Question

FACTS: Defendant Park, the president of a national food- chain corporation, was charged, along with the corpora- tion, with violating the Federal Food, Drug, and Cosmetic Act by allowing food in the warehouse to be exposed to rodent contamination. Park had conceded that his respon- sibility for the “entire operation” included warehouse sanitation, but he claimed that he had delegated the responsibility for sanitation to dependable subordinates. He admitted at trial that he had received a warning let- ter from the Food and Drug Administration regarding the unsanitary conditions at one of the company’s warehouses. The trial court found the defendant guilty. The court of appeals reversed. The case was appealed to the U.S. Supreme Court.

ISSUE: Can corporate executives be criminally liable for failing to ensure a company’s compliance with the law?

REASONING: The Supreme Court has noted that the only way corporations can act is through their individual employees. The act in question, the Federal Food, Drug, and Cosmetic Act, requires stringent, affirmative actions on the part of corporate executives, but these standards are justified by the public interest in food safety. We expect executives such as Park to exercise appropriate authority and demonstrate supervisory responsibility. There is considerable evidence that Park had a duty to ensure sani- tary conditions and that he violated that duty by failing to ensure that those to whom he delegated responsibility did their jobs. The Court said: “[T]he requirements of foresight and vigilance imposed on responsible corporate agents are beyond question, demanding, and perhaps oner- ous, but they are not more stringent than the public has a right to expect of those who voluntarily assume positions of authority in business enterprises whose services and products affect the health and well-being of the public that supports them.”

DECISION AND REMEDY: The U.S. Supreme Court reversed the appellate court’s reversal of the trial court’s conviction, finding that corporate executives can be crimi- nally liable for failing to ensure a company’s compliance with the law.

SIGNIFICANCE OF THE CASE: This case signaled to corporate officials that they could no longer use ignorance as a defense, because a court will hold high-level corporate actors responsible for their company’s failure to comply with the law, even if they were unaware of what was going on within their company.

CRITICAL THINKING

Given the rule laid down in this case, could the defendant have presented any evidence that would have led to a different decision?

ETHICAL DECISION MAKING

Suppose you were in Park’s position in this case. You allegedly allowed food in your warehouse to be exposed to rodent contamination. If you were guided by the public disclosure test, what would you decide to do?

Answer 1

The defendant could have presented evidence that they took all possible precautionary measures to prevent rodent infestation. However, no amount of standard measure had been able to contain or stop the rodents from encroaching. In such case they could cite natural condition of work that caused the damages and contributed to the compromise of safety.

The defendant could also provide evidence that even though there were rodents in the warehouse, they tool measures to discard those products and made sure that only non-contaminated food were supplied in the market.

In addition, the defendant could also take corrective measures to demonstrate his/her genuine lack of knowledge about FDA rules. He/she could show that even though he/she was not aware of the rules enough care was taken when the rule became known.

These are the possible defenses that could be used by Park to show that even though he did not know about the FDA rule, he practiced common judgement to make sure the products reaching the market were safe.

I would take corrective measures show that even though our poor decision lead to some breach of rules, we were doing everything to correct it. This demonstrates remorse and the willingness to correct the mistake.