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Law360 (July 12, 2021, 4:25 PM EDT) -- Appellate victories for Johnson & Johnson in product liability cases and wins for insurers in COVID-19 coverage suits dominated New Jersey's litigation scene over the last several months, with the state Supreme Court also handing down a pair of critical rulings signing off on medical marijuana reimbursements and virtual grand juries.
J&J scored state appellate decisions erasing multimillion-dollar verdicts in pelvic mesh and talcum powder suits. Insurance companies largely prevailed in policyholders' suits in federal and state court over pandemic coverage, and universities achieved mixed results in fighting claims they improperly kept tuition and fees after ceasing in-person instruction because of the coronavirus outbreak.
The New Jersey Supreme Court in April issued opinions finding that employers can be compelled to reimburse workers' medical cannabis expenses and upholding the constitutionality of the state's virtual grand jury program.
Here is a look at some of the major cases that unfolded in Garden State courts this year.
In the first appellate win for J&J, a state appellate panel on March 2 tossed verdicts totaling $83 million against the pharmaceutical giant's Ethicon unit and C.R. Bard Inc. over the exclusion of evidence at separate trials with respect to how the companies' pelvic mesh products were cleared through the U.S. Food and Drug Administration's 510(k) process.
The panel said in its published opinion that trial judges were wrong to bar evidence of 510(k) clearance showing the product is "substantially equivalent" to an older device already on the market.
Richard Ausness, a product liability professor at the University of Kentucky College of Law, said permitting 510(k) evidence at trials makes sense.
Excluding the evidence "might give a false impression that somehow this was a rogue operation and that what they did was somehow not what they should have done or not what the FDA would have allowed," Ausness said.
The panel's "exposition of the issue is quite helpful to the plaintiffs in future trials," according to Ellen Relkin of Weitz & Luxenberg PC, who has represented plaintiffs in product liability cases.
"The court recognized the distinctions between these regulatory regimes, noting the courts should 'explore whether a limited amount of 510(k) information, through a well-crafted stipulation or a modest presentation of evidence by both sides, along with a cautionary instruction from the judge, could help assure a fair trial,'" Relkin told Law360 in an email.
The cases are Mary McGinnis et al. v. C.R. Bard Inc. et al., case number A-001083-18, and Elizabeth Hrymoc et al., v. Ethicon Inc. et al., case number A-005151-17, both in the Superior Court of New Jersey, Appellate Division.
A different state appellate panel on April 28 threw out verdicts totaling $117 million in damages against J&J and Imerys Talc America over claims that J&J's purportedly asbestos-containing talc products caused a man to develop mesothelioma.
In a published opinion, the panel reasoned that Superior Court Judge Ana C. Viscomi improperly allowed two plantiffs' experts to testify during the trial that non-asbestiform minerals could cause mesothelioma. The experts did not back up that testimony, the panel said.
The decision largely relied on the state Supreme Court's 2018 landmark decision in Accutane , which outlined the "gatekeeping" role that trial courts must play in evaluating the admissibility of expert testimony. The panel said Judge Viscomi failed to perform that analysis.
Jean Eggen, distinguished emeritus professor at Widener University Delaware Law School, said by email that "we may be seeing some New Jersey appellate courts flexing the muscle of the N.J. Supreme Court's decision in Accutane, which relied on the federal standard in Daubert, but didn't necessarily endorse the flexibility inherent in Daubert, leaving room for harsher decisions."
Daubert refers to the federal standard for permitting expert testimony as set forth in the U.S. Supreme Court's 1993 decision in Daubert v. Merrell Dow Pharmaceuticals Inc.
"It is a wake-up call for plaintiffs, who may face greater scrutiny of their experts' methodologies," Eggen said.
Product liability defense attorney Nathan Schachtman said that from a gatekeeping perspective, the appellate opinion "signals that the Appellate Division has now finally gotten the message of Accutane and that the judge must look analytically at whether each inference in the chain of inferences ... has reasonable support."
The decision says that "when we said that judges must evaluate the scientific validity of the expert's opinion and what the expert is relying on, that we really meant it," Schachtman said.
