Judge mulls whether New Mexico can seek medical costs in Sterigenics lawsuit

LAS CRUCES — A state court is considering whether New Mexico Attorney General Raúl Torrez can recover increased Medicaid costs in a long-running lawsuit against a medical sterilization facility in Santa Teresa.

Torrez’s predecessor, Hector Balderas, brought a lawsuit against Sterigenics, a subsidiary of Sotera Health, in 2020, alleging excessive emissions of ethylene oxide from its plant near the Santa Teresa Port of Entry had exposed county residents to elevated cancer risks.

The company has faced environmental lawsuits in other communities where it operates due to concerns about EtO, a known carcinogen the Environmental Protection Agency has identified with cancers such as non-Hodgkin lymphoma after repeated exposure. The colorless gas is used to sterilize surgical instruments that can’t be sanitized through steam or radiation.

Since 2021, Sterigenics has continued operating under a court-mandated plan for controlling emissions, including facility upgrades, as the litigation has lingered in court. The company has consistently maintained that its facilities are safe, its operations essential to the nation’s health care system, and that it has complied with the court’s injunction pertaining to its Santa Teresa plant.

On Wednesday, attorneys for the company said approximately 50 people were employed at the facility, which processes 2.5 million devices daily, complying with federal and state regulations as well as additional scrutiny under the 2021 court order.

In a hearing before state District Judge Casey Fitch, the parties debated whether the state should be allowed to pursue $1.6 million in damages for increased Medicaid claims due to cancer care it claims was caused by EtO emissions from the plant.

In 2023, attorneys for Sotera asked the judge to dismiss the lawsuit, claiming there was no evidence emissions from the plant had caused the public harms alleged in the complaint. Fitch did not dismiss the case entirely, but ruled the state had failed to present evidence allowing it to pursue medical costs, effectively closing that avenue of relief as part of a partial summary judgment. Fitch later rejected a motion from the state to reconsider his ruling.

On Wednesday, Kyle McGee argued for the state that Fitch’s decision had been premature because the state did not initially claim it had already calculated the total costs. McGee said the discovery process had been prolonged due to the complexity of retrieving relevant data from the Medicaid system, which he described as “a massive living system that is growing day by day.” He said the process had been complicated further by the sudden death of a data technician assigned to the project.

Based on an economic analysis, the state is alleging the cost to New Mexico Medicaid from Sterigenics’ emissions amounted to $1.6 million over a period from 2006 to 2013.

Unrelated to the lawsuit, in 2020 the EPA reported that Sterigenics reduced EtO emissions by 83% from 2014 to 2016. In March, the Trump Administration announced it would reconsider emission standards for hazardous air pollutants for key industries, including commercial sterilization for medical devices and spices.

Daniel Diffley, an attorney for Sotera, delivered a blistering rebuttal in which he urged Fitch to stand by his 2023 decision and again accused the state Department of Justice of misconduct deserving of dismissal.

Diffley argued the state was merely dressing up old data with an analysis by an economist who was not a medical expert. “The state did not do their due diligence” before filing their complaint five years ago, he argued, adding, “They still do not have that evidence.”

Fitch listened to the arguments during an hour-long hearing, asking few questions and promising to issue a ruling on the matter Friday.

If the judge stands by his previous decision, it leaves the question of whether Sterigenics took due precautions to limit EtO emissions to safe levels as determined by state and federal regulations, or whether it permitted pollution that caused damage to the environment and public health.

The jury trial is scheduled for next summer.