Case Information
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE
__________________________________
:
JOSEPH BARRETT, :
:
Plaintiff, :
: Civil No. 18-14872 (RBK/AMD) v. : : OPINION
TRI-COAST PHARMACY, INC., et al. : : Defendants. : :
__________________________________
KUGLER , United States District Judge: This matter comes before the Court on Plaintiff’s second motion for Default Judgment (Doc. No. 21). The motion is unopposed. For the reasons set forth below, Plaintiff’s motion is
DENIED without prejudice. I. BACKGROUND
A. Factual Background
Joseph Barrett (“Plaintiff”) is an otherwise healthy 57-year-old adult residing in New Jersey. (Doc. No. 14, Am. Compl. at ¶ 1). In December of 2016, he was prescribed injectable human chorionic gonadotropin (“hCG”), which was purportedly developed, manufactured, and sold by Defendant Tri-Coast Pharmacy, Inc.—a Florida corporation that manufacturers, distributes, and sells pharmaceutical products to medical facilities and pharmacies throughout the United States, including New Jersey, for use on patients as injections. ( Id. at ¶¶ 2,9). At the time Plaintiff was prescribed the pharmaceutical, Defendant Kevin O’Connell, a citizen of South Carolina, was a pharmacist for and principal and/or officer of Tri-Coast Pharmacy. ( Id. at ¶¶ 5, 21). Shortly after administering the hCG, Plaintiff developed symptoms including diarhea, gas, bloating, pain, joint pain, and pain in various parts of his body. ( Id. at ¶ 11). He received treatment by his physician to alleviate these symptoms in December of 2016 and the years following. ( Id. ). However, subsequent testing revealed a bacterial infection and in January of 2017, Plaintiff underwent surgery for infective synovitis of the wrist. ( Id. at ¶¶ 12, 13).
In May of 2017, Tri-Coast Pharmacy recalled products due to bacterial contamination. ( Id. at ¶ 14). That same month, Plaintiff received a recall notice from Tri-Coast Pharmacy which indicated that the injectable hCG he had been prescribed was subject to the recall. ( Id. at ¶ 15). It is believed the contamination stemmed from the unsanitary environment in which Defendant Tri- Coast Pharmacy manufactured its pharmaceuticals. ( Id. at ¶¶ 24–25). Defendants allegedly did not disclose the unsanitary nature of their facilities to the hospitals, physicians, and consumers to which that their products were distributed to. ( Id. at ¶ 26). As a result, Plaintiff could not discover the cause of his bacterial infection and infective synovitis until after he received the recall notice in May of 2017. ( at ¶ 27).
B. Procedural Posture
October 11, 2018, Plaintiff filed his complaint against Defendant Tri-Coast Pharmacy and Defendant Kevin O’Connell alleging (1) violations of the New Jersey Products Liability Act; (2) breach of implied warranties; (3) breach of express warranties; (4) negligence; (5) negligence per se; (6) fraud under the New Jersey Consumer Fraud Act and NJSA 56:8-1; (7) intentional infliction of emotional distress; and (8) negligent infliction of emotional distress. (Doc. No. 1). Plaintiff sought damages for past and future medical expenses, loss of earnings, and pain and suffering. ( at ¶¶ 29–33). Subsequently, on December 6, 2018, Defendant Tri-Coast Pharmacy and Defendant Kevin O’Connell were served with a copy of the summon and complaint. (Doc. No. 4). Defendants were required to answer, move, or otherwise respond to Plaintiff’s complaint by December 27, 2018. Defendants’ did not do so and consequently, Plaintiff requested an entry of default from the Clerk of the Court on March 14, 2019. (Doc. No. 6). The Clerk granted Plaintiff’s request for entry of default that same day. Plaintiff then moved for an entry of default judgment on March 28, 2019. (Doc. No. 8). This Court denied Plaintiff’s motion as moot because he failed to properly allege diversity jurisdiction. (Doc. No. 9). Plaintiff amended the complaint but still failed to properly allege diversity jurisdiction causing this Court to dismiss the case without prejudice. (Doc. No. 11). Plaintiff moved for reconsideration, which this Court granted on October 4, 2019. (Doc. No. 13). The complaint was then amended to properly plead diversity jurisdiction. (Doc. No. 14). On March 2, 2020, Plaintiff made his second request for entry of default by the Clerk of the Court. (Doc. No. 17). It was granted on March 9 th . Plaintiff now moves for an entry of default judgment against Defendants Tri-Coast Pharmacy and Kevin O’Connell. (Doc. No. 21).
