Casa Grande baby formula plant tied to $384m settlement over unsafe production. Abbott Laboratories, the corporation behind Similac, did not admit any wrongdoing. by Kieran Hadley The government's Special Supplemental Nutrition Program for Women, Infants and Children (WIC) buys about half the baby formula in the U.S., awarding regional monopolies to a handful of large suppliers. Photo: Enfamil Formula at Kroger. Abbott Laboratories, the company behind popular infant formula brand Similac, settled a lawsuit this week over claims alleging unsanitary conditions at its production sites, including at its facility in Casa Grande. The lawsuit alleged that Abbott knowingly sold its formula to US government food assistance programs such as Medicaid and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) despite being aware of contamination risk at its facilities. Families enrolled in WIC account for over half of baby-formula consumption in the United States. In 2022, Abbott recalled several of its products and temporarily shut down its facility in Sturgis, Michigan, after some infants fell ill and died of cronobacter infection after consuming formula produced there. The Sturgis complaints focused on haphazard repair of roof leaks and a lack of testing for dangerous bacteria. The settlement also mentioned its Casa Grande facility, which is Casa Grande's fourth-largest employer, employing about 750 workers. According to the Associated Press, a 2023 inspection of the Casa Grande facility found numerous lapses in contamination safety protocols and detections of cronobacter. The AP also noted "nearly two dozen complaints of confirmed cronobacter, salmonella or other infections in infants who had been fed formula made at the plant." Abbott maintains that no unopened can of formula ever tested positive for cronobacter. The Department of Justice hailed the settlement as a victory for American families. "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," said Associate Attorney General Stanley E. Woodward, Jr. in a statement. Abbott agreed to pay over $384 million to settle the lawsuit. $69 million will go to the three whistleblowers who filed the qui tam lawsuit, and $36 million will go to specific states' Medicaid and WIC claims. The rest will go to the federal government. By posting comments, you agree to its Connect. About. Support. Compliance. AZPM is a service of the University of Arizona and its broadcast stations are licensed to the Arizona Board of Regents who hold the trademarks for Arizona Public Media and AZPM. Azpm respectfully acknowledge the University of Arizona is on the land and territories of Indigenous peoples.

Abbott faces $384 million cost as infant formula legal risks persist. Abbott will pay $384 million to resolve U.S. allegations over contaminated infant formula, easing one legal overhang while broader litigation risks remain. Published September 15, 2026 at 10:40 am EDT Abbott Laboratories (NYSE:ABT) has agreed to pay more than $384 million to resolve U.S. Justice Department allegations that it knowingly produced infant formula in potentially contaminated environments at its Michigan and Arizona facilities, including allegations of inadequate testing and failure to disclose positive contamination tests to regulators. The settlement resolves civil claims without an admission of wrongdoing or a finding of liability, while the related criminal investigation has been closed. The case stems from Abbott's 2022 Similac recall, which followed contamination concerns at its Sturgis, Michigan plant and contributed to a nationwide infant-formula shortage. Abbott maintains that no unopened, distributed formula tested positive for contamination. Financially, the $384 million payment is significant but manageable relative to Abbott's scale. Abbott generated $12.6 billion of sales in Q2 2026 and raised its full-year adjusted EPS outlook to $5.45-$5.60, while returning $2.1 billion to shareholders during the quarter. The more important issue is therefore not the one-time cash settlement itself, but whether the resolution removes a major overhang around Abbott's Nutrition business and limits further regulatory or litigation costs. Formula settlement may let Abbott refocus on broader growth. The strongest bullish argument is that the settlement could mark an important step