The second half of 2022 proceeded much like the first, with manufacturers busy navigating recalls and related litigation, although not necessarily in that order.
Philips CPAP/ BiPAP Machines Still Under Fire
Philips is still battling an onslaught of cases stemming from a June 2021 recall of CPAP and BiPAP breathing machines, including a consolidated consumer class action, In re Philips Recalled CPAP, Bi-Level PAP, & Mechanical Ventilator Products Liability Litigation, No. 2:21-mc-01230 (W.D. Pa.), MDL No. 3014, and a medical device supplier suit, Baird Respiratory Therapy, Inc. v. Philips, 2:22-cv-00886 (E.D. Pa.). Since early 2021, there have been reports of over 260 deaths and thousands of health problems associated with the degrading polyurethane foam found in these devices, which was used inside millions of CPAP and BiPAP machines for over a decade. Philips claims that it has produced over 3.95 million repair kits and replacement devices to date and continues to research potential health risks to users from its machines. Despite these efforts, its legal troubles will continue into 2023, with even more consumer-facing lawsuits, including Braverman v. Koninklijke Philips N.V., No. 2:22-cv-7927, which was first filed at the end of December 2022 in the U.S. District Court for the Eastern District of New York and is one of the first CPAP/BiPAP suits to allege the inhalation of the toxic foam particles caused mouth and tongue cancer.
The various lawsuits pending against Philips, including Baird Respiratory Therapy, Inc. v. Philips, have been transferred to the Western District of Pennsylvania and consolidated before Judge Joy Flowers Conti, who also presides over In re: SoClean, Inc., Marketing, Sales Practices & Products Liability Litigation), No. 2:22-mc-00152 (W.D. Pa.), MDL No. 3021, the multi-district litigation involving SoClean, a manufacturer of sanitation machines specifically designed to work with Philips’ CPAP and BiPAP devices. At the time of its recall, Philips indicated that CPAP cleaning devices like SoClean’s products, which use ozone gas to sanitize the machines, could create the rate of foam degradation. As a result of those statements, SoClean sued Philips and consumers filed dozens of class action lawsuits against SoClean. On September 1, 2022, Judge Conti held a science “show and tell,” where the parties had the opportunity to make presentations and better educate the Court on the complex scientific issues which will arise during the related litigations.
On December 6, 2022, the various Philips defendants in MDL No. 3014, which include Koninklijke Philips N.V., Philips North America LLC, Philips Holding USA, Inc., and Philips RS North America Holding Corporation filed multiple motions to dismiss Plaintiffs’ Third Amended Class Action Complaint for Economic Losses. Notably, the motion to dismiss filed by Philips Respironics argued, among other things that the decision to recall a product, in and of itself, is not a sufficient basis to impose liability for economic damages, because the purpose of a recall is to repair and replace potentially defective products for free. Philips Respironics also argues that plaintiffs’ warranty and tort claims are preempted by federal law because these claims are premised on allegations of fraud-on-the-FDA and violations of the Federal Food, Drug, and Cosmetic Act, which only the federal government has the power to enforce, and even if not preempted, should be dismissed under the primary jurisdiction doctrine in deference to the FDA’s ongoing role in Philips’ recall and related matters.
In addition to pending civil cases, Philips faces scrutiny from the U.S. Department of Justice. On April 8, 2022, DOJ subpoenaed Philips to obtain information about the company’s recall. As of November, DOJ was negotiating the terms of a consent decree with Philips. Although not much is known publicly about DOJ’s investigation, the consent decree will likely require Philips to document procedures to prevent additional product failure.
Lawsuits Prompt Recalls of Unilever Products
Although the recall of a product may ultimately lead to litigation, it does not always happen in that order. In 2022, consumer class actions prompted some notable recalls by Unilever.