II. Legal Standard
Federal Rule of Civil Procedure 55(b)(2) allows the Court, upon a plaintiff’s motion, to
enter default judgment against a defendant that has failed to plead or otherwise defend a claim
for affirmative relief. The Court should accept as true all well-pleaded factual allegations in the
complaint by virtue of the defendant’s default except for those allegations pertaining to damages.
Chanel, Inc. v. Gordashevsky
,
While the decision to enter default judgment is left principally to the discretion of the
district court, there is a well-established preference in the Third Circuit for cases to be decided
on the merits rather than by default judgment whenever practicable.
Hritz v. Woma Corp
., 732
F.2d 1178, 1180–81 (3d Cir. 1984). Consequently, the Court must address a number of issues
before deciding whether a default judgment is warranted in the instant case. If the Court finds
default judgment to be appropriate, the next step is for the Court to determine a proper award of
damages.
Slaughter v. Moya
, No. 17-6767,
III. Discussion
A. Court’s Jurisdiction
First, the Court must determine whether it has both subject-matter jurisdiction over
Plaintiff’s cause of action and whether it may exercise personal jurisdiction over Defendants.
U.S.
Life Ins. Co. in N.Y.C. v. Romash
, No. 09-3510,
This Court has subject-matter jurisdiction over the case pursuant to 28 U.S.C. § 1332. To establish diversity jurisdiction under 28 U.S.C. § 1332, “the party asserting jurisdiction must show that there is complete diversity of citizenship among the parties” as well as an amount in controversy that exceeds the statutory threshold. Schneller v. Crozer Chester Med. Ctr ., 387 Fed.Appx. 289, 292 (3d Cir. 2010). Plaintiff has alleged that he resides in and is a citizen of New Jersey and that Defendant Tri-Coast Pharmacy is incorporated in the state of and has its principal place of business in Florida. (Doc. No. 14, Am. Compl. at ¶¶ 1–3). Likewise, Plaintiff alleges that Defendant Kevin O’Connell resides in and is a citizen of the state of South Carolina. ( at ¶ 5). Damages are alleged to be in excess of $75,000. (Doc. No. 14, Am. Compl.). Accordingly, because the Plaintiff and Defendants are citizens of different states and the amount in controversy exceeds the statutory threshold, this Court has diversity jurisdiction.
Turning to the issue of personal jurisdiction, if the court lacks personal jurisdiction over a
defendant, the court does not have authority to render a default judgment, and any such judgment
will be deemed void.
Budget Blinds, Inc. v. White
,
There are two distinct theories under which personal jurisdiction can arise: general and
specific.
Grimes v. Vitalink Commc’ns Corp
., 17 F.3d 1553, 1559 (3d Cir. 1994). A court has
general jurisdiction when a defendant has “continuous and systematic” contacts with the forum
state.
O’Connor v. Sandy Lane Hotel Co
.,
Plaintiff does not allege that this Court has general jurisdiction over Defendant Tri-Coast Pharmacy and Kevin O’Connell. Rather, it appears Plaintiff is alleging that this Court has specific jurisdiction over Defendants because they allegedly sold the contaminated pharmaceuticals in numerous states, including New Jersey. (See Doc. No. 14, Am. Compl. at ¶ 16).
To satisfy federal due process limits, which are incorporated by the New Jersey long-arm
statute, a defendant’s minimum contacts are examined in relation “to the nature of the interactions
and type of jurisdiction asserted.”
Telcordia Tech Inc. v. Telkom SA Ltd
.,
Plaintiff has pled a prima facie case of specific jurisdiction. First, Plaintiff alleges that
Defendants have purposefully directed their activities to New Jersey by selling the contaminated
pharmaceuticals directly to consumers, including Plaintiff, in New Jersey. (See Doc. No. 14, Am.
Compl. at ¶ 16).
