Things are getting worse for Chipotle Mexican Grill Inc. Last month, the Denver-based fast- food company announced that the U.S. Food and Drug Administration's Office of Criminal Investigations is looking into a suspected norovirus outbreak that sickened more than 130 people who ate at a Sterling, Virginia, restaurant in June.
Last year, the U.S. Department of Justice launched an investigation after salmonella, norovirus and E. coli traced back to Chipotle's Tex-Mex-themed chain restaurants wreaked havoc in 2015 from coast to coast, sickening more than 500 people. Those incidents included a norovirus outbreak in Simi Valley, California, that sickened 234 people and another in which 140 Boston College students got ill.
Also this summer, two senior executives at an egg company in Iowa that was central to a nationwide salmonella outbreak in 2010 exhausted their appeals. A federal judge ordered Austin "Jack" DeCoster and his son, Peter DeCoster, to begin serving their three-month prison sentences. The pair pleaded guilty in June 2014 to the misdemeanor charge of introducing adulterated food into interstate commerce.
In addition, the European Union, in an unusual move, plans to meet in late September after it was revealed that eggs contaminated with an insecticide have spread to 17 countries.
In light of this renewed focus on food-safety matters, Corporate Counsel spoke with Eric Kuwana, a partner at Katten Muchin Rosenman who has defended national retailers, food manufacturers and other supply chain defendants in products liability class actions and hundreds of individual filed cases in foodborne outbreaks. Kuwana discussed everything from the Chipotle probe to what to expect in this area in the future and how other food and beverage companies can avoid a similar fate. The interview has been edited for length and clarity.
Corporate Counsel: What is going on with the Chipotle investigation? Is the company subject to increased scrutiny because it is a so-called "repeat offender"?
Eric Kuwana: This isn't a new investigation. It's a broadening of an old one [stemming from] the Simi Valley and Boston outbreaks. When people were getting sick in the Sterling, Virginia, location, [the DOJ] issued a broader or a new subpoena. Anytime this happens when there's already an investigation in place, they are going to take a look at the new outbreak.
What's interesting about this case is that most of these [investigations] are looking at different restaurants, different issues, and whether Chipotle really figured it out. There's an open question about whether they really implemented policies and procedures to make sure it didn't happen again. I think that's why you have a broadening investigation. Somebody is sitting there saying, "Wait a minute. Did you guys just make noises or, did you really do things?"
CC: Do you expect food-safety issues to be a top priority for the Trump administration?
EK: I think, honestly, the jury is still out on that, and I think it's impossible to predict whether this will be an area of focus.
The Obama administration wanted to focus on this area, but we've heard none of that kind of rhetoric so far from anybody who's a political appointee.
If you take a step back, you could say, "OK, Obama was pushing this, so, reflexively, you'd think Trump wouldn't." But, a lot of the outbreaks have occurred because of foreign-imported food, foreign sources. So if someone in the Trump administration really focuses on that fact, it actually may get more attention, given the trade isolationism rhetoric. But that is pure speculation, and, at this stage, it would be guesswork as to what they are really looking at.
CC: Even so, can we expect the trend of criminal charges in this area to continue?
EK: I would say generally we're going to see an increase over time because the science has gotten so much better. It used to be very hard to prove how exactly it happened, but that's getting much better. You can genotype things. You can trace them. You can show exactly how some of these [outbreaks] unfolded.
The Chipotle probe is going to be interesting in light of the DeCoster developments. I think it really has scared a lot of food executives. They are very worried about the criminal consequences.
CC: So what can companies do to prevent such an outcome?
EK: You have to ramp up your compliance programs. If you have an outbreak, and you are a CEO or COO, and you can't tell the investigators what your chief compliance officer or chief food safety person looks like or does or whether you've talked to them in the last half year, you're going to have some issues.
Companies need to have clear authority lines—who can stop production, who can shut down a restaurant, who can say, "This is a problem. We're shutting everything down, and we're throwing everything out and cleaning." I think that's one thing the criminal investigators are looking at—"What are those authority lines? What are the compliance programs? Are they real or are they just on paper?"
CC: Beyond compliance, what else should food companies be doing?
EK: They should have exercises to test their ability to conduct a recall, to understand clearly what's going into products so that they can quickly act in a recall. They need to make sure that they have essentially a SWAT team ready to go of multidisciplined litigators, product liability specialists, food safety specialists, scientists and lawyers who are used to dealing with government investigators. They have to have this team ready to act quickly when these kind of things happen.
And then the final thing is to know your industry, know the best practices, know how things are changing and hire the people necessary to really be abreast of that.