Did LaGrou knowingly engage in the improper storage of meat, poultry, and other food products, in violation of federal food safety laws? Rule of Law To control the shipment, storage and distribution of contaminated food, the government created the Federal Food, Drug, and Cosmetic Act (FDCA).
It is a federal statute that conforms to the safe creation and distribution of cosmetics, drugs, and medical devices (p. 94).
Facts of the Case LaGrou Distribution Systems, Incorporated, operated a cold storage warehouse and distribution center in Chicago, Illinois. The warehouse stored raw, fresh, and frozen meat, poultry, and other food products that were owned by customers who paid LaGrou to do so. Over 2 million pounds of food went into and out of the warehouse each day. The warehouse had a rat problem for a considerable period of time. LaGrou workers consistently found rodent droppings and rodent-gnawed products, and they caught rats in traps throughout the warehouse on a daily basis.
The manager of the warehouse and the president of LaGrou were aware of this problem and discussed it weekly. The problem became so that workers were assigned to “rat patrols” to search for rats and to put out traps to catch rats. At one point, the rat patrols were trapping as many as 50 rats per day. LaGrou did not inform its customers of the rodent infestation. LaGrou would throw out product that has been gnawed by rats but tell the customers that the product was thrown out because of the warehouse damage such as torn boxes and forklift mishaps.
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LaGrou employees, as a joke, would write “MM” for Mickey Mouse on product that was infested. One day, a food inspector for the United States Department of Agriculture (USDA) went to the LaGrou warehouse and discovered the rat problem. The following morning, 14 USDA inspectors and representatives of the federal Food and Drug Administration (FDA) arrived at the warehouse to begin an extensive investigation. The inspectors found the extensive rat infestation and the contaminated meat. The contaminated meat could transmit bacterial, viral, parasitic, and fungal pathogens, including E. oli and Salmonella, which could cause severe illness in human beings. The USDA ordered the warehouse shutdown. Of the 22 million pounds of meat, poultry, and other food products stored at the warehouse, 8 million pounds were found to be adulterated and were destroyed. The remaining product had to be treated with strict decontamination procedures. The U. S. government brought charges against LaGrou for violating federal food safety laws. The U. S. District Court ordered LaGrou to pay restitution of $8. 2 million to customers who lost product and to pay a $2 million fine, and it sentenced LaGrou to a five-year term of probation.
LaGrou appealed. Plaintiff’s Position The management of Lagrou Distribution Systems, Incorporated failed to execute what is stated in the contract. The fact that the company president, manager, and several employees were aware of the situation and did not take the proper action to fix the problem. In fact, the management tried to hide the rat infestation by giving false information to the customers. Defendant’s Position The management claimed that the rodent activity was located in a small area of the basement and not spread out in the warehouse.
LaGrou management requested that all the charges against them be dismissed because of their claim that there was no privity of contract existed between the company and the plaintiff. “Privity of contract is a doctrine of contract law that prevents any person from seeking the enforcement of the contract, or suing on its terms, unless they are a party to that contract (Duhaime, 2004).
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Brief Review of Court Ruling In reference to the U. S. Court of Appeals ruling, LaGrou Distribution Systems, Incorporated was in violation of federal food safety laws regarding safe and sanitary storage of meat, poultry, and other food products.
The court ordered the defendant to pay the penalty of $2 million and was reduced to $1. 5 million. Student Analysis As a senior level, decision-making manager, full responsibility rest upon our shoulder. We are held accountable for whatever decision we make. In the case of LaGrou Distribution Systems, Incorporated, the senior management consented to bad practices where safety of the employees and the consumers is at stake. Such bad practices will not be successful and the end result will be an expensive court battle. The management should abide whatever the agreement on the contract is.
Whatever has promised must be delivered. The rat infestation should be dealt with as soon as it was brought out to the attention of the management. Expert personnel should be consulted and proper guidelines and procedures should be followed in dealing with problem like this. Basing the decision of the district court on the complaint made by the plaintiff against the defendant, the judgment is fair and just because the company consented to the bad practices performed by top management and employees. The management knowingly stored meat, poultry, and other food products under unsanitary conditions.
A case like this should not be taking for granted and the company should be held liable for the wrongdoing they ever did. To be successful in business, good business ethics should be exercised starting from top management down to the employees.
