October 09, 2014 Articles

Punitive Damages Involving New Jersey Defendants

By Ellen Relkin and Justin Reiter

Due to the fact that many pharmaceutical and device companies are incorporated and/or headquartered in New Jersey, the state’s law as to punitive damages and its choice-of-law doctrine has determined the availability of such damages in some pharmaceutical and medical-device cases in New Jersey and beyond. However, choice-of-law analysis of other jurisdictions also has dictated differing results with cases from numerous jurisdictions interpreting this evolving law. This all began six years ago following a $9 million punitive-damages verdict against Merck in a Vioxx trial when the New Jersey Appellate Division held that plaintiffs suing New Jersey corporations are preempted from recovering punitive damages in cases involving Food and Drug Administration (FDA)-approved drugs. McDarby v. Merck & Co., Inc., 949 A.2d 223 (2008). This was the first appellate case to interpret the state’s Product Liability Act (PLA) subsequent to the U.S. Supreme Court’s decision in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), a decision that held that a cause of action for fraud on the FDA is preempted. The defendant argued that Buckman preempts a plaintiff from proving the requisites of punitive damages under New Jersey law. Since McDarby, defendants have advocated that New Jersey punitive-damage law applies even though they frequently advocate the home-state jurisdiction of the plaintiffs for other law, exercising the doctrine of “dépeçage,” urging application of the home-state liability, statute of limitation, and compensatory-damage law but New Jersey punitive-damage law. These efforts to apply New Jersey punitive-damage law have had mixed success, based on choice-of-law questions and interpretation of Buckman as it applies to the New Jersey PLA. Notably, the New Jersey Multicounty judges as well as multiple federal circuits and district judges have ruled discordantly.

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