According to the Food and Drug Administration (FDA), the no fault criminal provisions under the Food Drug and Cosmetic Act (FDCA) apply to "anyone who has a responsible share in the furtherance of the transaction."
The FDA has powerful and persuasive leverage before a matter gets anywhere near a courtroom to influence the behavior of regulated industry, and it is increasingly wielding that power by preemptively threatening criminal enforcement for failing to establish and follow manufacturing procedures. In a series of Warning Letters issued by the FDA in 2013 to manufacturers throughout the United States, the FDA has signaled that it will rely on the Park Doctrine for routine violations by referencing the following:
United States v. Dotterweich, 320 U.S. 277, 284 (1943) (explaining that an offense can be committed under the Act by anyone who has "a responsible share in the furtherance of the transaction which the statute outlaws"); United States v. Park, 421 U.S. 658, 672 (1975) (holding that criminal liability under the Act does not turn on awareness of wrongdoing, and that "agents vested with the responsibility, and power commensurate with that responsibility, to devise whatever measures are necessary to ensure compliance with the Act" can be held accountable for violations of the Act).
The FDA has put regulated industry on notice that it will apply the Park Doctrine, threatening criminal prosecution for marketing adulterated and misbranded products based upon routine violations such as the following:
Contract Manufacturing: "Although your firm may contract out certain ... manufacturing operations, it cannot, by the same token, contract out its ultimate responsibility to ensure that the [Product] it places into commerce (or causes to be placed into commerce) is not adulterated for failure to comply with ... CGMP requirements."
Current Good Manufacturing Practices (CGMP) Violations: "The Act prohibits a person from introducing or delivering for introduction, or causing the delivery or introduction, into interstate commerce [a Product] that is adulterated for failure to comply with ... CGMP requirements."
New Dietary Ingredients: For using ingredients where "to the best of FDA's knowledge, [the substance] itself is not commonly used as a food or drink by humans."
Generally Recognized as Safe (GRAS): For foods the FDA deems "additives" where the FDA declares a substance is not GRAS by qualified experts for its intended use in food and does not qualify for any of the other exemptions from the food additive definition, it is a food additive subject to FDA approval.
Website Content: Where the FDA reviews website content and determines "Your labeling - including the websites at which you take orders for [the products] - promotes your ...products for conditions that cause them to be drugs"
Testimonials: Where the FDA reviews product testimonials and decides that the"claims observed on your website ... provide evidence that your products are intended for use as drugs"
Adverse Event Reporting: Failing to report a customer complaint deemed related and serious by the FDA.
Following Procedures: Having procedures is not enough; when the FDA inspector comes around, your employees must know the procedures and follow them:
Your firm failed to follow written procedures for holding and distributing operations....In fact, your warehouse manager, who is responsible for warehouse procedures and responsibilities, stated that she was not aware of the procedures."
Expanding The FDA's Power
In 1906, Congress established the FDA 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 then, 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 FDCA and the FDA's Regulations.
5 Years for Serious Injury; 10 Years for Death
The Food Safety Modernization Act of 2010 (FSMA) gave the FDA significant new muscle to levy fines, detain products, suspend registrations and to criminally prosecute "anyone" in the manufacturing, labeling or distribution process. Section 402 of the 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 the new law, if the offense results in serious illness, "the person committing the violation shall be imprisoned for not more than 5 years" and not more than 10 years if it results in death.
The new power granted to the FDA under FSMA has resulted in a demonstrable willingness to use the new authority granted under FSMA without waiting for an adverse health outcome.
The Criminally Responsible Agent Prosecution Doctrine
The "Park Doctrine," also known by the misnomer the "Responsible Corporate Officer Doctrine" ("RCO"), has been hotly debated and questioned since it was created by the US Supreme Court in 1943. The doctrine permits criminal prosecutions where an individual may not have had any involvement in the events or awareness of the circumstances leading to the offense. The Park Doctrine has generally been applied and allowed by the courts to convict upper level executives in situations involving significant demonstrable health risks or outcomes, repeated violations and small penalties. Despite circumspect application by the courts, the FDA has been clear in stating that "anyone who has 'a responsible share in the furtherance of the transaction" is potentially criminally liable. What is new is the scope of the threatened use of this doctrine when complied with the severity of the statutory penalties.
