Criminal Liability For Food Safety Violations: Jensen Farms and the FDA s Heightened Enforcement Efforts December 4, 2013 Sarah L. Brew Partner, Faegre Baker Daniels LLP Jason Resnick Vice President & General Counsel, Western Growers
Food, Drug and Cosmetic Act (FDCA) Cannot adulterate or misbrand any food in interstate commerce Cannot introduce, deliver, or receive adulterated or misbranded food in interstate commerce
Felony Charges Under FDCA (Intent Required)
Felony Charges Under FDCA [I]f any person violates [section 331]... with the intent to defraud or mislead, such person shall be imprisoned for not more than three years or fined not more than $10,000, or both. FDA has its own Office of Criminal Investigations (OCI).
Recent Examples of Felony Charges Under the FDCA February 11, 2010 Brown Packing Co. was ordered to pay a $2 million fine for one felony count for charges related to the illegal use of growthpromoting hormone implants in non-ruminant veal calves, mail and wire fraud. February 16, 2011 Paisano Meat, Inc. and its president, Jose Cruz Lopez Perez, pleaded guilty to one felony count for selling adulterated meat food products containing sodium sulfite with intent to defraud. June 15, 2011 Mauret Curbelo, manager of Danilo Ranch, pleaded guilty to two felony counts for the inhumane slaughter of swine and the sale of uninspected and adulterated swine meat. Curbelo was sentenced to 2 years of supervised probation, 100 hours of community service, and was barred from any employment at any rand, farm, or slaughtering facility for the duration of his probation.
Felony Charges Peanut Corporation of America 2009 salmonella outbreak traced to a PCA roasting plant 9 died, 700 sickened FDA found PCA did not clean its plant adequately or take proper precautions to prevent food contamination
Felony Charges Peanut Corporation of America Feb. 20, 2013 DOJ charges 5 former officials and employees of PCA, including PCA s president and owner, Steward Parnell in a 76-count indictment Criminal conduct occurring over a period of six years, including: Failed to alert customers of presence of salmonella Fabricated of COAs Attempted to obstruct FDA investigation
Felony Charges Peanut Corporation of America When an employee in a 2007 email told Mr. Parnell that containers of peanut meal were covered in dust and rat feces, Mr. Parnell s responded: Clean em all up and ship them.
Felony Charges Peanut Corporation of America Parnell s new defense: ADHD. According to Parnell s attorney, the diagnosis means that the tragic events at PCA were not the result of a complicated, concerted scheme, but rather the result of inept daily plant management and negligent employees, and Stewart Parnell never acquired the knowledge required to commit the crimes the government alleges. Daubert hearing on this testimony is scheduled for Dec. 6.
Park Doctrine (Responsible Corporate Officer Doctrine) Misdemeanor Charges No Intent Required
Park Doctrine (Responsible Corporate Officer Doctrine) Misdemeanor Charges United States v. Park, 421 U.S. 658 (1975) John Park was the president of a large national food chain operating several warehouses that FDA determined to be unsanitary. Park was convicted of a misdemeanor violation of the FDCA for selling adulterated or misbranded food. Federal appeals court overturned conviction, finding on the basis of due process that Park s position as President was not enough and that some act of commission or omission is an essential element of every crime.
Park Doctrine (Responsible Corporate Officer Doctrine) Misdemeanor Charges United States v. Park, 421 U.S. 658 (1975) On appeal, the U.S. Supreme Court reinstated the conviction, holding that [t]he [FDCA] imposes upon persons exercising authority and supervisory responsibility reposed in them by a business organization not only a positive duty to seek out and remedy violations but also, and primarily, a duty to implement measures that will insure that violations will not occur.
Defenses A manufacturer charged with misbranding a FDA regulated product can assert a defense that he or she was powerless to prevent the violation. 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 ). Absent a showing of impossibility, violations of the FDCA are, effectively, strict liability crimes.
