Brown v. Novartis Pharmaceuticals Corporation

Filing 192

ORDER granting 46 Motion to Apply New Jersey Law to Issue of Punitive Damages; granting in part and denying in part 103 Motion in Limine to Exclude Inadmissible Evidence Concerning Dissimilar Adverse Drug Experience (ADE) Reports; denyi ng 114 Motion in Limine Exclude Evidence Based on Incorrect Legal Standards; granting in part 116 Omnibus Motion in Limine; granting in part 121 Motion in Limine to Exclude Evidence of NPC's Subsequent Knowledge/Conduct; granting in part and holding in abeyance in part 132 Motion to Seal Document; denying as moot 146 Motion for Leave to File Under Seal; and, granting in part 156 Motion to Seal Document - Signed by District Judge Louise Wood Flanagan on 07/26/2012. (Baker, C.)

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

SOUTHERN DIVISION

NO.7:08-CV-130-FL

VICTOR BROWN, and
MARTHA BROWN,
Plaintiffs,

v.
NOV ARTIS PHARMACEUTICALS
CORPORATION,
Defendant.

)

)

)
)
)
)
)
)

)

)

)

ORDER
(Redacted)

This matter is before the court on various pre-trial motions. 1 The court first addresses several
pending motions to seal (DE ## 132, 146, and 156).2 In addition, the court takes up defendant's
motion to apply New Jersey law to the issue of punitive damages (DE # 46), defendant's motion in
limine to exclude evidence concerning adverse drug experience reports (DE # 103), defendant's
motion in limine to exclude evidence based on incorrect legal standards (DE # 114), certain
remaining portions of defendant's omnibus motion in limine (DE # 116), and defendant's motion
in limine to exclude evidence of its subsequent knowledge or conduct (DE # 121). These motions
received supplemental briefing pursuant to the court's directive at motions hearing held February

1 The court does not take up here defendant's motion in limine to exclude evidence or argument that defendant should
have warned about certain risks earlier than it did (DE # 113), defendant's motion in limine to exclude certain
inadmissible statements in plaintiff Victor Brown's medical records (DE # 119), defendant's motion in limine to exclude
certain testimony by Dr. Yoh Sawatari (DE # 123), or those portions of defendant's motion to exclude testimony of
plaintiffs' expert Dr. Suzanne Parisian (DE # 51) not previously disposed of at motions hearing held February 3,2012.
These motions remain pending for future disposition.

The parties in these three motions move to seal filings and/or exhibits that relate to the motions in limine decided
herein. The court does not take up here other pending motions to seal, namely those lodged in the docket at entry
numbers 101, 182, and certain portions of 132. Where these latter motions to seal pertain to motions in limine not
adjudicated here, the court holds them in abeyance for future ruling.

2

3,2012. Accordingly, these motions are ripe for adjudication, and the court orders as follows.

BACKGROUND
This case was originally filed in 2005 and arises out of plaintiff Victor Brown's experience
with two drugs, Aredia and Zometa, manufactured by Novartis Pharmaceuticals Corporation
("defendant"). Mr. Brown, a multiple myeloma survivor, asserts that his use of Aredia and Zometa
caused him to develop osteonecrosis of the jaw ("ONJ"), He seeks compensatory and punitive
damages, and his wife, Martha Brown, seeks damages for loss of consortium.
Plaintiffs' case against defendant was consolidated with similar cases pursuant to the
Multidistrict Litigation Act, 28 U.S.C. § 1407, and assigned to United States District Judge Todd
J. Campbell in the Middle District of Tennessee ("the MDL court"). In order on summary judgment
entered December 7, 2010, the MDL court dismissed plaintiffs' claims for strict liability, design
defect, manufacturing defect, and negligence per se. Plaintiffs' claims for negligent failure to warn
and loss of consortium remain. The case was remanded to this court on December 17,2010.
On June 3, 2011, defendant filed motion to apply New Jersey law to the issue of punitive
damages (DE # 46), which motion the court takes up below. Defendant then filed Daubert motions
to exclude the testimony ofplaintiffs' experts Dr. Suzanne Parisian (DE # 51) and Dr. Robert Marx,
D.D.S. (DE # 59). Plaintiffs responded to the three motions, defendant replied, and they were
submitted to the magistrate judge for memorandum and recommendation ("M&R"). Finally, on
December 2,2011, defendant filed eleven motions in limine, and plaintiff filed one.
The court held motions hearing in New Bern on February 3,2012. In addition to discussing
pre-trial procedures with the parties, the court heard argument on and adjudicated several of the
motions in limine. Where the court could not reach a decision on several motions based on the

2

inadequacy of material before it, supplemental briefing was directed, as memorialized in order
entered March 5, 2012. At hearing, the court adopted as its own the determination ofthe magistrate
judge concerning the testimony of Dr. Marx, where no party objected to the M&R.
As directed, the parties filed supplemental briefing on May 1,2012, and responded to same
on May 25, 2012. By order entered July 12,2012, the court scheduled jury selection for September
14,2012, at 9:30 a.m. in New Bern,3 with trial to commence September 17, 2012. The court also
set a final pretrial conference for 9:30 a.m. on September 7,2012.

DISCUSSION
A.

Motions to Seal (DE ## 132, 146, 156)
1.

Defendant's Motion to Seal (DE # 132)

The parties have filed several motions to seal, three of which relate to motions addressed in
subsequent sections below. First, on December 2,2011, defendant filed motion to seal documents
lodged in the docket at entry numbers 125 through 131 (DE # 132). Docket entry number 125, an
e-mail from Ye Hua to Alan Jenkins, dated March 9, 2005, attaches as Exhibit 7 to defendant's
memorandum in support of its omnibus motion in limine (DE # 117). In addition, docket entry
number 127, an e-mail from Dionigi Maladorno to Katalin Renner, dated April 30, 2003, attaches
as Exhibit 4 to defendant's memorandum in support of its motion in limine to exclude evidence
based on incorrect legal standards (DE # 115). Where docket entry numbers 126 and 128 through
131 do not relate to motions decided herein, the court holds in abeyance the motion to seal as to
these documents for future ruling.
Before granting a motion to seal, courts must first give the public notice and a reasonable

3

The time ofjury selection on this date recently was changed to 1:30 p.m.

