U.S. v. H. B. Gregory Co., 73-1744
| Decision Date | 27 June 1974 |
| Docket Number | No. 73-1744,73-1744 |
| Citation | 502 F.2d 700 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. H. B. GREGORY CO. a corporation, and James H. Gregory, an individual, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Henry C. Friend, Milwaukee, Wis., for defendants-appellants.
David B. Bukey, U.S. Atty., Milwaukee, Wis., Joanne S. Sisk, Chief, Office of Gen. Counsel, Dept. of Health, Education & Welfare, Rockville, Md., Gregory B. Hovendon, Daniel M. Clements, Anti-Trust, Div., Dept. of Justice, Washington, D.C., for plaintiff-appellee.
Before HASTINGS and KILEY, Senior Circuit Judges, and CAMPBELL, Senior District Judge. *
This appeal is concerned with alleged violations of the Federal Food, Drug, and Cosmetic Act, Title 21, U.S.C. 301 et seq. (the Act), and, specifically, of 21 U.S.C. 331(k).
A four-count information was filed December 22, 1972, naming as defendants, H. B. Gregory Co., a Wisconsin corporation, and James H. Gregory, its president and treasurer, individually. The Gregory Company operated a bakery supply warehouse and supplied therefrom ingredients to bakeries throughout the Milwaukee metropolitan area. Mr. Gregory had personal responsibility for all operations of the warehouse.
The information charged defendants with violating 331(k) 1 for having caused four lots of food, i.e., corn meal (Count I), poppy seed (Count II), caraway seed (Count III), and corn grits (Count IV), to become adulterated while these foods were held for sale at the Gregory warehouse after shipment in interstate commerce.
Two separate specifications of adulteration were alleged: (1) that the food in all four counts was adulterated within the meaning of 21 U.S.C. 342(a)(4), 2 in that it was held under insanitary conditions whereby it may have become contaminated with filth; and (2) that the corn meal in Count I was adulterated within the meaning of 21 U.S.C. 342(a)(3), 3 in that it consisted in part of a filthy substance by reason of the presence in the corn meal of rodent excreta pellets.
The case was tried to the court, without the intervention of a jury, the Honorable Myron L. Gordon, District Judge presiding. There was little dispute about the basic evidentiary facts. The trial court found each defendant guilty on all four counts and entered judgment accordingly. Subsequently, the court sentenced the Gregory Company to pay a fine of $1,000 on each of the four counts, a total of $4,000, and sentenced Mr. Gregory to pay a fine of $500 on each of the four counts, a total of $2,000. There was no sentence of imprisonment as to Mr. Gregory. Thereafter, the court denied defendants' petitions for a reduction and modification of these sentences. This appeal followed.
A concise statement of the issues raised on this appeal follows: (1) whether the Government proved its case against each defendant beyond a reasonable doubt; (2) whether the trial court erred in imposing fines on each defendant on each of the four counts; and (3) whether the trial court abused its discretion in denying defendants' petitions for reduction or modification of the sentences.
We have read the entire transcript of the evidence introduced in this trial, as well as the record of the proceedings before Judge Gordon. It should be noted at the outset that the trial court rejucted an offer of the corporate defendant, Gregory Company, to change its plea from not guilty to guilty for the reason that its codefendant elected not to permit any corporate officer to waive his Fifth Amendment privilege for the purpose of testifying that there was corporate authority to do so. The court properly honored this privilege and as a result was compelled to reject the corporate offer. The Government put on its case with employees of the United States Food and Drug Administration (FDA) in one day and rested. The defendants, having cross-examined such witnesses, rested without introducing any evidence. It is on this state of the record that this appeal is submitted for our consideration.
It is beyond dispute that as to Count I the defendant Gregory Company received a number of bags of corn meal on or about March 14, 1972, which had been manufactured by Evans Milling Co., Inc., and shipped by it in interstate commerce from Indianapolis, Indiana. The bags were each labeled as containing 100 pounds net EMCO degerminated yellow snack meal. They were held for sale in the Gregory Company warehouse until at least on or about March 22, 1972.
