As the COVID-19 Pandemic Continues, Many Companies are Facing Litigation Related to the Sale of Ineffective Personal Protective Equipment (PPE)
Since the start of the COVID-19 pandemic, personal protective equipment (PPE) has been in extraordinarily high demand. With hospitals across the country seeing overwhelming numbers of patients, and with health authorities recommending (or requiring) masks for adults and children, many companies have seized on the opportunity to supply PPE to health care providers and the public.
While some companies are manufacturing their own PPE, others are distributing third-party products. As with many other types of products, in many cases, this third-party PPE comes from China. For various reasons, this third-party PPE is often of substandard quality; and, in some cases, it does not serve a protective function at all.
Companies that import masks, gloves, and other PPE have an obligation to ensure that these products serve their intended purpose. If a mask does not reduce the risk of COVID-19 exposure, or if gloves do not provide the level of protection represented on the box, it falls on U.S. distributors to identify these issues and resolve them with their suppliers. Companies that distribute ineffective PPE can face liability in civil litigation, and they can face federal law enforcement action as well.
Litigation Defense for Allegations of Selling Ineffective PPE
If your company is facing allegations of selling ineffective PPE, avoiding liability in civil litigation will require a strategic and thorough defense. These allegations can take various forms; and, in many cases, distributors can face “strict liability” for selling defective products. Under U.S. product liability laws, all companies involved in the “chain of distribution” of a defective product can be held liable—and this is true regardless of whether they knew the product was defective or had any involvement in the product’s design or manufacture.
With PPE, the risks in product liability litigation can be significant. At this point, the tragic death toll of the COVID-19 pandemic is almost certainly attributable in part (albeit in small part) to ineffective PPE. Wrongful death claims can involve millions of dollars in liability exposure for PPE distributors. Additionally, once one plaintiff comes forward, it can be expected that other plaintiffs will come forward as well; and, for companies that have distributed high volumes of masks, gloves, and other PPE, this could potentially lead to mass tort or class action litigation.
In strict liability cases, proof of negligence is not required. If a distributor sells defective PPE, then that distributor is at risk for liability. But, plaintiffs may choose to pursue claims on various negligence-based grounds as well; and, in many cases, product distributors can also face liability for breach of express and implied warranties.
U.S. distributors will often be able to pursue indemnification and other claims against PPE designers and manufacturers. However, this presents its own set of challenges—especially if the company is in China or elsewhere overseas. U.S. distributors are relatively easy targets for plaintiffs; and, if a plaintiff chooses to sue your company, it will be up to your company to not only defend against the allegations, but to seek indemnification if it is available.
At Oberheiden P.C., we represent companies in litigation involving allegations of selling defective PPE, breach of PPE warranties, and other PPE-related claims. We are actively representing companies during the COVID-19 pandemic, and we are intimately familiar with the types of claims that are being filed. Our defense lawyers can represent your company in defending against all PPE-related claims, and we can also assist your company in seeking indemnification and other remedies from its suppliers.
Litigation Defense for Federal PPE Fraud Investigations
In addition to facing private civil litigation, many PPE distributors are facing federal law enforcement investigations and litigation as well. While many of these cases involve the same factual allegations (i.e. the sale of ineffective PPE), in federal law enforcement cases, selling ineffective PPE is classified as a form of fraud.
In PPE fraud litigation, companies can face both civil and criminal prosecution. Generally speaking, civil cases involve allegations of unintentional fraud (i.e. selling PPE not knowing that it is ineffective), while criminal cases involve allegations of intentional fraud (i.e. knowingly selling ineffective PPE). However, there is a lot of “middle ground;” and, in many cases, company owners and executives will be forced to prove not only that they were unaware that their companies were selling ineffective PPE, but also that they did not have reasonable means of testing the PPE’s effectiveness prior to its distribution.
