Second Cyclospora Lawsuit Against Darden, Shares Don’t Waver

Andrew Klips |

Cases based upon the U.S. Food and Drug Administration’s assessment that salad served at Darden Restaurant, Inc.’s (DRI) Red Lobster and Olive Garden restaurants containing the parasite cyclospora doubled with a second lawsuit against the company hitting the wires on Wednesday. 

Cyclospora is a rare, one-celled parasite that, according to the Mayo Clinic, causes “watery, and sometimes explosive, diarrhea” and other symptoms like stomach cramps, nausea and weight loss.  Fresh produce is typically the culprit for the food illness that is spread by people ingesting food or water that is (if you’ve got a weak stomach, stop reading) contaminated with feces.

Late last week, an Addison, Texas woman named Suzanne Matteis filed a lawsuit against Darden, claiming that she contracted cyclosporiasis in July after dining at an Olive Garden.

There has been an outbreak spanning several states, with Texas registering the most cases through today, based on data on the Centers for Disease Control and Prevention website.  157 cases have been reported in Texas.  Iowa is a close second with 151 cases, followed by Nebraska with 85.  To date, 467 cases have been reported in 16 states.  At least 27 people have been hospitalized in five states.

Cases have been reported in Iowa, Texas, Nebraska, Florida, Wisconsin, New York, Georgia, Illinois, Arkansas, Kansas, Louisiana, Missouri, Connecticut, Minnesota, New Jersey and Ohio.

The CDC says the reported cyclosporiasis cases are linked to a salad mix.  So does the U.S. Food and Drug Administration, elaborating that their investigation confirmed the salad mix to come from Taylor Farms de Mexico, S. de R.L. de C.V., a processor of foodservice salads.

On Wednesday, the Houston-based law firm of Simon & Luke, along with local counsel Williams, DeClark & Tuschman, filed a lawsuit in Lucas County, Ohio stemming from the multi-state outbreak from Taylor Farms’ salads served at Olive Garden and Red Lobster.  The suit claims that Olive Garden is responsible for 35-year old Toledo resident Justin Haren on June 23 becoming ill and presenting at an urgent care and then a doctor’s office, where he was treated for cyclospora.

The FDA has said that Taylor Farms is cooperating in the investigation and an environmental assessment is happening to try and identify preventative measures.  The FDA last inspected the facility in 2011, where it found no notable issues.  The agency said that the Taylor Farms runs a state-of-the-art facility and has an exception food safety record.

Before anyone panics and runs to throw-away perfectly good salad or swear off Olive Garden, it is believed that because of the short shelf life of salad mixes (14 days) that the contaminated salad is no longer in the food supply chains.  The last cases of cyclopariasis were reported in Iowa and Nebraska early in July.  Taylor Farms makes bagged salads for consumer as well, but there have been no implications of salad mix being sold in grocery stores.  No other restaurants, including Longhorn Steakhouse, Bahama Breeze, Yard House of other brands under the Darden umbrella, have been implicated either. 

Further, no salad brand has been named, an announcement that states generally forbid if there is believed to be no apparent current threat.

Given the sue-happy nature of many people – and lawyers – in our country, now it will just be a matter of time to see how many of the more than 400 people hop on the bandwagon and decide to file suit against Darden.  In the case of Matteis, she is suing for negligence and says she suffered damages of at least $15,000.

 

Shares of DRI have not been impacted by the news of lawsuits, closing slightly lower on Monday (the first trading day after the first lawsuit was reported) and closing ahead by 0.9 percent at $49.68 on Wednesday.  So far in 2013, shares are up about 15 percent.

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Companies

Symbol Name Price Change % Volume
DRI Darden Restaurants Inc. 61.14 -0.38 -0.62 2,051,460
MEIJF Meiji Electric Indus Co 5.30 0.00 0.00 0

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