Split 8th Circuit Panel Upholds Park Case Ruling
An 8th Circuit Court of Appeals panel voted 2-1 to uphold a district court ruling imposing three-month prison sentences and $100,000 fines on the owner and COO of Quality Egg under the Park (responsible corporate officer) doctrine. Attorneys Jennifer Thomas and John Fleder (Hyman, Phelps & McNamara) write in their firm’s FDA Law Blog that the case is among the first in decades to analyze limits of the Park doctrine.
They note that a number of interests submitted amicus briefs on behalf of Austin and Peter DeCoster, including Washington Legal Foundation, Cato Institute, U.S. Chamber of Commerce, Pharmaceutical Research and Manufacturers of America, and the National Association of Manufacturers.
Thomas and Fleder write that although the three judges each wrote separately and reached different conclusions, they appeared unanimous in finding that a penalty of imprisonment for a misdemeanor violation of the Federal Food, Drug, and Cosmetic Act (FFDCA) would violate principles of due process only if the offense is merely one of “vicarious liability,” defined as liability “for the actionable conduct of a subordinate … based on the relationship between the two parties.”
According to the post, one judge wrote that Park liability under the FFDCA does not impose vicarious liability, but rather recognizes the “blameworthiness” of a corporate officer that “fails to prevent or remedy the conditions which gave rise to the charges against him.” A second judge, who concurred in the ruling, noted that the district court had found the DeCosters negligent. He said that negligence is an absolute prerequisite to imposing a sentence of imprisonment on a responsible corporate officer under the FFDCA. The panel’s third judge, who dissented from the majority conclusion, did not disagree that vicarious liability could not justify a prison sentence for violation of the FFDCA, but went further to conclude that a finding of negligence also was insufficient. That judge said that imposition of a jail term requires the government to demonstrate that the DeCosters had the necessary “guilty minds,” that they knew they were violating the law. The judge reasoned that the “guilty minds” requirement applies to FFDCA violations because that law contains no “express congressional statement to the contrary.”
The attorneys write that the DeCosters are likely to request a full 8th Circuit review of the decision or appeal it to the Supreme Court.