By Andrew J. Hull* -
On April 14, 2015, a federal judge in Iowa imposed a three-month term of imprisonment on two food executives, describing the period of imprisonment as “relatively small.”
After a major Salmonella outbreak in August 2010 that left thousands of people sickened across the United States, the federal government traced the outbreak to an Iowa-based company, Quality Egg, LLC (“Quality Egg”). As a result, Quality Eggs voluntarily recalled hundreds of millions of eggs from the market. In United States v. Quality Egg, LLC, No. C 14-3024, (N.D. Iowa), the government pressed charges against the company in the Northern District of Iowa (see criminal information here), alleging that the company engaged in 1) bribery of a public official, 2) introduction of misbranded food into interstate commerce with intent to defraud or mislead, and 3) introduction of adulterated food into interstate commerce.
The government also charged Austin DeCoster, the owner of the company, and his son, Peter DeCoster, the company’s chief operating officer, under the Responsible Corporate Officer Doctrine, also known as the Park Doctrine, for introduction of adulterated food into interstate commerce. Specifically, the government alleged that the eggs produced and shipped by Quality Egg containing Salmonella were adulterated within the meaning of the Federal Food, Drug & Cosmetic Act (“FDCA”). Despite the fact that the government acknowledged that they did not have knowledge that the eggs sold by Quality Egg were contaminated, both DeCosters, by virtue of their respective responsibilities as Quality Egg executives, were charged under section 303(a)(1) of the FDCA, a strict liability misdemeanor offense punishable by no more than one year of imprisonment, a $100,000 fine, or both per count.
Under the Park Doctrine, not only may a company be held strictly liable for the unintentional violations of the FDCA, but this liability also extends to include unassuming corporate officers whose companies engage in unlawful activities under the FDCA. As such, the government can seek to obtain misdemeanor convictions of a company official for alleged violations of the FDCA – even if the corporate official was unaware of the violation – if the official was in a position of authority to prevent or correct the violation and did not do so. (For a more in-depth discussion of this doctrine, see some of our past posts here, here, here, and here).
Under the framework of this doctrine, both DeCosters pled guilty to the two FDCA misdemeanor offenses. (The company also pled guilty to all three counts). On April 13, 2015, the District Court sentenced father and son to three months of imprisonment. At the sentencing hearing, the DeCosters argued that a sentence involving imprisonment under a strict liability offense was unconstitutional on due process grounds. The District Court rejected this argument. Specifically, the District Court held that imprisonment for a strict liability misdemeanor offense does not violate the Eighth Amendment’s prohibition against cruel and unusual punishment, and it recognized the Supreme Court’s repeated determinations that section 301(a) can be used to impose criminal penalties for violations of the FDCA, even absent proof of intent. See United States v. Park, 421 U.S. 648 (1975); United States v. Dotterweich, 320 U.S. 277 (1943).
Of particular interest, the District Court noted that the DeCosters:
created a work environment where employees not only felt comfortable disregarding regulations and bribing [Department of Agriculture] officials, but may have even felt pressure to do so. Because the offending parties were never disciplined for their actions, according to the record, it does appear that their conduct was condoned.
Additionally, in weighing the three-month prison sentence against the public welfare, the District Court found that the defendants knew about the insanitary conditions at Quality Egg. The District Court also stated:
Given the defendants’ careless oversight and repeated violations of safety standards, there is an increased likelihood that these offenses, or offenses like these, could happen again. The punishment will also serve to effectively deter against the marketing of unsafe foods and widespread harm to public health by similarly situated corporate officials and other executives in the industry.
There are several significant takeaways from the Quality Egg decision. First, this case demonstrates what we believe is a possible resurgence of the use of the Park Doctrine by the government (see our past post here). Indeed, it is one of the few true strict liability cases brought under this doctrine by the government. Second, both of the executives in Quality Egg were charged with shipping adulterated product that actually contained a harmful substance (i.e., Salmonella). Third, it is important to highlight that the District Court found the harm to the public significant enough to weigh in favor of sentencing the DeCosters to actual prison time in lieu of merely slapping them with a fine.
* Admitted only in Virginia. Work supervised by the Firm while D.C. application pending.