Saying that the nation’s food supply is non-negotiable, the Department of Justice announced a settlement with Abbott Laboratories for more than $384 million related to the 2022 infant formula crisis.
The company was linked to an outbreak of cronobacter infections that saw two infants die after consuming powdered infant formula products made by Abbott’s Sturgis, MI, production plant.The company’s recall of several brands and varieties of infant formula, including Similac, led to a severe nationwide shortage, including shortages of formula contracted by federal and state governments.
The settlement announced Sept. 14 resolves claims by the federal government related to allegations about false claims and is not a determination of liability on the part of the company. Numerous court actions brought by parents are pending.
The settlement relates to the fact that Abbott caused false claims to be submitted between Jan. 1, 2018, and Dec. 31, 2022, to federal and state programs arising from its failure to manufacture certain powdered infant formula and nutritional therapy products at its Sturgis, MI, and Casa Grande, AZ, facilities in compliance with federal and state statutory, regulatory and contractual requirements.
Under the civil settlement agreement, Abbott will pay $348,700,868 to the United States to resolve the False Claims Act allegations and an additional $36,298,172 to certain states for claims settled by their Medicaid and WIC programs.
The civil settlement also resolves claims brought under the False Claims Act’s qui tam provisions, which allow private individuals to bring suit on behalf of the United States for false claims submitted to federal programs and to share in any recovery. Abbott employees Scott Millard, Kristine Cooper and Loren Cooper will receive $69 million as their share of the federal settlement.
Food safety expert and Seattle attorney Bill Marler said Congress can go a step further than the resolution of the False Claims case in the fight for safe infant formula. There is pending legislation that would address safe production of infant formula.
“Today the Justice Department found $385 million worth of accountability for how infant formula was made between 2018 and 2022. Every dollar of it is backward-looking, and not one dollar of it requires anyone to run a single additional test tomorrow. Congress can do that part. It has had a bill since March,” Marler said.
On Nov. 13, 2025, the United States filed its Complaint in Intervention alleging that Abbott caused government programs to purchase powdered infant formula manufactured at the Sturgis facility despite the products’ failure to meet statutory, regulatory and contractual requirements. The Complaint alleged that Abbott knowingly manufactured infant formula purchased with taxpayer dollars in an environment that put the products at unacceptable risk of microorganism contamination and significantly impacted the products’ reliability, quality and safety.
“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,” said Acting Deputy Attorney General Trent McCotter.
Associate Attorney General Stanley E. Woodward, Jr. said: “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. The department will hold accountable bad actors that knowingly misrepresent compliance with essential health and safety standards designed to protect American families.”
In addition to the Department of Justice, the USDA’s Office of Inspector General participated in the investigation. The USDA’s Inspector General John Walk said Abbott’s behavior was inexcusable.
In its complaint against Abbott, the federal government cited roof leaks that allowed water to drip over equipment used to produce infant formula. The complaint states that rather than addressing the leaks in a permanent manner, the company merely placed rain umbrellas to try to divert water. The company also continued to use spray dryers that transformed liquid formula into powdered product even though corporate leadership knew there were cracks and pits in them.
“Abbott made its spray dryer conditions worse by lengthening the number of product batches that passed through the dryers between cleaning cycles — enabling Abbott to increase production,” according to a statement from the Department of Justice.
In addition to continuing to operate the dryers to increase production and therefore sales, the government contends that the company intentionally did not test for bacterial growth to avoid obtaining positive test results showing contamination, and that in certain instances where testing demonstrated “micro” contamination, Abbott failed to disclose the test results when responding to requests from FDA during 2019 and 2022 inspections at the Sturgis facility.
The False Claims action against Abbott states that the USDA funds and regulates the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program, which provides nutritional support — including infant formula — to eligible participants. More than half of all infant formula purchased in the United States is paid for with USDA funds through WIC. State Medicaid Programs also cover and pay for certain infant formula.
The federal court action was a coordinated effort by the Justice Department’s Civil Division, Commercial Litigation Branch, Civil Fraud Section, and the U.S. Attorney’s Office for the Western District of Michigan, with assistance from USDA’s Office of Inspector General.
The matter was handled by Civil Fraud Section Trial Attorneys Asha Natarajan and Erin Colleran of the Justice Department’s Civil Division and Assistant U.S. Attorneys Whitney Schnurr and Jacob Carlton for the Western District of Michigan.