3

opportunity to challenge the motion, and courts must then examine the public's right to access in
conformity with Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 181 (4th Cir. 1988). The
common law presumes a right to inspect and copy judicial records and documents. rd. at 180. The
presumption may be overcome ifcompeting interests outweigh the interest in access. Id. Ifthe court
finds that the public's right to access is outweighed by another significant interest, then the court
must consider whether there are less drastic alternatives to sealing. Id. at 181.
No objection has been raised as to defendant's motion to seal docket entries 125 and 127,
which motion was filed December 2, 2011. These entries contain coniidential and proprietary
information which could be harmful to defendant if revealed to the marketplace. The risk of harm
outweighs any public right to access, and the alternatives to sealing are inadequate. Accordingly,
for the reasons set forth in defendant's memorandum in support ofits motion to seal, the court finds
good cause to GRANT IN PART defendant's motion (DE # 132). The clerk of court is DIRECTED
to seal docket entry numbers 125 and 127.
2.

Plaintiffs' Motion to Seal Response to Defendant's Omnibus Motion in Limine (DE
# 146)

On December 16,2011, plaintiffs filed motion for leave to file under seal their response to
defendant's omnibus motion in limine (DE # 146), where said response referenced and attached as
exhibits deposition transcript excerpts designated confidential by defendant. However, in response
dated December 29,2011, defendant informs that it does not request that plaintiffs' opposition or
exhibits thereto be sealed. Accordingly, plaintiffs' motion to seal (DE # 146) is DENIED AS
MOOT. The clerk of court is DIRECTED to unseal the document provisionally filed under seal at
entry number 145 and all attachments thereto.

4

3.

Plaintiffs' Motion to Seal Objections to the Magistrate Judge's M&R (DE # 156)

Plaintiffs move to seal their objections to the magistrate judge' s December 16,2011 M&R,
as well as Exhibits 5 and 6 attached thereto. Plaintiffs inform that the exhibits are excerpts from
deposition transcripts of David R. Epstein and Rainer Boehm, designated as confidential by
defendant pursuant to the terms and provisions of the Confidentiality Order entered by the MDL
court. Further, plaintiffs' objection quotes at length from the deposition transcripts in question.
Defendant, in response, urges that plaintiffs' objections and the relevant exhibits be sealed.
Defendant maintains that the deposition testimony was properly designated as confidential under the
MDL protective order. Further, defendant states that Dr. Epstein and Dr. Boehm gave testimony
regarding the organization and business decision-making process of defendant's ultimate parent
corporation, which is in Switzerland and is not a defendant in the case.
The court finds that Exhibits 5 and 6 contain confidential and proprietary information which
could be harmful to defendant ifrevealed to the marketplace. The risk ofharm outweighs any public
right to access, and the alternatives to sealing are inadequate. Accordingly, for the reasons set forth
more particularly in defendant's response to plaintiffs' motion to seal, the court finds good cause to
GRANT IN PART plaintiffs' motion to seal (DE # 156). The clerk of court is DIRECTED to
maintain as sealed docket entries 155-5 and 155-6. The clerk is further DIRECTED to unseal those
filings provisionally sealed at docket entries 155-1 through 155-4. Finally, the court GRANTS IN
PART plaintiffs' request to seal their objections to the M&R. While the court upon its review finds
that pages 8 through 10 of plaintiffs' objections discuss particularly the noted deposition excerpts,
the court does not find cause to seal the entire document. Where the CM/ECF system does not have
the capability to maintain specific pages of documents under seal, the clerk of court is DIRECTED

5

to maintain plaintiffs' objections (DE # 155) under seal. However, plaintiffs shall file within
fourteen (14) days of entry of this order a redacted version of their objections, redacting only those
portions pertaining to the relevant deposition excerpts.
B.

Defendant's Motion to Apply New Jersey Law to the Issue of Punitive Damages (DE # 46)
1.

Standard of Review

The court takes up defendant's motion to apply New Jersey law to the issue of punitive
damages (DE # 46) with benefit of Magistrate Judge Daniel's memorandum and recommendation
("M&R"), lodged in the docket at entry number 144. This court reviews de novo those portions of
a magistrate judge's M&R to which specific objections are filed. 28 U.S.C. § 636(b). The court
does not perform ade novo review where a party makes only "general and conclusory objections that
do not direct the court to a specific error in the magistrate's proposed findings and
recommendations." Opriano v. Johnson, 687 F.2d 44,47 (4th Cir. 1982). Absent a specific and
timely filed objection, the court reviews only for "clear error" and need not give any explanation for
adopting the M&R. Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005);
Camby v. Davis, 718 F.2d 198,200 (4th Cir. 1983). Upon careful review of the record, "the court
may accept, reject, or modify, in whole or in part, the findings or recommendations made by the
magistrate judge." 28 U.S.C. § 636(b)(1).
2.

Analysis

The parties agree that the court must look to Tennessee choice-of-Iaw jurisprudence to
determine the law applicable to the issue of punitive damages, where plaintiffs originally filed suit
in the United States District Court for the Middle District ofTennessee, and the case was transferred
to this court pursuant to 28 U.S.c. § 1404(a). Def.'s Mem. 2; Pis.' Resp. 3; see also Ferens v. John

6

Deere Co., 494 U.S. 516, 519 (1990) (following a transfer under 28 U.S.C. § 1404(a) initiated by
defendant or plaintiff, the transferee court must follow the choice-of-Iaw rules of the transferor
court).
a.

