Testimony of
Gary Jay Kushner, Partner, Hogan & Hartson, L.L.P.

on behalf of American Meat Institute
Grocery Manufacturers of America, Inc.
National Broiler Council
National Food Processors Association
National Turkey Federation

delivered to Senate Committee on Agriculture
October 8, 1997

Good morning. My name is Gary Jay Kushner and I am testifying today on behalf of the American Meat Institute, Grocery Manufacturers of America, National Broiler Council, National Food Processors Association, and the National Turkey Federation. These five organizations have put together this panel to explain why -- from a legal, operational, and scientific perspective -- the statutory authority sought by the U. S. Department of Agriculture is not necessary and would be contrary to sound public policy.

The food industry is committed to doing everything within its powers to ensure that the food it processes, distributes, and serves to American consumers is the safest and most wholesome in the world. As my colleagues on this panel will explain, there are many practices in which food manufacturers routinely engage to guarantee the safety of our food supply. As they will also explain, through research and education -- cornerstones of a cooperative partnership in which the industry, government, and consumer organizations are already participating -- the industry's goal is to do an even better job. But USDA's Food Safety and Inspection Service does not need additional enforcement authority; more punitive measures will not and cannot make our food safer.

Specifically, the Department has asked for the authority to mandate product recalls without obtaining court orders, to withdraw inspection services from companies that the Department believes have willfully or repeatedly violated the inspection laws or regulations, and to impose administratively civil penalties upon companies that fail to comply with the laws, regulations, or agency's orders. In light of the scope and breadth of USDA's existing enforcement arsenal, and the absence of any showing that the tools currently available to USDA are inadequate, the proposed authority is not necessary. Moreover, because of the potential for administrative abuse that all three of the requested sanctions would present, enactment of the proposed legislation would be contrary to sound public policy.

First and foremost, it is important to understand that, under both the Federal Meat Inspection Act and Poultry Products Inspection Act, it is illegal to sell, transport, offer for sale or transportation, or receive for transportation in commerce any food product that is adulterated or misbranded. Violation of these laws can result in substantial fines as well as imprisonment.

It is true that, in the absence of a court order, FSIS does not have the legal authority to require a company to recall a misbranded or adulterated product. As a practical matter, however, any company that is asked to initiate a recall has little incentive to refuse this request, and significant incentive to cooperate promptly.

Fundamentally, because distribution in commerce of a misbranded or adulterated food is a criminal act, food manufacturers and everyone else involved in the distribution of misbranded or adulterated products have good reasons to remove such products from the market on their own initiative as quickly as possible. Failure to do so not only increases both the risk and magnitude of criminal sanction, but it also exposes companies to potential civil liability, not to mention adverse publicity.

Under USDA's existing recall policy, companies that believe they may have distributed adulterated or misbranded products and are considering initiating a recall, are requested to notify USDA; almost all companies do so routinely for several reasons. First, USDA can provide useful resources to help companies conduct health hazard evaluations and to coordinate activities within USDA, as well as those of other federal and state agencies that become aware of the recall. Second, it is important to make sure that USDA agrees with the company's hazard evaluation and recall strategy, especially as it relates to the scope and depth of the recall. And, frankly, even in a situation where a company has determined that a recall is not necessary, it is often prudent to notify USDA, nonetheless, to make sure that the agency concurs with this decision.

As any company that has been involved in a recall will attest, recalls can hardly be considered voluntary. Even when a company initiates the recall and informs USDA of its plan of action, the agency will typically have its own views as to the timing, scope, and depth of the recall, as well as the potential for public notification. When it is the agency that requests the recall, USDA will all but dictate the scope and depth of the recall; and, although the company can discuss with the agency some of these elements, there is usually very little time or realistic opportunity to influence the agency's recall recommendation.

