May 25, 2011

PUNITIVE DAMAGES: FAILURE TO WARN

Johnson & Johnson v. Superior Court, (Second District, January 20, 2011) --- Cal.Rptr.3d ----, 192 Cal.App.4th 757, 2011 WL 169407, 11 Cal.Daily Op. Serv. 1918, 2011 Daily Journal D.A.R. 2268

A boy who developed a serious skin condition as a result of a severe adverse reaction to an over-the-counter (OTC) pain reliever filed a products liability action against the manufacturer of the drug and its parent company, alleging that the defendants had failed to provide adequate warnings of the risks to consumers. The plaintiffs complaint asserted a claim for punitive damages, contending that the defendants had long known of the risk of the syndrome suffered by the plaintiff, but had misrepresented study results to the FDA in obtaining approval for the drug.

The Defendants moved for summary adjudication of the punitive damages claim, arguing that the product’s label had been approved by the FDA consistent with FDA regulations, and that regardless of whether they could or should have said something more explicit, their “FDA-approved labeling cannot conceivably evidence despicable conduct or a conscious disregard for safety.” The trial court denied the motion, and the Court of Appeal denied the defendants’ petition for a writ of mandate, holding that the evidence raised a triable issue of fact as to whether the manufacturer failed to warn, and whether there was a conscious disregard for safety:

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June 16, 2009

FDA ISSUES WARNING REGARDING ZICAM NASAL SPRAY

In a conference call with a group of reporters this morning the FDA announced it is warning users of Zicam, a popular cold-relief nasal spray, to stop using the product because it has been associated with approximately 130 reported cases of people losing their sense of smell.

The FDA stated that it had sent Matrixx Initiatives, Inc., the manufacturer of Zicam, a warning letter directing the company to stop marketing the internasal products. The agency also instructed Matrixx that it must seek FDA approval if it wishes to continue selling zinc-containing versions of Zicam administered through the nose.

No recall has been ordered because the FDA's authority is limited for regulation of over-the-counter homeopathic remedies such as Zicam. Although Matrixx denies that the product can cause a loss of smell, the company indicated that it will consider withdrawing the products from the market.

Several lawsuits have already been filed against Matrixx, asserting that Zicam nasal gel has caused permanent loss of smell (anosmia) and taste in users, some after a single application of the product. Zicam contains soluble zinc gluconate, a substance known to be linked to olfactory nerve damage when applied through the nose, which has been associated with anosmia since the 1930’s.

Shares of Matrixx Initiatives Inc. (MTXX) dropped 56% to $8.56 in recent trading after hitting a 52-week low of $8.41 earlier in the day.