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Investors and Feds Serve Up Legal Woes for Chipotle

1330873_27868463The popular “fast food” chain Chipotle Mexican Grill is not having a good year so far. Last year was undoubtedly its worst. Chipotle, which has been very successful at capturing a solid quality fast food market share, has seen those long lines dwindle and its stock value fall. Fans of the chain are accustom to waiting for the “fast” service and flavorful Mexican fare. But Chipotle has been plagued with food safety issues that have caused many to become ill. Investors are angry and apparently so are federal authorities.

Reuters reports that investors have now filed a lawsuit in the U.S. District Court for the Southern District of New York claiming that the popular restaurant did not have adequate food safety processes. They allege that investors purchasing shares during the period from February 2015 to January 2016 were misled by Chipotle’s failure to disclose the quality control issues.

The federal government is also taking legal action against Chipotle, which is said to be cooperating with the authorities. The matter is being handled by the U.S. Attorney’s Office for the Central District of California and the Food and Drug Administration through its Office of Criminal Investigations. USNews reports that Chipotle was served with a subpoena recently and is the subject of a criminal grand jury investigation relating to the norovirus at its Simi Valley, California location. This location was apparently the source of illness to nearly 190 restaurant guests and nearly 20 employees. The virus causes the type of symptoms generally thought of as “food poisoning.”

Another legal woe for the restaurant is the injury lawsuit filed by an individual who became seriously ill with E. coli after eating at a Seattle Chipotle. He was hospitalized for the illness which was later linked to other cases in the area. The outbreak was not made public by the local health authorities until a later date and the man’s case was not linked to the outbreak until recently.

The Centers for Disease Control are able to identify particular strains of many of these illnesses which helps to link the cases tougher. They are providing extensive information on the locations and nature of various outbreaks. They also provided information regarding the symptoms of various food borne illnesses and what to do if you have these symptoms. Other outbreaks that have included E. Coli and salmonella have occurred in Washington, Oregon, Minnesota, Kansas, North Dakota and Oklahoma. In Boston, a large group of college students became ill after eating at a Chipotle close to campus.

Chipotle is apparently revamping their food handling processes. It remains to be seen whether Chipotle will fully recover from the ongoing legal issues facing the restaurant chain. The company has said it is revamping their food safety and have apologized to consumers for what has happened. But only time will tell if that is sufficient for the chain to fully recover from this serious health and food safety crisis.

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