Jack DeCoster owned Quality Egg, LLC, an Iowa egg production company. Jacks son, Peter DeCoster, served as


Jack DeCoster owned Quality Egg, LLC, an Iowa egg production company. Jack’s son, Peter DeCoster, served as the company’s chief operating officer. Jack also owned and operated several egg production companies in Maine, and Peter worked at those facilities. In 2008, Salmonella enteritidis (“salmonella”) tests conducted at the Maine facilities came back positive. Other than conducting the single egg test in April 2009, Quality Egg did not test or divert eggs from the market before July 2010, despite receiving multiple positive environmental and hen test results. The Centers for Disease Control and Prevention estimated that about 56,000 Americans fell ill with salmonellosis in 2010 after consuming contaminated eggs. In August 2010, federal and state officials determined that the salmonella outbreak had originated at Quality Egg’s facilities. A criminal investigation was opened, and Jack and Peter pled guilty as responsible corporate officers for introducing adulterated eggs into interstate commerce. The DeCosters now appeal their prison sentences, arguing that they had not known the eggs were contaminated at the time they were shipped.
JUDGE MURPHY Under the FDCA responsible corporate officer concept, individuals who “by reason of [their] position in the corporation [have the] responsibility and authority” to take necessary measures to prevent or remedy violations of the FDCA and fail to do so, may be held criminally liable as “responsible corporate agents,” regardless of whether they were aware of or intended to cause the violation. The FDCA “punishes neglect where the law requires care, or inaction where it imposes a duty” because according to Congress, the “public interest in the purity of its food is so great as to warrant the imposition of the highest standard of care on distributors.” A corporate officer may avoid liability under this doctrine by showing that he was “powerless to prevent or correct the violation.”
The DeCosters raise two separate constitutional claims. They first argue that their sentences are not proportional to their crimes as required by the Eighth Amendment. They also argue that the penalty of incarceration of any length for this misdemeanor offense would violate substantive due process. The DeCosters argue that their prison sentences are unconstitutional because they did not personally commit wrongful acts. They analogize this case to others where courts have determined that due process is violated when prison terms are imposed for vicarious liability crimes.
Officer liability under the FDCA, however, is not equivalent to vicarious liability. Under vicarious liability, a supervisory party is held liable “for the actionable conduct of a subordinate … based on the relationship between the two parties.” Under the FDCA, in contrast, a corporate officer is held accountable not for the acts or omissions of others, but rather for his own failure to prevent or remedy “the conditions which gave rise to the charges against him.” Thus, “some measure of blameworthiness” is “import[ed]” directly to the corporate officer.
Here, as owner of Quality Egg, Jack decided which barns were subject to salmonella environmental testing, and as chief operating officer, Peter coordinated many of the company’s salmonella prevention and rodent control efforts. Neither of the DeCosters claim to have been “powerless” to prevent Quality Egg from violating the FDCA. Despite their familiarity with the conditions in the Iowa facilities, they failed to take sufficient measures to improve them. On this record, the district court reasonably found that “the defendants ‘knew or should have known,’ of the risks posed by the insanitary conditions at Quality Egg in Iowa, ‘knew or should have known’ that additional testing needed to be performed before the suspected shell eggs were distributed to consumers, and ‘knew or should have known’ of [] proper remedial and preventative measures to reduce the presence of [salmonella].” The FDCA “punishes neglect where the law requires care.”
We conclude that the record here shows that the DeCosters are liable for negligently failing to prevent the salmonella outbreak.
The DeCosters also argue that their sentences are substantively unreasonable because the district court gave substantial weight to prior offenses and regulatory violations committed by Quality Egg employees even though the DeCosters had not sanctioned those actions and the violations were unrelated to the salmonella outbreak. The sentences here are presumptively reasonable because they are within the stipulated guideline range of 0 to 6 months imprisonment for each defendant. Furthermore, the district court did not abuse its discretion by considering the Quality Egg employees’ pattern of deceiving the FDA. A sentencing court may consider “‘any information concerning the background, character, and conduct of [a] defendant.’” Here, the court considered such background information and found that the DeCosters had “created a work environment where employees not only felt comfortable disregarding regulations and bribing USDA officials, but may have felt pressure to do so.” In fact, one employee alleged that Jack DeCoster had once reprimanded him because he had not moved a pallet of eggs in time to avoid inspection by the USDA. Peter DeCoster was similarly personally implicated in the company’s violations because of inaccurate statements he made to Walmart about Quality Egg’s food safety and sanitation practices.
We conclude that the district court properly considered relevant past conduct and imposed substantively reasonable sentences on the DeCosters.

What analogy did the defendant attempt to use in this case to gain a reduced prison sentence? Why do you agree or disagree with the court that this analogy is not applicable to the current case?
Suppose you were in the DeCosters’ position and you know that eggs were being shipped to buyers without anyone ensuring that they had not been adulterated with salmonella. If you were guided by the public disclosure test, what would you decide to do?

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Dynamic Business Law

ISBN: 9781260733976

6th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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