FDA Uses Warning Letters to Expand the Park Doctrine to Include Violations of Contractors
The U.S. Food and Drug Administration (“FDA”) recently asserted that company executives are strictly liable for the actions of company contractors in five Agency Warning Letters. FDA is relying on the Park Doctrine, a doctrine that arose in a criminal prosecution under the Food, Drug and Cosmetic Act, which provides that corporate officers can be held strictly liable for violations of the Act at their companies. This strict liability applies even when the corporate officer has no actual knowledge or awareness of the wrongdoing.
The Park Doctrine has previously been invoked only to hold corporate officers liable for the unlawful acts of others that occur within their organization. FDA’s more recent Warning Letters, however, appear to signal a broadening of the term “organization” to include third-party contractors that manufacture, package, and/or label a product for distribution.
Beginning on April 2, 2013, the Agency notified five distributors of dietary supplements of a number of violations of the Current Good Manufacturing Practices (“CGMP”) in the production of their products. In each instance, the target of the Warning Letters was a distributor of dietary supplements that contracted out at least some part of the manufacturing, packaging, or labeling process. In the letters, FDA referenced the Park Doctrine in asserting that a distributor can be liable for the actions of its contract manufacturers. Notably, the Warning Letters stated that a distributor cannot contract out the distributor’s ultimate responsibility to ensure that its product complies with the appropriate CGMP requirements. In addition, FDA emphasized that a distributor has an obligation to ensure that the product is not adulterated for failure to comply with dietary supplement CGMP requirements, regardless of who actually performs the dietary supplement CGMP operations.
These Warning Letters appear to be the first time that FDA has claimed that the Park Doctrine imposes liability for contractor violations of CGMP. FDA’s actions are part of an increased focus on ensuring CGMP compliance of the manufacturers and distributors of dietary supplements. While FDA picked what appear to be egregious violations of CGMP upon which to base its claim, FDA’s expansion of the Park Doctrine requires added vigilance by corporate officers of all aspects of the company’s production processes.