United States: Fines, Detentions And Arrests

Last Updated: February 26 2013
Article by Michael A. Walsh

The New Normal for the Food Industry - Compliance Programs and Employees Who (Seriously) Enforce them.

The Company: Peanut Corporation of America (PCA). The Crime: not complying with good manufacturing practices resulting in a potentially deadly outbreak of food borne illness. The Punishment: PCA is out of business, and on February 20, 2013 the Department of Justice unsealed a 76 count criminal indictment of former executives and employees. See Indictment, available here.

The indictment relates to a national outbreak of salmonella in 2008 and 2009 that was traced to PCA "as a likely source for that outbreak."

As charged in the indictment, PCA produced peanuts ... under insanitary conditions, which included PCA's failure to follow appropriate practices to ensure its plants were sanitary, its failure to prevent cross-contamination between raw and cooked product, and its failure to take adequate steps to keep rodents and insects out of the plant.

See the Department of Justice Press release, Feb. 21, 2013, available here.

The Indictment charges that the employees committed fraud and conspiracy by falsifying data concerning the "quality and purity of the peanut products and specifically misled PCA customers about the existence of foodborne pathogens..." The indictment charges that test results were ignored and the company falsified documents that attested to quality "stating that shipments of peanut products were free of pathogens when, in fact, there had been no tests on the products at all or when the laboratory results showed that a sample tested positive for salmonella."

Compounding the criminal problems, once the investigation began "[defendants] gave untrue or misleading answers to questions" concerning "the plant, its operations, and its history." The charges range from conspiracy to introduce adulterated food into interstate commerce and misbranding with the intent to defraud, to wire fraud and obstruction of justice. One of the defendants has already pled guilty

Announcing the indictment, the Deputy Assistant Attorney stated that:

Under the FDCA, it is illegal to introduce into our markets a food or drug that is adulterated – which, for foods, generally can mean either that the product is tainted or that it was produced or handled in insanitary conditions. As a result, the FDCA is a powerful tool for protecting the health and safety of all Americans. Using the FDCA, the Department has worked to prevent adulterated products from reaching consumers by securing injunctions that ban companies from distributing food or drugs until they have cleaned up their facilities. And, when adulterated products do reach the market and pose a significant danger to the public, we will not hesitate to bring criminal cases that seek to hold wrongdoers accountable and deter other would-be violators.

See Statement of Principal Deputy Assistant Attorney General Stuart F. Delery, February 21, 2013, available here.

Beginning in 1906, when faced with information concerning widespread unsanitary food handling, Congress established the Food and Drug Administration and set its mission to promote the public health and to ensure that "foods are safe, wholesome, sanitary and properly labeled." 21 U.S.C. § 393. Since that time, outbreaks of foodborne illness have resulted in Congress increasing the grant of federal oversight of the food industry providing the FDA more and greater powers to regulate and punish food manufacturers for violations of the Food Drug and Cosmetic Act (FDCA) and FDA's Regulations. Most recently and perhaps most profoundly, the Food Safety Modernization Act of 2010 (FSMA) signed into law on January 4, 2011 gave the FDA significant new muscle and, since its enactment, FDA has flexed its substantial new regulatory might through fines, product detention, suspension of registration and criminal prosecution of executives and employees.

Section 402 FSMA granted the FDA "expanded authority" to detain and seize any regulated food determined to be unsafe, adulterated or misbranded, "or otherwise failing to meet the requirements of the food safety law." In addition to FDA's new seizure and detention powers, FSMA added significant civil penalties (i.e. "not more than $1,000,000 for each offense and every day is considered a separate offense) and expands on the criminal sanctions under the FDCA.

Under prior law, the penalty was up to 1 year in prison. Now, if the offense results in serious illness, "the person committing the violation shall be imprisoned for not more than 5 years" and 10 years if it results in death. Couple these sanctions with the government's use of the Park Doctrine in prosecuting "C" suite officers, even when they had no actual knowledge of an offense, and there should be no question that ensuring compliance can no longer wait until an inspector knocks at the door. In the past, adverse health outcomes were strong drivers for enforcement and criminal prosecutions, but the new powers granted under FSMA has resulted in a demonstrable willingness to use the new authority granted under FSMA without waiting for an adverse health outcome:

When food or drug manufacturers lie and cut corners, they put all of us at risk. The Department of Justice will not hesitate to pursue any person whose criminal conduct risks the safety of Americans who have done nothing more than eat a peanut butter and jelly sandwich.

As FDA continues its march to implement FSMA, including its proposed Rule concerning Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food there are three things manufacturers and distributors must do: Comply, Comply, Comply. Having a written Comprehensive Plan that includes responding to FDA inspections is an essential first step. A robust response with a comprehensive corrective action plan demonstrating the ability to immediately implement corrective measures might be the one thing that prevents fines, product detentions, suspension of registrations and criminal prosecution of executives and employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Michael A. Walsh
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions