July 2020 Legal Report
Print Issue: July 2020
Food poisoning. Blue Bell Creameries pled guilty to charges that it shipped contaminated food products linked to a 2015 listeriosis outbreak. As part of a plea agreement with the U.S. Department of Justice (DOJ), the company will pay $19.35 million—the second-largest amount ever paid to resolve a food safety infraction in the country.
The company admitted to two misdemeanor charges of distributing adulterated ice cream products, which were introduced into interstate commerce between 1 January 2013 and 20 April 2015, according to the plea agreement.
Blue Bell Creameries violated the Food, Drug, and Cosmetic Act by selling products that were manufactured in unsanitary conditions.
Even after notifications from U.S. state officials in February 2015 about two ice cream products from a company’s factory testing positive for Listeria monocytogenes, the DOJ said Blue Bell Creameries did not recall the products or warn customers, including federal purchasers, about the potential contamination.
Blue Bell Creameries will pay $17.25 million in criminal fines and forfeiture, and $2.1 million will go toward resolving civil False Claims Act allegations that contaminated products were sold to U.S. federal facilities. Blue Bell’s former president has also been charged for his alleged efforts to conceal the contamination from customers. (United States of America v. Blue Bell Creameries, L.P., U.S. District Court for the Western District of Texas, No. 1:20-cr-123-RP, 2020)
Harassment. Scottish lawmakers are considering a bill that would make “stirring up hatred” against protected classes illegal.
The country’s existing laws protect people on the basis of disability, race, religion, sexual orientation, and transgender identity. The proposed Hate Crime Bill, which was introduced on 23 April, would also add age and eventually sex to the list of protected characteristics.
According to Scottish Parliament, the bill was created to update the current laws regarding hate crimes in response to an independent review of such legislation. The review specifically recommended revising provisions about stirring up racial hatred to include the other protected classes.
Coronavirus. In response to the COVID-19 pandemic, India ordered all workers, both in the public and private sectors, to use a smartphone tracking app and maintain social distancing. The country’s Ministry of Home Affairs said it will hold company heads responsible for complete compliance in the private sector.
The Aarogya Setu (Health Bridge) app, backed by the Indian government, notifies users if they may have been near someone who tested positive for COVID-19.
Gun control. Canada banned assault weapons throughout the country at the beginning of May 2020, a decision announced less than two weeks after a gunman killed 22 people in Nova Scotia.
The ban, which went into effect 1 May, makes it illegal to buy, sell, transport, import, or use military-grade assault firearms in Canada. Prime Minister Justin Trudeau announced the prohibition of more than 1,500 types of assault-style weapons on the same day.
The ban limits the public’s access to such weapons in an attempt to “reduce the number and availability of assault-style firearms and other firearms that exceed safe civilian use in Canada, and to reduce the possibility of these firearms being diverted to the illegal market,” according to The Canada Gazette, the official government newspaper.
After mass shootings in both rural and urban areas of the country, including Nova Scotia, Quebec City, Montreal, and Toronto, the government determined that “the deadliest mass shootings are commonly perpetrated with assault-style firearms,” the Gazette said. “Given these events, the growing concern for public safety, the increasing public demand for measures to address gun violence and mass shootings and, in particular, the concern resulting from the inherent deadliness of assault-style firearms that are not suitable for civilian use, these firearms must be prohibited in Canada.” Such public use also includes hunting or sport shooting.
Gun owners have a two-year amnesty period, giving the government time to enact legislation that would provide owners with compensation. During this period, the weapons cannot be used or sold, but they can be exported if an owner has the appropriate permit. According to a government announcement, after 30 April 2022 gun owners can either surrender the firearm for compensation or participate in a “grandfathering” program.
Corruption. Israel’s largest bank and its wholly owned subsidiary agreed to pay more than $30 million to resolve an FBI and Internal Revenue Service (IRS) investigation into the bank’s involvement in a money laundering scheme that fueled international bribes for soccer federations, including the Fédération Internationale de Football Association (FIFA).
Bank Hapoalim B.M. (BHBM) and its subsidiary, Hapoalim Ltd. (BHS), admitted that from December 2010 to February 2015 they conspired with sports marketing executives to launder more than $20 million in bribes and kickbacks to soccer officials with the soccer federations. The U.S. financial system was used by bank employees to launder bribes to corrupt sports officials in multiple countries, according to the DOJ.
In exchange for the bribes, soccer officials awarded broadcasting rights for soccer matches and tournaments to the sports marketing executives and their firms.
