The New Jersey Supreme Court recently reinstated a $25 million jury award for an Alabama man who suffered from severe inflammatory bowel disease after taking Accutane. Accutane is a prescription medication used for the treatment of acne.

In June 1995, while living in Alabama, the plaintiff was prescribed Accutane by his dermatologist and took the drug daily for four months. In November 1996, the plaintiff was diagnosed with inflammatory bowel disease in Alabama and was treated in that state. Ultimately, after multiple surgeries and complications, the plaintiff’s colon and rectum were removed and replaced with a “J-pouch.” He later underwent an ileostomy and had a colostomy bag for four years, followed by another “J-pouch” surgery. He continues to suffer residual pain and other symptoms.

Defendants Hoffmann-La Roche, Inc., and Roche Laboratories, Inc., New Jersey corporations, designed, manufactured, and labeled Accutane in New Jersey and distributed it from New Jersey. The plaintiff filed this products-liability action in New Jersey, claiming that he developed inflammatory bowel disease as a result of taking Accutane. The plaintiff further claimed that had Accutane’s warning labels adequately informed him of the risks and dangers associated with Accutane, he would not have taken the medication.

The statute of limitations for product liability lawsuits is two years in both Alabama and New Jersey. Alabama’s statute of limitations for product liability actions had expired by the time the plaintiff filed his lawsuit. However — unlike in Alabama — in New Jersey, the clock does not begin to run until the injured party discovers, or should have discovered, a basis for an actionable claim. Thus, the “discovery rule” in New Jersey would save the plaintiff’s claim from being time-barred.

The trial court concluded that New Jersey’s statute of limitations applied. Because the plaintiff did not become aware that his use of Accutane could have caused his inflammatory bowel disease until June 2003, his lawsuit, filed six weeks later, was timely under New Jersey law. Following that determination, a jury found Roche liable on the plaintiff’s failure-to-warn claim and awarded $25 million in compensatory damages

The Appellate Division reversed and dismissed the action, finding that Alabama’s statute of limitations governed under the substantial-relationship test, which applies a presumption favoring the law of the state where the injury occurred.

However, in January 2017, the New Jersey Supreme Court reinstated the plaintiff’s verdict and damages award, finding that New Jersey’s statute of limitations applied. The Court held that section 142 of the Restatement (Second) of Conflicts of Law is now the operative choice-of-law rule for resolving statute-of-limitations conflicts. Under that standard, the statute of limitations of the forum state — here, New Jersey – applies if that state has a substantial interest in the claim and there are no “exceptional circumstances” that “make such a result unreasonable.” On these facts, New Jersey has a substantial interest in deterring its manufacturers from placing dangerous products in the stream of commerce, and inadequate warning labels can render prescription medications dangerous. No exceptional circumstances existed to render the application of New Jersey’s limitations period unreasonable.

Plaintiffs whose claims are time-barred in their home states may now seek to bring their lawsuits against New Jersey companies. But the Court also noted that its ruling may protect New Jersey companies from being sued in other states that have longer statutes of limitations.