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FDCA Criminal Investigations - What Catches the Prosecutor's Eye?

Date: Apr 25, 2017

Since the Peanut Corporation of America case, the Food and Drug Administration ("FDA") has launched multiple criminal investigations into the circumstances surrounding foodborne illness outbreaks. It appears that any such outbreak that results in a significant number of illnesses or deaths will be the basis of a criminal probe by the FDA and the United States Department of Justice ("DOJ"). Although the law provides that senior management can be held criminally responsible for shipping adulterated products in interstate commerce without personal knowledge or any prior misdeeds by the company, the reported prosecutions support the conclusion that the government has decided to pursue such prosecutions only in cases where there is evidence of knowledge or willful mismanagement or an intent to defraud or mislead on the part of the corporate executive.

In February 2016, Michelle Myrter, an executive at two cheese companies pled guilty to a misdemeanor alleging that she aided and abetted the introduction of adulterated and misbranded cheese products into interstate commerce in violation of the Food, Drug and Cosmetic Act, 21 U.S.C. 9. The companies that Ms. Myrter ran were selling cheese labeled 100% real Parmesan and 100% Romano, but each contained other cheeses and ingredients; a fact to which her father, the previous CEO, had admitted to the FDA. Ms. Myrter did not admit to knowing of the company's improper activities as part of her guilty plea. At sentencing, the government admitted that Ms. Myrter was prosecuted because "she was the most responsible and highest level officer physically present at the company . . . and handled nearly all the managerial functions" during the relevant time. Sentencing Memo, p. 8. Thus, under the Park doctrine, she was liable. Even though the prosecution did not assert that Ms. Myrter was personally involved in the illegality, the evidence of her company's wrongdoing was overwhelming. The government pointed out that she was responsible for purchasing raw ingredients and receiving orders from customers. Given the facts of the case, Ms. Myrter's familiarity with the raw ingredients demonstrated that she knew, or should have known of the company's illegal activities; the government's evidence showed that for almost three years the company sold a product labeled 100% real Parmesan or Romano cheese that "was nothing more than imitation cheese." Sentencing Memo, pp. 5 & 10. The evidence further showed that once the company started to sell real parmesan cheese, it lost money and went out of business.

This case follows the prosecution of the DeCosters for selling salmonella-tainted eggs, the Jensen brothers for selling tainted cantaloupes, and the Parnell brothers for selling salmonella-contaminated peanut butter. In the DeCoster case, the government's investigation found that the company run by the DeCosters had falsified records about food safety and lied to auditors for several years about pest control measures and sanitation practices. U.S. v. DeCoster, 828 F.3d 629, 631 (8th Cir. 2016). Additionally, an employee was prepared to testify that he was reprimanded by one of the DeCosters for not moving a pallet of eggs in time to avoid inspection by the USDA. There was other evidence as well that supported the trial court's finding that "the defendants `knew or should have known,' of the risks posed by the insanitary conditions at Quality Egg in Iowa; `knew or should have known' that additional testing needed to be performed before the suspected shell eggs were distributed to consumers; and `knew or should have known' of proper remedial and preventative measures to reduce the presence of [salmonella]. Id. at 633. In the Jensen case, the company bought used processing equipment that was corroded, dirty and hard to clean just before the outbreak. Additionally, the packing facility floors were constructed in a way that made them hard to clean, so pools of water potentially harboring bacteria were close to the packing equipment. In both, the Jensen and DeCoster cases, the owners pled guilty to misdemeanor offenses. Finally, the evidence in the Parnell case showed that the executives knowingly shipped peanut butter that had tested positive for salmonella, which resulted in felony convictions.

In a recent speech, Principal Deputy Assistant Attorney General Benjamin Mizer said that the Department's approach to food cases was expected "to continue well into the future." Time will tell whether the new administration will, in fact, continue to pursue foodborne illness cases in this manner or not.