Conflict of Law

Plaintiffs ask the court to apply North Carolina law to the issue of punitive damages.
Defendant requests application of New Jersey law. Under Tennessee choice-of-Iaw rules, the court
must first determine whether there is a conflict between North Carolina and New Jersey law as to
punitive damages. Hataway v. McKinley, 830 S.W.2d 53, 55 (Tenn. 1992). Each state allows
generally for punitive damages if plaintiff proves by clear and convincing evidence certain
aggravating factors in addition to entitlement to compensatory damages. See N.C. Gen. Stat. § 1D­
15(a)-(b), N.J. Stat. Ann. § 2A: 15-5.12(a). Similarly, each state caps punitive damages at a certain
amount. North Carolina law provides that punitive damages shall not exceed three times the
compensatory damages award, or $250,000, whichever is greater. Id. § ID-25(a)-(b). New Jersey
caps punitive damages at the greater of five times compensatory damages or $350,000. Id. § 2A: 15­
5.14(b).
Despite the similarities, however, New Jersey places a key limitation on punitive damages
not present in North Carolina. Under New Jersey law, "[p]unitive damages shall not be awarded if
a drug ... which caused the claimant's harm was subject to pre market approval or licensure by the
federal Food and Drug Administration ... and was approved or licensed," unless "the product
manufacturer knowingly withheld or misrepresented information required to be submitted under the
agency's regulations, which information was material and relevant to the harm in question." N.1.
Stat. Ann. § 2A:58C-5(c). Further. in McDarby v. Merck & Co.. Inc., a New Jersey intermediate
7

appellate court held that the exception in § 2A:58C-5(c) permitting punitive damages if the
manufacturer "knowingly withheld or misrepresented information" from the FDA was preempted
by the Federal Food Drug and Cosmetic Act (FDCA), 21 U.S.c. §§ 301 et seq. McDarby v. Merck
& Co., 401 N.J. Super. 10,99,949 A.2d 223, 279 (App. Div. 2008)

See also Forman v. Novartis

Pharmaceuticals Corp., 793 F. Supp. 2d 598, 601 (E.D.N.Y. 2011). Accordingly, as the parties
acknowledge, New Jersey's law as to punitive damages in a pharmaceutical products liability case
such as this one differs from North Carolina's. The court must therefore further apply Tennessee's
choice-of-Iaw analysis to determine which state's punitive damages law applies.
b.

Tennessee's Choice-Of-Law Analysis

In resolving conflicts oflaw questions in tort cases, Tennessee applies the "most significant
relationship" approach of the Restatement (Second) of Conflict of Laws (1971). Hataway, 830
S.W.2d at 59. Thus, the rights and liabilities of the parties here as to punitive damages "are
determined by the local law of the state which, with respect to [punitive damages], has the most
significant relationship to the occurrence and the parties under the principles stated in § 6 [of the
Restatement (Second)]." Restatement (Second) of Conflict of Laws § 145(1). Contacts to be
considered in applying the principles of § 6 include: "(a) the place where the injury occurred, (b) the
place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place
ofincorporation and place ofbusiness ofthe parties, and (d) the place where the relationship, if any,
between the parties is centered." Id. § 145(2). Pursuant to § 6, the factors relevant to the choice of
the applicable rule of law include:
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those

8

states in the detennination of the particular issue,
(d) the protection ofjustified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, unpredictability and unifonnity of result, and
(g) ease in the detennination and application of the law to be applied.
Id. § 6(2).
Here, the parties agree that North Carolina law applies to issues ofliability and compensatory
damages, because plaintiffs reside in North Carolina and all relevant medical and dental treatment
occurred there. Def. 's Mem. 2; Pis.' Resp. 2. Defendant argues, however, that New Jersey law
should apply to the issue ofpunitive damages. "Because the conduct that plaintiffs contend warrants
the imposition of punitive damages occurred at the corporate level, the law of the jurisdiction in
which the corporation is headquartered, here New Jersey, should govern the imposition of punitive
damages." Def.'s Mem. 4. Plaintiffs respond that North Carolina law, in addition to governing
questions ofliability and compensatory damages, should also govern punitive damages, because Mr.
Brown lived in North Carolina and obtained all medical care there.
c.

Tennessee's Choice-of-Law Jurisprudence Pennits Depeyage.

First, the court must detennine whether Tennessee choice-of-Iaw jurisprudence pennits
depeyage, a principle allowing for application ofthe laws ofdifferent jurisdictions to different issues
- for example, the application of one state's law as to compensatory damages and another's as to
punitive. Plaintiffs, in objection to M&R, contend that Tennessee choice-of-Iaw jurisprudence does
not pennit depeyage, although they cite no authority for this proposition. In Hataway, the Supreme
Court of Tennessee, after considering in detail several conflicts theories, expressly adopted the
approach of the Restatement (Second) for application to tort cases. The Restatement (Second)
repeatedly states that the law of the state with the most significant relationship to a specific issue

9

shall be applied. See Restatement (Second) of Conflict ofLaws §§ 145, 146. Further, commentary
to the Restatement provides for depe~age, See id. § 145 cmt. d ("The courts have long recognized
that they are not bound to decide all issues under the local law of a single state ... Each issue is to
receive separate consideration if it is one which would be resolved differently under the local law
rule of two or more ofthe potentially interested states"). Indeed, a Reporter's Note to Restatement
(Second) § 171, which section governs choice oflaw as to damages, provides,
The law governing the right to exemplary damages need not necessarily be the same
as the law governing the measure of compensatory damages. This is because
situations may arise where one state has the dominant interest with respect to the
issue of compensatory damages and another state has the dominant interest with
respect to the issue of exemplary damages.
Id. § 171, Reporter's Note, cmt. d. Based on the foregoing, the court finds that Tennessee choice-of­
law jurisprudence allows for depe~age. See also Talley v. Novartis Pharmaceuticals Corp., 3 :08-CV­
361-GCM, 2011 WL 2559974, at *2 (W.O.N.C. June 28,2011) reconsideration denied. 3:08-CV­
00361,2011 WL 3515858 (W.D.N.C. Aug. 11,2011).
d.