See J. McIntyre Mach., Ltd. v. Nicastro
,
B. Entry of Default
Second, the Court must ensure that the entry of default under Rule 55(a) was appropriate. Rule 55(a) directs the Clerk of the Court to enter a party’s default when the party “against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise.” Here, Plaintiff certified service of Defendants on December 6, 2018. (Doc. No. 4). Defendants have made no attempt to answer or defend the action. Accordingly, the Clerk appropriately issued the entry of default under Rule 55(a) on March 2, 2020. (Doc. No. 17).
C. Fitness of Defendant
Third, the Court must confirm that the defaulting parties are not infants or incompetent persons, or persons in military service exempted from default judgment. See Fed. R. Civ. P. 55(b)(2); 50 U.S.C.A. § 3931. Section 3931(b)(1) requires Plaintiff to file an affidavit “stating whether or not the defendant is in military service and showing necessary facts to support the affidavit” before the Court can enter default judgment for the plaintiff. Neither of these requirements apply to Defendant Tri-Coast Pharmacy because it is a corporation. Thus, Tri-Coast Pharmacy is fit for default judgment.
These requirements do apply to Defendant O’Connell, however. Plaintiff has satisfied the
first requirement because he alleged, upon information and belief, that Defendant Kevin O’
Connell is not an infant nor incompetent. This affirmation is sufficient to comply with Rule
55(b)(2).
Fogarty v. Household Fin. Corp. III
, No. CV 14-4525 (RBK/JS),
D. Plaintiff’s Cause of Action
Fourth, the Court must determine whether Plaintiff’s complaint states a proper cause of
action against Defendant Tri-Coast Pharmacy. The Court should accept well-pleaded factual
allegations while disregarding mere legal conclusions.
DirecTV v. Asher
, No. 03-1969, 2006 WL
680533, at *1 (D.N.J. Mar. 14, 2006). This is because by virtue of the defendant’s default he is
deemed to admit to well-pleaded factual allegations, but “is not held to admit facts that are not
well-pleaded or to admit conclusions of law.’”
Cotton v. Massachusetts Mut. Life Ins. Co
., 402
F.3d 1267, 1278 (11th Cir. 2005) (alteration omitted) (quoting
Nishimatsu Constr. Co. v.
Houston Nat'l Bank
,
i. Subsumption Under the New Jersey Products Liability Act
In implementing the New Jersey Products Liability Act, the Legislature intended “to limit
the expansion of products-liability law” and “to limit the liability of manufacturers so as to
balance[] the interests of the public and the individual with a view towards economic reality.”
Hindermyer v. B. Braun Med. Inc
.,
The rule that the NJPLA subsumes almost all other causes of action stems from the language of the statute itself. Specifically, N.J.S.A. 2A:58C–2 states:
A manufacturer or seller of a product shall be liable in a product liability action only if the claimant proves by a preponderance of the evidence that the product causing the harm was not reasonably fit, suitable or safe for its intended purpose because it: a. deviated from the design specifications, formulae, or performance standards of the manufacturer or from otherwise identical units manufactured to the same manufacturing specifications or formulae, or b. failed to contain adequate warnings or instructions, or c. was designed in a defective manner.
N.J.S.A. 2A:58C–2. Under the definition section of the statute, “harm” is defined as “(a) physical damage to property, other than to the product itself; (b) personal physical illness, injury or death; (c) pain and suffering, mental anguish or emotional harm; and (d) any loss of consortium or services or other loss deriving from any type of harm described in subparagraphs (a) through (c) of this paragraph.” N.J.S.A. § 2A:58C-1(b)(2). Further, a “product liability action” is defined as “any claim or action brought by a claimant for harm caused by a product, irrespective of the theory underlying the claim, except actions for harm caused by breach of an express warranty.” N.J.S.A. § 2A:58C-1(b)(3).
From these provisions, courts have concluded that a claim is subsumed by the NJPLA if:
(1) it is brought by a claimant for harm caused by a product, regardless of the theory underlying
the claim; and (2) the harm suffered if of a type listed in the definitional section.
Hindermyer v.