Park Doctrine (Responsible Corporate Officer Doctrine) A corporate official can be convicted of a misdemeanor based solely on his or her position of responsibility and control to prevent the underlying violation of the FDCA No requirement that the official acted personally in the wrongdoing or even had knowledge of it Misdemeanor convictions punishable by not more than one year or fines of not more than $250,000, or both
Park Doctrine Enforced Odwalla, Inc. paid $1.5 million after pleading guilty to 16 misdemeanors stemming from an outbreak of E. coli infection caused by unpasteurized apple juice in 1996 Sara Lee Corporation pleaded guilty to one misdemeanor charge and agreed to pay $4.4 million in civil and criminal penalties for producing and distributing contaminated hotdogs and deli meats in 2001
Recent Heightened Enforcement Climate
Recent Heightened Enforcement Climate: FDA Letter to Congress In 2010, FDA sent a letter to Congress setting forth steps FDA was taking to exert more control over OCI. Commissioner Margaret Hamburg stated she expected the efforts to improve enforcement and increase the appropriate use of misdemeanor prosecutions... to hold responsible corporate officials accountable. Stated FDA was developing criteria for the selection of Park misdemeanor prosecution cases.
Recent Heightened Enforcement Climate: Criteria for Park Prosecutions In 2011, FDA published new Special Procedures and Considerations for Park Doctrine Prosecutions. OCI considers a corporate official s position in the company and relationship to the violation, as well as: Whether the violation involves actual or potential harm to the public; Whether the violation is obvious; Whether the violation reflects a pattern of illegal behavior and/or failure to heed prior warnings; Whether the violation is widespread; Whether the violation is serious; The quality of the legal and factual support for the proposed prosecution; and Whether the proposed prosecution is a prudent use of agency resources.
Recent Heightened Enforcement Climate: FSMA Gave FDA authority to criminally prosecute anyone in the manufacturing, labeling or distribution process. Expanded criminal sanctions under the FDCA. 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. Added civil penalties. Not more than $1,000,000 for each offense and every day is a separate offense. New authority for mandatory recalls and registration suspension Expanded authority to detain and seize food determined to be unsafe, adulterated or misbranded, or otherwise failing to meet the requirements of the food safety law.
Recent Heightened Enforcement Climate: Other Enforcement Tools Increased domestic inspections Increased Warning Letters for violations of GMPs and insanitary conditions Increased actions for injunctions
Warning Letters The FDA may apply the Park Doctrine to routine violations: 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. Failure to Establish or Follow Procedures: 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.
Jensen Farms
Jensen Farms 2011 Listeria outbreak involving cantaloupe grown by Jensen Farms Linked to inadequate washing system 33 died, 1 miscarriage, 147 hospitalized
Jensen Farms Jensen Farms audited months before the outbreak and given superior rating.
Jensen Farms September 26, 2013: Eric and Ryan Jensen arrested and charged with six misdemeanor counts as the responsible corporate officers Jensens could face up to six years in prison and $1.5 million in fines
Jensen Farms How is it different? 1. OCI was involved
Jensen Farms How is it different? 2. Grand Jury Investigation
Jensen Farms How is it different? 3. Arrest Warrants
How to Prepare for Increased Enforcement Climate
How to Prepare for Increased Enforcement Climate: The Basics The Basics Compliance programs at all levels Ensure cgmps and SSOPs are up-to-date and followed Keep good records Train employees
How to Prepare for Increased Enforcement Climate: Lessons Learned Don t rely on audits (Jensen Farms) Trust, but verify, suppliers (don t rely on audits, certifications e.g., PCA) If contamination occurs, Properly investigate after contamination occurs Remedy the issues immediately Make prompt disclosures to the government Prepare for inspections Respond to 483s and warning letters
Resources FDA Regulatory Procedures Manual (2011) http://www.fda.gov/iceci/compliancemanuals/r egulatoryproceduresmanual/default.htm Sarah Brew, Faegre Baker Daniels LLP http://www.faegrebd.com
Questions?