A company that makes dialysis equipment for use in clinics and by patients in their homes has filed a complaint in federal court against a company that supplied a component part which allegedly contained a defect that led to a recall and caused injuries and at least one death. Fresenius Med. Care Holdings, Inc. v. Magnum Plastics, Inc., No. 11-02939 (U.S. Dist. Ct., D. Colo., filed November 14, 2011).
Plaintiff Fresenius Medical Care Holdings, Inc. claims that it has a supplier quality agreement with the defendant and that purchase orders applicable to the companies’ transactions require the defendant to “indemnify and hold harmless Buyer [Fresenius] from any and all loss, costs, expenses (including counsel fees) or damages (including incidental and consequential damages) which Buyer [Fresenius] may sustain or become liable for in whole or in part by reason of any defect or other breach of warranty contained herein whether said loss, costs or damages result from injuries to the person or to the property, or arise out of any recalls . . . “
According to the complaint, a defect in the part supplied by the defendant started causing leaks in the dialysis equipment. The plaintiff alleges that it issued a hold and eventually recalled the affected products, incurring costs relating to the investigation of the problem, institution of the recall, notification of patients and clinics, and providing replacement products. Other alleged damages include claims filed by third parties against the plaintiff for injuries and death purportedly caused by the equipment. The plaintiff alleges breach of express warranties and implied warranties of merchantability, as well as a declaration “that Magnum Plastics is responsible for costs (including attorney’s fees) incurred in recall and replacing the Magnum Cassettes, defending the Ohio lawsuit and responding to demands, and bringing this action.” The plaintiff also claims contractual indemnity.