Posted: 22 Jan 2017 11:39 AM PST
By Jennifer M. Thomas –
Loyal readers know that we at the FDALawBlog have been closely following a significant Park Doctrine case wending its way through the courts, involving father and son Austin (“Jack”) and Peter DeCoster, former executives of Quality Egg, LLC. In an earlier blog posting, we stated that this case is likely the most important Park Doctrine case in more than forty years. On January 10, 2017 the DeCosters timely petitioned the Supreme Court for review of an Eighth Circuit decision upholding their three month prison sentences for misdemeanor violations of the FDC Act involving distribution of egg products.
The DeCosters’ case presents the significant question of whether a corporate executive can be sentenced to imprisonment based on a Park doctrine conviction. The Park doctrine, also known as the “Responsible Corporate Officer” (“RCO”) doctrine, refers to United States v. Park, 421 U.S. 658 (1975) (here), in which the Court held that the federal Food, Drug, and Cosmetic Act (“FDC Act”), 21 U.S.C. § 331 imposes criminal liability on individuals whose corporate position affords them “the power to prevent or correct” violations of that section, even absent “knowledge of, or personal participation in” the violations. Park, 421 U.S. at 670, 676. Park expanded on an earlier Supreme Court decision upholding strict liability for a responsible corporate officer under a different statute in United States v. Dotterweich, 320 U.S. 277 (1943) (here).
Centrally at issue in the DeCosters’ case is whether their Park doctrine convictions represent “vicarious liability” (liability for the acts of others), or liability tied to their own “blameworthiness” for failure to prevent or remedy the FDC Act violation at issue. SeeUnited States v. DeCoster, 828 F. 3d 626, 633 (8th Cir. 2016) (here). Importantly, the DeCosters pleaded guilty as responsible corporate officers, but denied any knowledge of the FDC Act violations committed by Quality Egg, LLC. See id. at 631. They agreed to be sentenced based on facts the court found by a preponderance of the evidence. Id. At sentencing, the district court relied on evidence of the DeCosters negligence in carrying out their corporate roles in sentencing them to a three month imprisonment. Id.
The DeCosters argue in their Petition for a Writ of Certiorari (“Petition”), as they did before the Eighth Circuit, that their convictions as responsible corporate officers under the Park doctrine represents vicarious liability because they did not know of or participate in the violations at issue. As such, they further argue that federal precedent dictates that imprisonment would violate due process. See Petition, at 12-16. In anticipation of the government's likely response that – consistent with the Eighth Circuit ruling – the DeCosters’ own negligence in their roles as responsible corporate officers of Quality Egg, LLC subjects them to personal liability that is not “vicarious,” the DeCosters note that the Park doctrine liability to which they pleaded has not historically implicated negligence on the part of the responsible corporate officer. Rather, they assert that it is a strict liability standard based on the executive’s position of authority and the presumed ability to stop or prevent FDC Act violations. Id. at 17-18. They assert that imprisonment cannot follow from a strict liability offense under the due process clause. Id. at 18.
Is there anything new with regard to the DeCosters’ Petition? The answer is a resounding yes, largely found in the second question raised in the Petition. In that question, the DeCosters argue that the Park doctrine itself must be overturned by the Supreme Court. We cannot recall any case where a defendant has asked the Supreme Court to overturn its earlier rulings in Dotterweich and Park. The DeCosters acknowledge in their Petition that they did not ask the lower courts to question the legal validity of those Supreme Court decisions. Of course, those courts have no legal ability to overturn a Supreme Court decision. For both reasons, the lower courts did not discuss whether Dotterweich/Park should be overruled by the Supreme Court.
The DeCosters’ case presents a difficult question that the Supreme Court may well be inclined to address. Specifically, can the government tie the DeCoster's Park doctrine jail sentences to a degree of negligence, thereby preserving the specter of prison sentences for future individual defendants under a Park theory? If the answer is no, will the government retain its ability to apply strict liability to individual corporate officers under the Park doctrine without jail being an available remedy?
Relying on the unique facts of the DeCosters’ case, the Eighth Circuit was inclined to let the government have its cake and eat it too. However, the present Petition puts this broader question of undeniable importance squarely before the Supreme Court, and numerous amici earlier weighed in in favor of the DeCosters. Will the government’s effort to expand the Park doctrine ultimately destroy it? Will the Park doctrine as we know it survive?
The government of course has an opportunity to oppose the DeCosters’ Petition. We will watch carefully for the government’s brief and report on that brief in a later posting. We also expect that there will be amici briefs filed on both sides of the Petition.
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