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Law360 (February 18, 2021, 9:35 PM EST ) Molecular laboratory TruGenX launched a $1.5 million complaint Thursday accusing supplier Thermo Fisher Scientific Inc. of selling it faulty equipment that led to false and invalid COVID-19 test results during the height of the pandemic.
Thermo Fisher repeatedly promised to investigate and resolve the issues, only to keep charging TruGenX and ultimately blame the company for the unsolved problems when TruGenX sought reimbursement, according to the lawsuit, filed in New Jersey federal court.
Lyndhurst, New Jersey-based TruGenX claims that Waltham, Massachusetts-based Thermo Fisher knew about the product defects given that they had sparked a regulatory alert, a manufacturer recall and an internal investigation.
The company "has incurred significant costs" related to the defective equipment and fraudulent misrepresentations, affecting its "testing capabilities, business relationships with referring providers, and ability to report valid results" to the providers and public health authorities, the complaint said.
The complaint lodges counts of breach of contract, breach of express warranty, fraud and negligent misrepresentation. TruGenX is seeking punitive damages, along with attorney fees and court costs.
TruGenX began buying COVID-19 testing supplies from Thermo Fisher in April and issues began to "ensue shortly thereafter," leading TruGenX to produce a number of inconclusive results, invalid tests and testing failures, according to the complaint.
The complaint details how, between April 2020 and early 2021, TruGenX regularly raised issues about the purported product defects with Thermo Fisher officials, who often delegated concerns to a tech department that was unable to offer resolutions. TruGenX contends that it regularly provided data files and reports to Thermo Fisher as evidence to help the company troubleshoot.
On one occasion, a Thermo Fisher field applications scientist visited the lab and confirmed that the problems were not caused by TruGenX personnel, workflow or procedures, and that TruGenX had followed protocol, according to the complaint.
In August, the U.S. Food and Drug Administration issued a public alert to health care providers and laboratories about the risk of false results based on two issues with Thermo Fisher's COVID-19 testing products, the complaint said. In response, Thermo Fisher updated its instructions to labs and labs had to update their software, according to the complaint.
In September, Thermo Fisher subsidiary Life Technologies Corporation recalled a COVID-19 testing kit and its related software and recommended that labs update their software, according to the complaint. The recall was still in effect as of Thursday, TruGenX claimed.
But testing issues persisted and had grown "progressively worse" by November, according to TruGenX. Product replacements, which the lab was charged for, "were often delayed, missing, incorrect or undelivered," and the ones that were delivered led to the same poor results, the complaint said.
During a December conference call with TruGenX, Thermo Fisher executives admitted that the company was negligent regarding the testing equipment and promised to contact the lab soon with results of an internal investigation, the complaint said.
That information never came, TruGenX claimed, adding that it was unable to reach the executives.
Around that time, TruGenX discussed with Thermo Fisher executives the possibility of getting credit for the unusable inventory, but Thermo Fisher continued to charge for defective testing supplies and replacements, according to the complaint.
In early January, TruGenX informed Thermo Fisher that it had no choice but to stop all COVID-19 testing due to Thermo Fisher's inability to fix its products, the complaint said.
Over the next week, the field applications specialist who had visited the lab earlier accused TruGenX of misusing the products, and Thermo Fisher executives sent TruGenX a letter indicating that they were unable to "identify and confirm the root cause" of the issues. Thermo Fisher's senior quality and compliance manager "then brazenly shifted the cause of the issues onto" TruGenX, the complaint said.
Representatives for the parties didn't immediately respond to requests for comment on Thursday.
Gene Tox Worldwide LLC is represented by Frank X. Wukovits and John W. Leardi of Buttaci Leardi & Werner LLC.
Counsel information for Thermo Fisher was unavailable.
The case is Gene Tox Worldwide LLC d/b/a TruGenX v. Thermo Fisher Scientific Inc., case no. 2:21-cv-02854, in the U.S. District Court for the District of New Jersey.
--Editing by Karin Roberts.
For a reprint of this article, please contact reprints@law360.com.
