• As previously reported on this blog, a multi-state listeriosis outbreak in 2015 linked to Blue Bell Creameries LP’s ice cream products contaminated with Listeria monocytogenes led to recalls, state regulatory enforcement actions (discussed here), civil litigation (including shareholder lawsuits), and criminal prosecution of the company and its former president. According to the Centers for Disease Control and Prevention, at least 10 people were sickened with listeriosis and hospitalized in Arizona, Kansas, Oklahoma, and Texas, and three people in Kansas died.
  • Pursuant to a plea agreement filed in federal court in Austin, Texas, in May 2020, the company pled guilty to two misdemeanor counts under the Federal Food, Drug, and Cosmetic Act of distributing adulterated ice cream products through interstate commerce. After conviction, Blue Bell was recently sentenced to pay $17.25 million in criminal penalties ($9.35 million in criminal fines and $7.9 million in forfeiture). According to the U.S. Department of Justice (DOJ), this represents the largest-ever criminal penalty following a conviction in a food safety case.
  • Blue Bell also agreed to pay an additional $2.1 million to resolve civil False Claims Act allegations regarding ice cream products manufactured under insanitary conditions and sold to federal facilities. According to DOJ, the combined total of $19.35 million in fine, forfeiture, and civil settlement payments constitutes the second largest-ever amount paid in resolution of a food-safety matter (the largest to date is a $25 million fine paid by Chipotle Mexican Grill Inc. in connection with a three-year deferred prosecution agreement to avoid conviction through implementation of an improved food safety program). According to the U.S. Department of Justice’s (DOJ) press release announcing the Blue Bell plea agreement, since reopening its facilities in late 2015, Blue Bell has taken significant steps to enhance sanitation processes and enact a program to test products for listeria prior to shipment.
  • In a related federal action in the same court, Blue Bell’s former president, Paul Kruse, was charged with seven felony counts (including attempt and conspiracy to commit mail fraud, wire fraud, and attempted wire fraud) for his alleged efforts to conceal from customers what the company knew about the listeria contamination. Among other allegations, Kruse allegedly directed Blue Bell employees to remove potentially contaminated products from store freezers without notifying retailers or consumers about the real reason, directed employees to tell customers who inquired that there was an unspecified issue with a manufacturing machine instead of informing them that samples of the products had tested positive for listeria, and directed employees to conceal and destroy evidence. In July 2020, the court dismissed the felony charges for lack of subject-matter jurisdiction, after Kruse successfully argued that while prosecutors had filed an information to charge him, they had failed to properly secure the required indictment or, in the alternative, a waiver of the right of indictment.

 

 

  • A multi-state listeriosis outbreak linked to consumption of Blue Bell Creameries’ ice cream products in 2015 lead to state regulatory enforcement actions (discussed here) and multiple civil lawsuits.  As our readers may recall, Blue Bell did not recall any products that had tested positive for Listeria monocytogenes until after hospitalizations and deaths had occurred.  FDA later published inspectional observations for Blue Bell production facilities indicating the company was aware of food safety violations in facilities dating back to 2007 and positive tests for Listeria monocytogenes in one plant as far back as 2013.  Thus, criminal charges may have been expected to follow.
  • According to its May 1, 2020 Press Release, the U.S. Department of Justice filed a plea agreement in a Texas federal court whereby Blue Bell has plead guilty to two misdemeanor counts of distributing adulterated ice cream products and has agreed to pay a criminal fine and forfeiture of $17.25 million.  Blue Bell also agreed to pay an additional $2.1 million to resolve civil False Claims Act allegations regarding ice cream products manufactured under insanitary conditions and sold to federal facilities.  The total $19.35 million in fine, forfeiture, and civil settlement payments constitutes the second largest-ever amount paid in resolution of a food-safety matter.
  • In a related federal action, Blue Bell’s former president, Paul Kruse, was charged with seven felony counts for his alleged efforts to conceal from customers what the company knew about the listeria contamination.  Kruse allegedly directed other Blue Bell employees to remove potentially contaminated products from store freezers without notifying retailers or consumers about the real reason and directed employees to tell customers who asked that there had been an unspecified issue with a manufacturing machine instead of that samples of the products had tested positive for listeria.

