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D''Agostino v. Johnson & Johnson Inc.

Decided: June 3, 1988.


On appeal from Superior Court of New Jersey, Law Division, Essex County.

Dreier and Baime. The opinion of the Court was delivered by Baime, J.A.D.


Plaintiff Richard J. D'Agostino instituted this action to obtain compensatory and punitive damages against Johnson & Johnson, Inc. (J & J), Robert Wilson, the vice-chairman of its executive committee, and Ronald Gelbman, president of Ortho Diagnostic Systems, Inc., a corporate affiliate, alleging that they directed Cilag AG (Cilag), J & J's wholly owned Swiss subsidiary, to terminate his employment when he refused to approve the payment of bribes to a leading Swiss governmental official. In his complaint, plaintiff also claimed that defendants issued defamatory statements concerning the reason for his dismissal and that they entered into an unlawful conspiracy to prevent him from obtaining employment with other companies in the pharmaceutical industry. The Superior Court, Law Division, conditionally dismissed plaintiff's complaint on the basis of forum non conveniens. We reverse.

Certain prefatory comments are in order. The factual background of this litigation is hotly contested. The briefs submitted to us, although otherwise providing an excellent exposition of the law, are pregnant with charges, counter-charges and hyperbole. We emphasize that discovery proceedings had not yet commenced when the order dismissing the complaint was entered and, of course, no evidentiary hearing was ever conducted. Our recitation of the facts thus rests upon the pleadings, affidavits and certifications contained in the paltry record before us. By our recital of the parties' respective allegations and contentions, we, of course, do not offer any opinion as to their accuracy.

Plaintiff, an American citizen born in Newark, New Jersey, has apparently resided in Switzerland for some time and currently lives in the city of Aubonne. On April 15, 1985, plaintiff was hired by Cilag to serve as general manager of marketing in Switzerland. The written employment agreement provided that the canton of Shaffhausen was the "agreed upon local place of venue for disputes arising out of the contract" and that the

"Swiss Obligation Law [was to] apply." In addition, plaintiff executed a document requiring him to return all confidential materials in his possession to Cilag upon his termination.

From the commencement of his employment with Cilag, the ability to obtain Swiss approvals for new drugs in an expeditious manner was emphasized as a "mandatory aspect" of plaintiff's employment. In Switzerland, the process of drug registration involves filing an application with the Intercantonal Office for the Control of Medicaments (IOCM). Evaluation of applications is undertaken by the IOCM's "college of experts," a panel which examines specific medical questions relating to the approval of new products.

In 1985, Dr. Rudolph Preisig was the president of the college of experts. Preisig was also president of the "reception committee," a body which reviews and screens all applications for registration and either rejects them at the outset or forwards them to the college for further evaluation. According to plaintiff, Preisig exerted substantial control over the initial and final determination pertaining to all Swiss pharmaceutical registration applications. His pivotal role was further accentuated by the fact that Swiss approval apparently has great weight on the determinations of other European countries concerning the registration of new drugs.

At the time plaintiff commenced his employment with Cilag, J & J was seeking to obtain Swiss registration of a synthetic hormone known as Imunox. J & J's prior applications had been denied twice in the past by IOCM, based upon the insufficiency of the clinical data submitted. Because of these difficulties, plaintiff, Dr. Hans Schmid, a vice-president of J & J International, and Dr. H. U. Balthaser, the doctor coordinating the Swiss registration efforts, met personally with Wilson at J & J's headquarters in New Brunswick, New Jersey. At the meeting, Wilson purportedly stressed the importance of obtaining Swiss registration for Imunox in order that the drug could

be quickly registered in other nations by Cilag's affiliate, Cilag International.

On June 24, 1985, a payment order was submitted to plaintiff for his approval. The order was for 20,000 Swiss francs (approximately $12,500), with payment to be made in favor of Preisig. Although the payment was described as a "consultant fee," plaintiff harbored suspicions that its purpose was to influence Preisig in obtaining approval of Cilag's pending registration applications. Plaintiff claimed that confidential, internal J & J memoranda, several of which he later attached to his complaint as exhibits, disclosed the true objective of the arrangement between Cilag and Preisig.

At this time, plaintiff also received an internal memorandum from Balthaser noting that Preisig had complained because he had not received his fee. Plaintiff refused to authorize this payment. He was then informed of an agreement, dated November 20, 1984, between various Cilag divisions, allocating among them the cost of the amounts to be paid to Preisig. On the following day, a smaller payment order for Preisig was presented to plaintiff for his approval, but he again refused. This was repeated on July 23, 1985. Plaintiff declined to authorize payment of any amounts to Preisig and was discharged the next day.

The letter of termination was signed by Schmid on stationery bearing the address of J & J International in New Brunswick. In his complaint, plaintiff contends that his discharge was orchestrated and directed by defendants and that such conduct occurred primarily in New Jersey. Plaintiff also claims that when he was fired J & J promised to place him somewhere else in the corporation. It is undisputed, however, that plaintiff was presented with a termination agreement which was silent on this question. Although plaintiff accepted its principal terms, the payment of severance compensation and the use of a corporate automobile for a limited period, he refused to sign the document and now asserts that it was "coercive."

At the time of his discharge, plaintiff apparently publicized his claim that his termination was the result of his refusal to authorize improper payments to Preisig. Several newspaper articles were published describing plaintiff's allegations in some detail. Plaintiff asserts that after he was fired he wrote to Gelbman at the latter's office in New Jersey, requesting assistance in finding another position with J & J. In a curt reply, Gelbman refused, recommending that plaintiff start anew with another company. Plaintiff contends that defendants entered into a conspiracy to prevent him from obtaining employment with other companies in the pharmaceutical industry and that they issued defamatory statements misrepresenting the cause of his discharge.

Sometime in May of 1986, plaintiff's attorney contacted J & J and threatened to institute a lawsuit. In the course of these discussions, certain confidential Cilag documents were presented by plaintiff to J & J. According to plaintiff's allegations, representatives of J & J asked that he forbear commencing a legal action pending further discussions pertaining to a possible settlement. On the other hand, defendants deny this allegation and assert that they immediately rejected what they regarded as plaintiff's extortionate demands.

In any event, on October 31, 1986, Cilag brought an action in the Schaffhausen Canton, Switzerland, seeking a declaratory judgment of its rights under its contract with plaintiff. Plaintiff asserts that this action was designed as a preemptive strike to prevent the filing of a suit in New Jersey, where our discovery rules are ...

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