 WL 1382910 (D.N.J. Apr. 17, 2017).
The product at issue is Tysabri, a drug used to treat multiple sclerosis. Patients who test positive for anti-JC Virus antibodies were shown to be at an increased for developing a certain brain infection with use of the drug. Id. at *1. Plaintiff contracted the infection after being treated with the drug for three years.
It is worth pointing out some of the procedural history here to understand that his was a bit of a hail-Mary by the plaintiffs. Plaintiff’s initial and first amended complaints contained a claim for negligence that was dismissed because in New Jersey the sole remedy for products liability is the New Jersey Product Liability Act (NJPLA). Id. at *2. All products liability claims, except express warranty, are subsumed by the Act. So plaintiff’s second amended complaint alleged design defect and failure to warn under the NJPLA. Defendants moved to dismiss the design defect claim as preempted and plaintiff withdrew the claim before the court could rule on the motion. Id. Which left plaintiff with only a failure to warn claim in his third amended complaint. After two years of discovery, plaintiff moved to amend his complaint for a fourth time, this time to add a negligent undertaking claim.
The basis for the claim, argued plaintiff, was that defendants had entered into a licensing agreement with the NIH to allow defendants to use the NIH’s JC virus antibody assay to develop the assay for commercial use. The assay would allow doctors to test for the antibodies to determine if their patients were at an increased risk for the brain infection. Id. The licensing agreement was entered into in 2006 and defendants released their JC virus antibody assay in 2012. Plaintiff alleges that when defendants entered into the licensing agreement, they were voluntarily undertaking the duty to develop the assay and that they failed to do so in a reasonable and timely manner. Id. at *3.
First, the court held that this negligent claim, like the negligence claim in plaintiff’s original complaint, was preempted by the exclusivity of the NJPLA. Plaintiff argued that negligent undertaking was different than other negligence claims because it is not based on a pre-existing duty. Not only did plaintiff have no New Jersey or other authority for this argument, it is a distinction without merit. As the court pointed out, “the application of the NJPLA is not premised on the timing of the duties incurred.” Id. at *4. Further, most duties (unlike those in my household) are at some point voluntarily assumed. “For example, before Defendants decided to develop, market, and sell Tysabri, they had no duty to do so. Once Defendants voluntarily decided to produce Tysabri, they then had a duty to act with reasonable care in doing so.” Id. Negligent undertaking is precluded by the NJPLA.
Second, the court found it would be an unprecedented expansion of liability to use negligent undertaking to create third-party negligence obligations to non-parties to the license, or indeed to any contract. Plaintiff cited no cases in which a party who agreed to a license was held liable for negligent undertaking. Id. at *5. Acknowledging significant policy concerns, the court suggested that the more appropriate way to address issues of the type raised by plaintiff would be to deal with them specifically in the contract. The NIH could have included a time limit by when defendants should have developed the assay or the license would be revoked. Id.
Further, plaintiff failed to allege an essential element of negligent undertaking – reliance. Id. at *6. Plaintiff alleged that his status as a third-party beneficiary to the license agreement satisfied the reliance requirement, but he cited no authority for that proposition. So, closely adhering to the Erie doctrine, the court concluded that “If the courts of New Jersey believe that such an extension is appropriate, then they are in a better position to expand their own common law in the first instance.” Id.
This means plaintiff is back to his third amended complaint – failure to warn only. And as we just reported last week, there is good precedent on the adequacy of the Tysabri warnings and on Wyeth v. Levine preemption. And precedent has much more bearing in the courtroom than in the laundry room – where when prior rulings are cited to the judges they can be summarily ignored with a simple – “that was then, and I’ve changed my mind.”