Speaking at the 2010 FDLI Annual Conference last week, Eric Blumberg, FDA deputy chief for litigation in the Office of the Chief Counsel, heralded the reemergence of the Park Doctrine as part of FDA’s new enforcement efforts. Named after the Supreme Court decision in United States v. Park, 421 U.S. 658 (1975), the doctrine allows the government to seek misdemeanor convictions against company officials for alleged violations of the FDCA – even if the officials were unaware of the violations – if they were in positions of authority to prevent or correct violations and did not.
Despite extensive use of the Park Doctrine in the 1960s and 1970s, sexier felonies stemming from intent to mislead or defraud largely supplanted Park’s misdemeanor charges over the past 30 years. However, one key difference is bringing back Park as “deterrence with a bite” – it’s essentially a strict liability standard. Even before a warning letter is issued, FDA can ask the Justice Department to bring criminal indictments against any executive who executes corporate mission.
Using this individual liability as a deterrent may be the next big wave in clamping down on noncompliance. Park removes the defense of lack of knowledge, with the intent to motivate high-level executives to hear, see and do no evil – lest they add a criminal conviction to their records.
Generally, misdemeanor cases carry a year in prison and/or maximum fine of $100,000 per count for an individual (unless the crime results in death, in which case the maximum fine is $250,000), or $200,000 per count for an entity (raised to $500,000 if death occurs). The fines can be increased up to double the amount of the defendant’s pecuniary gain or victims’ pecuniary loss.
Moreover, in 2008, the U.S. Sentencing Commission adopted changes to the guideline that increased the likelihood that misdemeanor convictions will result in prison time. Now, a sentencing court is to consider an upward departure in any case in which the offense created “a substantial risk of bodily injury or death” – a standard FDA supports for any FDCA violation.
Now more than ever, regulatory compliance programs must be solid and effective. Any executive who allows otherwise is taking a personal risk.