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Foodborne illness settlements might signal Chipotle’s recovery

Denver-based Chipotle Mexican Grill has one Bill mostly in the company’s rearview mirror and another Bill just taking a large stake in what’s been the most popular fast-casual restaurant chain in the country, with 2,000 or so locations. The separate actions by the two Bills could together mean that Chipotle is on the mend.

Chipotle is completing its business with food safety attorney Bill Marler, who confirmed that he has settled with the restaurant chain on behalf of nearly 100 clients. They were among 510 people who were sickened with foodborne illnesses last year during outbreaks associated with Chipotle.

Chipotle-burritoExcept for one more complex case, Marler told Chipotle’s hometown daily newspaper, The Denver Post, that he’s close to being done with representing the 97 clients he had with claims against the burrito chain. (Marler said that one of his clients, a 19-year-old woman, said a few days after getting out of the hospital that she wanted to go back to Chipotle.)

All the settlements include non-disclosure agreements with terms that were arranged between last March and one week ago.

Marler is mostly getting out of Chipotle’s life just as billionaire activist investor Bill Ackman, and his Pershing Square hedge fund, has acquired a 9.9-percent stake in the chain, which is traded on the New York Stock Exchange.

Restaurants involved in past outbreaks of foodborne illness — from Jack in the Box to Taco Bell — have seen their financial misfortunes turn around fairly quickly once they settled with Marler, who ends up representing most victims of such highly publicized outbreaks.

A string of outbreaks plagued Chipotle at locations throughout the country during the last half of 2015. They included:

  • Seattle — E. coli O157:H7, July 2015, five sickened people, source unknown;
  • Simi Valley, CA — Norovirus, August 2015, 234 people, source was sick employee;
  • Minnesota — Salmonella Newport, August and September 2015, 64 sick people, source was tomatoes but it is not known at what point in the field-to-fork chain the pathogen was introduced;
  • Nine states — E. coli O26, began October 2015 and declared over on Feb. 1, 55 sickened people, source unknown, states involved are California, Delaware, Illinois, Kentucky, Maryland, Minnesota, New York, Ohio, Oregon, Pennsylvania and Washington, and,
  • Three states — E. coli O26, began December 2015, declared over Feb. 1, five sickened people, source unknown, states involved are Kansas, Oklahoma and Nebraska.

Chipotle spokesman Chris Arnold told the Post that the company settled the cases over the past few months because “it was the right thing to do.”

Arnold said that, by the second quarter, the chain had reduced its customer losses by 40 percent since a low point in January.

(Editor’s note: Attorney Bill Marler is also publisher of Food Safety News.)

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