United States v. Farinella
558 F.3d 695, 2009 WL 615408 (2009)
Rule of Law:
To sustain a criminal conviction for misbranding or fraud based on a label representation, the government must prove the meaning that consumers attach to the label and that the representation was false or misleading under that understanding; convictions cannot rely on ambiguous terms or unpublished agency interpretations.
Facts:
- In May 2003, the defendant purchased 1.6 million bottles of Henri's Salad Dressing from a distributor.
- The bottles bore labels with 'best when purchased by' dates ranging from January to June 2003, which had been set by the manufacturer.
- The salad dressing was a 'shelf stable' product that did not have a safety-based expiration date.
- Before reselling the dressing to discount 'dollar stores,' the defendant pasted new labels over the original dates, extending them to May or July 2004.
- The distributor had guaranteed freshness for only 180 days past the original date, but the defendant's new labels extended beyond this timeframe.
- The defendant falsely told the distributor he had checked with the FDA regarding the relabeling, though he had not.
- There was no evidence that the salad dressing had actually deteriorated in taste or quality, nor were there consumer complaints about the taste or safety of the product.
Procedural Posture:
- The government indicted the defendant in federal district court for wire fraud and introducing misbranded food into interstate commerce.
- A jury convicted the defendant on all counts.
- The district court judge sentenced the defendant to probation, home confinement, a fine, and forfeiture.
- The government filed a cross-appeal challenging the sentence as too lenient.
- The defendant appealed the conviction to the Seventh Circuit Court of Appeals, arguing insufficient evidence.
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Issue:
Does the alteration of 'best when purchased by' dates on shelf-stable food products constitute criminal misbranding or fraud when the government fails to present evidence regarding consumer understanding of the label's meaning or proof that the product's quality had deteriorated?
Opinions:
Majority - Posner
No, the alteration of the dates does not support a conviction because the government failed to prove the label change was actually false or misleading to consumers. The court reasoned that 'best when purchased by' is not defined by statute or regulation, and the government presented no evidence—such as consumer surveys—to show that consumers interpret this phrase as a strict expiration date or a safety warning. Because the product was shelf-stable and there was no proof it had deteriorated, the label change might simply have extended a warranty of freshness that was still valid. Furthermore, the court rejected the testimony of an FDA employee regarding 'secret' agency rules that were not published in regulations, holding that due process prevents convicting a defendant based on a bureaucrat's internal understanding of the law. Finally, the court noted significant prosecutorial misconduct, including improper class-based arguments and baseless implications that the food was unsafe.
Analysis:
This opinion serves as a significant check on prosecutorial overreach in regulatory crime cases. It highlights two critical principles: 1) Ambiguous commercial terms (like 'best when purchased by') cannot be the basis for fraud convictions without evidentiary proof of how consumers interpret them; the government cannot simply assert a meaning (e.g., that 'best by' means 'expires on'). 2) The 'Secret Law' doctrine: Criminal liability cannot be predicated on the internal, unpublished opinions of agency employees. The decision is also notable for its sharp rebuke of the prosecutor's 'class warfare' rhetoric (attacking the defendant's 'high-paid lawyer'), reinforcing that such inflammatory tactics can jeopardize convictions.