Contacts Set Forth in Restatement (Second) § 145(2)

The court next considers those contacts set forth in Restatement (Second) § 145(2), with
instruction that they "are to be evaluated according to their relative importance with respect to the
particular issue." Restatement (Second) of Conflict of Laws § 145(2). Here, plaintiffs allege that
injury occurred in North Carolina. Further, North Carolina is the domicile ofplaintiffs and the place
where the parties' relationship is centered, as Mr. Brown was treated and prescribed the relevant
medication in North Carolina. Defendant is incorporated in Delaware and has principle offices in
New Jersey. Ans. ~ 2. However, more weight should be placed on defendant's contact with New
Jersey than Delaware, where "a corporation's principal place ofbusiness is a more important contact
10

than the place of incorporation." Restatement (Second) of Conflict of Laws § 145, cmt. e; see also
Kelly v. Ford Motor Co., 933 F. Supp. 465, 469 (E.D. Pa. 2006).
The most contested contact, set forth in § 145(2), is "the place where the conduct causing the
injury occurred." Plaintiffs emphasize that defendant marketed, sold, and distributed Aredia and
Zometa in North Carolina, where Mr. Brown purchased them. Defendant replies, however, that its
"communications regarding Aredia and Zometa originated from New Jersey, based on marketing
materials developed in New Jersey and drug labeling approved by the FDA based on data provided
by [defendant] from New Jersey." Def.'s Repl. 7.
The court does not find convincing plaintiffs' argument that all relevant decisions would have
been made in Basel, Switzerland, which plaintiffs assert is the primary location for Novartis. To
begin, plaintiffs' second amended complaint identifies defendant as having its principal place of
business in East Hanover, New Jersey, and it makes no reference to Switzerland. Further, the FDA
approval letter for Zometa is addressed to defendant in East Hanover, New Jersey. See Def.'s Mot.,
Ex. 4.

Nor have other courts been compelled by plaintiffs' argument that
all relevant decisions occurred in Switzerland, particularly where plaintiffs do not request for Swiss
law to be applied.

See Talley, 2011 WL 2559974, at *3; see also Deutsch v. Novartis

Pharmaceuticals Corp., 723 F. Supp. 2d 521, 525 (E.D.N.Y. 2010) ("However, the Plaintiffs have
not urged the Court to apply Swiss law, and for an obvious reason: punitive damages are not
permitted under Swiss law") (citing Exxon Shipping Co. v. Baker, 554 U.S. 471, 497 (2008) (noting
that Swiss law does not permit punitive damages)).

11

Based on the foregoing, this court joins others that have confronted the issue in finding that
defendant's conduct relevant to the determination ofpunitive damages occurred in New Jersey. See
Deutsch, 723 F. Supp. 2d at 525-26 ("Plaintiffs have failed to rebut Novartis's plausible claim that
the corporate decisions at issue were made from the company's corporate headquarters in New
Jersey. Accordingly, because the relevant conduct at issue took place primarily in New Jersey, and
not New York, New Jersey law on punitive damages is applicable under the New York choice oflaw
analysis."); Talley, 2011 WL 2559974, at *4 ("The record demonstrates that the corporate decisions
at issue regarding labeling and packaging, occurred in New Jersey"); Charles S. Irby v. Novartis
Pharmaceuticals COfJ?, No. MID-L-1815-08, 278, 2011 WL 5835414 (Superior Court of New
Jersey, Nov. 18, 2011) ("Plaintiff's claims stem from Defendant's business activities in New Jersey
regarding the marketing, distributing, and selling of Zometa").
e.

Which State has the Most Significant Relationship

Next, the court must determine, with reference to the factors in section 6(2) and the contacts
in section 145(2) of the Restatement (Second), which state has the most significant relationship to
the issue of punitive damages in this matter. Hataway, 830 S.W.2d at 59. "[T]he local law of the
state where the injury occurred determines the rights and liabilities ofthe parties, unless, with respect
to the particular issue, some other state has a more significant relationship under the principles stated
in § 6 to the occurrence and the parties, in which event the local law of the other state will be
applied." Restatement (Second) of Conflict of Laws § 146. Here, the parties agree North Carolina
is where injury is alleged to have occurred. Accordingly, defendant must demonstrate that New
Jersey has a more significant relationship to the issue ofpunitive damages than does North Carolina.
"The extent of the interest of each of the potentially interested states should be determined

