Abbott Laboratories has agreed to pay approximately $385 million to resolve a civil False Claims Act lawsuit brought by the Justice Department and several states. The settlement addresses allegations of Cronobacter bacterial contamination at the company’s powdered infant formula facility in Sturgis, Michigan, the department announced on Monday.
The agreement follows a parallel criminal investigation that federal authorities closed earlier this year. Although Assistant Attorney General Tyson Duva supported felony charges, senior DOJ leadership declined to pursue them, with a source telling CBS News that a civil resolution under the False Claims Act was “the best mechanism to achieve accountability, deterrence and protection of the public.”
The civil complaint alleged that Abbott allowed its manufacturing environment to become unsafe, causing government programs to purchase powdered infant formula produced under unsanitary conditions. The government asserted that these conditions posed unacceptable risks of microorganism contamination and severely compromised product reliability and safety.
Associate Attorney General Stanley Woodward condemned the company’s actions, stating, “No company should be gambling on the health and safety of our nation’s infants by allowing unsanitary conditions to persist at a facility manufacturing baby formula.”
In response, Abbott Laboratories stated that the settlement does not constitute an admission of fault or liability. The company noted that government regulators tested unopened formula from the homes of infants involved in the 2022 recall and found no traces of Cronobacter sakazakii.
The decision to settle civilly rather than prosecute criminally represents a broader trend of softened enforcement in corporate cases involving public health under the Federal Food, Drug, and Cosmetic Act. This mirrors the Justice Department’s earlier nonprosecution agreement with Alibaba, which resulted in a $600 million payment despite prosecutors’ beliefs that felony charges were warranted due to the sale of dangerous drugs and chemicals over an eight-year period.
California Senator Adam Schiff initiated a congressional inquiry into the closure of the Abbott Labs criminal probe in July. Writing to Attorney General Todd Blanche, Schiff questioned the department’s priorities, asking what matters would be considered worthy of prosecution if cases involving risks to premature infants were not prioritized.
The controversy stems from a 2022 recall of major Abbott Nutrition brands, including Similac, after consumers reported infant illnesses linked to products from the Michigan plant. According to the Justice Department, the company failed to repair roof leaks, relying instead on temporary fixes that left products vulnerable to contamination. Officials further alleged that Abbott intentionally avoided testing for bacterial growth to prevent positive results and failed to disclose known contamination evidence to the FDA during 2019 and 2022 inspections.
Leave a Reply