Quality Egg and Hillandale Farms have reached a settlement with NuCal Foods Inc., a California distributor that lost profits from a 2010 Salmonella outbreak blamed on the two egg producers. Financial terms were not immediately disclosed.
Quality Egg was based in Galt, Iowa, and owned by Jack DeCoster. Hillandale Farms had ties to DeCoster's operations, processing and marketing shell eggs from some Quality Egg plants, according to reports.
The companies issued recalls covering 550 million eggs in 2010, after scientists traced illnesses back to their farms in northern Iowa. As many as 62,000 people became ill in the outbreak.
Ripon, Calif.-based NuCal sued the companies and DeCoster, contending they were aware their farms were contaminated with Salmonella but continued marketing their eggs as safe.
NuCal said it bought 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.
Hillandale Farms had also filed counterclaims against DeCoster, blaming his operations for the outbreak.