12

on the basis, among other things, of the purpose sought to be achieved by their relevant local law
rules and of the particular issue." Restatement (Second) of Conflict of Laws § 146, cmt. c. North
Carolina's punitive damages law has the explicit purpose "to punish a defendant for egregiously
wrongful acts and to deter the defendant and others from committing similar wrongful acts." N.C.
Gen. Stat. § 1D-1. "Punitive damages are never awarded as compensation. They are awarded above
and beyond actual damages, as punishment for the defendant's intentional wrong." Rhyne v. K-Mart
Corp., 358 N.C. 160, 166, 594 S.E.2d 1, 6 (2004). Similarly, the purpose behind New Jersey's
punitive damages statute, generally, is "to punish the defendant and to deter that defendant from
repeating such conduct." N.J. Stat. Ann. § 2A:15-5.l4(a). Further, "N.J.S.A. 2A:58C-5c is designed
to effectuate the State's interest in punishing unlawful conduct." McDarby, 401 N.J. Super. At 93,
949 A.2d at 275. "In contrast, the purpose of compensatory damages is to make the individual
plaintiff whole." Id., 401 N.J. at 91,949 A.2d at 274.
Commentary to the Restatement (Second) emphasizes that "when the primary purpose ofthe
tort rule involved is to deter or punish misconduct, the place where the conduct occurred has peculiar
significance." Restatement (Second) of Conflicts § 145, cmt. e. See also id § 146, cmt. d ("If [the
purpose of the rule of tort law involved] is to punish the tortfeasor and thus to deter others from
following his example, there is better reason to say that the state where the conduct occurred is the
state of dominant interest and that its local law should control than if the tort rule is designed
primarily to compensate the victim for his injuries."). Courts, applying Restatement (Second)
analysis, have chosen to apply the punitive damages law of the state in which the tortfeasor's
allegedly wrongful conduct occurred. See Talley, 2011 WL 2559974, at *5 (applying the punitive
damages law of New Jersey, where defendant's corporate decisions were made); Deutsch, 723 F.
13

Supp. 2d at 525 (similarly applying the punitive damages law of New Jersey, where defendant's
corporate decisions were made); Aguirre Cruz v. Ford Motor Co., 435 F. Supp. 2d 701, 706 (W.D.
Tenn. 2006) (applying Tennessee choice-of-Iaw rules, namely the Restatement (Second) approach,
and holding, "Michigan, as defendant's principal place of business and the place where the alleged
misconduct occurred, has the most significant relationship to the issue of punitive damages").
Accordingly, where wrongful conduct here is alleged to have occurred at defendant's
principal place of business, located in New Jersey, and where the purpose of both North Carolina
and New Jersey punitive damages law is to punish and deter tortfeasors, rather than compensate
victims, the court holds that New Jersey law applies to the issue of punitive damages. As to that
issue, New Jersey has the most significant relationship under the principles stated in § 6 to the
occurrence and the parties. The "occurrence" relevant for determination of punitive damages is
conduct that would have occurred in New Jersey, namely defendant's decisions as to marketing, drug
labeling, and notification. And where New Jersey is the location of defendant's principal offices,
it has the most significant relationship with defendant of any interested state.
Applying New Jersey law to the issue ofpunitive damages conforms with the factors set forth
in Restatement (Second) § 6, particularly factors (c), (d), (e), and (t). Defendant has a justified
expectation to have New Jersey law determine whether its conduct in that state warrants punishment.
In turn, plaintiffs, as North Carolina residents, have a justified expectation to have their
compensation, ifany, determined by the laws ofthe state in which they Iive and suffered the alleged
injury. Further, the policy reflected in New Jersey's punitive damages law - to punish a defendant
if warranted for misconduct within its border - is advanced through application of its punitive
damages law. In contrast, North Carolina does not have as great an interest in punishing conduct that
14

occurred in another state. Finally, application of New Jersey law to the issue of punitive damages
will promote certainty, predictability, and uniformity of result. Defendant has principal offices in
New Jersey, and, pursuant to 28 U.S.C. § 1332(c)(1), is considered a citizen of that state. New
Jersey is therefore most interested in regulating the conduct of its citizen and is best-suited to
determine when such conduct warrants punitive damages.
For the foregoing reasons, defendant's motion to apply New Jersey law to the issue of
punitive damages (DE # 46) is GRANTED.
C.

Defendant's Motion in Limine to Exclude Adverse Drug Experience Reports (DE # 103)
On December 2, 2011, defendant filed motion in limine, requesting that the court exclude

evidence concerning (1) adverse drug experience (HADE") reports or aggregate numbers of ADE
reports not substantially similar to the events alleged in this case and (2) ADE reports received by
defendant after September 13, 1996, the date Mr. Brown commenced bisphosphonates therapy with
Aredia. Defendant contends that any individual AD E report should be excluded under Federal Rules
ofEvidence 401-403, unless the particular ADE report at issue is substantially similar to the alleged
events in this case. Defendant further argues that any probative value of one or more ADE reports
would be substantially outweighed by the time and confusion involved in disputing the substantial
similarity of the particular report. In addition, defendant maintains that ADE reports and collected
numbers of such reports should be excluded as inadmissible hearsay. Finally, defendant argues that
to the extent ADE reports are admitted, they must be limited to reports received by defendant prior
to September 13, 1996, when Mr. Brown commenced his Aredia therapy.
Plaintiffs responded in opposition on December 15,2011. As to the dissimilarities between
Mr. Brown's condition and the experiences described in specific ADE reports sent to defendant,

15

plaintiffs argue that such dissimilarities effect the weight of the evidence, not admissibility. As to
defendant's hearsay objection, plaintiffs respond that they would offer the reports as proof of
defendant's notice, not for the truth of the matter asserted. Plaintiffs further direct the court's
attention to opinion of the Western District of Kentucky, dated December 14,2011, disposing of
similar objections to introduction of ADE reports. See Mahaney ex reI. estate of Kyle v. Novartis
Pharmaceuticals Corp., 835 F. Supp. 2d 299,311 (W.D. Ky. 2011).
At motions hearing held February 3,2012, the court took up defendant's objections to the
ADE reports. First, as to the admissibility ofaggregate numbers of ADE reports, the court signaled
agreement with Mahaney. Where the parties have attempted to further litigate this issue, the court
clarifies its ruling here. Plaintiffs' experts may reference the aggregate number of Zometa- and
Aredia-related ADE reports to prove medical causation, insofar as they relied on it to form their
opinions. See Mahaney, 835 F. Supp. 2d at 312. This ruling applies at least to plaintiffs' expert Dr.
Marx, who will testify among other things as to general causation. Defendant may address on cross­
examination dissimilarities between Mr. Brown's medical conditions and experiences and those
referenced in the ADE reports. ld.
The court also ruled at hearing that specific ADE reports could be admitted to show notice
on defendant, rather than for the truth of the matter asserted. Other courts have allowed admission
of ADE reports to show notice on pharmaceutical manufacturers of a drug's side effects. See
Mahaney, 835 F. Supp. 2d at 312; Hogan v. Novartis Pharmaceuticals Corp., 06 CIV. 0260 BMC
RER, 2011 WL 1533467, at *13 (E.D.N.Y. Apr. 24, 2011); Bartlett v. Mut. Pharm. Co .. Inc., 08­
CV-358-JL, 2010 WL 3092649, at *1 (D.N.H. Aug. 2, 2010). The court has instructed the parties
to submit, if desired, a proposed limiting instructing that would clarify for the jury that any ADE
16

