Blue Bell Lawsuit Hits News Again

Another Blue Bell lawsuit hits the news again. This time, targeting directors and officers on the company’s board. This case comes nearly 9 years after the Listeria outbreak linked to the Texas ice cream company.

Will the outcome of this case impact future activities in other board rooms?

The Outbreak

The original outbreak was officially linked to 10 people across four states. Arizona, Kansas, Oklahoma, and Texas. All associated cases were serious enough to require hospitalization. Three of the outbreak patients died – all reported from Kansas. Connected cases spanned from January 2010 through January 2015.

The outbreak investigation began in February 2015, when a South Carolina Department of Health and Environmental Control routine sampling activity revealed the presence of Listeria monocytogenes in a few Blue Bell products.

Blue Bell Creamery, a huge name in ice cream was linked to these cases.

In March 2015, five people were reported as infected with the same strain of Listeria and linked to the outbreak. Some of these illnesses occurred more than a year prior, however all four cases reported consuming milkshakes made from Blue Bell ice cream products. Three of those people died as a result of invasive Listeria infection.

By mid-March 2015, certain Blue Bell Creameries products were removed from the market and the company reported that they shut down that production line at the Brenham, Texas facility.

More products were linked to the outbreak later in March 2015, including some that were made at the company’s other facility in Broken Arrow, Oklahoma.

In April 2015, an additional seven people from the states of Arizona, Oklahoma, and Texas were identified with the outbreak Listeria strain.

The outbreak investigation ended in May 2015, however concerns of recalled products remaining in consumers’ freezers was a huge problem.

Retailers were urged to check stock and consumers were urged to check their freezers to ensure they do not have recalled products in their homes.

The First Blue Bell Lawsuit in 2020 Ended with Plea Agreement

In 2020, Blue Bell agreed to plead guilty to two misdemeanor counts of distributing adulterated ice cream products and pay a criminal fine and forfeiture amount that totaled $17.25 million. An additional $2.1 million was also paid to resolve civil False Claims Act allegations for selling ice cream products manufactured under insanitary conditions to federal facilities.

This $19.35 million resolution marked the second largest on record for a food safety matter.

Former Blue Bell President Charged in Criminal Case

In a separate but related case, Blue Bell’s former president, Paul Kruse was charged with seven felony counts related to his alleged efforts to hide what the company knew about the Listeria contamination.

This case was brought about due to allegations that he directed Blue Bell employees to remove potentially contaminated products from store freezers without explaining the true reason for the withdrawal. These employees were allegedly instructed to say that the removal was due to an unspecified issue with a manufacturing machine instead of indicating that products had tested positive for Listeria if pressed for an explanation.

This case went to trial in August 2022 and resulted in a mistrial.

Mr. Kruse subsequently agreed to a plea agreement and criminal information that led to a criminal misdemeanor violation of the Food, Drug, and Cosmetic Act.

The New Blue Bell Lawsuit is Aimed at the Company’s Board

A case that was originally brought in 2017 and remained without progress is the new Blue Bell lawsuit that has recently hit the news. A panel has moved to reactivate this Delaware Court of Chancery derivative suit aimed to hold the company’s past directors and officers accountable in “food-safety oversight failures” related to the 2015 Listeria outbreak.

A committee has filed a motion to move the case forward.

But will it?

The case has bounced back and forth up and down the court system but has not made progress. Recently, however, a decision has been made that would allow the pursuit of litigation on behalf of the company.

The stance behind this case involves alleging “to support a reasonable inference that the Blue Bell board failed to implement any system to monitor Blue Bell’s safety performance or compliance” for mission-critical responsibilities. A role that did not exist at the time for the board. But should have.

Additionally, an earlier suit alleged that the company and its leadership not only was negligent for the sanitation issue not being addressed, but the company did nothing to investigate the cause of Listeria contamination.

What Does This New Blue Bell Lawsuit Mean for Future Cases?

So, what exactly does this new Blue Bell lawsuit mean for future cases? It could set a legal standard, called a precedence. This would pave the way for other similar suits against the role a company’s board of directors and officers are held in safety cases.

If a board can sway the direction of the company, the expectation is that these people are also responsible for the safety of the end product. Or at the very least, the tools to keep the product safe.

Have You Become Sick from a Listeria Outbreak?

If you have become seriously ill and involved in a Listeria outbreak? You may have a legal case.

The Lange Law Firm, PLLC has helped many families with cases just like yours help hold accountable those responsible for foodborne illness. An experienced Listeria lawyer can help navigate you through the legal process so you and your family can do the difficult job of recovering while having the peace of mind that you have someone fighting for you.

Call (833) 330-3663 or submit your information on the online submission form for a free consultation.

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By: Heather Van Tassell (contributing writer, non-lawyer)