UPDATES & ANALYSIS

7.07

Split Eighth Circuit panel affirms the DeCoster’s prison sentence

by Rox Laird | July 7, 2016

The U.S. Court of Appeals for the Eighth Circuit ruled Wednesday that corporate executives can be sentenced to prison when their companies violate federal food-safety laws.

A three-judge panel of the St. Louis-based Court of Appeals, by a 2-1 vote, rejected the appeal by Austin (“Jack”) DeCoster and his son, Peter, who argued they should not have been sentenced to serve prison terms.

The prospect of sending a company executive to prison for what arguably is beyond his or her control raised alarms among national business groups concerned that the DeCoster case could lead to increased risks for business executives in regulated industries. (See our earlier post for more background.)

The DeCosters pled guilty in U.S. District Court in Sioux City last year to violating the federal Food Drug & Cosmetic Act following a 2010 outbreak of food poisoning traced to their Iowa-based egg business. Jack and Peter each pled guilty to misdemeanor violations as “responsible corporate officers” under the food and drug act. Each was sentenced to serve three months in federal prison and ordered to pay a $100,000 fine.

The Eighth Circuit Wednesday rejected the DeCosters’ arguments that their prison sentences violated the Eighth Amendment to the U.S. Constitution, due process of law and were procedurally and substantively unreasonable.

The panel held that as responsible corporate officers the DeCosters were liable, not for the acts or omissions of other company employees, but rather for their own failure to act to prevent or remedy violations of the federal food-safety law.

“Neither of the DeCosters claim to have been ‘powerless’ to prevent Quality Egg from violating” the Food Drug & Cosmetic Act, Judge Diana Murphy wrote for herself and Judge Raymond Gruender. “We conclude that the record here shows that the DeCosters are liable for negligently failing to prevent the salmonella outbreak.”

The panel also rejected the DeCosters’ contention that their prison sentences were “grossly disproportional” to the crime under the Eighth Amendment. “The 2010 salmonella outbreak may have affected up to 56,000 victims,” Murphy wrote, “some of whom were hospitalized or suffered long term injuries. For one example, a child hospitalized in an intensive care unit for eight days was saved by antibiotics which damaged his teeth, causing them to be capped in stainless steel.”

Judge Arlen Beam issued a dissenting opinion in which he argued that the defendants should not be sentenced to prison “without establishing some measure of a guilty mind on the part of these two individuals, and none is established in this case.”

Beam wrote that the DeCoster egg-production facilities are “large, diverse, and labor-intensive agricultural operations requiring several levels and areas of management, as well as a substantial number of ‘hands-on’ production workers.”  The DeCosters were not individually culpable for the company’s actions that led to criminal violations, he said, and thus lacked the necessary “guilty mind” (mens rea) required by federal law.

In any case, the DeCosters are not likely going to federal prison anytime soon. Given the issues involved, and the fact that the panel was split, they likely will ask for a rehearing before the full 11-member Court of Appeals. Depending on the outcome there, the case could be appealed to the U.S. Supreme Court.

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