At least once a month, our USDA or FDA practice group receives that phone call…the phone call that comes from an existing or prospective food client at that point in time (and no sooner) when the proverbial “slop is about to hit the fan.”
In our experience, most food companies do a good job recognizing that they need regulatory or legal assistance. They just don’t always recognize it soon enough. While the old adage, “better late then never,” holds true when it comes to seeking regulatory or legal advice, the effectiveness of legal counsels’ or regulatory experts’ efforts in terms of the likelihood of a favorable outcome often hinges on how early these experts become involved.
There are many examples of when food companies have hurt themselves by waiting too long to seek regulatory or legal assistance. Take, for example, a potential recall situation. In many instances, companies do not seek assistance from legal counsel or other regulatory experts until just moments before an FDA or FSIS Recall Committee asks for a conference call with the company to discuss the matter. At this point in time, the agency has likely already made up its mind that there is a need for a recall and has decided on the Recall Classification. Convincing FSIS or FDA to accept a lesser action (like a market withdrawal) or lower classification (Class II or Class III recall instead of a Class I) at this point is often futile, particularly when there has not been adequate time for legal counsel or other experts to learn all the facts and prepare. Engaging assistance early in the process, when a potential problem or contamination event is discovered and legal or regulatory experts can discuss the merits of a market withdrawal or a particular recall classification with the agency, will increase the chance of a favorable outcome.
Another re-occurring “late” call is from meat or poultry companies waiting until they receive a Notice of Alleged Violation from FSIS before they seek legal assistance. A FSIS Notice of Alleged Violation is a letter that alleges violations of the Inspection Acts and threatens referral to a U.S. Attorney’s Office for criminal prosecution. These letters are typically issued months, and sometimes years, after the alleged unlawful conduct occurred and after the agency has completed its investigation. If a company waits until the issuance of a Notice of Alleged Violation to hire legal counsel, it will be difficult for counsel to gather the appropriate facts to defend the action, due to factors such as employee turnover at the company, faded recollections, and/or lost or destroyed records. Even more importantly, by waiting to obtain legal counsel, the company has already missed the most crucial time that legal counsel is needed, i.e., during the process that FSIS collects records, interviews employees, and takes employee statements. Once this evidence is provided, it is too late to argue that the records or statements were protected by company privileges, were taken out of context, or did not adequately portray the situation at hand. For this reason, it is critical that companies seek legal counsel immediately after they become aware that there are allegations that could lead to criminal prosecution (e.g., allegations regarding shipment of adulterated or misbranded product, inhumane treatment of animals, fraud, etc.).
Finally, one of our most common late calls…the dreaded FSIS or FDA suspension action after numerous repetitive noncompliances. In most cases, agencies make companies aware that they are on thin ice well before taking suspension actions. If a company has been put on notice that its corrective actions are not preventing noncompliances from reoccurring, it may be time to seek outside experts to provide a fresh look at the situation. In many instances, these experts can provide experience gained from representing clients in similar situations to recommend more effective corrective/preventive actions that a company may not have considered. In some situations, these experts may also assist a company in appealing alleged noncompliances that are not based in fact or law, helping to ensure that potential enforcement actions are not based on faulty grounds. In either case, seeking assistance early can help minimize the chance that the government agency will feel the need to take such a drastic action as shutting down an establishment.
Judging whether to seek outside assistance is not always an easy task. Obviously, the ability to handle an issue in-house, the likelihood of adverse action/results and cost of services provided are factors to be considered. However, when it becomes likely that legal or regulatory counsel is needed, it is imperative that it is sought in a timely manner. Knowing when to seek legal or regulatory assistance could be the difference between a recall or market withdrawal, a criminal prosecution or a letter of warning, and a plant suspension or no action at all.