Abbott Lawsuit, Baby Formula NEC Litigation, Shareholder Derivative Claims, and Wage Disputes in 2025
Abbott Laboratories faces three major legal battles as of December 2025: 774 pending lawsuits in federal court alleging its Similac baby formula causes necrotizing enterocolitis (NEC) in premature infants, a shareholder derivative lawsuit over the 2022 infant formula contamination crisis, and a November 2025 Fair Labor Standards Act collective action over unpaid overtime. The NEC litigation has produced both massive verdicts—including a $495 million award in July 2024—and recent defense victories, while shareholders seek to hold Abbott’s board accountable for billions in damages from safety failures.
These cases represent the most significant corporate litigation facing Abbott in decades, with implications for infant health, corporate governance, and worker compensation.
What Are the Abbott Lawsuits?
NEC Baby Formula Litigation
The primary Abbott litigation involves parents suing over Similac formula products allegedly causing NEC—a life-threatening gastrointestinal disease—in premature infants. As of December 2, 2025, there are 774 pending actions in the federal multidistrict litigation (MDL No. 3026) in the U.S. District Court for the Northern District of Illinois, with Judge Rebecca Pallmeyer presiding.
Parents claim Abbott failed to warn that cow’s milk-based formula significantly increases NEC risk in preterm babies compared to human milk or donor milk alternatives. The disease carries a 15-40% fatality rate and can cause severe long-term complications for survivors.
Shareholder Derivative Lawsuit
Abbott shareholders, led by the International Brotherhood of Teamsters Local No. 710 Pension Fund and Southeastern Pennsylvania Transportation Authority (SEPTA), filed a derivative lawsuit in June 2023 over the 2022 infant formula contamination crisis that caused nationwide shortages.
The suit alleges Abbott’s board breached fiduciary duties by failing to oversee safety at the Sturgis, Michigan plant, resulting in:
- Massive product recalls
- A nationwide infant formula shortage
- Billions in lost sales and reputation damage
- Federal investigations and Congressional scrutiny
- Hundreds of wrongful death, personal injury, and consumer lawsuits
On August 7, 2024, Judge Sunil R. Harjani denied Abbott’s motion to dismiss the core claims, allowing the case to proceed. On February 14, 2025, the court largely denied a motion to stay by Abbott’s Special Litigation Committee, permitting discovery to continue.
Overtime Wage Lawsuit
On November 25, 2025, warehouse associate Kassandra Dominguez filed a Fair Labor Standards Act collective action in the Northern District of Illinois, alleging Abbott failed to include “Award Pay” and other non-discretionary payments when calculating overtime rates.
Dominguez worked for Abbott from April 2021 through June 2025 at the North Chicago K-2 Complex. She claims Abbott systematically underpaid hourly workers on overtime by excluding certain earnings from regular rate calculations.
Who Are the Plaintiffs in the NEC Baby Formula Lawsuits?
Parents of premature infants who developed NEC after consuming Similac formula products comprise the plaintiff class. Notable cases include:
Margo Gill – Illinois resident whose daughter Robynn developed NEC after being fed Abbott’s Similac premature infant formula in 2021. In July 2024, a Missouri jury awarded Gill $95 million in compensatory damages and $400 million in punitive damages—the largest NEC verdict to date.
Marie Smith – Filed lawsuit after her premature infant Amirea died from NEC after just two weeks of life following formula feeding. “This is a feeling I would not wish on anyone… I feel like people have been lied to,” Smith told NBC affiliate KARE 11.
Deondrick Brown Sr. and Rebekah Etienne – Alleged Abbott’s formula was “unreasonably dangerous” and caused their son’s death from NEC. Their son was born 24 weeks premature, fed fortified donated breast milk initially, then died within days of transitioning to Abbott’s cow’s milk-based formula.
Cassidy and Addison (pseudonyms for privacy) – Teenage daughter Addison lives with serious digestive issues including GERD and esophageal swelling requiring injectable medication, allegedly stemming from NEC complications after formula feeding as a premature infant.
What Is Necrotizing Enterocolitis (NEC)?
NEC is a life-threatening gastrointestinal disease primarily affecting premature infants that causes:
- Inflammation and bacterial infection in the intestines
- Death of intestinal tissue (necrosis)
- Perforation of intestinal walls
- Severe infection and sepsis
- Mortality rate of 15-40% in severe or surgical cases
Symptoms include:
- Feeding intolerance and vomiting
- Abdominal distention and discoloration
- Bloody stools
- Lethargy and temperature instability
- Metabolic acidosis
The condition can rapidly deteriorate from initial symptoms to life-threatening complications within hours or days. Survivors often face long-term health problems including growth and developmental difficulties, chronic digestive issues, and short bowel syndrome requiring lifelong medical care.
