September 22, 2015
The Stuart Parnell Sentence
Posted by David Zaring

Just as no jailed financial executives in the wake of the last crisis is a pretty big outlier, the sentence for Stuart Parnell, the CEO of the Peanut Corporation of America - 336 months, which is, essentially, the rest of his life - takes the breath away.

It also illustrates just how surprising it is that big sentences were avoided, as they go up, up, up the more money is involved.  Parnell looks like he was directly involved in a decision to affirmatively sell peanuts that tested positively for salmonella, and that isn't exactly good.  But check out the roteness of this calculation, per the DOJ's own press release:

Judge Sands took into account the fraud loss of PCA’s corporate victims when imposing today’s sentence.  The court found that Stewart Parnell and Mary Wilkerson should be held accountable for more than $100 million but less than $200 million in losses, and Michael Parnell should be held accountable for more than $20 million but less than $50 million in losses.  The court also found the government established evidence that Stewart Parnell and Mary Wilkerson should be accountable for harming more than 250 victims, and Michael Parnell should be accountable under federal sentencing guidelines for harming more than 50 victims.  The court additionally found that the Parnells should have known that their actions presented a reckless risk of death or serious bodily injury.

If I were defending this on appeal, I'd want to be pretty careful with representations like the one below, given the likelihood of type II and type I error, but maybe the Feds have the goods:

Expert evidence at trial showed that tainted food led to a salmonella outbreak in 2009 with more than 700 reported cases of salmonella poisoning in 46 states.  According to the Centers for Disease Control and Prevention (CDC), based on epidemiological projections, that number translates to more than 22,000 total cases including nine deaths.  The court found that the evidence presented at trial linked Stewart and Michael Parnell’s conduct, and specifically PCA’s contaminated peanut products, to the victims’ illnesses.

And if I were Volkswagen executives, I'd start worrying.


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