FDA issues public update regarding listeriosis outbreak linked to ice cream products.

  • FDA has many tools in its arsenal to prevent and respond to food contamination issues; these include the Agency’s inspection power and various enforcement authorities (e.g., warning letters, mandatory recall orders in class I situations, administrative detention, seizure, suspension of facility registration).  In addition to its formal authorities, the Agency also has at its disposal the power of publicity.
  • Over the past two months, Blue Bell Creameries conducted a series of high-profile recalls after its ice cream products were linked to listeriosis outbreaks in multiple states, resulting in hospitalizations and deaths.  As of April 20, 2015, Blue Bell voluntarily expanded its recall to include all products currently on the market due to potential contamination with Listeria monocytogenes.  On May 7, 2015, FDA published an update on its website alerting consumers to the scope and nature of the problem and releasing a series of inspectional observations from Blue Bell production facilities in three states.  The inspectional observations indicate that one processing facility was aware of positive tests for Listeria monocytogenes in the plant as far back as 2013.
  • Media outlets quickly began publicizing FDA’s findings, focusing on Blue Bell’s alleged longstanding awareness of a potential problem.  It will not be surprising if a host of class action lawsuits are filed in the wake of this negative publicity.  Situations such as this should serve as a reminder to the food industry that above and beyond FDA’s traditional enforcement tools, the Agency’s power of publicity should not be underestimated.

 

  • A large number of pathogen-related recalls of ice cream (16 over the three-year period of 2013, 2014, and 2015) and a deadly outbreak of listeriosis in 2015 that was linked to ice cream from Blue Bell Creameries (reported here), spurred a special assignment by the Food and Drug Administration (FDA).  Specifically, FDA conducted inspections and environmental sampling of 89 of the nation’s largest ice cream production facilities in 32 states from September 12, 2016, to August 30, 2017.
  • On April 24, 2019, FDA announced the release of its report on the inspection and environmental sampling of about 16% of the domestic ice cream manufacturers in fiscal year 2017/2017 for Salmonella and Listeria monocytogenes.  FDA’s activity began about a month before larger food facilities were required to comply with the Preventive Controls for Human Food Rule that was established by the Food Safety Modernization Act (FSMA).  No objectionable conditions or practices were found at 44 of the 89 inspected plants.  Listeria monocytogenes was detected on non-food contact surfaces in 19 plants and from a food contact surface at 1 plant.  Salmonella was less prevalent, reportedly detected only from a non-food contact surface and only in one facility.
  • FDA suspended Food Facility Registration for one of the inspected plants, Working Cow Homemade, Inc., after it was linked to a clinical listeriosis case.  After ceasing operations, the firm later resumed business as a warehouse distributor of ice cream products with no production operations.  FDA worked with two other firms to conduct voluntary recalls, held seven regulatory meetings, and notified management at 39 facilities of the need to take voluntary corrective actions.  FDA is also conducting follow-up inspections at all six of the facilities where objectionable conditions or practices warranting official action were observed in the first inspection.
  • FDA’s findings underscore the need for ice cream production plants and other food production facilities to develop and implement a food safety plan.  Please email us at fooddrug@khlaw.com with any questions regarding the Preventive Controls for Human Food Rule or other FSMA requirements.

 

Blue Bell signs agreements with three states to address Listeria contamination.

  • As previously covered on this blog, Blue Bell Creameries has been dealing with the aftermath of a multi-state listeriosis outbreak linked to consumption of its ice cream products.  FDA has published inspectional observations for Blue Bell production facilities, indicating the company’s awareness of food safety violations in facilities dating back to 2007, as well as positive tests for Listeria monocytogenes in one plant as far back as 2013.
  • Blue Bell has signed voluntary agreements with health departments in Alabama, Oklahoma, and Texas specifying various steps that the company plans to take to address Listeria contamination prior to resuming the sale of products in these states.  The agreements include action items such as conducting root cause analyses to identify sources and potential sources of contamination; retaining the services of an independent microbiology consultant; notifying the health department of presumptive positive tests for Listeria and providing access to test results; targeting Listeria response as part of the company’s environmental monitoring program; and instituting a “test and hold” program prior to product distribution.
  • The agreements are illustrative of an extra-legal or quasi-enforcement strategy that state and local health authorities may deploy in the wake of a food safety crisis.  Particularly because of the high level of publicity associated with the Blue Bell situation, the agreements could have precedential value in the handling of future multi-state outbreaks.