What Do the NEC Lawsuits Allege?
Failure to Warn
Plaintiffs claim Abbott and competitor Mead Johnson (Enfamil manufacturer) failed to warn doctors, hospitals, and parents that:
- Cow’s milk-based formula significantly increases NEC risk in premature infants
- Studies dating back to 1990 showed NEC was 6-20 times more common in formula-fed preemies versus breastfed babies
- Human milk or donor milk dramatically reduces NEC risk
The lawsuits state companies provided no warnings on labels, websites, or marketing materials about increased NEC risk and offered no instructions on how to properly use formulas to lower risk.
Products Liability and Negligence
Legal claims assert:
- Similac formulas for premature infants are “unreasonably dangerous” when used as intended
- Abbott failed to ensure product safety
- Companies engaged in deceptive marketing, promoting formulas as safe and effective without disclosing dangers
- Manufacturers knew or should have known about NEC risks based on decades of medical research
Specific Abbott Products Named
Lawsuits identify these Similac products as particularly dangerous for premature infants:
- Similac Special Care formulas for preterm infants
- Similac Human Milk Fortifier
- Other cow’s milk-based Similac products marketed for NICU use
What Has Happened in the NEC Litigation?
Major Plaintiff Victories (State Courts)
March 2024: $60 Million Verdict – St. Clair County, Illinois jury awarded $60 million to the family of fraternal twin brothers admitted to NICU. After donor breast milk became unavailable, doctors transitioned babies to Mead Johnson formula. One twin developed NEC and died at 25 days old.
July 2024: $495 Million Verdict – Missouri jury in St. Louis awarded Margo Gill $95 million compensatory and $400 million punitive damages. Her daughter developed NEC and suffered irreversible neurological damage requiring long-term care after consuming Abbott premature infant formula in 2021.
Recent Defense Victories (Federal MDL)
May 2025: First Bellwether Dismissal – Illinois federal Judge Pallmeyer granted summary judgment to Abbott days before the first MDL bellwether trial (Mar v. Abbott Laboratories) was scheduled to begin May 5, 2025.
July 2025: Second Bellwether Dismissal – Judge Pallmeyer granted summary judgment to Abbott in another case after excluding plaintiff’s expert testimony on causation.
October 2025: Third Consecutive Win – Judge Pallmeyer ruled Abbott not liable for infant death in Etienne & Brown v. Abbott Laboratories, finding the case “factually weak” just before trial.
Abbott has now won three consecutive summary judgment rulings in federal court, preventing cases from reaching juries.
Vacated Defense Verdict
March 2025: New Trial Ordered – Missouri state judge vacated an October 2024 jury verdict that had cleared Abbott and Mead Johnson, citing “errors and misconduct” by defense attorneys. The judge found Abbott’s legal team:
- Repeatedly introduced inadmissible evidence to mislead jurors
- Falsely claimed plaintiff wanted all formulas banned, creating fear-based bias
- Violated court orders in bad faith
The ruling confirmed previous sanctions against Abbott’s lead attorney, who was barred from closing arguments and accused by the trial judge of trying to provoke a mistrial.
What Is Abbott’s Defense?
No Conclusive Evidence
Abbott points to a statement from three federal agencies—the FDA, CDC, and National Institutes of Health—released in 2024 stating: “There is no conclusive evidence that preterm infant formula causes NEC.”
Defense attorneys argue it’s “the absence of human milk—rather than exposure to formula” that is associated with NEC.
Alternative Causation
In the Gill case, Abbott argued the child “suffered from a traumatic brain injury in utero and at birth, long before she was fed any Abbott products” and that “no one is to blame” for the condition.
In other cases, Abbott contends long-term injuries resulted from birth trauma that deprived infants’ brains of oxygen, not from formula feeding.
Medical Necessity
Lawyers argue that while mother’s milk lowers NEC risk, specialized formula is sometimes necessary and life-saving for premature babies who cannot receive adequate human milk.
Expert Testimony Challenges
Abbott successfully excluded plaintiff expert testimony in multiple federal cases, arguing:
- Experts relied inappropriately on animal and in vitro studies
- Causation methodology was not scientifically sound
- Experts lacked specific qualifications regarding NEC pathology
Judge Pallmeyer has required plaintiffs to show safer alternatives existed for premature infant feeding, setting a high evidentiary bar for causation.
