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Case Study: To recall or not to recall? That is the question

You are part of the executive team of Nature Only, LLC, a small business that manufactures wholesome organic snacks, such as granola bars, trail mix, and popcorn. One of your suppliers sent an email to your CEO stating that the last stock of oats sent to Nature Only may have been contaminated with Listeria, which can either be completely harmless or cause serious and sometimes fatal infections in young children, the elderly, and those with weakened immune systems. Your CEO is now faced with the dilemma of recalling all of the granola bars that could be impacted by the tainted oats. A recall would cost potentially $200,000 and could cause negative public relations but could also save lives and mitigate liability for Nature Only.

Instructions: Your CEO has come to you for advice. Your task is to present a well-argued case as to why the company should or should not recall the granola bars. Use the materials provided in the downloaded case study and the textbook to support your case. Be sure to include your legal conclusion (whether the company should or should not recall the granola bars and why). Responses should be a minimum of 300 words.

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Federal Statute 21 U.S. Code 331. Prohibited acts

The following acts and the causing thereof are prohibited:

(a) The introduction or delivery for introduction into interstate commerce of any food, drug, device, tobacco product, or cosmetic that is adulterated* or misbranded.

(b) The adulteration or misbranding of any food, drug, device or cosmetic in interstate commerce.

*Adulteration usually refers to mixing other matter of an inferior and sometimes harmful quality with food or drink intended to be sold. As a result of adulteration, food or drink becomes impure and unfit for human consumption.

Federal Statute 21 U.S. Code 333. Penalties

(a) Violation of section 331 of this title; second violation; intent to defraud or mislead

(1) Any person who violates a provision of section 331 of this title shall be imprisoned for not more than one year or fined not more than $1,000, or both.

(2) Notwithstanding the provisions of paragraph (1) of this section,1 if any person commits such a violation after a conviction of him under this section has become final, or commits such a violation with the intent to defraud or mislead, such person shall be imprisoned for not more than three years or fined not more than $10,000, or both.

Arizona Revised Statute 13-2202. Deceptive business practices; classification

A. A person commits deceptive business practices if in the course of engaging in a business, occupation or profession such person recklessly:

1. Uses or possesses for use a false weight or measure or any other device for falsely determining or recording any quality or quantity; or

2. Sells, offers or exposes for sale or delivers less than the represented quantity of any commodity or service; or

3. Takes or attempts to take more than the represented quantity of any goods or service when as buyer such person furnishes the weight or measure; or

4. Sells, offers or exposes for sale adulterated goods or services; or

5. Sells, offers or exposes for sale mislabeled goods or services.

B. Deceptive business practices is a class 1 misdemeanor.

Arizona Revised Statute 13-707. Misdemeanors; sentencing

A. A sentence of imprisonment for a misdemeanor shall be for a definite term to be served other than a place within custody of the state department of corrections. The court shall fix the term of imprisonment within the following maximum limitations:

1. For a class 1 misdemeanor, six months.

2. For a class 2 misdemeanor, four months.

3. For a class 3 misdemeanor, thirty days.

A Bit(e) of history of outbreak criminal prosecutions

By Bill Marler, May 3, 2016

I thought it might be helpful to see a few cases where a food borne outbreak brought the attention of the U.S. Attorneys office.

Odwalla: In 1998, in what was the first criminal conviction in a large-scale food-poisoning outbreak, Odwalla Inc., pleaded guilty to violating Federal food safety laws and agreed to pay a $1.5 million fine for selling tainted apple juice that killed a 16-month-old girl and sickened 70 other people in several states in 1996.

Odwalla, based in Half Moon Bay, CA, pleaded guilty to 16 counts of unknowingly delivering adulterated food products for introduction into interstate commerce in relation to the October 1996 outbreak. A batch of its juice infected with the toxic E. coli bacteria sickened people in Colorado, California, Washington and Canada. Fourteen children developed a life-threatening disease that ravages kidneys.

At the time, the $1.5 million penalty was the largest criminal penalty in a food poisoning case. Odwalla also was on court-supervised probation for five years. As part of the probation, the company had to submit a detailed plan to the food and drug agency demonstrating its food safety precautions and any subsequent violations could have resulted in more serious charges.

