Virginia Long Virginia Long

Ten years ago, the Supreme Court in Sinclair v. Merck & Co., Inc., 195 N.J. 51 (2008), apparently misread the New Jersey Product Liability Act and decided that economic losses were barred by the act and, furthermore, ipse dixit, that Consumer Fraud Act claims were likewise barred. Justice Long in a strong dissent pointed out the errors apparent from the history of the Product Liability Act, and explicit Supreme Court authority. We wrote editorials on the subject. Critical notes appeared elsewhere, but the case has stood without amendment.

The issue there was whether liability for the cost of medical monitoring was barred as “harm” under the PLA, and whether a consumer fraud claim for monetary losses would likewise be barred. The court correctly held that medical monitoring, an economic loss, did not fall within the definition of “harm” as it was not a “personal physical illness, injury or death” or “physical damage to property, other than to the product itself.” But, rather than finding the PLA inapplicable, the court ruled that the claims were barred by the PLA. The court overlooked that the act itself stated clearly that it only covered “harm” as defined in the act, and therefore losses outside of the act were to be governed by existing other law. The PLA should not bar such extraneous claims. The Committee and Sponsors’ Comments further made it clear that the act was not to be all-encompassing, and was limited to the specific subjects in the statute. The cost of the medical monitoring should have been treated by the court without reference to the PLA, other than to have said that it was inapplicable. If the court reached its conclusion as a policy matter, so be it. But the PLA should not have been strained to encompass and exclude such claims.

The Consumer Fraud Act claim was deemed precluded. There were no citations, and there was no explanation why an assertion of a purely economic loss was precluded as “harm” (again, defined in the act as personal injury or property damage). If this was also a policy decision of the court, it might have been explained as such, but the PLA control of a strictly defined “harm” was no foundation for such a ruling.

Why discuss this again now? Recently in the Law Journal, there was an article celebrating the 10th anniversary of Sinclair. The bar, and hopefully the court, should realize that rather than celebration, we should be looking for a refinement from the court so that later claims based on the economic loss doctrine, thought to be embedded in the law in such cases as Spring Motors Distributors v. Ford Motor Co., 98 N.J. 555 (1985), and Alloway v. General Marine Ind., 149 N.J. 620 (1997), are not lost under Sinclair’s shaky logic. The UCC’s warranty claims in non-“harm” cases still stand, triggering federal Magnuson-Moss Warranty Act claims; and, yes, even Consumer Fraud Act claims persist, where numerous courts still apply the CFA, notwithstanding Sinclair.