Leonard et al v. Abbott Laboratories, Inc.

Filing 35

MEMORANDUM OF DECISION AND ORDER - The three and half page submission by Abbott provides an insufficient basis for the Court to render a decision on whether the claims are moot. As a result, the Court directs the parties to submit supplemental brief s addressing whether Abbotts voluntary recall of the contaminated formula rendered moot the Plaintiffs claims under the consumer protection statutes. The submission is not to exceed 10 pages and shall be filed on or before January 27, 2012. Opposition briefs not to exceed 5 pages can be filed on or before February 3, 2012. The Court will not grant any requests for extensions. Ordered by Senior Judge Arthur D. Spatt on 1/20/12. (Coleman, Laurie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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SHELLY A. LEONARD, ESTHER
ALEXANDER, BRIDGETT HERRERA,
VELICIA MATA, LeRON DAVIS, and
ASHLEY SULLIVAN, individually and as
MEMORANDUM OF
parents and natural guardians of their minor
DECISION AND ORDER
children and on behalf of all others similarly
10-CV-4676(ADS)(WDW)
situated,
Plaintiffs,
-againstABBOTT LABORATORIES, INC.,
Defendant.
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APPEARANCES:
Blau, Brown & Leonard, LLC
Attorneys for the plaintiffs
224 West 30th Street, Suite 809
New York, NY 10001
By: Jason T. Brown, Esq.
Steven Bennett Blau, Esq., Of Counsel
Patterson, Belknap, Webb & Tyler LLP
Attorneys for the defendant
1133 Avenue of the Americas
New York, NY 10036
By: John D. Winter, Esq., Of Counsel
SPATT, District Judge.
This case arises from the recall by Abbott Laboratories, Inc. (“Abbott”) of five million
containers of its Similac brand infant powder formula that were potentially contaminated with
beetle parts and larvae, which could cause gastrointestinal discomfort and refusal to eat. The
plaintiffs allege that Abbott engaged in unfair and deceptive practices by misrepresenting the
safety of Similac and failing to timely warn consumers of the dangers associated with the
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contaminated product in violation of the consumer protection statutes in New York, Texas, Ohio,
and New Hampshire.
Presently before the Court is a motion by Abbott for judgment on the pleadings and a
motion by the plaintiffs to amend the complaint. For the reasons set forth below, the Court
determines that supplemental briefing is necessary on whether the plaintiffs’ claims are moot
before the Court can reach a decision on the pending motions.
I. BACKGROUND
Abbott Laboratories, Inc. formulates, designs, manufactures, markets, advertises,
distributes, and sells infant powder formulas under the brand name Similac. In September 2010,
during an internal quality review at its Sturgis, Michigan facility, Abbott detected the presence of
a common warehouse beetle and its larvae in its powdered formula. Subsequently, on September
20, 2010, Abbott notified the United States Food and Drug Administration (“FDA”), which
determined that “while the formula containing these beetles poses no long-term health problems,
there is a possibility that infants who consume formula containing the beetles or their larvae
could experience gastrointestinal discomfort and refusal to eat as a result of small insect parts
irritating the GI tract”. (FDA Press Release, September 27, 2010, Knobler Decl. in Support of
Abbott’s Motion for Judgment on the Pleadings, Ex. B.) As a result, on September 22, 2010,
Abbott recalled five million containers of Similac infant formula products.
The plaintiffs in this case are: Shelley A. Leonard, a resident and citizen of the State of
New York; residents and citizens of the State of Texas Esther Alexander, Bridgett Herrera, and
Velicia Mata; LeRon Davis, a resident and citizen of the State of Ohio; and Ashley Sullivan, a
resident and citizen of New Hampshire (“the Plaintiffs”). According to the Plaintiffs, they each
purchased the recalled formula during an undefined “relevant time period”, rather than
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purchasing a less expensive alternative, based on various statements by Abbott that indicated that
Similac was safe for consumption by infants. The Plaintiffs also allege that their infant children
became ill after consuming the contaminated Similac formula.
On October 10, 2010, the Plaintiffs commenced this action against Abbott in their
individual capacity, as parents and natural guardians of their minor children, and as
representatives of putative classes of similarly situated individuals from their respective states.
In the complaint, and the Amended Class Action Complaint filed on December 2, 2010, the
Plaintiffs seek declaratory, injunctive, and monetary relief based on Abbott’s alleged unfair and
deceptive acts and practices in misrepresenting that Similac was “safe for the consumption by
infants” and failing to warn consumers or recall the contaminated formula sooner, in violation of:
(1) New York General Business Law § 349; (2) the Texas Deceptive Trade Practices-Consumer
Protection Act, Tex. Code. Ann., Bus. & Comm. § 17.41, et. seq.; (3) the Ohio Uniform
Deceptive Trade Practices Act, Ohio Rev. Code Ann. § 4165, et. seq., and Uniform Consumer
Sales Practices Act, Ohio Rev. Code Ann. § 1345, et. seq.; and (4) the New Hampshire
Consumer Protection Act, N.H. Rev. Stat. Ann. § 358-A, et. seq. (the “consumer protection
statutes”).
On March 15, 2011, Abbott filed a motion for judgment on the pleadings seeking the
dismissal of the Plaintiffs’ claims under the consumer protection statutes and the cause of action
seeking injunctive relief for failure to state a claim. In addition, Abbott also sought dismissal of:
(1) any claim predicated on Abbot’s representation that it is “dedicated to . . . complying with all
applicable laws and regulations in the countries where [it] do[es] business” (Am. Compl., ¶ 24),
or its failure to comply with certain federal laws, as preempted by federal law; (2) any class
claim under the Ohio Uniform Deceptive Trade Practices Act because the statute does not permit
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a class action under the circumstances alleged; (3) any claim under the Ohio Uniform Consumer
Sales Practices Act because the statute does not confer standing on a consumer; and (4) any
claim under the Texas Deceptive Trade Practices-Consumer Protection Act because the Plaintiffs
failed to provide the requisite notice under the statute.
On September 21, 2011, the Plaintiffs moved to amend their complaint to: (1) include
Kristie Pagano in the caption of this matter as a party plaintiff and potential representative of the
putative New York class; (2) remove plaintiff Shelly A. Leonard from the caption in this matter
and dismiss her claims without prejudice with leave to renew her individual claims or any claims
on behalf of her infant/child in the event the Court certifies a class under Federal of Civil
Procedure 23; (3) include additional factual contentions “clarifying and amplifying the false,
misleading, fraudulent and deceptive business practices employed by [the Defendant]” (Pl.’s Br.
at 1); and (4) to remove the allegation expressly waiving the New York Plaintiffs’ right to seek
punitive damages under New York General Business Law § 349.
In opposition to the motion to amend, Abbott argued for the first time that, because the
Plaintiffs only explicitly seek monetary loss associated with their purchases of the contaminated
product, which were remedied by its recall and consumer refund program, the Plaintiffs’ claims
under the consumer protection statutes are moot, “and have been since before this action was
commenced”. (Def.’s Opp. at 14.) Consequently, Abbott argues that permitting the Plaintiffs to
amend the complaint to allege additional facts in support of these claims would be futile.
In support of this contention, Abbott cited decisions in two cases premised on the same
recall at issue here, where the courts dismissed claims for monetary loss against Abbott for
violations of consumer protection statutes. See Vavak v. Abbott Labs., Inc., No. 10-CV-1995,
Dkt. 43, at *5 (C.D. Cal. June 17, 2011) (dismissing the plaintiff’s claim under the California
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Unfair Competition Law as moot “[b]ecause Abbott offered a full refund to consumers who
purchased infant formula from the affected lots” and further noting that the fact that the plaintiff
“rejected a full refund and opted to file suit does not change this result”); Jovine v. Abbot Labs.,
Inc., 795 F. Supp. 2d 1331, 1344 (S.D. Fla. 2011) (dismissing the plaintiff’s claim under the
Florida Deceptive and Unfair Trade Practices Act on the ground that he could not plausibly
allege any compensable damages because any damages he suffered from the purchase of the
product could be recovered through the voluntary recall).
After Abbott filed its opposition, at least one other court has also held that a similar claim
against Abbott for unfair and deceptive business practices was moot. See Tosh-Surryhne v.
Abbott Labs. Inc., No. 10-CV-2603, 2011 WL 4500880, at *5 (E.D. Cal. Sept. 27, 2011) (“The
court finds that defendant has made a full offer of restitution to plaintiff for the recalled
containers of Similac plaintiff alleges she purchased, even as to those for which she provides no
evidence. This offer moots plaintiff's claims and strips this court of jurisdiction.”).
Abbott further argued in opposition to the motion to amend that, to the extent the
consumer protection statutes permit the imposition of exemplary damages for willful or knowing
violations, such damages are unavailable because: (1) the Plaintiffs have not sufficiently alleged
that Abbott acted willfully; (2) where compensatory damages are zero, exemplary damages that
are multiples of the compensatory damages would also be zero; and (3) where there is no injuryin-fact that can be redressed by a court, and exemplary damages are described as a multiple of
compensatory damages, a plaintiff cannot commence an action solely to recover exemplary
damages. In their reply submission, the Plaintiffs did not address the issue of futility at all, let
alone the critical issue of whether their claims are moot.