Jensen Farms: In 2012 Eric Jensen, age 37, and Ryan Jensen, age 33, brothers who owned and operated Jensen Farms, a fourth-generation cantaloupe operation in Colorado, presented themselves to U.S. marshals in Denver and were taken into custody on federal charges brought by the U.S. Attorneys Office with the Food and Drug Administration Office of Criminal Investigation.

According to the six-count indictment, Eric and Ryan Jensen unknowingly introduced adulterated (Listeria-tainted) cantaloupe into interstate commerce. The indictment further stated that the cantaloupe was prepared, packed and held under conditions that rendered it injurious to health. The outbreak sickened more than 147 in the fall of 2011, killing more than 33 people in 28 states. The Jensens faced up to six years in jail and $1.5 million each in fines. The eventually pleaded guilty and were sentenced to five years of probation.

Jack DeCoster: In 2013, Austin Jack DeCoster and his son, Peter DeCoster, both faced charges stemming from a Salmonella outbreak caused by their Iowa egg farms in 2010. The Salmonella outbreak ran from May 1 to Nov. 30, 2010, and prompted the recall of more than a half-billion eggs. And, while there were 1,939 confirmed infections, statistical models used to account for Salmonella illnesses in the U.S. suggested that the eggs may have sickened more than 62,000 people.

The family business, known as Quality Egg LLC, pleaded guilty in 2015 to a federal felony count of bribing a USDA egg inspector and to two misdemeanors of unknowingly introducing adulterated food into interstate commerce. As part of the plea agreement, Quality Egg paid a $6.8 million fine and the DeCosters $100,000 each, for a total of $7 million. Both DeCosters were sentenced to three months in jail. They are appealing the jail sentence.

ConAgra: In 2015 ConAgra Foods agreed to plead guilty and pay $11.2 million in connection with the shipment of Salmonella contaminated peanut butter linked to a 2006 through 2007 nationwide outbreak of that sickened more than 700. ConAgra signed a plea agreement admitting that it unknowingly introduced Peter Pan and private label peanut butter contaminated with Salmonella into interstate commerce during the outbreak.

PCA: In 2015 former Peanut Corporation of America owner Stewart Parnell, his brother and one-time peanut broker Michael Parnell, and Mary Wilkerson, former quality control manager at the companys Blakely, GA, plant, faced a federal jury in Albany, GA.

The 12-member jury found Stewart Parnell guilty on 67 federal felony counts. Michael Parnell was found guilty on 30 counts. Wilkerson was found guilty of one of the two counts of obstruction of justice fined against her. Two other PCA employees earlier pleaded guilty to charges related to the outbreak. The felony charges of introducing adulterated food into interstate commerce, with the intent to defraud or mislead, stemmed from a 2008 to 2009 Salmonella outbreak that sickened 714 and left nine dead. All defendants were sentenced in July of 2015. Stewart and Michael are facing decades in jail.

Molly Moons ice cream shops reopen after dairy recall

By Stephanie Klein, January 2, 2015

After a dairy recall, Molly Moons Homemade Ice Cream opened Friday.

Molly Moons closed shop Dec. 23, after its dairy partner, Snoqualmie Ice Cream, issued a voluntary recall of all their ice cream, gelato, custard and sorbet products. Molly Moons had its milk and cream pasteurized at Snoqualmie Ice Cream.

The recall included all flavors and container sizes produced on or after January 1, 2014 until December 21, 2014 because they said the products have the potential to be contaminated with Listeria monocytogenes.

Owner Molly Moon Neitzel told KIRO Radio, for now, the dairy in Lynden, Wash. is pasteurizing the milk and cream.

She doesnt have the final tally, but estimates the loss to be somewhere around $57,000. Im hoping our community will come back and support us, as usual, and by the end of the year, we will have forgotten about it. Neitzel said they paid all their employees for the shifts they would have worked and potential tips.

Molly Moons, with six locations in Seattle, is touting its seasonal flavors: eggnog ice cream, chocolate orange ice cream, clementine sorbet, and vegan salted caramel ice cream.