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Chipotle Coughs Up Big Bucks for Its E. Coli Disaster

It just settled out of court with more than 100 victims

Chipotle AP

Nearly a year since more than 500 diners reported falling ill after eating at Chipotle restaurants, the fast-casual chain has agreed to settle out of court with 100 people sickened by its E. coli and Norovirus outbreaks of 2015.

As Reuters reports, resolving the claims out of court means the chain will not have to face allegations in what would have been a series of probably well-publicized food safety trials. The terms of the individual settlements are being kept confidential.

Settlements out of court have pros and cons for both sides. They tend to result in faster decisions and are more confidential, but they also may not yield the big payouts of a trial. Of course, the opposite can be true, too. "Trials can go either way," says William Marler, an attorney with Marler Clark, the firm handling 96 of the cases against Chipotle that were settled. "With a 12-person jury, you have no idea who you're going to get. Which is why companies tend to settle. You want to control your risk."

According to Marler, it's rare for food safety claims to make their way to the courts. "If you look for verdicts in food cases, you'd find a handful," he says. "In this case, the CDC has confirmed the outbreak, so the only thing to fight about is what the case is worth."

Marler says both he and his clients were happy with the settlements. "If I thought a case was worth $10 and they offered $1, that case would have gone to trial," he says. "But I was able to resolve these cases. My clients have accepted the money and Chipotle's insurance company is willing to pay it."

Given the public's current wariness of the burrito chain, it's unlikely that a judge or jury would be sympathetic to Chipotle's mistakes in food handling. Had the claims made their way to court, headlines about Chipotle's legal battles could have carried on for months. Though the settlement news is making headlines today, by next week the news cycle will have largely moved on.

Chipotle spokesperson Chris Arnold told Eater the company settled the claims "because we are a company that does the right things for our customers. We simply believed it was the right thing to do to settle these claims." He noted that there is still one food safety lawsuit pending.

Chipotle's 2014-2015 E. coli, Norovirus, and Salmonella outbreaks sickened hundreds of people across nine states and landed 22 in the hospital. Loyal customers fled to competitors like Qdoba, sales dropped, stocks plummeted, and the Centers for Disease Control opened an investigation. (A criminal investigation was also launched.) The CDC ended its investigation in February, though investigators were never able to determine which ingredient was to blame. Chipotle, however, believes Australian beef may have been the culprit.

The burrito behemoth has attempted to move on from the foodborne illness problems in a number of ways: by announcing new food safety procedures, unveiling a loyalty program, introducing new menu items, and launching a spendy marketing campaign that includes freebies and deals.

Though these suits are behind it now, Chipotle has been mired in lawsuits since the scandal, including one alleging the company misled investors and others claiming it was guilty of gender discrimination. Just last month, it was reported that nearly 10,000 Chipotle workers were suing the company over unpaid wages.

Update, 2:38 p.m.: This post has been updated to include comments from attorney William Marler.

Chipotle Settles Consumer Food Safety Claims [USA Today]
Chipotle Settles Sick Customers' Claims, Avoiding Court Battles [Reuters]
Tracking Chipotle’s E. Coli Outbreak [E]
All Chipotle Coverage [E]

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