Abbott Laboratories has agreed to pay nearly $385 million to resolve federal and state False Claims Act allegations tied to the quality and safety of powdered infant formula and nutritional therapy products manufactured at its facilities in Sturgis, Michigan, and Casa Grande, Arizona. The resolution follows a qui tam action filed in 2022 by three former Abbott employees and later joined in part by the United States and participating states. The dispute centers on whether Abbott’s manufacturing environment and compliance representations caused government programs, including the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and Medicaid, to pay for products that did not meet applicable statutory, regulatory, and contractual requirements during a defined period.
United States and States Resolve False Claims Act Allegations Against Abbott
The settlement announced Sept. 14, 2026, totals $384,999,040 and addresses allegations that Abbott caused false claims to be submitted from Jan. 1, 2018, through Dec. 31, 2022. Under the agreement, Abbott will pay $348,700,868 to the United States and $36,298,172 to certain states for claims tied to state Medicaid and WIC programs. The matter involves powdered infant formula and nutritional therapy products manufactured at Abbott’s Sturgis and Casa Grande plants, with the Sturgis facility drawing heightened scrutiny after its temporary closure in 2022 amid concerns involving microorganism contamination and resulting impacts on supply.
The government’s theory, as described in court filings, was that compliance certifications used in bids and contracts were material to government purchasing decisions. USDA funds and regulates WIC, which pays for more than half of all infant formula purchased in the United States, while state Medicaid programs also cover certain infant formula. The settlement resolves civil allegations only, and the parties did not obtain a determination of liability.
Relators’ Qui Tam Case and Government Intervention in Western District of Michigan
The underlying case is captioned United States et al. ex rel. Scott Millard, Kristine Cooper, and Loren Cooper v. Abbott Laboratories, No. 1:22-cv-00994-HYJ-SJB (W.D. Mich.). The relators are former Abbott employees who worked in quality and maintenance operations and reported concerns to federal regulators. Their qui tam complaint alleged Abbott knowingly made and sold powdered infant formula and other products that did not comply with federal manufacturing requirements, including the Federal Food, Drug, and Cosmetic Act and current good manufacturing practices, and that the alleged noncompliance increased the risk of microorganism contamination.
In November 2025, the Department of Justice, acting on behalf of USDA, and six states partially intervened. The government’s complaint in intervention alleged Abbott certified in bids and contracts that its infant formula complied with FDCA and CGMP requirements and that Abbott nevertheless caused government programs to purchase powdered infant formula produced at Sturgis that failed to meet statutory, regulatory, and contractual requirements. The relators, who brought the action under the FCA’s qui tam provisions, have been awarded $69 million from the federal settlement as their share of the recovery.
Manufacturing Conditions and Testing Practices Alleged at the Sturgis Facility
The complaint in intervention described specific conditions at the Sturgis plant that the government contended contributed to contamination risk and undermined product reliability, quality, and safety. Among the allegations were recurring roof leaks, including water running and dripping over equipment in processing areas. Filings further alleged that Abbott used temporary measures such as roof leak umbrellas to divert leaks rather than permanently addressing root causes, despite an understanding that moisture could elevate microorganism contamination risk in production environments.
The government also alleged issues involving spray dryers used to convert liquid formula into powder, including documented cracks and pits that purportedly increased contamination risk, particularly when moisture was present. Additional allegations focused on production and quality practices, including lengthening the number of batches processed between cleaning cycles to increase production. The complaint further alleged Abbott intentionally did not test for bacterial growth to avoid positive results and, in certain instances where testing showed microorganism contamination, failed to disclose results when responding to FDA requests during 2019 and 2022 inspections at the Sturgis facility.
Enforcement Framework, Counsel, and Program Integrity Considerations
The settlement reflects the False Claims Act’s structure, which permits private relators to file actions on behalf of the United States and share in recoveries. In this matter, the resolution was described as the product of coordinated work involving the Justice Department’s Civil Division components and the U.S. Attorney’s Office for the Western District of Michigan, with assistance from USDA’s Office of Inspector General, as well as participating state offices and Medicaid Fraud Control Units referenced in case descriptions. The filings also identify Civil Fraud Section trial attorneys Asha Natarajan and Erin Colleran and Assistant U.S. Attorneys Whitney Schnurr and Jacob Carlton as handling the matter for the government.
Counsel for the whistleblowers included Stein Mitchell Beato & Missner LLP, which filed the original 2022 action on behalf of Scott Millard, Kristine Cooper, and Loren Cooper. More broadly, the resolution underscores the government position that compliance representations tied to WIC and Medicaid purchasing are treated as conditions connected to eligibility for payment, particularly where manufacturing practices are alleged to implicate safety-focused requirements. Any further litigation is foreclosed as to the settled civil allegations for the covered period and facilities, while the agreement expressly leaves the settlement as a resolution of allegations without an adjudication of fault.
