Half Moon Bay fruit-juice maker Odwalla Inc. has reached a settlement — reportedly for $12 million to $15 million — with the families of five young victims of a 1996 food-poisoning outbreak caused by a tainted batch of the company’s apple juice.
The hefty settlement brings closer to an end a painful saga for the company and victims’ families, which began when Washington health authorities announced the outbreak at Halloween a year and a half ago. The company now has settled 17 lawsuits, with three remaining.
“It’s behind us now and we will move on,” said Terry Beverly of Seattle, a Microsoft engineer whose son, now 4, hovered near death after being stricken with an advanced stage of poisoning caused by a deadly microbe known as E. coli O157:H7.
“We’re very pleased to be able to fully compensate these children and to move forward with the families and with the lawyers to address the bigger issues of food-safety awareness,” said Chris Gallagher, a company official.
The settlement calls for an undisclosed amount of money to be placed in trust for the victims, five children who became seriously ill after drinking the tainted apple juice in Washington and Colorado. The youngsters have since resumed normal lives but will need to be monitored for years for potential long-term consequences.
The New York Times said the company agreed to pay $12 million to $15 million to the families. Odwalla and the families’ attorney said the terms of the settlement were confidential.
William Marler, the Seattle attorney who represented the five families, said the amounts of the settlements “will be substantial enough to fully compensate the children and their families for what they went through and may encounter in the future.”
The lawsuits were filed by the families of Michael Beverly, 4, Katherine Wright, 4, and Brooke Hiatt of Seattle; Brian Dimock, 7, of Washington, D.C., and Amanda Berman, 5, of Chicago. The families reached the settlement in talks with Odwalla Chairman Greg Steltenpohl and chief executive officer Stephen Williamson, and Odwalla’s insurance firm.
“You know, it was tough for Odwalla to face all of us,” said Richard Dimock, father of a victim. “We got to talk across the table from them. . . . It was an emotional two days for everybody.”
The outbreak was caused by a highly toxic microorganism, E. coli, which tainted a batch of apple juice bottled at Odwalla’s processing plant in Dinuba. Seventy people were sickened by the juice and a 16-month old Colorado girl died. The poisoning was a shock to the young, fast-growing company, which promoted its unpasteurized juices as nutritious health foods. The company now pasteurizes its apple juice.
A federal grand jury in Fresno is investigating the outbreak, examining several issues, among them whether the company properly reported its own tests which found another bacteria — Listeria monocytogenes — in samples of its juices in early 1996.
E. coli poisoning, which has been a growing problem worldwide for the past few years, can have devastating consequences for the very young, the elderly and the immune-suppressed, such as AIDS victims. Four of the five children suffered the most acute phase, hemolytic uremic syndrome, in which the kidneys shut down.
Parent Beverly said his son “was nearly dead” after drinking the tainted juice and suffering the horrific illness that E. coli causes in some youngsters.
“The doctors weren’t sure he was going to pull through. It was up to his little body. . . . He had heart murmurs, lung (problems), his kidney shut down. I was really scared. One night the doctor came up and told us he might die tonight. I broke down in tears. . . . You can have all the money in the world, but with a sick 2-year-old, you have to have faith in God. You’re totally helpless and at the mercy of this disease and it’s up to his little body to get him through it.”
Beverly said that during the mediation, he met with Steltenpohl and Williamson and was convinced of their sincerity. “They said they were very sorry. I know they were sincere about this. They have kids too.”
Williamson, Odwalla’s CEO, said “our sympathy will forever be extended to the individuals and families who were affected by this.”
After the 1996 recall of its apple juice, the company implemented a juice-safety program that meets and exceeds current Federal Drug Administration proposed fresh-juice requirements.