WALTERS v. CARSON et al
Filing
87
OPINION FILED. Signed by Judge Robert B. Kugler on 3/5/14. (js)
NOT FOR PUBLICATION
(Document No. 71)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
___________________________________
:
MICHAEL WALTERS,
:
:
Plaintiff,
:
:
v.
:
:
:
JOHNSON & JOHNSON,
:
MCNEIL-PPC , INC.
:
:
Defendants. :
___________________________________ :
Civil No. 11-6545 (RBK/AMD)
OPINION
KUGLER, United States District Judge:
In this case, Plaintiff Michael Walters (“Plaintiff”) asserts claims under the New Jersey
Products Liability Act (“NJPLA”) against Defendants McNEIL-PPC, Inc. (“McNEIL”) and
Johnson & Johnson (“J&J”), as well as an “alter ego” claim against J&J. Defendants move for
summary judgment on Plaintiff’s claims against J&J, and for dismissal under Fed. R. Civ. P.
12(b)(6) on Plaintiff’s claims against McNEIL. For the reasons stated herein, Defendants motion
for summary judgment on Plaintiff’s claims against J&J will be GRANTED, and their motion to
dismiss on Plaintiff’s claims against McNEIL will be DENIED.
I.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
In October 2009, Plaintiff began taking Tylenol Arthritis, a medication “manufactured,
sold and distributed” by McNEIL, “a company owned, guided, managed, supervised and
controlled” by J&J. (Second Am. Compl. ¶ 10.) On or about October 21, 2009, Plaintiff began
to experience stomach problems, which required him to take off five days from work. (Id. ¶ 11.)
1
At that time, Plaintiff was employed as a custodian in the maintenance and grounds department
of the North Hanover Township Board of Education. (Id. ¶ 7.)
“On November 4, 2009, Plaintiff received a letter from Matthew J. Ernandes, Jr., the
business administrator of the North Hanover Township School District and the secretary to the
Board of Education of North Hanover Township, advising [Plaintiff] that he was recommending
to the superintendent of that school district, Dr. Richard J. Carson, that [Plaintiff’s employment]
contract with the North Hanover Township District should be terminated effective December 1,
2009.”1 (Id. ¶ 12.) Plaintiff was informed by Mr. Ernandes that the reason he was recommended
for termination was that he “had utilized ten of his allotted twelve sick days since July 1, 2009.”
(Id. ¶ 13.) Plaintiff was subsequently terminated from employment as of December 1, 2009. (Id.
¶14.)
In or around December 2009, Plaintiff became aware that “there was a recall on some lots
of Tylenol Arthritis that had been sold to the public” and that the recall included the specific
Tylenol Arthritis that he purchased. (Id. ¶ 15.) Plaintiff also learned that the recall was due to an
incidence of stomach problems that were allegedly linked to J&J and McNEIL’s use of wood
pallets to transport and store packaging materials for the drug. (Id. ¶ 16.) These packing
materials contained the chemical 2, 4, 6-tribromoanisole, which led to the breakdown of
chemicals in the wood pallets and consequently contaminated Defendants’ product. (Id. ¶¶ 1617.)
Approximately two years later, on October 21, 2011, Plaintiff filed suit against J&J, the
Board of Education of North Hanover Township, Dr. Richard J. Carson, and Matthew J.
1
Although Plaintiff alleges that he was employed in the maintenance and grounds department of the North Hanover
Township Board of Education, it appears that his employment contract was with the North Hanover Township
School District. This distinction, however, is immaterial for the purposes of the instant opinion.
2
Ernandes Jr. in the Superior Court of New Jersey, Burlington County. On November 8, 2011,
the Board of Education of North Hanover Township, and its employees Dr. Richard Carson and
Matthew J. Ernandes, Jr. (collectively, the “North Hanover Defendants”), filed a Notice of
Removal pursuant to 28 U.S.C. § 1441, invoking this Court’s jurisdiction under 28 U.S.C. §
1331.2 Plaintiff filed a Motion to Amend/Correct Complaint on April 10, 2012, (Doc. No. 23),
which was not opposed and subsequently granted by Magistrate Judge Donio in an Order dated
April 25, 2012, (Doc. No. 24). Plaintiff’s proposed amendments only added McNEIL as a
defendant. (Doc. No. 23.)