The cases are Lanzo et al. v. Cyprus Amax Minerals Co. et al., case numbers A-005711-17 and A-005717-17, in the Superior Court of New Jersey, Appellate Division.
Virtual Grand Juries
On the same day the Appellate Division wiped away the talc verdicts, the state Supreme Court rendered a unanimous opinion that virtual grand juries amid the pandemic did not run afoul of the state constitution.
Addressing a constitutional challenge from criminal defendant Omar Vega-Larregui over his drug indictment by a grand jury that met remotely, the justices shot down arguments from him and his amicus backers, including that the remote format could threaten the confidentiality of the grand jury process and that the Supreme Court had overstepped its authority in approving it.
Christopher Gramiccioni of Kingston Coventry LLC, who recently served as Monmouth County prosecutor, said, "I think any of us in government, as well as in the defense bar, we applaud the court's efforts to try to come up with a solution in times of a pandemic, which is really unpredictable and ... there's really no playbook, at least in modern history, on how to handle it."
But Gramiccioni has lingering concerns about grand juries operating virtually, saying, "There are still practical realities and concerns with respect to ensuring the integrity and confidentiality of those proceedings," which are mandated under law to be secret.
"I'm heartened that we had the public vetting of it, with litigants on both sides [able] to share their thoughts and concerns and positions," Gramiccioni added. "The court spoke, and we live by the court's announcement."
The case is State of New Jersey v. Vega-Larregui, case number 085288, in the New Jersey Supreme Court.
Another closely watched Supreme Court case was decided about two weeks earlier, with the justices on April 13 unanimously holding that employers can be compelled to reimburse workers' medical cannabis expenses despite the federal prohibition on marijuana under the Controlled Substances Act.
The court found that a congressional budgetary provision has suspended that statute with respect to New Jersey's medical marijuana law and signed off on a workers' compensation order directing M&K Construction to reimburse its former employee Vincent Hager for the ongoing costs of his medical marijuana following a work-related accident.
The justices also found that "Hager presented sufficient credible evidence to the compensation court to establish that the prescribed medical marijuana represents, as to him, reasonable and necessary treatment" under the state's Workers' Compensation Act.
Cannabis attorney Ryan Magee of Riker Danzig Scherer Hyland & Perretti LLP noted that the decision was "fact-specific" with respect to Hager's situation. The opinion does not mean that medical marijuana will always be deemed reasonable and necessary under the WCA, but "the significance of it is it says it can be," according to Magee.
"We now have a ruling from the highest court in the state that says medical marijuana can in the right circumstances be characterized as reasonable and necessary under the act," Magee said.
But the "biggest takeaway" from the decision for Magee is that "this is just yet another example demonstrating the fact that conflicting federal and state laws — when it comes to be it medical marijuana or adult-use marijuana — have a very real impact on the citizens of the states and the country."
The case is Vincent Hager v. M&K Construction, case number 084045, in the New Jersey Supreme Court.
Beyond those matters, the Garden State's legal landscape in 2021 has been marked to a large degree by state and federal litigation arising from the pandemic.
One batch of suits has involved proposed class actions against universities for keeping tuition and fees after ceasing in-person classes due to the health crisis. In such cases, students have said they did not get the in-person experiences they paid for and were entitled to a refund of the prorated share of tuition and fees for the services the schools failed to provide.
Another group of pandemic-related cases has been against insurance companies from policyholders seeking coverage for losses related to the outbreak.
While universities have had varied success in attempting to dismiss complaints, insurers have mostly won their bids to toss policyholders' suits. Those disputes have mostly centered on the meaning of policy phrases like "physical loss of or damage" to property and the applicability of virus exclusions.
But the coverage issues at stake will be "ultimately decided by the highest state courts," according to policyholders' attorney Kenneth Frenchman of Cohen Ziffer Frenchman & McKenna LLP. Even for cases before the Third Circuit, "if it's under New Jersey law, at some point I think they'll be looking to the New Jersey Supreme Court," Frenchman said.
"I don't even think we're at the halfway mark of this war. There's been a few battles, but this is a war, and we're maybe a third of the way through it," Frenchman said.
--Editing by Jill Coffey and Philip Shea.
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