Products Liability Law Daily Wrap Up, DAMAGES—FOOD AND BEVERAGES—W.D. Pa.: Claims against collagen seller move forward in protein bar contamination case, (Mar 18, 2025)

By Pankhuri Bhatnagar, B.A. LL.B.

A buyer’s strict liability and negligence claims were not barred by the economic loss doctrine because the underlying complaint alleged damage to property other than the loss of the raw material collagen.

In an action brought by a buyer against a collagen seller for providing contaminated collagen powder, a federal district court in Pennsylvania denied the seller’s motion to dismiss. The court found that the buyer’s failure to join an upstream collagen supplier did not warrant dismissal. The supplier was not a necessary party under Fed. R. Civ. P. 19 because the controversy could be effectively resolved between the existing parties; it was not necessary for all joint tortfeasors to be joined as defendants in a single lawsuit; the supplier had not claimed an interest in this suit; and the defendant-companies could seek contribution from the supplier in a later lawsuit (Talbot Underwriting Ltd. v. Nutra Food Ingredients, LLC, No. 2:24-cv-258 (W.D. Pa. Mar. 11, 2025)).

Background. Bakery Barn LLC (bakery) manufactured protein bars containing hydrolyzed collagen. In April 2022, it received a shipment of collagen from Nutra Food Ingredients, LLC, (Nutra Food or buyer) and used it in its protein bars, only to find plastic and other foreign objects in the finished products. The bakery’s insurer, Talbot Underwriting Limited, brought suit against the buyer and against Total Food Packaging, LLC (blender), the company hired by the supplier to blend two different types of collagen powders. Nutra Food filed a third-party complaint against the blender, AusVita Nutrition, Inc. (seller), and “Collagensei/Gensei Global Industries” (supplier), seeking indemnification and/or contribution for providing contaminated collagen. The latter entity supplied collagen to AusVita, who, in turn, sold it to Nutra Food. The seller moved to dismiss the buyer’s complaint for failure to join an indispensable party under Rule 19 and failure to state a claim.

Joinder. AusVita first claimed that Nutra Food was obligated to sue the collagen supplier higher up in the chain and that Collagensei/Gensei Global Industries was a necessary or indispensable party under Fed. R. Civ. P. 19 since it was in the best position to address all design, manufacturing, packaging, labeling, and shipping issues related to the contaminated collagen. The first inquiry under Rule 19(a)(1)(A) is whether complete relief can be afforded among the parties already in the case. Here, there was no reason the court could not afford complete relief between the existing parties. A “person suffering damages due to a defective product may sue and recover from anyone in the chain of distribution[.]” Bailey-P.V.S. Oxides, LLC v. S & K Packaging, Inc., No. 8-1596, 2009 WL 3294862, at *2 (W.D. Pa. Oct. 13, 2009). The supplier, if added, would simply be a joint tortfeasor, and “[i]t is well-established that not all joint tortfeasors must be joined as defendants in a single lawsuit.” Alulis v. Container Store, Inc., No. 19-2564, 2020 WL 2556946, at *5 (E.D. Pa. May 20, 2020). Since the entire controversy could be effectively resolved between the existing parties, the supplier was not a necessary party under Rule 19(a)(1)(A).

The second inquiry under Rule 19(a)(1)(B)(i) and (ii) is whether disposition of the action without the absent party may impair or impede the party’s ability to protect its interest or lead to inconsistent judgments. Here, a finding of liability as to any or all the defendant-companies would not preclude them from bringing a later contribution claim against the supplier if a liable defendant so chose. Additionally, Collagensei/Gensei Global Industries had not otherwise claimed an interest in the case at bar, and the fact that another court may assign liability differently from this court did not subject any party to multiple or inconsistent obligations within the meaning of subsection (a)(1)(B)(ii). As such, the failure to join the supplier in this action was not grounds for dismissal.

Economic loss doctrine. AusVita also moved to dismiss Nutra Food’s complaint on the basis of the economic loss doctrine, which provides that “no cause of action [can] be maintained in tort for negligence or strict liability where the only injury was ‘economic loss’—that is, loss that is neither physical injury nor damage to tangible property.” 2-J Corp. v. Tice, 126 F.3d 539, 541 (3d Cir. 1997). Because Nutra Food’s claims against AusVita flowed from Talbot’s claims against Nutra Food, the court considered whether Talbot sufficiently alleged damage to property other than the collagen. The insurer claimed that the bakery was “forced to destroy approximately 3.5 million individual protein bars” that contained the contaminated collagen and “expended over 105 man hours in addressing the contaminated collagen[.]” Drawing all reasonable inferences in favor of the buyer, these allegations showed that Talbot sustained losses and damages to other property beyond the loss of the raw material collagen. As such, the challenged claims were not barred by the doctrine.

The case is No. 2:24-cv-258.

Judge: Ranjan, N.

Attorneys: Andrew D. Shannon (Robb Leonard Mulvihill LLP) for Talbot Underwriting Ltd. Christopher T. Yoskosky (Zimmer Kunz, PLLC) for Nutra Food Ingredients, LLC.

Companies: Talbot Underwriting Ltd.; Nutra Food Ingredients, LLC

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