Beginning in November 1971, FDA inspectors carried out a 12-day inspection at an Acme warehouse in Baltimore. During the inspection, inspectors discovered evidence of rodent activity in the warehouse. During a follow-up inspection three months later, the inspectors noted improvement, but nonetheless found evidence of continuing rodent activity.
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Park first became aware of the violation a month after the fact, at which point he immediately contacted Acme’s vice president for legal affairs, who assured Park the head of the respective division “was investigating the situation immediately and would be taking corrective action and would be preparing a summary of the corrective action to reply to the letter.”
Soon thereafter, Park and Acme were charged with multiple misdemeanor violations of the FD&C Act. Acme, in its capacity as a corporate entity, pleaded guilty. Park, who had no personal involvement or knowledge, pleaded not guilty.
During his trial testimony, Park acknowledged that, as Acme’s CEO, he was ultimately responsible for “any result which occurs in our company.” That testimony was enough to ensure his conviction.
Park, widely regarded as the seminal case on the RCOD (hence the “Park Doctrine”), reaffirmed the holding of Dotterweich from 30 years earlier. Park stands for the proposition that FD&C Act violations are chargeable against anyone and everyone with a share of the responsibility for preventing such violations. In other words, criminal liability for a violation of the FD&C Act attaches “not only to those corporate agents who themselves committed the criminal act, but also to those who by virtue of their managerial positions or other similar relation to the actor could be deemed responsible for its commission.”
For the last 40 years, Park has withstood all challengers, and remains the law of the land. Upon conviction, defendants face the potential for significant fines and even jail time. Fortunately, there are some safeguards in place to prevent overzealous prosecutors from overstepping. For instance, before the U.S. Department of Justice (DOJ) can begin pursuing an investigation into criminal violations of the FD&C Act under the RCOD, the U.S. Attorney’s office must first notify and consult with the Consumer Protection Branch of the Civil Division. This additional layer of scrutiny is intended to foster uniformity in prosecutorial decision-making and is perhaps why criminal prosecutions have been the exception rather than the rule.
Nevertheless, even the possibility of prosecution is cause for alarm for food industry executives. Every executive should at least be cognizant of the potential for criminal liability. This is especially true given the increasingly aggressive approach taken by FDA and DOJ in recent years.
United States v. DeCoster, 828 F.3d 626 (8th Cir. 2016)
Austin “Jack” DeCoster owned Quality Egg, an Iowa company that operated a processing facility, six farms, and 97 barns housing chickens and hens. His son, Peter DeCoster, was Quality Egg’s COO. The DeCosters also owned and operated several egg production companies in Maine.
The DeCosters employed an environmental testing program for Salmonella. In 2006, the number of environmental positives began to gradually increase year over year. In 2009, seeking to reverse the increase in Salmonella positives, the DeCosters retained Dr. Charles Hofacre, a poultry disease specialist, and Dr. Maxcy Nolan, a rodent control expert. The DeCosters purportedly adopted all the consultants’ recommendations. They also provided a second round of Salmonella vaccinations to their chickens.
In August 2010, the company was responsible for an outbreak of Salmonella enteritidis. During the subsequent investigation, FDA identified a litany of sanitation problems at the chicken farms, eventually compelling the company to euthanize its animals, clean and repair its facilities, and disinfect its barns.
Following a criminal investigation, Quality Egg and the DeCosters were charged criminally. Quality Egg was charged with and pleaded guilty to: 1) felony bribery of a USDA inspector, 2) felony violation of the FD&C Act, and 3) misdemeanor violation of the FD&C Act. The DeCosters were not implicated in the felonies but were charged with misdemeanor violations of the FD&C Act under the RCOD. After pleading guilty, Jack and his son were each fined $100,000 and sentenced to three months in prison.