Food: Park Doctrine, Individual Liability, and
the Yates Memo
Timothy Moore, Senior Associate, Shook, Hardy & Bacon LLP
Enforcement
Litigation and
Compliance
Jeffrey Steger, Assistant Director, Consumer Protection Branch,
Civil Division, Department of Justice
Andrew Ittleman, Partner, Fuerst Ittleman David & Joseph, PL
Washington, DC
December 9-10, 2015
Moderated by James Cole, Partner, Sidley Austin LLP
Tim Moore
Senior Associate
Shook, Hardy & Bacon LLP
tmoore@shb.com
(305) 755-8924
http://www.shb.com/professionals/m/moore-timothy
Responsible Corporate Officer Doctrine
• Enables the government to criminally prosecute
someone who had, “by reason of his [or her] position in
the corporation, responsibility and authority either to
prevent in the first instance, or promptly to correct, the
violation complained of,” and did not. Park, 421 U.S.
674.
• Applies to violations of the Food, Drug & Cosmetic Act
and other federal legislation.
• Enables prosecution of executives for misdemeanor
violations without proof of knowledge of wrongful act.
Responsible Corporate Officer Doctrine
(Cont’d)
• First announced in United States v. Dotterweich, 320
U.S. 277 (1943) and refined in United States v. Park,
421 U.S. 658 (1975).
• Recent Cases
– United States v. Purdue Frederick Co.
– United States v. Quality Egg, LLC
– The Jensen Farms Case
Recent Examples of Corporate
Prosecution Outside RCO
• Peanut Corporation of America
• November crackdown on dietary
supplement makers
• Warner Chilcott
Jeffrey Steger
Assistant Director
Consumer Protection Branch
U.S. Department of Justice
Jeffrey.Steger@usdoj.gov
The views expressed are the author’s and do not necessarily represent
the views of the Department of Justice or any other agency.
Consumer Protection Branch

CPB enforces through civil litigation and criminal prosecutions a number
of Federal statutes that protect the public health and safety and protect
consumers from unfair trade practices.

Under 28 U.S.C. § 510, the Attorney General has delegated to the Civil
Division’s AAG the responsibility to conduct, handle or supervise “all
civil and criminal litigation and grand jury proceedings arising under the
Food, Drug, and Cosmetic Act . . . .”

CPB’s role within DOJ on FDCA matters.
CPB’s Enforcement Priorities

Identify and prosecute the most serious instances of food, drug,
and medical device violations

Prevent future violations, especially those involving fraud or
consumer safety

Protect consumers

Protect integrity of regulatory process
Individual Accountability
for Corporate Wrongdoing

Consistently been a DOJ priority.

Effective way to combat corporate misconduct is by seeking accountability
from the individuals responsible.

Deters future illegal activity, incentivizes change, holds proper parties
responsible for their actions, promotes public’s confidence in justice system.

New Guidance from the Deputy AG recently re-emphasized this priority.
DAG Yates Memo:
Key Steps for Federal Prosecutors

To be eligible for any cooperation credit company must provide all relevant facts relating to
individuals

Focus on individuals from inception of investigation

Coordination between criminal and civil attorneys

No release for culpable individuals when resolving matter with corporation

No resolution without clear plan to resolve related individual cases

Civil attorneys should consider appropriateness of suit based on considerations beyond
ability to pay
Cooperation Credit

Principles of Federal Prosecution of Business Organizations

Timely and voluntary disclosure of wrongdoing and
willingness to cooperate is important consideration

What does it mean to be eligible for credit?


Identify all individuals involved in misconduct regardless of position, status,
seniority, etc.
Provide all facts relating to that misconduct
Cooperation Credit

Extent of cooperation credit will depend on factors traditionally applied:



Timeliness
Diligence, thoroughness, and speed of internal investigation
Proactive nature of cooperation

Applies equally to civil matters

Within the bounds of legal privileges

Department attorneys will vigorously review information to insure
completeness

Continued cooperation may be necessary post-resolution
Practical Responses to the
Yates Memorandum
Steps for a Company to Protect
Itself and its Employees
Andrew S. Ittleman
Fuerst Ittleman David & Joseph, PL
Most Critical Safeguard
• Standard of Conduct
(e.g., 8 Del. C. §145(a))
If the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful.
• Independent Determination that the Employee
met the Standard of Conduct (e.g., 8 Del. C. §145(d))
– Independent Directors (with outside counsel)
– Independent Counsel legal opinion
Indemnification
• Legally Sufficient
– Meets requirements of state law
• Functionally Sufficient
– Meets needs of
company and employee
Advancement
• Sufficient for protracted investigations
and/or prosecutions
• Subject to reasonable conditions
Insurance
• Understand existing policies
– D&O limitations and exclusions
• Appropriate for investigations
and/or prosecutions
Questions?
Andrew S. Ittleman, Esq.
Fuerst Ittleman David & Joseph, PL
305-350-5694
aittleman@fuerstlaw.com
www.fuerstlaw.com/Yates