In his first Amended Complaint, Plaintiff asserted three causes of action against
McNEIL: (1) negligence in the manufacture of Tylenol Arthritis; (2) breach of express and
implied warranties in selling the “inherently defective” Tylenol Arthritis; and (3) strict liability
for placing the allegedly defective product into the stream of commerce.3 (Doc. No. 25, Am.
Compl. ¶¶ 22-31.) On May 9, 2012, McNEIL filed a motion to dismiss Plaintiff’s Amended
Complaint, (Doc. No. 28), which the Court granted on December 17, 2012, (Doc. No. 44). In a
separate opinion issued that date, the Court held that Plaintiff’s negligence, breach of implied
warranty, and strict liability claims were subsumed by the NJPLA, and his failure to assert a
claim under that statute was a fatal pleading deficiency. (Doc. No. 43.) The Court further held
that Plaintiff failed to state a claim for breach of express warranty. (Id.) Plaintiff was, however,
permitted to seek leave to file a second amended complaint addressing the deficiencies noted in
the Court’s opinion. (Doc. No. 66.)
2
Because Plaintiff alleged a cause of action under the Family and Medical Leave Act (“FMLA”), 29 U.S.C. § 2611,
against the North Hanover Defendants, jurisdiction was proper before this Court. (See Doc. No. 1.)
3
The Court exercised supplemental jurisdiction over Plaintiff’s state law claims as they formed part of the same
transaction or occurrence giving rise to Plaintiff’s FMLA claim against the North Hanover Defendants. See 28
U.S.C. § 1367(b).
3
On January 16, 2013, Plaintiff filed his motion for leave to file a second amended
complaint, (Doc. No. 49), which McNEIL and J&J did not oppose, (Doc. No. 56). On April 26,
2013, the North Hanover Defendants filed a motion for summary judgment. (Doc. No. 59.) On
June 28, 2013, Plaintiff filed his Second Amended Complaint,4 (Doc. No. 68), and on July 19,
2013, McNEIL and J&J filed their Motion to Dismiss or in the Alternative for Summary
Judgment, (Doc. No. 71).
On December 19, 2013, the Court granted the North Hanover Defendants’ motion for
summary judgment and dismissed those defendants from this action. (Doc. No. 81.) On January
6, 2014, the Court ordered that McNEIL and J&J show cause as to why the Court should retain
supplemental jurisdiction over Plaintiff’s state law causes of action against McNEIL and J&J
since the Court dismissed all claims over which it had original jurisdiction. (Doc. No. 83.) On
January 20 and 21, 2014, Plaintiff and Defendants responded to the Court’s order. (Doc. Nos.
85-86.)
The Court agrees with the parties that retaining jurisdiction over this matter serves the
principles of judicial economy, convenience, and fairness, and that certain of Plaintiff’s
allegations are inextricable from the common nucleus of operative facts of his now dismissed
claims against the North Hanover Defendants. Thus, the Court will retain jurisdiction and turn to
J&J and McNEIL’s pending motion.
4
Because Plaintiff’s proposed amendments to his Amended Complaint did not implicate his claims against the
North Hanover Defendants—who did not oppose Plaintiff’s motion for leave to file a second amended complaint,
(Doc. No. 53)—the North Hanover Defendants’ earlier-filed Motion for Summary Judgment remained ripe for
disposition.
4
II.
LEGAL STANDARD
Rule 12(b)(6) allows a court to dismiss an action for failure to state a claim upon which
relief can be granted. Fed. R. Civ. P. 12(b)(6). When evaluating a motion to dismiss, “courts
accept all factual allegations as true, construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff
may be entitled to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)
(quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). In other words, a
complaint is sufficient if it contains enough factual matter, accepted as true, to “state a claim to
relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 570 (2007). It is not for courts to decide at this point whether
the moving party will succeed on the merits, but “whether they should be afforded an
opportunity to offer evidence in support of their claims.” In re Rockefeller Ctr. Prop., Inc., 311
F.3d 198, 215 (3d Cir. 2002). Also, legal conclusions and “[t]hreadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S.
at 678.
To determine whether a complaint is plausible on its face, courts conduct a three-part
analysis. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the court must
“tak[e] note of the elements a plaintiff must plead to state a claim.” Id. (quoting Iqbal, 556 U.S.
at 675). Second, the court should identify allegations that, “because they are no more than
conclusions, are not entitled to the assumption of truth.” Id. at 131 (quoting Iqbal, 556 U.S. at
680). Finally, “where there are well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise to an entitlement for relief.” Id.
