Products Liability Law Daily Manufacturing defect claims against nasal spray maker move forward
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Friday, June 19, 2020

Manufacturing defect claims against nasal spray maker move forward

By Nicholas Kaster, J.D.

Consumer’s negligence claims were dismissed, however.

Manufacturing defect claims against Bausch Health U.S., LLC, involving an allegedly contaminated nasal spray, survived a motion to dismiss. According to a federal district court in California, a consumer’s allegations of chronic and serious infections arising from the use of the product, combined with a recall letter he had received, were sufficient to reasonably infer that he was harmed by the manufacturing defect. However, the court dismissed the consumer’s negligent product liability claims, finding that the allegations in the complaint, based on "information and belief," failed to demonstrate a reasonable factual basis for establishing negligence (Warnshuis v. Bausch Health U.S., LLC, June 18, 2020, Mendez, M.).

Background. The consumer bought Ocean Saline Nasal Spray through Amazon.com. After using the nasal spray, he began suffering chronic and unexplained sinus infections that would not respond to treatment. He later received a recall letter stating that the nasal spray that he had purchased through Amazon could have microbial contamination; namely, the bacteria pseudomonas aeruginosa. Subsequent culture tests returned positive results for pseudomonas aeruginosa bacterial infections. The bacterial infections have caused and continue to cause the consumer serious injury and damages, he alleged.

The consumer then initiated a products liability suit against the manufacturer, distributor, and seller of Ocean Saline Nasal Spray, alleging state law claims for strict products liability (manufacturing defect) and negligent products liability. One of the defendants, Bausch Health U.S., LLC, moved to dismiss.

Manufacturing defect claims. Bausch argued that the strict products liability cause of action should be dismissed for three reasons: (1) the cause of action contained many allegations that were made on "information and belief," but no underlying facts were identified supporting the claim; (2) the complaint lumped Bausch together with other defendants without adequately differentiating the specific conduct of Bausch that was at issue; and (3) the complaint did not plausibly allege a strict liability claim.

The court found that the complaint contained allegations that touched on each of the elements of a manufacturing defect claim. First, the complaint alleged that Bausch occupied one or a combination of various links in the manufacturing and distribution chain for Ocean Saline Nasal Spray. Included in this list of links were manufacturer, distributor, and seller. Therefore, the allegations indicated that Bausch was within the class of defendants that could be held liable for a manufacturing defect.

Second, the complaint alleged that the nasal spray was contaminated when it was placed on the market by Bausch and that the consumer did not modify the product. It was reasonable to read this allegation as meaning that the consumer just opened and used the nasal spray and that the nasal spray was defective/contaminated when it left Bausch’s control, the court stated. It was obvious that no manufacturer or distributor of a product that is intended for human ingestion, particularly a nasal spray, would intend for the product to be contaminated with a bacterial organism that can cause severe illness in humans. Therefore, the complaint adequately identified a "manufacturing defect," the court found.

Third, the allegations of chronic and serious infections from pseudomonas aeruginosa, combined with the recall letter, were sufficient to reasonably infer that the consumer was harmed by the manufacturing defect. Thus, the court was satisfied that the allegations in the complaint stated a plausible manufacturing defect claim. Thus, dismissal was inappropriate.

The court noted that additional allegations were made on "information and belief." However, those allegations were unnecessary to plausibly plead a strict liability manufacturing defect claim. Therefore, dismissal due to improper "information and belief" allegations was inappropriate, the court ruled.

As to the "lumping" allegation, the court noted that the manufacturing defect claim was specifically alleged against Bausch and another company, Product Quest Manufacturing, LLC (PQM). Most of the allegations were made as to both Bausch and PQM, and the allegations did not distinguish between the individual conduct of Bausch and the individual conduct of PQM. Instead, conduct was ascribed to Bausch and PQM equally, identically, and without differentiation. For many causes of action, this would be problematic since the allegations did not identify individualized conduct. However, the court said, the cause of action at issue was a strict products liability manufacturing defect claim. Putting aside causation and damages, the only other elements of a manufacturing defect claim require that the product was manufactured, distributed, or sold by a defendant, and that the product had a manufacturing defect when it left the defendant’s control. That is, a defendant may be liable for a manufacturing defect as long as the product was defective when it left the defendant’s control, and the defendant was sufficiently within the chain of distribution.

