In 2018, our blogpost on In re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices & Liability Litigation, 903 F.3d 278 (3d Cir. 2018), was entitled “Money For Nothing?  No Standing This Time in the Third Circuit.”  There, it appeared that the Third Circuit had drawn an eminently reasonable bright line disallowing no-injury class actions by plaintiffs who used a product without incident, and then belatedly claimed that the product had some attribute that it supposedly should not have had.  J&J Talc held – “succinctly” – that “buyer’s remorse, without more, is not a cognizable injury” that provides constitutional standing in federal court.  Id. at 281.

What a difference six years – and a different panel – make.  Recently, in Huertas v. Bayer US LLC, ___ F.4th ___, 2024 WL 4703136 (3d Cir. Nov. 7, 2024), the same court rejected a standing argument on essentially identical facts.  The unsuccessful plaintiff class in J&J Talc alleged that the product at issue “can lead to an increased risk of developing . . . cancer,” and thereby caused them economic loss.  903 F.3d at 281.  Similarly, the plaintiff class in Huertas “s[ought] compensation for economic losses they allegedly suffered from purchasing products that they claim are worth less” because they were allegedly “contaminated” with “[b]enzene . . . a chemical that has been labeled a human carcinogen.”  2024 WL 4703136, at *1.

Thus, both cases shared not only economic loss claims alleging products that were supposedly “worth less” than what was purportedly “bargained,” but also the shared same reason for the claimed diminished value − an undisclosed, and entirely unrealized, cancer risk.  Neither product allegedly failed to do what it was supposed to do.  J&J Talc, 903 F.3d at 281 (plaintiffs did “not allege that [the product] failed to adequately perform any of these functions”); Huertas, 2024 WL 4703136, at *4 (no claim that the product “did not perform therapeutically as expected”).  How could the no-standing decision in J&J Talc possibly not be controlling of the claim in Huertas?

The only distinction Huertas offered was gossamer thin and factually irrelevant:

J&J is distinguishable because the Court explicitly recognized that it did “not involve allegations of a defective product.”  Here, however, [defendant’s] products were not supposed to contain benzene, and Plaintiffs plausibly alleged that the benzene contamination − the product’s defect − rendered it unusable, making it inherently worth less than if it had been manufactured properly.

2024 WL 4703136, at *4 (footnotes omitted).

So what was the alleged cancer risk in J&J Talc?  The majority didn’t bother to say, but the dissent mentioned “asbestos” almost immediately.  903 F.3d at 294.  The dissent also had no trouble calling the product “defective” despite the plaintiff not pleading that in so many words.  Id. at 295.  That raises the legal question whether the undisclosed presence of asbestos in a product can make it “defective”?  Well, duh.

Both J&J Talc and Huertas arose in New Jersey, and consulting Westlaw reveals that the New Jersey Supreme Court has used “asbestos” and “defect” or “defective” in the same sentence twelve times – for instance:

In this common law, strict-liability failure-to-warn action, plaintiff had to prove that . . . use of [defendant’s] asbestos . . . was dangerous − a product defect; [and that defendant] forwarded the asbestos bags . . . without adequate warnings − in a defective condition. . . .  [Liability] requires proof of two different forms of causation:  product-defect causation and medical causation.  For product-defect causation, the plaintiff must show that the defect in the product − the lack of warnings or adequate warnings − was a proximate cause.

Fowler v. Akzo Nobel Chemicals, Inc., 276 A.3d 1146, 1160 (N.J. 2022) (citations and quotation marks omitted).  All in all, no fewer than 90 New Jersey state and federal cases have used “asbestos” and some version of “defect” in the same sentence.  Under New Jersey law, it seems safe to say that asbestos-containing products can be considered “defective.”

To distinguish J&J Talc because, supposedly, an incompetent plaintiffs’ counsel simply failed to plead that the purported presence of asbestos made the product “defective” is to distinguish an otherwise controlling prior published opinion into oblivion, since all that any future plaintiff need do is remember to label the defendant’s product “defective” – which is easy, since it’s a legal conclusion rather than a fact.

Beyond essentially thumbing its nose at the Third Circuit’s stare decisis rules, Huertas strained mightily to analogize the “waste” of a partial tube of OTC fungicide (see 2024 WL 4703136, at *2 & n.6 (no plaintiff purchased more than one tube of an implicated product lot) with an earlier decision involving an expensive prescription drug – where the plaintiffs had quantified their damages as being in the hundreds or thousands of dollars.  See Cottrell v. Alcon Laboratories, 874 F.3d 154, 160 (3d Cir. 2017), cited in Huertas, 2024 WL 4703136, at *5.  In J&J Talc the named plaintiff sought damages for products bought over “approximately six decades.”  903 F.3d at 282 n.4.  Huertas is truly a money-for-nothing case, even worse than J&J Talc, where de minimis non curat lex.

