A timely petition for certiorari is going to keep Austin “Jack” DeCoster, 82, and his son, Peter DeCoster, 52, out of jail, at least for several more months while the U.S. Supreme Court decides if it is interested in their case.
The high court is being asked to decide if a corporate official without specific knowledge of a violation can be incarcerated for the offense. The issue is being closely watched in corporate America as a half dozen Amicus briefs from business groups are part of the record in the case.
The 8th U.S. Circuit Court of Appeals has put its own ruling against the DeCosters on hold pending the disposition of the DeCoster petition for a writ of certiorari, which is scheduled to be filed with the Supreme Court before the end of year.
The 2-1 ruling by the 8th Circuit appeals panel upheld the three month jail sentences imposed on the DeCosters by U.S. District Judge Mark W. Bennett. They pleaded guilty and agreed to pay $100,000 fines as “responsible corporate officials” for allowing adulterated food from their egg production businesses to enter interstate commerce.
The fines and potential jail sentences were part of their plea agreement with the Department of Justice, but they appealed the jail sentences on the basis they had no personal knowledge at time the violation occurred.
About 10,000 petitions for certiorari are filed annually with the Supreme Court. Most are rejected as the highest court of the land has the capacity to hear only 70 or 80 cases during each annual session, which runs from the first Monday in October to the following June or July.
Once the DeCosters file for certiorari, attorneys in the case will be checking the “Order List,” which is the Supreme Court’s weekly report, posted on Mondays, that lists cases it has accepted and rejected for review. Supreme Court experts say not all petitions for certiorari are equal.
Because of its concerns for consistency and control, the Supreme Court frequently hears cases that involve so called conflicts of law. With 13 federal circuit appeals courts and 50 state supreme courts, it is not unusual for the high court to step in where rulings have become conflicted and the Supreme Court wants to provide clarification.
Peter D. Keisler, former acting Attorney General of the United States, is the lead appellate attorney for the DeCosters. He will argue that the 8th Circuit’s ruling against the DeCosters conflicts with other federal and state appellate decisions.
At the 8th Circuit Court of Appeals
Like most appellate court cases, the review of the DeCoster sentences was assigned to a three-judge panel. It voted 2-1 to uphold the sentences imposed by Judge Bennett in Sioux City, IA.
Key to the panel’s ruling was how the majority treated the concept of “vicarious liability,” which involves whether someone is held responsible for the actions or omissions of others.
Here’s how it came down.
Judge Diana E. Murphy, writing the lead opinion for the appeals panel, recognized that “courts have determined that due process is violated when prison terms are imposed for vicarious liability crimes.” However, the judge, who was appointed by President Bill Clinton, said under the federal Food, Drug and Cosmetic Act (FDCA), there is a difference between “vicarious liability” and unknowingly but “negligently failing to prevent” a company from violating the law.
Judge Raymond Gruender, named to appellate bench by President George W. Bush in 2003, agreed with Murphy that the District Court found the DeCosters negligent and therefore vicarious liability does not come into play.
The dissent on the three-judge panel came from Judge Clarence Arlen Beam. Who wrote “the improvident prison sentences imposed in this case were due process violations.” Appointed by President Ronald Reagan, Judge Beam pointed out that the District Court relied on a “vicarious liability” standard in imposing the sentences.
He said the sole basis of charges against the DeCosters was the Salmonella contamination of the eggs, which the government “fully conceded” the two men did not know about. Beam wrote that the DeCosters’ supposed negligence in performing executive functions on behalf of Quality Egg could not establish the measure of a guilty mind required for sufficient due process.
After they lost, attorneys for the DeCosters filed a petition for rehearing by either another panel or by the entire court. Those requests were denied Sept. 30. If accepted, the next to hear the DeCoster appeal will be the justices of the Supreme Court.
If the high court wants to settle those conflicts, it will issue a writ of certiorari, but only after the petition with all its documentation has gone through a pool of Supreme Court clerks who can also ask government attorneys to respond. The conflicts of law argument could get the case heard.
If it gets that far, Keisler and a Department of Justice appellate attorney, Jeffrey Eric Sandberg, would likely be the ones to square off in the oral arguments before the justices. Each would get 30 minutes to make their arguments.
Those arguments likely won’t get very far beyond narrow points of law — not food safety in general or specifics about what put the DeCosters in the dock. Instead it will be about areas of federal law going beyond the Federal Food Drug and Cosmetic Act where corporate officials might be jailed.
Prior to 2010, “Jack” DeCoster was likely producing more eggs than anyone else in America, with facilities and brands stretching across the country, but with ownerships that were not obvious even within the industry. Peter was heading up Iowa operations.
After national Salmonella levels spiked, sickening as many as 56,000 according to the Centers for Disease Control and Protection. Health officials found two Iowa egg farms were responsible for the outbreak and the DeCosters were forced to recall more than half a billion eggs, the largest recall of shell egg in U.S. history.
When the DeCosters negotiated their plea bargains with government attorneys, their company, known as Quality Egg LLC, also agreed to enter guilty pleas — including one for bribing a federal egg inspector — and paid fines totaling $6.8 million.
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