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Marler Blog Providing Commentary on Food Poisoning Outbreaks & Litigation

Mr. Peanut Goes to China – Deadly Nuts/Deadly Crimes

On January 29, 2009, the Untied States Food and Drug Administration (FDA) implicated Peanut Corporation of America (PCA) of Blakely Georgia as the source of a massive Salmonella Typhimurium outbreak that sickened at least 700 sent about a dozen to early graves. Investigation into the outbreak revealed knowledge of product contamination at the highest levels of the PCA corporate structure, yet, ten months later, criminal charges have yet to be filed against PCA executives.

One can only imagine what thoughts are going through the head of PCA owner Stewart Parnell these days. Perhaps he’s grown complacent with the fact that it has been over three quarters of a year since the massive recall of PCA products and yet criminal charges are nowhere in sight. Perhaps he’s more concerned at the moment with his company’s bankruptcy proceedings. One thought that may not yet have occurred to him, however, is gratitude for the fact that, at worst, he’s subject to American tainted food laws. In other countries (read: China) Mr. Parnell might have more to worry about right now than shaky finances.

The facts of the PCA Salmonella outbreak are no light matter. What made the PCA outbreak particularly noteworthy was the huge number of products involved in the recall and the disastrous nation-wide health consequences resulting from the tainted products. The investigation following the outbreak revealed evidence of conditions unsanitary to a degree that would likely make Upton Sinclair turn in his grave. The most egregious findings from the investigation, however, came not from production facilities riddled with rat feces, but from internal communications that illustrated knowledge of shipping contaminated products that could be traced all the way to Mr. Parnell himself.

In an e-mail dated October 6, 2008, Mr. Parnell complained to Blakely, Georgia PCA plant manager, Sammy Lightsey, that positive Salmonella results were “costing us huge $$$$$ and causing obviously a huge lapse in time from the time we pick up peanuts until the time we can invoice.”  In the same e-mail, Mr. Parnell stated, “we need to protect our self [sic] and the problem is that the tests absolutely give us no protection.” (Link)

Subsequent statements from Michelle Pronto, the microbiology manager of the lab that warned PCA of dangerous test results, indicated that Mr. Lightsey “confirmed that because of high coliform results they were going to send samples to a different lab for a while.” (Link)  Ms. Pronto further indicated that her lab “did not receive any samples labeled ‘PCA’ between 8/26/08 and 11/24/08.” Additional evidence indicates that Mr. Parnell begged the FDA to allow PCA to continue shipping peanuts even after the FDA identified PCA’s Georgia plant as the source of the Salmonella outbreak. (Link)

In light of the fact that Mr. Parnell and Mr. Lightsey wanted to continue with business as usual, even though their products were dangerously contaminated, and the fact that those practices resulted in hundreds of illnesses and a dozen deaths, criminal charges in this case seem more than apt. And yet, to this day we have yet to see a single PCA employee or shareholder prosecuted. It is not as if there are no laws applicable to this situation.

Under federal law, it is a felony to adulterate or misbrand food and put it into interstate commerce. A person who commits such an act “with the intent to defraud or mislead” is guilty of a felony punishable by three years imprisonment.

Under the same federal law, a person may be convicted of a misdemeanor without a showing by the prosecution of proof of fraudulent intent, or even a showing of knowing or willful conduct. Instead, a person may be convicted if he or she held a position of responsibility or authority in a firm such that the person could have prevented the violation. Convictions under the misdemeanor provisions are punishable by up to one year imprisonment or a $1,000 fine.

In cases involving food adulteration or misbranding, individuals can be named as defendants along with corporate entities through which crimes were committed. (Link). Individuals named in such cases are usually high ranking officials who were in charge of the decision-making process that led to a violation of the law, as well as those persons who were actively involved in fraudulent activity. As a result, the presidents of corporations and the managers of the facilities where violations took place are often proper defendants.

These laws indicate that sellers of tainted food in America may at least be subject to some criminal penalties, however, such laws don’t hold a candle to the criminal penalties executives of Chinese companies have faced in similarly egregious matters. This fact is easily observed by looking at just a couple recent examples.

On September 16, 2008, a Chinese powdered milk company accused of selling poisoned product that left nearly 300,000 children ill fired its general manager and board chairwoman Tian Wenhua. That same day, Communist party officials from Hebei Province removed Ms. Tian from her position as secretary of the corporation committee of the Communist Party of China. The next day, Ms. Tian was formally charged with producing toxic food, a criminal charge punishable by up to life imprisonment or death.

By September 18, six days after the official announcement of the crisis, Chinese police had already arrested 18 people in connection with the powdered milk contamination, including 6 sellers of melamine and 12 milk suppliers accused of adding melamine to their products. Police also seized 300 kg of chemicals, including 223 kg of melamine. Additionally, 87 people were summoned for questioning and 28 were detained.

Over the next three weeks, the arrests continued. By October 10, Hebei police had arrested 36 people in total, including a dairy farmer who was accused of producing over 600 tons of a protein powder made of melamine and maltodextrin, which he subsequently sold to food additive vendors, cattle farm owners, and fresh milk purchasers.

Another notorious recent example was the execution of Zheng Xiaoyu, the former director of the Chinese State Food and Drug Administration. According to government authorities, during Mr. Zheng’s tenure as State Food and Drug Administration director, from its founding in 1998 to his removal in mid-2005, he accepted bribes totaling $850,000. In exchange, he allegedly approved drug production licenses for multiple untested and unsafe medicines, resulting an unknown number of deaths. In May 2007, after pleading guilty to charges of corruption and accepting bribes from pharmaceutical companies, Mr. Zheng was sentenced to death. The court that sentenced Mr. Zheng stated that he had approved at least six fake drugs during his tenure. Mr. Zheng was executed on July 10, 2007.

What makes these examples interesting is not only the harshness of the punishments compared to American law, but also the swiftness. In Ms. Tian’s case, a mere day passed between her firing and her facing severe criminal charges. In Mr. Zheng’s case, he was executed less than two months after sentencing. Whether such harsh punishments will deter future wrongdoing in China is yet to be seen, and certainly the Chinese legal system is not a place American courts or lawyers should turn to for inspiration. Nevertheless, PCA executives may want to take a moment to consider the fact that their reprehensible behavior is a capital offense in some parts of the world. Likewise, executives of similar food companies that may be looking for ways to cut costs in this difficult economic climate may want to think twice about putting profits before ethics. These executives owe it to their customers to ensure that the food they produce is safe. They owe it to their customers to work to produce safe products as if their lives depend on it.

I leave for China on Monday with my 10 year old daughter.  Thanks to Alex Ferguson of my office for the help on the above.

  • Larry Andrew

    Thank you for the excellent and relevant article. I hope Parnell reads it. Perhaps it may cause officials responsible for prosecuting such offenses to move on the PCA and Parnell for their criminal actions.
    Be safe.