report could not be considered for the truth of the matter asserted.
At hearing, the court requested further briefing as to limits on admissibility based on the date
of a particular ADE report. Plaintiffs, in brief filed May 1, 2012, contend that they should be
allowed to introduce or refer to individual reports dated on or before April 27, 2005, the date Mr.
Brown was diagnosed with osteonecrosis of the jaw and ceased bisphosphonate treatment.
Defendant maintains that the appropriate cut-offdate should be either September 13, 1996, when Mr.
Brown began Aredia therapy, or January 11,2002, when he commenced Zometa therapy.
Plaintiffs' proffered date, April 27, 2005, is more compelling. Underrelevant North Carolina
law, a manufacturer of a product may be found liable, given satisfaction of certain preliminary
conditions, if"the manufacturer ... became aware of or in the exercise ofordinary care should have
known that the product posed a substantial risk ofharm to a reasonably foreseeable user or consumer
and failed to take reasonable steps to give adequate warning or instruction or to take other reasonable
action under the circumstances." N.C. Gen. Stat. § 99B-5(a)(2). Thus, notice on defendant of
adverse effects of its drugs would be relevant at least up until Mr. Brown ceased medication. See
also Hogan, 2011 WL 1533467, at *13 (finding that notice can be established by "[i]ndividual
reports and the total number of ONJ reports before June, 2005," at which point plaintiff s doctors
temporarily halted the Zometa infusions because they concluded it was contributing to plaintiff sjaw
condition). Accordingly, the court agrees with plaintiffs that the AD E reports received by defendant
on or before April 27, 2005, the date Mr. Brown stopped taking Zometa, may be admitted for the
purpose of showing notice on defendant.
Finally, the court is aware that other courts have required demonstration that a particular
ADE report is "substantially similar" to a plaintiffs condition before allowing introduction of the

17

report to show notice on defendant. In Mahaney, for instance, the court held, "[i]f Plaintiff
introduces specific ADE reports to show notice to NPC of Zometa' s side effects, those reports must
be substantially similar to the matter at hand. For substantial similarity, it is enough that the ADE
report concern a patient suffering medical complications analogous to ONJ after taking Zometa or
Aredia." Mahaney, 835 F. Supp. 2d at 312-13; see also Bartlett, 2010 WL 3092649, at *1 ("They
need only be 'substantially similar'''); but see Hogan, 2011 WL 1533467, at * 13 ("Individual reports
and the total number of ONJ reports before June, 2005 can establish notice regardless of whether
Hogan's jaw condition was not similar to any of the patients described in the report"). Where the
parties have not made clear to the court the content or quantity ofADE reports at issue, nor presented
any specific reports for review, the court declines at this time to set a standard of "substantial
similarity." The level ofsimilarity required, if any, will need to be determined in the context oftrial.
D.

Defendant's Motion in Limine to Exclude Evidence Based on Incorrect Legal Standards (DE
# 114)
Defendant seeks to preclude plaintiffs from presenting evidence that would suggest that

defendant had a duty to warn Mr. Brown's dentist, oral surgeon, periodontist, or health care
providers other than his prescribing physicians, Drs. John Hunter and Birgit Arb, concerning any of
the alleged risks related to Aredia or Zometa or any of the alleged preventive measures plaintiffs
contend defendant ought to have warned about. Defendant argues that pursuant to North Carolina
General Statute § 99B-5(c), defendant's duty to warn extends only to the prescribing physician, not
to other medical personnel who later become involved with the care ofthe patient. Thus, defendant
maintains, evidence of its failure to warn persons other than Mr. Brown's prescribing physicians is
irrelevant under Federal Rule of Evidence 401 and unfairly prejudicial under Rule 403.

18

Section 99B-5(a) provides the appropriate starting point here:
(a)

No manufacturer or seller of a product shall be held liable in any product
liability action for a claim based upon inadequate warning or instruction
unless the claimant proves that the manufacturer or seller acted unreasonably
in failing to provide such warning or instruction, that the failure to provide
adequate warning or instruction was a proximate cause ofthe harm for which
damages are sought, and also proves one of the following:
(1)

At the time the product left the control of the manufacturer or seller,
the product, without an adequate warning or instruction, created an
unreasonably dangerous condition that the manufacturer or seller
knew, or in the exercise of ordinary care should have known, posed
a substantial risk of harm to a reasonably foreseeable claimant.

(2)

After the product left the control of the manufacturer or seller, the
manufacturer or seller became aware of or in the exercise of ordinary
care should have known that the product posed a substantial risk of
harm to a reasonably foreseeable user or consumer and failed to take
reasonable steps to give adequate warning or instruction or to take
other reasonable action under the circumstances.

