Case Law Database

Falsified medical products

Details

Interstate shipment of a bottle of cascara compound: misbranded; interstate shipment of a bottle of digitalis tablets: adulterated and misbranded.

 

USA v. Dotterweich

Fact Summary

This was a prosecution begun by two informations, consolidated for trial, charging Buffalo Pharmacal Company, Inc., and Dotterweich, its president and general manager, with violations of the Federal Food, Drug, and Cosmetic Act. The Company, a jobber in drugs, purchased them from their manufacturers and shipped them, repacked under its own label, in interstate commerce. 

Commentary and Significant Features

The Supreme Court made numerous precedential statements about the liability of legal persons, still relied upon today.

The Supreme Court highlighted that the prosecution to which Dotterweich was subjected is based on a now familiar type of legislation whereby penalties serve as effective means of regulation. Such legislation 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.

The court examined the evolution of the establishment of criminal liability for a corporation, noting that it had "taken time to establish criminal liability also for a corporation and not merely for its agents" and were the court to hold the Food, Drug, and Cosmetics Act of 1938 freed all individuals, except when proprietors, from culpability, such a holding would "defeat the very object of the new Act," which was "designed to enlarge and stiffen the penal net and not to narrow and loosen it." 

Sentence Date:
1943-11-22

Cross-Cutting Issues

Liability

... for

• completed offence

... based on

• no criminal intent

... as involves

• legal persons (corporations)

Procedural Information

Legal System:
Common Law
Latest Court Ruling:
Supreme Court
 
Proceeding #1:
  • Stage:
    first trial
  • Description

    The informations were based on § 301 of that Act (21 U.S.C. § 331), paragraph (a) of which prohibits "The introduction or delivery for introduction into interstate commerce of any … drug … that is adulterated or misbranded." "Any person" violating this provision is, by paragraph (a) of § 303 (21 U.S.C. § 333), made "guilty of a misdemeanor." Three counts went to the jury — two, for shipping misbranded drugs in interstate commerce, and a third, for so shipping an adulterated drug.

    The jury disagreed as to the corporation and found Dotterweich guilty on all three counts. “For some unexplainable reason” (see United States v. Buffalo Pharmacal Co.) the jury disagreed as to the corporation's guilt. 

     

    Outcome

  • Verdict:
    Guilty
  • Other Outcome

    The sentence imposed on the appellant was a fine of $500 on each count, with payment suspended on the second and third counts, and probation for 60 days on each count to run concurrently.

     
    Proceeding #2:
  • Stage:
    appeal
  • Official Case Reference:
    131 F.2d 500 (1942)
  • Decision Date:
    03 December 1942

    Court

    Court Title

    Circuit Court of Appeals, Second Circuit

     

    Description

    The Circuit Court of Appeals, one judge dissenting, reversed the conviction on the ground that only the corporation was the "person" subject to prosecution unless, perchance, Buffalo Pharmacal was a counterfeit corporation serving as a screen for Dotterweich. On that issue, after rehearing, it remanded the cause for a new trial. 

     

    Outcome

  • Verdict:
    Reversal
  • Proceeding #3:
  • Stage:
    appeal
  • Official Case Reference:
    320 U.S. 277 (1943)
  • Decision Date:
    22 November 1943

    Court

    Court Title

    U.S. Supreme Court

     

    Description

    The Supreme Court addressed whether the president/general manager of a corporation, as well as the corporation itself, could be liable under the Food, Drug, and Cosmetics Act of 1938 (the Act), which imposed criminal liability on ‘[a]ny person’ shipping adulterated or misbranded drugs.

    The Supreme Court disagreed with the federal appellate court, and held that the offense is committed by all who have a responsible share in the furtherance of the transaction which the statute outlaws, namely, to put into the stream of interstate commerce adulterated or misbranded drugs.

    Central to the court's holding was that the Act was public welfare legislation and the statute imposed strict liability. Specifically, it was noted that Food and Drugs Act of 1906 was an exertion by Congress of its power to keep impure and adulterated food and drugs out of the channels of commerce, and that by an Act of 1938, Congress extended the range of its control over illicit and noxious articles and stiffened the penalties for disobedience.

    The Supreme Court also emphasized that the Act allowed for criminal conviction without proof of awareness of some wrongdoing, and thus put the burden of acting at hazard upon a person otherwise innocent but standing in responsible relation to a public danger.

    The Supreme Court further explained why Dotterweich, and not just the corporation, was liable: “The statute makes ‘any person’ who violates § 301 (a) guilty of a ‘misdemeanor.’ It specifically defines ‘person’ to include "corporation." But the only way in which a corporation can act is through the individuals who act on its behalf.” In addition, “[i]f, then, Dotterweich is not subject to the Act, it must be solely on the ground that individuals are immune when the "person" who violates [the Act] is a corporation, although from the point of view of action the individuals are the corporation.”

    Using this reasoning, the court found that Dotterweich had a responsible share in the furtherance of the transaction which the statute outlaws, namely, to put into the stream of interstate commerce adulterated or misbranded drugs. This was held despite the fact that he had no personal connection with either shipment of misbranded and adulterated drugs and was simply in general charge of the corporation's business and had given general instructions to its employees to fill orders received from physicians.

     

    Outcome

  • Verdict:
    Reversal
  • Defendants / Respondents in the first instance

    Defendant:
    Dotterweich
    Gender:
    Male

    Defendants are, collectively, Buffalo Pharmacal Company, Inc., and Dotterweich, its president and general manager.

    Charges / Claims / Decisions

    Defendant:
    Dotterweich
    Charge:

    The introduction or delivery for introduction into interstate commerce of any … drug … that is adulterated or misbranded.

    Statute:
    Food, Drug, and Cosmetics Act of 1938Section 301(a), read with section 303(a).

    Court

    U.S. Supreme Court