The reeling Chipotle restaurant chain had more bad news for investors on Wednesday, announcing it has been served with a federal grand jury subpoena as part of a criminal investigation tied to a norovirus outbreak this summer at one of its restaurants in California.
The investigation, which is being conducted by the U.S. Attorney's Office for the Central District of California in conjunction with the Food and Drug Administration’s Office of Criminal Investigations, involves an outbreak at a restaurant in Simi Valley in August 2015, the company said in a filing with the Securities and Exchange Commission Wednesday.
Chipotle Mexican Grill said the subpoena requires it to produce a "broad range" of documents and that it intends to fully cooperate with the investigation.
The Simi Valley norovirus outbreak, initially reported to have sickened 98 people, actually made 234 people ill, Food Safety News reported last month, citing Ventura County Public Health documents. The report said that an inspection of the restaurant shortly after the outbreak found numerous safety violations, including failures in pest control, sanitation, and maintenance. Employees also were working without valid food handler cards as required by California law, according to the report.
Doug Beach, a manager of the food program at Ventura County's Environmental Health Division, told the Associated Press on Wednesday that the company was slow to notify authorities of the outbreak. He said Chipotle started getting complaints about illnesses on Tuesday, Aug. 18, and shut down its restaurant on Friday, Aug. 21. Yet the company did not alert the county of the matter until the 22nd — after it had already reopened the restaurant, he said.
He said the U.S. Attorney's Office had requested records regarding the Chipotle case about a month ago.
"That was a first for us," Beach said.
Mark Mansour, an attorney at Mayer Brown in Washington, D.C., who focuses on FDA regulatory matters, told NBC News that serving a subpoena on the company in connection with a public health matter is unusual, but “it has happened on occasion.”
He said that because the FDA and Justice Department typically don’t provide any information on the nature of an investigation it is “very hard to speculate on why this happened.”
“It could be negligence or beyond that or it … may just be the FDA trying to get to the bottom of this because they don’t have the information they need,” he said. “I think it’s basically stay tuned and see what comes out of this.”
Denver-based Chiptle has been reeling since an E. coli outbreak in October linked to its restaurants, which was followed up by a separate norovirus outbreak in Boston.
In its SEC filing, Chipotle says it expects sales for the fourth quarter to be down 14.6 percent and that sales in December were down 30 percent on persistent media reports on the food-borne illnesses.
Last month, Chipotle said it could no longer reasonably predict sales trends given the food scares. It retracted its sales forecast for 2016.
The Associated Press contributed to this report.