Chi-Chi's chain sues suppliers of green onions

PITTSBURGH -- A Mexican restaurant chain that was hit by a hepatitis A outbreak traced to raw green onions is suing food wholesalers in an effort to get them to help pay for scores of lawsuits.

The outbreak last fall sickened 660 people who had eaten at a Chi-Chi's restaurant in suburban Beaver County and killed four.

Chi-Chi's has settled 134 of the more than 300 lawsuits filed against it, said Chi-Chi's attorney David Ernst.

Chi-Chi's filed suit last month against three suppliers -- Castellini Co. of Wilder, Ky.; Sysco Corp. of Houston; and a Sysco subsidiary, Sygma Network Inc. of Lakewood, Colo.

"We have tried for months to get those companies to voluntarily step up to the plate and help the victims. They're refusing to do so and we're continuing to do so ... so we've had to sue them," Ernst said Monday.

Some victims required liver transplants, though none of the cases Chi-Chi's settled involved deaths or critical injuries.

Ernst wouldn't give a specific amount, but said Chi-Chi's has spent "seven figures" on settlements, which are being channeled through a court-approved mediation process. Because Chi-Chi's filed for Chapter 11 bankruptcy protection a few weeks before the outbreak -- due to unrelated cash-flow problems -- a bankruptcy judge had to approve the mediation process and must also OK any individual lawsuit settlements of $35,000 or more.

The money Chi-Chi's paid to settle those suits is in addition to hundreds of thousands of dollars in smaller payments Chi-Chi's made to cover out-of-pocket customers' medical expenses. It also doesn't include the chain's business losses. Chi-Chi's had 122 restaurants in the Midwest, Mid-Atlantic and Northeast before the outbreak, and now has 65, the lawsuit stays.

Federal and state health officials traced the hepatitis outbreak to Mexican-grown green onions that Chi-Chi's used in salsa and as a garnish.

Castellini officials didn't immediately return calls seeking comment Monday.

Toni Spigelmyer, a Sysco spokesman, said the company "followed all applicable standards and FDA requirements" in supplying the onions.

"It's always regrettable when events like this happen. As a food service provider, we value the safety of our customers," Spigelmyer said.