Current Status of NEC Litigation as of December 2025
Federal MDL
- 774 pending cases in MDL No. 3026 (Northern District of Illinois)
- Judge Pallmeyer ordered second wave of bellwether trials scheduled to begin August 2026
- No global settlement announced despite extensive negotiations
- Court ordered comprehensive census of all NEC claims to facilitate settlement discussions
State Court Cases
- Thousands of cases consolidated in Madison County, Illinois (Illinois appellate court ruled consolidation proper)
- Additional cases pending in Missouri, Pennsylvania, and California
- State courts may apply different evidentiary standards than federal MDL
- New state-level case filed in New Jersey in 2025
Mixed Results Pattern
- Plaintiffs: 2 massive state court verdicts ($60M and $495M)
- Defendants: 3 consecutive federal MDL summary judgment wins
- 1 vacated defense verdict due to attorney misconduct
The divergence between state and federal outcomes suggests evidentiary rulings—particularly regarding expert testimony—drive case results.
What Is the Shareholder Derivative Lawsuit About?
The 2022 Formula Contamination Crisis
In winter 2022, Abbott recalled infant formula products and shut down its Sturgis, Michigan facility after concerns about contamination with Salmonella newport and Cronobacter sakazakii bacteria. Several infants became seriously ill, triggering:
- Nationwide formula shortage affecting millions of families
- Federal investigations (FDA, DOJ, FTC)
- Congressional hearings and scrutiny
- Consent decree with Department of Justice
- Hundreds of millions in lost sales and profits
- Billions in remediation costs and reputation damage
Shareholder Allegations
Lead plaintiffs claim Abbott’s board and executives:
- Breached fiduciary duties by failing to implement adequate safety oversight systems at the Sturgis plant despite six years of documented FDA compliance problems
- Violated Section 10(b) of the Securities Exchange Act by making false and misleading statements about safety and regulatory compliance
- Engaged in insider trading – executives sold stock and the company repurchased billions in shares at artificially inflated prices before problems became public
- Unjustly enriched themselves while producing formulas unsafely and unethically
The complaint alleges these failures caused billions of dollars in damage to Abbott since 2019.
August 2024: Major Ruling Against Abbott
Judge Harjani denied Abbott’s motion to dismiss, finding:
- Shareholders sufficiently alleged breach of fiduciary duty (Caremark claim) – directors repeatedly failed to implement, monitor, or oversee safety compliance at Sturgis
- Federal securities law violations were properly pleaded
- Dismissing the suit was NOT in the company’s best interest
- Plaintiffs met the high burden required for shareholder derivative suits
The court dismissed certain ancillary claims that don’t affect the case’s overall scope.
February 2025: Discovery Continues
The court largely denied a motion to stay by Abbott’s Special Litigation Committee, allowing written discovery to proceed. Abbott’s November 2024 motion to reconsider the dismissal denial was rejected.
Insider Trading Allegations
The lawsuit claims certain Abbott executives engaged in insider stock sales before problems at the Sturgis plant became public, personally benefiting from stock sold at artificially inflated prices based on false statements about safety compliance.
What About the Overtime Wage Lawsuit?
Kassandra Dominguez filed a Fair Labor Standards Act (FLSA) collective action on November 25, 2025, alleging Abbott violated federal wage laws by miscalculating overtime pay.
The Allegations
Abbott allegedly excluded “Award Pay” and other non-discretionary payments from the “regular rate” when calculating overtime, resulting in systematically underpaid workers.
Example from complaint: For the pay period November 11-17, 2024, Dominguez worked 42.25 hours at base rate $24.1673 with overtime rate $36.2509. She earned $1,048.28 including $76.45 in Award Pay. Abbott allegedly didn’t include Award Pay in overtime calculations.
Legal Framework
Under FLSA regulations, there’s a presumption that all remuneration must be included in the “regular rate” for overtime calculations unless specifically excluded by statute. Dominguez asserts Award Pay doesn’t fall into any statutory exclusion.
Potential Class Size
The complaint alleges other hourly employees across Abbott’s U.S. operations experienced similar underpayment, suggesting a potentially large collective action spanning multiple facilities.
What Are the Implications for Consumers and Parents?