(quoting Iqbal, 556 U.S. at 680). This plausibility determination is a “context-specific task that
5
requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556
U.S. at 679. A complaint cannot survive where a court can only infer that a claim is merely
possible rather than plausible. Id.
“To decide a motion to dismiss, courts generally consider only the allegations contained
in the complaint, exhibits attached to the complaint and matters of public record.” Pension Ben.
Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). If on a Rule
12(b)(6) motion dismiss, however,
matters outside the pleading are presented to and not excluded by the court, the motion
shall be treated as one for summary judgment as provided in Rule 56, and all parties shall
be given reasonable opportunity to present all material made pertinent to such a motion
by Rule 56.
In re Rockefeller, 184 F.3d at 287 (citing Fed. R. Civ. P. 12(b)). When converting motions to
dismiss into motions for summary judgment, courts “must provide the parties ‘reasonable
opportunity’ to present all material relevant to a summary judgment motion. The parties can take
advantage of this opportunity only if they have ‘notice of the conversion.’” Id. at 287-88
(internal citations omitted).
The Third Circuit has opined that although notice need not be express, it is recommended
“that District Courts provide express notice when they intend to convert a motion to dismiss”
because it “is easy to give and removes ambiguities.” Id. at 288 & n.11. Illustratively, “notice
might be provided through the court’s orders or at a hearing.” Id. However, the Third Circuit
has also held that where motions to dismiss have been framed in the alternative as motions for
summary judgment, the parties are on notice that the court is considering the motions for
summary judgment. See Hilfirty v. Shipman, 91 F.3d 573, 578-79 (3d Cir. 1996); see also In re
Rockefeller, 184 F.3d at 288.
6
Summary judgment is appropriate where the Court is satisfied that “there is no genuine
dispute as to any material fact and that the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). A genuine dispute
of material fact exists only if the evidence is such that a reasonable jury could find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When the Court
weighs the evidence presented by the parties, “[t]he evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255.
The burden of establishing the nonexistence of a “genuine issue” is on the party moving
for summary judgment. Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1080 (3d Cir.
1996). The moving party may satisfy its burden either by “produc[ing] evidence showing the
absence of a genuine issue of material fact” or by ‘showing’ – that is, pointing out to the district
court – that there is an absence of evidence to support the nonmoving party’s case.” Celotex,
477 U.S. at 325.
If the party seeking summary judgment makes this showing, it is left to the nonmoving
party to “do more than simply show that there is some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, to
survive summary judgment, the nonmoving party must “make a showing sufficient to establish
the existence of [every] element essential to that party’s case, and on which that party will bear
the burden of proof at trial.” Celotex, 477 U.S. at 322. Furthermore, “[w]hen opposing
summary judgment, the nonmovant may not rest upon mere allegations, but rather must ‘identify
those facts of record which would contradict the facts identified by the movant.’” Corliss v.
Varner, 247 F. App’x. 353, 354 (3d Cir. 2007) (quoting Port Auth. of N.Y. and N.J. v. Affiliated
FM Ins. Co., 311 F.3d 226, 233 (3d Cir. 2002)).
7
In deciding the merits of a party’s motion for summary judgment, the Court’s role is not
to evaluate the evidence and decide the truth of the matter, but to determine whether there is a
genuine issue for trial. Anderson, 477 U.S. at 249. Credibility determinations are the province
of the fact finder, not the district court. BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358,
1363 (3d Cir. 1992).
Here, Defendants seek summary judgment on all claims against J&J. In support of that
motion, they attach the Declaration of Douglas K. Chia, Secretary of J&J. Because Defendants
framed their motion to dismiss in the alternative as a motion for summary judgment, Plaintiff
was on notice that the Court could consider Defendants’ motion as one for summary judgment as
well as any documents submitted in connection with that motion. See Hilfirty, 91 F.3d at 57879. Accordingly, the Court’s consideration of Mr. Chia’s declaration in resolving Defendants’
motion for summary judgment is proper.
III.
A.
