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8th Circuit denies rehearing; DeCosters must serve jail time

Tuesday, October 4, 2016 11:10
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(Before It's News)

It looks like Austin “Jack” DeCoster and son Peter DeCoster will both be wintering at the federal prison in Yankton, SD.

The 8th U.S. Circuit Court of Appeals denied petitions from the DeCosters who were both seeking a rehearing en banc or a rehearing by a three-judge panel. Only Chief Judge William Jay Riley and Judges Roger Wollman and James B. Loken favored the rehearing petitions, according to court documents.

All other judges in the circuit, except for an absent Judge Jane Kelly, supported an earlier ruling by a three-judge panel. That July 6 judgement upheld U.S. District Court Judge Mark W. Bennett’s decision to sentence each of the DeCosters to three months in federal prison.

The 82-year old Jack DeCoster was, prior to 2010, believed to be America’s largest egg producer. His now 52-year-old son Peter was chief operating officer for the family’s Quality Egg LLC. The far flung egg empire stretched from Iowa to Maine with some of the holdings not easily traced back to the family.

Then came the 2010 nationwide Salmonella outbreak that sickened as many as 56,000 Americans and two Iowa egg farms owned by the DeCosters were found to be the source of the illnesses.

A federal investigation lasting more than four years finally resulted in a three-way plea agreement between the U.S. District Attorney for Northern Iowa and Quality Egg LLC, and the DeCosters.

The two men agreed to plead guilty to one federal count each of introducing adulterated food into instate commerce and agreed to pay fines of $100,000. Under their objections, Judge Bennett imposed the three month jail terms.

Quality Egg LLC also pleaded guilty to one felony count of bribing a USDA egg inspector — there was no evidence either of the DeCosters knew about the bribe. And the corporate entity was fined $6.8 million. By the time of sentencing, Quality Egg had also divested its egg operations and made large contributions to charity.

In Sioux City, IA, however, Judge Bennett said that unless either the federal sentencing guidelines or the Congress had adopted any language preventing it, he was sentencing the former egg producers to some jail time, and he finally sentenced the two men to three months each.

Bennett’s recommendation to the federal Bureau of Prisons is to allow the DeCosters to serve their sentences at the Yankton federal prison. Bennett will allow the DeCosters to serve their sentences one after the other to minimize impact on their continuing business activity.

Their failed appeal did attract widespread interest by the business community. Their misdemeanor convictions did not require the government to prove “mens rea” or evidence of a guilty mind or any intent.

At the 8th Circuit Court of Appeals, their attorneys argued unsuccessfully that without “mens rea,” the DeCosters could not be imprisoned. The three-judge panel voted 2-to-1 to uphold Judge Bennett’s sentencing decision.

The rulings against both petitions for rehearing means the court will remand the case  to Judge Bennett’s court to carry out the sentences.

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