Doing the Time Without Doing the Crime

Imagine that you are the CEO of large food producer, and you are notified out of the blue that your company is responsible for a salmonella outbreak possibly affecting thousands of people around the country.  If I were that CEO, I would be worried for those who were affected and disappointed that my leadership hadn’t prevented such an outbreak.  Most importantly, I would immediately act to remedy the situation.

In August, 2010, this hypothetical became a reality for Austin (“Jack”) DeCoster and his son, Peter DeCoster, the CEO and COO, respectively, of a large Iowa egg producer, Quality Egg, LLC.  Around this time, the Food and Drug Administration traced a salmonella outbreak back to the company’s eggs after it received reports of roughly 1,900 illnesses.  Jack and Peter DeCoster were unaware of the contamination in their facilities and had no knowledge that their company was sending out such eggs, but they immediately took steps to remedy the outbreak.  They voluntarily recalled millions of dozens of eggs and complied with all of the Food and Drug Administration’s investigations into their facilities.

When the United States prosecuted Quality Egg under the Food, Drug, and Cosmetic Act (“FDCA”), which prohibits the introduction of any adulterated food into interstate commerce, the company plead guilty and agreed to pay a $6.8 million dollar fine.  Jack and Peter DeCoster also plead guilty to being “responsible corporate officers” of Quality Egg under a doctrine created by the Supreme Court in United States v. Park, 421 U.S. 658 (1975).

Under the Park doctrine, a corporate officer can be found guilty of committing a misdemeanor when his or her corporate position affords them “the power to prevent” violations of the FDCA, even absent “knowledge of, or personal participation in” the violation.  Park, 421 U.S. at 6670, 676.  Because of this low burden for proving criminal culpability, and the lack of any “guilty mind” requirement, no corporate officer had ever received a jail sentence under the Park doctrine.  In the plea agreement, both the government and the DeCosters agreed that the DeCosters had no knowledge that the eggs contained salmonella and that the DeCosters had taken no action to contribute to the release of the adulterated eggs into the marketplace.  In other words, the DeCosters had neither a “guilty mind” nor had they taken any “guilty act” to commit this crime, as is required to receive a prison sentence under the Fifth Amendment Due Process Clause of the United States Constitution.

Nonetheless, at sentencing, the Judge found the DeCosters had run the company in a negligent manner, and sentenced them each to pay a $100,000 fine and serve three months in prison.

After a split panel of the United States Court of Appeals for the Eighth Circuit affirmed, the DeCosters filed a petition for a writ of certiorari, asking the Supreme Court to review the legality of their prison sentence.  The DeCosters’ petition highlights Due Process concerns that could affect anyone being charged criminally for the conduct of others.  On February 10, 2017, Cause of Action joined a “friend of the court” brief in support of the DeCosters’ petition, along with the National Association of Manufacturers and the National Association of Criminal Defense Lawyers, arguing that liability for “responsible corporate officers” has never and should never result in prison time, due to a lack of any mens rea requirement for conviction.

In our system, the government must prove in a criminal prosecution that the defendant committed a criminal act and did so with criminal intent.  As the Supreme Court has stated, “we must construe [an imprisonment] statute in light of the background rules of the common law in which the requirement of some mens rea for a crime is firmly embedded.”  Staples v. United States, 511 U.S. 600, 605 (1994).

The DOJ wants to make an example of the DeCosters.  The U.S. Attorney who filed the case stated: “Corporate officials are on notice….[c]laims of ignorance or ‘I delegated the responsibility to someone else’ will not shield them from criminal responsibility.”  But to do so at the expense of a hallmark principle of our justice system is a mistake, and marks a dangerous departure from the safeguards of American criminal jurisprudence.

The brief can be found here.

Erica Marshall is counsel at Cause of Action Institute.

Supreme Court Restrains The Government: A Financial Fraud Law Does Not Criminalize Undersized Fish

The Supreme Court today ruled that John Yates, a commercial fisherman, could not be prosecuted under a financial-fraud law [18 USC §1519] for catching undersized red grouper. Cause of Action, together with the Southeastern Legal Foundation and the Texas Public Policy Foundation, filed a brief in support of Mr. Yates arguing that upholding the conviction would mean a potential twenty year federal prison sentence for anyone who conceals evidence of a surfboard being used on a beach designated for swimming, throws away a bag of chips from a workplace restroom prior to an OSHA inspection, or discards an empty container of medicine purchased from a foreign pharmacy.

CoA and the other amici also noted that Captain Yates’ case raises troubling questions about the government’s inconsistent application of the law, given the multiple cases of document destruction by federal officials. For example, in 2011, during the course of an Inspector General investigation into NOAA’s Office of Enforcement, then director Dale J. Jones, Jr., actually shredded documents to conceal evidence.  Jones was not prosecuted—instead, he was given a different job. Similarly, Charles Edwards, former Department of Homeland Security Acting Inspector General, allegedly destroyed documents to impede a federal investigation. Edwards, too, was reassigned to another federal job.

