Corporate Executives May Face Jail Time over Adulterated Food ProductsOct 19, 2016
Corporate Officers Responsible For Food Contamination
Increasingly, corporate officers are being prosecuted for introducing unsafe foods into commerce. However, the law may be holding executives even more responsible when consumers are exposed to adulterated foods. A federal district court ruled, and the Eight Circuit Court of Appeals upheld, that "responsible corporate officers" can face jail time when their company introduced adulterated food into interstate commerce, even if that individual did not know the food was adulterated. The final decision on this matter now rests with the U.S. Supreme Court.
The first example of a corporate executive going to jail for food contamination they allegedly knew nothing about occurred in 2014. The adulteration involved a 2010 Salmonella outbreak from Quality Egg, LLC, sickening as many as 56,000 people. The company was owned by Austin "Jack" DeCoster and his son Peter DeCoster. The company itself pled gfuilty to several charges in 2014, including: bribing a USDA inspector, introducing misbranded eggs into interstate commerce with intent to defraud and mislead and introducing adulterated eggs into interstate commerce. Quality Egg paid $6.8 million for these violations.
DeCosters Sentenced Imprisonment And Fined $100,000
The DeCosters said they had no knowledge of the adulteration, but acknowledged that they were in a position to address the situation if they knew the eggs were contaminated. They each pled guilty as responsible corporate officers under the Federal Food, Drug & Cosmetic Act. The misdemeanor violation presented a possibility of 1 year in prison and up to a $100,00 fine. The DeCosters were each sentenced to three months in prison and fined $100,000. The court ruled that they did not know about the adulteration, but their business practices were so egregious that it constituted more than "a mere unaware corporate executive."
Naturally, the consequences are more severe when there is evidence that an executive did have knowledge of food contamination and introduced it into commerce nonetheless. A primary example involves a Salmonella outbreak with the Peanut Corporation of America. Stewart and Michael Parnell were found guilty of having knowledge of adulteration and helping to the spread the contaminated product. They were convicted of 72 counts of fraud, conspiracy and the introduction of adulterated foods into interstate commerce. Stewart Parnell was sentenced to 28 years and Michael Parnell was sentenced to 20 years in prison.
In 2015, the Department of Justice said that holding individuals behind corporate misconduct personally liable was the most effective way to ensure corporate accountability. The DOJ has also stated that it will no longer rely on the U.S. Food and Drug Administration (FDA) for information about food contamination.
As corporate executives in the food industry face ramifications, some legal experts are raising questions as to whether similar accountability will be applied to the medical device industry. Lawsuits involving drugs and medical devices most often allege that companies knew, or should have known, that a product presented certain risks to patients but failed to warn them or the medical community. Resolution of cases can lead to a settlement or a verdict, but rarely does it involve a prison sentence.
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