Navigating Recall Litigation: Identifying Key Trends for Biotech in 2025

Biotech companies should be aware that the surge in product recalls and related lawsuits observed in 2024 is continuing into 2025. This trend impacts various sectors, including food and consumer products, and highlights critical legal considerations, particularly around class action lawsuits and the concept of "prudential mootness."

Increased Class Actions Following Food Recalls:

Last year saw a significant uptick in class action lawsuits against food manufacturers after recalls due to pathogens like Salmonella and Listeria. These lawsuits raise a spectrum of claims, from deceptive marketing to design flaws and the need for medical monitoring.

• Boar's Head Listeria Recall (Torres v. Boar's Head): Following a large deli-meat recall for potential Listeria contamination, a class action alleged deceptive practices and false advertising based on the company's failure to disclose the contamination. The lawsuit questioned the adequacy of the recall instructions, suggesting an attempt to avoid dismissal based on mootness. This case ultimately settled early in 2025.

• Daily Harvest Salmonella Recall (Peni v. Daily Harvest): A class action followed the recall of French Lentil + Leek Crumbles due to potential Salmonella. Claims included strict liability, breach of warranty, and negligence. Daily Harvest settled this litigation for $7.67 million in May 2024, with individual payouts depending on the level of harm.

• TreeHouse Foods Listeria Recall (Unnamed Class Action): After a frozen pancake and waffle recall due to Listeria, a class action asserted various warranty, tort, and strict liability claims. Notably, the plaintiffs alleged a defective formulation and sought medical monitoring due to the potential long-term health risks associated with Listeria exposure.

• Ongoing Litigation Against TreeHouse Foods (Unnamed Class Action, March 2025): Demonstrating the continuing trend, another class action was filed against TreeHouse Foods in early 2025 related to their 2024 frozen breakfast product recall, alleging false marketing and failure to warn consumers about Listeria risks.
  

Prudential Mootness: Does a Recall End the Lawsuit?

Companies facing class actions often argue for dismissal based on "prudential mootness," claiming their recall efforts provide complete relief to the plaintiffs. However, courts analyze whether the recall truly addresses all alleged damages.

• Ford Engine Defect (Bolton v. Ford): While not definitively ruling on mootness, the court indicated skepticism towards dismissing the case because plaintiffs alleged the recall didn't compensate them for the diminished value of their vehicles purchased or leased with allegedly defective engines. The court suggested prudential mootness wouldn't apply if the recall didn't offer "complete relief."

• BMW Fire Risk (Patlan v. BMW): The court rejected BMW's mootness argument, even though a recall was initiated for vehicles with a potential fire risk. The court reasoned that because the plaintiffs sought damages beyond the recall's scope (e.g., diminished vehicle value, out-of-pocket expenses), the claims were not moot.

• Ford Fuel Injector Defect (Letson v. Ford): In contrast, this court found Ford's recall sufficient to render the claims moot. The recall included free repairs, software updates, and reimbursement for prior repairs. The court reasoned that these actions restored the vehicle's value, thus addressing the plaintiffs' "overpayment injuries."

• Jaguar Battery System (Joyce v. Jaguar Land Rover): The court denied Jaguar's motion to dismiss warranty claims despite a buyback program. Key reasons included that the program didn't cover all affected model years mentioned in the complaint.
  

Standing Requirements: Economic Injury and Contamination Allegations

Courts continue to grapple with whether economic injury alone provides sufficient legal standing in recall-related class actions, leading to differing opinions among circuit courts. However, a consistent requirement is that plaintiffs must plausibly demonstrate the purchased products were actually contaminated.

• Abbott Infant Formula Recall (In re Abbott Infant Formula): The Seventh Circuit ruled that plaintiffs alleging economic injury based on "benefit of the bargain" and "premium price" theories lacked standing. The court reasoned that these alleged harms were speculative as there was no known contamination at the time of purchase, and consumers were offered refunds upon recall. Critically, the plaintiffs didn't allege that their specific products were contaminated or that contamination was widespread enough to plausibly affect any given unit.

• Bayer Antifungal Spray Recall (Huertas v. Bayer): The Third Circuit held that alleging economic injury based on the "benefit of the bargain" theory could establish standing, arguing that a contaminated product is worth less than represented. However, the court emphasized that plaintiffs must plausibly allege that their specific purchased products were defective (e.g., by referencing lot numbers in the recall). The recall itself wasn't sufficient proof of individual contamination.

• Dollar Tree Cinnamon Recall (Bell v. Greenbrier): Following the reasoning in Huertas, this court found the plaintiff lacked standing because she didn't allege her specific cinnamon was from a recalled lot or that she had it tested for lead. Simply alleging a general recall and overpayment wasn't enough without a link to the contamination of her specific purchase.

• Procter & Gamble Herbal Essence Recall (Quinn v. Proctor & Gamble): This court dismissed a case where the plaintiff alleged regular purchase of recalled shampoo and conditioner containing benzene. The dismissal was based on the plaintiff's failure to allege that the specific products she used came from the contaminated batches identified in testing or the recall.
  

PFAS Litigation: An Emerging Area

Litigation involving Per-and Polyfluoroalkyl Substances (PFAS) in consumer and recalled products is increasing, raising concerns about potential health and environmental impacts.

• Kerrygold Butter Recall (Winans v. Ornua Foods): Following a New York state law banning PFAS in food packaging, a class action was filed after a Kerrygold butter recall. The court denied the motion to dismiss, accepting the plaintiff's "migration theory" (PFAS migrating from packaging to butter) as sufficient to establish standing and a misrepresentation of "Pure Irish Butter." The agreement that PFAS was in the packaging distinguished this case from those requiring proof of contamination in the specific product.

• Costco Baby Wipes (Bullard v. Costco): The court granted a motion to dismiss a class action alleging unsafe PFAS levels in Kirkland Signature Baby Wipes but allowed the plaintiffs to amend their complaint. While the court found allegations of paying a premium sufficient for standing, it deemed the claims lacking sufficient factual allegations to demonstrate that the wipes contained PFAS at levels causing the alleged harm. The court emphasized that simply mentioning "PFAS" is insufficient for litigation.

Key Takeaways for Biotech:

• Increased Litigation Risk: Be prepared for a potentially heightened risk of product recall-related litigation, including class actions.

• Recall Adequacy: Ensure recall procedures are comprehensive and address all potential consumer harms to strengthen arguments for prudential mootness.

• Standing Requirements: Understand the evolving legal landscape regarding standing based on economic injury and the necessity of demonstrating actual contamination in individual cases.

• Emerging PFAS Concerns: Monitor the increasing scrutiny and litigation surrounding PFAS in products and packaging.

• Clear Communication: Accurate and transparent communication with consumers regarding product safety and recalls is crucial to mitigate legal risks.

By staying informed about these legal trends, biotech companies can proactively assess their risks and implement strategies to minimize potential liabilities associated with product recalls and related litigation. Content Credit: Crowell