In August 2010, the U.S. government oversaw a massive recall of 228 million eggs due to a salmonella scare. The eggs were all produced by Wright County Egg is Galt, Iowa. (Photo by The Associated Press)

IOWA CITY, Iowa (AP) – Dozens of people sickened last year after eating salmonella-tainted eggs will receive compensation, including six-figure checks for two children, in the first wave of legal settlements with the Iowa egg producer blamed in the outbreak, attorneys in the case have told The Associated Press.

Wright County Egg, owned by egg magnate Jack DeCoster, reached financial settlements with roughly 40 salmonella victims during a Sept. 14 mediation conference in Minneapolis, both sides confirmed. The financial payouts are coming from Selective Insurance, the company’s insurer.

“The DeCoster family continues to sympathize with those who became ill, and we are pleased to begin resolving these cases,” the DeCoster Family said a statement to the AP.

While the settlements are confidential, details of three became public last week when a federal judge in Iowa approved deals totaling $366,000 for children from Texas, California and Iowa who were hospitalized after becoming sick. They offer a glimpse into the litigation and show payments varied widely depending on how seriously the claimant was sickened.

Federal officials say 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.

“In short, the Wright County Egg facility was a major salmonella outbreak waiting to happen,” Seattle attorney Bill Marler wrote in demand letters seeking compensation from the company. “Our clients were among those sickened when the outbreak did, in fact, come to fruition.”

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 3-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.

The boy’s parents, Jennifer and Jason Tucker of Sachse, Texas, said in legal documents that it was heartbreaking to watch their son in so much pain.

Elsewhere, $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.

U.S. District Judge Mark Bennett on Nov. 10 approved the settlements, which include compensation for medical bills, legal fees, and money for the child’s pain and suffering that won’t be available until they turn 18. The settlement for the 3-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.

Marler said details of the other cases were confidential and he declined to put a price tag on the total value. He said the children’s settlements needed the approval of a federal judge because they are minors, and that is why they became public.

“This is not like a gift to them,” he said. “It’s compensation for a pretty frightening experience for some of these people, especially like the Tuckers.”

The settlements do not end the legal problems facing 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.

Houston attorney Ron Simon said he has sent letters seeking compensation on behalf of 70 individuals sickened during the outbreak — “an enormous amount of money” he declined to reveal. He said he hopes to reach settlements in those cases during a mediation conference scheduled for next month in California.

A Chicago law firm in March dropped a lawsuit in which attorneys planned to seek class-action status on behalf of victims, but attorney Kurt Hyzy said they are trying to negotiate out-of-court settlements for roughly 40 clients.

Simon said he has learned DeCoster’s companies have $26 million in insurance coverage spread out over three policies and “he’s going to need every bit of it.”

“They have a tremendous amount of punitive damage exposure for their prior history of salmonella testing which they didn’t reveal to the government and prior history of Mr. DeCoster and other egg farms that have been fined so many millions of dollars,” he said. “They’ve got a lot of evidentiary baggage to carry around.”

Marler said he and his associates turned down four people who had salmonella for every one claim they pursued. He said many of those sickened could not prove they ate eggs in the hours before they got sick. Others likely never came forward because they had salmonella before the eggs were implicated as the cause.

“In a lot of these outbreaks where people got sick over several months, it’s difficult to connect up the dots between ill people, the food and the outbreak,” he said.

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