Food Company Execs May Be Held Liable for Food Poisoning Outbreaks

Instances of food company executives receiving prison sentences and serving time over large, even deadly, food poisoning case are mounting. Now, some wonder why pharmaceutical and medical device company executives are not subject to the same punishments.

Stewart Parnell, former owner of Peanut Corporation of America (PCA) was at the center of an historic, massive peanut paste contamination and facing life imprisonment; his brother, a food broker, faced 17 years in prison. The case was the first time a food company official received a conviction on federal felony charges tied to a food contamination epidemic, according to CNN. Both men were charged with felony charges by the Department of Justice (DOJ) and a Georgia jury convicted Stewart on 72 counts of conspiracy, fraud, and the introduction of adulterated foods into interstate commerce. He was sentenced to 28 years; his brother was sentenced to 20.

A federal district court and the Eighth Circuit Court of Appeals are saying that responsible food company officers may be held responsible when their adulterated food is introduced into interstate commerce. Jail time is a real possibility, even if executives were unaware of the adulteration. The U.S. Supreme Court has the final decision.

Two owners of Quality Egg, LLC, Austin “Jack” DeCoster and his son, Peter, were executives when a massive salmonella egg outbreak led to 56,000 illnesses. Quality Egg pled guilty to felony violations over bribing a U.S. Department of Agriculture (USDA) inspector and introducing misbranded eggs into interstate commerce with the intent to defraud and mislead, and pled guilty to a misdemeanor violation for introducing adulterated eggs into interstate commerce. Quality Egg paid $6.8 million and each man pled guilty to misdemeanor violations as responsible executives under the Federal Food, Drug & Cosmetic (FD&C) Act. Based on the Act’s language, Congress intended for the Act to punish “neglect where the law requires care” and for penalties to be available and not violations of due process.

The DeCosters said they were ignorant of the contamination at the time of shipment, but acknowledged being in positions of authority to know, prevent, and, correct sales had they been aware of the issue, according to their plea agreement. They were facing one year in prison and a fine of up to $100,000. The sentencing court found no evidence proving the men knew of the contamination; however, their business practices were so outrageous the case was found to more than “a mere unaware corporate executive.” The men were each sentenced to three months in prison and were fined $100,000.

In July 2016, the sentence was upheld by the Eighth Circuit Court of Appeals. A petition for writ was filed with the U.S. Supreme Court soon after over if a corporate official may be jailed for something about which he/she was oblivious. If, by year-end, the court decides to consider and declines the petition, the men must serve their time. This sends a clear message to food company corporate officers to become better acquainted with their firm’s activities and may help pave the way for executives at medical device and pharmaceutical corporations.

Criminal liability is typically seen when a party has intent to commit a wrongful act. Under the FD&C Act, an executive is held responsible for his/her failure to stop or correct conditions leading to the charges, not for the acts or omissions of others.

In this case, the court found there was a degree of blame by the corporate officers. The Department of Justice (DOJ) also indicated that it will not wait for a U.S. Food and Drug Administration (FDA) referral of food contamination, but will, instead, review and track referrals it believes threaten the safety of food in commerce. The DOJ maintains a stated commitment to hold firms criminally liable, to pursue responsible individuals for company actions, and noted that the best way to ensure corporate accountability is to hold those responsible individually accountable for illegal conduct.

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