DOJ's Decision to Drop Abbott Labs Case Signals Broader Shift in Corporate Crime Enforcement

Reported by Ben Penn | July 6, 2026

The Department of Justice's decision to terminate a protracted criminal investigation into Abbott Laboratories—centered on contaminated infant formula—has triggered a systemic withdrawal from the prosecution of corporate crimes affecting public health, according to sources familiar with the matter.

The Abbott Laboratories Conflict

The friction began when Tysen Duva, the head of the DOJ's Criminal Division, attempted to pursue aggressive charges against the pharmaceutical giant. However, these efforts were blocked by the deputy attorney general’s (DAG) office, then overseen by Todd Blanche.

Legal Theories and Outcomes

The prosecution's strategy shifted dramatically from a criminal focus to a civil one:

• Criminal Felony Theory: Allegations that Abbott executives conspired to defraud the United States.
• Regulatory Violation: Charges under the Food, Drug, and Cosmetic Act.
• Actual Resolution: A civil settlement via the False Claims Act.

The financial implications of the civil route are significant, as the False Claims Act allows for treble damages, represented mathematically as: $\text{Total Recovery} = 3 \times \text{Actual Damages}$

The "Ohio Factor" and External Influence

The case originated from a 2022 bacterial outbreak at a powder formula facility in Michigan, which was linked to infant illnesses and fatalities. During the deliberations, Mark Filip (a partner at Kirkland Ellis and former DAG) reportedly advised against criminal prosecution.

Filip suggested that an indictment might jeopardize Abbott's plans to construct a $1 billion plant in Ohio, a project expected to generate hundreds of local jobs.

"The Department did not give any weight" to Abbott’s potential Ohio facility when deciding to close the criminal case, a senior DOJ official stated.

The DOJ maintains that the final agreement, involving a substantial payment, serves as a warning:

"Companies that violate consumer health and safety standards—particularly standards designed to protect babies—will face serious consequences."

The 2025 DOJ Reorganization

The retreat from corporate prosecution is not an isolated incident but is tied to a broader structural overhaul of the DOJ in 2025 under the Trump administration.

Structural Shift

The reorganization dissolved the Civil Division’s consumer-focused office and merged its criminal prosecutors into a new health and safety unit within the Criminal Division's fraud section.

This realignment stripped prosecutors of their ability to simultaneously pursue civil and criminal paths. Furthermore, they now report to managers who view previous consumer-protection efforts as overly aggressive or lacking sufficient pre-charging evidence.

Current State of Enforcement

While the Abbott case was initially seen as a priority—with lawyers drafting a prosecution memo over the 2025 Thanksgiving holiday—the eventual shutdown has created a "chilling effect."

Investigation Status Tracker

• Abbott Laboratories (Closed/Civil Settlement)
• Alkyl Nitrates ("Poppers") Mislabeling Case (Stalled)
• Other Pharmaceutical Misbranding Probes (Stalled)

The unit is still pursuing cases involving the fraudulent sale of alkyl nitrates (marketed as cleaning products), but many such probes are currently idling due to a newly imposed, more stringent evidentiary threshold.

Summary of Internal Sentiment

{
  "internal_climate": "Cautious",
  "primary_concern": "Avoiding DAG rejection",
  "evidentiary_standard": "Heightened",
  "target_sector": "Food and Drug Industry"
}

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Related Entities:

• Arnold Porter Kaye Scholer
• Kirkland Ellis
• Justice Department
• Abbott Laboratories