Brent Zell Jul. 18, 2016, 9:17am


ST. LOUIS (Legal Newsline) – The question of supervisory liability was recently raised in an appeals court case concerning salmonella in eggs.

In July 2015, the nonprofit Washington Legal Foundation filed a brief in the U.S. Court of Appeals for the Eighth Circuit seeking a reversal of a decision against Austin and Peter DeCoster, who own and operate Quality Egg in Iowa. 

According to the brief, a salmonella outbreak in August 2010 was traced to Quality Egg, leading to a recall and an investigation by the Food and Drug Administration. The DeCosters were charged with violating the Food, Drug and Cosmetic Act prohibiting the introduction of adulterated food to interstate commerce.

The DeCosters pleaded guilty under an agreement that stipulated no one associated with Quality Egg had any knowledge of the presence of the salmonella contamination. Cory Andrews, senior litigation counsel at the Washington Legal Foundation, told Legal Newsline that the district court accepted the findings of the presentencing reports, with findings established not beyond a reasonable doubt and containing some information that suggested the DeCosters were negligent.

However, in addition to levying large fines, the judge in the case gave each of the DeCosters a three-month jail sentence, citing that an inference of careless oversight created a work environment conducive to helping the outbreak occur.

The concern for WLF with this case was the expansion and increasing use at the federal level of the “responsible corporate officer” doctrine, said Andrews, who filed the brief. CaseBriefs.com summarized the doctrine as there needs to be evidence that a corporate officer failed to prevent or correct a violation, despite having the authority and responsibility to do so. The case of United States v. Park is at the heart of the doctrine.

Andrews told Legal Newsline that previously, when the Supreme Court has upheld use of the doctrine, it said that the doctrine can only be applied when the punishment is a minimal penalty – relatively small fines and no jail time – and no great harm to reputation.

“The deprivation of liberty without proof beyond a reasonable doubt of actual criminal intent or even criminal knowledge concerned us,” Andrews said about the Quality Egg case.

On July 6 of this year, the Eighth Circuit upheld the lower-court decision by a 2-1 vote. Judge Diana Murphy wrote in the majority opinion that the district court “properly considered relevant past conduct” in imposing the sentences. 

Judge Raymond Gruender concurred, although adding that “Park requires a finding of negligence in order to convict a responsible corporate officer.”

Judge C. Arlen Beam, in his dissenting opinion, wrote that there was no proof the DeCosters had a guilty mind or negligence, and that the prison sentences were given with no due process.

Andrews said the decision appears to reject the basic premise that an executive's punishment can be based on merely being the head of an organization that is at the center of a controversy.

“They make it clear that some sort of blameworthy conduct is required,” he said. “The concurring opinion, in particular, based its affirment that the DeCosters were actually personally culpable based on that presentence report.”

While disagreeing with the court's opinion that the DeCosters were personally culpable beyond a preponderance of the evidence, Andrews said he thinks the opinion gives corporate executives in such a situation additional support that they cannot be jailed just because of their position in the company in the absence of blameworthy conduct.

“In terms of the doctrine, the 8th Circuit agrees with us that you can't deprive someone of their liberty if they haven't been personally blameworthy,” he said. “We think that's a good precedent, and we're glad that two out of the three members of the panel feel that way.”

Organizations in this Story

Washington Legal Foundation
2009 Massachusetts Avenue Northwest
Washington, DC 20036

U.S. Food and Drug Administration (FDA)
10903 New Hampshire Ave
Silver Spring, MD 20903

U.S. Supreme Court
1 First St NE
Washington, DC 20543

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