Feldman v. Lederle Laboratories, a Div. of American Cyanamid Co.

• Decision Date: 15 June 1992
• Citation: 608 A.2d 356,257 N.J.Super. 163
• Parties: , Prod.Liab.Rep. (CCH) P 13,225 Carol Ann FELDMAN, Plaintiff-Respondent, v. LEDERLE LABORATORIES, A DIVISION OF AMERICAN CYANAMID COMPANY, a Maine corporation doing business in the State of New Jersey, Defendant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 163

257 N.J.Super. 163

608 A.2d 356, Prod.Liab.Rep. (CCH) P 13,225

Carol Ann FELDMAN, Plaintiff-Respondent, v. LEDERLE LABORATORIES, A DIVISION OF AMERICAN CYANAMID COMPANY, a Maine corporation doing business in the State of New Jersey, Defendant-Appellant.

Superior Court of New Jersey Appellate Division.

Argued Jan. 31, 1989.

Decided July 13, 1989.

Remanded by Supreme Court

July 24, 1991.

Reargued April 13, 1992.

Decided June 15, 1992.

William C. Slattery, Somerville, for defendant-appellant (Norris, McLaughlin & Marcus, attorneys).

James I. Peck IV, West Orange, for plaintiff-respondent.

Before Judges MICHELS, MUIR, Jr. and KEEFE.

The opinion of the court was delivered by

KEEFE, J.A.D.

This matter is again before us on remand from the Supreme Court to decide those issues raised on Lederle's appeal but not addressed by us in our prior opinion. Feldman v. Lederle Lab., 125 N.J. 117, 122, 592 A.2d 1176 (1991) (Feldman II ), rev'g, 234 N.J.Super. 559, 561 A.2d 288 (App.Div.1989), petition for cert. filed, 505 U.S. 1219, 112 S.Ct. 3027, 120 L.Ed.2d 898 (1991). ¹

I

The Distinction Between Preemption and Compliance With A Legislative Standard.

The jury verdict rejected any notion that Lederle's product was defective at the time it was first marketed or when it was administered to plaintiff in 1960 and 1961. Rather, Lederle's liability was based on "its failure to warn during the 13 month period that elapsed between November of 1962, when it first wrote to the Food and Drug Administration (FDA) for permission to change its labeling, and December of 1963, when the FDA approved the label change and Lederle complied." Feldman v. Lederle Lab., 234 N.J.Super. 559, 573, 561 A.2d 288 (App.Div.1989). (This conclusion was not challenged by plaintiff on appeal to the Supreme Court. Feldman II, supra, 125 N.J. at 131, 592 A.2d 1176.) Thus, liability was predicated on defendant's duty to warn based upon subsequently acquired knowledge of a danger which was actually known.

In such circumstances, Lederle's duty was to warn " 'as soon as reasonably feasible.' " Feldman II, supra, 125 N.J. at 144, 592 A.2d 1176 (quoting Feldman v. Lederle Lab., 97 N.J. 429, 456, 479 A.2d 374 (1984) (Feldman I )). Even where the manufacturer knows of the danger, as Lederle admits it did by November 1962, the question is whether it " 'acted in a reasonably prudent manner in marketing the product or in providing the warnings given.' " Id. (quoting Feldman I, supra, 97 N.J. at 451, 479 A.2d 374). "Under that standard negligence and strict liability in failure-to-warn cases may be deemed to be functional equivalents." Feldman II, supra, 125 N.J. at 144, 592 A.2d 1176. ² Thus, while the manufacturer's liability is strict, it is not absolute.

Lederle's primary defense in this case was that, irrespective of its knowledge in November 1962, it had, in the context of the federal regulatory scheme to which it was subject, acted as a reasonably prudent manufacturer by informing the FDA and requesting permission to change its warnings. Lederle is correct in its argument that, even in the absence of federal preemption, a drug manufacturer is entitled to introduce evidence of compliance with FDA regulations as proof of the reasonableness of its conduct. McQuaid v. Burlington Cty. Memorial Hosp., 212 N.J.Super. 472, 475-76, 515 A.2d 796 (App.Div.1986).

In the instructions to the jury the trial judge properly advised them that "reasonableness of the defendant's conduct is a factor to be considered in determining liability." However, with respect to the relevancy of FDA regulations in that context, the judge said:

Now for legal reasons, with which you need not concern yourselves, this Court has ruled that the defendant, Lederle Laboratories, was not required to obtain the prior approval of the Federal Food and Drug Administration before issuing a warning concerning the side effect of tooth discoloration in Declomycin between 1960 and 1963. The Federal Food and Drug Administration regulations and requirements are minimal standards and the defendant still owes a duty to warn its users in the exercise of reasonable care. However, the exchange of correspondence and other communications between the Federal Food and Drug Administration and the defendant, Lederle Laboratories, have been admitted into evidence and may be considered by you on the issue of the reasonableness of defendant's conduct.