toward containing the financial and regulatory fallout from the 2022 formula crisis. The Justice Department says the agreement resolves the civil claims and that the related criminal investigation has been closed, reducing the probability of another major escalation from this particular matter. For investors, that provides greater visibility around the potential cash costs associated with the episode and allows Abbott Laboratories to focus on its broader portfolio rather than continuing to absorb uncertainty around the Sturgis-related controversy. The settlement also appears manageable against Abbott's earnings and cash-generation capacity. With 2026 adjusted EPS guidance of $5.45-$5.60 and Q2 sales of $12.6 billion, a $384 million settlement represents a material but not balance-sheet-threatening charge for a company of Abbott's size. More importantly, Abbott recently resolved a separate portion of litigation involving specialty formulas for preterm infants for approximately $670 million, covering the Gill case and claims involving roughly 2,000 individuals. If these settlements substantially reduce the remaining litigation uncertainty surrounding infant nutrition, the market could increasingly treat the issue as a contained legacy liability rather than a recurring threat to Abbott's valuation. There is also evidence that Abbott Laboratories's broader business remains capable of absorbing setbacks in Nutrition. The company reported 13% sales growth and 4.8% comparable sales growth in Q2, while maintaining its 6.5%-7.5% full-year comparable-sales growth forecast. That diversification matters because it reduces the likelihood that problems surrounding infant formula alone materially derail consolidated growth. The settlement could therefore be viewed as a cost of closing out a legacy problem while Abbott's larger medical-device, diagnostics and pharmaceutical businesses continue supporting earnings growth. Formula litigation could keep weighing on Abbott's risk profile. The principal bearish concern is that the $384 million payment reinforces the seriousness of the underlying manufacturing and regulatory allegations. The Justice Department alleged not simply an isolated contamination event, but deficiencies involving product testing and the disclosure of positive contamination tests to regulators. Even without an admission of wrongdoing, such allegations can damage trust in a category where safety and reliability are especially important. Abbott's infant-nutrition franchise depends heavily on consumer, hospital, and regulatory confidence, so reputational damage could have consequences beyond the immediate settlement. The 2022 episode has also already demonstrated that manufacturing disruption in Abbott Laboratories's formula business can have consequences far beyond a single product recall. The Sturgis plant closure contributed to a nationwide infant-formula shortage, and Abbott has subsequently faced continuing litigation related to its specialty formulas. Abbott's June 2026 10-Q said numerous NEC-related lawsuits remained outstanding and disclosed that a $495 million Missouri jury award had been affirmed on appeal, although Abbott was seeking further review. The existence of this broader litigation backdrop means investors cannot necessarily treat the $384 million settlement as the final cost of Abbott's infant-formula controversies. There is also a potential margin and cash-flow consideration if Abbott Laboratories must continue increasing quality-control, testing and compliance spending. Abbott has previously described enhanced pre- and post-production testing when restarting Similac production at Sturgis. Additional safeguards may be necessary to rebuild confidence, but they can raise manufacturing costs and reduce the economic benefit of the Nutrition business. If future recalls, settlements or legal judgments emerge, the cumulative cash burden could become more material than the latest $384 million payment suggests. Conclusion. Abbott Laboratories's $384 million settlement is financially manageable and reduces uncertainty by closing the DOJ case, but broader infant-formula litigation remains a risk. Overall, the news is modestly positive if it marks meaningful legal closure, but it does not eliminate Abbott's remaining regulatory, reputational, and litigation exposure.

