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Marler Blog Providing Commentary on Food Poisoning Outbreaks & Litigation

Chi-Chi’s, plaintiffs agree to mediate hepatitis lawsuits

As Joe Mandak of the Associated Press reported today, Chi Chi’s hepatitis claims may go to mediation. As the AP reported, I have been working for two months to come up with a solution for people who want to get their claims settled. My firm represents 67 people who intend to sue Chi-Chi’s.

The bankruptcy court has only allowed one lawsuit, filed by Richard Miller who needs a liver transplant to save his life. He already has more than $500,000 in medical bills.

Marler said the agreement was reached, in part, because if the total claims against Chi-Chi’s exceed its insurance, the chain’s assets – which could be used to pay bankruptcy creditors – could be targeted in lawsuits.

“The creditors are concerned that the $51 million isn’t enough (to cover the hepatitis A lawsuits) and they want to have some ability to at least keep track of the settlements,” Marler said.

Under the mediation system, potential lawsuits settled for $35,000 or less will be paid from $500,000 in self-insurance the restaurant chain has or a $1 million Arch Specialty policy, without further review from the bankruptcy court. Chi-Chi’s will agree to seek the bankruptcy judge’s approval of settlements of more than $35,000.

Retired U.S. District Judge Donald E. Zeigler and his law partner, Tom Cooper, of Pittsburgh, will mediate the cases.