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 Chipotle Mexican Grill has been under increasing scrutiny in the
wake of a series of foodborne illnesses that have led to a decline
in its shares and a projected plunge in its fourth-quarter
same-store sales.
Chipotle disclosed on Wednesday that the U.S. Attorney's Office for
the Central District of California had served the company with a
grand jury subpoena in December as part of a criminal investigation
by that office and the Food and Drug Administration.
Officials in the Justice Department's Consumer Protection Branch
contacted Los Angeles federal prosecutors to discuss the early stage
inquiry on Thursday, according to people familiar with the matter.
While officials in the Justice Department's headquarters in
Washington often work with regional prosecutors, their interest in
the Chipotle matter underscores the federal government's stepped-up
enforcement of food safety laws in recent years.
 Prominent prosecutions include a 2015 case in which a subsidiary of
ConAgra Foods Inc agreed to plead guilty and pay $11.2 million in
connection with shipping peanut butter tainted with salmonella.
In September, the former head of the Peanut Corporation of America
was sentenced to 28 years in prison for his role in a salmonella
outbreak that killed nine people.
The subpoena over the Chipotle outbreak requires the company to hand
over documents in connection with an August 2015 outbreak of
norovirus at one of its restaurants in Simi Valley, which sickened
more than 200 people.
One of the sources, who asked not to be named because the probe is
not public, said investigators at this point are only looking at the
Simi Valley outbreak and that it is unclear where the inquiry will
lead.
A spokesman for Chipotle said the company plans to cooperate with
the investigation as it moves forward.
Chipotle has come under fire for a rash of recent outbreaks of
foodborne illnesses at its restaurants across several states,
involving E. coli, salmonella and norovirus.
The incidents prompted the Los Angeles Department of Public Health
to preemptively review its inspection records for local Chipotle
restaurants, even though there have been no outbreaks there.
The county also plans to call a meeting with Chipotle
representatives to discuss food safety.
"I suspect we'll find conditions that, in view of everything that's
happening around the country, warrant us calling Chipotle in and
reviewing our violation history with them,” said Angelo Bellomo, the
Deputy Director of Health Protection.
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"We don't wait,” he added. “We really shouldn't be waiting for
foodborne illnesses or outbreaks to take action."
Lawyers have said a federal investigation of the Chipotle outbreak
is highly unusual, because past prosecutions involving foodborne
illnesses have focused on food producers who were the original
source of the problems such as farmers or food manufacturers, not
the restaurants or stores that sold the products.
They say the most likely legal tool that prosecutors could invoke is
the federal Food, Drug and Cosmetic Act, which gives the Justice
Department both criminal and civil powers to bring charges.
Under that law, a company or individual can face felony or
misdemeanor charges if "adulterated" food that is harmful to human
health or is prepared in unsanitary conditions is introduced across
state lines.
For it to be a felony, prosecutors must prove there was an intent to
defraud or mislead.
Experts say it remains unclear if the law could apply to Chipotle
because the investigation so far is focused on just one restaurant
location, and the outbreak involves norovirus- an illness that is
easily transferred from person-to-person contact and may not be tied
to an "adulterated" food.
Reuters could not determine what legal theories prosecutors may be
pursuing in the investigation.
A Justice Department official declined to comment about Chipotle
when asked by Reuters earlier this week.
The unit within the U.S. Attorney's Los Angeles office that is
leading the charge is a branch that specializes in environmental and
community safety crimes.
The head of the unit, Joseph Johns, has a track record for working
on health and environmental crimes, including a 1998 case against
juice maker Odwalla, which pleaded guilty and was fined $1.5 million
in connection with an E. Coli outbreak that killed one person and
sickened dozens.
(Reporting by Sarah N. Lynch, additional reporting by Tom Polansek
in Chicago, Editing by Soyoung Kim and Andrew Hay)
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