On May 1, 2020, Blue Bell Creameries L.P. (Blue Bell) and the U.S. Department of Justice (DOJ) entered into two separate agreements related to the 2015 listeriosis outbreak linked to Blue Bell ice cream. This memorandum provides an overview of the negotiated agreements, the facts giving rise to the agreements, and key takeaways for the food industry. These takeaways include: (1) DOJ continues to actively pursue criminal investigations of companies in the food industry; (2) DOJ places a high interest not just on food safety, but also on the company’s communications with the public and its customers; (3) DOJ will take note of remediation efforts implemented by food manufacturers for the purposes of negotiated agreements; and (4) the False Claims Act is a statute that food manufacturers should become familiar with in short order, particularly if they sell food products to government customers.

In the first agreement with DOJ, Blue Bell agreed to plead guilty to two strict liability misdemeanors under the Federal Food, Drug, and Cosmetic Act (FFDCA) and pay a criminal fine and forfeiture totaling $17.25 million. In the second agreement with DOJ, Blue Bell also agreed to pay $2.1 million to resolve (without any admissions of liability) civil False Claims Act allegations regarding ice cream product sold to federal government customers. The total of $19.35 million in fine, forfeiture, and civil settlement payments is the second largest amount ever paid to resolve a food safety matter.

Separately, the former president of Blue Bell was charged with seven felony counts alleging that he orchestrated a scheme to deceive certain Blue Bell customers after he learned that products from the company’s Texas factory tested positive for Listeria monocytogenes.

Disclosure: Hogan Lovells represented Blue Bell in connection with these matters. The information contained in this client alert is based strictly on publicly available information. Hogan Lovells does not represent the former president of Blue Bell.

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Photo of Douglas Fellman Douglas Fellman

Partner, Washington, D.C.

For more than 25 years, Douglas Fellman has represented public and private companies, boards of directors, board committees, and individual officers and directors regarding government and internal investigations, corporate governance matters, and “sticky issues” that occasionally arise at even the…

Partner, Washington, D.C.

For more than 25 years, Douglas Fellman has represented public and private companies, boards of directors, board committees, and individual officers and directors regarding government and internal investigations, corporate governance matters, and “sticky issues” that occasionally arise at even the best of companies.

While these matters can be among the most consequential and sensitive for his clients, Doug is known for his sound judgment and strategic thinking, business acumen and practicality, and for the sense of calm and discretion that he brings to the representations he leads.

Doug has represented clients in connection with civil, criminal, and administrative investigations and other proceedings involving the U.S. Department of Justice, Securities and Exchange Commission, and other federal and state departments and agencies, often involving cross-border and other multi-jurisdiction or parallel proceedings.

As Doug works with and defends clients, he often advises company senior management and boards of directors on matters of corporate governance, officer and director fiduciary duty, and interactions with outside auditors and other constituencies, including in the context of current or possible future strategic transactions.

Doug regularly represents clients in enforcement matters involving whistleblower complaints and other alleged compliance exceptions, financial restatements, accounting irregularities, insider trading, and the Foreign Corrupt Practices Act (FCPA). He also has comprehensive knowledge of the Food Drug and Cosmetic Act (with extensive experience representing clients in the food industry in criminal and other enforcement investigations), as well as international trade laws and regulations involving the Commerce, Treasury, and State Departments, government contacts and related suspension and debarment issues, and many other regulatory frameworks. In addition, Doug has successfully represented public companies in matters involving the NYSE, NASDAQ, FINRA, the CBOE, and other regulatory bodies.

Photo of Joe Levitt Joe Levitt

Partner, Washington, D.C.

As the FDA’s former top food regulator, Joe Levitt brings a true insider’s knowledge to helping food industry clients deal effectively with the FDA. Whether influencing policy making or confronting a threatened compliance action, Joe’s 25 years of FDA experience…

Partner, Washington, D.C.

As the FDA’s former top food regulator, Joe Levitt brings a true insider’s knowledge to helping food industry clients deal effectively with the FDA. Whether influencing policy making or confronting a threatened compliance action, Joe’s 25 years of FDA experience puts clients in the best position to succeed.  In the private sector, Joe was on the ground floor when Congress developed the landmark FDA Food Safety Modernization Act (FSMA). Joe was also a leading voice for the food industry when the FDA developed regulations that all food companies must now follow. No one can help navigate the labyrinth of FDA’s FSMA regulations better than Joe and his team, and no one can better put your company in the driver’s seat when the FDA inspector knocks on your door for your first FSMA inspection.

