A federal court in New York has dismissed with prejudice a shareholder suit against Chipotle Mexican Grill Inc., finding the plaintiffs were unable to allege that the company made “demonstrably false” statements about foodborne illness outbreaks linked to its restaurants. Ong v. Chipotle Mexican Grill, No. 16-0141 (S.D.N.Y., entered March 22, 2018). The plaintiffs alleged that Chipotle and three of its executives misled shareholders and the public in 2015 and 2016 statements after outbreaks of norovirus, E. coli and Salmonella were linked to its restaurants. In addition to finding Chipotle’s annual reports contained sufficient disclosures about its processes, the court found that the plaintiffs failed to adequately allege that executives who knew about the outbreaks' connection to Chipotle sold more than $214 million in stock because the stock sales occurred months before the outbreaks were linked to the company.
Tag Archives norovirus
A website that allows individuals to report food poisoning incidents may help health officials identify outbreaks of foodborne illness, according to NPR. Developed by Patrick Quade, iwaspoisoned.com has reportedly handled more than 75,000 user posts from 46 states and 90 countries since its launch. After a cluster of reports, the website notifies local health officials; the site has correctly identified the source of four outbreaks before health officials did. Officials reportedly praise the site’s ability to identify norovirus outbreaks, which are often underreported. Officials have previously used Yelp to curate reports of foodborne illness.
Two consumers have filed lawsuits alleging they contracted norovirus after eating at one of Chipotle Mexican Grill’s locations. Hogan v. Chipotle Mexican Grill, No. 109599 (Va. Cir. Ct., Loudoun Cty., filed July 26, 2017); Moore v. Chipotle Mexican Grill, No. 109660 (Va. Cir. Ct., Loudoun Cty., filed July 26, 2017). Both complaints allege negligence and breach of implied warranties, and each plaintiff seeks $74,000 in damages and attorney’s fees. The Loudoun County Health Department has identified more than 135 people who became ill after eating at Chipotle’s Sterling, Virginia, restaurant between July 13-16, 2017, and confirmed that two people tested positive for the same strain of norovirus. On July 19, federal prosecutors served Chipotle with a new subpoena seeking details about the outbreak. In 2015, the U.S. Attorney’s Office for the Central District of California began a criminal investigation into a series of norovirus, E. coli and Salmonella outbreaks traced…
A Colorado federal court has dismissed a shareholder derivative action against Chipotle alleging the company’s officers and directors of food-safety oversight failed to take action to prevent outbreaks of foodborne illness. Gubricky v. Ells, No. 16-2011 (D. Colo., order entered June 7, 2017). The plaintiff claimed the defendants had failed to implement and enforce effective food-safety procedures, monitor compliance with food-safety laws or commit necessary resources to store audits and risk assessment after a series of foodborne illness outbreaks. The complaint further alleged that the board failed to take action or offer sick employees paid leave until 2015, seven years after the outbreaks began. In a shareholder derivative suit, plaintiffs must plead “with particularity” why demanding the corporate board to take corrective action would be futile, the court said, but the plaintiff failed to plead facts specific to each director establishing a “substantial likelihood of personal liability.” The plaintiff must…
Chipotle Mexican Grill Inc. and its customers who consumed tainted food during outbreaks of E. Coli, Salmonella and norovirus have reportedly reached a settlement agreement. Terms of the agreement were not disclosed except for one class member’s request to receive vouchers for free burritos. One case in the litigation is still pending. See The Denver Post, September 9, 2016. Chipotle was also hit with an unrelated lawsuit in California alleging the company fired an employee for saying that her Latino coworkers received preferential treatment. The plaintiff argues that after a Latina woman was promoted to the district manager position, Latino employees began receiving more favorable day shifts while other employees received night shifts. When the plaintiff complained about the scheduling to a Latino manager, she was allegedly told that “black girls always have attitude.” See CBS Los Angeles, September 13, 2016. Issue 617
Chipotle Mexican Grill has reportedly been served with a grand jury subpoena as part of a U.S. Attorney’s Office and Food and Drug Administration criminal investigation into a California norovirus outbreak in August 2015 that sickened more than 200 people. The company’s fare was also linked to a norovirus outbreak in Massachusetts in December 2015. Chipotle’s food safety practices face additional scrutiny over an ongoing E. coli outbreak that has resulted in the closure of 43 Chipotle locations in Washington and Oregon and reports of related illnesses in several other states. See The New York Times, January 6, 2016. In a January 6 Form 8-K filing with the U.S. Securities and Exchange Commission, Chipotle reported a 14.6 percent drop in fourth quarter 2015 sales and non-recurring expenses related to its foodborne illness incidents of $14 to $16 million. Meanwhile, Pomerantz LLP announced on January 8 that it has filed a…
The European Food Safety Authority’s (EFSA’s) Panel on Biological Hazards (BIOHAZ) has issued a scientific opinion on the risk posed by Salmonella and norovirus in fresh and frozen berries. According to BIOHAZ, which reviewed the limited data pertaining to the prevalence of these foodborne pathogens in berries, the risk factors for contamination are likely to include environmental conditions, contact with animal reservoirs and insufficiently treated compost, the use of contaminated water for irrigation or chemical applications, and cross-contamination by harvesters, food handlers or equipment. To mitigate these risks, BIOHAZ urges primary producers to implement Hazard Analysis and Critical Control Points (HACCP) systems as well as Good Agricultural Practices, Good Hygiene Practices and Good Manufacturing Practices (GMP). More specifically, the scientific opinion identifies Norovirus in frozen raspberries and strawberries as “an emerging public health risk,” stressing the need for additional data to develop microbiological criteria for improved control of norovirus in…
