Late last week, a federal judge found that the leniency agreement negotiated between the Department of Justice and Boeing over the corporation 737 Max disaster violated the rights of the families of the 346 plane crash victims.
The agreement, which was negotiated by Trump’s DOJ and defended by Biden’s DOJ, has been criticized by numerous corporate crime experts, including, notably, Columbia Law Professor John Coffee, who described it as “an egregious case and one of the worst deferred prosecution agreements I have seen.”
The families of Boeing crash victims sued, arguing that under the Crime Victims Right Act, the DOJ should have conferred with them before finalizing the settlement. The DOJ argued that the Federal Aviation Administration – the safety regulator from which Boeing concealed information – is, technically, the sole victim under the Crime Victims Rights Act in its case, not those who died in Lion Air Flight 610 and Ethiopian Airlines Flight 302.
U.S. District Judge Reed O’Connor ruled against the DOJ and Boeing and for the crash victims’ families. “[B]ut for Boeing’s criminal conspiracy to defraud the FAA, 346 people would not have lost their lives in the crashes,” Judge O’Connor writes.
A separate ruling will determine the ultimate remedy for the crash victims families, who seek to have the leniency agreement rescinded.
In an apparent concession to the decision, the DOJ on Friday released updated guidelines for victim assistance.
While the full implications of the decision remain to be seen, it is clear that even when the sole charge the DOJ brings against a corporation is fraud, that should not be bar those harmed by the corporation’s misdeeds from being granted their full rights as “crime victims” under the Crime Victims Rights Act.
One hopes a more robust assertion of the rights of victims of corporate crime in any number of cases will follow – and that this robust assertion of corporate crime victim rights leads to stronger accountability for corporate criminals.
Big Business Blotter News Roundup
ENFORCEMENT POLICY
Justice Department Promises to Crack Down as Corporate Crime Cases Decline - WSJ
Although defense lawyers welcomed many of the changes, some are skeptical that they will lead to more cases.
OSHA Steps Up Prosecution of Safety Violations - EHS Today
A series of recent criminal prosecutions stemming from workplace fatalities in connection with OSHA’s worker safety laws underscore the Justice Department’s willingness to charge OSH Act crimes, even in the absence of other Title 18 offenses or other criminal charges.
Democratic Lawmakers Ask Justice Department to Publish Data on Corporate Crime - Wall Street Journal
In a letter to Attorney General Merrick Garland, the three Democrats said they were urging the Justice Department to more thoroughly track and publish agency-wide statistics on the number of actions taken by prosecutors against corporations and executives who engage in business crimes. The letter, which was signed by Sens. Dick Durbin (D., Ill.) and Richard Blumenthal (D., Conn.) and Rep. Mary Gay Scanlon (D., Penn.), comes after a top Justice Department official said data showed a decline in corporate criminal prosecutions.
Is DOJ Underusing Authority to Hold Pharma, Device Execs Accountable? - Medpage Today
Few federal prosecutions in the past 2 decades have gone after corporate officers of pharmaceutical and medical device companies via the little known Park doctrine, a powerful legal tool available to the Department of Justice (DOJ) that doesn't require proving intent for liability, a systematic literature review indicated. Since 2000, only 13 prosecutions (11 guilty pleas, two jury trials) of six drug or medical device corporations charged individual executives for violating the Food, Drug, and Cosmetic Act (FDCA) using what's known as the Responsible Corporate Officer doctrine, according to Aaron S. Kesselheim, MD, JD, MPH, of Brigham and Women's Hospital in Boston, and colleagues.
TRUMP WORLD
Trump’s Business, Under Threat, Faces a Tough Test in Court - New York Times
This week will drive home that stark reversal of fortune as the company faces a highly public reckoning: a criminal trial in Manhattan, where the district attorney’s office will accuse it of tax fraud and other crimes.
The property management subsidiary of Jared Kushner’s family real estate company has agreed to pay a $3.25 million fine to the state of Maryland and to reimburse many of the tens of thousands of tenants in the Kushners’ Baltimore-area apartment complexes for excessive fees and for rent they were forced to pay over the past decade despite serious maintenance problems in the units.
CORRUPTION
Under the agreement, the company admits that it arranged to make payments to an associate of Madigan, who was one of the state’s most powerful political figures at the time, in exchange for Madigan’s help in pushing through legislation favorable to the company, the U.S. attorney’s office in Chicago said in a news release. In what could spell trouble for Madigan, prosecutors also said the company agreed to cooperate with any related investigations.
