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Lora Vuotto, Individually and On Behalf of Others Similarly Situated v. Abbott Laboratories

August 31, 2011

LORA VUOTTO, INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
ABBOTT LABORATORIES, INC., DEFENDANT.



The opinion of the court was delivered by: Judge Ronald A. Guzman

MEMORANDUM OPINION AND ORDER

Lora Vuotto has sued Abbott Laboratories, Inc. ("Abbott") on behalf of herself and others similarly situated alleging that the contamination of Abbott's Similac infant formula makes Abbott liable for negligence, strict liability, intentional misrepresentation, negligent misrepresentation, breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose and unjust enrichment. Before the Court is Abbott's motion to dismiss pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). For the reasons provided herein, the Court grants the motion.

Facts

Vuotto, a Pennsylvania resident,*fn1 bought a container of Abbott's Similac Go & Grow formula powder, and she fed the entire can to her daughter before she learned that Similac had recalled the lot of formula including the container she had purchased. (Am. Compl. ¶¶ 7, 9.) Abbott recalled the product following an internal quality review that detected the remote possibility of the presence of a small common beetle in the product produced in one production area in Abbott's Sturgis, Michigan manufacturing facility. (Id. ¶ 19.) The Food and Drug Administration ("FDA") determined that while the formula containing the beetles posed no immediate health risk, there was a possibility that infants who consumed formula containing the beetles or their larvae, could experience symptoms of gastrointestinal discomfort and refusal to eat as a result of small insect parts irritating the GI tract. (Id.) The Department of Health and Human Services ("HHS") reported that, as early as January 2007, there were numerous instances of beetle infestation at Abbott's Sturgis facility. (Id. ¶ 22.) Abbott received complaints in July and August 2010 from two consumers that the Similac products they had purchased contained insects. (Id.) Abbott issued the recall on September 22, 2010. (Id. ¶ 18.)

Abbott's marketing of Similac included the following statements: (1) "A baby's first year is so important, so count on Similac for nutrition you can trust."; (2) "When it comes to the science of nutrition, Similac stands apart."; (3) "We hold to a higher standard when it comes to infant nutrition. Similac formulas have been developed with leading scientists and more than 280 clinical studies."; (4) "Nutrition for a Strong Start - The right nutrition can make a big difference in your baby's first year. When you choose Similac Advance, you're giving your baby the patented nutrient bled in EarlyShield for immune support, brain and eye development and strong bones."; and (5) "You can trust Similac Sensitive to provide a strong start for your baby's developing digestive system." (Id. ¶ 17.) Vuotto alleges that these were misrepresentations concerning the safety of Similac products for ingestion by infant children and that she relied on these statements in purchasing Similac products. (Id. ¶ 60.)

Discussion

On a Rule 12(b)(6) motion to dismiss, the court accepts as true all well-pleaded allegations in the complaint, drawing all reasonable inferences in plaintiff's favor. Killingsworth v. HSBC Bank Nev., N.A., 507 F.3d 614, 618 (7th Cir. 2007). The complaint should give the defendant "'fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). "[D]etailed factual allegations" are not required, but the plaintiff must allege facts that when "accepted as true . . . state a claim to relief that is plausible on its face" and raise the possibility of relief above the "speculative level." Id. at 555, 570.

Strict Liability, Negligence, Negligent Misrepresentation and Intentional Misrepresentation Claims (Counts I- IV)

Abbott argues that Vuotto's strict liability, negligence, negligent misrepresentation and intentional misrepresentation claims are barred by Pennsylvania's economic loss doctrine. Vuotto concedes that she merely seeks economic damages for purchasing Abbott's recalled Similac product. (Pl.'s Resp. Br. 1.) However, she argues that her claims fall under an exception to Pennsylvania's economic loss doctrine. The Court disagrees.

Under Pennsylvania law, "[t]he economic loss doctrine bars recovery for the plaintiff when a claim is brought in tort (strict liability or negligence) but no physical injury exists, and the only damage is to the product itself." Repasky v. Jeld-Wen Inc., No. 06-S-717, 2006 WL 4663416, at *498 (Pa. Com. Pl. Dec. 29, 2006) (citing N.Y. State Elec. & Gas Corp. v. Westinghouse Elec. Corp., 564 A.2d 919, 925-26 (Pa. Super. Ct. 1989)). "The economic loss doctrine is designed to place a check on limitless liability for manufacturers and establish clear boundaries between tort and contract law." Werwinski v. Ford Motor Co., 286 F.3d 661, 675 (3d Cir. 2002). "The only exception to the economic loss doctrine is for claims brought against 'a design professional' or someone else who is 'in the business of providing information to others.'" Duquesne Light Co. v. Pa. Am. Water Co., 850 A.2d 701, 703 (Pa. Super. Ct. 2004) (quoting Bilt-Rite Contractors, Inc. v. The Architectural Studio, 866 A.2d 270, 286-87 (Pa. 2005)).

There has been a split of authority among Pennsylvania lower courts regarding whether the economic loss doctrine applies to intentional fraud or misrepresentation claims. KNK Med.-Dental Specialties, Ltd. v. Tamex Corp., Nos. Civ. A. 99--3409, 99-5265, 2000 WL 1470665, at *5 (E.D. Pa. Sept. 28, 2000). However, the Third Circuit analyzed the split in authority as well as persuasive authority from other jurisdictions and predicted that the Pennsylvania Supreme Court would hold that the economic loss doctrine applies to intentional torts for purely economic loss when the alleged misrepresentation relates to the quality or characteristics of the goods sold. Werwinski, 286 F.3d at 675; see Ellenbogen v. PNC Bank, N.A., 731 A.2d 175, 188 n.26 (Pa. Super. Ct. 1999) (stating that the economic loss doctrine "bar[s] a plaintiff from recovering purely economic losses suffered as a result of a defendant's negligent or otherwise tortious behavior, absent proof that the defendant's conduct caused actual physical harm to a plaintiff or his property"). This Court finds the Third Circuit's analysis of the law persuasive and agrees that when faced with two competing interpretations of Pennsylvania law, courts should "opt for the interpretation that restricts liability, rather than expands it, until the Supreme Court of Pennsylvania decides differently." Id. at 680.

In this case, Vuotto concedes that she seeks recovery for purely economic loss and her claims are based on alleged misrepresentations relating to the quality or characteristics of the Similac that Abbott sold. Further, she has not alleged that she received poor professional advice from an entity in the business of providing information to others, such as an architect, engineer or design professional. Thus, the Court holds that the economic loss doctrine applies and its exception is inapplicable. Accordingly, the Court grants Abbott's motion to dismiss Vuotto's strict liability, negligence, negligent misrepresentation and intentional misrepresentation claims and dismisses these claims with prejudice.

Breach of Express Warranty and Implied Warranties of Merchantability and Fitness for a Particular Purpose (Counts V, VI and VII)

In Count V, Vuotto alleges breach of express warranty based on Abbott's representations that its Similac products were safe for ingestion by infants and contained "clinically proven ingredients." (Am. Compl. ¶¶ 62-64.) In Count VI, she alleges breach of implied warranty of merchantability based on Abbott's implied warranties that its Similac infant formula was of merchantable quality and was fit, safe and in proper condition for the ordinary and particular purpose for which the infant formula was designed and sold, i.e., ingestion by infants. (Id. ¶ 71.) In Count VII, Vuotto alleges breach of implied warranty of fitness for a particular ...


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