A New Yorker brings a tort action in a New York state court for injuries caused in New York by a drug prescribed in New York.
What law applies? Why New York's, of course!
The action is pending for a few years, some documents are produced and depositions taken, and then the defendant says in a letter that it will move for summary judgment based on New York's 3-year statute of limitations.
Well, when the going gets tough, the tough plaintiffs go forum shopping! And I hear Minnesota is lovely this time of year. They have the Mall of America, the world's largest booming Prairie Chicken, and a 6-year statute of limitations that, as the Drug and Device Law Blog explains, they are willing to let any foreigner take advantage of. (Reasoning that statutes of limitations are "procedural," and not "substantive," Minnesota courts have applied that forum's 6-year statute of limitations to foreigners' tort claims filed in Minnesota courts.) Minnesotans are a generous people, indeed.
The question is, should a New York court allow the plaintiff to voluntarily discontinue her action and go forum shopping, thereby avoiding summary judgment?
That was the question facing Justice Martin Shulman in In re New York Hormone Replacement Therapy Litigation, Case Management Index No. 763000/06 (N.Y. Sup. Ct. -- N.Y. Cty. Nov. 30, 2009). Justice Shulman, the coordinating court for New York State hormone replacement therapy cases, answered it with a resounding "no."
In his decision, Justice Shulman acknowledged that plaintiffs generally are allowed to voluntarily dismiss an action when they want to because a plaintiff cannot be compelled to litigate. Slip op. at 6. However, under New York precedents, prejudice to the defendant flowing from the dismissal can justify a court's denial of leave to voluntarily discontinue an action. Id.
Plaintiffs argued that because the defendant had not yet brought the summary judgment motions and discovery was not yet closed in the matter, they were free to dismiss their product liability actions at will, re-file them in federal court in Minnesota, and then have them transferred to the federal HRT multidistrict litigation in the Eastern District of Arkansas. The court disagreed:
On this record, while plaintiffs' position is superficially reasonable, still, under the circumstances presented it is truly difficult for this court to fathom anything more prejudicial to defendants than being deprived of their right to judgment on the merits dismissing these clearly time-barred actions. . . . [H]aving established the right to judgment in their favor, the court finds that defendants will be severely prejudiced if plaintiffs' [without prejudice] discontinuance motions are granted.
Id. at 8.
The court proceeded to analyze the parties' statute of limitations arguments. Under the New York CPLR, the products liability causes of action were clearly subject to a three-year statute of limitations. The plaintiffs had been diagnosed with breast cancer between 1987 and 2002, but each commenced their actions in 2004 and 2005, more than three years after diagnosis. Thus, the viability of their claims depended upon there being an applicable exception to the three-year rule.
Plaintiffs first argued that CPLR section 214-c(4) applied. This provision gives an additional one-year period where the "technical, scientific, or medical knowledge and information" was not known within the statute of limitations period. The court looked at the available scientific evidence and concluded that the publication of the National Institutes of Health's "Women's Health Initiative Study" -- which "actually caused [defendant] to change its HRT product labels inter alia to include a black box warning" -- "indubitably linked HRT to breast cancer." As such the publication date for the WHIS, July 9, 2002, was the trigger of the one-year period, and no plaintiff had filed her claim within that time. Indeed, the court concluded that "the fact that taking HRT exposes the consumer to the potential risk of breast cancer . . . was a matter of public knowledge for decades and duly disclosed after the publication of the WHIS on [defendant's] HRT product labels themselves." Slip op. at 18.
Plaintiffs next argued that one of the defendants was equitably estopped from asserting a statute of limitations defense because it had acted to fraudulently conceal the cause of action. Justice Shulman noted that there is a sharp distinction between underlying fraud and fraudulent concealment, and the conduct supporting the latter must be different from that pled for the former. Id. at 19. Here, it was not. Plaintiffs alleged that a defendant concealed that HRT increased breast cancer risk and sought to ghostwrite scientific articles promoting the use of HRT medicines. That did not prove fraudulent concealment of a cause of action. As the court noted, the complaint did not plead that plaintiff could not learn about an association between HRT medicines and breast cancer prior to the WHIS study's publication, and not one plaintiff alleged that she was "lulled by [defendant's] alleged misleading tactics and/or deliberate concealment of scientific information to refrain from timely filing their claims." Id. at 20.
The court observed that the evidence merely reflected a medical debate about whether the benefits of hormone replacement therapy are worth the risks:
Though this debate does not appear to be settled, the potential risk of contracting breast cancer from taking HRT medication was well known and at all times out there in the stream of public information. On this record, this court simply cannot conclude that [defendant] engaged in any intentionally fraudulent or deceptive act which ostensibly lulled plaintiffs into inactivity and induced them to refrain from filing timely actions.
Id. at 21-22.
The third argument plaintiffs advanced to escape the effect of the statute of limitations was American Pipe tolling, i.e., that the pendency of a prior class action tolled the statute of limitations for all absent class members. This tolling rule is part of federal common law, and is based on the fiction that absent class members are aware of the pendency of the class action and would otherwise seek to intervene in it but for American Pipe tolling.
Here, the prior class actions were filed in federal courts in Illinois and West Virginia. Justice Shulman was faced with deciding whether New York law would adopt an American Pipe tolling rule and, if so, apply it to the two foreign federal class actions. As Justice Shulman noted, there is no binding appellate authority on whether New York would adopt American Pipe tolling. He decided to align himself with the many federal decisions refusing to read this decidedly federal rule into state law. Id. at 23-24.
Justice Shulman's opinion is an important example of a court applying anti-forum-shopping principles to enforce the statute of limitations and prevent litigants from gaming the system. Many of the plaintiffs in this case already had filed duplicative federal actions in Minnesota, and it remains to be seen how difficult enforcing Justice Shulman's judgment will become.