With an unprecedented 28-year prison sentence, Stewart Parnell, former CEO of the Peanut Corporation of America (PCA), and two co-defendants received some of the harshest sentences recorded in a food safety case last week.
The case involved the known distribution of salmonella-contaminated peanut butter, which caused an outbreak that likely contributed to the deaths of nine people and sickened hundreds, as well as the falsifying of documents trying to cover up the contamination before the products were distributed.
This case is a new era for the food industry and for accountability of companies and executives, according to two food safety lawyers, Bill Marler and Shawn Stevens. Marler, of Seattle, represented victims sickened by the outbreak. Stevens represents food companies in food safety litigation and also founded FoodIndustry Counsel to help companies determine best food safety practices.
A look at how the industry got here
The charges against the PCA executives — Stewart Parnell, his brother Michael Parnell, a food broker on PCA's behalf, and Mary Wilkerson, the salmonella source plant's quality control manager — were not in connection with the nine deaths associated with the salmonella outbreak. Instead, prosecutors took a different route by pursuing charges regarding fraud for lying to customers about the contamination. According to the government’s prosecution, the recall led to the loss of nearly $1 billion in peanut sales.
During the case, prosecutors revealed internal emails showing that Stewart Parnell and the PCA "had for years hidden the fact that many of the firm's products were contaminated with salmonella. In some cases, company officials falsified lab results, stating peanut products were safe to eat when tests showed otherwise, or when products had never been tested at all, according to court papers," The Wall Street Journal reported.
In September 2014, the three executives were convicted of various charges, ranging from conspiracy and fraud for deliberately and knowingly selling food contaminated with salmonella for the Parnell brothers to obstruction for Wilkerson.
Defense attorneys attempted to argue that the individuals who were sickened or relatives of those who died as a result of the salmonella outbreak were not crime victims and should not be allowed to submit written statements or oral testimony at sentencing. However, nine outbreak victims did testify at the sentencing, including one boy who as a 3-year-old was stricken by salmonella after eating peanut butter crackers.
For Stewart Parnell, a life sentence had been previously suggested, but Parnell ended up receiving a 28-year prison sentence for 68 federal felonies. His attorneys plan to appeal.
Scott Austin, an attorney at Gentry Locke, told Politico's Morning Agriculture, "The principal issue for appeal is whether the jurors improperly considered consumer deaths in a case where the only charges were conspiracy, wire fraud, mail fraud, obstruction of justice and introduction of misbranded food into interstate commerce."
Michael Parnell and Wilkerson's lawyers plan to appeal as well. Both Parnells were detained after their sentencing as potential flight risks, while Wilkerson returned home pending her appeal.
"In some respects, to some people, the fact that they prosecuted them at all was significant," said Marler. "Had they given [the defendants] any jail time, it would have been significant. … This is one of those kinds of instances where justice has been served."
Introducing more severe criminal sanctions to food safety cases
Marler said that in his 22-year career, there have been a handful of prosecutions, but most of them have been in the last few years. Since 2013, four criminal cases under the 1938 Federal Food, Drug and Cosmetic Act resulted in convictions or guilty pleas, about the same number won by the government in the 24 years leading up to 2012.
Two Colorado cantaloupe farmers, brothers Eric and Ryan Jensen, were involved in a 2011 listeria outbreak that killed 33 people, which the FDA called the deadliest U.S. foodborne illness outbreak since 1924. Last year, the brothers were sentenced to five years probation and six months home detention as well as having to pay $150,000 in restitution and perform 100 hours of community service.
In the Quality Egg case wrapped up earlier this year, Austin "Jack" DeCoster and his son, Peter DeCoster, were sentenced to three months in jail after being charged with shipping contaminated eggs that caused the 2010 salmonella outbreak that sickened thousands. As part of a plea agreement, the company paid a $6.8 million fine, and the DeCosters each paid $100,000.
In May, ConAgra Foods settled its federal misdemeanor charge by paying $11.2 million in fines, the largest criminal fine ever paid in a food safety case, due to the 2007 salmonella outbreak caused by ConAgra’s peanut butter products.
As for the PCA case, Stevens said he believes that the sentencing was "a reflection of what we're seeing on the ground currently with respect to FDA and its more recent announcement that it's going to use criminal sanctions as a tool to help create a deterrent for the food industry and help ensure compliance under FSMA. … We will see increasingly FDA using PCA as the model as it brings criminal sanctions against food companies moving forward."
"Part of what we’re seeing is prosecutorial discretion," Marler said. "It's a tricky area, who you prosecute, who do you not, why do you prosecute, why do you not. … Right now, frankly, they don't have very clear guidelines of when they're going to do it or how. And I think that's probably something they're going to have to grapple with now."
How food companies can avoid the same fate
Food companies and executives are on notice that the U.S. Department of Justice will be bringing more severe criminal charges against those who do not take the necessary actions to address safety risks in their supply chains and document how those actions are working to ensure food safety, according to the FDA's new preventive controls rule under the Food Safety Modernization Act.
"They're not immune from criminal liability," said Marler. "… I certainly think that companies have to be paying more attention to criminal prosecutions than they were 10 years ago."
"The FDA has been tasked with the monumental objective of overhauling the safety of our nation's food supply, and it can only accomplish that substantial and drastic goal by taking drastic steps," said Stevens. "I think criminal sanctions, from the perspective of the agency, are an integral and key part to its efforts in making sure that it can accomplish what it's been tasked with."
What businesses must do internally to prevent criminal food safety charges will be wide-ranging depending on the protocols and documentation they currently have in place and the nature of their products, process, and supply chain.
"Already I have received multiple telephone calls from various clients asking what they can do within their companies to ensure that at the end of the day, and despite best efforts, they don't suffer the same fate," said Stevens. "The counsel I've given to all of them is the same, which is to tell your employees that beginning this morning, food safety, hands down, comes first."
"Now we are entering a world in which safe or almost safe isn't good enough," Stevens added. "We have to double our efforts to make sure our food is without question as good as it can possibly be. If we don't, we hurt people, and we expose ourselves to criminal sanctions."