Several Diacetyl Plaintiffs Settle Claims with Mustard Oil Manufacturer

A company that manufactures mustard oil supplied to the employers of food-flavoring workers who alleged they contracted bronchiolitis obliterans from occupational exposure to diacetyl and other chemicals, is seeking court confirmation of its good faith settlement with some of the workers. Ortiz v. Flavor & Extract Mfrs. Assoc. of the U.S., No. BC364831 (Cal. Super Ct., Los Angeles Cty., motion filed June 2, 2009).

According to Naturex, Inc.’s motion for an order confirming the settlement, its experts were prepared to testify that scientific evidence and published literature do not link mustard oil to bronchiolitis obliterans, a point two of the plaintiffs appeared to concede when they initiated settlement discussions rather than making their expert available for deposition. The settlement agreement would provide these plaintiffs with $7,500 in exchange for a release and dismissal with prejudice. The motion also indicates that another plaintiff never used mustard oil during his employment. He has apparently agreed to sign a release and dismiss his claims with prejudice in exchange for defendant’s waiver of costs.

If the court determines that the settlement was reached in good faith, Naturex will be protected from future contribution or indemnity claims by other parties. Among other matters, Naturex will have to persuade the court that the settlement is not a product of fraud, collusion or tortuous conduct and that the settlement amount is not “grossly disproportionate” to its proportionate share of liability.