Joe adeptly handles high visibility recalls and compliance actions. If a company finds itself in trouble with the FDA, they need someone with a deep insider’s understanding of what works and what doesn’t. Joe knows what the agency expects in the compliance arena, and the bar clients will be expected to meet. He can communicate his client’s position calmly and effectively to the FDA so the matter gets put behind them. His record of “helping startups and multinational companies… survive Food and Drug Administration investigations and avoid import bans that could shutter the companies,” led to Joe being named a Law360 Food & Beverage MVP (2016).

Joe is among the most decorated officials in FDA history, with his achievements being recognized by multiple U.S. presidents, cabinet secretaries, and FDA Commissioners. He maintains close working relationships with senior FDA officials and has served as the Board Chair of the FDA Alumni Association.

Photo of Elizabeth Fawell Elizabeth Fawell

Partner, Washington, D.C.

Elizabeth Fawell navigates the detailed, and often complex, regulatory issues confronting food companies and helps them understand both the rules and various risks involved so that they can make informed business decisions. Elizabeth works with every segment of the food…

Partner, Washington, D.C.

Elizabeth Fawell navigates the detailed, and often complex, regulatory issues confronting food companies and helps them understand both the rules and various risks involved so that they can make informed business decisions. Elizabeth works with every segment of the food industry, including manufacturers, distributors, retailers, restaurants, and food service operators; and their trade associations.  Elizabeth’s work on behalf of food industry clients with the Food Safety Modernization Act (FSMA) since its inception and her understanding of Hazard Analysis Critical Control Point (HACCP) systems provides her with the experience and perspective needed as she counsels clients on how to comply with new requirements under the law. Elizabeth is a Preventive Controls Qualified Individual (PCQI) and has completed the FSPCA PCQI training.

Elizabeth knows how laws, regulations, and guidance documents are developed, interpreted, and enforced. Her extensive knowledge enables clients to prevent and respond to enforcement actions such as Warning Letters, Import Alerts, and agency investigations. She helps clients in determining whether an RFR is necessary and whether a recall is warranted. If so, she helps manage the recall to minimize business impacts. Elizabeth provides real-time advice during factory inspections, helps clients prepare 483 responses, and drafts inspection manuals. She also assists clients in lawfully and creatively promoting their products; such as the development of labels, claims, and website and promotional campaigns. Elizabeth also supports clients in advertising disputes and with responses to FTC and Attorney General investigations.

Elizabeth helps clients stay informed of and ahead of public policy issues and develops strategies for effective advocacy before regulators. She also counsels clients on compliance with Consumer Product Safety Commission (CPSC) safety standards, testing and certification requirements, and reporting obligations.

Elizabeth is a member of the Food and Dietary Supplements Committee of the Food and Drug Law Institute.

Photo of David I. Sharfstein David I. Sharfstein

Counsel, Washington, D.C. and Baltimore

David draws upon his combined experience as a Trial Attorney and Assistant U.S. Attorney at the DOJ to pragmatically guide clients through their most sensitive matters, including high stakes investigations, enforcement actions, and litigation.

David’s practice covers a…

Counsel, Washington, D.C. and Baltimore

David draws upon his combined experience as a Trial Attorney and Assistant U.S. Attorney at the DOJ to pragmatically guide clients through their most sensitive matters, including high stakes investigations, enforcement actions, and litigation.

David’s practice covers a wide cross section of the law, including conducting internal investigations and representing both corporates and individuals in complex criminal and civil litigation. He skillfully represents clients facing investigations and enforcement actions brought by key domestic enforcement agencies, often in cross-border matters. David has extensive experience with matters involving the Foreign Corrupt Practices Act (FCPA), the Food, Drug, and Cosmetic Act (FDCA), and the False Claims Act (FCA). David also provides unique insight into matters involving tax controversies, including criminal investigations. He regularly counsels clients on a range of compliance issues.

David is well versed in the consumer food and beverage industry sector, having advised household names in some of their most significant matters, including those related to FDA inspections and criminal matters involving insanitary conditions and adulterated product.

David also represents clients facing scrutiny under U.S. export control and sanctions laws, and often involving the Department of Commerce’s Bureau of Industry and Security (BIS), and the Department of Treasury’s Office of Foreign Assets Control (OFAC).

