Prison for peanut execs sets new example

Bill Marler’s focus at an upcoming conference of corporate attorneys was supposed to be product liability law, but last week’s prison sentence for a disgraced peanut company executive prompted a quick topic change.

Marler, a Seattle attorney who has represented victims in lawsuits against Peanut Corporation of America, has been asked to discuss the implications of a Georgia judge’s decision Monday to send ex-CEO Stewart Parnell to prison for 28 years. Prosecutors say it was the stiffest sentence ever in a food safety case.

“Given the history of sentences in food safety cases, if Parnell had gotten one year, that would have been more than any food executive has ever gotten,” Marler said. “So the length of his sentence is a really big deal.”

How big a deal, however, is up for debate. Food safety advocates hope it prompts the industry to redouble safety checks. But some wonder if prosecutors will still be reluctant to go hard after executives at bigger corporations with teams of lawyers.

U.S. District Judge Louis Sands found Parnell guilty of more than five dozen felony counts for his role in a 2008-2009 salmonella outbreak, after a jury in 2014 concluded he knowingly directed the shipment of dangerous product from his Virginia-based company’s plant in Blakely, Ga. Nine deaths and hundreds of illnesses were linked to the tainted peanut butter.

Parnell’s brother Michael, 56, also an executive at the now-defunct PCA, received a 20-year prison term. A third PCA manager got five years in prison and two on probation.

But the ramifications of the prison terms, which the U.S. Attorney’s Office hailed as a “landmark,” could be both narrow and substantial, depending on how the precedent affects other cases, experts said.

Prior to last week’s sentences, consequences for food safety convictions were usually measured in fine amounts than in years behind bars.

The first criminal conviction stemming from an outbreak came in 1998 when juicemaker Odwalla, an independent brand at the time but now owned by Atlanta-based Coca-Cola, paid a $1.5 million penalty for selling tainted apple juice that killed a 16-month-old and sickened 70.

Brothers Eric and Ryan Jenson, who operated a fourth-generation cantaloupe farm in Colorado, faced six years in prison but received five years probation after pleading guilty in 2012 of unknowingly shipping cantaloupe laced with Listeria. The 2011 outbreak killed 33 people and sickened more than 140.

The next year, father-son team Austin “Jack” and Peter DeCoster were charged in a salmonella outbreak linked to their Iowa egg farms. One-half billion eggs were recalled and almost 2,000 people were infected, though no one died. The DeCosters were sentenced to three months in jail, but are appealing their sentence.

Food companies already can be prosecuted for simply shipping contaminated products — whether they are aware the product is tainted or not — and food safety advocates hope the sentence in the PCA case will prod a tighter focus on safety protocols.

Another motivation is that civil lawsuits, which have grown steadily since the E. coli outbreak in the 1990s at burger chain Jack in the Box, may find easier paths with criminal prosecution.

At the same time, prison sentences require a “smoking gun” of evidence that can be hard to find, experts said.

Parnell was accused of sending emails acknowledging that he knew the company’s peanut butter and peanut paste were poisoned by salmonella but shipped them anyway. He shopped around for laboratories that would pronounce his products salmonella-free after earlier tests found evidence of the bacteria.

It didn’t help that evidence showed his Blakely factory had a leaking roof and a floor filthy with rat droppings.

“It is money, it is money, it is money, it is (expletive) money,” Parnell wrote in an email assistant U.S. District Attorney Alan Dasher shared with the court during sentencing proceedings.

Marler said prosecutors will have to clarify how they decide the level to which an outbreak would have to reach for it to trip an investigation the size of the PCA case, which they pursued for six years.

For instance, Marler asked what separates Blue Bell’s listeria outbreak earlier this year, which killed three and sickened close to a dozen, from scrutiny since the ice cream manufacturer’s facilities were alleged by some to suffer some of the same issues as PCA’s. Officials have not said whether they plan to launch an investigation into Blue Bell’s outbreak.

“That is part of the dialogue that will have to happen because you want the public to feel that the government is being fair,” he said.

Some say size plays a role.

Emails show that auto giant GM was just a egregious in its disregard for safety, and evidence suggests executives knew there were faulty ignition switches well before the auto giant conducted a recall of affected vehicles in 2014, said Rena Steinzor, a professor at the University of Maryland School of Law.

Yet the government settled its criminal probe of the company for $900 million, she said. No executives have been charged, though one federal prosecutor has not ruled that out.

The deaths of more than 120 people have been linked to the faulty ignition switches.

“How you do explain GM?” Steinzor asked, adding that one engineer from the company called the faulty part “the switch from hell.” “Was there a case against GM, you bet.”

Marler said prosecutors will have to determine what level of outbreak would trigger an investigation the size of the PCA case, which they pursued for six years.

But Timothy Lytton, a law professor at Georgia State University, said it would be a mistake to apply the impact of the Parnell sentencing too broadly. Food safety is less complex than manufacturing a car, which has multiple parts, supplies and a host of mechanics to make it run.

“Producing food is a much more simple calculation,” he said.

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