That’s the bad part of Huertas – its resurrection of a bogus “benefit-of-the-bargain theory,” based on a product that “perform[ed] therapeutically as expected,” 2024 WL 4703136, at *4, and that a prior published opinion had definitively put to rest.  All one has to do is read the conclusion in J&J Talc to understand that its holding did not in any depend at all on the absence of a “defect” allegation in the pleading, but instead on fundamental flaws with this sort of economic loss theory:

[Named plaintiff] contends that other people have suffered health complications from using [defendant’s product].  Regardless of whether that serious allegation has merit, injuries suffered by others do not permit us to conclude that [plaintiff] has herself suffered an injury in fact.  The only injury that [plaintiff] alleges is purely economic in nature − that is, that had she known more about [the product], she would not have purchased it in the first place.  But [plaintiff’s] wish to be reimbursed for a functional product that she has already consumed without incident does not itself constitute an economic injury within the meaning of Article III.

903 F.3d at 293 (emphasis added).  These were the “reasons” that J&J Talc “conclude[d] that [the named plaintiff] does not have Article III standing,” id. – not that the plaintiff had a bad lawyer who failed to plead that an asbestos-containing product was “defective.”

However, while this aspect of Huertas was awful – and it was the most important part of the case – Huertas does have some silver linings that defendants should keep in mind going forward.

First, Huertas holds that a recall, by itself, does not establish product contamination:

Plaintiffs urge us to infer from [defendant’s] recall itself that Plaintiffs’ products were contaminated. . . .  [T]his was insufficient to establish that they purchased contaminated products.  The mere fact that a product was recalled would not nudge Plaintiffs’ claims across the line from conceivable to plausible.

2024 WL 4703136, at *6 (citation, footnote and quotation marks omitted).  That’s important, because these no-injury cases are all class actions, and this holding prevents contamination from becoming a dreaded “common issue” upon mere proof of a recall.

Second, the Huertas plaintiff was only able to establish that he purchased any contaminated product because of a factual quirk that is unlikely to recur in future cases of this ilk.  Plaintiffs had commissioned some rather spotty pre-complaint testing that the defendant contended with considerable force failed to establish that the claimed product contamination “was sufficiently widespread to plausibly affect any given [unit].”  Id.  However, the court’s “reservations” over plaintiff’s less-than-conclusive testing were counteracted by allegations the defendant made in a separate complaint filed in a supplier liability action while the Huertas matter was on appeal.  Id. at *7.  Those allegations – trumpeted by plaintiff at oral argument − prompted a remand to consider this “new” evidence.  Id.  Going forward, that unusual circumstance should be avoidable, such as by the use of arbitration clauses.

Third, even if the plaintiffs’ testing were enough to avoid dismissal, the scope of such testing – which (as here) will usually be minimal – limits the size of any recall-based class action.  “[N]either the recall itself, nor the . . . testing . . . have any relevance” to anyone (presumably including absent class members) who cannot establish use of a product from a lot that tested positive for contamination.  Id. at *8.  Those plaintiffs were all “properly dismissed . . . for lack of standing”:

To conclude otherwise would require an inference that all products sold during the recall window contained the specified prefixes, or that those prefixes dominated [defendant’s] sales during that time frame.  [Nothing] allege[s] facts that would support this inference.  Without any information to tie these Plaintiffs’ products to the recall other than the timeframe during which they made their purchases, these Plaintiffs’ allegations stop short of the line between possibility and plausibility.

Huertas, 2024 WL 4703136, at *8 (citations and quotation marks omitted) (emphasis added).

To us on the defense side, this last point is the most useful aspect of a rather dismal opinion.  Since proof of contamination cannot be based on the recall alone, as already mentioned, that means some sort of product testing is essential to fill that gap.  Thus, in a recall situation Huertas requires, as a prerequisite to standing, “sufficiently widespread,” id. at *6, testing – on a batch/lot by batch/lot basis – to establish that each plaintiff used a contaminated product.  Since standing is much easier to achieve than establishing liability, that also means that the requisite proof of use of a contaminated product will be an individualized issue that both limits the size of any putative class and ultimately should defeat class certification.