Facts
- Acme Markets, Inc., a national retail food chain, stored food for sale after interstate shipment in a Baltimore warehouse.
- Federal authorities found insanitary conditions, including rodent infestation, that exposed stored food to contamination and adulteration.
- The United States charged Acme and its president, John R. Park, under 21 U.S.C. § 331(k) for causing such food to become adulterated while held for sale.
- Acme pleaded guilty; Park proceeded to trial on a misdemeanor theory of liability based on his corporate role.
- Evidence showed Park had previously received an FDA letter warning of insanitary conditions at another company warehouse and that substantially the same personnel managed sanitation across the relevant facilities.
- Park acknowledged that sanitary conditions were within his overall responsibility, though he stated he delegated sanitation tasks to subordinates.
Issues
- Whether the FDCA permits convicting a corporate officer for adulteration caused by insanitary conditions without proof of personal participation or conscious wrongdoing.
- Whether it is sufficient for the Government to prove the officer had authority and responsibility to prevent or correct the violation and failed to do so.
- Whether a prior FDA warning letter about insanitary conditions at another company facility was admissible to show responsibility and knowledge relevant to the charged violation.
Decision
- The Supreme Court reversed the court of appeals and reinstated Park’s conviction.
- The Court held that a corporate officer may be held criminally liable under the FDCA when, by virtue of position, the officer had responsibility and authority to prevent or promptly correct the violation and failed to do so.
- The Court upheld the jury instructions when read as a whole as requiring a finding of a responsible relationship tied to authority to prevent or correct the violation, plus failure to discharge that duty.
- The Court held the FDA warning letter was properly admitted as relevant to Park’s notice of sanitation problems and the reasonableness of reliance on subordinates.
Legal Principles
- The FDCA is a public welfare statute that may impose misdemeanor liability without proof of intent or awareness of wrongdoing.
- A “responsible corporate officer” can be convicted if the Government proves the officer had, by reason of corporate position, responsibility and authority to prevent the violation in the first instance or to correct it promptly, and failed to do so.
- Delegation to subordinates does not by itself relieve an officer of the FDCA-imposed duty to implement and maintain measures designed to prevent violations.
- Liability is not unlimited; an officer may defend by showing inability or powerlessness to prevent or correct the violation in the circumstances.
- Prior regulatory warnings may be admissible when they bear on the defendant’s notice of recurring compliance problems and the defendant’s opportunity and obligation to address them.
Conclusion
The Court sustained misdemeanor liability under the FDCA for a corporate president based on his authority and duty to prevent or correct adulteration-causing insanitary conditions and his failure to do so, and it approved admission of prior FDA warnings as relevant to responsibility and notice.