The Effect of the Product Liability Act’s Presumption of Labeling Adequacy on the Statute of Limitations in Products Cases

Kendall v. Hoffman-LaRoche, Inc.., 209 N.J. 173 (2012).  In this case, the 5-1 majority opinion by Justice Long offers a comprehensive tutorial about New Jersey’s “discovery rule,” which mitigates the strict statute of limitations in various circumstances.  But the main issue in the case, which involved the drug Accutane and its tendency to cause inflammatory bowel disease (including ulcerative colitis), was whether the presumption of labeling adequacy contained in the Product Liability Act, N.J.S.A. 2A:58C-4 (“PLA”), puts a plaintiff on notice of a claim as a matter of law and, by itself, triggers the statute of limitations.  The majority correctly determined that it does not.  Judge Wefing was the lone dissenter.

The case came to the Court after a trial that resulted in a multi-million dollar verdict for plaintiff.  Before trial, the Law Division had denied defendants’ attempt to dispose of the case based on the statute of limitations.  After conducting a “Lopez hearing” (Lopez v. Swyer, 62 N.J. 267 (1973)), the Law Division allowed the case to proceed.  The jury verdict followed.  Defendants appealed.  The Appellate Division found the case timely but reversed the jury award on other grounds.  The Supreme Court granted review.  The sole issue was the timeliness of the case.

Justice Long detailed the facts underlying this case.  Ultimately, those facts were dispositive in the majority’s finding that the case was timely.  But the Court’s decision on the legal issue has broad impact beyond the facts of this case.

The parties and their respective amici took polar extreme positions on the impact, if any, of the PLA presumption of labeling adequacy on the statute of limitations.  The defense contended that FDA approval of labeling was “virtually dispositive” on the statute of limitations.  Plaintiff argued that the labeling presumption had nothing to do with the discovery rule and that, in any event, the facts overcame any impact that the presumption might be found to have.  Justice Long adopted neither view.  Instead, the Court chose a “middle-of-the-road approach.”

Defendants were wrong because the PLA says nothing substantive about the statute of limitations, and because the language of the PLA made clear that the presumption of labeling adequacy was intended to be part of the “ultimate liability calculus” only, not to be dispositive at a Lopez hearing.  But plaintiff’s view that the presumption had no role at all was also not the right answer.  The PLA was designed to “rebalance” the law more toward manufacturers, and there was “something awry” about barring evidence of the label from a statute of limitations analysis when the very purpose of the label is to notify consumers about a product and its risks.

The “middle-of-the road approach” was to allow a judge at a Lopez hearing to consider the presumption, but not to make it virtually dispositive.  Plaintiff still has the burden at such a hearing, but ordinary presumption law still applies.  Given the language of the PLA, and balancing all the considerations, this was a fair result.

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