Punitive damages are fair game for plaintiffs bringing claims against Novartis Pharmaceuticals for a drug made to manage metastatic bone cancer that they claim caused permanent disfigurement, a federal judge has ruled.
U.S. District Judge Mark R. Hornak of the Western District of Pennsylvania applied choice of law analyses from two other jurisdictions to determine that Pennsylvania law would apply to the issue of punitive damages rather than New Jersey law. Pennsylvania law would allow for the plaintiffs to seek punitives while New Jersey law wouldn’t.
“New Jersey caps punitive damages at the greater of $350,000 or five times the compensatory damages award,” Hornak said. “In addition, under the New Jersey Products Liability Act, punitive damages are not available if a product was approved by the [Food and Drug Administration]. … Pennsylvania has no such limitations on the recovery of punitive damages,” he said.
Because the two cases Hornak ruled on were transferred to his court by the panel on multidistrict litigation for consolidated pretrial proceedings, he had to apply the choice-of-law analysis from the state in which each case was filed. One was filed in the District of Columbia and the other was filed in New York.
The plaintiffs, who were either prescribed the Novartis drug called Zometa or married to someone who was given the drug, all live in Pennsylvania. They allege that Zometa, which has been approved by the Food and Drug Administration, caused the development of osteonecrosis of the jaw. Hornak described the affliction, called ONJ for short, as “a permanently disfiguring and painful condition that may result in complete loss of the jaw bone.”
Novartis is a Swiss pharmaceutical company with its American operations incorporated in Delaware, but its primary place of business in New Jersey, according to the opinion.
Novartis Pharmaceuticals Corp., called NPC for short, argued that the judge “should apply New Jersey law to the plaintiffs’ punitive damages claims because NPC maintains its principal place of business in New Jersey, and the conduct that it maintains is most relevant to the punitive damages claims—NPC’s corporate decisions regarding Zometa labeling, clinical trials, adverse event reporting, and marketing—occurred in New Jersey,” Hornak said.
However, the “plaintiffs contend that because they are Pennsylvania residents, were prescribed Zometa and treated in Pennsylvania by Pennsylvania doctors, purchased Zometa in Pennsylvania, were infused with Zometa in Pennsylvania, and suffered the effects of ONJ here, allegedly as a result of taking Zometa, Pennsylvania law should also apply to their claims for punitive damages,” he said.
The plaintiffs also noted that Novartis is a Swiss company and many of the decisions it made about the labeling of its drug were made in Switzerland, not New Jersey.
The District of Columbia and New York have different tests for determining what law to apply in a given case, but Hornak’s application of each test pointed to Pennsylvania law.
Both tests start with the threshold question of establishing that there is a genuine conflict between the competing states’ laws. That standard was quickly met for each test.
The District of Columbia then looks to the Restatement (Second) of Conflict of Laws and New York considers the significance of each states’ contacts with the case, “almost exclusively, the parties’ domiciles and the locus of the tort,” Hornak said.
The great weight of the points in the District of Columbia’s test tip toward Pennsylvania law, Hornak found.
“Although the court respects New Jersey’s interest in punishing and deterring the conduct of corporations domiciled there on its own terms, the conduct far more relevant to the issue of punitive damages here occurred in Pennsylvania,” Hornak said.
Similarly, he found that Pennsylvania law would apply under New York’s choice-of-law analysis, which considers the place where the “last event necessary” to make the defendant liable occurred.
“The last event necessary to make NPC liable plainly occurred in Pennsylvania,” Hornak said.
“While NPC may have made corporate decisions regarding Zometa in New Jersey, its liability to these plaintiffs would not be in dispute had it not marketed Zometa to them and their doctors in Pennsylvania, sold Zometa to them in Pennsylvania, and allegedly failed to warn them in Pennsylvania of Zometa’s possible connection to ONJ. Therefore, under New York’s interests analysis, Pennsylvania is the place where the tort occurred.”
(Copies of the 26-page opinion in Rowland v. Novartis Pharmaceuticals, PICS No. 13-3226, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •