United States District Court, E.D. Pennsylvania
IN RE: TYLENOL (ACETAMINOPHEN) MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION
McNEIL-PPC, Inc., McNeil Consumer Healthcare, and Johnson & Johnson, Inc., Defendants. This Document Relates to: Rana Terry, as Personal Representative and Administrator of the Estate of Denice Hayes, Deceased, Plaintiff, No. 2:13-md-02436
LAWRENCE F. STENGEL, District Judge.
This case is part of a Multidistrict Litigation (MDL) involving claims of liver damage from the use of Tylenol. At the heart of this MDL is the question of whether Tylenol poses a serious risk of liver damage to consumers taking it at or just above the recommended dosage. The plaintiff claims that her sister died of acute liver failure after taking Tylenol "as directed" by its label. She asserts that Johnson & Johnson and McNeil-the makers of Tylenol-knew or should have known of this risk of acute liver failure to consumers, yet failed to warn users or to redesign the drug to minimize this risk. The court chose this case as a "bellwether" case and has scheduled it for trial.
The parties have a dispute about whether Alabama law or New Jersey law applies to the claims for wrongful death and punitive damages. For the reasons explained below, I find that Alabama law applies to all of the plaintiff's claims.
Plaintiff Rana Terry alleges that her sister Denice Hayes died as a result of acute liver failure caused by taking Extra Strength Tylenol as its label directed. Hayes lived in Alabama, purchased the Tylenol in Alabama, was treated for liver damage in Alabama, and died in Alabama. Defendants Johnson & Johnson and McNeil are New Jersey corporations. Johnson & Johnson is headquartered in New Brunswick, New Jersey. Johnson & Johnson considers its headquarters to be its principal place of business. McNeil is headquartered in Fort Washington, Pennsylvania but maintains that its principal place of business, or "nerve center, " is located in Skillman, New Jersey.
The parties agree that Alabama law applies to all but two of the plaintiff's claims: wrongful death and punitive damages. "Because choice of law analysis is issue specific, different states' laws may apply to different issues in a single case, a principle known as depecage.'" Berg Chilling Sys., Inc. v. Hull Corp., 435 F.3d 455, 462 (3d Cir. 2006). Therefore, it is possible for Alabama law to apply to some of the plaintiff's claims, while New Jersey law may apply to other claims.
Alabama's wrongful death statute does not provide for compensatory damages, only punitive damages. See, e.g., Savannah & M.R. Co. v. Shearer, 58 Ala. 672, 680 (1877)("The damages [under the wrongful death statute] are punitive...."); Industrial Chemical & Fiberglass Corp. v. Chandler, 547 So.2d 812, 818 (Ala. 1988)("[T]he statute is punitive' in its purposes..."). Under Alabama law, damages in a wrongful death case "... are awarded to preserve human life, to punish... wrongful conduct, and to deter or discourage [the defendants] and others from doing the same or similar wrongs in the future." Alabama Pattern Jury Instructions: Civil 2d § 11.28. Alabama's wrongful death statute, not the state's general punitive damages statute, governs personal injury actions resulting in death. See Susan Randall, Only in Alabama: A Modest Tort Agenda, 60 ALA. L. REV. 977, 985 (2009)("The legislature exempted wrongful death damages from its treatment of punitive damages generally...")(citing Alabama's general punitive damages statute Ala. Code § 6-11-29 (2005)). For this reason, the parties dispute the applicable choice of law on both the wrongful death claim and the punitive damages claim. The "issue" in dispute is which state's law applies to a punitive damages recovery. I will apply the choice-of-law analysis to the issue of punitive damages. The choice is between Alabama's wrongful death statute (which provides only punitive damages) and New Jersey's punitive damages statute coupled with its wrongful death statute.
a. Pennsylvania Choice-of-Law Principles Apply
Pennsylvania choice-of-law principles apply to this case. A federal court sitting in diversity must apply the choice-of-law rules of the state in which the court sits to determine which state's law applies. Chin v. Chrysler, LLC, 538 F.3d 272, 278 (3d Cir. 2008)(citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). In the context of an MDL, courts routinely apply the choice-of-law rules of the court from which the case was transferred. See In re Diet Drugs (Phentermine/ Fenfluramine/Dexfenfluramine), No. MDL 1203, Civ.A. 03-20284, 2004 WL 1925010, at *1 (E.D. Pa. Aug. 30, 2004)("As the MDL transferee court in this matter, we must apply the choice-of-law rules of Florida, the state where the transferor court sits.") (citations omitted); In re American Investors Life Ins. Co. Annuity Marketing and Sales Practices Litigation, 2007 WL 2541216, at *27 n. 16 (E.D. Pa. Aug. 29, 2007)("Although neither the Supreme Court nor the United States Court of Appeals for the Third Circuit has explicitly ruled on the issue, it appears that in MDL proceedings the transferee court applies the choice-of-law rules that would govern in the transferor forum.")(citations omitted). Despite the fact that the decedent was in Alabama, this case was originally filed in the Court of Common Pleas of Philadelphia, Pennsylvania, removed to the Eastern District of Pennsylvania based on diversity jurisdiction, and then transferred into this MDL. See Doc. No. 1, 27. For these reasons, Pennsylvania choice-of-law principles should be used to decide which state law applies.
b. Pennsylvania Choice-of-Law Analysis
Pennsylvania employs a "flexible rule" which combines the "significant contacts" analysis of Restatement (Second) of Conflict of Laws § 145 and a "governmental interest analysis." See Griffith v. United Air Lines, Inc., 203 A.2d 796, 805 (Pa. 1964)("[W]e are of the opinion that the strict lex loci delicti rule should be abandoned in Pennsylvania in favor of a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court."). "The merit of such a rule is that it gives to the place having the most interest in the problem paramount control over the legal issues arising out of a particular factual context' and thereby allows the forum to apply the policy of the jurisdiction most intimately concerned with the outcome of [the] particular litigation.'" Id. at 806 (citation and quotation marks omitted). Pennsylvania's choice-of-law analysis asks three questions: 1) is there an actual conflict or a false conflict between potentially applicable states' laws, 2) if there is an actual conflict, is there a "true conflict" based on the governmental interests underlying each law, and 3) if there is a "true conflict, " which state has more significant contacts and a greater interest in its law being applied. See Specialty Surfaces Intern., Inc. v. Continental Cas. Co., 609 F.3d 223, 229-36 (3d Cir. 2010); Hammersmith v. TIG Ins. Co., 480 F.3d 220, 229-36 (3d Cir. 2007).
1. An Actual Conflict Exists
It is clear that an actual conflict exists between Alabama's and New Jersey's laws. Alabama allows for uncapped punitive damages, not compensatory damages, in the case of wrongful death. See Ala.Code § 6-5-410. New Jersey, on the other hand, precludes punitive damages in wrongful death actions. N.J.S.A. § 2A:31-5. A jury may only award pecuniary damages. Id. New Jersey's general punitive damages statute caps recovery at five times the compensatory damages award or $350, 000, whichever is greater. N.J.S.A. § 2A:15-5.14(b). New Jersey's general punitive damages provision precludes recovery of punitive damages in drugs products liability cases in which a drug has been "generally recognized as safe and effective" by the Food and Drug ...