Reference no: EM131674924

Question: UNITED STATES v. PARK UNITED STATES SUPREME COURT

FACTS: Defendant Park, the president of a national foodchain 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 his responsibility for the "entire operation" included warehouse sanitation, but he claimed that he had delegated the responsibility for sanitation to dependable subordinates. He admitted at 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.

ISSUE: Can corporate executives be criminally liable for failing to ensure a company's compliance with the law?

REASONING: The Supreme Court has noted that the only way corporations can act is through their individual employees. The act in question, the Federal Food, Drug, and Cosmetic Act, requires stringent, affirmative actions on the part of corporate executives, but these standards are justified by the public interest in food safety. We expect executives such as Park to exercise appropriate authority and demonstrate supervisory responsibility. There is considerable evidence that Park had a duty to ensure sanitary conditions and that he violated that duty by failing to ensure that those to whom he delegated responsibility did their jobs. The Court said: "[T]he 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."

DECISION AND REMEDY: The U.S. Supreme Court reversed the appellate court's reversal of the trial court's conviction, finding that corporate executives can be criminally liable for failing to ensure a company's compliance with the law.

SIGNIFICANCE OF THE CASE: This case signaled to corporate officials that they could no longer use ignorance as a defense, because a court will hold high-level corporate actors responsible for their company's failure to comply with the law, even if they were unaware of what was going on within their company.

CRITICAL THINKING: Given the rule laid down in this case, could the defendant have presented any evidence that would have led to a different decision ?

ETHICAL DECISION MAKING: Suppose you were in Park's position in this case. You allegedly allowed food in your warehouse to be exposed to rodent contamination. If you were guided by the public disclosure test, what would you decide to do?