On October 3, 2018, the New Jersey Supreme Court dismissed 532 cases against Hoffmann-La Roche Inc. and Roche Laboratories Inc., the manufacturer of the prescription acne medication Accutane, holding that the laws of New Jersey – the location of Roche’s principal place of business– and not the respective laws of plaintiffs’ home states governed the adequacy of the warnings underlying plaintiffs’ failure to warn claims. The Court held that because the medication’s warnings were FDA-approved, “they enjoy a ‘rebuttable presumption’ of adequacy under New Jersey’s Products Liability Act ([NJ]PLA).”

In In re: Accutane Litigation, plaintiffs in 532 cases designated as a Multicounty Litigation (“MCL”) alleged that Accutane caused inflammatory bowel disease (“IBD”) and that defendants failed to give adequate label warnings advising plaintiffs of the known risks of the medicine. Of the 532 plaintiffs, 18 were New Jersey residents and the remaining 514 were residents of 44 other jurisdictions.

The consolidated cases presented two issues. First, whether the adequacy of the warnings was governed by the law of the 45 jurisdictions in which plaintiffs were prescribed and ingested Accutane (i.e., plaintiff’s home state), or by the law of New Jersey where the 532 cases were filed and consolidated as an MCL. Second, whether the Accutane warnings were adequate as a matter of law. As to the first issue regarding choice of law, the NJPLA recognizes that warnings which have received FDA approval enjoy a rebuttable presumption of adequacy, while many other states do not recognize such a presumption. The post-April 2002 Accutane warnings were approved by the FDA.

The trial court held that the NJPLA and its rebuttable presumption applied to all of the cases, irrespective of the plaintiffs’ home states. Because the trial court found that plaintiff failed to overcome the NJPLA’s rebuttable presumption of adequacy, it granted defendants’ summary judgment motion and dismissed all 532 cases.

The Appellate Division, however, reversed in part, diverging from the trial court on the choice of law issue. The Appellate Division held that each individual case should be judged under the respective substantive laws of the plaintiffs’ home states, and not simply under the NJPLA. It also held that plaintiffs had presented sufficient evidence to overcome the NJPLA’s rebuttable presumption of adequacy.

New Jersey’s Product Liability Act Governs the Adequacy of the Warnings

The New Jersey Supreme Court, applying choice of law principles, concluded that New Jersey had the most significant interests, given the consolidation of the 532 cases for MCL purposes. New Jersey law applies the most-significant-relationship test in personal injury cases, and recognizes a presumption that the law of the state where the injury occurred applies. The presumption may be overcome if another state has a more significant relationship with the parties and the occurrence based on an assessment of each state’s contacts. This contacts analysis is governed by section 145 of the Restatement (Second) of Conflicts, which specifically considers the location of the injury, the conduct causing the injury, and where the parties’ relationship is centered. The contacts analysis is also conducted under the “overarching principles” of section 6 of the Restatement, which considers broader factors such as the needs of the interstate and international systems and the relevant policies of the forum.

The Court held that the section 145 contacts did not point to one ineluctable result. Consequently, it turned to section 6’s overarching principles, and identified two “most significant” Restatement factors implicated by this MCL: section f (“certainty, predictability and uniformity of result”) and section g (“ease in the determination and application of the law to be applied”). The Court stressed that “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.” The Court also noted that “[t]here can be no question that administrative ease and efficiency favor the application of” the NJPLA because “[a] single judge presiding over highly complex Multicounty Litigation cannot be expected to gain a mastery of the laws of forty-five jurisdictions.” The Court held that the weight of these two factors determined that New Jersey had the most significant relationship to the occurrence and the parties. As a result, the Court held that the NJPLA governed the adequacy of the Accutane warnings in all 532 cases.

Plaintiffs Did Not Overcome New Jersey’s Presumption of Adequacy

Analyzing application of the NJPLA’s presumption, the Court held that the NJPLA’s “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.” The Court did, however, add “one caveat”: “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. If not, it cannot seek shelter behind it.” The Court noted that this interpretation of the rebuttable presumption was consistent with the court’s decisions in Perez v. Wyeth Laboratories, Inc. and McDarby v. Merck & Co.

The Court determined that the presumption of adequacy could be overcome in one of three “pathways”: (1) if plaintiff established deliberate concealment or nondisclosure of after-acquired knowledge of harmful effects; (2) if plaintiff demonstrated economically-driven manipulation of the post-market regulatory process; or (3) if plaintiff established by clear and convincing evidence that defendant knew or should have known in the post-marketing phase that the warnings were inadequate based on the pertinent federal regulations.

Applying this framework to Accutane, the Court found that plaintiffs failed to show any of these bases for overcoming the presumption. Plaintiffs’ failure to warn claims focused on excerpts from several internal company documents referencing Accutane and the potential risk of IBD, including a 1994 memorandum and less than one page of a 1197-page internal report noting that Accutane “ha[d] been found to be causally associated with” IBD, as evidence that defendants should have issued better warnings. Specifically, plaintiffs argued that the warnings should have used the term “causes” IBD, instead of saying Accutane “has been associated with” IBD. The Court was not persuaded, and held that the excerpts cited by plaintiffs did not amount to clear and convincing evidence that defendants knew or should have known the use of the word “associated” was inadequate. The Court reversed the judgment of the Appellate Division and dismissed all 532 cases.

It is unknown how this decision will apply outside the MCL context, but it may be interpreted and applied so as to render all product liability cases filed in New Jersey governed by the NJPLA no matter the plaintiff’s home state. Although In re Accutane was evaluated in the pharmaceutical context, the NJPLA rebuttable presumption equally applies to medical device cases. The Court’s analysis, and its rooting in the practical realities and complexities present in all Multicounty Litigations, suggests its decision will apply in all product liability MCLs filed in the state of New Jersey. In this respect, In re Accutane may usher in an era of enhanced predictability for those defending against product liability cases in New Jersey.