By Jesse Newman
A ConAgra Foods Inc. unit agreed to pay a record fine and plead
guilty to a federal misdemeanor charge stemming from a 2006-2007
salmonella outbreak. The rare criminal case spotlights how
stepped-up enforcement of food-safety laws is shaking up the
industry.
ConAgra Grocery Products LLC will pay $11.2 million to resolve
allegations that the company shipped contaminated peanut butter
under its Peter Pan brand and Wal-Mart Stores Inc.'s Great Value
label. The salmonella contamination sickened more than 700
people.
The fine--the largest ever levied in a food-safety case--marks
the latest in a string of successful efforts by the Justice
Department to hold food companies or their executives accountable
for outbreaks of foodborne illnesses that, added together, have
sickened thousands.
Since 2013, the Justice Department has won convictions or guilty
pleas in four criminal cases against food companies or the
executives that ran them. All of the cases fell under the 1938
Federal Food, Drug and Cosmetic Act. By contrast, that is roughly
the same number of convictions or guilty pleas as the agency landed
under the same act in the 24-year-period from 1988 through
2012.
In most of the recent cases, the Justice Department has
successfully prosecuted defendants for introducing contaminated
food into the market even without proof that officials acted with
criminal intent--a nuance that has jolted the food industry, given
its broad implications.
The agency's actions have sparked greater awareness in corporate
boardrooms and many companies have stepped-up efforts to bolster
food safety, according to industry executives and lawyers. Some
companies have invested in new technologies to prevent the build-up
of bacteria in plants and to enhance and speed up data collection
and analysis.
"It's a sea change," said James Neale, a Virginia attorney who
represents food manufacturers and retailers in foodborne-illness
cases, but wasn't directly involved in the recent federal criminal
cases. "Everyone is paying closer attention to food safety."
It is widely agreed that tougher enforcement is one of several
factors increasing food makers' vigilance. New safety rules from
the Food and Drug Administration are also contributing.
Among the Justice Department's other recent prosecutorial
successes in food safety:
Last year, a federal jury convicted the former owner of a
Georgia peanut-processing company, Peanut Corp. of America, and
three ex-employees of felony conspiracy and other charges following
a 2008-'09 salmonella outbreak that was tied to nine deaths and
sickened more than 700 others.
Last month, two executives at a large egg producer were
sentenced to prison for their roles in a 2010 salmonella
outbreak.
In 2014, two Colorado brothers were sentenced to five years'
probation after pleading guilty to misdemeanor charges following a
2011 listeria outbreak that resulted in 33 deaths linked to their
farm's cantaloupes.
Stuart Delery, acting associate U.S. attorney general, said the
gravity of recent outbreaks of food-borne illnesses focused his
attention on addressing threats to food safety soon after his
arrival at the Justice Department's civil division in 2012.
American families "are relying on us and on food companies to make
sure their products are safe to eat," he said in an interview. "The
[current] state of affairs is unacceptable."
The enforcement efforts come amid several recent voluntary
recalls, including by Blue Bell Creameries LP, which last month
pulled all its ice-cream products from grocery store shelves
because of a listeria outbreak. And in April, Jeni's Splendid Ice
Creams recalled all of its products after listeria was discovered
in one of its desserts--an action that some food-industry
consultants point to as a sign food companies now are taking more
precautions. The company has since resumed making ice cream.
ConAgra in 2007 pulled its peanut butter from store shelves
after the salmonella outbreak--which sickened people in 47
states--was traced to the company's Sylvester, Ga., plant. But
ConAgra admitted as part of Wednesday's plea agreement that it had
been aware of some risk of contamination prior to the recall. The
government alleged that ConAgra had earlier shipped from Georgia to
Texas peanut butter produced under conditions in which it may have
become contaminated with salmonella. Routine product testing on two
occasions in 2004 had revealed what later was confirmed to be
salmonella in samples of finished peanut butter, according to the
government.
After the outbreak, the government said ConAgra made significant
upgrades to its plant, and instituted enhanced safety protocols for
manufacturing, testing and sanitation.
"We did not, and never will, knowingly ship a product that is
not safe for consumers," said Dr. Al Bolles, chief technical and
operations officer for ConAgra Foods, in a news release on
Wednesday.
Last year, an internal email trail helped government attorneys
convince a jury that Stewart Parnell, the former owner of Peanut
Corp. of America, had presided over a multiyear scheme to conceal
that many of the firm's products were contaminated with salmonella.
The government said Peanut Corp. for years failed to notify
customers when laboratory tests revealed traces of salmonella in
its products.
In some cases, company officials fabricated lab results, stating
peanut products were safe for consumption when tests showed
otherwise, or when products had never been tested at all, according
to court papers.
One internal email suggested Mr. Parnell's desperation after
learning that shipment of an order would be delayed because test
results weren't yet available for a batch of peanut products.
"S---, just ship it," he wrote, according to court papers. "I
cannot afford to loose [sic] another customer."
The verdict in the Peanut Corp. case could result in a lengthy
prison sentence and fines. Mr. Parnell's lawyer has filed a motion
for a new trial.
Tom Bondurant, Mr. Parnell's lead attorney, declined to comment
on Wednesday. Participants in the case are under a gag order
imposed by a federal judge.
Government attorneys levied felony charges--a rare move in
food-safety cases--against Mr. Parnell because they felt they could
prove criminal intent, according to food-safety lawyers.
Other cases may represent a more significant development for
food companies, the lawyers said, with two pairs of executives
recently convicted of misdemeanor crimes even without proof of
intent.
In April, a federal judge sentenced a former Iowa egg magnate
and his son to three months in prison and payment of $100,000 in
fines for misdemeanor violations linked to a 2010 salmonella
outbreak that sickened thousands of people and prompted the recall
of a half-billion shell eggs.
Austin "Jack" DeCoster and his son Peter DeCoster, each pleaded
guilty to one count of selling contaminated food across state
lines. The DeCosters ran Quality Egg LLC.
Lawyers say the prison terms for the DeCosters reflect the
resurrection by prosecutors of a little-used legal doctrine to
impose "strict liability"--through which guilt can be ascribed
regardless of whether there was intent to violate the law--against
an individual rather than a corporate entity.
Attorneys for the DeCosters have appealed the sentences. "Where
there was no criminal intent, does the penalty fit the crime?" said
Stuart Dornan, the younger Decoster's attorney. "While Peter has
great concern and sympathy for the victims, he didn't know his eggs
had any salmonella in them."
Write to Jesse Newman at jesse.newman@wsj.com
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