NYT19980526.0388 NEWS NEWSWIRE In what is believed to be the largest resolution of a case involving food poisoning from fresh foods, Odwalla, Inc. has agreed to a multimillion dollar settlement to resolve claims by five families whose children were sickened in an October 1996 outbreak caused by the bacterial contamination of the company's apple juice. As part of the agreement, lawyers for both sides declined to disclose the amount of the settlement or discuss details of the resolution, which was worked out in Seattle over two days of mediation involving the families, Odwalla officials and insurance company representatives. A person familiar with the settlement said the total amount the five families would receive was between $12 and $15 million. Most of the money will go to the families of the three children who were the most seriously injured, but survived poisoning from the toxic bacteria, E.coli O157:H7. In all, the outbreak sickened 70 people in several states, mostly in the West, and in Canada, and took the life of one child, a 16-month-old girl from Colorado. ``What we tried to do in each of these settlements is look at how these kids were injured, the extent of their injures and the extent that they might suffer risks in the future,'' said William Marler, a Seattle lawyer who represented the families. Four of the five children, who range in age from 4 to 7, suffered the most serious consequence of E. coli poisoning, a severe blood and kidney disorder called hemolytic uremic syndrome. Doctors say children with this disorder are at risk of permanent kidney damage and other problems as they grow older. Odwalla's chairman, Greg Steltenpohl, said, ``It's certainly been a long road, but I'd say it was very important for us to settle these cases within a positive atmosphere and the constructive format of a mediation.'' The Odwalla outbreak had reverberations around the country because it showed that this dangerous strain of E. coli could infiltrate fresh fruits and vegetables, which have soared in popularity as consumers become increasingly health conscious. Indeed, Odwalla, based in Half Moon Bay, Calif., near San Francisco, grew into one of the nation's largest fresh juice companies as demand rose for its juices and nutritional shakes. Until the Odwalla outbreak and a few others involving lettuce, E.coli O157:H7 was primarily associated with the 1993 Jack in the Box hamburgers outbreak, which killed three children and made hundreds of people sick. As a result of the Odwalla outbreak, federal regulators proposed rules that would require processors to take new steps against contamination and place warning labels on juice that is not pasteurized to kill disease-causing bacteria. Odwalla began pasteurizing its apple juice after the outbreak and hired experts to help it overhaul its safety systems. The Odwalla case also spurred a federal grand jury investigation, which is looking at whether the company committed any criminal violations of food safety laws. The New York Times reported in January that in the weeks before the outbreak, Odwalla began relaxing its standards on accepting blemished fruit and began to rein in the authority of its own safety officials, according to company documents and interviews with former Odwalla managers. By these accounts, on the day that the contaminated juice was pressed, production managers brushed aside warnings from a young company inspector that a batch of apples was too rotten to use without taking special precautions against contaminants. People with knowledge of the criminal investigation have said recently that a plea agreement is being negotiated. One scenario that is being discussed is that Odwalla would plead guilty to 15 misdemeanor food safety violations and pay a $1.5 million penalty. That would make Odwalla's settlement the second largest in a criminal case involving adulterated food; the largest was a $2 million fine paid by Beech-Nut Nutrition Corp. in 1987 for selling watered-down apple juice for infants. A spokesman for Odwalla, Chris Gallagher, declined to discuss the grand jury investigation. Odwalla officials have acknowledged that their safety systems failed to keep out the E. coli, but they deny that the company took any undue risks and insist no laws were broken. Top company executives say that, like many others in their industry, they simply did not realize that E. coli O157:H7 could live in apple juice. Soon after the outbreak, Odwalla settled dozens of smaller cases and paid medical expenses for all the victims. It also paid about $250,000 to the family of the child who died. But Marler, who represented some of the most serious Jack in the Box victims and who hired two lawyers who had represented the fast-food chain, Denis Stearns and Bruce Clark, to work on the Odwalla case, said he pressed for larger settlements because of the unpredictability of the longterm effects of E. coli contamination. He said that the money would be placed in trusts for future medical or educational needs of the children. Parents of the injured children said Tuesday they were relieved at the settlement, but were aware that their children would need to monitored for medical problems all their lives. ``It's basically an up in the air thing,'' said Adam Berman, a Chicago lawyer, whose daughter Amanda, now 4, drank Odwalla apple juice while in Seattle, where he was having a bone marrow transplant performed. Amanda was the most severely injured, needing blood transfusions and 17 days of kidney dialysis. Richard Dimock, whose son Brian, now 7, spent 15 days in the hospital after drinking Odwalla in Colorado, became involved in lobbying for stricter food safety regulations as a result of his son's illness. ``He's doing pretty good,'' said Dimock, whose family now lives in Maryland. ``But as the doctor said, see me in 10 years when the kid's fully grown.''