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7th Circuit upholds dismissal of economic loss claims

against

Abbott

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7th Circuit calls plaintiffs' claimed injury

"hypothetical"

By Nate Raymond

April 2 (Reuters) - A federal appeals court on Tuesday

upheld the dismissal of a proposed class action by parents who

say they overpaid for Abbott Laboratories' ( ABT ) baby formula

before one of its plants was shuttered for unsanitary

conditions.

The parents had urged the Chicago-based 7th U.S. Circuit

Court of Appeals to conclude they had legal standing to sue

Abbott, arguing that they would not have paid the purchase price

for Similac and other Abbott brands if they had known of the

safety risks that led to the plant shutdown and a subsequent

recall.

But U.S. Circuit Judge Michael Brennan said the parents were

asserting a "hypothetical or conjectural" injury, having not

alleged that the contamination was widespread enough to

plausibly affect the infant formula they had actually bought.

"When purchasing the infant formula, plaintiffs received

what they asked for," Brennan wrote for the three-judge panel.

"At that point, there was no known risk of contamination and no

loss of the benefit of the bargain or premium price paid."

He said once the parents learned of the contamination risk,

they were told not to use the formula they bought, which Abbott

offered to refund. "So, there was not a time when plaintiffs

were at a risk of harm," Brennan wrote.

The ruling upheld a decision by U.S. District Judge Matthew

Kennelly, the Chicago judge overseeing multidistrict litigation

concerning the recall. Other lawsuits, alleging that babies were

sickened by contaminated formula, remain pending.

Kiley Grombacher, a lawyer for the parents at Bradley

Grombacher, and John O'Quinn, an attorney for Abbott at Kirkland

& Ellis, did not immediately respond to requests for comment.

Abbott closed its Sturgis, Michigan, baby formula plant on

Feb. 1, 2022, and recalled batches of its products, triggering a

nationwide baby formula shortage.

In May 2022, U.S. Food and Drug Administration Commissioner

Robert Califf told Congress that conditions in the plant were

"egregiously unsanitary." The plant reopened that July following

the company's agreement with the FDA.

One hundred cases were still pending before Kennelly as of

Monday. Those lawsuits allege that contaminated formula caused

salmonella infection, bacterial meningitis and other health

problems. Abbott has denied the claims.

The case is Economic Loss Plaintiffs v. Abbott Laboratories ( ABT ),

7th U.S. Circuit Court of Appeals, No. 23-2525.

For plaintiffs: Kiley Grombacher of Bradley Grombacher

For Abbott: John O'Quinn of Kirkland & Ellis

Read more:

Judge tosses out some claims in Abbott baby formula

litigation

Abbott, FDA reach agreement to reopen baby formula facility

in Michigan

(Reporting by Nate Raymond in Boston)