Since the manufacturing defect here was adequately identified, the court stated that it was unaware of any authority that required specification in terms of what or how a particular defendant was involved in either manufacturing or distributing the defective product. Given the limited conduct that would make Bausch or PQM liable (manufacturing or distributing a defective product), lumping the two companies together and essentially alleging that they were part of the manufacturing and distribution chain was sufficient. Bausch (and PQM) should be able to intelligently admit or deny that they either distributed or manufactured the nasal spray. Therefore, dismissal because of improper "lumping" allegations was inappropriate, the court held.

Negligent product liability claim. In addition to relying on its arguments regarding improper "information and belief" and "defendant-lumping" allegations, Bausch argued that no plausible negligence claim was pleaded, and that dismissal of this claim was warranted.

The court found that negligent conduct was adequately alleged. In addition to the factual allegations that outlined the consumer’s medical history and receipt of a recall letter, the negligence claim alleged that the consumer’s use of the nasal spray caused him to suffer chronic sinus infections and test positive for the potentially life-threatening microbial pseudomonas aeruginosa, which has caused and continues to cause him serious harm.

However, the court noted that the complaint contained a number of allegations made on "information and belief." The complaint alleged in part that the two companies were aware of prior instances of contamination, yet they failed to: (1) maintain separate production areas; (2) implement and follow regular cleaning procedures; and (3) investigate non-conforming batches of nasal spray. The general factual allegations of the complaint did not contain a "readily apparent basis" to allege either that the companies were aware of prior instances or that they failed to take the actions specified, the court stated. Further, the court noted, although the companies likely would have knowledge of prior instances of contamination and would certainly know what they did or did not do in their particular role in the manufacturing and distribution chain, it was not clear that the conduct alleged in the complaint necessarily happened.

The assertions in the complaint were particular, and the consumer must have a reasonable factual basis for making them, the court stated. The consumer "cannot just make the allegation out of thin air or in the hope that it might actually be correct under the guise of ‘information and belief.’" Because the factual basis for the allegations regarding prior instances of microbial contamination and the failure to separate, clean, and investigate was not identified within the complaint, use of "information and belief" pleading was improper.

In addition, the complaint alleged that the companies were put on notice that their failures regarding production separation, cleaning practices, and investigations of non-conforming batches caused the contamination of the nasal spray. However, the court stated, these assertions were not necessarily true or apparent. A reasonable factual basis was required for making the assertions. Because that factual basis was not clear from the complaint, use of "information and belief" was improper. Thus, the court disregarded those allegations. Without them, the complaint no longer contained a plausible negligence claim, the court found.

Further, the allegations in the complaint used the term "Defendants" followed by a list of each defendant in this case. In other words, the allegations were made against all defendants. The failure to identify individual conduct was problematic, the court stated. The negligence claim was different from the strict liability manufacturing defect claim. The only conduct by a defendant that is truly at issue in a strict liability manufacturing defect claim is the manufacture or distribution of a defective product, i.e., somehow passing on a defective product. With negligence, a defendant is not liable simply for being within the manufacturing and distribution chain of a defective product. Rather, a defendant must have engaged in conduct that is negligent and that caused the defect. Therefore, although great detail is not required, a defendant must be made aware of its own conduct that is allegedly negligent.

The general rule, the court stated, is that broad allegations that lump multiple defendants together without distinguishing the alleged wrongs or actions between the defendants fail to provide a defendant with adequate notice. The allegations in the negligence claim violated this general rule, the court said. The consumer may not have known everything about the manufacturing and distribution process of the nasal spray, but he should have a reasonable basis for believing that a particular company engaged or failed to engage in a particular type of negligent act.

Because the second cause of action improperly lumped all defendants together without differentiating the specific conduct of each defendant, dismissal of the second cause of action for this additional reason was appropriate.

Accordingly, Bausch’s motion to dismiss the manufacturing defect claim was denied. However, the motion to dismiss the negligent product liability claims was granted with leave to amend.

The case is No. 1:19-CV-1454 AWI BAM.

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