A US District Judge has ruled that the American Red Cross must face part of a lawsuit filed by Massachusetts-based Verax Biomedical Inc. The lawsuit alleges that the Red Cross attempted to stifle competition in the market for anti-contamination treatments related to blood clotting.
The judge, Patti Saris, allowed Verax to move forward with claims that the Red Cross violated a state unfair-competition law and intentionally harmed its contracts with hospitals, reported Reuters.
Verax Biomedical Inc, known for its blood-testing product, filed the lawsuit in February, specifically targeting the Red Cross’s alleged interference with Verax’s services designed to reduce bacterial contamination in blood platelets—a crucial component for preventing bleeding.
While Judge Saris dismissed Verax’s claim that the Red Cross violated U.S. antitrust law, citing the organization’s status as an “instrumentality of the United States,” she allowed the claims related to state unfair-competition law and intentional contractual harm to proceed. The judge also rejected Verax’s defamation claim against the American Red Cross.
In response to the ruling, a spokesperson for the American Red Cross stated on Monday that the organization appreciated the court’s review and expressed satisfaction with the outcome, reinforcing their stance that the lawsuit lacked merit. Verax and its legal representatives have yet to respond to requests for comments on the recent development.
Verax’s lawsuit alleges that the American Red Cross, which claims to provide approximately 40% of the country’s blood and blood components, attempted to persuade customers to switch to the organization’s own “pathogen reduction treatment.” The Red Cross vehemently denies these claims and, in April, informed Judge Saris that they had adopted technology different from Verax’s testing product.
The U.S. Justice Department intervened in the case, arguing that the Red Cross could be subject to a federal antitrust lawsuit under the Sherman Act. However, it did not assert that the organization should be held liable. The Red Cross countered by stating that accepting the government’s argument would expose other entities performing “vital government functions” to federal antitrust liability.
Judge Saris, in her ruling, emphasized that the “goals, obligations, and powers” of the American Red Cross support treating it as “a public rather than a private entity.” This distinction played a crucial role in the decision to dismiss the antitrust claims while allowing other aspects of Verax’s lawsuit to proceed. The case raises important questions about the intersection of public entities, antitrust laws, and competition in critical sectors such as healthcare.