Where Did This Doctrine Come From?
"Individuals are the Corporation." The seminal "Park Doctrine" case involved misdemeanor violations of the FDCA. In United States v. Dotterweich, 320 U.S. 277 (1943), recognizing that what at issue was a misdemeanor charge against an individual who had no awareness of the alleged wrongful conduct, the Supreme Court stated: "[h]ardship there doubtless may be under a statute which thus penalizes the transaction though consciousness of wrongdoing be total wanting." The Court was confident that "[i]n such matters, the good sense of prosecutors, the wise guidance of trial judges, and the ultimate judgment of juries must be trusted." The decision was not without controversy, and the four (4) member dissent was less confident in governmental discretion stating:
The legislative power to restrain the liberty and to imperil the good reputation of citizens must not to rest upon the variable attitudes and opinions of those charged with the duties of interpreting and enforcing the mandates of the law. Id. at 293.
According to the dissent, "it is inconsistent with established canons of criminal law to rest liability on an act in which the accused did not participate and of which he had no personal knowledge." Id. at 319.
Thirty years later, in United States v. Park, 421 U.S. 658 (1975), a case involving charges against a food manufacturing executive for alleged violations of good manufacturing practices, the Court stated:
The requirements of foresight and vigilance imposed on responsible corporate agents are...demanding, and perhaps onerous, but...no more stringent than the public has a right to expect of those who voluntarily assume positions of authority in...enterprises whose services and products affect the health and well-being of the public... ." U.S. v. Park, 421 U.S. at 672.
In U.S. v. Park,the four member dissent likened the application of the doctrine to "trial by ordeal" stating "[t]he instructions given by the trial court in this case, it must be emphasized, were a virtual nullity, a mere authorization to convict if the jury thought it appropriate." The dissent further observed:
the standardless conviction approved today can serve in another case tomorrow to support a felony conviction and substantial prison sentence. However highly the Court may regard the social objectives of the Food, Drug, and Cosmetic Act, that regard cannot serve to justify a criminal conviction so wholly alien to fundamental principles of our law. Id. at 683.
While this doctrine has been serious questioned as having dubious constitutional validity, challenges to the Park Doctrine will not be taken up by the Supreme Court any time soon, and FDA's use in leveraging compliance and settlements by regulated industry will remain unabated.
Criminal Strict Liability "Defenses":
A manufacturer charged with misbranding a FDA regulated product can assert a defense that he or she was "powerless" to prevent the violation. See Park, 421 U.S. at 673. Yet in practice courts are reluctant to permit the defense. See, United States v. New Eng. Grocers Supply Co., 488 F. Supp. 230, 234 (D. Mass. 1980) ("[A]lthough an impossibility defense may be available if an executive can show he exercised extraordinary care but nevertheless was powerless to stop the violation, this standard is difficult to meet"). Accordingly, absent a showing of impossibility, violations of the FDCA are, effectively, strict liability crimes.
FDA's Park Doctrine Guidelines:
In January 2011, the FDA published its new "Special Procedures and Considerations for Park Doctrine Prosecutions," describing the factors the agency considers in deciding to apply the Park Doctrine for FDCA violations. Under the Agency's "Guidelines" the FDA has a two pronged approach. First it will look to whether there was:
1. actual or potential harm to the public;
2. an obvious violation;
3. a pattern of illegal behavior or failure to heed prior warnings;
4. a widespread violation; and
5. a serious violation.
Second, if the FDA finds some unspecified combination of these factors present it will determine if:
1. there is legal and factual support for the proposed prosecution; and
2. the proposed prosecution a prudent use of agency resources.
Conclusion
One hundred years ago, none more exalted than Supreme Court Justice, Oliver Wendell Holmes, Jr., in his dissent in Northern Securities Co. v. United States, 193 U.S. 197 (1904) reminded us that
Great cases like hard cases make bad law. For great cases are called great, not by reason of their importance... but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment.
While the so-called Park Doctrine is of highly suspect constitutional validity, until or unless the Court significantly restrict its applicability, "anyone who has a responsible share in the furtherance of the transaction" resulting in a violation of the FDCA runs the risk of criminal prosecution. Ensuring compliance yourself and compliance by your coworkers and all of your suppliers can no longer wait until an inspector knocks at the door.
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