On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-2971-03.
The opinion of the court was delivered by: Wecker, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing, Wecker and Graves.
This appeal from the dismissal of a products liability suit presents a choice of law question: whether New Jersey or Michigan law governs plaintiff's failure-to-warn claim. The appeal does not concern the adequacy of the warning itself, which is not part of the record before us, but only the choice of law to be applied.
Plaintiff, Robert Rowe, appeals from an order granting defendants' motion for summary judgment and dismissing his failure-to-warn complaint against defendants Hoffmann-La Roche Inc. and Roche Laboratories Inc. ("Roche"). The motion judge held that Michigan products liability law applied to plaintiff's claims, and that because defendants' warning for the drug had received approval by the United States Food and Drug Administration (FDA), defendants' warning was adequate as a matter of law under Michigan's products liability statute, specifically, M.C.L. § 600.2946(5). Plaintiff contends that a contrary provision of New Jersey's Products Liability Act, N.J.S.A. 2A:58C-1 to -11, applies, and that under New Jersey law, FDA approval provides only a rebuttable presumption that the warning was adequate. N.J.S.A. 2A:58C-4. We conclude that New Jersey products liability law respecting the effect of prior FDA approval applies to plaintiff's claim. We therefore reverse.
Rowe, who was at all relevant times a Michigan resident, claims that as a result of taking the prescription drug Accutane in 1997, when he was sixteen years old, he became severely depressed and attempted suicide several times. Accutane is an FDA-approved prescription drug for the treatment of severe recalcitrant nodular acne.*fn1 Rowe's Michigan dermatologist prescribed Accutane for him in Michigan, where he purchased and ingested the drug.
Defendants admit that their principal place of business is located in Nutley, New Jersey, and that Hoffmann-La Roche Inc. is a New Jersey corporation.*fn2 Almost the entire Accutane manufacturing process is conducted at the Nutley site. Defendants label and package Accutane in Nutley, where they maintain the Drug Regulatory Affairs unit, which is responsible for communications with the FDA regarding Roche products, labeling, and warnings. Roche Laboratories Inc. also maintains its United States Accutane sales and distribution facilities in Nutley. In short, New Jersey is the exclusive location in the United States for defendants' domestic operations relating to sales, distribution, drug safety, drug regulatory affairs, and labeling of Accutane, as well as almost its entire manufacturing process.
Rowe's one-count amended complaint alleges that contrary to the New Jersey Products Liability Act, defendants negligently, carelessly, and recklessly placed Accutane into the stream of commerce by failing to timely and adequately warn him of the "dangers and adverse health risks associated with Accutane/Roaccutane"*fn3 and that defendants are liable to him for failing to provide an adequate warning of the possible psychological side-effects of Accutane. Rowe contends that defendants negligently failed to perform sufficient laboratory testing or obtain sufficient test results regarding a link between Accutane use and patient depression and suicide and that when defendants launched their Accutane marketing campaign, they knew that some patients who had taken the drug had experienced severe depression and some of those had even committed suicide. He contends that in March 1997, the French government ordered defendants to strengthen their Accutane warning "to include suicide as a possible side effect," and that Roche willfully failed to advise the FDA of the suicide warning it was required to provide in France to avoid imposition of a stronger warning requirement in the United States.
Defendants' answer to the amended complaint did not assert Michigan products liability law as a defense. Nonetheless, defendants brought their motion for summary judgment on the ground that plaintiff's claims were barred under Michigan law, specifically, M.C.L. § 600.2946(5). The motion judge permitted (and subsequently adopted) that defense over plaintiff's objection. The judge's decision to permit the defendants to move for summary judgment when Michigan law was not pled as a defense was within her discretion. See Erny v. Russo, 333 N.J. Super. 88, 96 (App. Div. 2000), rev'd on other grounds, 171 N.J. 86 (2002) (where the trial judge allowed the plaintiff to seek application of New York law after the liability trial, we said, "[i]n view of the broad discretion enjoyed by the trial court in such matters, we refrain from disturbing that determination.")
As a preliminary determination, the motion judge correctly found an actual conflict between Michigan law and New Jersey law on the viability of a failure-to-warn claim with respect to FDA-approved warnings. New Jersey law creates a rebuttal presumption that a drug warning is adequate if it was approved by the FDA:
In any product liability action the manufacturer or seller shall not be liable for harm caused by a failure to warn if the product contains an adequate warning or instruction or, in the case of dangers a manufacturer or seller discovers or reasonably should discover after the product leaves its control, if the manufacturer or seller provides an adequate warning or instruction. An adequate warning or instruction is one that a reasonably prudent person in the same or similar circumstances would have provided with respect to the danger and that communicates adequate information on the dangers and safe use of the product, taking into account the characteristics of, and the ordinary knowledge common to, the persons by whom the product is intended to be used, or in the case of prescription drugs, taking into account the characteristics of, and the ordinary knowledge common to, the prescribing physician. If the warning or instruction given in connection with a drug or device or food or food additive has been approved or prescribed by the federal Food and Drug Administration under the "Federal Food, Drug, and Cosmetic Act," or the "Public Health Service Act," a rebuttable presumption shall arise that the warning or instruction is adequate.
