Company agrees to pay almost $385 million without admitting fault

September 14, 2026

The US Department of Justice (DoJ) and Abbott Laboratories have agreed to settle a federal lawsuit that was filed by the DoJ in November of 2025.

The lawsuit alleged that Abbott had “…caused government programs to purchase powder infant formula manufactured at the Sturgis facility despite the products’ failure to meet statutory, regulatory, and contractual requirements.”

In its November 2025 filing, the DoJ alleged that the company

• failed to maintain its Sturgis, Michigan facility in a clean and sanitary condition
• knowingly operated deteriorated major manufacturing equipment (spray dryers)
• failed to validate key manufacturing processes
• failed to maintain adequate testing records and failed to investigate positive results
• avoided testing for the presence of microorganisms
• failed to disclose to the FDA that the Sturgis facility had a recurring presence of microorganisms and failed to disclose positive test results to the FDA
• falsely certified compliance with statutory, regulatory, and contractual requirements for WIC powder infant formula manufactured at the Sturgis facility

The backstory in a nutshell

On February 17, 2022, the FDA issued a warning to consumers not to use multiple Similac, Alimentum, or EleCare powdered infant formulas in response to reports of four illnesses among infants who had been fed the indicated products. Abbott initiated a voluntary recall of the products and suspended production pending the outcome of an FDA investigation.

The complaints spanned a period of time from September 6, 2021 to December 18, 2021, and were reported from Minnesota (1), Ohio (1) and Texas (2). Three of the infants were infected with Cronobacter sakazakii, and one with Salmonella Infantis. One of the infected infants died.

During its follow-up investigation of the company’s Sturgis manufacturing facility, the FDA uncovered multiple serious violations of good manufacturing practices, which were included in the DoJ’s list of allegations (see above).

In May 2022, the FDA and Abbott entered into a consent decree designed to allow Abbott to resume production under the close supervision of the FDA.

A tale of two news releases

The DoJ takes a victory lap

In its news release announcing the settlement agreement with Abbott, the DoJ took a victory lap while also summarizing some of the many maintenance and production flaws in general terms.

“Today’s settlement is a victory for American families and makes clear the safety of our children is not negotiable,” said Acting Deputy Attorney General Trent McCotter.  “Abbott will pay a substantial sum to resolve serious allegations it violated federal health and safety requirements designed to protect babies. The Justice Department will act decisively against anyone who puts American families at risk and ensure misconduct carries serious consequences.”

“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,” said Associate Attorney General Stanley E. Woodward, Jr. “The Department will hold accountable bad actors that knowingly misrepresent compliance with essential health and safety standards designed to protect American families.”

 “It is critical that infant formula manufacturers adhere to regulatory and contractual requirements to ensure that the products they manufacture are safe for the babies who consume them,” said U.S. Attorney Timothy VerHey for the Western District of Michigan. “This settlement demonstrates our commitment to holding manufacturers accountable when the United States pays for noncompliant products.”

“Parents rely on companies like Abbott Laboratories to responsibly follow the rules and ensure their products – especially baby formula – are safe. USDA OIG remains vigilant against those that would compromise public health and safety by failing to comply with legal standards and put infants at risk,” said USDA Inspector General John Walk.  “This behavior is inexcusable and will not be condoned.”

Abbott’s reply

Abbott’s news release disclaimed any finding of fault or liability and made no reference to the numerous violations documented during the FDA’s 2022 investigation and listed in the DoJ’s 2025 complaint.

Instead, while not denying the presence of Cronobacter sakazakii in its production environment, the company took pains to state that the strains of Cronobacter sakazakii found in the Sturgis production environment were different from the strains recovered from the sick infants, and that “no unopened, distributed Abbott infant formulas have ever tested positive for Cronobacter sakazakii.”

Abbott’s statement also underlined that other producers of powdered infant formula have reported “Cronobacter-related findings” in their manufacturing facilities, and that Cronobacter is found naturally in the environment.

The settlement

Most of the money from the settlement agreement ($348,700,868) will go to the federal government to resolve allegations under the False Claims Act. The remaining $36,298,172 will be distributed to certain States for claims settled by their State Medicaid and WIC programs.

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