The U.S. Supreme Court will let Sherman Oaks-based Worldwide Restaurant Concepts Inc. sue one of the nation's largest meat suppliers over an E. coli bacteria poisoning that killed a girl and sickened more than 100 others at one of its Sizzler restaurants in 2000.
The court refused to hear an appeal by Wichita, Kan.-based Excel Corp., a unit of privately held Cargill Inc., seeking to end a suit by the restaurant chain and others who became ill. Excel argued that it couldn't be sued in state court because the steaks it sold to the Sizzler USA restaurant in Milwaukee were not a ground beef product and thus was not considered "adulterated" under federal law.
Earlier, a Wisconsin appeals court found that federal regulations do not preempt a state requirement banning the sale of contaminated meat. The Supreme Court's refusal means that the case will move back to Milwaukee circuit court.
Sizzler, which operates 320 restaurants worldwide, is seeking more than $10 million in damages from Excel, which it alleges supplied the contaminated meat that caused the July 2000 outbreaks, said Frederick L. Gordon, Sizzler's attorney. The chain has already settled with more than 100 people who became sick from the E. coli outbreak and the Milwaukee restaurant has been closed.
"When you guarantee a product is going to perform, you have to live up to those obligations," Gordon said. "You don't get to place a deadly product into the field of commerce and then blame the victim for not making it safe."
Excel officials say they are not convinced that their steaks were responsible for the E. coli outbreak.
"The local Sizzler franchise bought meat from a distributor who bought meat from a couple of different suppliers, including Excel," said Excel attorney Ralph Weber.
E. coli is a food-borne bacteria that can be spread through undercooked meat.
Wisconsin health officials said they believed the E. coli outbreak was caused by workers handling contaminated meat who then cut up fruit and other items for the restaurant's salad bar.
Most of the country's major meat and food-processing organizations rallied around Excel's petition to the Supreme Court, arguing that federal regulators, not state courts, should have jurisdiction over certain contamination cases.
If suits such as these were allowed to go to state court, food processors would face "possible civil and criminal penalties for distributing products that comply with USDA standards and pass federal inspection," the groups said in court filings.
Worldwide Concepts also owns Pat & Oscar's restaurants and operates KFC restaurants in Australia. Shares of Worldwide Concepts rose 15 cents Monday to $3.18 on the New York Stock Exchange.