B. Braun Med. Inc
.,
Plaintiff’s claims arise out of the personal injuries he suffered as a result of using the
contaminated pharmaceutical. The gravamen of the complaint is that Tri-Coast Pharmacy’s
failure to maintain a sterile and clean environment resulted in the manufacture of contaminated
pharmaceuticals and Plaintiff’s use of these pharmaceuticals ultimately caused his bacterial
infection and infective synovitis of the wrist. While Plaintiff attempts to shoehorn his allegations
into other causes of action, it is clear from the innumerable boilerplate allegations that his claims
sound in products liability causes of action. For instance, Plaintiff alleges Tri-Coast Pharmacy
violated New Jersey’s Consumer Fraud Act along with N.J.S.A. 56:8-1 et. seq., when it
represented on its website that it “pride[s] [itself] in offering services and compounds that are
prepared with the utmost integrity to the rules and regulations set forth by USP Chapter 797”
because it knew that Plaintiff’s pharmaceuticals were not prepared in this manner and did not
comply with these regulations. Whatever the merits of these two claims, it is axiomatic that they
are premised on the product being defective because the alleged misrepresentation would not be
actionable if Tri-Coast Pharmacy’s pharmaceuticals were not contaminated.
See Sun Chem.
Corp. v. Fike Corp
.,
Plaintiff’s claims for breach of implied warranty, negligence, negligence per se,
intentional infliction of emotional distress, and negligent infliction of emotional distress fare no
better.
[1]
Plaintiff alleges Tri-Coast Pharmacy was negligent in, among other things,
manufacturing a pharmaceutical that was unsafe and contaminated with harmful fungus, failing
to warn users of the unsafe and hazardous conditions of the pharmaceutical drugs, and failing to
test and inspect the drugs. Plaintiff further alleges Tri-Coast Pharmacy was negligent per se
because it violated “various State and Federal standards, regulations and requirements.” In
addition to Plaintiff’s averments not being sufficient to state a claim for negligence per se, both
the negligence and negligence per se claims are premised on the Defendant’s alleged
manufacture, design and sale of the contaminated pharmaceutical which brings them within the
ambit of the PLA.
See Hindermyer v. B. Braun Med. Inc
.,
Accordingly, Plaintiff’s claims for: (1) negligence; (2) negligence per se; (3) fraud under the New Jersey Consumer Fraud Act and N.J.S.A. § 56:8-1; (4) intentional infliction of emotional distress; (5) negligent infliction of emotional distress; and (6) breach of implied warranty are subsumed under the NJPLA.
ii. Violation of the New Jersey Product’s Liability Act
In the Complaint, Plaintiff appears to allege claims for design defect, manufacturing
defect, and failure to warn under the NJPLA. To plead a prima facie case under the NJPLA, a
plaintiff must show that: (1) the product was defective; (2) the defect existed when the product
left the hands of the defendant; (3) the defect proximately caused injuries to the plaintiff; and (4)
the injured plaintiff was a reasonably foreseeable user.
Myrlak v. Port Auth. of New York & New
Jersey
,
Plaintiff has satisfied elements two, three, and four. He alleges, upon information and belief, that at the time the pharmaceutical were placed into the stream of commerce they were contaminated and lacked adequate warnings. (Doc. No. 14, Am. Compl. at ¶ 43). He further asserts the contaminated pharmaceuticals were the proximate cause of his bacterial infection and infective synovitis of the wrist. ( Id. at ¶ 45). Additionally, Plaintiff avers that Defendant Tri- Coast Pharmacy knew that its pharmaceuticals would reach patients, including Plaintiff, after they were placed into the stream of commerce. ( Id. at ¶ 35). It is a closer call, however, whether Plaintiff has alleged sufficient facts to support an inference that the product is defective.
To establish a prima facie case of design defect, the plaintiff must assert that the product
could have been designed more safely and present, under a risk-utility analysis, the existence of
an alternative design that is both practical and feasible.
Mendez v. Shah
,
Here, while Plaintiff’s allegations border on legal conclusions, he has managed to plead
enough facts to eke out a claim for a design defect. Plaintiff asserts the pharmaceutical was
defectively designed because “it was developed, mixed and/or created in an insanitary and unsafe
environment that contained or promoted the development of harmful organisms such as bacteria,
which was . . . unreasonably dangerous.” (Doc. No. 14, Am. Compl. at ¶ 36). While not stated in
explicit terms, this allegation is sufficient to constitute an assertion that the risk of using the
contaminated pharmaceutical outweighs its utility.
