Abbott to Pay $384.99 Million to Settle False Claims Act Case Over Sturgis and Casa Grande Infant Formula

Abbott Laboratories has agreed to pay $384,999,040 to resolve civil False Claims Act allegations that it caused false claims to be submitted to federal and state health programs for powder infant formula and nutritional therapy products made at its Sturgis, Michigan, and Casa Grande, Arizona, plants between January 1, 2018, and December 31, 2022, the U.S. Department of Justice announced. The claims resolved by the settlement are allegations only, and there has been no determination of liability, according to the Justice Department.

How the settlement is structured

Under the civil settlement agreement, Abbott will pay $348,700,868 to the United States to resolve the False Claims Act allegations, plus an additional $36,298,172 to certain states for claims settled through their Medicaid and WIC programs, the DOJ said. Together those two figures add up to the total $384,999,040 payment. More than half of all infant formula purchased in the United States is paid for with USDA funds through WIC, and state Medicaid programs also cover formula costs, which is how the government came to have a financial stake in the products' compliance with federal and state requirements.

The resolution is a civil settlement of a qui tam case, brought under the False Claims Act's whistleblower provisions, captioned United States, et al., ex rel. Scott Millard, et al., v. Abbott Laboratories, No. 1:22-cv-994, in the U.S. District Court for the Western District of Michigan. Three relators in the case who were Abbott employees, Scott Millard, Kristine Cooper and Loren Cooper, will receive $69 million as their share of the federal settlement, the DOJ said. The United States filed its Complaint in Intervention on November 13, 2025, alleging Abbott caused government programs to purchase powder infant formula manufactured at the Sturgis facility despite the products' failure to meet statutory, regulatory and contractual requirements.

There was no finding of liability and Abbott did not admit wrongdoing as part of the settlement. Abbott said in a statement that the Justice Department closed a related criminal investigation, according to reporting carried by AOL.

What the government alleged inside the Sturgis plant

The DOJ's complaint described a pattern of plant conditions and internal decisions that officials said increased contamination risk. As described in the complaint, roof leaks were a common occurrence at the Sturgis plant, leading to water running and dripping over equipment. Rather than permanently addressing the root causes, Abbott used temporary solutions such as "roof leak umbrellas" to try to divert leaks in product processing areas, even though the complaint alleges Abbott's corporate leadership understood that the wet environment put products at increased risk of microorganism contamination.

The complaint further alleged that Abbott continued to run spray dryers, which turn liquid formula into powder, even after documenting cracks and pits in the equipment that also raised the risk of contamination, particularly in the presence of moisture. The government alleged Abbott made dryer conditions worse by lengthening the number of product batches passed through the dryers between cleaning cycles in order to increase production. According to the complaint, Abbott intentionally did not test for bacterial growth to avoid obtaining positive results showing contamination, and in certain instances where testing did show contamination, the company failed to disclose those results when responding to FDA requests during 2019 and 2022 inspections at Sturgis.

Officials and Abbott respond

Acting Deputy Attorney General Trent McCotter called the settlement "a victory for American families" that "makes clear the safety of our children is not negotiable," adding that "Abbott will pay a substantial sum to resolve serious allegations it violated federal health and safety requirements designed to protect babies," according to the DOJ. 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."

Abbott, in a statement carried by AOL, said "nothing matters more than the safety and quality of Abbott's products," adding that no unopened, distributed Abbott infant formulas have ever tested positive for the bacteria at issue. The company said it makes infant formula "with the same care" it would for its own families and is "deeply committed to earning and maintaining caregivers' trust."

The resolution was handled 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 the USDA's Office of Inspector General.

Separate from the personal-injury litigation

This civil fraud settlement is distinct from a separate track of personal-injury litigation Abbott has been navigating over its specialty formulas for preterm infants. According to Yahoo Finance, Abbott said on August 20, 2026, that it had reached a $670 million settlement with three law firms to resolve claims by 2,000 people who alleged harms relating to its specialty formulas for preterm infants, a deal that includes one large case in which Abbott had already been ordered to pay $495 million. Yahoo Finance reported that about 1,000 similar necrotizing enterocolitis (NEC) lawsuits have been filed against Abbott, which makes Similac formulas, and against Reckitt's Mead Johnson unit, which makes Enfamil formulas, with more than 800 of the cases centralized in an Illinois federal court and others pending in state courts including Illinois, Missouri and Pennsylvania. Separately, plaintiffs' law firm Motley Rice reported that as of January 5, 2026, there were 769 pending actions in the related multidistrict litigation docket, In re: Abbott Laboratories, et al., Preterm Infant Nutrition Products Liability Litigation, MDL No. 3026.

NEC mostly affects premature newborns, causes the death of bowel tissue, and has an estimated mortality rate of more than 20%, according to Yahoo Finance's reporting. Abbott and Mead Johnson have said that while breast milk protects against the disease, their formulas do not cause it. The DOJ's announcement of the $384,999,040 False Claims Act settlement addresses claims submitted to federal and state health programs and makes no reference to the separate personal-injury cases, which involve private plaintiffs rather than government purchasers.

The False Claims Act case traces back to Abbott's 2022 recall and closure of the Sturgis plant, which followed the discovery of traces of a potentially deadly bacteria at the facility, according to reporting carried by AOL. That recall and closure worsened a national infant-formula shortage that had begun amid pandemic-era supply-chain problems.

Bottom Line

The $384,999,040 figure resolves civil, not criminal, allegations under the False Claims Act, and Abbott said the Justice Department closed a related criminal investigation. Abbott admitted no wrongdoing, and the settlement is formally described as resolving allegations only, with no determination of liability. It sits alongside, but separate from, the company's $670 million settlement of private necrotizing enterocolitis claims disclosed about three weeks earlier — a reading of the two resolutions that indicates Abbott's formula-related legal exposure has run on two distinct tracks: government false-claims liability tied to Medicaid and WIC purchases, and private personal-injury litigation over preterm-infant formula that remains active in federal and state courts.