Former Blue Bell CEO’s listeria case ends in mistrial

Dive Brief:

• Former Blue Bell Creameries CEO Paul Kruse’s trial for charges related to what investigators say was a cover up of a deadly listeria outbreak ended in a mistrial on Monday. The U.S. Justice Department declined to comment on the lack of verdict or whether the case would be retried.  
• The trial began on Aug. 1, and jurors spent four days deliberating. Kruse’s attorney told the Austin American-Statesman that of the 12-person jury, 10 voted for a not guilty verdict. 
• Kruse faces wire fraud and conspiracy charges in connection with the 2015 listeria outbreak that sickened 10, killed three and resulted in all of the company’s products being recalled. The corporate side of the ice cream giant pleaded guilty to two misdemeanor counts of introducing adulterated food products into interstate commerce in 2020, and paid a total of $19.35 million in fines and forfeitures. 

Dive Insight:

The U.S. Justice Department’s strategy of holding current and former executives in the food business accountable for wrongdoing in their companies hit another snag with this mistrial in the Blue Bell CEO’s case. And while the mistrial does not effectively change the pending case — Kruse is still facing six federal criminal charges — it means that there is a longer path to resolving it.

Investigators say that Kruse knew that there had been unsanitary conditions in the company’s ice cream factories in Brenham, Texas, and Broken Arrow, Oklahoma, since 2010. Instead of ordering repairs at the factories, Kruse ordered the company to stop testing for listeria, investigators said. And when contaminated products went out from the factory in 2015, instead of issuing an immediate formal recall or statement about listeria-contaminated products, it stopped deliveries or collected some products because of “machine issues.” 

According to local Texas media that covered the trial, current and former Blue Bell executives — including the former quality control manager at one of the affected plants and current Blue Bell CEO Richard Dickson — testified about Kruse’s conduct. And leaders from grocery stores, schools and hospitals that served Blue Bell’s products testified they were never informed about potential food safety risks.

All of the charges Kruse faces stem from conduct in 2015 — even though what investigators say was a coverup of unsanitary conditions date back to 2010.

Since 2015, Justice Department policy has dictated corporate misconduct investigations focus on individual wrongdoing. This policy, outlined in a memo from former U.S. Deputy Attorney General Sally Yates, says this strategy deters illegal activity, incentivizes changes in corporate behavior and holds the correct people accountable.

However, this strategy hasn’t worked well in the recent past in the food and beverage industry. Five chicken executives charged in connection with a price fixing scheme faced three trials in the past year. Two ended in mistrials, with no unanimous verdict. The Justice Department pushed for a third trial of the executives, which ended in acquittals. There have been successes further back, with the former leaders of Peanut Corporation of America receiving 20-plus year prison sentences for a major salmonella outbreak in 2008 and 2009.

The Justice Department has been trying to hold Kruse accountable for the listeria outbreak for some time. He was first charged with seven felony counts in May 2020, but his lawyers petitioned to have the charges dismissed because they hadn’t been brought by a grand jury. The first set of charges were dropped two months later, but were brought again in a formal indictment in October 2020. The Justice Department said at the time that grand juries were not meeting in spring 2020 because of the COVID-19 pandemic.