Fabricant v. Intamin Amusement Rides Int.
Corp. Est
., No. CV 19-12900,
In a failure to warn case, the duty to warn is premised on the notion that a product is
defective absent an adequate warning for foreseeable users that the product can potentially cause
injury.
Clark v. Safety–Kleen Corp
.,
Similarly, although Plaintiff’s pleadings for the failure to warn claim are minimal, they
are sufficient to state a plausible claim for relief. Plaintiff alleges “[a]t the time the
pharmaceutical and prescription drug material and/or medication was designed . . . and sold to
Plaintiff, Defendants knew . . . that the material was . . . contaminated with bacteria.” (Doc. No.
14, Am. Compl. at ¶ 53). This allegation is sufficient to establish that Defendant had a duty to
warn.
Fellner v. Tri-Union Seafoods
, L.L.C., No. CIVA06-CV-0688(DMC),
A manufacturing defect exists if the product “deviated from the design specification,
formulae, or performance standards of the manufacturer or from otherwise identical units
manufactured to the same manufacturing specifications or formulae.’”
Vicente v. Johnson &
Johnson
, No. CV201584KMJBC,
Under New Jersey law, the plaintiff need not prove the nature or etiology of the
manufacturing defect with scientific precision.
Vicente v. Johnson & Johnson
, No.
CV201584KMJBC,
While Plaintiff’s allegations are razor thin, they are enough to state a plausible claim for relief for a manufacturing defect. Like the design defect claim, Plaintiff alleges the product was defectively manufactured because “it was developed, mixed and/or created in an insanitary and unsafe environment that contained or promoted the development of harmful organisms such as bacteria.” (Doc. No. 14, Am. Compl. at ¶ 36). Plaintiff further alleges that Defendant Tri-Coast Pharmacy “fail[ed] to ensure the manufacture and/or compounding of the pharmaceutical and prescription drug material in a sterile environment” and failed to “to inspect the manufacturing . . . environment to ensure that it [was] sterile, clean and safe.” ( Id. at ¶¶ 38i, j). Plaintiff then concludes that the “pharmaceutical and prescription drug material and/or medication, as manufactured, compounded, and designed, deviated from the design specifications, formulae or performance standards of other pharmacists and/or manufacturers. . . in that the subject pharmaceutical and prescription drug material did not include all necessary safety features that would prevent the product from causing injury.” ( at ¶ 49). While this is a close call, Plaintiff’s common-sense allegations that Defendant Tri-Coast Pharmacy failed to inspect and ensure that the pharmaceuticals were manufactured in a sterile environment support the inference that the product failed to conform to the manufacturer’s standards. Therefore, Plaintiff has pled a plausible manufacturing defect claim.
iii. Breach of Express Warranty
To state a claim for breach of express warranty under New Jersey law, a plaintiff must
allege the following three elements: “(1) that Defendant made an affirmation, promise or
description about the product; (2) that this affirmation, promise or description became part of the
basis of the bargain for the product; and (3) that the product ultimately did not conform to the
affirmation, promise or description.”
Snyder v. Farnam Companies, Inc
.,
(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.
(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.
N.J.S.A. 12A:2-313. “A statement can amount to a warranty, even if unintended to be such by
the seller, if it could fairly be understood ... to constitute an affirmation or representation that the
[product] possesse[s] a certain quality or capacity relating to future performance.”
Volin v.
General Electric Company
,
Plaintiff has failed to state a viable claim for breach of express warranty because he has
not identified specific affirmations made by Defendants and has merely provided “bald
assertions.”
Simmons v. Stryker Corp
., Civ. No. 08–3451,
E. Emasco Factors
Fifth, the Court must consider the
Emasco
factors: (1) whether the defaulting party has a
meritorious defense; (2) whether Plaintiff will suffer prejudice if default is denied; and (3)
whether the defaulting party is culpable in bringing about default.