Defending Against Allegations of Selling Ineffective PPE
Despite the “strict liability” nature of product liability claims, and despite the substantial resources that the U.S. Department of Justice (DOJ) and other federal authorities are devoting to combatting PPE fraud, there are a number of potential defenses to allegations of selling ineffective PPE. The specific defenses that a company will be able to assert will depend on both the nature of the allegations and the nature of the proceedings. Given the risk of facing both civil liability and federal enforcement action, it is important for companies to choose defense counsel who are experienced in handling both types of matters.
We represent clients in both private civil litigation and federal law enforcement matters. Our firm is led by founder and career defense attorney Nick Oberheiden, PhD, and our defense lawyers include former U.S. Attorneys and Assistant U.S. Attorneys who bring decades of experience handling fraud claims at the federal level. As a result, not only do we have a clear understanding of the defense strategies that can be used to overcome allegations of product liability, breach of warranty, negligence, and PPE fraud, but we have first-hand knowledge of how federal prosecutors target companies (and their owners and executives) in these types of cases as well.
Regardless of the nature of your company’s PPE litigation, it is essential that you engage experienced counsel to begin working on your company’s defense right away. Our defense lawyers are prepared to take action 24/7, and we are able to assist companies facing PPE-related allegations nationwide.
FAQs: Ineffective PPE Liability Claims and Enforcement Actions
Q: Can my company be held liable for selling ineffective PPE manufactured by a third party?
Potentially, yes. Under the law of products liability, distributors can be held liable for selling defective products manufactured by a third party.
However, a key question in these cases is whether or not the product at issue qualifies as “defective” under applicable state law. While ineffective PPE may qualify, this is not necessarily the case. Additionally, as it is up to the plaintiff to prove that the PPE sold was not only ineffective but also defective, distributors must not assume that they are automatically at risk for liability. For example, if a plaintiff alleges that a mask was ineffective in preventing COVID-19 exposure but the mask met the standards that were advertised, then the fact that the mask did not live up to the plaintiff’s unreasonable expectation does not make the mask defective.
Q: What is my company's liability exposure in ineffective PPE litigation?
A company’s exposure in ineffective PPE litigation depends on the scope and nature of the allegations at hand. In private civil litigation, plaintiffs can potentially claim millions of dollars in damages for suffering long-term effects or losing a loved one. In federal law enforcement matters, companies can face fines that can climb into the millions of dollars as well; and, in criminal cases, company owners and executives can potentially be at risk for federal incarceration.
Q: What are some possible defenses to allegations of selling ineffective PPE?
The defenses that companies can assert in ineffective PPE litigation also depend on the nature of the allegations—as well as the nature of the proceedings. In private civil litigation, companies can challenge plaintiffs’ evidence of defectiveness, and they can dispute allegations of negligence, breach of warranty, and any other claims the plaintiff puts forward. In federal law enforcement matters, arguing against intent will often be an effective (and essential) defense to criminal culpability, while defending against civil liability requires the ability to dispute the other elements of the charges that are on the table.
Q: What should I do if my company has been contacted by federal authorities regarding its sale of PPE?
If your company has been contacted by federal agents or served with a federal civil investigative demand (CID), search warrant, or subpoena, you need to engage experienced federal defense counsel promptly. If you choose Oberheiden P.C., our lawyers will get to work immediately in order to try to prevent the investigation from leading to charges.
Q: If my company is facing ineffective PPE litigation, should I be thinking about settlement?
At this point, it is too early to tell. Making an informed decision about settlement requires a thorough understanding of the strength of the plaintiff’s or government’s allegations. Once our lawyers investigate your company’s case, we can advise you regarding strategy—whether this means fighting the allegations in court or targeting a pre-trial resolution.
Schedule a Free Consultation at Oberheiden P.C.
If your company is facing litigation related to allegations of selling ineffective PPE during the COVID-19 pandemic, we encourage you to contact us for a free consultation. To speak with one of our senior defense lawyers in confidence, please call 214-251-4238 inquire online today.