On May 1, 2020, Blue Bell Creameries L.P. (Blue Bell) and the U.S. Department of Justice (DOJ) entered into two separate agreements related to the 2015 listeriosis outbreak linked to Blue Bell ice cream. This memorandum provides an overview of the negotiated agreements, the facts giving rise to the agreements, and key takeaways for the food industry. These takeaways include: (1) DOJ continues to actively pursue criminal investigations of companies in the food industry; (2) DOJ places a high interest not just on food safety, but also on the company’s communications with the public and its customers; (3) DOJ will take note of remediation efforts implemented by food manufacturers for the purposes of negotiated agreements; and (4) the False Claims Act is a statute that food manufacturers should become familiar with in short order, particularly if they sell food products to government customers.
In the first agreement with DOJ, Blue Bell agreed to plead guilty to two strict liability misdemeanors under the Federal Food, Drug, and Cosmetic Act (FFDCA) and pay a criminal fine and forfeiture totaling $17.25 million. In the second agreement with DOJ, Blue Bell also agreed to pay $2.1 million to resolve (without any admissions of liability) civil False Claims Act allegations regarding ice cream product sold to federal government customers. The total of $19.35 million in fine, forfeiture, and civil settlement payments is the second largest amount ever paid to resolve a food safety matter.
Separately, the former president of Blue Bell was charged with seven felony counts alleging that he orchestrated a scheme to deceive certain Blue Bell customers after he learned that products from the company’s Texas factory tested positive for Listeria monocytogenes.
Disclosure: Hogan Lovells represented Blue Bell in connection with these matters. The information contained in this client alert is based strictly on publicly available information. Hogan Lovells does not represent the former president of Blue Bell.
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