Wal-Mart Stores, Inc., CVS Health Co. and other retailers face a new proposed class suit in the wake of a recall of generic blood pressure medication tainted with a cancer-causing substance that plaintiffs allege was once used in the production of rocket fuel.

The Food and Drug Administration announced a voluntary recall in July of several brands of generic drugs that used valsartan supplied by a Chinese company, Zhejiang Hauhai Pharmaceuticals.

At that time, the FDA found N-nitrosodimethylamine, also known as NDMA, in the recalled valsartan products.

NDMA can cause liver damage and cancer in humans, the suit says.

Plaintiffs...