DISCUSSION
Plaintiff’s Claims Against J&J
Plaintiff alleges that J&J violated the NJPLA and that it is vicariously liable for the
actions of its subsidiary McNEIL. J&J counters that both of Plaintiff’s claims fails as a matter of
law. The Court considers each claim in turn.
1. Violation of the NJPLA
Plaintiff contends that J&J is liable under the NJPLA because the “Tylenol Arthritis sold
and distributed by defendants was not reasonably fit, suitable or safe for its intended use.”
(Second Am. Compl. ¶ 25.) J&J counters that Plaintiff fails to state a claim under the NJPLA
“because it is a holding company that does not design, develop, manufacture, market, promote or
sell any product.” (Defs.’ Br. 5.) Although Defendants are correct, the Court notes that while
8
they took great care to style their motion to dismiss in the alternative as a motion for summary
judgment, as well as submit a declaration in support of their arguments that Plaintiff’s claims
against J&J fail as a matter of law, they only apply the legal standard for a motion under Rule
12(b)(6) when addressing Plaintiff’s claims against J&J. However, because the Court has
decided to treat Defendants’ motion to dismiss as a motion for summary judgment in regards to
Plaintiff’s claims against J&J, it will evaluate those claims under Rule 56 and determine whether
there is any genuine dispute as to any material fact, and whether J&J is entitled to judgment as a
matter of law.
Product liability actions in New Jersey are governed by the NJPLA. Liability under the
NJPLA is limited to “manufacturers” and “product sellers.” Smith v. Alza Corp., 948 A.2d 686,
691 (N.J. Super. Ct. App. Div. 2008); see also N.J. Stat. Ann. § 2A:58C-2. The NJPLA defines
“Manufacturer” as:
(1) any person who designs, formulates, produces, creates, makes, packages, labels or
constructs any product or component of a product; (2) a product seller with respect to a
given product to the extent the product seller designs, formulates, produces, creates,
makes, packages, labels or constructs the product before its sale; (3) any product seller
not described in paragraph (2) which holds itself out as a manufacturer to the user of the
product; or (4) a United States domestic sales subsidiary of a foreign manufacturer if the
foreign manufacturer has a controlling interest in the domestic sales subsidiary.
N.J. Stat. Ann. § 2A:58C-8. Comparatively, a “Product seller” means
any person who, in the course of a business conducted for that purpose: sells; distributes;
leases; installs; prepares or assembles a manufacturer’s product according to the
manufacturer’s plan, intention, design, specifications or formulations; blends; packages;
labels; markets; repairs; maintains or otherwise is involved in placing a product in the
line of commerce.
Id.
Here, Plaintiff alleges that J&J “sold” and “distributed” the allegedly defective Tylenol
Arthritis. (Second Am. Compl. ¶ 25.) In response, Defendants state, by way of the Declaration
9
of Douglas K. Chia, that “J&J does not design, develop, manufacture, market, promote or sell
any products,” (Defs.’ Br., Declaration of Douglas K. Chia (“Chia Decl.”) ¶ 5), which rebuts
Plaintiff’s allegation that J&J is a “product seller.” See N.J. Stat. Ann. § 2A:58C-8 (defining
“product seller” to include anyone who “sells” or “distributes”). Because Plaintiff has failed to
counter Defendants’ evidence and demonstrate that there is a genuine dispute of material fact as
to whether J&J is a “product seller”—and thus can be held liable under the NJPLA—the Court
will grant J&J summary judgment on Plaintiff’s NJPLA claim. See Corliss, 247 F. App’x at 354.
2. Vicarious Liability
Plaintiff also seeks to hold J&J vicariously liable for McNEIL’s actions. Defendants
argue that Plaintiff has failed to satisfy the threshold pleading requirements for piercing the
corporate veil under New Jersey law, and thus J&J cannot be held liable for the actions of one of
its subsidiaries. Although Defendants once again fail to apply the proper legal standard as to this
claim, the Court will evaluate it under Rule 56 and determine whether there is no genuine dispute
as to any material fact and whether J&J is entitled to judgment as a matter of law.
Under New Jersey law, a plaintiff may state a claim for piercing the corporate veil by
showing: “(1) one corporation is organized and operated as to make it a mere instrumentality of
another corporation, and (2) the dominant corporation is using the subservient corporation to
perpetrate fraud, to accomplish injustice, or to circumvent the law.” Bd. of Trs. of Teamsters
Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d 164, 171-72 (3d Cir. 2002) (citing Craig v.
