The Southeastern Pennsylvania Transportation Authority (“SEPTA”) and Teamsters Local 710, co-lead plaintiffs in the Abbott Laboratories shareholder derivative case, filed a comprehensive amended complaint on October 16, 2023. The amended complaint presents detailed allegations addressing claims related to Abbott’s production and sale of infant formula products.

The amended complaint asserts that Abbott officers and directors breached fiduciary duties by concealing safety protocol lapses at the Sturgis facility, leading to environmental contamination with Cronobacter sakazakii bacteria.  Following a February 2022 FDA inspection confirming Cronobacter contamination, Abbott issued a recall of various infant formula products, impacting the U.S., Canada, and other markets. The amended complaint alleges that Abbott portrayed the recall as proactive, concealing the FDA investigation.

The closure of the Sturgis facility, due to safety concerns, resulted in massive formula shortages in the U.S., prompting the federal government to invoke the Defense Production Act to address the crisis.  Further, the amended complaint references a whistleblower complaint, publicly disclosed in April 2022, alleging Abbott management’s awareness of issues at the Sturgis facility, including false test records, releasing untested infant formula, and attempts to mislead the FDA.

John A. Kehoe, Partner at Kehoe Law Firm, commented on the strength of the amended complaint: “The detailed amended complaint filed by SEPTA and Teamsters Local 710 underscores the gravity of the allegations against Abbott. The document meticulously outlines breaches of fiduciary duties, concealment of safety issues, and the subsequent impact on the market. We believe these allegations are robust and compelling, reflecting our commitment to pursuing justice for shareholders and ensuring corporate accountability.”

The filing of the amended complaint marks a significant milestone in the Abbott shareholder derivative case. Kehoe Law Firm remains dedicated to representing institutional investors in cases that uphold shareholder rights and seek to improve corporate governance.

For more information about Kehoe Law Firm and its involvement in this matter, please contact John A. Kehoe at [email protected] or call (215) 792-6676.