Products Liability Law Reporter

The Seventh Circuit Court of Appeals held that consumers of infant formula lacked Article III standing to pursue their economic loss claims against the formula manufacturer.

Abbott Laboratories, an infant formula manufacturer, was the subject of an FDA and CDC investigation into consumer complaints of bacterial illness allegedly related to Abbott formula products manufactured in Sturgis, Mich., which allegedly had unclean conditions. The FDA and CDC issued a consumer warning; Abbott later announced a voluntary recall of certain products manufactured at Sturgis and offered consumers a full refund. A potential class of consumers sued Abbott Laboratories, alleging violations of state consumer fraud acts and claims for unjust enrichment, breach of the implied warranty of merchantability, and negligent misrepresentation. The cases fell into two categories: personal injury plaintiffs and economic harm plaintiffs. The defense moved to dismiss the economic loss class action complaint. The trial court granted the motion.

Affirming, the Seventh Circuit noted that Article III of the Constitution limits federal judicial power to certain cases and controversies. Constitutional standing requires an injury in fact that is fairly traceable to the challenged action of the defendant and is likely to be redressed by a favorable decision, the court said. Here, the court found, the plaintiffs’ alleged injury is hypothetical or conjectural. The court reasoned that once the plaintiffs learned of the unsanitary conditions at the Sturgis facility and the potential risk of contamination, they were told not to use the formula, and Abbott offered a refund. Thus, the court said that there was not a time when the plaintiffs were at risk of harm. Citing case law, the court noted there is no economic injury sufficient to confer standing where plaintiffs receive what they bargained for.

Moreover, the court found that the plaintiffs’ claimed injury is not particularized in that the plaintiffs did not allege that any of the products they purchased were actually contaminated and asserted only that there was a potential risk. The plaintiffs received the benefit of their bargain and suffered no economic loss, the court concluded.

Consequently, the court held that the plaintiffs’ risk-of-harm theory did not support Article III standing.

Citation: In re Recalled Abbott Infant Formula Prods. Liab. Litig., 2024 WL 1394247 (7th Cir. Apr. 2, 2024).