Lake Asbestos of Quebec, Ltd., 843 F.2d 145, 149 (3d Cir. 1988).
To succeed in piercing the corporate veil, a plaintiff must allege that the parent
“completely dominate[s] the finances, policy, and business practice with respect to the subject
10
transaction” to such a degree that the subsidiary has “no separate mind, will, or existence of its
own.” Craig, 843 F.2d at 150. The relevant factors in this inquiry include:
Gross undercapitalization . . . failure to observe corporate formalities, non-payment of
dividends, the insolvency of the debtor corporation at the time, siphoning of the funds of
the corporation by the dominant stockholder, non-functioning of other officers or
directors, absence of corporate records, and the fact that the corporation is merely a
façade for the operations of the dominant stockholder or stockholders.
Id. (quoting American Bell, Inc. v. Fed’n of Tel. Workers, 736 F.2d 879, 886 (3d Cir. 1984)). It
is well-established that “mere ownership of a subsidiary does not justify the imposition of
liability on the parent.” Pearson v. Component Tech. Corp., 247 F.3d 471, 484 (3d Cir. 2001).
Plaintiff offers two allegations in support of his claim that J&J should be held vicariously
liable for McNEIL’s conduct. First, he alleges that McNEIL “was the alter ego of . . . [J&J], and
thus, the liability of [McNEIL] should be imputed onto [J&J].” (Second Am. Compl. ¶ 27.)
Second, he alleges that J&J “had the right of control over [McNEIL], and did in fact control or
fail to control [McNEIL], with regard to all of the events and circumstances relevant to this
action, thus making [J&J] vicariously liable for the actions of [McNEIL]. (Id. ¶ 28.) In
response, Mr. Chia states that J&J is a company incorporated under the laws of the State of New
Jersey which “directly or indirectly owns more than 275 operating companies in 60 countries.”
(Chia Decl. ¶ 4.) He further states that McNEIL, a corporation organized and existing under the
laws of the State of New Jersey, “is an indirect subsidiary of J&J.” (Id. ¶ 10.) Finally, he states
that although McNEIL is an indirect subsidiary of J&J, “J&J maintains separate corporate
records, separate financial books, and separate corporate officers and directors from [McNEIL],”
and that “J&J does not intermingle funds with [McNEIL].” (Id. ¶¶ 8-9.) Plaintiff has failed to
offer any evidence to contradict Mr. Chia’s declaration. See Corliss, 247 F. App’x at 354.
11
Based on the record before the Court, it is apparent that J&J is not engaged in the type of
activity ordinarily associated with an abandonment of or disregard for corporate formalities.
Compare Foodtown, Inc., 296 F.3d at 172 (holding that allegations were sufficient to meet first
prong of the veil-piercing test where the complaint alleged that a corporation and its alleged alter
ego: “failed to maintain formal barriers between the management structures”; “commingled
funds and other assets”; “failed to observe other corporate formalities”; “shared twelve of
thirteen common directors”; shared the same shareholders, the same principal office, and
registered office; and were structured such that the Board of Directors of one corporation “was
dominated and controlled” by the alter ego’s Board), with Premier Pork L.L.C. v. Westin, Inc.,
No. 07–1661, 2008 WL 724352, at *7 (D.N.J. Mar. 17, 2008) (holding that allegations that one
corporation was a subsidiary of another, that both corporations shared the same chief financial
officer, and that one corporation had a controlling interest in the other to be insufficient to pierce
the corporate veil).
Accordingly, because Plaintiff has failed offer evidence in support of his claims against
J&J that would create a genuine issue of material fact more appropriately reserved for trial,
Defendants’ motion for summary judgment on this claim will be granted.
B.
Plaintiff’s Claim against McNEIL
Plaintiff’s claim against McNEIL can be summarized as follows: Due to the allegedly
defective Tylenol Arthritis, Plaintiff was forced to miss several days of work. (See generally
Second Am. Compl.) Because Plaintiff used ten of twelve sick days that were allotted to him by
his employer, he was terminated from his employment and suffered “economic deprivation.”
(Id. ¶ 19.) Accordingly, Plaintiff seeks recovery of the economic damages he sustained as a
result of his loss of employment. (Id.)