Similarly, as to Count II the defendant Company received a number of bags of poppy seed, and as to Count III, a number of bags of caraway seed, on or about March 8, 1972. These two shipments were products of The Netherlands and were shipped in interstate commerce from New York, New York, by Transit Trading Company. The bags were each labeled as containing 109 pounds net of the respective products, and were held for sale in the Gregory warehouse until at least on or about March 21, 1972.
Finally, as to Count IV the defendant Company received a number of bags of corn grits on or about February 21, 1972, which had been manufactured by Evans Milling Co., Inc., and shipped by it in interstate commerce from Indianapolis, Indiana. The bags were each labeled as containing 100 pounds net EMCO degerminated special grits, and were held for sale in the Gregory Company warehouse until at least on or about March 22, 1972.
FDA Inspector Robert G. Brett, Jr., was assigned to inspect the Gregory warehouse. After testifying in support of the interstate shipment of the four lots of food in question, he testified in detail about his inspection of the warehouse covering a five-day period of March 20-24, 1972. Without relating here this detailed step by step inspection and its results, it is sufficient to state that, as to the lot of corn meal specified in Count I, in addition to rodent excreta pellets and a rodent urine stain on the bag material, the inspector found a rodent gnawed hole in one of the bags, two rodent excreta pellets in the corn meal itself inside the bag, and at least 60 rodent excreta pellets in corn meal which had spilled from the hole onto the warehouse floor. Inspector Brett further stated that, as to the lots of poppy seed, caraway seed and corn grits specified in Counts II, III and IV, he found on the bag material surfaces numerous rodent excreta pellets and multiple rodent urine stains, as well as numerous rodent excreta pellets on the floor beneath the bags. He also testified that he observed other general insanitary conditions throughout the warehouse during his inspection. He found that 75 percent of the small rodent traps in the warehouse were unbaited. He observed various potential rodent entryways in the areas of the receiving and shipping dock and the boiler room. Brett reported a redent entry in the shelving behind the lot of adulterated corn meal above referred to, rodent tracks in the spilled corn meal from this lot, and a rodent burrow in the enclosure of the warehouse syrup tank.
Inspector Brett testified that he collected samples of the rodent excreta pellets, urine stains and food in the several lots. FDA Analytical Chemists Trauba, Carlson, Melchior, Palmer and Netz each testified that their respective analyses of the samples Inspector Brett collected confirmed that they consisted of rodent excreta pellets and rodent urine stains.
As above stated, the corn meal found in one bag was actually shown to be unfit for human consumption. No such showing was made as to the other lots of food.
Inspector Brett took numerous photographs of the warehouse area and the various lots of food he inspected depicting the conditions he found during the five-day period. These photographs were introduced and received in evidence.
Inspector Brett testified that when he first arrived at the warehouse he inquired of the bookkeeper for Mr. Gregory. Upon learning that he was not in, Inspector Brett identified himself and was given permission to enter the warehouse. He first saw Mr. Gregory on the third day of his inspection when Mr. Gregory observed him taking photographs and inquired what he was doing. A brief conversation ensued concerning the bad condition of some shelving being photographed. At the conclusion of the fifth day of the inspection, Inspector Brett made an appointment with Mr. Gregory and gave him a list of the samples he had collected and the insanitary conditions he had found during his inspection.
In the course of this conversation, Inspector Brett stated that Mr. Gregory said he was president and treasurer of the H. B. Gregory Company; that he was in charge of the sanitation program and specifically the rodent control program in the warehouse; and that he was there on a daily basis. Further, Inspector Brett observed during his inspection that Mr. Gregory was giving the employees directions concerning where to store lots of food materials and was giving directions to load out trucks to his customers. The only other persons he observed employed at the warehouse were the bookeeper and two warehouse employees. One of the two warehouse employees was working in the syrup area and the other was engaged in receiving and shipping food materials.
Inspector Brett testified that during this final conference Mr. Gregory did not question his findings which he submitted in writing. Mr. Gregory did say that he felt the building was too old to be made rodent proof; he discussed two new 'wind up' mouse traps he was purchasing; and he asked for any suggestions Inspector Brett might have concerning the rodent problem within the warehouse. The inspector declined to make any such suggestions because of his lack of qualifications but did propose a different manner of storing the food materials. Mr. Gregory responded...
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