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December 27, 2007

Fifth Circuit Refuses to Permit Texas Plaintiff to Dismiss Accutane Case with No Prejudice to Avoid Texas Statute of Repose

A recent Fifth Circuit case provides a good illustration of the impact of conflicts of laws rules in products liability cases. In Hyde v. Hoffman LaRoche, Inc, 2007 WL 4441065 (5th Cir. Dec. 20, 2007), the plaintiff claimed that he suffered physical and psychological injuries from ingesting Accutane, a prescription drug, during the early 1980s. He brought suit against the manufacturer and distributor of Accutane in Texas state district court, but the case was removed to federal court based on diversity jurisdiction. The defendants moved for summary judgment on the basis that the plaintiff's claims were barred by a Texas statute of repose, see Tex. Civ. Prac. & Rem.Code § 16.012(a), (b) (Vernon's 2003), barring the filing of a "products liability action" beginning on "the date of the sale of the product by the defendant."  Hyde admitted that the last time he took Accutane was almost 20 years before he filed his suit, but in response to the motion for summary judgment he asserted that the statute of repose would violate the “open courts” provision of the Texas Constitution if it applied to his claims, and, in addition, that his claims fell within the statutory exception for latent diseases. He did not produce any evidence that he actually satisfied that exception, but instead argued that it was sufficient under that exception if he alleged facts meeting the exception's elements.

Prior to responding to the summary judgment motion, however, Hyde moved to dismiss all his claims without prejudice pursuant to Fed.R.Civ.P. 41(a)(2), stating that he “no longer desire[d] to prosecute th[e] action.” The Roche defendants opposed dismissal and urged the court to rule on the pending motion for summary judgment, arguing that they would be prejudiced if Hyde refiled the lawsuit in a state without an applicable statute of repose.

At some point in the litigation, Hyde filed a virtually identical suit against the Roche defendants in New Jersey state court. The Roche defendants brought this to the attention of the federal district court in Texas and advised the court that New Jersey does not have an applicable statute of repose and argued that New Jersey's choice-of-law rules would likely not result in a New Jersey court applying the Texas statute of repose.

The Fifth Circuit concluded that the Roche defendants had a viable defense under Texas law, since irrespective of whether Texas or New Jersey law applied, the case would be resolved by the application of Texas's choice-of-law rules, which means that Hyde would have to establish that his claim was filed within the time permitted by the Texas products liability statute of repose.

The court vacated the district's order dismissing the case without prejudice and remanded for proceedings consistent with its opinion.

MKS

December 27, 2007 | Permalink

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