It’s been a long road. Well after product liability litigation over Accutane and inflammatory bowel disease (“IBD”) had been thoroughly debunked everywhere else in the nation, such litigation lived on in New Jersey – for year after interminable year. First, a number of trials occurred, but literally every verdict for the plaintiffs was reversed on appeal. Here are some of our posts on that phase of the litigation. Then, once the trial court had had enough and began dismissing large numbers of cases, the intermediate appellate court reversed those decisions, too. Here are some of our posts on that phase of the litigation.
Ultimately, it was up to the New Jersey Supreme Court to step in and figure everything out. We blogged recently about it reversing the Appellate Division and entering a landmark decision on the admissibility of expert testimony in New Jersey. See In re Accutane Litigation, ___ A.3d ___, 2018 WL 3636867 (N.J. Aug. 1, 2018). Well, the defendant went back to the well on the adequacy of the drug’s warnings, and yesterday it rang the bell again. In In re Accutane Litigation, ___ A.3d ___, 2018 WL 4761403, slip op. (N.J. Oct. 3, 2018), the court unanimously reversed the Appellate Division and affirmed the grant of summary judgment against another 532 cases brought mostly by litigation tourists. “Of the 532 plaintiffs, 18 are New Jersey residents and 514 are residents of 44 other jurisdictions.” Id. at *5.
The trial court had told the tourist plaintiffs that they were stuck with the consequences of choosing to descend on New Jersey like a plague of locusts – New Jersey law applied, including the presumption of adequacy that the state’s Product Liability Act (“PLA”) gives to FDA-approved warnings. The warnings were adequate as a matter of law because “plaintiffs failed to overcome the presumption of adequacy.” 2018 WL 4761403 at *5. The Appellate Division held that the law of each of the plaintiffs’ home states, 45 states altogether, governed, and reversed summary judgment under the laws of most of those states (all but eight). Id.
Choice of Law
The New Jersey Supreme Court first said “you’ve got to be kidding” to the Appellate Division’s multifarious choice of law result. The plaintiffs made their bed and thus had to sleep in it:
[W]e hold that New Jersey has the most significant interests, given the consolidation of the 532 cases for MCL [multi-county litigation] purposes. . . . The aggregation of hundreds of cases under MCL allows the resolution of common issues of law. A trial judge cannot be expected to gain a mastery of the law of forty-five different jurisdictions. Construing New Jersey’s PLA is challenging enough. New Jersey’s interest in consistent, fair, and reliable outcomes cannot be achieved by applying a diverse quilt of laws to so many cases that share common issues of fact.
Accutane, 2018 WL 4761403 at *6 (summarizing ruling). See Id. at *15-20 (lengthy discussion of rationale for applying New Jersey law to all cases).
The court “proceed[ed] under the assumption” that true conflicts existed – that “application of New Jersey’s PLA may lead to an outcome different from the application of the laws of those other jurisdictions.” Id. at *17 (citation and quotation marks omitted). Even so, the most “significant relationship” for choice of law purposes in all cases was New Jersey. First, as to alleged failures to warn, the corporation’s principal place of business “is where the alleged conduct causing the injury occurred − the manufacturing and labeling of [the product].” Id. at *18 (citation and quotation marks omitted).
Second, in mass torts, “ordinary choice-of-law practices should yield in suits consolidating large numbers of claims and that courts should apply a single law in such cases.” Id. at *17 (citation and quotation marks omitted).
The two most significant Restatement factors in this MCL matter are . . . “certainty, predictability and uniformity of result” and . . . “ease in the determination and application of the law to be applied”. Applying a single standard to govern the adequacy of the label warnings in the 532 individual cases will ensure predictable and uniform results − rather than disparate outcomes among similarly situated plaintiffs.
Id. at *20 (discussing factors under Restatement (Second) of Conflict of Laws §6 (1971)). Litigants cannot expect “[a] single judge . . . to gain a mastery of the laws of forty-five jurisdictions.” Id. If mass tort plaintiffs don’t want New Jersey law to apply they should “bring suit in the state where they reside.” Id. Under this new, mass-tort-specific application of choice of law, the plaintiffs in Accutane were stuck with New Jersey substantive law, which “is not as beneficial to their cause as the laws of other jurisdictions.” Id.
We recommend that defense counsel study the court’s choice of law rationale. It is no accident that, in its discussion of choice of law, the court cited Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017). Accutane, 2018 WL 4761403 at *20. Save for Delaware, more major pharmaceutical manufacturers are probably “at home” in New Jersey than anywhere else. Thus, if the other side in the future chooses to congregate in New Jersey, they’ll have to put up with New Jersey substantive law, at least if the defendant makes motions in the aggregate. Query, however, if the practicality rationale still applies in a single “bellwether” case where the alternative is application of one other state’s law, rather than the multi-state muddle the court faced in Accutane. We think defendants have another opportunity to exercise some strategic discretion here.