Before joining Hogan Lovells, David served with distinction at the DOJ Tax Division and the U.S. Attorney’s Office for the District of Maryland, where he received the U.S. Attorney’s Award for Excellence in Prosecution of Fraud and also the award for Excellence in Prosecution of Organized Crime.  David also served as the office’s Election Fraud Coordinator.

David clerked for the Honorable Richard D. Bennett of the U.S. District Court for the District of Maryland.

Photo of Brian Eyink Brian Eyink

Counsel, Washington, D.C.

Drawing on experience throughout the supply chain — from animal production to food processing to distribution and retail sale — Brian Eyink brings vast and cross-cutting industry knowledge to help clients find practical solutions to regulatory problems. Brian is particularly…

Counsel, Washington, D.C.

Drawing on experience throughout the supply chain — from animal production to food processing to distribution and retail sale — Brian Eyink brings vast and cross-cutting industry knowledge to help clients find practical solutions to regulatory problems. Brian is particularly sensitive to risk management issues as companies adapt to a regulatory and political environment increasingly focused on inspections, enforcement, and investigations.

Brian helps food and agriculture companies navigate increasingly complex and high-stakes federal and state regulatory issues. He draws on deep experience with the USDA, FDA, and FTC, as well as state, local, and self-regulatory bodies, litigation, and acquisitions to solve clients’ regulatory and business problems. Brian advises clients on the full scope of regulatory issues facing the food and agriculture sectors, ranging from USDA and FDA enforcement actions and federal investigations to regulatory compliance, import and export issues, litigation support, comment preparation, legislative drafting, policy development, trade association governance, advertising disputes, and labeling issues.

Brian also represents food and agriculture trade associations, advising on issues including general counseling and governance, influencing policy and public perspective, and implementation of industry initiatives.

Before joining Hogan Lovells, Brian served as a judicial law clerk to the Honorable Gerald Bard Tjoflat of the United States Court of Appeals for the Eleventh Circuit. While in law school, he served as an executive editor of the Duke Law Journal.

Photo of James Hennelly James Hennelly

Senior Associate, Washington, D.C.

Jamie Hennelly advises clients facing complex civil litigation, as well as civil, criminal, and administrative investigations involving the federal government. He works closely with both public and private companies dealing with corporate crises and helps them wade through difficult…

Senior Associate, Washington, D.C.

Jamie Hennelly advises clients facing complex civil litigation, as well as civil, criminal, and administrative investigations involving the federal government. He works closely with both public and private companies dealing with corporate crises and helps them wade through difficult legal questions.

Jamie has particular experience representing clients in the health care and life sciences industries, including with False Claims Act litigation and criminal investigations.

He has also represented clients involved with wide-ranging investigations and enforcement actions brought by the Department of Justice, the Securities and Exchange Commission, and the Consumer Financial Protection Bureau. Jamie regularly assists clients in the food industry in criminal and other enforcement investigations involving the Food, Drug, and Cosmetic Act.

Prior to joining Hogan Lovells, Jamie was a regulatory health policy and reimbursement consultant for clients in the life sciences industry.

Photo of Evan Guimond Evan Guimond

Senior Associate, Washington, D.C.

Evan Guimond represents clients facing investigations and enforcement actions brought by the Department of Justice, the Securities and Exchange Commission, the Financial Crimes Enforcement Network (FinCEN), and congressional committees.

Evan works closely with public and private companies, as well…

Senior Associate, Washington, D.C.

Evan Guimond represents clients facing investigations and enforcement actions brought by the Department of Justice, the Securities and Exchange Commission, the Financial Crimes Enforcement Network (FinCEN), and congressional committees.

Evan works closely with public and private companies, as well as individuals, guiding clients through their most difficult legal questions. In counseling clients to comprehensive resolutions, Evan frequently manages the demands of parallel criminal and civil proceedings.

Evan regularly assists clients in the food industry in criminal and other enforcement investigations involving the Food, Drug, and Cosmetic Act. Evan also counsels financial institution clients facing regulatory enforcement investigations under the Bank Secrecy Act, and advises clients on BSA/AML compliance. Additionally, Evan has significant experience representing clients facing congressional investigations, including preparing clients for congressional testimony.

Evan also maintains an active pro bono practice. He is engaged in a broad range of pro bono matters including capital punishment, immigration, and efforts to uphold reasonable gun regulations. Evan has particular experience drafting amicus briefs on behalf of pro bono clients in cases involving the Second Amendment in the federal Circuit Courts of Appeals and the Supreme Court.