Delaware’s Supreme Court has overturned the dismissal of a shareholder lawsuit against one the country’s largest ice cream makers after a 2015 listeria outbreak that killed three people.
The court ruled Tuesday that a judge erred because the plaintiff had not demanded that the board of Blue Bell Creameries take action itself before the lawsuit was filed. That demand requirement can be waived if a plaintiff raises reasonable doubts about the impartiality of directors because of close ties to management. Former CEO Paul Kruse is a defendant in the suit.
The court also said the lawsuit adequately alleges that the board at Blue Bell failed to implement any system to monitor food safety performance or compliance.
The Brenham, Texas, company suffered significant financial losses due to the outbreak.