In September 2022, consumers filed suit against Unilever in the U.S. District Court for the District of Connecticut, Little et al. v. Unilever United States, Inc., No. 3:22-cv-01189 (filed Sept. 21, 2022), alleging that after an independent testing company detected high levels of benzene in Unilever’s Suave antiperspirant products back in November 2021, the company knew that its other aerosol products could have the same problem but failed to adequately test its products to ensure safe levels of benzene, to disclose the risks of benzene to consumers, or to issue a recall. Only a few weeks later, Unilever announced a recall of its Dove, Nexxus, Suave, TIGI, and TRESemmé-brand dry shampoos due to “potentially elevated levels of benzene.” After consumers in other states filed similar lawsuits in New Jersey, Illinois, New Jersey, Florida, and Louisiana, Unilever moved on December 27 to transfer and consolidate all of these cases to the U.S. District Court for the District of Connecticut under the first-to-file rule and 28 U.S.C § 1404(a).
On November 24, 2022, a California resident filed another putative class action lawsuit against Unilever, alleging that the company’s Laundress laundry and household cleaning products contained undisclosed, deadly bacteria despite marketing claims that these products are non-toxic, better alternatives to other cleaners. Murphy v. Unilever United States, Inc., No. 1:22-cv-07648 (N.D. Cal.). Within a matter of days, on December 1, 2022, the U.S. Consumer Product Safety Commission (CPSC) announced a recall of this line of products, warning consumers that they contain bacteria, including “Burkholderia cepacian complex, Klebsiella aerogenes and multiple different species of Pseudomonas,” which render consumers with weakened immune systems or underlying lung conditions at risk of serious infection. The recall includes approximately 8 million products produced between January 2021 and September 2022.
Lack of Standing & Primary Jurisdiction Doctrine Leads to Early Dismissal for Gerber
As manufacturers saw with the motion to dismiss decision in Sharp v. FCA US LLC, No. 2:21-12497 (E.D. Mich.) in October, a quick and comprehensive recall may be an effective tool in defending against consumer class actions. For companies that decide not to issue a recall, there may be other tools at their disposal.
In 2021, consumers filed a putative, nationwide class action against Gerber, In re Gerber Prod. Co. Heavy Metals Baby Food Litigation, No. 1:21-cv-269 (E.D. Va.), alleging that certain baby food products contained harmful levels of heavy metals (including, arsenic, lead, cadmium, and mercury). The complaint relied on the U.S. House of Representatives Subcommittee on Economic and Consumer Policy report titled “Baby Foods are Tainted with Dangerous Levels of [Heavy Metals],” which criticized Gerber for not testing products for those ingredients. Plaintiffs alleged that Gerber failed to disclose the risk of heavy metals in its products or adequately test for these ingredients, and asserted claims for breach of implied warranty, violation of consumer protection statutes, fraudulent concealment, and unjust enrichment.
On October 17, Judge Nachmanoff of the U.S. District Court for the Eastern District of Virginia granted Gerber’s motion to dismiss on the grounds that (1) plaintiffs failed to alleged a particularized injury in fact sufficient for Article III standing, and (2) the Court lacked jurisdiction because the FDA had primary jurisdiction to determine whether the amount of heavy metals in the products was harmful.
With respect to standing, plaintiffs had sought to recover economic loss based on the price premium and benefit of the bargain theories. The Gerber Court rejected both, holding that it was insufficient to establish standing because plaintiffs did not allege that the baby food failed to perform as (or was otherwise “less” than) expected. Judge Nachmanoff concluded that plaintiffs’ “only purported basis for economic injury stems from their allegation that the [products] posed a threat of future harm,” and plaintiffs had failed to allege any facts that would permit the court to determine the economic value of a price premium or lost benefit with out resorting to “mere conjecture.”
With respect to primary jurisdiction, the Gerber Court explained that this doctrine requires referral of a case to an agency in order to take “advantage of agency expertise” and deferring on “issues of fact not within the conventional expertise of judges or cases which require the exercise of administrative discretion.” In this case, Judge Nachmanoff held that (1) he could not conclude whether Gerber’s labeling was misleading without FDA guidance on what levels of heavy metals are harmful, which is an issue “particularly within the FDA’s discretion,” and (2) there was a substantial danger of inconsistent rulings given the number of proceedings against baby food producers related to this issue.
Although not applicable in all circumstances, and heavily dependent on the facts of the case, challenges for lack of standing and/or under the primary jurisdiction doctrine may be the key to early dismissals in lawsuits alleging product defects, with or without a recall.