Informed Feeding Decisions
The litigation highlights critical information parents and healthcare providers need when making feeding decisions for premature infants:
- Human milk (mother’s own or donor milk) significantly reduces NEC risk
- Cow’s milk-based formulas carry substantially higher NEC risk for preemies
- Medical studies dating to 1990 documented 6-20x greater NEC risk with formula
- Hospitals and NICUs may not have adequately warned about these risks
Medical Professional Responsibility
Healthcare providers caring for premature infants should:
- Prioritize human milk feeding whenever possible
- Clearly inform parents of NEC risks associated with formula
- Monitor formula-fed preemies closely for NEC symptoms
- Consider human milk-based fortifiers rather than cow’s milk-based products
Corporate Accountability
The massive verdicts and ongoing litigation signal potential accountability for companies that:
- Market products without adequate safety warnings
- Fail to disclose known risks to vulnerable populations
- Prioritize profits over infant safety
Formula Safety Concerns
Beyond NEC risks, Abbott faces separate litigation over:
- Heavy metals contamination – March 2025 class action alleges Similac contains arsenic, cadmium, lead, and mercury without disclosure
- 2022 bacterial contamination – Salmonella and Cronobacter led to recalls and shortages
What Are the Corporate Governance Implications?
Fiduciary Duty Standards
The shareholder derivative lawsuit tests board oversight responsibilities when health and safety issues are involved. Courts increasingly scrutinize whether directors implemented adequate:
- Compliance and safety monitoring systems
- Information reporting mechanisms
- Responses to regulatory red flags
- Risk management for mission-critical operations
Securities Law Violations
The case examines whether executives can be held liable for:
- Making false statements about safety and compliance
- Causing company stock repurchases at inflated prices
- Engaging in insider trading before problems become public
Delaware vs. Other Venues
The Abbott litigation demonstrates the importance of state and federal courts outside Delaware in investor protection. Cohen Milstein, co-lead counsel, achieved success in Illinois federal court, showing Delaware isn’t the only venue for significant derivative litigation.
Texas Corporate Law Changes
In May 2025, Texas Governor Greg Abbott signed Senate Bill 29, creating new protections for corporate directors and officers including:
- Codifying the business judgment rule
- Requiring 3% minimum ownership for derivative lawsuits
- Limiting books and records demands
- Raising pleading requirements for shareholder claims
These changes—aimed at attracting companies like Tesla and SpaceX to Texas—would have made the Abbott shareholder lawsuit more difficult to bring if the company were incorporated in Texas rather than Illinois.
Timeline of Key Events
1990s-2010s: Medical studies document 6-20x higher NEC risk in formula-fed premature infants versus breastfed
2019-2022: FDA documents compliance problems at Abbott’s Sturgis, Michigan plant
February 2022: Abbott recalls Similac products; Sturgis plant shut down due to bacterial contamination
Winter 2022: Nationwide infant formula shortage affects millions of families
June 2023: Teamsters Local 710 and SEPTA file shareholder derivative lawsuit
October 2023: Lead plaintiffs officially appointed in shareholder derivative case
March 2024: $60 million verdict against Mead Johnson in Illinois state court NEC case
July 2024: $495 million verdict against Abbott in Missouri state court (Gill case)
August 7, 2024: Federal judge denies Abbott’s motion to dismiss shareholder derivative suit
October 2024: Jury clears Abbott and Mead Johnson in state court; later vacated for misconduct
May 2025: Judge Pallmeyer grants summary judgment to Abbott in first federal MDL bellwether case
May 14, 2025: Texas Governor Abbott signs corporate law reforms making shareholder suits harder
July 2025: Second federal MDL bellwether dismissed on summary judgment
October 2025: Third consecutive federal MDL summary judgment for Abbott
November 2025: Overtime wage collective action filed
February 14, 2025: Court denies stay motion in shareholder derivative case, discovery continues
December 2, 2025: 774 NEC cases pending in federal MDL; second wave of bellwether trials scheduled for August 2026
What Happens Next?
NEC Litigation
August 2026 Bellwether Trials – Second wave of federal MDL trials scheduled, potentially including:
- More rigorous expert testimony after prior exclusions
- Cases with stronger factual records
- Different causation evidence and alternative feeding options analysis
Settlement Negotiations – Court-ordered census of all NEC claims suggests possible movement toward global settlement, though none announced as of December 2025. The mixed verdict pattern (state court plaintiffs’ victories vs. federal court defense wins) complicates settlement valuation.
State Court Cases Continue – Thousands of cases proceeding in state courts may face different evidentiary standards, potentially more favorable to plaintiffs based on 2024 verdicts.
Shareholder Derivative Lawsuit
Discovery proceeding despite Abbott’s attempts to stay the case. Key issues:
- What did board members know about Sturgis plant problems?
- When did executives engage in stock sales?
- What internal communications show about safety oversight?
- Can shareholders prove insider trading and securities violations?
If successful, the case could result in:
- Financial recovery for Abbott from directors/officers
- Corporate governance reforms
- Changes to safety oversight systems
- Accountability for executives
Overtime Wage Lawsuit
As a potential collective action, the case could expand to include:
- All hourly Abbott employees in the U.S.