12
In moving to dismiss Plaintiff’s claim, McNEIL sets forth several arguments. First,
because Plaintiff limits his claim to economic injury, and his remedy to economic loss, he cannot
recover under the NJPLA. Second, Plaintiff fails to allege sufficiently a physical injury. Third,
Plaintiff’s claims are barred by an intervening act. And fourth, Plaintiff’s claims are barred by
the applicable statute of limitations.
1. Statute of Limitations and Relation Back under Rule 15(c)(1)
McNEIL claims that Plaintiff’s suit under the NJPLA is barred by the applicable twoyear statute of limitations and cannot be saved by the relation-back rule under Fed. R. Civ. P.
15(c)(1). Plaintiff disagrees and counters that the appropriate statute of limitations is the six-year
statute set forth in N.J. Stat. Ann. § 2A:14-1 for tortious injury resulting only in economic losses.
But, even if the two-year period applies, Plaintiff argues that his Amended Complaint relates
back to his original Complaint under Rule 15(c)(1), and thus his claims against McNEIL are
timely.
With respect to the first issue, McNEIL is correct that Plaintiff’s claim under the NJPLA
is subject to a two-year statute of limitations. See Dziewiecki v. Bakula, 853 A.2d 234, 237 (N.J.
2004) (citing N.J. Stat. Ann. § 2A:14-2) (the NJPLA “permits suit up to two years from accrual
of the cause of action.”). Although Plaintiff argues that he is only claiming damages for
economic losses, and thus the more appropriate statute of limitations is that set forth in § 2A:141, the damages that Plaintiff claims flow from his alleged physical injury, i.e., his stomach
problems. Thus, the limitations period set forth in § 2A:14-2 applies.
With respect to the second issue, McNEIL concedes that Plaintiff’s original Complaint
against J&J was timely, (Defs.’ Br. 8), but argues that when he amended his original Complaint
13
in order to add McNEIL as a defendant, he did so well outside the statute of limitations and
without justification, and thus cannot be saved by Rule 15(c). McNEIL is wrong.
Rule 15(c)(1) provides that an amendment to a pleading relates back to the date of the
original pleading when:
(A) the law that provides the applicable statute of limitations allows relation back;
(B) the amendment asserts a claim or defense that arose out of the conduct, transaction,
or occurrence set out—or attempted to be set out—in the original pleading; or
(C) the amendment changes the party or the naming of the party against whom a claim is
asserted, if Rule 15(c)(1)(B) is satisfied and if, within the period provided by Rule 4(m)
for serving the summons and complaint, the party to be brought in by amendment:
(i) received such notice of the action that it will not be prejudiced in defending on
the merits; and
(ii) knew or should have known that the action would have been brought against
it, but for a mistake concerning the proper party’s identity.
Fed. R. Civ. P. 15(c)(1). Although the “chief consideration of policy [underlying Rule 15(c)] is
that of the statute of limitations,” Nelson v. County of Allegheny, 60 F.3d 1010, 1014 n.7, “[t]he
substitution of . . . parties after the applicable statute of limitations may have run is not
significant when the change is merely formal and in no way alters the known facts and issues on
which the action is based,” Staren v. American National Bank & Trust Co. of Chicago, 529 F.2d
1257, 1263 (7th Cir. 1976).
McNEIL acknowledges that it had notice of Plaintiff’s original Complaint against J&J
within 120 days of when Plaintiff first filed, but states that the reason Plaintiff failed to include
McNEIL as a defendant in his original Complaint was because he failed to fully investigate his
claim such that he could identify the proper parties to sue. Plaintiff counters that he did make a
mistake in initially naming J&J, but excluding McNEIL, as a defendant. He further states that
J&J “was closely identified with [Tylenol Arthritis] in various newspaper articles . . . [but now]
14
claims that it did not manufacture the Tylenol Arthritis, but rather that McNEIL did.” (Second
Am. Compl. ¶ 4.)
McNEIL conceded notice and did not argue that it was prejudiced in any way in
defending on the merits, thus part (i) of Rule 15(c)(1)(C) is satisfied. See Queens W. Dev. Corp.
v. Honeywell Int’l, Inc., No. 10-4876, 2013 WL 163306, at *6 (D.N.J. Jan. 15, 2013) (“[W]here
the defendant has had notice from the beginning that the plaintiff . . . is trying to enforce a claim
against it because of specified conduct, the reasons for the statute of limitations do not exist.”).
