Class actions following a product recall often focus on what the company allegedly knew before its products were taken off the market. But this is not always the case. A company can also come under fire for its actions after the recall and, specifically, what recourse it offers to consumers of recalled products.
On October 5, 2021, the U.S. Food and Drug Administration (“FDA”) alerted the public of a manufacturing issue with certain lots of Ellume USA LLC’s (“Ellume”) COVID-19 Home Tests that had could lead to false positive results, and several weeks later, the FDA announced a Class I recall of these tests based on the higher-than-acceptable false positive test result. When it comes to COVID-19, a false positive could lead to delayed diagnosis and treatment of the actual cause of illness; further spread of COVID 19 when presumed positive people are grouped based on false test results; unnecessary COVID-19 treatment from health care providers, such as antiviral treatment, convalescent plasma, or monoclonal antibody treatment, which can result in side effects; disregard for the recommended precautions against COVID-19, including vaccination; and isolation, monitoring household or close contacts for symptoms, limiting contact with family or friends, and missing school or work.
Now, nearly six months after the FDA recall, Ellume is facing a class action in the U.S. District Court for the District of Maryland. On March 22, 2022, two consumers from Indiana and Ohio filed Karen Kerschen et al., v. Ellume USA LLC, 1:22-cv-00704 (D. Md.), alleging that Ellume refused to refund purchasers of the recalled COVID tests. In the complaint, plaintiffs allege they were personally affected by false positive test results, which led them to cancel, change, and/or delay travel plans, and incur costs for additional tests. Plaintiffs assert claims for unjust enrichment on behalf of themselves and a nationwide class of purchasers of the Ellume COVID tests recalled in October and November 2021. In the alternative, plaintiffs seek to represent two-state specific classes of Indiana and Ohio purchasers.
Ellume is not the only company facing scrutiny for its actions following an FDA recall. Over nine months ago, Philips Respironics (“Philips”) initiated a recall of ventilators, continuous positive airway pressure (CPAP) and bilevel positive airway pressure (BiPAP) machines. And on March 10, 2022, the FDA sent Philips a 518(a) Notification Order mandating that Philips improve its communication about the recall and the serious risk posed by the PE-PUR sound abatement foam used in the recalled products. The FDA’s Order states that it continues to hear from patients and medical equipment suppliers who are unaware of the recall and/or have received insufficient information about next steps. Among other things, Philips has 45 days to (1) notify all device users, durable medical equipment suppliers, importers, distributors, retailers, and health professionals who prescribe the device about the potential health risks of using these sleep apnea and ventilator machines, (2) display this information prominently on its website, and (3) provide a link for healthcare providers and registrants to access available testing results and findings. According to the Notification Order, failure to comply is a “prohibited act” under the Federal Food, Drug, and Cosmetic Act, which could result in fines and penalties. And if the FDA determines that its Notification Order is not sufficient, it is also entitled to take legal action though seizure, injunction or prosecution, or through regulation of, or regulations or bans of the sale, distribution, or use of the recalled products.