Case Analysis _Case 6-1 United States v. Park


Case 6-1 United States v. Park

United States Supreme Court 421 U.S. 658 (1975)

Defendant Park, the president of a national food-chain corporation, was charged, along with the corporation, 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 he was responsible for the sanitary conditions as part of his responsibility for the “entire operation,” but claimed that he had turned the responsibility for sanitation over to dependable subordinates. He admitted at the trial that he had received a warning letter 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.

Chief Justice Burger

The question presented was whether “the manager of a corporation, as well as the corporation itself, may be prosecuted under the Federal Food, Drug, and Cosmetic Act of 1938 for the introduction of misbranded and adulterated articles into interstate commerce.” In Dotterweich, a jury had disagreed as to the corporation, a jobber purchasing drugs from manufacturers and shipping them in interstate commerce under its own label, but had convicted Dotterweich, the corporation’s president and general manager.

In reversing the judgment of the Court of Appeals and reinstating Dotterweich’s conviction, this Court looked to the purposes of the Act and noted that they “touch phases of the lives and health of people which, in the circumstances of modern industrialism, are largely beyond self-protection.” It observed that the Act is of “a now familiar type” which “dispenses with the conventional requirement for criminal conduct—awareness of some wrongdoing. In the interest of the larger good it puts the burden of acting at hazard upon a person otherwise innocent but standing in responsible relation to a public danger.”

Central to the Court’s conclusion that individuals other than proprietors are subject to the criminal provisions of the Act was the reality that “the only way in which a corporation can act is through the individuals who act on its behalf.” The Court also noted that corporate officers had been subject to criminal liability under the Federal Food and Drugs Act of 1906, and it observed that a contrary result under the 1938 legislation would be incompatible with the expressed intent of Congress to “enlarge and stiffen the penal net” and to discourage a view of the Act’s criminal penalties as a “license fee for the conduct of an illegitimate business.”

At the same time, however, the Court was aware of the concern which was the motivating factor in the Court of Appeals’ decision, that literal enforcement “might operate too harshly by sweeping within its condemnation any person however remotely entangled in the proscribed shipment.” A limiting principle, in the form of “settled doctrines of criminal law” defining those who “are responsible for the commission of a misdemeanor,” was available. In this context, the Court concluded, those doctrines dictated that the offense was committed “by all who . . . have . . . a responsible share in the furtherance of the transaction which the statute outlaws.”

The rule that corporate employees who have “a responsible share in the furtherance of the transaction which the statute outlaws” are subject to the criminal provisions of the Act was not formulated in a vacuum. Cases under the Federal Food and Drugs Act of 1906 reflected the view both that knowledge or intent were not required to be proved in prosecutions under its criminal provisions, and that responsible corporate agents could be subjected to the liability thereby imposed. Moreover, the principle had been recognized that a corporate agent, through whose act, default, or omission the corporation committed a crime, was himself guilty individually of that crime.

The rationale of the interpretation given the Act in Dotterweich, as holding criminally accountable the persons whose failure to exercise the authority and supervisory responsibility reposed in them by the business organization, resulted in the violation complained of, has been confirmed in our subsequent cases. Thus, the Court has reaffirmed the proposition that “the public interest in the purity of its food is so great as to warrant the imposition of the highest standard of care on distributors.” In order to make “distributors of food the strictest censors of their merchandise,” the Act punishes “neglect where the law requires care, and inaction where it imposes a duty.” “The accused, if he does not will the violation, usually is in a position to prevent it with no more care than society might reasonably expect and no more exertion than it might reasonably extract from one who assumed his responsibilities.”

Thus, Dotterweich and the cases which have followed reveal that in providing sanctions which reach and touch the individuals who execute the corporate mission— and this is by no means necessarily confined to a single corporate agent or employee—the Act imposes not only a positive duty to seek out and remedy violations when they occur but also, and primarily, a duty to implement measures that will ensure that violations will not occur. The requirements of foresight and vigilance imposed on responsible corporate agents are beyond question demanding, and perhaps onerous, 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.

The Act does not, as we observed in Dotterweich, make criminal liability turn on “awareness of some wrongdoing” or “conscious fraud.” The duty imposed by Congress on responsible corporate agents is, we emphasize, one that requires the highest standard of foresight and vigilance, but the Act, in its criminal aspect, does not require that which is objectively impossible.

[I]t is equally clear that the Government established a prima facie case when it introduced evidence sufficient to warrant a finding by the trier of the facts that the defendant had, by reason of his position in the corporation, responsibility and authority either to prevent in the first instance, or promptly to correct, the violation complained of, and that he failed to do so. The failure thus to fulfill the duty imposed by the interaction of the corporate agent’s authority and that statute furnishes a sufficient causal link. The considerations which prompted the imposition of this duty, and the scope of the duty, provide the measure of culpability. *

United States v. Park, United States Supreme Court 421 U.S. 658 (1975).

Reversed in favor of the Government.

Critical Thinking About The Law

The Court in  Case 6-1  was guided by a fundamental principle that it did not explicitly state: To the extent that one has authority, he or she also has responsibility and can be liable for criminal action. This guiding principle played a significant role in the Court’s justification (i.e., reasoning) for its decision.

Context was very important in the formulation of this principle, as well as in its application to  Case 6-1 . Key facts, primary ethical norms, and judicial precedent were important elements of this context. Consequently, the questions that follow focus on those aspects of  Case 6-1 .

1. What key fact was very important to the Court in its determination of Park’s guilt?

Clue:  Think again about the Court’s guiding principle in this case. You want to identify the key fact that allowed the Court to apply the principle to this particular case.

2. Precedent plays a crucial role in the Court’s reasoning and, thus, in its decision. What key precedent in criminal law did the Dotterweich decision dispense with, thereby clearing the way for the guiding principle discussed previously to take on greater significance and make conviction in the present case possible?

Clue:  Reread the section in which Justice Burger discusses the Dotterweich decision.

Although the Park case demonstrates that corporate executives may be found guilty of committing a corporate crime, few are charged and even fewer are actually convicted. Even when they are convicted, harsh penalties are not likely to be imposed. Furthermore, even when executives do go to prison, because they are not seen as security risks they are often sent to prisons that some would argue are nicer than the motels many people can afford to stay in on vacations! See  Exhibit 6-5  for a glimpse of some of these prisons where white-collar criminals are likely to end up.

Exhibit 6-5 White-Collar Prison Camps

A primary reason for the limited number of convictions is the diffusion of responsibility. It is often difficult to establish who was responsible for the criminal act. Another problem related to corporate structure is that everyone usually has a specific job, and putting all of the pieces of the crime together is difficult. The reader should remember that the burden of proof is on the prosecution. Corporate executives also tend to have high-caliber counsel who specialize in defending white-collar criminals. These skilled attorneys, often paid for by the corporation or (when permitted by law) by an insurance carrier, usually get involved during the initial investigation of the case and perceive one of their key functions as keeping evidence out of the hands of the prosecutor. They often regard themselves as having lost the case if they do not prevent their client from being indicted or if they do not at least get the charge reduced to the lowest possible misdemeanor. 14  Another alleged reason for the limited number of convictions of corporate executives is that they are generally persons with a great deal of knowledge, including knowledge of inefficiencies and improprieties on the part of the government officials who are regulating them. It is argued that regulators are unlikely to press for prosecution when their own ineptness may be revealed in the process.

14  K. Mann, Defending White-Collar Crime 10 (Yale University Press, 1985).