According to Justice Ginsburg: “A fish is no doubt an object that is tangible; fish can be seen, caught, and handled, and a catch, as this case illustrates, is vulnerable to destruction. But it would cut [the law] loose from its financial-fraud mooring to hold that it encompasses any and all objects, whatever their size or significance, destroyed with obstructive intent. Mindful that…Congress trained its attention on corporate and accounting deception and cover-ups, we conclude that a matching construction…is in order: A tangible object….we hold, must be one used to record or preserve information.” Even the dissent, filed by Justice Kagan, noted: “That brings to the surface the real issue: overcriminalization and excessive punishment in the U. S. Code… [§1519] is a bad law— too broad and undifferentiated, with too-high maximum penalties, which give prosecutors too much leverage and sentencers too much discretion. And I’d go further: In those ways, §1519 is unfortunately not an outlier, but an emblem of a deeper pathology in the federal criminal code.”

Cause of Action Executive Director Dan Epstein applauded the decision:

“We are gratified by the Court’s decision. The Supreme Court has today protected individual rights against arbitrary government prosecutions. The government’s conduct in this case was quintessential Executive Branch overreach because Congress never imagined, much less intended, that the law it passed to deter corporate financial scandals would be applied to fish. Further, this case stands for the principle that overzealous prosecutions should not be broadly applied to private citizens while taxpayer-funded government officials engage in unremediated violations. The rule in this case, requiring courts to read statutes in context and in the fashion Congress intended, will help numerous individuals stand up to government abuses of its authority.”

A copy of the Supreme Court’s decision can be found here. A copy of the Cause of Action, Southeastern Legal Foundation and Texas Public Policy Foundation amicus brief can be found here. Gus Coldebella of Goodwin Proctor was counsel of record for amici on this case.

Yates v US Amicus Brief by Cause of Action

Cause of Action Signs Letter of Support for Amending Rule on Judiciary Committee Jurisdiction

Cause of Action joined ten organizations in support of the proposed amendment to the Rules of the House of Representatives that would clarify the jurisdiction of the Committee on the Judiciary by adding “criminalization” to the Committee’s legislative jurisdiction.

Bipartisan Support for Amending Rule on Judiciary Committee Jurisdiction by Cause of Action

National Law Journal: Post-Enron Law Snags Fisherman

Read the full story: National Law Journal

To bolster their conflicting arguments, each side engages in a classic battle of statutory interpretation. They turn to the dictionary for the ordinary meaning of “tangible object.” They fight over such canons of interpretation as “noscitur a sociis” and “ejusdem generis” with citations to a book by Justice Antonin Scalia and Bryan Garner. They look to the legislative history of Sarbanes-Oxley and they argue over Congress’ intent.


Yates finds support in briefs from the U.S. Chamber of Commerce, the National Association of Criminal Defense Lawyers, the Cato Institute, Pacific Legal Foundation, Cause of Action, former U.S. Rep. Michael Oxley of Ohio and 18 criminal law professors. They stress the overcriminalization issue, the lack of fair warning to Yates and others that their actions could bring criminal liability, and the canons of statutory interpretation.

National Law Journal: Justices Fear Over-Prosecution in Case Against Fisherman

Read the full story: National Law Journal

The United States, he added, has existed for more than 200 years “without this mega, all-inclusive, obstruction-of-justice statute with the intent to impede anything, any matter, that the possibility of the United States could or may or may never be interested in. [Congress] didn’t create it buried within the Sarbanes-Oxley Act and this court shouldn’t put it in there now.”


Reed Rubenstein, senior vice president for litigation of Cause of Action, an amicus party supporting Yates, said after watching the arguments, “I think they’re struggling to find a limiting principle that will cabin the government’s discretion. The obvious one is that this law was designed to apply to business records. To do anything else leads you into the land of absurdities that justices Breyer and Kennedy pointed out.”


Greenwire: Justices to weigh prosecution of fisherman under white-collar law

Read the full story: Greenwire

The court’s willingness to take up the case appears to be part of a trend among the justices to address instances of potentially over-aggressive prosecution. Last term, they took up a case brought against a woman who tried to poison her husband’s mistress. The government prosecuted her under an international treaty on chemical warfare. The court ruled unanimously in Bond v. United States that the government had no need to use the treaty when myriad other criminal laws would have sufficed (Greenwire, June 2).


Notably, groups on both sides of the political spectrum have filed friend-of-the-court briefs backing Yates in the case. The U.S. Chamber of Commerce, National Association of Manufacturers, and American Fuel and Petrochemical Manufacturers have weighed in. The government accountability nonprofit Cause of Action has also filed an amicus brief.

SCOTUSblog: Argument preview: Can plain language be vague?

Read the full story: SCOTUSblog

In upholding Yates’s conviction under that provision, the U.S. Court of Appeals for the Eleventh Circuit rejected his lawyers’ argument that the law was aimed solely at a “document offense.”  The Eleventh Circuit said that, since the specific law did not define its terms, they were to be given their ordinary or natural meaning, and under that reading, a fish qualifies as a “tangible object.”


That is the ruling the Supreme Court agreed to review, last April, declining to also review a separate claim that Yates had made about exclusion by the trial judge of an expert witness his lawyers had wanted to call to the stand.


His petition was supported by the National Association of Criminal Defense Lawyers, urging the Court to hear the case and to act against the “over-criminalization” of conduct by expansive interpretations of federal laws by prosecutors.  The same argument was made by another advocacy group, Cause of Action.