Who Has Legal Liability Arising From the Fungal Meningitis Outbreak?

The fungal meningitis outbreak continues to grow.  Five patients have died and over 40 other patients have contracted fungal meningitis, reportedly after each of them received the steroid  methylprednisolone acetate compounded by the New England Compounding Center ("NECC").  Each of the patients received the steroid as treatment for chronic back pain.

Allegedly, the steroid injections were contaminated with a fungus that led to meningitis, an infection of the lining of the brain and spinal cord. Fungal meningitis is very rare and presents a real risk of death to the patients who contract it.

Who has legal responsibility for this outbreak?  There is a substantial amount of investigation that must be done to fully answer that question.  The Centers for Disease Control is coordinating the multi-state investigation into the fungal meningitis outbreak and will help get to the bottom of the matter from a scientific standpoint.  At this point, the CDC has not definitively demonstrated that the steroid is the source of the infection and, while that level of certainty is not necessary from a legal standpoint (in Tennessee, a victim or a victim’s family would only have to prove that more likely than not the steroid was the source of the infection) the CDC’s work will undoubtedly be of assistance in this matter.

That being said, it is not too early to analyze what entities and persons may have legal responsibilities, depending on how the facts shake out.   So, with the understanding that there are many missing facts that will affect the ultimate answer of who bears legal responsibility here, lets get to work.

At the outset, legal responsibility may depend on which state’s law applies in any given case.  In a case filed in Tennessee, our choice of law rules would probably hold that Tennessee law applies to anyone who was injured or died from an epidural steroid injection that was administered in Tennessee.  This is not necessarily true in other states.

If Tennessee law applies and if the steroid is found to have been contaminated and the contamination occurred during the compounding process, the compounding pharmacy will face liability under Tennessee’s law of product liability.  Those who "compounds" products are manufacturers under Tennessee law.  T.C.A. Sec. 29-28-102(4), Tennessee law prohibits product manufacturers from selling products  that are defective or unreasonably dangerous.  A manufacturer that sells a product that is contaminated with a substance that can cause serious injury or death has sold a product that is both defective and unreasonably dangerous (although under Tennessee law only one of those need be proved).  

Thus, if the evidence demonstrates that NECC was the compounding pharmacy that put steroid products into the stream of commerce and that the steroid products were  contaminated a the time of compounding with a substance that could cause fungal meningitis NECC has potential liability under Tennessee product liability law.  Why does NECC have only potential liability?  Because the patient bringing a claim under Tennessee law also will have to prove that, more likely than not,  the steroid was  the source of his or her fungal meningitis. 


Does the health care facility where the injection of the steroid took place have any responsibility? Perhaps. If we assume that (a) it was legal for a Tennessee health care facility to purchase this product from this manufacturer; (b) the facility correctly stored the product; (c) there was nothing about the appearance of the steroid or its other qualities that would have put the health care provider on notice that it was contaminated or otherwise posed a risk to patients; (d) the facility administered the steroid with an appropriate technique, including achieving a sterile injection site; (e) the facility gave instructions to patients about the risks of steroid injections that were consistent with the applicable standard of care; (f) the facility appropriately followed up on post-injection complaints that turned out to be complaints of fungal meningitis; (g) the facility appropriately referred patients making these complaints to complaints to other health care providers; and (h) the facility did not continue to administer the steroids after it knew or reasonably should have known that they may have been contaminated, the health care facilities (and the individual providers) will not face liability under Tennessee’s health care liability law.

Of course, there are a lot of assumptions in that paragraph, and significant factual investigation will be required to flush out the responsibility, if any, of health care providers.

Health care facilities do face another liability risk in this matter. Under Tennessee law, these health care facilities are "sellers" of a product under Tennessee law.  T.C.A. Sec. 29-28-102(7). Under the new tort reform law that came into effect on October 1, 2011, a seller of a product is not liable for injuries caused because the product itself  was sold in a defective or unreasonably dangerous condition unless (a) the manufacturer of the product is not subject to service of process in Tennessee or (b) the manufacturer is or becomes insolvent.  To be precise on the latter point, the manufacturer has be "judicially declared insolvent."  T.C.A. Sec. 29-28-106.  Note:  there are a couple other ways that sellers can be liable under our product liability statute but none of them appear to be applicable to this situation – see 29-28-106. 

Obviously, a Massachusetts company that sells a product in Tennessee is subject to service of process in Tennessee, so Tennessee health care providers who sold this product have no risk under that provision of our product liability law. But health care providers face a real risk of seller liability under the "insolvency" section of the law, because it is very possible that NECC will have insufficient liability insurance or other assets to pay claims in this matter if it is determined to have created an unreasonably dangerous or defective product that has injured or killed over 40 people. I don’t have much information about NECC and quite frankly it doesn’t appear much is known about it, but (a) it has taken its website down; (b) it is not answering its phone; and (c) it has surrendered its license to the state authorities in Massachusetts. If I was advising the health care providers in Tennessee who purchased this subject, I would be advising them that a product liability claim was a real risk under the "manufacturer insolvency" exception.

Once again, I stress that this is a very preliminary assessment of the legal liability issues.  I can think of several other potential defendants here, but so little is known about the facts that I simply don’t feel comfortable writing about that at this time. 

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