United States: 2014 Food Industry Outlook - Criminal Investigations

Uptick in Criminal Prosecutions For Food Safety Violations

For the last several years, there have been signs federal prosecutors planned to increasingly target food industry executives for criminal prosecution. In 2013, this became a reality as the federal government brought high-profile criminal charges against food company executives on at least two occasions.

On Feb. 20, 2013, the United States Department of Justice (DOJ) announced criminal charges against five former officials and employees of Peanut Corporation of America (PCA), a peanut processor and manufacturer. The government charged four individuals, including PCA's president and owner, in a 76-count indictment, and another employee plead guilty to similar charges. The charges stem from a 2009 salmonella outbreak that the FDA traced to a PCA roasting plant in Georgia. The FDA alleges that at least nine people died due to consumption of the tainted peanut products, which were recalled. The indictment is broad in scope, setting forth a detailed and lengthy six-year conspiracy to deliver adulterated and misbranded food. The charges also included nine instances of attempts to obstruct the government investigation of the PCA facility.

Significant enforcement activity in the food industry is not limited to PCA. In September 2013, misdemeanor criminal charges were filed against executives Eric and Ryan Jensen, who owned a melon farm on which listeria monocytogenes contaminated fruit and allegedly led to 33 deaths. See "Colo. Farmers arrested in listeria outbreak that killed 3," USA Today, Sept. 26, 2013, available here (last visited on Oct. 8, 2013). These charges did not allege criminal "intent," but such intent is not necessary for misdemeanor charges. The Food, Drug, and Cosmetic Act criminalizes the distribution or sale of adulterated food even without knowledge of that adulteration. Both executives face up to six years in jail and a combined $1.5 million fine if found guilty. Arrest warrants were issued for both defendants, which is atypical in misdemeanor cases, and the executives were brought to their arraignments in shackles.

Revival of Park Doctrine

Criminal charges against individuals historically have been an unusual step for the government in cases involving food safety violations. Although both civil and criminal statutes and penalties against a company and individuals are available, the government has rarely used criminal provisions to charge individual food industry executives and employees. This remained true even though the U.S. Supreme Court specifically held in the seminal 1975 case of United States v. Park, 421 U.S. 658 (1975) — now known as the Park Doctrine — that corporate executives could be prosecuted criminally for unintentional violations of food and drug laws by their companies.

It now seems clear that federal prosecutors have revived the Park Doctrine. For instance, in 2010, FDA Commissioner Dr. Margaret Hamburg told Congress that an internal committee had recommended "increas[ing] the appropriate use of misdemeanor prosecutions, a valuable enforcement tool, to hold responsible corporate officials accountable." Letter from Margaret A. Hamburg, commissioner of Food and Drugs, to Sen. Charles E. Grassley (March 4, 2010) at 2. Soon thereafter, in January 2011, that recommendation was followed as the FDA changed its internal regulatory procedures to authorize Park Doctrine prosecutions against corporate executives under some circumstances. See U.S. Food and Drug Administration, Regulatory Procedures Manual at Section 6-5-3. 3. U.S. Department of Justice Press Release, April 24, 2012.

This renewed emphasis on the Park Doctrine was reaffirmed recently in the prosecution of Gary Osborn, the owner of the compounding pharmacy ApothéCure, Inc., who was charged with and pled guilty to two misdemeanor criminal violations of the Food, Drug, and Cosmetic Act, despite having no direct or personal involvement in the misbranding or labeling of the adulterated drug. The acting assistant attorney general of the Civil Division of the Department of Justice, Stuart Delery, said about this prosecution: "This plea shows that the Department of Justice will enforce the Food, Drug, and Cosmetic Act against responsible corporate officers of companies that fail to control the quality of their products." See U.S. Department of Justice Press Release, April 24, 2012.

Moreover, in 2011, the FDA's enforcement authority was increased with passage of the Food Safety Modernization Act, including the ability to issue mandatory recalls and revoke the registration of food facilities. The FDA used its increased powers, for example, in November 2012 to shut down a peanut butter plant in New Mexico associated with another salmonella outbreak.

It is clear that federal prosecutors, as a deterrence strategy, are more aggressively pursuing criminal charges against the food industry. Given the apparent revival of the Park Doctrine and the PCA and Jensen Farm prosecutions, all signs point toward this trend of criminal enforcement increasing even more in 2014.

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