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It is well-settled that “[a] case is moot, and accordingly the federal courts have no
jurisdiction over the litigation, when ‘the parties lack a legally cognizable interest in the
outcome.’” Fox v. Bd. of Trustees of State Univ. of New York, 42 F.3d 135, 140 (2d Cir. 1994)
(quoting County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S. Ct. 1379, 1383, 59 L. Ed. 2d
642 (1979)); Dean v. Blumenthal, 577 F.3d 60, 64 (2d Cir. 2009). Whether this Court has
subject matter jurisdiction over the Plaintiffs consumer protection statute claims is a threshold
issue that must, and in the interest of judicial resources should be decided before the Court can
render any decision on the pending motions. See Fed. R. Civ. P. 12(h) (“If the court determines
at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”); see also
Tosh-Surryhne, 2011 WL 4500880, at * 3 (“In other words, if a plaintiff seeks only restitution,
which had been offered her before the claim was brought, there can be no claim; rather, any
claim brought at that point is an unnecessary call upon this court's resources.”).
The three and half page submission by Abbott provides an insufficient basis for the Court
to render a decision on whether the claims are moot. As a result, the Court directs the parties to
submit supplemental briefs addressing whether Abbott’s voluntary recall of the contaminated
formula rendered moot the Plaintiffs’ claims under the consumer protection statutes. The
submission is not to exceed 10 pages and shall be filed on or before January 27, 2012.
Opposition briefs not to exceed 5 pages can be filed on or before February 3, 2012. The Court
will not grant any requests for extensions.

SO ORDERED.
Dated: Central Islip, New York
January 20, 2012
__/s/ Arthur D. Spatt_______
ARTHUR D. SPATT
United States District Judge
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