The Hammer Falls on PCA; Indictment Could Raise Difficult Questions About Supplier Verification Under FSMA

By Ricardo Carvajal & JP Ellison –

The U.S. Department of Justice ("DOJ") announced the indictment of former officials of the Peanut Corporation of America ("PCA") for their alleged role in the distribution of peanut products that were implicated in a 2008-2009 national outbreak of salmonellosis.  In part, the indictment charges PCA’s former president, vice-president, plant operations manager, and QA manager with conspiracy to defraud PCA’s customers, introduction of adulterated and misbranded food into interstate commerce with intent to defraud or mislead, and obstruction of justice.  Possible sanctions include fines, imprisonment, and forfeiture to the government of any property derived from proceeds that can be traced to the offenses.

The indictment alleges that defendants:

• shipped products prior to receiving test results and failed to inform customers when test results confirmed the presence of Salmonella;
• shipped products that had tested positive for Salmonella;
• retested products after initial tests confirmed the presence of Salmonella, and shipped products on the basis of subsequent negative test results;
• shipped products manufactured at plants not approved by customers;
• substituted imported products for the domestic products specified by customers;
• substituted non-organic products for the organic products specified by customers;
• falsified Certificates of Analysis ("COAs") in numerous ways; and 
• repeatedly lied to FDA inspectors during the course of their investigation.

As noted in DOJ’s press release, “an indictment is merely an allegation.”  Nonetheless, the indictment can be expected to refocus scrutiny on the adequacy of certain approaches to supplier verification and acceptance/rejection of ingredients.  As we noted in a prior posting, FDA did not include provisions that require supplier approval and verification in its proposed rule on preventive controls, which was recently issued under authority granted to FDA by the Food Safety Modernization Act ("FSMA").  However, FDA requested comment on that issue and might include related requirements in the final regulation.  The results of the PCA investigation could well influence FDA’s thinking on the issue, given the relative ease with which PCA is alleged to have defrauded a number of purchasers ranging from specialty manufacturers to multinational companies.