[N.J.S.A. 2A:58C-4 (internal citations omitted) (emphasis added).]
Thus the presumption under New Jersey law, while strong, is not conclusive. See, e.g., Perez v. Wyeth Labs., Inc., 161 N.J. 1, 24 (1999).
By contrast, an FDA-approved warning is adequate, that is, by definition "not defective" under Michigan law, which effectively provides absolute immunity to a drug manufacturer in a failure-to-warn case.
In a product liability action against a manufacturer or seller, a product that is a drug is not defective or unreasonably dangerous, and the manufacturer or seller is not liable, if the drug was approved for safety and efficacy by the United States [F]ood and [D]rug [A]dministration, and the drug and its labeling were in compliance with the United States [F]ood and [D]rug [A]dministration's approval at the time the drug left the control of the manufacturer or seller.
[M.C.L. § 600.2946(5).*fn4]
The motion judge found that the goal of the New Jersey law is to "insure a high standard of care attaches to the . . . drugs that are produced . . . in New Jersey and distributed from New Jersey," whereas the goals underlying the Michigan law are "to encourage drug companies to market their products in Michigan so that their products are available to Michigan residents," and "to create predictable standards of due care for drug manufacturers who do business within Michigan."
The issue presented is entirely a question of law. On appeal, de novo review is therefore appropriate. Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). As the forum state, New Jersey's choice-of-law rules apply. Fu v. Fu, 160 N.J. 108, 117 (1999) (considering the dual interests of deterrence and compensation supported the application of New York law, which allowed vicarious liability against a motor vehicle's owner, rather than New Jersey law, which did not). The choice-of-law analysis here is governed by the analytical framework set forth in Gantes v. Kason Corp., 145 N.J. 478 (1996), and Erny v. Estate of Merola, 171 N.J. 86 (2002). The dispute is how that analysis applies to the facts before us.
Whereas tort claims at one time were almost universally governed by the law of the place of injury, that approach was abandoned long ago. Mellk v. Sarahson, 49 N.J. 226, 228-29 (1967).
Where a foreign state has no real interest in having its law applied to a particular right or liability of parties to an event which occurred within its borders, a mechanical application of a disability or immunity imposed by lex loci delicti may work an unjust result having no relation to the purposes and policies behind the foreign law.
The Supreme Court has adopted a more flexible, governmental interest analysis in addressing choice-of-law issues, expressly holding that "[c]hoice-of-law determinations are made on an issue-by-issue basis, with each issue receiving separate analysis." Erny, supra, 171 N.J. at 94 (New Jersey's law of comparative negligence but New York's law of joint and several liability applied, based on each state's interest in the application of its law). The law that applies is the law of the state with the greatest interest in the specific issue on which the laws conflict. E.g., Gantes, supra, 145 N.J. at 484 (Georgia had no interest in enforcing its statute of repose to protect a New Jersey manufacturer, and New Jersey's interest in deterring dangerous manufacturing within the state supported applying New Jersey's statute of limitations); Veazey v. Doremus, 103 N.J. 244, 247 (1986) (where Florida husband and wife were involved in an automobile accident in New Jersey, Florida's inter-spousal immunity law applied; despite having abrogated inter-spousal immunity, New Jersey had no interest that outweighed Florida's interest in applying its law). The law of one jurisdiction may apply to a particular issue and the law of another jurisdiction may apply to a different issue in the same case. Erny, supra, 171 N.J. at 95. As is evident in New Jersey cases involving conflicts of laws, governmental-interest analysis neither favors nor disfavors the law of the forum; there is clearly no automatic preference for applying the law of the forum.
The first step in resolving a potential conflict of laws issue is to determine whether an actual conflict exists. Fu, supra, 160 N.J. at 118; Gantes, supra, 145 N.J. at 484-85. Clearly such a conflict exists here, for whether plaintiff's case withstands summary judgment depends upon which state's law applies. See, e.g., Gantes, supra, 145 N.J. at 484-85 (finding an "obvious and direct conflict" between Georgia's ten-year statute of repose and New ...