Former NJ Employee’s Tort Suit Alleging Pharma Employer Forced Him to Use Non-FDA Approved Nasal Spray is Barred by Exclusivity Rule

A former pharmaceutical employee, who contended his employer and its CEO forced him to use a proposed (and non-FDA approved) nasal spray medication that the employer was trying to develop and which, the former employee contended, subsequently caused him to develop permanent endocrine failure and a colon tumor, may not maintain a tort action against the employer and its CEO, held a New Jersey appellate court [Bove v. AkPharma Inc., 2019 N.J. Super. LEXIS 110 (July 11, 2019)]. The court said the plaintiff/former employee’s allegations (and proof at the summary judgment level) did not support an intentional tort claim under New Jersey law. The tort action was, therefore, barred by the exclusive remedy provisions of the New Jersey Workers’ Compensation Act (WCA).

The plaintiff’s appeal was not totally unsuccessful, however. The appellate court reversed an order of the trial court that had entered judgments of sanctions under Rule 1:4-8 against the plaintiff’s attorneys for more than $205,000. Generally speaking, the rule allows for the imposition of sanctions against an attorney or pro se party where, inter alia, the argument advanced is deemed to be frivolous. The appellate court held that the defendants’ Rule 1:4-8 “safe harbor” letter did not adequately specify the WCA exclusive remedy bar—the issue upon which the plaintiff lost at the summary judgment hearing. The appellate court also held the trial court erred in awarding sanctions without accounting for “the temporal limitation governing such an award.”

Background

Plaintiff held several positions with the defendant, AkPharma, serving finally as its Director of Clinical Studies. He filed the instant suit against AkPharma and its CEO, contended the defendants were liable for fraudulent concealment, battery, and prima facie tort. He alleged in relevant part that the defendants forced plaintiff to use NasoCell, a nasal spray prepared by AkPharma and its CEO. According to the plaintiff’s allegations, AKPharma’s CEO hoped NasoCell would be effective against asthma. The nasal spray was never approved, however, by the FDA. In fact, in August 2010, AkPharma received a full clinical hold letter from the FDA regarding the spray.

Used NasoCell Both at Work and at Home

NasoCell had been developed as early as 2007 by AkPharma’s CEO, who used the product personally. According to the plaintiff, the CEO claimed NasoCell helped him with his asthma and that several of his family members also used the nasal spray. The plaintiff contended that the CEO suggested the plaintiff and other AkPharma employees use the spray and the plaintiff agreed to try it. He used NasoCell from 2007 to some point in 2010. During that period, he documented the effects he observed while using this product, and submitted his observations to the CEO. The record reflected that the plaintiff often used NasoCell outside the workplace and in his home, and he provided many positive reviews about his use of NasoCell.

NasoCell Later Abandoned

In August 2010, AkPharma received a full clinical hold letter from the FDA, essentially banning further clinical study of NasoCell until certain stated deficiencies were cured. It was undisputed that the plaintiff knew NasoCell did not have FDA approval before he used the product. AkPharma subsequently discontinued development of NasoCell as a drug.

Do-it-Yourself Pharma Research

In 2011, the plaintiff and other employers were terminated as part of a workforce reduction. In 2013, the plaintiff was diagnosed with permanent endocrine failure and a colon tumor. Following these diagnoses, he researched the ingredients that had been used in NasoCell, such as CGP and parabens, and personally concluded his use of NasoCell had caused his health problems. He also asserted a number of medical professionals had connected his use of NasoCell to his ailments, but did not present any reports to the court to support this contention.

Trial Court Grants Summary Judgment

Based on the foregoing, the trial court granted defendants summary judgment, finding the plaintiff had failed to “vault” the exclusive remedy provision of the WCA in that the plaintiff had failed to show that the CEO knew his actions were substantially certain to result in death or injury to plaintiff. The trial judge noted that the plaintiff used NasoCell at work and at home, made positive findings regarding its effectiveness, and they ceased using it, years prior to his initial workers’ compensation petition (and the tort action filed against defendants). The trial court added that several years after the plaintiff stopped using the nasal spray, he had no medical evidence to support his claim that it caused his health problems.

Appellate Court Decision

Analyzing a number of earlier cases, the appellate court stressed that the exclusivity bar was high, that even violations of safety regulations or failure to follow safety procedures generally did not rise to the level required to avoid the employers’ immunity under the WCA. Plaintiff’s mere allegations of battery or fraud did not automatically vault the WCA exclusivity bar. The plaintiff had failed to demonstrate that defendants knew their conduct was substantially certain to result in injury or death (see Larson’s Workers’ Compensation Law, § 103.04[2][e]). Moreover, the plaintiff provided no proof that his medical conditions resulted from his use of the nasal spray, while the defendants provided expert medical proof that there was no causal connection.

Sanctions Were Erroneously Awarded

The court stressed that the award of sanctions was erroneous, however. The court indicated the trial court did not “fully appreciate the temporal limitation associated with such sanctions.” It also held the defendants’ safe harbor letter neglected to warn the plaintiff that his action was barred by the exclusive remedy provision of the WCA.