The Valentine’s Day recall last year of 8,742,700 pounds of beef — all production of the Rancho Feeding Corporation from Jan. 1, 2013 through Jan. 7, 2014 — immediately sparked protests from customers who used the Petaluma, CA, slaughterhouse to process their cattle. After all, they had nothing to do with the scheme to slip animals with diseased eyes past USDA inspectors. Those caught up in the recall complained to USDA and their members of Congress, but they did not get excluded from the recall because the breakdown in inspections during that period at “EST 527” was just too much. Yet the costs the massive recall imposed on others were not forgotten, and related civil litigation has been working its way through California’s courts. Now these damages, which could add up to almost $20 million, have made their way into the criminal case against former Rancho owner Jesse J. Amaral Jr., and three other defendants who have pleaded guilty in the scheme to send beef from cattle with diseased eyes to market. Business records of Rancho’s customers and downstream customers being used to determine restitution that might be imposed at sentencing are only being provided to the defense under the restrictions of a “protective order” from the U.S. Attorney’s Office for Northern California. The restrictions are intended to protect “confidential and commercially sensitive business plans, customer information, strategies and procedures of these customers and down stream customers.” Crying foul is Michael A. Dias, who represents Amaral in both civil and criminal courts, and he’s persuaded U.S District Court Judge Charles R. Breyer to give the issue a full-blown hearing. The dispute will delay Amaral’s sentencing to Dec. 16, 2015. He pleaded guilty Feb. 18, 2015, to conspiracy to distribute adulterated, misbranded, and uninspected meat, and most recently was scheduled for sentencing on Sept. 2, 2015. Instead, on Sept. 3, Breyer will hear oral arguments on the government’s protective order. In Dias’ motion asking for the hearing, he says that in the civil litigation with Ruiz Foods, Custom Foods, and RBR Meat Co., he had agreed to a protective order. But, Dias notes that the federal prosecutors have “failed to articulate what harm could come by providing the defense with information for its loss and restitution calculations without a protective order.” Dias says that federal prosecutors are seeking “a blanket protective order that restricts the use of all discovery provided by the Government.” He also says their protective order would infringe on Amaral’s rights. “The defendant has been negotiating a resolution in the civil case, and expects to negotiate further,” Dias said. “The defendant intends to use the loss and restitution figures the victims provided to the Government in these negotiations. The use of these figures in negotiations will circumvent a long drawn out discovery process to the benefit of judicial economy in the civil case. Furthermore, if the victims produce different loss or restitution figures than presented to the Government, the defendant needs to have the leverage to confront the civil litigants to justify or rectify the differences.” “The civil protective order defines confidential information as “confidential business plans and strategies … which would risk the loss of significant competitive advantage, any aspect of food safety programs … production and quality assurance documents and any other documents which are in the possession of a Propounding Party who reasonably and in good faith believes that such information is entitled to confidential treatment under applicable law,” he argues. “The blanket protective order is too restrictive, Dias adds. “The defense is actively seeking experts in the beef distribution industry to assist with determining how much beef was recalled. Typically, FSIS publishes on its website the amount and type of meat that is in a particular recall. FSIS has not done so in this case.” Dias goes on to argue that “the amount and type of food recalled has traditionally been part of the public purview; the Government offers no reason why it should not remain so. The defense intends to use the quantity of beef collected in the recall to refute the United States proposed restitution and loss figures.” The Hanford, CA-based agriculture attorney also says, “ In some cases, victims reported a loss of sales from the entire year of 2013.” “This seems unreal since beef typically does not stay on the shelf for an entire year. The defendant needs to consult with experts in the industry to gauge if these numbers are true. Sadly, the defendant cannot vet an expert without at least providing the quantity or type of beef that was recalled. Furthermore, if the Government were to call witnesses, the defendant must be able to cross-examine these witnesses in open court. That is a basic and fundamental right to the accused. If the civil litigants proceed to trial and testify to a different loss figure, the defendant must reserve the right to cross-examine that witness’s inconsistent statements. The Government’s order unduly restricts the defendant’s ability to prepare a full defense. “However, the defendant asks the court to not protect the following information: (1) actual damage figures and calculations, (2) any lost profit figures or calculations, (3) any other costs that any victim seek to recover as restitution, (4) the quantity of meat recovered from the recall, and (5) the type of meat recovered from the recall.” The other three defendants — Robert Singleton, Felix Cabrera, and Eugene Corda — will be sentenced on Oct. 7, 2015. Singleton, who owned Rancho Veal, along with the real property, equipment and meat products produced at Rancho Feeding, entered into a plea agreement with the government on Aug. 22, 2014. Employees Corda and Cabrera both pleaded guilty to conspiracy to distribute adulterated, misbranded and uninspected meat on Oct. 10, 2014, and Nov. 26, 2014, respectively.
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