Why the Chipotle criminal probe shouldn’t be surprising

Jan 06, 2016   
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Federal prosecutors are stepping up legal action in food safety cases. Chipotle’s subpoena in a criminal investigation linked to foodborne illness is the latest example. 

To some, it was surprising that Chipotle was linked to a federal criminal investigation into an outbreak of illnesses last August. But as federal regulators and prosecutors intensify efforts to keep America’s food supply safe, that kind of news may not be so unusual.

The exact details of the case, and what’s next legally for the company, are still unfolding. But the case follows a recent spate of strong federal action to improve overall food safety standards and to hold companies and executives more accountable for wrongdoing.

Last week, the United States Department of Justice opened a criminal probe into ice cream-maker Blue Bell Creameries following an outbreak last year that health officials linked to 10 illnesses and at least three deaths in Texas and Oklahoma. And in September, the Justice Department sentenced Stewart Parnell, the former owner and CEO of the Peanut Corporation of America, to 28 years in prison for his role in a deadly salmonella outbreak in peanut butter.

For Chipotle, the investigation is the latest in a series of problems that have temporarily shuttered dozens of locations across America and done damage to a formerly peerless brand reputation.

Chipotle has “kind of positioned themselves as a special company that caters to the fresh and delicious product, etc., and they’ve let people down. And when you let people down, they take that pretty seriously,” food marketing professor John Stanton told NPR Tuesday.

Such scandals can be a powerful motivator for change in the food industry, where a cracked reputation can be difficult to repair. Burger chain Jack in the Box overhauled its operations in the wake of a deadly E. coli outbreak in 1993, and it has had a near-spotless safety record since.

For its part, Chipotle has promised to become a “leader in food safety,” outlining a detailed plan to screen its produce, retrain its workers to handle food more safely, and rework its supply chain to reduce the risk of more foodborne outbreaks.

The restaurant chain was subpoenaed for what it called a “broad range” of documents related to what officials say was a norovirus outbreak in Simi Valley, Calif. The investigation is being conducted by the Food and Drug Administration and the US Attorney’s Office for the Central District of California.

The investigation, which Chipotle discussed in a Securities and Exchange Commission filing Wednesday, comes on the heels of the new Blue Bell probe. Prosecutors in that case are examining whether company officials did anything illegal in their handling of the outbreak, which shut down Blue Bell’s manufacturing facilities and led to all of its products being temporarily removed from stores in 23 states. The investigation comes even after Blue Bell submitted to a program of reporting its progress to the FDA and its products were returned to grocery store shelves.

The Blue Bell and Peanut Corporation cases are early tests of the so-called Yates memo, a September notice from the Justice Department that encourages prosecutors and judges to target individual executives in corporate wrongdoing.

The Blue Bell case “could be one of the first case studies of the practical application of the Yates Memo in food safety cases,” Fuerst Ittleman David & Joseph, a Miami law firm, wrote in a client memo posted on its website last week.

The cases are also an effect of the FDA’s broadened authority to take action in food safety matters. In 2011, President Obama signed the Food Safety Modernization Act into law, giving the FDA the power to unilaterally shut down food processing facilities deemed unsafe. The legislation also requires food handlers and distributors to register with the FDA and maintain regular food safety records.

Since then, the FDA has increased both its inspections and its warnings to companies that it deems at risk.

There are limits to what regulation can do, and the FDA lost another $209 million during 2013 federal budget cuts. But the new efforts could have an effect, some say.

“That increased enforcement activity in combination with the [Department of Justice’s] willingness to investigate and charge food companies and individuals will likely lead to an increased number of criminal investigations and charges in the upcoming year,” the memo by Fuerst Ittleman David & Joseph reads. “Food manufacturers and distributors must make food safety compliance a top priority.”