The post below is a follow-up to an earlier post written by my colleagues, Edward Heath and Kate Dion. Edward is my partner and is Chair of Robinson + Cole’s White-Collar Defense and Corporate Compliance Practice. Kate is a litigation associate who routinely handles government and internal investigations for manufacturing clients.
In the wake of reports about the government’s investigation of Blue Bell Creameries, the United States Department of Justice has issued an ominous warning to food companies: compliance failures will be aggressively prosecuted.
Last week, the third highest-ranking DOJ official announced that food safety investigations and prosecutions are a priority for the agency. Noting that both companies and individual employees are subject to prosecution, the DOJ official directed his comments to senior management: “It is easy to think — that could never happen at my company. It is easy to think — that could never be me.”
He then added:
Even a single decision to cut corners can have deadly consequences. The criminal prosecutions we bring should stand as a stark reminder of the potential consequences of disregarding danger to one’s customers in the name of getting a shipment out on time — of sacrificing what is right for what is expedient.
To reinforce the point, the official noted that the government is willing to rely upon criminal laws that are not directly related to food manufacturing, such as those addressing obstruction of justice, and mail and wire fraud.
DOJ has conducted some noteworthy prosecutions in the last two years involving the sale of adulterated food.
- In one case, the company entered a guilty plea to a misdemeanor violation of the federal Food, Drug, and Cosmetics Act in connection with the sale of a contaminated food product. The company admitted that some of its employees were aware that the product could be contaminated. The plea agreement required the company to pay millions of dollars in a criminal fine and forfeiture of assets.
- In another case, two former company officials were tried and convicted on criminal charges related to the sale of a contaminated product. The evidence presented at trial established that the defendants misled consumers about the contamination and then fabricated COAs accompanying various shipments. When FDA officials visited the plant to investigate the outbreak, the defendants then gave misleading or untrue answers to their questions. Those defendants are still awaiting sentencing.
Blue Bell has entered into voluntary agreements with several state agencies outlining corrective actions necessary to commence selling its ice cream products again, including engaging an expert to oversee sanitation efforts and instituting a “test and hold” procedure that requires it to obtain negative test results before distributing its product for sale. While the FDA has approved of these agreements and is in discussions with Blue Bell concerning resuming sales of its product, the government has not yet indicated whether it will pursue criminal charges against that company for the three deaths and seven people that were hospitalized as a result of the listeria outbreak.
Regardless, the DOJ’s latest commentary is a striking reminder of the importance of a robust, well-enforced compliance program that addresses all applicable Federal and State rules and regulations.