Right on the heels of the eye-popping $408 million settlement between a major commercial sterilizer and plaintiffs claiming injuries resulting from exposure to ethylene oxide (EtO) emitted from the company’s Illinois facility (covered by ELM here), the company now faces two different legal actions initiated by two new groups of plaintiffs but similarly stemming from fugitive EtO emissions from the company’s U.S. facilities. These legal battles come at a time when there are not yet viable alternatives to EtO, a highly efficient medical-equipment sterilizing agent, and there remains a pandemic-related demand.
Just last week, the sterilizer’s parent company was named as a defendant, along with its officers, directors, and CEO, in a securities class action, just over two years following the company’s initial public offering in November 2020. In the securities lawsuit, the plaintiffs, led by two retirement funds, allege that the parent company made false and misleading statements concerning its subsidiary’s EtO facilities’ environmental controls and associated liabilities through hundreds of EtO-exposure lawsuits filed against it. Specifically, plaintiffs allege that the parent company falsely stated that it used sufficient safeguards to control EtO emissions that would otherwise escape from its subsidiary’s EtO commercial-sterilizer facilities, and falsely denied claims that the Illinois facility’s EtO emissions caused cancer and other injuries found in nearby residents, assurances that contributed to inflated stock prices. However, the plaintiffs allege, evidence disclosed during the September 2022 Cook County jury trial involving cancer-causing EtO emissions from the Illinois facility, leading to a historic $363 million verdict (covered by ELM here), tells a different story. These shareholder plaintiffs are now claiming a dramatic drop in the market value of parent-company shares was caused by its own wrongful acts and omissions.
Also last week, in Cobb County, Georgia, plaintiffs filed four individual lawsuits, alleging that the same subsidiary’s Cobb County facility’s EtO emissions that led to exposure lawsuits also led to the Cobb County Property Assessor’s Office devaluing more than 5,000 homes in the neighboring vicinity of the commercial sterilizer plant. Plaintiffs are demanding compensation for the alleged fair-market-value loss on their homes. An influx of similar suits is expected to be filed.
These two new, sprawling litigations come while the U.S. Environmental Protection Agency updates its Clean Air Act’s National Emission Standards for Hazardous Air Pollutants like EtO and works with commercial sterilizing facilities to reduce EtO emissions. The lawsuits come also at a time when the entire world has been dramatically reminded during a years-long pandemic of just how much this fragile world relies on EtO as its premier medical sterilizer. Indeed, in a January public letter to President Joseph Biden, the CEO of AdvaMed, a medical technology association for device industry manufacturers, emphasized the small number of commercial sterilizers throughout the United States – numbering only about 100 – that were capable of sterilizing 20 billion medical devices annually, and the resulting danger that shutdown-induced disruption posed to the industry and the entire world, which is reliant upon sterilized medical devices and equipment.
The EPA’s work with the facilities that pose the greatest EtO exposure risk to neighboring communities, however (covered by ELM here), may provide hope that a proper balance with fulfilling the societal need for billions of sterile medical devices and equipment can be reached. During the January 19, 2023, EPA EtO community outreach meeting in Erie, Pennsylvania, concerninga local commercial sterilizer’s facility that had been emitting EtO at the maximum risk level as recently as July 2022, EPA representatives had good news forneighbors: after the facility immediately voluntarily invested in state-of-the-art controls in July 2022, emissions had dropped to levels so low that it was now difficult for our best technology to measure. As a result, the Erie facility was no longer considered by the EPA to be a maximum risk-level EtO emitting hazard to its neighbors.