Even though, technically speaking, USDA cannot force a company to recall a product without a court order, the agency has several other tools in its enforcement arsenal to make sure that adulterated or misbranded products are promptly removed from the marketplace. An inspector in a slaughter or processing plant can retain and prevent shipment of products believed to be in violation of the law; if the plant's inspector believes that the plant is operating under conditions that are not sanitary, the inspector can order that production and processing operations cease. USDA also has the legal authority to detain products believed to be misbranded or adulterated wherever they are found in commerce, including all the way down to the retail level. And the agency can -- and will -- issue press releases notifying consumers if a company has refused to recall a product believed to be adulterated or misbranded.

Ultimately, if USDA believes that a product is misbranded or adulterated and the company refuses to recall it in on the agency's terms, USDA can obtain a federal court order permitting the agency to seize the product and remove it from commerce. And even when a company has cooperated with the agency and recalled the suspect product, the agency can seek criminal prosecution of the company and its senior management.

In short, USDA has more than enough authority to obtain prompt removal of unsafe products from the marketplace, and to make sure that companies who are uncooperative with the agency or who are found to be in violation of the law are sanctioned. Certainly, additional recall authority is not justified. Frankly, to take away a company's limited right to discuss with the agency the scope and depth of its recall would likely lead to less coordination and more litigation, both to the consumer's detriment. For similar reasons, the Department should not be given increased authority to withdraw a company's inspection services.

Under current law, USDA has the authority to withdraw inspection services from any company if the company or anyone responsibly connected with the company has been convicted of any felony or more than one misdemeanor relating to the handling of food. The Department can also suspend inspection services from any plant operating under conditions that are not sanitary. The agency can suspend inspection if a company refuses to destroy condemned products. And, the agency can suspend inspection services in any situation in which an inspector has been physical threatened or the inspector's performance of his or her duties has been jeopardized.

USDA has always wanted more authority to withdraw inspection services from a company that the Department believes has willfully or repeatedly violated agency regulations, even in the absence of a criminal conviction. The Department actually was given this authority when the Processed Products Improvements Act was passed in 1986. Because withdrawal of inspection services effectively puts a meat or poultry company out of business, though, it has historically been Congress' opinion that only an independent third party tribunal should have this extraordinary authority. Hence, the 1986 Act required USDA to seek a court order to withdraw inspection. Ironically, to the best of my knowledge, the Department never used that expanded authority; and, when the Processed Products Improvements Act expired in 1992, USDA did not seek its reauthorization.

In the same way that current law already gives USDA the functional equivalent of mandatory recall authority, current law provides the agency with adequate ability to suspend operations of a company that the agency believes is consistently violating its rules. To give the Department unbridled additional inspection withdrawal authority is not only unnecessary, but an invitation to regulatory abuse.

In light of USDA's unprecedented authority to prevent companies from producing, distributing, or selling adulterated or misbranded foods, to seek prosecution of companies that do so, to issue press releases that inform consumers of suspect practices and, ultimately, to put a company out of business through the suspension and even withdrawal of inspection services, it is hard to imagine that additional penal sanctions would be needed or justifiable. Yet the proposed legislation would authorize USDA to assess substantial civil penalties for any violation of the law, the Department's regulations, or any agency order.

As written, USDA's proposed legislation would allow the agency to fine companies as much as $100,000 per violation per day. The requested authority is so broad, and its parameters for imposition so vague, that a company that has refused to follow a USDA recall order or inspection directive to the letter, or a company that has been cited by an inspector for one or more processing or sanitation deficiencies, could face potentially enormous fines. And this would be in addition to the plethora of sanctions already at the agency's disposal; certainly, suspension of operations, detention and retention of products, and the issuance of press releases warning consumers about a company's products represent severe civil penalties that USDA regularly imposes under current law.

The statutory authority that USDA is seeking through its most recent legislative proposal is not new. The same provisions, in one form or another, have appeared in legislation proposed by the Department or at its request a number of times during the last two decades. Each time, Congress has recognized the breadth of the agency's current enforcement arsenal; each time, Congress has questioned how effectively the Department has used its existing authority; and each time, Congress has considered companies' Constitutional due process rights. Every time USDA has sought this kind of legislative authority, Congress has said "no". We urge this Committee to reject the Department's latest proposal for the same reasons.

Thank you for this opportunity to testify.