The banks also admitted to laundering money for Luis Bedoya, former president of Federación Colombiana de Futbol, vice president of the Confederación Sudamericana de Fútbol, and member of FIFA’s executive committee. In November 2015, Bedoya pled guilty to racketeering conspiracy and wire fraud conspiracy.
As part of the deferred prosecution agreement, the banks agreed to forfeit approximately $20.73 million and pay a criminal penalty of approximately $9.33 million. BHBM also closed Bank Hapoalim (Latin America) S.A. and a branch in Miami, Florida, USA, and as of 30 April 2020 is closing BHS operations. (Re: United States v. Bank Hapoalim B.M, U.S. District Court for the Southern District of New York, 2020)
Sexual assault. U.S. Education Secretary Betsy DeVos released new regulations for higher education institutions on how to handle claims of sexual misconduct, relieving colleges and universities of some legal liabilities.
This new set of rules, effective 14 August, amends Title IX requirements to prohibit universities and colleges from relying on a sole official to both investigate and rule on allegations of sexual assault and harassment. Schools will instead create and use a process similar to the U.S. judicial system of due process, where the accused has the right to a hearing and a cross-examination of any accusers. The regulation also creates “rape shield protections,” which offer the accuser some protections, including a ban on questioning the accuser’s sexual history.
The rules also expanded the definition of sexual harassment to include dating violence and stalking.
The regulation was originally planned to be published in late 2019, but was delayed after the U.S. Department of Education received and needed to respond to more than 124,000 public comments—many of which were from schools, advocacy groups, and others critical of the proposed regulation. Opponents of the new rules, including victims’ rights groups and women’s rights groups, plan to challenge the regulation in court.
Inspections. The U.S. Nuclear Regulatory Commission (NRC) decided to scale down inspections of nuclear waste containers at reactor sites in response to the COVID-19 pandemic.
Nuclear power plants usually refuel their facilities in the spring and fall, the timing of which coincides with lulls in power demands. On 1 April, the NRC ordered monitors—who would usually be on site for complex tasks like refueling—to work from home because of the novel coronavirus.
According to UtilityDive, the commission has considered decreasing both the frequency and scope of annual nuclear reactor inspections since July 2019, partly to cut costs. The 2019 recommendations also proposed reducing other inspections from once every two years to every three years.
Elsewhere in the Courts
Coronavirus. A U.S. district court dismissed a case against a Missouri meat processing plant after deciding that the matter fell within the jurisdiction of the Occupational Safety and Health Administration (OSHA). Employees of Smithfield Foods, Inc., represented by the nonprofit workers group Rural Community Workers Alliance (RCWA), sued the company for allegedly placing them in danger during the COVID-19 pandemic, claiming that Smithfield failed to comply with virus safety guidelines. Judge Greg Kays determined that the issue should be directed to OSHA instead. He also added that under state law, RCWA needed to prove that Smithfield was negligent in providing safety measures that led to injuries. Kays wrote in his opinion that RCWA was unlikely to prove such a breach of duty. (Rural Community Workers Alliance and Jane Doe v. Smithfield Foods, Inc., U.S. District Court for the Western District of Missouri, 5:20-cv-06063, 2020)
Harassment. A U.S. appeals court ruled that electronic retailer Best Buy was not liable for an employee’s racist comment to another worker. Erika Bazemore filed a report to human resources about an incident where a coworker allegedly made a racial and sexual joke while looking directly at her. Best Buy followed up on the complaint and said it had resolved the manner, but Bazemore said she felt subject to a hostile work environment and filed a claim with the U.S. Equal Employment Opportunity Commission, followed by a lawsuit against her employer. The court determined Best Buy was not liable because the supposed harasser was not a supervisor, the company had no prior knowledge of such harassment, and HR followed up on the complaint. (Bazemore v. Best Buy, U.S. 4th Circuit Court of Appeals, No. 18-2196, 2020)
Age discrimination. Baltimore County agreed to a $5.4 million settlement with the U.S. Equal Employment Opportunity Commission (EEOC), ending a long-running age discrimination lawsuit. More than 2,000 retired county employees will receive monetary relief after a U.S. district court found that the county forced employees hired at older ages to pay a higher rate into their pension plans than younger workers who received the same benefits. The EEOC filed the lawsuit in 2007. (EEOC v. Baltimore County et al., U.S. District Court for the District of Maryland, Northern Division, No. 1:07-cv-2500-RDB, 2020)