Criminal Liability -- 2017

DeCoster v. United States   (U.S. Supreme Court)

Prison sentence under Responsible Corporate Officer Doctrine

This is an appeal to the Eighth Circuit of a jail sentence for two corporate officers under the Responsible Corporate Officer Doctrine for a strict liability crime about which the officers were unaware and in which they did not participate. Jack and Peter DeCoster, respectively the owner and Chief Operating Officer of Quality Egg LLC, pled guilty as Responsible Corporate Officers to violating the Food, Drug, and Cosmetic Act (FDCA) by unknowingly introducing eggs containing salmonella into interstate commerce.

The DeCosters were subject to criminal liability solely as a result of their jobs because they had, “by reason of [their] position[s] in the corporation, responsibility and authority either to prevent in the first instance, or promptly to correct” the FDCA violations. The DeCosters were each sentenced to three months imprisonment, one year of supervised release, and a $100,000 fine. The corporation was separately fined $6.79 million and placed on probation for three years.

The NAM filed an amicus brief on July 27, 2015, urging the Eight Circuit to reject this dangerous encroachment of strict criminal liability into the C-suite. There are over 300,000 regulations that can trigger criminal sanctions, and if this decision is allowed to stand, every corporate executive could potentially be liable for any employee’s unwitting violation of any one of those regulations. Our brief argued that this sentence undermines the deterrence justification of imprisonment because an executive cannot weigh the punishment for and choose to avoid or prevent illegal conduct of which he is not aware. Longstanding principles of criminal law require the limitation of strict liability, and this case not only stacks two strict liability doctrines on top of one another but goes so far as to impose a prison sentence as a result. Prison for an offense that requires no particular mental state (strict liability) or even participation in the underlying forbidden act violates the Fifth Amendment’s Due Process Clause and the Eighth Amendment’s ban on cruel and unusual punishment.

A panel of the Eighth Circuit ruled 2-1 on 7/6/2016 to uphold the convictions. It rejected a due process claim, saying that no mens rea, or guilty mind, need be proven "where the penalty is 'relatively small,' [and] the conviction does not gravely damage the defendant's reputation . . . ." The three-month prison sentence in this case was short and was not a felony. The court also rejected the argument that the punishment is disproportional to the severity of the crime under the Eighth Amendment.

The NAM filed an amicus brief on 2/10/2017 urging the Supreme Court to accept review of the case. The NAM brief argued that argued that the time has come for this Court to reconsider this rule altogether or, at a minimum, to resolve the division among lower courts as to whether conviction for a vicarious liability offense alone permits a court to impose a sentence of imprisonment.

On 5/22/2017 the Supreme Court declined to hear the case.

Related Documents:
NAM amicus brief  (February 10, 2017)
NAM amicus brief  (July 28, 2015)


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