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Publisher’s Platform: DeCosters – Three Months Seem Just About Right

Opinion

539wJack DeCoster and Peter DeCoster were sentenced April 13, 2015 by U.S. District Court Judge Mark Bennett to three months in prison for introducing adulterated food into interstate commerce.  In addition, they were each required to pay $100,000. The DeCosters’s former company, Quality Egg LLC, was fined nearly $6.8 million. Eggs from their Iowa farms were linked to a 2010 national Salmonella  enteritidis outbreak that sickened nearly 2,000 and caused the recall of 500,000,000 eggs.

The DeCosters filed an appeal April 27, 2015, asking the U.S. District Court of Appeals 8th Circuit to remove remove the jail time from their sentence.

Pro-business groups, including the Cato Institute and the National Association of Manufacturers, Pharmaceutical Research and Manufacturers of America and Chamber of Commerce, and the Washington Legal Foundation filed briefs in support of the DeCosters, arguing executives shouldn’t serve jail time for this type of crime.  In part, the arguments for no jail time were the same:

“If executives can be imprisoned for criminal violations of strict liability laws by virtue of the position they hold within a company, the United States economy would suffer.”

“Executive business decisions would be motivated less by good business principles and more by fear of possible future prison sentences.”

The 8th Circuit heard oral arguments in the appeal March 17, 2016 and the parties are now waiting for a decision.

I am not sure if Judges of the 8th Circuit have read Bill Neuman’s New York Times article from September 2010 entitled, “An Iowa Egg Farmer and a History of Salmonella.” However, they should. Here are some of the highlights/lowlights.

DeCoster’s frequent run-ins with regulators over labor, environmental and immigration violations have been well cataloged. But the close connections between DeCoster’s egg empire and the spread of Salmonella enteritidis in the United States have received far less scrutiny.

Farms tied to DeCoster were a primary source of Salmonella enteritidis in the U.S. in the 1980s, when some of the first major outbreaks of human illness from the bacteria in eggs occurred, according to health officials and public records. At one point, New York and Maryland regulators believed DeCoster eggs were such a threat that they banned sales of the eggs in their states.

“When we were in the thick of it, the name that came up again and again was DeCoster Egg Farms,” said Paul A. Blake, who was head of the Enteric Diseases Division at the Centers for Disease Control and Prevention in the 1980s, when investigators began to tackle the emerging problem of Salmonella enteritidis and eggs.

Records released by Congressional investigators suggest that tougher oversight of Mr. DeCoster’s Iowa operations might have prevented the 2010 outbreak, which federal officials say is the largest of its type in the nation’s history, with nearly 2,000 reported illnesses and probably tens of thousands more that have gone unreported.

According to the records, Mr. DeCoster’s farms in Iowa conducted tests from 2008 to 2010 that repeatedly showed strong indicators of possible toxic Salmonella enteritidis contamination in his barns. Such environmental contamination does not always spread to the eggs, and it is unclear what actions Mr. DeCoster took in response. However, when the Food and Drug Administration inspected the farms after the recalls, officials found insanitary conditions and the presence of Salmonella enteritidis in barns and feed.

The first Salmonella enteritidis outbreak recognized by public health officials came in July 1982, when about three dozen people fell ill and one person died at the Edgewood Manor nursing home in Portsmouth, N.H. Investigators concluded that runny scrambled eggs served at a Saturday breakfast were to blame. They traced the eggs to what the Centers for Disease Control reports referred to as a large producer in Maine; interviews with investigators confirmed that it was Mr. DeCoster’s former operation.  Eggs from the same farms were also suspected in a simultaneous outbreak that sickened some 400 people in Massachusetts.

In 1987, the deadly outbreak at Coler Memorial Hospital on Roosevelt Island occurred. Investigators determined that mayonnaise made from raw eggs had caused the outbreak. They traced the eggs to Mr. DeCoster’s Maryland farms. On a July night in 1987, scores of elderly and chronically ill patients at Bird S. Coler Memorial Hospital in New York City began to fall violently sick with food poisoning from eggs tainted with Salmonella enteritidis “It was like a war zone,” said Dr. Philippe Tassy, the doctor on call as the sickness started to rage through the hospital. By the time the outbreak ended more than two weeks later, nine people had died and about 500 people had become sick. It remains the deadliest outbreak in this country attributed to eggs infected with the bacteria known as Salmonella enteritidis.

After two more outbreaks were linked to DeCoster eggs the following year, New York banned Mr. DeCoster from selling eggs in the state. He was forced to agree to a rigorous program of Salmonella enteritidis testing on his farms in Maine and Maryland.  Michael Opitz, a poultry expert retired from the University of Maine, said that the testing found that a Maine breeder flock owned by Mr. DeCoster was infected, meaning that hens there could be passing the bacteria to their chicks, which might grow up to lay tainted eggs. Widespread contamination was also found in laying barns.

In 1991, tests revealed more Salmonella enteritidis contamination at one of Mr. DeCoster’s farms in Maryland. The state quarantined the eggs, allowing them to be sold only to a plant where they could be pasteurized to kill bacteria. Mr. DeCoster challenged the order and a federal judge ruled that Maryland could not block him from shipping eggs to other states. He was still barred from selling the eggs in Maryland, and in 1992, a state judge found that he had violated the quarantine by selling eggs to a local store; Mr. DeCoster was given a suspended sentence of probation and a token fine.

Soon after interstate shipments resumed in 1992, eggs from the Maryland farm caused a Salmonella enteritidis outbreak in Connecticut, according to a 1992 memo from the Maryland attorney general’s office. Federal regulators insisted that Mr. DeCoster decontaminate his barns.  Dr. Roger Olson, the former state veterinarian of Maryland, said that Mr. DeCoster complained about the cost of testing and the quarantine and insisted there was little risk associated with his eggs.

Perhaps the Pro-business groups arguing for the DeCosters remain free are unaware of the DeCoster history?  The Business arguments aside, personally, I think Jack and Peter need some time away to think about this history – three months seem just about right.

For a little background on the law – Congress passed the Federal Food, Drug, and Cosmetic Act (FDCA) in 1938 in reaction to growing public safety demands.  The primary goal of the Act was to protect the health and safety of the public by preventing deleterious, adulterated or misbranded articles from entering interstate commerce.

Under section 402(a)(4) of the Act, a food product is deemed “adulterated” if the food was “prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health.” A food product is also considered “adulterated” if it bears or contains any poisonous or deleterious substance, which may render it injurious to health. Chapter III of the Act addresses prohibited acts, subjecting violators to both civil and criminal liability.

Felony violations include adulterating or misbranding a food, drug, or device, and putting an adulterated or misbranded food, drug, or device into interstate commerce.  Any person who commits a prohibited act violates the FDCA.  A person committing a prohibited act “with the intent to defraud or mislead” is guilty of a felony punishable by years in jail and millions in fines or both. The key here is an intentional act.

A misdemeanor conviction under the FDCA, unlike a felony conviction, does not require proof of fraudulent intent, or even of knowing or willful conduct.  Rather, a person may be convicted if he or she held a position of responsibility or authority in a firm such that the person could have prevented the violation.  Convictions under the misdemeanor provisions are punishable by not more than one year or fined not more than $250,000, or both.

Seems evident that the DeCosters more than fit this definition.  Like I said, three months seem just about right.

 

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