Judge Dismisses Many Of Claims Against Abbott Labs Over Baby Formula

CHICAGO — A federal judge last week tossed out a class action complaint and more than a dozen counts from individual personal injury suits over baby formula produced by Abbott Labs.

U.S. District Judge Matthew Kennelly on May 22 issued a pair of case management orders in consolidated multi-district litigation alleging wrongdoing by the North Chicago-based healthcare product manufacturer.

Abbott, the leading producer of infant formula in the country, was forced to shut down operations at its Sturgis, Michigan plant as a result of pandemic-delayed inspections of the facility by federal regulators early last year.

U.S. Food and Drug Administration inspectors turned up samples of Cronobacter bacteria at the plant, as well as major sanitation issues. At the recommendation of the FDA, Abbott company officials shuttered the "egregiously unsanitary" facility in February 2022 and recalled some of the formula produced there, leading to a nationwide formula shortage and dozens of lawsuits against the company.

Following a consent decree with the federal government, Abbott re-opened the plant last June. Many of the lawsuits against it were consolidated in Chicago federal court before Kennelly, a senior district judge who was appointed to the bench in 1999.

In an 11-page opinion, Kennelly granted Abbott's motion to dismiss the entirety of a class action lawsuit alleging solely economic losses from the company's failure to disclose the risk of harmful bacteria in its formulas manufactured at the Sturgis plant, such as Similac, Alimentum and Elecare.

The judge ruled that the complaint should to be tossed on the grounds the plaintiffs lacked standing and failed to allege that they suffered any real harm.

"The plaintiffs contend that they have suffered an economic injury, alleging that they 'would not have paid the purchase price for the products had they known the products were at substantial risk of being contaminated with Cronobacter sakazakii, Salmonella, and/or other harmful bacteria at the time of purchase,'" Kennelly said in his ruling.

But they did not allege that any of the products they purchased were contaminated. And none of them have suggested that they have suffered any latent effects from bacterial contamination.

"Indeed, none of the plaintiffs have experienced any symptoms, even though all but one stopped purchasing Abbott's formula over a year ago. On this backdrop, there is no plausible inference that the plaintiffs are at risk of latent effects from bacterial contamination," Kennelly said.

"In short, the plaintiffs received exactly what they say they bargained for: safe infant formula," the judge ruled. "If their standing contention were sufficient, any purchaser of a good that functioned precisely as expected without any risk of future harm could bring suit if they later discovered undisclosed information, even if it only affected others."

In the other order he issued last week, Kennelly addressed 28 complaints over allegations of personal injuries caused by Abbott's formula, granting motions from the company to dismiss 19 of the counts it faced, including all claims for unjust enrichment and requests for injunctive relief.

But the judge denied Abbott's motion to dismiss 13 claims for damages on behalf of individual children, allowing allegations that the company violated state consumer protection statutes and some fraud-based statutes to stand in a 34-page order.

Kennelly said the plaintiffs had sufficiently alleged that the company knew of the danger from formula produced at the Sturgis plant in and around September 2021 — the month when the FDA first informed Abbott of a consumer complaint of a Cronobacter contamination.

"Given the allegations of systemic food safety failures at the Sturgis plant," Kennelly said, "plaintiffs plausibly contend that Abbott had knowledge prior to that date."

The judge directed both sides to propose a schedule for responding to the counts he allowed to stand ahead of the next case management conference on June 23.

Related:
Justice Department Investigating Michigan Abbott Baby Formula Plant
Abbott Baby Formula Whistleblower Complaint First Filed February 2021
Abbott Restarts Baby Formula Production At Michigan Plant
FDA Chief Testifies About Abbott Labs Recall, Unsanitary Conditions
Parents File Class Actions Over Abbott's Recalled Baby Formula