SEC Charges Oracle a Second Time for Violations of the Foreign Corrupt Practices Act - SEC
The Securities and Exchange Commission announced settled charges requiring Oracle Corporation to pay more than $23 million to resolve charges that it violated provisions of the Foreign Corrupt Practices Act (FCPA) when subsidiaries in Turkey, the United Arab Emirates (UAE), and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019.
U.S. drugmaker Biogen to pay $900 million to settle federal whistleblower case - UPI
The alleged kickback scheme, which involved medicines to treat multiple sclerosis, took place between January 2009 and March 2014, and led to a surge in false claims to Medicaid and Medicare for prescriptions of Avonex, Tysabri and Tecfidera, the Justice Department said in a statement.
A global building materials manufacturer and its subsidiary pleaded guilty today to a one-count criminal information charging them with conspiring to provide material support and resources in Northern Syria from 2013 to 2014 to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), both U.S.-designated foreign terrorist organizations. Immediately following the defendants’ guilty pleas this morning, U.S. District Judge William F. Kuntz II sentenced the defendants to terms of probation and to pay financial penalties, including criminal fines and forfeiture, totaling $777.78 million.
AMAZON
A parents' lawsuit accuses Amazon of selling suicide kits to teenagers - NPR
Amazon is facing a lawsuit accusing it of selling so-called suicide kits, brought by the families of two teenagers who bought a deadly chemical on the company's website and later used it to take their own lives.
Amazon employee monitoring system directly connected to workplace injuries, L&I finds - NBC
Amazon was fined $60,000 for "knowingly putting workers at risk of injury" at a Kent fulfillment center, according to the Washington Department of Labor & Industries. L&I ergonomists found that workers were required to perform repetitive, physical work like twisting, lifting, and carrying at "such a fast pace" that it increased the risk of injury.
Delivery drivers sue Amazon for wage theft — again - Axios
The class-action claim, filed Friday in King County Superior Court, alleges that the conduct by Amazon and its delivery contractors amounts to wage theft, since drivers aren't compensated for the rest and meal breaks they miss.
Texas Sues Google for Collecting Biometric Data Without Consent - New York Times
The Texas attorney general filed a privacy lawsuit against Google on Thursday, accusing the internet company of collecting Texans’ facial and voice recognition information without their explicit consent.
Google Settles Consumer Privacy Lawsuit For $85 Million - Search Engine Journal
The suit, which was filed in May 2020, alleged the search engine violated the state’s Consumer Fraud Act and misled internet users about its use of location data and data collection practices. It accused Google of continuing to track user location without consent in order to increase ad revenue, even after users had turned off location history in settings.
PG&E
Ex-PG&E Execs Paying $117M To Settle California Wildfires Lawsuit - Insurance Journal
The settlement was announced by the PG&E Fire Victim Trust, which was established to handle claims filed by more than 80,000 victims of deadly wildfires ignited by PG&E’s rickety electrical grid. The trust’s lawsuit, filed last year, alleged that former officers and board members neglected their duty to ensure the utility’s equipment wouldn’t kill people.
Energy Company PG&E Facing Lawsuit for Starting Wildfires in California - Newsweek
The lawsuit, claiming that the Mosquito fire was ignited by PG&E's poorly maintained utility infrastructure, was filed in San Francisco Superior Court on September 23. This lawsuit comes as the Mosquito fire, which started on September 6, continues to blaze across 76,775 acres of land west of Lake Tahoe. As of September 28, the inferno is 85 percent contained.
FOOD
Tyson employees’ COVID lawsuit reinstated - Food Dive
The employees claimed in their lawsuit that by keeping its Amarillo, Texas plant open in the early months of the pandemic, Tyson behaved with gross negligence toward employees and was responsible for wrongful death. The employees also claimed Tyson did not provide proper safety equipment to workers.
JBS to pay $20 million in pork price-fixing settlement - Times-Republican
JBS has agreed to pay $20 million to settle a lawsuit with consumers that accused the giant meat producer of conspiring with other meat companies to inflate the price of pork. The latest meat-industry settlement will likely reinforce concerns that the White House, members of Congress and trade groups have raised about how the lack of competition in the industry affects prices.
McDonald's ordered to face Byron Allen's $10 bln discrimination lawsuit - Reuters
McDonald's Corp has been ordered by a U.S. judge to defend against media entrepreneur Byron Allen's $10 billion lawsuit accusing the fast-food chain of "racial stereotyping" by not advertising with Black-owned media.