Abbott agreed to pay $385 million to resolve claims over its Sturgis plant shutdown.
Why it matters: The settlement closes a major legal overhang tied to the 2022 infant formula shortage. It also marks a reputational hit for a major healthcare and nutrition company that has denied fault.
- Abbott reached the deal on Sept. 14, 2026, to settle U.S. DOJ, state and relator claims.
- The case centers on Abbott's Sturgis, Michigan, infant formula plant, the largest baby formula factory in the U.S.
- The plant shut in February 2022 after an FDA investigation and reopened in June 2022.
- Abbott says the settlement is not an admission of fault and says the criminal investigation has been closed.
Abbott Laboratories agreed to pay a total of $385 million to resolve claims tied to contamination concerns and the 2022 recall at its Sturgis, Michigan infant formula plant, according to company and Justice Department materials. The plant was the largest baby formula factory in the United States, and its shutdown fed into nationwide shortages that drew intense scrutiny in 2022.
The DOJ settlement agreement says Abbott will pay $384,999,040.12 plus interest, including a federal payment of $348,700,868 and a Medicaid-state payment of $35,491,288.40, plus a separate Massachusetts WIC-related payment. The agreement also provides for a $69 million relators' share. Read the settlement agreement
Abbott said the deal is not an admission or finding of fault or liability, and said the criminal investigation has been closed. In its release, the company said regulators' testing of unopened product from infants' homes was negative for Cronobacter sakazakii and that the CDC later concluded there was no definitive link between the Sturgis plant and the clinical cases under investigation at the time. Abbott's statement
FDA and DOJ officials said in 2022 that powdered infant formula from the facility was alleged to have been manufactured under insanitary conditions and in violation of good manufacturing practice requirements. The FDA said the Sturgis plant shut in February 2022 after an agency investigation began, and it reopened in June 2022. FDA update
Abbott's June 30, 2026 SEC filing said it faced a qui tam case related in part to Sturgis and estimated total legal exposure of about $120 million to $530 million, with a recorded accrual balance of about $510 million. See Abbott's filing
By the numbers
- $385 million - Abbott's total settlement amount
- $348.7 million - federal share in the DOJ agreement
- $510 million - Abbott's recorded accrual balance at June 30, 2026
Yes, but: Abbott denies fault, and the company says testing and CDC findings did not establish a definitive link between the plant and the illness cluster.
What's next: The dossier does not identify a further court date or filing deadline.