The Justice Department has declined to prosecute businesses in several recent cases, even when senior employees were believed to be involved in wrongdoing. A prominent example is the closure of a criminal investigation into Abbott Laboratories concerning a 2022 bacteria outbreak at its Michigan baby formula plant, which was linked to infant deaths and illnesses. Despite an initial push by DOJ Criminal Division head Tysen Duva to levy felony fraud charges against Abbott executives and a Food, Drug, and Cosmetic Act charge against the company, the Deputy Attorney General’s office, then under Todd Blanche, overruled this effort, opting instead for a civil settlement under the False Claims Act. This decision has sparked a broader pullback on corporate prosecutions, particularly in the food and drug industry, with division supervisors imposing a heightened evidentiary standard for other investigations.
Sources familiar with the internal deliberations noted that Kirkland & Ellis partner Mark Filip, a former federal judge and deputy attorney general, argued against prosecuting Abbott, highlighting the potential for a criminal indictment to derail the company's plans to build a $1 billion plant in Ohio, which would create hundreds of jobs. While a senior DOJ official stated that the potential Ohio facility did not influence the decision, they emphasized that the agreement in principle with Abbott includes a *significant monetary payment* and is intended to send a clear message that companies violating consumer health standards, especially those protecting infants, will face serious consequences.
This shift in policy follows the Justice Department's implementation of a new department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy, which encourages companies to self-report misconduct, cooperate with investigations, and remediate issues in exchange for potential declination of prosecution. For instance, under this new policy, the DOJ recently declined to prosecute Balt SAS, a foreign medical device company, for Foreign Corrupt Practices Act violations despite evidence of *bribery between 2017 and 2023 that yielded profits in excess of $1.2 million*. This declination was based on Balt's timely self-disclosure, full cooperation, and appropriate remediation actions. This approach reflects a broader strategy to incentivize responsible corporate behavior and address declining corporate crime cases by encouraging companies to police their own employees and hand over evidence of wrongdoing to prosecutors.