In essence the instruction advised the jury that, as a matter of law, Lederle had not exercised reasonable care in waiting for FDA approval before warning of the danger because federal regulations did not require prior FDA approval. If the judge was correct in that analysis of the regulations, then the interchange of correspondence between the FDA and Lederle concerning the request for permission to change the warnings, which the judge permitted the jury to consider on the question of Lederle's reasonableness, was irrelevant to that issue. Armed with the knowledge it had in November 1962 and the duty to warn as soon as feasible, how could it be said that Lederle acted reasonably in waiting for a federal agency to give approval which the law did not require it to seek? Since Lederle offered no other explanation for its delay, there appears to have been no fact issue for the jury to decide.

On the other hand, if the judge's interpretation of the regulations was incorrect and Lederle was required to submit the changed warning to the FDA for prior approval the instruction was erroneous. The Restatement (Second) of Torts § 288C (1965) provides:

Compliance with a legislative enactment or an administrative regulation does not prevent a finding of negligence where a reasonable man would take additional precautions.

Applying that principle to this case, the question to be decided by the jury is whether Lederle in the exercise of reasonable care should have taken steps to warn physicians of its concerns while awaiting FDA approval. See Feldman I, supra, 97 N.J at 458-61, 479 A.2d 374. ³ While the trial judge undoubtedly concluded that there was sufficient evidence to prove that Lederle should have done more, the ultimate resolution of that issue was a question of fact for the jury. The instruction given, however, had the effect of directing the jury how to resolve the issue. Thus, the instruction given was erroneous if the judge's interpretation of the regulations was incorrect.

Our prior opinion in this matter held that the regulations in place in 1962 required Lederle to seek the approval of the FDA before changing its warnings at the risk of suffering suspension of its new drug application if the new labeling contained an untrue statement of material fact. Feldman, supra, 234 N.J.Super. at 587-88, 561 A.2d 288. The dilemma presented was that Lederle believed the proposed new warning to be true, but the FDA correspondence evidenced the agency belief that the proposed warning was inaccurate. Under our interpretation of the regulation, even in the absence of preemption, the question of fact presented was whether Lederle acted reasonably in withholding a warning in view of the agency's reluctance to approve it. Even assuming the federal regulations can be read to have allowed Lederle to change the warning prior to FDA approval and there was no risk of suspension so long as the change was subsequently deemed by the FDA not to constitute an untrue statement of material fact, the question remains whether the correspondence from the FDA was sufficient evidence to justify Lederle's decision to withhold a warning until such time as the FDA was convinced otherwise.

The Supreme Court in Feldman II disagreed only with our finding that "literal compliance" with the provisions of 21 C.F.R. § 130.9(a) (1960) "preclude[d] finding for plaintiff on her strict-liability claim for failure to warn." 125 N.J. at 147, 592 A.2d 1176. The Court interpreted the statutory provision in the context of the Federal Food, Drug and Cosmetic Act of 1938 (FDCA) and concluded that

federal law did not clearly require that Lederle obtain prior approval from the FDA before warning of a known or knowable danger. Accordingly, we find nothing in the federal scheme to support the assertion that manufacturers of prescription drugs and antibiotics who literally comply with that isolated provision must be immune from state tort liability for injuries caused by their products.

Id. (emphasis added). The quoted passage from Feldman II is a recognition of the fact that Lederle was at least complying with the literal requirements of the regulation, i.e., it was seeking FDA approval before changing its warnings. However, the Supreme Court found that federal law did not "clearly" mandate that Lederle await government approval before warning of a known danger or prevent Lederle from taking other steps, such as withdrawing the product from the market, pending approval. Lederle's new drug application and license to distribute Declomycin would not be in jeopardy unless it was later ascertained that the proposed warning was "untrue," an event which retrospectively did not occur. The Court's interpretation of federal law, in our view, supports Lederle's fall-back position that its compliance with FDA regulations was a factor to be considered by the jury in determining the reasonableness of its decision not to warn during the critical thirteen month period.

We conclude that Lederle's exception to the charge in this respect was properly taken. The error cannot be deemed harmless, especially in view of the FDA's reluctance to approve the changed warning for Declomycin. While the trial judge was correct in holding that the federal regulations did not preempt state tort law, that conclusion did not preclude consideration of Lederle's interpretation of the regulation and effort to comply with it on the question of the reasonableness of Lederle's conduct. The instructions had the effect of taking those considerations...