Copeland makes case against collateral consequences of ‘Responsible Corporate Officer’ doctrine in book chapter

UNIVERSITY PARK, Pa. – The federal government’s practice of penalizing pharmaceutical company executives without demonstrating moral blameworthiness is flawed and misguided, according to a chapter by Penn State Law professor Katrice Bridges Copeland in new book on the Food and Drug Administration’s regulation of the pharmaceutical industry.

FDA in the Twenty-First Century: The Challenges of Regulating Drugs and New Technologies was published in August by Columbia University Press. The book features essays by leading scholars and government and private-industry experts that address problems and improvements the FDA can make to better serve the public good.

In her chapter, “The Crime of Being in Charge: Executive Culpability and Collateral Consequences,” Copeland takes to task the government’s use of the “Responsible Corporate Officer” doctrine, which gives the government the authority to prosecute an executive for a subordinate’s misdemeanor violation of the Food Drug and Cosmetic Act regardless of the officer’s lack of awareness of misconduct. Prosecutors need only prove that, by reason of the officer’s position in the company, the officer had the responsibility and authority to prevent the misconduct or promptly correct the violation, but failed to do so. 

The real problem, Professor Copeland argues, is that following the misdemeanor criminal conviction, the Office of Inspector General of Health and Human Services has the discretion to exclude the offending executive from participation in federal health care programs. This action makes the executive virtually unemployable in the health care industry because companies that receive federal health care dollars cannot employ excluded individuals except in very limited circumstances. Further, while the base level of exclusion for a misdemeanor violation is three years, the government has imposed exclusions as long as 20 years.

Using the exclusion of Purdue Pharma executives as a case study, Copeland examines the justification for, and problems with, long periods of exclusion for executives who had no knowledge of wrongdoing. She argues that the collateral consequence of exclusion is more devastating than the sentence an executive would face upon criminal conviction.

“Exclusion should be treated as a de facto criminal penalty in this context where it is the most serious consequence that responsible corporate officers face as a result of conviction,” she concludes.  “The collateral consequences of holding responsible corporate officers criminally accountable for the misconduct of their subordinates are disproportionate to the crime of conviction and should not be imposed for longer than three years absent a showing of moral blameworthiness.”

Copeland focuses her scholarship on white collar crime and health care fraud and abuse. Prior to joining Penn State Law she clerked for Judge David H. Coar of the U.S. District Court for the Northern District of Illinois and Judge Damon J. Keith of the U.S. Court of Appeals for the Sixth Circuit and practiced at Sidley Austin LLP in Washington, D.C., where her practice focused on white collar criminal defense and constitutional litigation. As part of her white collar crime practice, she represented pharmaceutical companies in health care fraud and abuse prosecutions.

More information on FDA in the Twenty-First Century, edited by Holly Fernandez Lynch and I. Glenn Cohen of Harvard Law School, is available on the Columbia University Press website.