Chamberlain v. Giampapa
,
i. Meritorious Defense
The showing of a meritorious defense is accomplished when “allegations of defendant’s
answer, if established on trial, would constitute a complete defense to the action.”
United States v.
$55,518.05 in U.S. Currency
,
ii. Prejudice to Plaintiff
Prejudice occurs when “a plaintiff has no other means to vindicate rights and recover
damages.”
Trs. of the BAC Local 4 Pension Fund v. Danaos Group LLC
, No. 18-15551, 2019 WL
3453270, at *2 (D.N.J. July 31, 2019). If a plaintiff is unable to prosecute its case, engage in
discovery, or obtain a final outcome on its claims—whatever that outcome might be—it will face
prejudice in being denied default judgment.
Id.
However, delay in obtaining an outcome will not
be sufficient to deny a motion by the defendant to vacate a default judgment.
Gant v. Advanced
Elec., Inc.
, No. 16-1954,
iii. Defendant’s Culpability
Culpable conduct is conduct that displays “willfulness” or “bad faith” and amounts to
“more than mere negligence.”
Mrs. Ressler’s Food Prods. v. KZY Logistics LLC
, 675 F. App’x
136, 142 (3d Cir. 2017). Culpable conduct can be shown by a “reckless disregard for repeated
communications from plaintiffs and the court.”
Nationwide Mut. Ins. Co. v. Starlight Ballroom
Dance Club, Inc.
,
Here, the Court will presume culpability on part of Defendant Tri-Coast Pharmacy because it has failed to respond, answer, or involve itself in this case in any way and it has done nothing to overcome this presumption. At no point during this action has Defendant Tri-Coast Pharmacy answered any filing. Thus, all of the Emasco factors point towards granting Plaintiff’s motion for default judgment against Defendant Tri-Coast Pharmacy.
F. Damages
Finally, the Court must determine the appropriate amount of damages to be awarded.
Under Rule 55(b)(1), when a plaintiff’s claim against a defendant is for “a sum certain or for a
sum which can by computation be made certain, the Clerk upon request of the plaintiff and upon
affidavit of the amount due shall enter Judgment for the amount and costs against defendant, if
the defendant has been defaulted for failure to appear and if he is not an infant or incompetent
person.” The Court may order a plaintiff to provide additional clarifying information to justify
the damages sought or conduct a hearing to determine the amount of damages owed by the
defendant.
Doe
,
Plaintiff’s claims are not for a sum certain. Therefore, as requested, a hearing to assess damages is necessary and a separate order shall issue setting forth the date of the hearing. The plaintiff will be required to put forth evidence regarding the specific amounts of damages requested.
IV. Conclusion
Plaintiff’s Motion for Default Judgment as to Defendant Kevin O’Connell is
DENIED
without prejudice because he has failed to show that Defendant is fit for default judgment. While
Plaintiff’s Motion for Default Judgment against Defendant Tri-Coast Pharmacy for the
manufacturing defect, design defect, and failure to warn claims have satisfied all requirements
for the motion to be granted, this Court cannot enter a final judgment against Tri-Coast
Pharmacy until the breach of express warranty claim has been withdrawn or resolved.
U.S. Golf
Ass'n v. ISaAC Scoring Sys., LLC
, No. CIV. 09-1848,
Dated: 2/10/2021 s/ Robert B. Kugler ROBERT B. KUGLER United States District Judge
Notes
[1] Not only does Plaintiff recite boilerplate legal conclusions but the allegations do not support the claims. For instance, Plaintiff alleges Defendants acted in an extreme and outrageous manner by “deceiving hospitals, physicians, buyers, consumers, and patients.” The Court is not sure how the deception as to others caused Plaintiff’s alleged emotional distress.
[2] We do note that Plaintiff’s allegation regarding a reasonable alternative design is wholly inadequate because it is
conclusory and unsupported by any facts. Plaintiff alleges that an alternative design exists because “[a]t the time the
pharmaceutical . . . was designed . . . and sold to Plaintiff, safer reasonably feasible safeguards and safety standards
and procedures were utilized by other pharmacists . . . which represented the standard of care, and which if
Defendants had followed would have prevented or minimized the risk to Plaintiff.”
Nelson v. Biogen Idec Inc
., No.
CIV.A. 12-7317,