The remaining issue before the Court is whether McNEIL “knew or should have known that the
action would have been brought against it, but for a mistake concerning the proper party’s
identity.” Fed. R. Civ. P. 15(c)(1)(C)(ii).
In Krupski v. Costa Crociere S.p.A., the Supreme Court stated that part (ii) of Rule
15(c)(1)(C) “asks what the prospective defendant knew or should have known during the Rule
4(m) period, not what the plaintiff knew or should have known at the time of filing [his or] her
original complaint.” 130 S. Ct. 2485, 2493 (2010). Indeed, “[i]nformation in the plaintiff’s
possession is relevant only if it bears on the defendant’s understanding of whether the plaintiff
made a mistake regarding the proper party’s identity.” Id. at 2493–94; see also Arthur v.
Maersk, Inc., 434 F.3d 196, 208 (3d Cir. 2006) (“A ‘mistake’ is no less a ‘mistake’ when it flows
from lack of knowledge as opposed to inaccurate description.”).
In his initial Complaint, Plaintiff listed Johnson and Johnson as the defendant responsible
for the manufacture, distribution, and sale of Tylenol Arthritis. (Doc. No. 1, Compl. ¶ 21.) As
J&J’s indirect subsidiary, and the party actually responsible for the manufacture, marketing,
distribution and sale of Tylenol Arthritis, (see Defs.’ Br. 5), McNEIL should have known that
Plaintiff made a mistake with regard to J&J’s connection to the allegedly defective Tylenol
15
Arthritis. Consequently, McNEIL should have also known that but for this mistake, it would
have been identified in the initial Complaint as the defendant responsible for the manufacture,
distribution, and sale of Tylenol Arthritis, and thus responsible for the alleged defect.
Accordingly, because part (ii) of Rule 15(c)(1)(C) is satisfied, the Court finds that Plaintiff’s first
Amended Complaint relates back to his initial Complaint. See Myers v. Demoss, No. 12-3660,
2012 WL 5401862, at *4 (E.D. Pa. Nov. 6, 2012) (holding that plaintiff’s amended complaint
related back to his original complaint, and thus was not barred by the applicable statute of
limitations, where even though she mistakenly identified a certain police officer as being
affiliated with the Chester Police Department when, in fact, he was not, that police officer’s true
employer “should have known that the plaintiff made a mistake in regards to [that officer’s]
affiliation,” and thus they also should have known that “but for th[at] mistake, they would have
been identified in the initial complaint as the defendants who allegedly failed to train that officer
in the use of deadly firearms); see also Browning v. Safmarine, Inc., 287 F.R.D. 288, 292-93
(D.N.J. 2012).
2. Injury and Proximate Cause
McNEIL also challenges the sufficiency of Plaintiff’s allegations concerning his alleged
injury and whether the alleged defect in the Tylenol Arthritis was the proximate cause of that
injury.
To prevail on a products liability action, plaintiff must show, among other things, “that a
reasonably foreseeable user was injured, and [ ] that the [product] defect was the proximate cause
of the plaintiff’s injury.” Ebenhoech v. Koppers Indus., Inc., 239 F. Supp. 2d 455, 472 (D.N.J.
2002). “Harm” is defined in the NJPLA as, “(a) physical damage to property, other than to the
product itself; (b) personal physical illness, injury or death; (c) pain and suffering, mental
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anguish or emotional harm; and (d) any loss of consortium or services or other loss deriving from
any type of harm described in subparagraphs (a) through (c) of this paragraph.” N.J. Stat. Ann. §
2A:58C–1(b)(2) (emphasis added). Comparatively, the concept of proximate cause is well
developed under New Jersey common law and “has been defined as any cause which in the
natural and continuous sequence, unbroken by an efficient intervening cause, produces the result
complained of and without which the result would not have occurred.” Garrison v. Twp. of
Middletown, 712 A.2d 1101, 1114 (N.J.1998); see also Kasper v. Board of Trustees of Teachers’
Pension and Annuity Fund, 754 A.2d 525, 540 (N.J. 2000) (stating that proximate cause is “any
cause which in the natural and continuous sequence, unbroken by an efficient intervening cause,
produces the result complained of and without which the result would not have occurred.”).