Presumption of Adequacy
On the merits, the Supreme Court agreed with the trial court, that the defendant’s warnings were adequate as a matter of law under the PLA’s presumption of adequacy of FDA-approved labeling. Initially, we get another shout out for the learned intermediary rule from the court:
[T]he PLA codifies what is commonly referred to as the learned intermediary doctrine – . . . that the physician acts as the intermediary between the manufacturer and the patient. The prescribing physician − as a learned intermediary − generally is in the best position to advise the patient of the benefits and risks of taking a particular drug to treat a medical condition. Under the learned intermediary doctrine, a pharmaceutical manufacturer generally discharges its duty to warn the ultimate user of prescription drugs by supplying physicians with information about the drug’s dangerous propensities.
Accutane, 2018 WL 4761403 at *21 (citations and quotation marks omitted). We’re always on the lookout for high court reaffirmations of the learned intermediary rule.
As to the statutory presumption of the adequacy of FDA warnings, the court reached the right result, but not before a lengthy detour based on a questionable source (a law review article written by plaintiff-side professional expert David Kessler) and the infamous decision in Wyeth v. Levine, 555 U.S. 555 (2009). 2018 WL 4761403 at *21-24. The upshot is a ruling on how the PLA’s “rebuttable” presumption of adequacy can be rebutted:
[T]he rebuttable presumption of adequacy attaching to an FDA-approved drug label is overcome when a plaintiff presents clear and convincing evidence that a manufacturer knew or should have known, based on newly acquired information, of a causal association between the use of the drug and “a clinically significant hazard” and that the manufacturer failed to update the label accordingly.
Id. at 26. Notably, the substantive aspects of this rebuttal standard are based on federal regulations, including the notorious Levine “CBE regulation,” 21 C.F.R. §314.70. This result leaves little daylight between the PLA presumption and implied preemption under Levine, except for the burden of proof. Preemption is also based on “newly acquired information” – specifically the lack of it. So any claim that would be preempted in other jurisdictions because plaintiffs can’t point to anything new that the FDA hadn’t already considered is independently barred in New Jersey by the PLA presumption. However, while defendants bear the burden of proving preemption, in New Jersey the PLA presumption means that plaintiffs bear the burden of proving the presence of the necessary “new” information, and must do with clear and convincing evidence, which Accutane defined as “evidence so clear, direct, weighty in terms of quality, and convincing as to cause one to come to a clear conviction of the truth of the precise facts in issue.” Id. at *26 (citation and quotation marks omitted).
The Accutane court added “one caveat” – regardless of anything else:
A manufacturer that acts in a reasonable and timely way to update its label warnings with the FDA, in accordance with its federal regulatory responsibilities, will receive the protection of the rebuttable presumption.
The Accutane court acknowledged that this “is a standard protective of responsible drug manufacturers.” Id.
The PLA’s rebuttable presumption of adequacy that attaches to label warnings gives pharmaceutical companies the protection necessary to research and develop the drugs that will improve and extend the lives of people around the world. The presumption of adequacy protects manufacturers from unmeritorious lawsuits.
Plaintiffs’ Failure of Proof
Finally, Accutane applied the law to the facts, and found that none of the 532 plaintiffs came close to overcoming the statutory presumption of adequate warnings. “[M]ultiple warning tools,” the package insert, the patient package insert, the medication guide and “blister packaging,” all warned about the possibility of IBD. Id. at *27. “Association” was the proper description of the drug’s relationship to the plaintiffs’ injuries; “cause” would have been too strong. Defendant “had reports that some patients, after taking [the drug], developed symptoms of IBD. That one followed the other does not prove cause and effect.” Id. (citing Accutane, 2018 WL 3636867, at *8-10). Plaintiffs offered only “isolated examples” that had been “culled from the voluminous discovery.” Id. at *27-28. “To be sure,” that evidence “is not clear and convincing evidence that [defendant] knew or should have known that the use of the word ‘associated’ was inadequate.” Id. at *28.
Nor is there any evidence that [defendant] avoided necessary label changes for economic reasons. [Defendant’s] marketing personnel certainly expressed an interest in Accutane’s financial success; it would have been surprising if it were otherwise. However, there is no evidence that [defendant’s] financial interest in Accutane’s success led it to withhold necessary IBD-related warnings.
* * * *
This latest Accutane decision is a great result and should finally drive a stake through this vampire of a litigation. Still, a couple aspects of this ruling give us pause. As for choice of law, the application of multiple states’ laws was one means of defending against class actions, since doing so defeated both proportionality and manageability. Many other reasons for rejecting class actions in personal injury litigation remain, but like practically everything else about choice of law, this could be a two-edged sword. Second, the continued willingness of New Jersey courts to craft extra-statutory “exceptions” to the New Jersey legislature’s presumption of adequacy of FDA warnings bothers us doctrinally. The statute says what it says, and we think that – as with all other statutory provisions (including preemption clauses) – courts should enforce statutes as written, and not use subsequent developments to change what the legislature did. Short of a constitutional issue, courts should not encroach on the legislature’s prerogative to draft legislation.