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Lawsuit settled over salmonella-tainted eggs from Iowa

Arnie Riebli.

Press Democrat File Photo
Published: Wednesday, July 17, 2013 at 3:40 p.m.
Last Modified: Wednesday, July 17, 2013 at 3:40 p.m.

A California food distributor with ties to a Petaluma egg processor has settled its lawsuit against the Iowa egg producers blamed for a 2010 salmonella outbreak.

NuCal Foods Inc., a Ripon-based cooperative of egg farmers, reached the settlement last week with Iowa producers Quality Egg and Hillandale Farm. The two sides ended three years of litigation in federal court in Sacramento that shed light on an outbreak which sickened an estimated 62,000 people nationwide.

Arnie Riebli, a partner in Petaluma's Sunrise Farms and a founding member in NuCal, declined comment on the settlement. So did a NuCal attorney, while lawyers for the two Iowa egg producers didn't return messages.

The Iowa producers issued recalls covering 550 million eggs in 2010, after scientists traced illnesses back to their farms.

NuCal sued the two companies and Quality Egg owner Jack DeCoster, contending they were aware their farms were contaminated with salmonella but continued marketing their eggs as safe.

Citing documents that its lawyers obtained, NuCal alleged that testing by an Iowa State University lab had found salmonella in up to 43 percent of DeCoster's poultry houses and in the internal organs of their birds, which were dying at high rates and likely laying tainted eggs.

NuCal said it purchased millions of eggs in 2010 from the Iowa egg producers, then distributed those eggs to retail customers. After the companies announced the recalls in August 2010, NuCal had to recall the eggs it bought, which led to demands for refunds and lawsuits from those who fell sick. The outbreak also led to a reduced demand for eggs, which hurt NuCal's sales, the lawsuit contended.

The case exposed the existence of a federal grand jury investigation in Iowa examining the outbreak, which remains active. One DeCoster supervisor has pleaded guilty to bribing a federal inspector and is facing sentencing next month.

— This story contains information from the Associated Press.

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