Turning first to McNEIL’s argument that Plaintiff’s conclusory assertions of “stomach
problems” are too vague to satisfy the pleading standard of Iqbal, the Court holds that Plaintiff
has sufficiently alleged an injury under the NJPLA. Although the Court imagines that Plaintiff
could have provided more detail about his stomach problems, it is not for this Court to pass
judgment on the nature of Plaintiff’s alleged injury on a motion to dismiss. Plaintiff’s allegation
of some physical injury—no matter how slight—still alleges “harm” as is required by the
NJPLA. See N.J. Stat. Ann. § 2A:58C-1(b)(2) (“harm” includes “personal physical illness,
injury or death”).
Turning next to McNEIL’s arguments concerning proximate cause, McNEIL argues that
there is no proximate cause because Plaintiff’s economic damages are based upon his allegedly
wrongful termination and that wrongful termination is an intervening and superseding cause of
Plaintiff’s injury. However, at this juncture of the proceedings, Plaintiff need only sufficiently
allege proximate cause, not prove it. McNEIL’s arguments, while persuasive, would have this
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Court engaging in a factual determination as to whether Plaintiff’s lost wages from his
termination are too remote an injury to hold McNEIL responsible for the allegedly defective
Tylenol Arthritis. Accepting Plaintiff’s allegations as true, as the Court must on a motion to
dismiss, McNEIL’s defective medication “caused [Plaintiff] . . . to improperly lose his
employment with the Board of Education of North Hanover Township, which [ ] resulted in his
incurring significant damages, primarily, economic deprivation.” (Second Am. Compl. ¶ 19.)
Although Plaintiff might not succeed on the merits of his case, he has alleged enough to at least
“be afforded an opportunity to offer evidence in support of [his] claims.” See In re Rockefeller,
311 F.3d at 215.
3. Plaintiff’s Ability to Recover for His Economic Losses Under the NJPLA
Finally, McNEIL argues that Plaintiff has failed to state a claim under the NJPLA
because pure economic harm is not recoverable under the statute. In support of this argument,
McNEIL relies on Crouch v. Johnson & Johnson, No. 09-2905, 2010 WL 1530152 (D.N.J. April
15, 2010) and DeBendetto v. Denny’s, Inc., 23 A.3d 496 (N.J. Super. Ct. 2010). However, these
cases are distinguishable.
In Crouch, plaintiffs alleged that they suffered an economic loss at the time they
purchased various children’s personal care products because these products were contaminated
with toxic chemicals linked to, among other things, increased cancer risk. 2010 WL 1530152, at
*1. In seeking recovery for their economic losses, plaintiffs did not allege any “present or future
physical injuries as a consequences of Defendants’ products.” Id. at *6. As a result, the Court
held that because “[h]arm, for purposes of the [NJ]PLA, does not include pure economic loss[,]
[i]nsofar as Plaintiffs concede that their injury is purely economic, Plaintiffs’ claims cannot
survive.” Id. at *7.
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Similarly, in DeBendetto, plaintiff filed suit under the New Jersey Consumer Fraud Act
(“NJCFA”) claiming that defendant “‘deceptively presents’ menu items without disclosing that
its meals contain ‘excessive’ amounts of sodium.” Id. at 497-98. The Court held that plaintiff’s
NJCFA claim was, in essence, a products liability claim and thus subsumed by the NJPLA. Id.
at 499, 502. In granting defendant’s motion to dismiss plaintiff’s claims, the Court held that
although plaintiff alleged that defendant’s menu items posed potential health risks, he failed to
include any actual personal injury allegations in his complaint, and sought only to recover the
amount of money he spent on those meals. Id. at 501, 503-05. The Court concluded that
“insofar as [plaintiff] concedes that his injury is purely economic, his claims cannot survive.” Id.
at 504-05.
Here, although Plaintiff seeks pure economic recovery stemming from the loss of his job,
he has alleged a physical injury, and thus has stated a cognizable claim under the NJPLA.
IV.
CONCLUSION
For the reasons stated above, the Court will GRANT Defendants’ motion for summary
judgment as to J&J and DENY their motion to dismiss as to McNEIL. An appropriate order
shall issue today.
Dated: 3/5/2014
s/ Robert B. Kugler ___
ROBERT B. KUGLER
United States District Judge
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