Boskovich sues Taco Bell, saying the fast-food chain sought a scapegoat when diners fell ill
Boskovich Farms Inc., the Oxnard green onion grower linked and then cleared in Taco Bell's E. coli outbreak in December, is firing back at the fast-food chain.
The grower contended in a lawsuit last week that the Irvine-based chain's actions libeled the farming concern and destroyed much of its business.
Taco Bell continued to link its onions to the outbreak that sickened more than 70 restaurant patrons in the Northeast in December even after it knew the produce was not contaminated, the lawsuit said.
But the fast-food chain said it acted responsibly and was only trying to keep the public informed as events unfolded.
The false connection between the farm and Taco Bell's E. coli problem has cost Boskovich "millions of dollars of business," said attorney Thomas Girardi, but he declined to state a specific dollar amount.
"We had a whole crop of green onions that we couldn't even give away. It was just plowed under."
He added, "Taco Bell engaged in an irresponsible and intentional crusade to save its own brand at the expense of an innocent supplier."
In a statement, Taco Bell Corp. defended its actions Wednesday.
"Our goal was to be transparent and provide the public with information as we learned of it. We believed green onions may have been the source based on the presumptive positive testing, so we immediately removed them from our products to put public safety first.
"We later learned they were not the source of the E. coli outbreak.
Throughout this entire matter, Taco Bell acted openly, responsibly and with the public safety as our primary concern," the company said.
The incident cost Taco Bell $20 million in operating profit. The company sells more than $6 billion of tacos, chalupas and burritos annually at its 5,800 U.S. restaurants.
The lawsuit claims that Taco Bell probably knew by Dec. 9 and certainly by Dec. 11 that confirmatory tests for E. coli in the green onions were negative. The company and FDA officials said Dec. 11 that the green onions were not the source of the disease.
Yet on Dec. 13, Taco Bell President Greg Creed published an open letter in national newspapers stating that "all Taco Bell ingredients have come back negative for E. coli with the possible exception of green onions, which we removed from all 5,800 restaurants on December 6."
Creed also said Taco Bell would no longer include green onions as a food ingredient.
Boskovich Farms had about 55 acres planted with green onions in Ventura County when the outbreak occurred. Now, it has no plans to replant green onions in those fields as a result of the product's declining sales since the Taco Bell crisis.
Lettuce was eventually identified as the culprit. But the lawsuit notes that lettuce remains in about 70% of Taco Bell's offerings.
The libel case pits two Southern California institutions against each other.
In 1915, Stephen Boskovich started his farming career in the San Fernando Valley, selling fresh produce in the Los Angeles wholesale produce market.
His sons expanded the business, moving it to a 145-acre ranch owned by the Newhall Land & Farming Co. Boskovich's grandsons took control of the business in the 1970s, expanding beyond green onions and carrots into a range of produce.
A decade later the company was farming land in California, Arizona and Mexico. Boskovich Farms moved its headquarters to Oxnard three years ago, and the fourth generation of the family now farms about 10,000 acres.
The first Taco Bell opened in Downey in 1962. It was the brainchild of Glenn Bell, a fast-food entrepreneur who had dabbled in hot dog and taco chains in Southern California for much of the previous decade. The company sold shares to the public in 1966 after having trouble lining up bank financing for expansion.
In 1978, Bell sold what was then a 868-unit restaurant chain to PepsiCo Inc. PepsiCo spun off Taco Bell, along with its Pizza Hut and KFC chains, in 1997 into a company that now operates as Lexington, Ky.-based Yum Brands Inc.
The restaurant was first linked with E. coli in early December, when New Jersey health officials found a cluster of infected people who said they had eaten at a Taco Bell in South Plainfield.
Although Taco Bell never named Boskovich as its green onion supplier, the farm provided all of the chain's green onions and was quickly mentioned in media reports about the outbreak.
An executive with Boskovich responded that there was only a tentative link between the outbreak and the farm's produce, a claim that was backed up by federal and state health officials who said there was no official evidence implicating any particular food.
Kevin Reilly, a deputy director of the California Department of Health Services, said there were often false positives in preliminary E. coli tests.
Nonetheless, Taco Bell "was anxious to find a scapegoat," lawyer Girardi said. "We don't know what the ultimate damage to the Boskovich brand will be."