Prison Terms Upheld for Execs in Salmonella Case

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By Steven M. Sellers

July 6 — Federal prison sentences handed down to two egg company executives in the wake of a multi-state salmonella outbreak are constitutional, a split Eighth Circuit panel held ( United States v. DeCoster, 2016 BL 216013, 8th Cir., No. 15-1890, 7/6/16 ).

The “relatively short,” three-month sentences imposed on Austin and Peter DeCoster violated neither their Eighth Amendment nor their due process rights, the court said in the 2-1 decision.

The prosecutions under a provision of the Federal Food, Drug, and Cosmetic Act makes executives criminally liable for failing to prevent or remedy “the conditions which gave rise to the charges against them,” the court said.

It upheld the sentences July 6.

“We conclude that the record here shows that the DeCosters are liable for negligently failing to prevent the salmonella outbreak” at the commercial egg farm they operated in Iowa, the court said.

The appeal stemmed from salmonella-tainted eggs shipped from the DeCosters's commercial farm in Iowa. The multi-state outbreak sickened thousands of consumers in 2010.

‘Responsible Corporate Officer' Doctrine Challenged

The appeals challenged the U.S. District Court for the Northern District of Iowa's reliance on the “responsible corporate officer” doctrine in sending the DeCosters to jail (44 PSLR 524, 5/23/16).

The doctrine makes executives criminally liable by virtue of their oversight of company activities, without proof of intent to commit the company's underlying strict liability crimes.

The DeCosters argued, in part, that the sentences were improper because they didn't know the eggs the company distributed actually contained salmonella.

But the U.S. Court of Appeals for the Eighth Circuit dismissed that argument.

Defendants prosecuted under the relevant FDCA provisions (21 U.S.C. §§331(a), 333(a)(1)) “are not required to have known that they violated the FDCA to be subject to the statutory penalties,” the court said.

Here, where the government alleged the DeCosters introduced adulterated eggs into commerce, the court also rejected the argument that the sentences were grossly disproportionate to the crimes.

“When defining the statutory penalties in the FDCA, Congress recognized the importance of placing the burden on corporate officers to protect consumers ‘who are wholly helpless' from purchasing adulterated food products which could make them ill,” Judge Diane E. Murphy wrote for the court.

Judge Raymond W. Gruender concurred in the judgment, but said imprisonment based on vicarious liability “would raise serious due process concerns.”

Here, however, those concerns weren't evident because the district court found the DeCosters negligent, he said.

Dissent Cites Lack of ‘Guilty Mind.'

Senior Judge C. Arlen Beam dissented. In his view, the DeCosters lacked the “guilty mind” on which a prison sentence must be based.

“While it might be possible to concoct an actionable interpretation of §333(a)(1) that omits a mens rea requirement, Congress has no power to enact a federal statute that violates the Fifth Amendment Due Process Clause,” Beam said.

Judge Diane E. Murphy wrote the opinion, joined by Judge Raymond W. Gruender, who filed a concurring opinion.

Senior Judge C. Arlem Beam dissented.

The law offices of Sidley Austin represent Austin DeCoster.

Dornan, Lustgarten & Troia represent Peter DeCoster.

To contact the reporter on this story: Steven M. Sellers in Washington at ssellers@bna.com.

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

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