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Suits Against Odwalla Mount in E. coli Case

Another lawsuit was filed Monday against Odwalla Inc., even as a Fresno grand jury continues to investigate circumstances surrounding an October 1996 outbreak of E. coli that led to the death of a Colorado child.

Seattle attorney William Marler, who has filed four previous suits against the juice maker in the 1996 incident, filed the latest suit in King County Superior Court in Seattle on behalf of 4 1/2-year-old Katherine Wright, who allegedly drank apple juice contaminated with E. coli 0157:H7.

The Wright lawsuit is the latest to stem from the outbreak of E. coli that killed a 16-month-old girl in Colorado and injured at least 60 other people. To date, 17 personal-injury suits have been filed in the incident; seven have been settled, according to Odwalla's 1997 annual report.

Odwalla is based in Half Moon Bay near San Francisco, and its plant is in Dinuba.

The Wright girl is the fifth young Odwalla consumer Marler is representing. The lawsuits could go to trial this spring.

The complaint alleges the girl drank Odwalla apple juice, provided to her by a day-care provider, periodically from Oct. 21-28, 1996.

Girl became sick

On the morning of Oct. 27, 1996, the young girl became ill, complained of excruciating stomach pain, cramps, vomiting and diarrhea. She seemed to recover, however, and returned to day care two days later, where she once more was given Odwalla to drink.

She became sick again that night and was taken to her pediatrician and then to a hospital the next day, after the day-care provider called with the news that unpasteurized Odwalla juice was linked to E. coli, according to the suit.

The suit alleges that Katherine continued to receive ongoing care. It also alleges that Odwalla knew of the dangers associated with unpasteurized apple juice.

Odwalla made its then-unpasteurized products at its 65,000-square-foot production plant in the Central Valley.

No evidence

After the outbreak, a U.S. Food and Drug Administration investigation found no evidence of E. coli at the plant, but faulted Odwalla for failing to test for the bacteria.

Odwalla has since started a "flash-pasteurization" process that kills harmful bacteria.

In a court brief filed last year in another case, Marler alleged that Odwalla was told of problems with its unpasteurized juices more than a year before the E. coli outbreak.

That brief was filed in opposition to a motion by Starbucks Corp. asking to be dropped as a defendant in a Marler lawsuit. Marler filed the suit on behalf of a child who drank apple juice at a Starbucks outlet. The child spent more than two weeks on kidney dialysis.

Marler wrote that Starbucks and Odwalla knew of people who became sick from the juice and of foreign objects -- broken glass, an insect and a nail -- being found in the products months before the E. coli outbreak.

The document contended that a Starbucks worker wrote his company headquarters to say he got "extremely ill within a few hours" after drinking Odwalla juice.

The letter was relayed to Odwalla, one of a number of times the two companies conferred over reports of juice problems, the brief stated.

Claims criticized

Odwalla spokesman Chris Gallagher called Marler's claims of Odwalla's negligence in processing the juice "careless and scientifically unfounded" and said the "implications are absolutely false."

"We took responsibility, paid related medical bills and have done everything to make sure it hasn't happened again," said Gallagher.

The publicly traded company lost about $ 12.4 million in the fiscal year ended Aug. 31, but said in its latest quarterly filing with the Securities and Exchange Commission that sales have returned to almost pre-recall levels. Gallagher said that 75,000 people continue to buy Odwalla products daily.

"Rebuilding our business has been expensive, but it is the result of consumers who stuck with us," the spokesman said.

Grand jury probe

Still, a Fresno grand jury is probing the circumstances surrounding the contamination and a subsequent recall of Odwalla's apple juice products.

Odwalla officials said in documents filed with the government that the Fresno grand jury is investigating events that occurred "in 1996 and before, including the E. coli incident."

The New York Times reported Sunday that interviews with former Odwalla managers and company documents show that before the outbreak, Odwalla relaxed its standards on accepting blemished fruit.

In a response Monday, Odwalla Inc. defended its quality-control practices.

'Unfounded speculation'

Odwalla officials labeled as "unfounded speculation" the Times article's suggestion that better fruit-handling practices, more rigorous adherence to good manufacturing practices or different quality-control procedures could have avoided the outbreak.

"Odwalla concluded after the outbreak, and after extensive consultation with several outside experts, that only pasteurization would provide a fail-safe means of avoiding E. coli," the company stated.

It also disagreed with allegations that safety took a back seat to growth at the company, whose revenues ballooned from $ 9 million in 1991 to $ 59 million in 1996.

"In fact, Odwalla continuously upgraded its manufacturing process in the period leading to the E. coli outbreak," the statement read.

Issues being examined by the Fresno grand jury include:

* Whether Odwalla had relaxed its standards of accepting blemished fruit in the weeks before the 1996 incident, and whether special precautions were not taken in processing the fruit.

* Whether production managers brushed aside warnings from a company inspector that a batch of apples was too rotten to use without taking special precautions.

* In the three weeks before the bad juice was made, company documents showed some loads of apples came in with 25 to 30 percent defective fruit.

In its response Monday, Odwalla Inc. defended its quality-control practices.

"Odwalla's primary indicator of overall quality was bacterial level readings, known as total plate counts (TPC's)," the statement said. "It's a fact that in the period leading to the E. coli incident, our TPC's in apple juice were relatively low and decreasing. These test results, however, indicated high-quality juice and contradict the suggestion that lots of substandard fruit were passing through our sorting and culling process."

Details that have emerged in recent days sharpen the spotlight on California growers of the apples processed into the contaminated batch and the way those apples were handled at the Odwalla plant.

Kenton Kidd, president of the Fresno-based California Apple Commission, said from the outset of federal and state investigations of the outbreak, a suspected culprit was the use of what those in the apple industry refer to as "drops" or "grounders," apples that have been picked up from the ground.

Warning against 'drops'

After the outbreak, the apple commission issued a warning against use of "drops," Kidd said.

Kidd said he knows of nobody in his industry who sells dropped apples. He understood investigators found no E. coli at Valley orchards they visited, Kidd said.

"From what I understand, there was no problem at the growing level," he said.

Kidd stopped short of pointing the finger at Odwalla in an interview Monday, but remarked: "The contamination from E. coli can come from workers in the plant not washing their hands. There are so many possibilities."

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