N.C. Gen. Stat. § 99B-5(a).
This subsection makes clear that the claimant has the burden of proving the manufacturer
acted unreasonably in failing to provide warning or instruction. Further, the unambiguous language
of § 99B-5(c) provides that if a pharmaceutical company gives adequate warning to claimant's
prescribing physician, the manufacturer shall not be liable for failing to provide warning directly to
claimant (unless the FDA requires such direct consumer warning)4:
(c)

Notwithstanding subsection (a) of this section, no manufacturer or seller of
a prescription drug shall be liable in a products liability action for failing to
provide a warning or instruction directly to a consumer if an adequate
warning or instruction has been provided to the physician or other legally
authorized person who prescribes or dispenses that prescription drug for the
claimant unless the United States Food and Drug Administration requires

4 Plaintiffs do not contend here that the FDA requires direct consumer warning or instruction to accompany either Aredia
or Zometa.

19

such direct consumer warning or instruction to accompany the product.
N.C. Gen. Stat. § 99B-5(c). The meaning of this subsection is clear: if defendant provided an
adequate warning to the physicians that prescribed Mr. Brown's Aredia and Zometa, defendant shall
not be liable in a products liability action for failure to warn.
However, the above analysis does not support a finding that evidence of defendant's failure
to warn Mr. Brown, his dentist, oral surgeon, or other non-prescribing health care providers, is
irrelevant. Pursuant to § 99B-5(a), plaintiffs have the burden of proving that defendant acted
unreasonably in failing to provide warning. Therefore, evidence about defendant's failure to warn
Mr. Brown's non-prescribing care providers, such as his dentist, oral surgeon, or periodontist, may
be relevant if plaintiffs are able to show that defendant did not adequately warn Mr. Brown's
prescribing physicians. It would be premature to order excluded any evidence regarding defendant's
warnings to Mr. Brown's non-prescribing physicians. Accordingly, defendant's motion is DENIED,
but the court will revisit this argument if particularized objections are made at trial.
E.

Out-of-Court Statements by Panel Members (Schubert E-mails) (DE## 111,116)
Defendant, in its omnibus motion in limine, moves to exclude any out-of-court statements

by members of two Advisory Boards, composed of physicians and oral surgeons, who provided
comments regarding defendant's draft: White Paper on the development of osteonecrosis of the jaw
in patients using Zometa and Aredia. 5 In particular, defendant identifies e-mails from Dr. Mark
Schubert, an oral surgeon, dated May 12,2004, and May 28,2004. Defendant argues that such out­
of-court statements constitute inadmissible hearsay.
Plaintiffs respond that the e-mails are admissible as statements ofan opposing party's agent,

5

Defendant issued the White Paper in June 2004.

20

pursuant to Federal Rule of Evidence 80 1(d)(2)(D), or as records of a regularly conducted activity,
pursuant to Rule 803(6). In the alternative, plaintiffs argue that the e-mails would not be offered for
the truth ofthe matter asserted, although plaintiffs do not identifY the purpose for which they would
be offered.
Rule 801 (d)(2)(D) provides that a statement is not hearsay ifit is offered against an opposing
party and "was made by the party's agent or employee on a matter within the scope of that
relationship and while it existed." Fed. R. Evid. 801 (d)(2)(D). The party offering the evidence must
show that the declarant is an agent ofthe party-opponent and the scope of that agency. Womack v.
Tierco Maryland Inc., 38 F. App'x 850, 857 (4th Cir. 2002) (citing United States v. Portsmouth
Paving Corp., 694 F.2d 312,321 (4th Cir. 1982)). "Agency is the fiduciary relationship that arises
when one person (a 'principal') manifests assent to another person (an 'agent') that the agent shall
act on the principal's behalf and subject to the principal's control, and the agent manifests assent or
otherwise consents so to act." Restatement (Third) of Agency § 1.01. See also Kernan v. One
Washington Park Urban Renewal Associates, 154 N.J. 437, 453, 713 A.2d 411,419 (1998) ("[a]n
agency relationship is created when one party consents to have another act on its behalf, with the
principal controlling and directing the acts of the agent"); State v. Weaver, 359 N.C. 246, 258, 607
S.E.2d 599, 606 (2005) ("Two essential elements of an agency relationship are: (1) the authority of
the agent to act on behalf of the principal, and (2) the principal's control over the agent").
Here, plaintiffs have not provided evidence that Dr. Schubert acted as defendant's agent
while serving on the Advisory Board. Plaintiffs have not shown that defendant exercised control
over Dr. Schubert or any other members of the Advisory Boards, nor have they demonstrated that
the members agreed to act on defendant's behalf. Accordingly, Rule 801 (d)(2)(D) does not provide

21

a means of admission for the referenced Schubert e-mails.
Plaintiffs argue in the alternative that the Schubert e-mails and similar correspondence from
Advisory Board members fall under the hearsay exception for records of regularly conducted
activity. See Fed. R. Evid. 803(6). Rule 803(6) requires, among other things, that "the record was
kept in the course of a regularly conducted activity of a business," and that "making the record was
a regular practice of that activity." Fed. R. Evid. 803( 6)(B), (C). "Reports and documents prepared
in the ordinary course of business are generally presumed to be reliable and trustworthy for two
reasons: First, businesses depend on such records to conduct their own affairs; accordingly, the
employees who generate them have a strong motive to be accurate and none to be deceitful. Second,
routine and habitual patterns of creation lend reliability to business records." Certain Underwriters
at Lloyd's, London v. Sinkovich, 232 F.3d 200,204-05 (4th Cir. 2000) (internal quotation marks
omitted).
Yet plaintiffs have failed to establish that defendant's organization of Advisory Boards was
a "regularly conducted activity," and they further fail to demonstrate that e-mail correspondence with
Advisory Board members was a "regular practice of that activity." See New York v. Microsoft
Corp., crv A. 98-1233 (CKK), 2002 WL 649951, at *2 (D.D.C. Apr. 12,2002). Accordingly, the
Schubert e-mails do not satisfY the requirements of the Rule 803(6) hearsay exception.
Based on the foregoing, the court finds that the Schubert e-mails identified in the parties'
memoranda do not fall under the Rule 801(d)(2)(D) non-hearsay exclusion or the Rule 803(6)
hearsay exception. Where plaintiffs have not identified an applicable hearsay exception, the
Schubert e-mails will not be admitted to prove the truth of the matter asserted. Fed. R. Evid.
801 (c)(2), 802. However, should plaintiffs seek to introduce correspondence from Schubert or from
22

other members of the Advisory Boards for purposes other than to prove the truth of the matter
asserted, argument shall be presented at the appropriate time to the court. Accordingly, final ruling
on the admissibility of the Schubert e-mails or similar correspondence is reserved for trial.
F.

