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Corporations Keyed to O’Kelley
Marchand v. Barnhill
Citation:212 A.3d 805 (2019)
FDA regulations require food manufacturers to conduct operations with adequate sanitation principles and must prepare and implement a written food safety plan. Blue Bell is subject to federal regulations and various state regulations. Blue Bell Creameries USA, Inc. suffered a listeria outbreak in early 2015, causing the company to recall all of its products and shut down production at all of its plants. Blue Bell’s failure to contain listeria’s spread in its manufacturing plants caused listeria to be present in its products. Three people died as a result of the listeria outbreak. Stockholders also suffered losses because Blue Bell suffered a liquidity crisis that forced it to accept a dilutive private equity investment. The complaint alleges that, as a single-product food company, Blue Bell’s management turned a blind eye to red flags that were waved in front of it by regulators and its own tests, and the board – by failing to implement any safety system to monitor the company’s food safety compliance programs – was unaware of any problems until it was too late.
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