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Outbreak News

Fourteen hepatitis claims settle in first mediation sessions

JOE MANDAK

Associated Press

Thu, Apr. 29, 2004

Centre Daily Times

PITTSBURGH - Court-approved mediators have settled 14 of the first 15 claims they have heard stemming from a hepatitis A outbreak at a western Pennsylvania Mexican restaurant last fall.

Only two settlements must be approved by a bankruptcy judge, meaning they involve more than $35,000 each. The settlements were relatively small because none involved people who underwent liver transplants or died from the liver virus, a plaintiffs' attorney said Thursday.

"The amount of the settlements are confidential, although the cases we resolved are certainly none of the long-term hospitalized cases or deaths or liver transplants," said attorney William Marler, whose Seattle-based firm Marler Clark specializes in tainted food litigation.

Wrongful death claims and those filed by the handful of transplant patients are expected to consume the lion's share of some $51 million in liability insurance Chi-Chi's has.

"What we dealt with is people who were sick for three to six weeks and had your standard, but horrible, hepatitis A infection," Marler said of the first round of mediation, which occurred privately late last week near Pittsburgh.

A second round of mediation is being scheduled for late next month, Marler said.

Four people died in the outbreak, which surfaced six months ago. Eventually, more than 660 people were sickened, nearly all of whom ate or worked at a Beaver County Chi-Chi's restaurant that served tainted green onions.

Attorneys for the more than 300 known plaintiffs are splitting the cost of mediators with Chi-Chi's. Marler Clark represents 85 clients; most of the other plaintiffs have hired Pittsburgh-area attorneys.

"We're very pleased that this process is under way ... and we look forward to the growers and shippers, the suppliers of the green onions, stepping up to the plate and partnering with us to help the victims of the outbreak," said Chi-Chi's attorney, David Ernst. "But Chi-Chi's is having to fund these settlements (alone) and that's not right."

The restaurant chain will soon sue to try and force the onion suppliers to contribute to the damages the victims get, Ernst said.

A federal bankruptcy judge earlier this year approved the Chi-Chi's mediation system. The system needed bankruptcy approval because the Louisville-based restaurant chain had filed for Chapter 11 protection in October, just weeks before the outbreak became known.

Hepatitis plaintiffs have until June 4 to bring a claim against Chi-Chi's. Those settled for $35,000 or less will be paid without further review from the bankruptcy court. The bankruptcy judge must approve larger settlements.

If a claim can't be settled or the settlement is rejected by the bankruptcy court, the plaintiffs are then free to sue Chi-Chi's in court. Companies under Chapter 11 protection can't be sued without bankruptcy court approval, so their assets are protected to repay creditors.

Plaintiffs who settle must agree to end all claims against Chi-Chi's and anyone involved in the restaurant's supply chain.

The Food and Drug Administration found the onions came from one or more of four Mexican farms that also supplied onions that sickened at least 300 people who ate at various restaurants in Georgia, North Carolina and Tennessee last year.

Officials with the FDA and the Centers for Disease Control and Prevention have said there was no way for Chi-Chi's to detect or prevent the contamination. Under Pennsylvania law, a restaurant that serves tainted food is liable for serving it - but it can also seek to get other responsible parties to bear the financial burden.

"We don't want two years of lawsuits and lawyer fees to take precedence over helping the victims, but we're not going to (settle the claims) without the partnership of the people supplying the onions," Ernst said.

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More on this outbreak: Chi-Chi's Hepatitis A Outbreak

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