A settlement has been reached between Wright County Egg and dozens of people who had been sickened after eating salmonella-tainted eggs. The agreement will include six-figure payments for two children. This is the first round of settlements with the Iowa egg producer blamed in the outbreak. The settlements were reached with about 40 salmonella victims during a mediation conference. The payouts will come from Selective Insurance, the company’s insurer.
While the settlements are confidential, details of three became public when a federal judge in Iowa approved settlements totaling $366,000 for children from Texas, California and Iowa who were hospitalized after becoming sick. Payments varied widely depending on how seriously the Claimant was sickened.
According to federal officials, 1,900 people fell ill during the outbreak that started in July 2010 and was later linked to contaminated eggs supplied by Wright County Egg and Hillandale Farms of Iowa. Both companies voluntarily recalled 550 million eggs nationwide. Regulators put most of the blame on Wright County Egg, based in Galt, Iowa, which sold chickens and feed to Hillandale. Wright County Egg also had more illnesses linked to its eggs and was cited for numerous violations.
Inspectors found samples of salmonella at both farms along with dead chickens, insects, rodents, towers of manure and other filthy conditions. A Congressional investigation revealed that Wright County Egg’s testing found salmonella samples more than 400 times between 2008 and 2010.
Salmonella is a bacteria that typically causes fever, cramps and diarrhea within 12 to 72 hours of eating a tainted product. It lasts for several days and can require hospitalization. The largest of three settlements made public last week was $250,000 for a three-year-old boy who had severe diarrhea and vomiting and collapsed days later at pre-school, where his mother found him on the ground shivering and holding his right leg in pain. The boy had to spend a week in the hospital because the infection had spread to bones and muscles and was life-threatening.
Two other settlements were approved: $100,000 was awarded in the case of an 11-year-old Newbury Park, Calif., girl who fell violently ill and was hospitalized for four days; and $16,000 was awarded to a 16-year-old Urbandale, Iowa, girl who was rushed to the emergency room after eating a restaurant sandwich dipped in egg-batter and fried.
On November 10th, U.S. District Judge Mark Bennett approved the settlements, which include compensation for medical bills, legal fees, and money for the children’s pain and suffering that won’t be available until they turn 18. The settlement for the three-year-old includes $70,000 for his parents, $15,000 to cover medical expenses and a $100,000 annuity to be invested from which he’ll receive guaranteed payments of $25,000 at age 18, $50,000 at 21 and $119,059 at 25. Details of the settlement in the other cases were confidential. The children’s settlements had to be approved by a federal judge because they are minors. That is why they became public.
The settlements won’t end the legal problems facing Austin “Jack” DeCoster, who built an egg empire stretching from Maine to Iowa and has a long record of labor, health and environmental violations. His son, Peter DeCoster, ran Wright County Egg. There are many Claimants who have not settled their cases. A number of cases are being mediated and it is expected that more settlements will be announced fairly soon. DeCoster’s companies have $26 million in insurance coverage spread out over three policies. They likely have a large punitive damage exposure for their prior history of salmonella testing, which they didn’t reveal to the government, and the prior history of Mr. DeCoster and other egg farms that have been fined many millions of dollars.
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