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Bausch & Lomb Goes to Court to Force Insurers to Pay for Renu with MoistureLoc Lawsuits

Jan 7, 2008 | Parker Waichman Alonso LLP

Bausch & Lomb, maker of the recalled Renu with MoistureLoc contact lens solution, is trying to force several insurance companies to help it pay for more than 1,000 lawsuits filed against the company over the tainted product.  That insurance battle is just one example of how the Renu with MoistureLoc recall is still causing problems for the company. Nearly two years later, Bausch & Lomb is still facing serious legal and financial ramifications of the Renu with MoistureLoc disaster.

In 2006, Bausch & Lomb’s Renu with MoistureLoc Contact Lens Solution was  linked to Fusarium Keratitis, a rare eye infection that has the potential to cause blindness. The company pulled Renu with MoistureLoc from Asian markets in February 2006, and did the same in the U.S. in April, before finally issuing a worldwide recall on May 15, 2006. The Centers for Disease Control (CDC) determined that bad hygiene habits among users were not to blame for the infections, but that the contact lens solution appeared to have poor disinfectant qualities. In October of 2006, the Food & Drug Administration (FDA) issued a warning letter to Bausch & Lomb, criticizing the company for not reporting nearly three dozen infections linked to Renu with MoistureLoc that occurred before sales of the product were suspended. The letter also cited the company for numerous violations found during a May inspection of its Greenville, South Carolina manufacturing plant.

Now, Bausch & Lomb faces more than 1,000 product liability lawsuits over Renu with MoistureLoc, and some legal experts believe the company could end up paying out more than $1 billion in damages.  The company recently filed lawsuits against four of its insurers to force them to help pay the costs of litigation.  So far, the companies have refused to make any payments, according to the complaint filed in federal court in Rochester, NY.  Two of the companies, Ace American Insurance and Illinois Union, have filed a countersuit. The other two, Lexington Insurance and Steadfast Insurance, are expected to respond to the Bausch & Lomb lawsuit by Jan. 15.

The Renu with MoistureLoc product liability lawsuits aren’t the only problems Bausch & Lomb faces from the recall.   The recall was the driving factor behind a more than 20 percent profit reduction in 2006 for the Rochester company.   In October, in an attempt to stem the bleeding, Bausch & Lomb was acquired by the private equity firm Warburg Pincus for $3.67 billion.  Following the buyout, Bausch & Lomb ceased to be a publicly traded company, a status it has held for over 69 years. However, Warburg Pincus has indicated that Bausch & Lomb could again become a publicly traded company within five to seven year.