House Agricultural Committee votes to repeal COOL requirements.

  • As covered on this blog earlier this week, the World Trade Organization (WTO) rejected the U.S. appeal of a ruling regarding the propriety of its country of origin labeling (COOL) requirements for meat products.  The WTO’s latest action means that its earlier ruling against the COOL requirements will stand, exposing the U.S. to trade sanctions from Canada and Mexico if the government does not act to repeal or amend the requirements.
  • In response to the ruling, the House Agriculture Committee has voted to repeal the COOL requirements.  The bill, H.R. 2393, would amend the Agricultural Marketing Act of 1946 such that labels for beef, pork, and chicken products would not need to declare where animals were born, raised, and slaughtered.
  • Because the controversial COOL requirements were imposed by statute, a legislative fix was the only viable way for the U.S. to act in a manner consistent with the WTO ruling.  It is hoped that Congress will act quickly to enact this legislation to avoid significant retaliatory tariffs from neighbors in trade.

FDA releases additional Blue Bell inspection reports.

  • As covered on this blog yesterday, Blue Bell Creameries continues to face the ramifications of a multi-state listeriosis outbreak linked to consumption of its ice cream products.  FDA has published inspectional observations for Blue Bell production facilities, indicating the company’s awareness of positive tests for Listeria monocytogenes in one plant as far back as 2013.  At least one private lawsuit has been filed in the matter, with others likely to follow.
  • Responding to a request from a Dallas newspaper, FDA now has released four additional inspection reports from Blue Bell facilities dating back to 2007.  Although the earlier reports do not indicate Listeria contamination, they cite numerous violations of food safety protocols.
  • The additional negative publicity is likely to provide additional fodder for the upcoming complaints that we expect to be filed in this matter.  FDA’s willingness to issue public updates and to share the results of specific inspections indicates the Agency’s continued use of the media as a quasi-enforcement tool.

ConAgra to pay $11.2 million in connection with Salmonella outbreak.

  • In 2006-2007, Peter Pan peanut butter produced by ConAgra Foods, Inc. was recalled in connection with a nationwide Salmonella Tennessee outbreak.  The outbreak resulted in hundreds of infections and hospitalizations across 44 states.  The contamination ultimately was traced to plant and equipment conditions in a Georgia facility.  In 2011, the federal government launched a criminal investigation into the matter.
  • To resolve the investigation, ConAgra has agreed to plead guilty to a single misdemeanor violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act).  Under the plea agreement, the company would pay a fine and forfeiture in the amount of $11.2 million.  The plea agreement must be approved by the U.S. District Court in Albany, Georgia.
  •  The ConAgra situation serves as a reminder to industry that the FD&C Act is a criminal statute with potentially severe financial and other penalties for violations.  Although many FDA enforcement actions ultimately are resolved before turning into criminal proceedings, plea agreements of this nature show that FDA (working through federal prosecutors) can impose significant consequences for companies when problems in a facility are linked to outbreaks of foodborne illness.

First lawsuit filed in wake of Blue Bell listeriosis outbreak.

  • In recent months, Texas-based Blue Bell Creameries has recalled all of its products after the company’s ice cream was linked to listeriosis outbreaks in multiple states, resulting in hospitalizations and deaths.  FDA published an update alerting consumers to the issue and released a series of inspectional observations from Blue Bell production facilities, indicating the company’s awareness of positive tests for Listeria monocytogenes in one plant as far back as 2013.  We speculated that class action lawsuits were likely to follow.
  • As anticipated, the first lawsuit has now been filed.  The affected consumer states that he contracted a severe listeriosis infection after consuming Blue Bell products in 2013 and alleges that Blue Bell acted with gross negligence for failure to use adequate sanitation in its plant to prevent product contamination.  The complaint includes specific references to the inspectional observations that FDA recently made public in connection with Blue Bell’s product recall.
  • The lawsuit filed in this case is unlikely to be the last that Blue Bell faces in connection with the listeriosis outbreak.  Again, it serves as a reminder to industry that FDA regulatory violations can trigger significant product liability and litigation implications where human health consequences result.