Lisa Noller, Esq.
Following heavy-handed rhetoric by agency chiefs, the FDArecently has increased the number of enforcement actions it has pursued against both entities and individuals. The agency has not only expanded its use of Warning Letters sent to and fines levied against corporations, but it also pursued more actions against corporate officers. Utilizing its long-dormant power to work with the Department of Justice (DOJ) to bring criminal charges against company owners, officers and directors for violations of the Food, Drug, and Cosmetic Act (FDCA)—perhaps most famously exemplified in the 1975 Supreme Court case U.S. v. Park 1 —the FDA has revitalized its authority to prosecute persons for noncompliance with the FDCA. At stake for corporate officers in such a prosecution are criminal penalties of up to one year in prison plus fines, as well as agency exclusion from federal health care benefit programs.
In Park, the FDA sought to prosecute the president of a large, national food store chain for causing interstate food shipments to be exposed to rodent contamination in violation of § 301(k) of the FDCA.2 A jury convicted the company’s president after the court instructed that it could find the president guilty if the jurors concluded he had a “responsible relationship to the issue.” The Court of Appeals, however, overturned the verdict, concluding the company president could not be convicted absent proof that the he was “aware of some wrongdoing.”3 The Supreme Court granted the FDA’s appeal, and reversed the appellate court’s decision, reinstating the trial court’s conviction of the company president. In so holding, the Court held the FDCA imposes upon corporate officers “not only a positive duty to seek out and remedy violations but also, and primarily, a duty to implement measures that will insure that violations will not occur.” Moreover, the Court held, the FDCA “punishes neglect where the law requires care or inaction where it imposes a duty.” These general precepts became known as the Park Doctrine, and it is this doctrine the Department of Justice and FDA have relied upon in the recent prosecutions of corporate officers from companies such as Synthes and Purdue Frederick Co.
In 2011, the FDA published nonbinding criteria the agency considers in recommending Park Doctrine prosecutions. These criteria include: (1) the individual’s position in the company; (2) the individual’s relationship to the violation; and (3) whether the official had the authority to correct or prevent the violation. The FDA also has provided a non-exhaustive list of seven additional factors the agency may consider, including one drawn directly from Park: “whether the violation reflects a pattern of illegal behavior and/or failure to heed prior warnings.”
To minimize the chance of prosecution under the Park Doctrine, it is wise for life-science companies to designate a compliance officer or committee responsible for implementing and updating written policies, procedures, and standards of conduct to which corporate officers must adhere. It is not sufficient for responsible corporate officers to delegate and discharge compliance and oversight; rather, they should take an active role in ensuring a proactive and positive culture of compliance.
1 421 U.S. 658 (1975).
3499 F.2d 839, 842 (4th Cir. 1974).
Lisa Noller, Esq. is a litigation partner with Foley & Lardner LLP.
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