Defendant's Motion in Limine to Exclude Evidence of Modifications of Labels (DE # 121)
Defendant moves to exclude any evidence that defendant modified the Zometa label in

November 2007, or the Aredia label in December 2008. In support, defendant cites Federal Rule of
Evidence 407, which provides:
When measures are taken that would have made an earlier injury or harm less likely
to occur, evidence of the subsequent measure is not admissible to prove:
•
negligence;
•
culpable conduct;
•
a defect in a product or its design; or
•
a need for a warning or instruction.
But the court may admit this evidence for another purpose, such as impeachment
or-if disputed-proving ownership, control, or the feasibility of precautionary
measures.
Fed. R. Evid. 407. "Rule 407 promotes an important policy of encouraging subsequent remedial
measures." Werner v. Unjohn Co., Inc., 628 F.2d 848,856 (4th Cir. 1980).
In Werner, the Fourth Circuit found reversible error where a district court allowed
introduction of a defendant's 1975 alteration of a prescription drug warning in a trial regarding the
adequacy of warning given in 1974. Id. at 853 ("This use of the 1975 warning clearly was
impermissible and constitutes reversible error"). Other federal courts have similarly found that a
pharmaceutical company's subsequent alternation ofa drug's labeling is not admissible as evidence
of defects in prior labeling. See Stahl v. Novartis Pharmaceuticals Corp., 283 F.3d 254,271 n. 10
(5th Cir. 2002); Gerber v. Hoffmann-La Roche Inc., 392 F. Supp. 2d 907, 919 (S.D. Tex. 2005).
Indeed, defendant cites to recent opinions in which federal courts have found that labeling changes
23

for Zometa and Aredia in November 2007 and December 2008, respectively, fall within the
protections of Rule 407. Mahaney ex reI. estate of Kyle v. Novartis Pharmaceuticals Corp., 835 F.
Supp. 2d 299,314 (W.D. Ky. 2011); Hogan v. Novartis Pharmaceuticals Corp., 06 CIV. 0260 BMC
RER, 2011 WL 1336566, at *4 (E.D.N.Y. Apr. 6, 201l).
In accordance with the above, the court finds that evidence of the 2007 and 2008 labeling
changes for Zometa and Aredia is inadmissible for those prohibited purposes set forth in Rule 407,
namely to prove negligence, culpable conduct, a defect in a product or its design, or a need for a
warning or instruction. Fed. R. Evid. 407. The court may however admit such evidence for a
purpose permitted under Rule 407, such as impeachment. Id. Before doing so, counsel must
approach the bench and identifY for the court intended evidentiary purpose. See Mahaney, 835 F.
Supp. 2d at 314.

CONCLUSION
As set forth above, the court herein orders the following:
1.

Defendant's motion to seal (DE # 132) is GRANTED IN PART and HELD IN ABEYANCE
IN PART. The clerk of court is DIRECTED to seal those documents provisionally filed
under seal at docket entries 125 and 127. The court reserves for future determination
whether to seal docket entry numbers 126 and 128 through 131;

2.

Plaintiffs' motion to seal their response to defendant's omnibus motion in limine and
attachments thereto (DE # 146) is DENIED AS MOOT. The clerk of court is directed to
unseal the document provisionally filed under seal at entry number 145 and all attachments
thereto;

3.

Plaintiffs' motion to seal their objections to the magistrate judge's M&R (DE # 156) is

24

GRANTED IN PART. The clerk of court is DIRECTED to maintain under seal docket
entries 155, 155-5, and 155-6. However, plaintiffs shall file within fourteen (14) days of
entry of this order a redacted version of their objections to the M&R, redacting only those
portions pertaining to the discussed deposition excerpts. Further, the clerk of court is
DIRECTED to unseal docket entry numbers 155-1 through 155-4;
4.

Defendant's motion to apply New Jersey law to the issue of punitive damages (DE # 46) is
GRANTED;

5.

As set forth more particularly above, defendant's motion in limine to exclude evidence
concerning dissimilar ADE reports (DE # 103) is GRANTED IN PART AND DENIED IN
PART. Plaintiffs' experts may reference the aggregate number of ADE reports to prove
medical causation, insofar as they relied on it to form their opinions. Specific ADE reports
received by defendant on or before April 27, 2005 may be admitted to show notice on
defendant, not to prove the truth of the matter asserted;

6.

Defendant's motion in limine to exclude evidence based on incorrect legal standards (DE #
114) is DENIED;

7.

Defendant's request to exclude comments of Dr. Schubert or other members of Advisory
Boards, referenced in defendant's omnibus motion in limine (DE # 116), is GRANTED IN
PART. The Schubert e-mails will not be admitted to prove the truth of the matter asserted.
However, should plaintiffs seek to introduce correspondence from Schubert or from other
members of the Advisory Boards for purposes other than to prove the truth of the matter
asserted, argument shall be presented at the appropriate time to the court; and

8.

Defendant's motion in limine to exclude evidence of its subsequent knowledge or conduct
25

(DE # 121) is GRANTED IN PART.

SO ORDERED, this the 26th day of July, 2012.

LOTIJISE W. FLANAGAN
United States District Judge

26