- Multiple years of alleged underpayment
- Substantial back wages and penalties
- FLSA liquidated damages (doubling recovery)
Frequently Asked Questions
Q: Can I still file an NEC lawsuit against Abbott?
Yes. While the federal MDL has 774 pending cases as of December 2025, new cases continue to be filed in both federal and state courts. If your premature infant developed NEC after consuming Similac formula, consult an attorney experienced in product liability litigation. Most NEC attorneys work on contingency (no upfront fees).
Q: What damages can families recover in NEC lawsuits?
Successful plaintiffs have recovered compensatory damages for medical expenses, ongoing care costs, pain and suffering, emotional distress, lost wages, and in wrongful death cases, funeral expenses and loss of companionship. Punitive damages (awarded when conduct is particularly egregious) can be substantial—the Gill verdict included $400 million in punitive damages. However, outcomes vary significantly; Abbott has won three consecutive federal cases.
Q: Why have Abbott’s results been different in state vs. federal court?
Federal Judge Pallmeyer has strictly applied evidence rules, frequently excluding plaintiff expert testimony on causation. State courts may apply different evidentiary standards or have judges more willing to allow expert testimony based on animal studies and medical literature. The procedural posture also differs—federal cases resolved on summary judgment before juries hear evidence, while state verdicts came after full trials.
Q: Has Abbott recalled Similac due to NEC risks?
No. Similac has not been recalled for NEC risks. Abbott’s February 2022 recall involved potential bacterial contamination (Salmonella and Cronobacter), not NEC. Abbott maintains its formulas are safe and necessary for premature infants who cannot receive adequate human milk, pointing to federal agency statements that there’s “no conclusive evidence” formula causes NEC.
Q: What should parents of premature infants do?
Medical professionals and advocacy groups recommend prioritizing human milk for premature infants whenever possible—either mother’s own milk or donor milk from milk banks. If formula is medically necessary, discuss NEC risks with your healthcare team, ensure close monitoring for symptoms (feeding intolerance, vomiting, abdominal distention, bloody stools), and seek immediate medical attention if symptoms appear. Don’t stop formula feeding without medical supervision.
Q: How is the shareholder derivative lawsuit different from the NEC cases?
The NEC lawsuits are product liability claims brought by parents/families directly harmed by formula. They sue Abbott seeking compensation for their children’s injuries or deaths. The shareholder derivative lawsuit is brought by shareholders ON BEHALF OF Abbott against the company’s board and executives for harming the company through mismanagement, safety failures, and securities violations. If successful, recovery goes to Abbott (the company), not to individual shareholders, though shareholders benefit from improved governance.
Q: Will Abbott face criminal charges?
The 2022 formula contamination crisis triggered federal investigations, and Abbott entered into a Consent Order with the Department of Justice to resolve inquiries. As of December 2025, no criminal charges have been filed against Abbott or individual executives, though investigations may be ongoing. The shareholder lawsuit references potential criminal probes, but civil litigation proceeds independently of any criminal investigations.
Q: What does the overtime wage lawsuit mean for Abbott employees?
If the case is certified as a collective action and plaintiffs prevail, current and former hourly Abbott employees across the U.S. may be entitled to back pay for improperly calculated overtime, plus liquidated damages (typically equal to the unpaid amount), plus attorney fees. The FLSA allows employees to recover up to three years of back wages. Employees don’t need to take action immediately—if the case is certified, they’ll receive notice and can opt in to the collective action.
Resources for Families Affected by NEC
If your child developed NEC:
- Consult with product liability attorneys experienced in NEC litigation
- Preserve medical records documenting NEC diagnosis and formula feeding
- Document all medical expenses and ongoing care needs
- Most NEC attorneys work on contingency (no fees unless you recover)
For support and information:
- NEC Society: necrotizingenterocolitis.org
- Pediatric gastroenterology specialists
- NICU parent support groups
Reporting adverse events:
- FDA MedWatch: 1-800-FDA-1088 or www.fda.gov/medwatch
Legal Disclaimer: This article provides information about ongoing litigation and should not be construed as legal advice. Outcomes in litigation vary based on specific facts, jurisdiction, and applicable law. Families considering legal action should consult with qualified attorneys. Information about corporate governance and securities litigation is educational and does not constitute investment advice.
Sources: This article is based on court filings from the U.S. District Court for the Northern District of Illinois (MDL No. 3026 and In re Abbott Laboratories Infant Formula Shareholder Derivative Litigation), Missouri and Illinois state court records, verified news reports from Reuters, Chicago Tribune, NBC News, and legal analysis from Cohen Milstein, Motley Rice, TorHoerman Law, and other sources reporting on ongoing litigation as of December 2025.
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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