December 07, 2015 Practice Points

DOJ Looks to Increase Individual Accountability to Enforce Food, Drug, and Cosmetic Act

By John F. O'Brien III

The Park Doctrine, also known as the "Responsible Corporate Officer (RCO) Doctrine," allows the government to seek a misdemeanor conviction against corporate officers for alleged violations of the Federal Food, Drug, and Cosmetic Act (FDCA) without having to prove that they participated in or were even aware of the violations. The government must only show that the official was in a position of authority to prevent or correct the alleged violation. The doctrine stems from United States v. Park, 421 U.S. 658 (1975).

Public officials have been calling for enhanced use of the Park Doctrine for years. Just this May, Senators Hatch and Heinrich requested the Department of Justice (DOJ) to employ the Park Doctrine more frequently "as part of a focused-deterrence and selective targeting strategy against current and would-be transgressors." Given the DOJ's recent policy memo, its latest public remarks, and its continued pursuit of convictions against high-level executives, the DOJ appears to be responding to these calls.

In September 2015, Deputy Attorney General Yates released a memorandum outlining several changes the DOJ was implementing "to strengthen [its] pursuit of individual corporate wrongdoing" and to help it determine "the culpability of high-level executives." Now, the DOJ expects corporations to provide "all relevant facts about individual misconduct," with the end goal of identifying individuals "involved in or responsible for the conduct at issue, regardless of their position, status, or seniority." This includes "determining the culpability of high-level executives, who may be insulated from the day-to-day activity in which the misconduct occurs." In a policy address accompanying the memo's release, Yates emphasized the DOJ would be "vigorously testing" corporate disclosures to ensure they are complete and do not "seek to minimize the role of any one person or group of individuals."

In October 2015, Principal Deputy Assistant Attorney General Mizer touted the DOJ's "renewed commitment to ensuring that individuals who engage in fraud schemes and other wrongdoing are held accountable." In his remarks, Mizer praised, among other recent DOJ victories, the 2014 prosecutions of Jack and Peter DeCoster. There, the DeCosters pleaded guilty to introducing adulterated food into interstate commerce in violation of Sections 331(a), 333(a)(1), and 342(a)(1) of the FDCA after their company's contaminated eggs caused a salmonella outbreak. Although the DeCosters stated in their plea agreements they had no direct involvement in the sale of the contaminated eggs, Judge Bennett of the Northern District of Iowa sentenced them to three-month federal prison sentences in April 2015. This case is now on appeal to the Eighth Circuit. And interestingly, it's Mizer who's leading the charge on behalf of the Government.

On appeal, the DeCosters argue that that "due process prohibits the state from imposing a person without proof of some form of personal blameworthiness more than a 'responsible relation'" and that "[n]o appellate court has held that the Due Process Clause permits a supervisory liability offense to be punished through a prison sentence." The National Association of Manufacturers, The Cato Institute, the Pharmaceutical Research and Manufacturers of America, and the U.S. Chamber of Commerce have filed amici curiae briefs in support of the DeCosters. They argue "[t]he government's recent determination to seek imprisonment of corporate officers who had neither knowledge of nor intent to commit violations of the FDCA raises substantial constitutional doubts about the responsible corporate officer concept" that "had previously been avoided by decades of restraint in the government's use of strict liability theories under the FDCA, but now have been brought to the fore by the government's decision to seek imprisonment of an individual for violation of a strict liability misdemeanor."

Although the DOJ did not formerly seek to jail the DeCosters, the DOJ seeks to uphold their prison sentences on appeal. In fact, Mizer argues in the Government's brief that jail time for executives should be more common. The Constitution, Mizer maintains, "does not preclude Congress from concluding that certain offenses—such as the introduction of adulterated foods into interstate commerce—are so serious as to warrant the possibility of a short term of imprisonment even for unknowing violations."

Now that briefing is complete, the parties are preparing for oral argument. Whatever the Eighth Circuit decides, it's clear the outcome will have significance far beyond the question of whether the DeCosters spend any time in jail. And until this issue is finally resolved, personnel in the FDA-regulated industries should tread carefully.

Practice Pointers:

  • High-level executives are not immune from imprisonment for violations of the FDCA, regardless of whether they had knowledge of or intended to commit the violations.
  • Disclose all relevant facts about individual misconduct upfront to the government. If you don't, the business organization risks not receiving any cooperation credit under the Principles of Federal Prosecution of Business Organizations.
  • When conducting an internal investigation, be sure to identify any individuals—regardless of their position, status, or seniority—who are in a position of authority to prevent or correct alleged violations of the FDCA.
  • Keep organizational charts and management trees for the business organization accurate and up to date. These charts may prove useful in determining those individuals within the organization who should be interviewed when conducting an investigation and who ultimately face potential liability exposure for violations of the FDCA.

Keywords: products liability, litigation, park doctrine, DeCoster, corporate investigation

John F. O'Brien III is with Lewis, Brisbois, Bisgaard & Smith, LLP, in Atlanta, Georgia.


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