Abbott's $670 million NEC settlement: what it means for Illinois families with pending or new claims. By Varun / Sep 10, 2026 Abbott Laboratories has agreed to pay $670 million to resolve lawsuits alleging its cow's-milk-based infant formulas, including Similac products designed for premature babies, increased the risk of a life-threatening bowel disease called necrotizing enterocolitis (NEC). The August 2026 settlement resolves claims involving roughly 2,000 infants, but for Illinois families, it is important to understand what this settlement does, and does not, mean for a new or pending claim. What the settlement covers, and what it doesn't. The $670 million settlement is a compromise of disputed claims, and Abbott has not admitted liability or wrongdoing as part of the deal. Just as importantly, this settlement does not end the litigation. According to court filings and public reporting, roughly 1,700 lawsuits covering claims on behalf of an additional 12,700 infants remain active, and more than 800 cases are still pending in the coordinated federal litigation, In re: Abbott Laboratories, et al., Preterm Infant Nutrition Products Liability Litigation (MDL No. 3026), before U.S. District Judge Rebecca R. Pallmeyer in the Northern District of Illinois, according to the official U.S. Judicial Panel on Multidistrict Litigation case report. In other words: if your family has not yet filed a claim, the door has not closed. This settlement resolved one large group of cases; it did not resolve the underlying litigation. (Note: this NEC litigation is separate from a different, largely-resolved case involving Abbott's 2022 Similac formula recall over bacterial contamination, the two involve different allegations and different infants.) What is necrotizing enterocolitis (NEC)? NEC is a serious, sometimes fatal intestinal disease that primarily affects premature infants, particularly those fed formula rather than human breast milk. It causes inflammation that can damage or destroy intestinal tissue, sometimes requiring emergency surgery, and it carries a real risk of death in severe cases. Families whose premature infants developed NEC after being fed Similac or Enfamil-brand cow's-milk-based formulas in the neonatal intensive care unit (NICU) may have grounds for a claim. The allegations against Abbott and Mead Johnson. The lawsuits allege that Abbott Laboratories (maker of Similac) and Mead Johnson (maker of Enfamil) knew, or should have known, that cow's-milk-based formula significantly increases the risk of NEC in premature infants compared to human milk or specialized formula, but failed to adequately warn parents and hospital staff about that risk. Earlier trials in this litigation produced substantial verdicts even before the recent settlement, including a $60 million jury verdict in the first trial to reach a verdict on these claims, and a $495 million verdict against Abbott in a separate case, which included a large punitive damages award. Those verdicts are being appealed and do not guarantee the outcome of any other case, but they reflect how juries have viewed the evidence presented so far. Why this case is in Chicago. The NEC formula litigation, like several other major product liability cases, has been consolidated before a single federal judge in the Northern District of Illinois for coordinated pretrial proceedings. That means the discovery disputes, expert testimony fights, and major rulings shaping this litigation are happening in Chicago's federal courthouse, even though the babies and families affected live all over the country, including right here in Illinois, where major NICUs at hospitals like Northwestern Memorial, Lurie Children's, Rush, and UChicago Medicine treat premature infants every day. Illinois families: what to do if your baby developed NEC. If your premature infant was fed Similac or Enfamil formula in the NICU and later developed NEC, whether your child recovered, required surgery, or did not survive, you may have an independent claim regardless of the recent Abbott settlement. Illinois recognizes both personal injury claims for surviving children and wrongful death claims for families who lost an infant to NEC. Frequently asked questions. Does the $670 million settlement mean the case is over? No. It resolves claims for about 2,000 infants specifically. More than 1,700 additional lawsuits, and hundreds of cases still pending in the federal court in Chicago, remain unresolved. My baby was fed both breast milk and formula. Can I still file a claim? Possibly. These cases are evaluated based on the specific facts of feeding history, diagnosis, and medical records, not a strict formula-only rule. An attorney can review your child's NICU records to assess whether a claim is viable. What if my child passed away from NEC? Illinois wrongful death law allows certain family members to bring a claim on behalf of a child who died from injuries caused by another party's conduct, including, potentially, a manufacturer's failure to warn. Is there a deadline to file? Yes. Deadlines vary depending on the specific facts of your case, including your child's age and the date of diagnosis. Because this is an active, evolving litigation, it's important not to wait to have your situation reviewed. Talk to an Illinois NEC formula attorney. If your premature infant developed necrotizing enterocolitis after being fed Similac or Enfamil formula, the mass tort attorneys at Phillips Law Offices can review your medical records and explain whether you may have an independent claim, separate from Abbott's recent settlement, at no cost to you. Call (312) 346-4262 or contact Phillips Law Offices online to get started.