A federal appeals court is backing a U.S. District Court judge who says the insurance companies hired by Blue Bell before the problems do not have to pay. The reason? The listeria outbreak was not the result of an accident, rather a decision by the board to press forward with production.
Ten people were infected and three died after listeria made its way into Blue Bell’s food chain. The courts have found that traces of listeria began showing up months before the outbreak was made public, yet the company did not shut down production. Blue Bell lost millions, and shareholders sued. The directors tried to claim the insurance companies were on the hook for damages, but the courts have dismissed the insurers from the legal action.