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And You Thought the Recall Was Hard Enough; Wait Till You Get the Grand Jury Subpeona

Date: Feb 23, 2016

Whether mandatory or "voluntary," a food recall has a significant impact on a company's business. The costs of a recall are significant, the customer relations difficult and the personal injury law suits expensive. The impact of a recall has been ratcheted up a notch with the FDA's apparent decision to conduct a criminal investigation of companies involved in a recall in many cases.

It is unclear if this is an outgrowth of the investigation and successful prosecution of the Peanut Corporation of America, and its executives, but there have been several grand jury investigations of companies involved in food recalls publicly acknowledged including Chipotle Mexican Grill, Inc. and Blue Bell Creameries and we are aware of several others. A grand jury is empaneled by a court to investigate whether there is probable cause to believe that a crime was committed and, if so, who committed it. In the context of a food recall, the grand jury, assisted by criminal investigators and others from the FDA, are looking generally for evidence of the shipment of adulterated products across state lines and whether such shipments were the result of criminal intent or negligence. The situation is further complicated, however, because under the Park Doctrine, which was established in 1975, the Food, Drug and Cosmetic Act is a strict liability statute so criminal intent is not required to support a conviction.

In our experience, the grand jury begins its investigation by issuing broad subpoenas to the companies directly involved with the recalled product for documents, including electronically stored information. We have seen grand jury subpoenas requiring the production of all documents "related to" over 30 different categories of information. Subpoenas may also be issued to third-parties such as testing laboratories. These subpoenas are issued, and must be complied with, even though the recall companies probably produced many of the requested documents to FDA during the recall. Because the subpoenas are issued to the company, there is no Fifth Amendment privilege to protect any of the documents.

Once the criminal investigators have had a chance to review the documents that are produced, they may ask to interview one or more employees or officers of the recalling company or, in the alternative, subpoena them to appear before the grand jury to give testimony under oath. Depending on the level of interest, such interviews could involve many people. 

There is no way to avoid becoming involved in a grand jury investigation if your company issues a recall; the government has unfettered discretion. The only thing a company can do is involve knowledgeable counsel at the time the recall begins.