An ice cream cone is held against a blue sky in Blackpool, northern England July 24, 2013 REUTERS/Phil Noble
(Reuters) - Few things seem more innocuous than a scoop of ice cream on a hot summer day.
Yet eight years ago, three people died after eating frozen treats made by Blue Bell Creameries that were contaminated with listeria, a pathogen that can’t be detected by taste, smell or the naked eye.
Now, the company’s former CEO, Paul Kruse, will face a federal jury in Austin, Texas, on Monday in what’s expected to be a three-to-four-week trial. U.S. District Judge Robert Pitman is presiding.
Kruse is charged with felony conspiracy and fraud for allegedly concealing from customers what the company knew about contamination of its products including chocolate chip cookie ice cream sandwiches, half-chocolate, half-vanilla ice cream bars and individually packaged scoops of ice cream.
It’s a bold move for prosecutors to go after Kruse, whose father and grandfather led the Texas-based company before him.
Holding top executives personally accountable when their products poison their customers sends a powerful message about food safety. Still, this won’t be an easy case for the Justice Department to win.
“We are confident that if we can get the truth in the courtroom, the jury will find Paul Kruse not guilty of all the charges,” defense counsel Chris Flood of Flood & Flood in Houston told me.
A Department of Justice spokesperson declined comment.
Blue Bell in a related case pleaded guilty in 2020 to misdemeanor charges of distributing adulterated food products, agreeing to pay a $17.3 million criminal fine, plus an additional $2.1 million to settle civil False Claims Act allegations. According to DOJ, it’s the second-largest amount ever paid to resolve a food safety matter. Blue Bell, noting Kruse is no longer an employee or a member of the board, said in a statement that the "trial is between the United States government and Mr. Kruse." It added that the company over the last seven years "has worked tirelessly to ensure the safety" of its ice cream.
Also in 2020, when Blue Bell pleaded guilty, Chipotle Mexican Grill set the record when it forked over $25 million. However, no individual Chipotle executives faced charges in connection with a series of food-borne illness outbreaks that sickened more than 1,100 customers of the fast-casual chain. The company admitted as part of the agreement that some of its restaurants failed to follow certain procedures aimed at ensuring food safety.
To Marler Clark founder Bill Marler, who has represented plaintiffs in virtually every major food poisoning outbreak in the past 30 years, there seems to be “no particular rhyme or reason” why prosecutors charge some food executives with felonies, others with misdemeanors and others with nothing at all.
But one key factor is when prosecutors allege that CEOs “essentially try to cover up an outbreak for financial gain,” Marler told me. “It’s the cover-up, not the crime.”
The most sobering example is Stewart Parnell, the former owner and CEO of now-defunct Peanut Corporation of America, who in 2015 was sentenced to 28 years in prison for selling peanut-based products tainted with salmonella.
According to federal prosecutors, Parnell knew the company’s products tested positive for the pathogen but sold them anyway, “all the while lying to their customers about the safety of those products.”
Still, the case against Kruse differs in significant ways from the one against Parnell, which included evidence, for example, of forged safety documents.
The Blue Bell investigation did not originate in response to reports of illnesses, though. As part of a routine sampling program, South Carolina state health investigators in February 2015 found listeria in Blue Bell’s cookie ice cream sandwiches and ice cream bars.
The products came from Texas, and the state’s Department of State Health Services promptly responded by collecting samples from Blue Bell’s production facility in Brenham. Officials confirmed the discovery of listeria monocytogenes, a potentially dangerous bacteria, especially for the very young or old, pregnant women or people who have weakened immune systems.
According to the indictment, when Texas officials notified Blue Bell of the contamination, Kruse “ordered his sales employees to pull products from customers' shelves without disclosing the reason.”
If the retailers asked why, Kruse allegedly created the following statement for employees to use in response: "There was an issue discovered with one of our manufacturing machines” and that Blue Bell was withdrawing the products from the market “until further testing can be completed.”
The statement made no mention of listeria, prosecutors said.
Within days, tests by the U.S. Centers for Disease Control and Prevention showed a genetic match between the Blue Bell listeria strains and five hospital patients in Kansas. Admitted for unrelated reasons, the patients fell ill between January 2014 and January 2015 with listeriosis after being served milkshakes containing the company’s single-serve ice cream "Scoops" product in the hospital. Three of them died.
The CDC found another 10 people around the country who between 2010 and 2014 were sickened by listeriosis matching Blue Bell samples.
The indictment focuses on Kruse’s public response when confronted with Blue Bell’s listeria problem. Still, he didn’t personally write or respond to any of the emails that form the basis of the six counts of wire fraud. They’re all missives by Blue Bell employees - and only two directly reference Kruse’s there-was-an-issue-with-a-machine statement.
The CEO did not order a recall of all Blue Bell products until April 20, 2015 - about two months after the company received the first reports of contamination.
It’s notable that there were no new reports of illnesses during this period. The real-world consequences of Kruse’s alleged evasiveness were apparently minimal.
But were his actions nonetheless criminal?
That’s for the jury to decide.
Our Standards: The Thomson Reuters Trust Principles.
Jenna Greene writes about legal business and culture, taking a broad look at trends in the profession, faces behind the cases, and quirky courtroom dramas. A longtime chronicler of the legal industry and high-profile litigation, she lives in Northern California. Reach Greene at jenna.greene@thomsonreuters.com
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.