Defense wants a thin-downed indictment before trial of retired Blue Bell president

The defense attorneys for retired Blue Blell president Paul Kruse want more struck from the criminal indictment going to an August 1 jury trial in Austin, TX.

Chris Flood of Houston and John Cline of Seattle this time, want the indictment dismissed “to the extent it relies on Kruse’s alleged nondisclosure of certain information to Blue Bell’s customers because the indictment does not allege that Kruse had a duty to disclose that information. In the alternative, Kruse asks that the Court strike the nondisclosure allegations.”

The pre-trial motion follows another asking that the indictment’s discussion of specific sanitation issues be set aside before trial.

“The indictment does not allege that Kruse had a duty to disclose information to Blue Bell’s customers and thus must be dismissed to the extent it relies on a nondisclosure theory, says the defense motion.

The indictment alleges one count of conspiracy to commit wire fraud between February 13, 2015, and April 20, 2015, and six substantive counts of wire fraud based on wirings between those dates.

The scheme to defraud rests on two theories, according to the defense motion:

(1) that Kruse actively concealed from Blue Bell’s customers the fact that tests had detected listeria monocytogenes (“L.M. “) in Blue Bell ice cream, including through what the government will contend were misleading half-truths, and

(2) that Kruse did not disclose the fact of the positive L.M. tests to Blue Bell’s customers. This motion addresses only the second theory.

“Rather than send a public notification about the contaminated products to customers and consumers, defendant Paul Kruse ordered his sales employees to pull products from customers’ shelves without disclosing the reason,” the defense motion continues.

“It was further a part of the conspiracy that Paul Kruse did not share with Blue Bell’s customers the information he learned on or about February 17, 2015, i.e., that additional samples of Chocolate Chip Country Cookie and Great Divide Bar collected by South Carolina health officials from Blue Bell’s Columbia, South Carolina, distribution center tested positive for [L.M.]. It was further part of the conspiracy that Paul Kruse did not immediately direct Blue Bell employees to communicate openly and honestly with customers regarding the potential Listeria contamination in certain Blue Bell products.”

The motion says it was further part of the alleged conspiracy that Kruse did not immediately inform Blue Bell customers of the link between Blue Bell ice cream and known illnesses” upon learning of tests suggesting such a link.

The defense team argues that “no statute, regulation, or other authority imposes a duty on an ice cream manufacturer (or the C.E.O. of an ice cream manufacturer) to notify customers of a positive Listeria test. Instead, a federal statute requires the manufacturer to notify the F.D.A. through the Reportable Food Registry (“R.F.R. “) when the manufacturer determines that its ice cream is a “reportable food.”

“A food is “reportable” when there is a “reasonable probability” that use of or exposure to it “will cause serious adverse health consequences or death to humans or animals.”
Ther motion adds.

Once reported, it is FDA that “shall issue or cause to be issued, an alert or notification concerning a reportable food using information from the [R.F.R.] as [the F.D.A.] deems necessary to protect the public health.”

The FDA may require the manufacturer to “[p]rovide a notification” to “the immediate previous source of the article of food if [the F.D.A.] deems necessary” and to “the immediate subsequent recipient of the article of food, if [the F.D.A.] deems necessary.”

If the FDA determines that “there is a reasonable probability that . . . the use of or exposure to [an adulterated item] will cause serious adverse health consequences or death to humans or animals,” it “shall” provide the manufacturer an opportunity to recall the item.

And if the manufacturer declines to do so, the motion says FDA may order a mandatory recall. In connection with a mandatory recall, the F.D.A. may require the manufacturer to notify those in the distribution chain to cease distributing the product.

The FDA. may also “cause to be disseminated information regarding food . . . in situations involving, in the opinion of [the F.D.A.], imminent danger to health or gross deception of the consumer.”

The defense says Blue Bell submitted a report to the R.F.R. on February 13, 2015 — the day it learned of a positive L.M. test — and the company updated the R.F.R. report several times over the next two months.

After receiving Blue Bell’s R.F.R. report, the FDA did not issue an alert, and it did not require Blue Bell to provide notifications. Nor did it invoke its mandatory recall authority or notify any grocery stores.

The F.D.A. did not provide any public notice of the positive L.M. tests for Blue Bell ice cream until March 13, 2015, the day Blue Bell initiated a voluntary recall of certain products and a month after the first positive L.M. test.

“Between March 13 and April 20, 2015 — the date of Blue Bell’s final, complete voluntary recall–the F.D.A. periodically commented to Blue Bell on the company’s public communications about the L.M. issue. Still, it did not impose a duty on Blue Bell to provide any particular notification form, ” the motion continues.

For its part, the government is seeking two orders. They are:

~Prohibiting counsel from admitting, discussing, or eliciting testimony about the unimplemented Critical Information, Grocery Store Notification, and Consumer NotificationprovisionsoftheFederalFood,Drug,andCosmeticAct,unlessanduntil the defendant testifies that he relied upon them; and

–Prohibiting counsel from admitting, discussing, or eliciting testimony about the 2008 FDA draft guidance on the control of Listeria monocytogenes (“L. mono”) in refrigeratedandfrozenready-to-eatfoods,unlessanduntilthedefendanttestifiesthat he relied on it.

Kruse, 67, is accused of one count of conspiracy and six counts of fraud for actions he took during the 2015 listeriosis outbreak when he was president of Blue Bell Creameries.

Kruse issued the first recall in the company’s century-long history and suspended all production for several weeks. In the four-state outbreak, there were three deaths among ten illnesses. All ten patients were hospitalized.

A federal Grand Jury indicted Kruse in 2020 after a five-year investigation.

The federal Western District Court for Texas calls the United States v. Kruse “a complex criminal case.” The court is based in Austin,

As a corporate entity, Blue Bell pleaded guilty in a related case in 2020 to two counts of distributing adulterated food products in violation of the Federal Food, Drug, and Cosmetic Act.

The company agreed to pay criminal penalties totaling $17.5 million and $2,1 million to resolve False Claims Act allegations regarding ice cream products manufactured under unsanitary conditions and sold to federal facilities, including the military. The total $19.35 million in fines, forfeiture, and civil settlement payments was the second-largest amount ever paid in the resolution of a food safety matter.

Kruse is the only individual facing criminal charges due to the 2015 outbreak.

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