The plaintiff in In re Avandia Marketing, Sales Practices and Prods. Liability Litig., 2013 U.S. Dist. LEXIS 148641 (E.D. Pa. Oct. 15, 2013), was suing over the drug Avandia. But he wasn’t claiming personal injuries. He was claiming economic loss and trying to bring a class action. He alleged that he and others would have sought other types of treatment for their diabetes if GSK had not allegedly concealed Avandia’s risks. This sure sounds like a failure to warn claim. It replaces a personal injury with a supposed economic loss.
Fortunately, the New Jersey Appellate Division has already dealt with this in McDarby v. Merck, 949 A.2d 223 (N.J. App. Div. May 29, 2008), which we posted about 5 years ago. There, one of the plaintiffs lost his claim under New Jersey’s Product Liability Act (PLA) but nonetheless sought to use the New Jersey’s Consumer Fraud Act (CFA) and its damages provisions to triple his $45 dollars in co-pays for Vioxx into an award of $135 and accompany that with an attorneys fee award exceeding $2 million. If this were allowed, virtually every action properly brought under the PLA could be usurped as a CFA claim with treble damages and attorneys fee awards, neither of which is authorized by the PLA. The Appellate Division saw this problem:
With these precepts in mind, we find no basis, in legislative history, statutory language or Court decisions, to conclude that plaintiffs can maintain separate causes of action under the PLA and the CFA in this case. As Merck notes, to permit such an expanded form of relief would be to destroy the balance established between the interests of manufacturers, the public and individuals established by the Legislature in enacting the PLA by introducing an otherwise unavailable treble-damage remedy for harms resulting from a failure to warn. Additionally, the essential effect of recognition of a cause of action for the fraudulent withholding of safety information such as that espoused by plaintiffs pursuant to the CFA—a cause of action that likely would be available to most product liability plaintiffs claiming a failure to warn—would be to permit an award of attorneys fees in the majority of product liability actions without Legislative authorization for such relief. We find no warrant for such action. Plaintiffs' verdicts based upon Merck's alleged violation of the CFA are thus reversed, and the awards of attorneys' fees and costs are vacated.
Accordingly, the Appellate Division held that the PLA subsumed the CFA claims.
With this background, it’s pretty clear what should happen to plaintiff’s CFA claim in the Avandia case. And it did happen. Citing New Jersey Supreme Court and Appellate Division precedent, the court dismissed the claim:
As the New Jersey Supreme Court has held, "[t]he language chosen by the Legislature in enacting the PLA is both expansive and inclusive, encompassing virtually all possible causes of action in relating to harms caused by consumer and other products."13 New Jersey courts have explicitly held that the PLA encompasses claims such as those brought by Plaintiff (except for the express warranty claim), although Plaintiff seeks to recover economic losses, not compensation for a personal injury. "To allow plaintiffs to seek damages for loss of their co-payments as a result of purchasing defendants' drugs under a theory of consumer fraud will create a cause of action entirely inconsistent with the PLA's comprehensive legislative scheme.”14 Thus, all of Plaintiff's claims, with the exception of the express warranty claim, can only be brought under the PLA, and Plaintiff does not attempt to proceed under that statute. 15
13 Sinclair v. Merck & Co., 948 A.2d 587, 595 (N.J. 2008) (citations omitted).
14 Bailey v. Wyeth, Inc., 37 A3d 549, 582 (N.J. Super. Ct. Law Div. 2008) (internal quotation omitted), aff'd sub nom. DeBoard v. Wyeth Inc., 28 A.3d 1245 (N.J. Super. Ct. App. Div. 2011), cert. denied, 48 A.3d 355 (N.J. 2012).
15 Id. at 580.
2013 U.S. Dist. LEXIS 148641, at *5-6.
Plaintiff also brought an express warranty claim. And, while the PLA explicitly leaves such claims alone, that didn’t matter. Plaintiff’s complaint – his third amended complaint – fell “significantly short of what is required” to be alleged under TwIqbal. Id. at *7. So the court not only dismissed it. The court dismissed it with prejudice.
When McDarby was decided, plaintiff was seeking to bring a CFA claim alongside a PLA claim. That would have, in effect, destroyed the notion of a uniform action for product liability claims under the PLA. Instead, almost every product liability claim – certainly those involving a drug – would’ve been accompanied by a CFA claim with very different remedies from those envisioned by the PLA. McDarby stopped that. This Avandia decision stops the next step: turning those product liability actions into class actions.