Chipotle Mexican Grill Inc (NYSE: CMG) Investor Securities Class Action Lawsuit 07/20/2017

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Company Name(s): 
Chipotle Mexican Grill
Case Name: 
Chipotle Mexican Grill Shareholder Class Action Lawsuit 07/20/2017
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
Class Period Begin: 
Class Period End: 
Court of Filing: 
U.S. District Court for the District of Colorado
Deadline To File for Lead: 

July 20, 2017 - An investor in shares of Chipotle Mexican Grill Inc (NYSE: CMG) filed a lawsuit in the U.S. District Court for the District of Colorado over alleged violations of Federal Securities Laws by Chipotle Mexican Grill Inc in connection with certain allegedly false and misleading statements made between February 5, 2016, and July 19, 2017.

According to the complaint the plaintiff alleges on behalf of purchasers of Chipotle Mexican Grill Inc (NYSE: CMG) common shares between February 5, 2016, and July 19, 2017, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between February 5, 2016, and July 19, 2017, the defendants made false and/or misleading statements and/or failed to disclose that Chipotle Mexican Grill Inc’s purported improvements in its restaurants’ food safety policies were inadequate, that accordingly, Chipotle Mexican Grill Inc’s quality controls were still not in compliance with applicable consumer and workplace safety regulations, that in turn, Chipotle Mexican Grill Inc’s quality controls remained inadequate to safeguard consumer and employee health, and that as a result of the foregoing, Chipotle Mexican Grill Inc’s public statements were materially false and misleading at all relevant times.

Between August 19 and September 3, 2015, more than 60 people fell ill after dining at Chipotle Mexican Grill Inc restaurants in Minnesota. On September 17, 2015, the Minnesota Department of Health announced that the illnesses were salmonella linked to tomatoes consumed at 22 Chipotle Mexican Grill Inc locations. The affected restaurants changed tomato suppliers but did not close.

On or around November 1, 2015, Chipotle Mexican Grill Inc closed all of its restaurants in Portland, Oregon and Seattle, Washington, following reports of approximately 20 cases of E. coli by Chipotle Mexican Grill Inc patrons.

On November 20, 2015, the Centers for Disease Control and Prevention (“CDC”) announced that the E. Coli outbreak in Oregon and Washington previously linked to Chipotle Mexican Grill Inc had spread to a total of six states.

On December 7, 2015, post-market, Boston College announced that several of its students had complained of gastrointestinal symptoms after eating at a Chipotle Mexican Grill Inc restaurant in Brighton, Massachusetts. On December 9, 2015, health officials confirmed that the students had contracted norovirus.

On January 6, 2016, Chipotle Mexican Grill Inc announced that it was served in December 2015 with a federal grand jury subpoena as part of a criminal investigation tied to a norovirus outbreak the previous summer at one of its restaurants in California. The investigation is being conducted by the U.S. Attorney's Office for the Central District of California in conjunction with the Food and Drug Administration (“FDA”).

On February 8, 2016, the Company closed all of its restaurants for several hours for an all-staff meeting regarding food safety. In addition, Chipotle Mexican Grill Inc hired a new head of food safety who implemented a number of changes to policies at the Company’s restaurants—for example, requiring all employees to wash their hands every half hour, mandating that two employees verified that certain ingredients had been immersed in hot water for at least five seconds to kill germs, and using Pascalization to pre-treat food ingredients. By touting these measures, along with free food promotions and increased advertising, Chipotle Mexican Grill Inc aimed to restore customer confidence in the safety of its food.

On July 18, 2017, media outlets reported that Chipotle Mexican Grill Inc had closed a restaurant in Sterling, Virginia due to a suspected norovirus outbreak. According to Business Insider, citing information from, a website on which consumers document suspected incidents of foodborne illness, at least 13 customers fell ill after eating at the Chipotle Mexican Grill Inc restaurant in question between July 14 and July 15. The Business Insider article further stated that customers who fell sick after eating at the restaurant reported “vomiting violently,” fevers, “violent stomach cramps,” and dizziness for several days. On this news, Chipotle Mexican Grill Inc’s share price fell $17.02, or 4.34%, to close at $374.98 on July 18, 2017. 13. On July 20, 2017, The Wall Street Journal published an article entitled “Over 100 Report Being Sickened at Virginia Chipotle,” disclosing that the number of reports of illness associated with the restaurant-chain continue to rise.