When he sentenced a father and son to three months each, the federal judge in a criminal trial about an egg-related Salmonella outbreak said he was imposing the jail time unless someone could tell him federal law specifically prohibited him from doing so. With a 2-1 vote made public Wednesday, a federal appeals panel said U.S. District Court Judge Mark W. Bennett was indeed within the law April 13, 2015, when he sentenced Austin “Jack” DeCoster and his son Peter DeCoster to serve time for their responsibilities related to the outbreak, which triggered the recall of more than half a billion eggs in 2010. Bennett has allowed the DeCosters to remain free while their appeal runs its course. Also, to avoid constraining their business activities, the father and son will be allowed to serve their sentences separately, if their appeal efforts fail completely. If the DeCosters are imprisoned, it will be at a federal prison camp on the campus on a former Yankton, SD, state college that is known during the summer months for its many flowers and lush grounds. It’s a prison where visiting hours are many and prison violence and other perils are reportedly non-existent. Bennett imposed the DeCosters’ three-month sentences in relation to the 2010 Salmonella Enteritidis outbreak that sickened a minimum of about 1,940 people — and possibly as many as 56,000 — according to the U.S. Centers for Disease Control and Prevention. The three judges from the U.S. Court of Appeals for the 8th Circuit in St. Louis, who heard oral arguments in the DeCosters’ appeal on March 17, were divided in their opinions. Judges Diana Murphy and Raymond Gruender upheld Bennett’s sentencing, while Judge Clarence Arlen Beam dissented. The ruling, however, does not mean action in the case is over. The clerk of court has provided instructions for filing for a re-hearing to DeCoster attorney Peter D. Keisler of the Washington, D.C., firm of Sidley & Austin. Keisler is one of the nation’s best-known attorneys and a former acting U.S. Attorney General. Inquiring business minds want to know The issue raised by the DeCoster appeal — whether a “responsible corporate officer” can be sentenced to prison for misdemeanor violations that were outside their knowledge or control — has raised concern in the broader business community.
The U.S. Chamber of Commerce, the National Association of Manufacturers, and numerous other business and enterprise groups have taken up the DeCosters’ cause by filing amicus briefs in the case. Two Iowa egg farms owned by 82-year-old Jack DeCoster’s company Quality Egg LLC were under 53-year-old Peter DeCoster’s day-to-day management as chief operating officer when they were implicated in the nationwide Salmonella outbreak, making the DeCosters “responsible corporate officers,” according to prosecutors. The two farms were part of the DeCosters’ vast egg-producing holdings that stretched from Iowa to Maine. A criminal investigation ultimately resulted in Quality Egg Inc. pleading guilty to two felonies — bribing a USDA egg inspector and introducing misbranded eggs into interstate commerce with the intent to defraud. The corporate entity also pleaded guilty to the misdemeanor of introducing adulterated eggs into interstate commerce. The corporation paid a $6.8-million fine. The DeCosters each pleaded guilty as corporate officers to the misdemeanor violation. “In their plea agreements, the DeCosters stated that they had not known the eggs were contaminated at the time of shipment, but stipulated that they were in positions of sufficient authority to detect, prevent and correct the sale of contaminated eggs had they known about the contamination,” Murphy wrote for the majority.
“The district court explained that the record supported the inference that the DeCosters had ‘created a work environment where employees not only felt comfortable disregarding regulations and bribing USDA officials, but may have even felt pressure to do so,’” Murphy wrote. “The district court accordingly concluded that this was not a case involving ‘a mere unaware corporate executive.’”