E Coli Lawyer & Attorney : Marler Clark Law Firm : E. coli Blog

Dateline NBC reported on fresh food contamination, with emphasis on fresh spinach and lettuce grown in California, and whether irradiation is the answer to ensuring our fresh produce is safe.

"We can say all day long that we have the safest food system in the world," says Seattle attorney Bill Marler, who specializes in cases involving victims of E. coli-contaminated produce. "Well, we don't. And we have systems that are broken. We have things that need to be fixed."

Marler represents Michelle Matthews, who is suing Dole Foods and Natural Selections/Earthbound Foods to cover her past and future medical bills and her pain and suffering. He says the industry has known about and ignored the problem for years.

"It's easy in these situations to go, 'I'm not sure exactly what caused the problem, so there's nothing I can do. But I'm making a lot of money selling spinach and lettuce in a bag, so I'm going to keep doing that.' They didn't take the time to figure out what the problem was," says Marler.
 

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Yum Brands Inc. said Wednesday that 11 lawsuits have been filed against the company and its Taco Bell Corp. subsidiary for an E. coli outbreak in November and December.

According to the Centers for Disease Control, the outbreak was associated with food at Taco Bell restaurants in Pennsylvania, New Jersey, New York and Delaware. The CDC said that 71 people fell ill because of the outbreak.

In its annual report to the U.S. Securities and Exchange Commission, Louisville-based Yum said the stores named in at least five of the lawsuits are not company-owned, and therefore, Yum believes it is not liable for any losses at those stores. Yum said it has provided for the estimated litigation costs.

The company has said that the E. coli outbreak cost it about $20 million in the fourth quarter because of lost sales and franchise and license fees, and increased marketing costs.

Irvine, Calif.-based Taco Bell operates in 14 countries and territories. As of the end of 2006, there were 5,608 Taco Bell stores in the United States and 238 international stores. About 23 percent of the U.S. units and 1 percent of the non-U.S. units are company-owned.

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Investigators for the FDA and CDC have indicated that the E. coli-contaminated lettuce that sickened customers at Northeast Taco Bell restaurants in November and December of 2006 came from California's Central Valley. The Taco Bell outbreak was reported just before an outbreak at Taco John's locations in the Midwest, which was also traced to lettuce grown in the Central Valley.

In an article for the Salinas Californian, Brian Tumulty reported that FDA was continuing its investigation and that a final investigation report into the Taco Bell E. coli outbreak would not be published for at least another month, while a report on last fall's E. coli outbreak traced to baby spinach will be issued before then.

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Los Angeles Times reporter Jerry Hirsch wrote about Taco Bell's five percent drop in earnings in the fourth quarter of 2006, and noted that Taco Bell cited a "produce sourcing" issue as part of the reason for the drop in earnings. E. coli, according to Hirsch's article, was conspicuously absent in Yum! Brands' earnings report.

Yum provided almost no financial details about the effect on Taco Bell except to say that sales were recovering from their December low.

Overall, Yum reported a profit of $232 million, or 83 cents a share, a 3% gain from $226 million, or 77 cents, a year earlier. Sales rose 4% to $3 billion. Yum also owns the fast food chains Pizza Hut and KFC.

Before the earnings release, Yum shares rose 29 cents to $60.78. The price, near its 52-week high, was little changed in after-hours trading.

In a report Monday to investors, UBS analyst Palmer said he believed Taco Bell restaurants would bounce back to at least flat sales and might log "slightly positive" growth in April.

Yum also will collect an undetermined level of insurance payments to help offset profit lost because of the E. coli-related drop in sales, he said.

In an article for BusinessWeek.com, Bruce Schreiner wrote that Taco Bell and Yum!'s performance surprised financial analysts:

Larry Miller, a restaurant analyst with RBC Capital Markets, said the drop at the Mexican-style chain wasn't as severe as he had expected. "I think investors are going to be somewhat relieved with Taco Bell," he said in an interview. "It wasn't quite as bad as I think some of us thought it might be."

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