United States District Court, N.D. Illinois
January 27, 2004.
UNITED STATES OF AMERICA, Plaintiff,
LAGROU DISTRIBUTION SYSTEM, INC., et al., Defendants
The opinion of the court was delivered by: HARRY LEINENWEBER, District Judge
MEMORANDUM OPINION AND ORDER
Defendants Jack Stewart ("Stewart"), Michael Faucher ("Faucher"), and
David Smith ("Smith") are charged with five counts related to charges of
conspiracy and statutory violations pertaining to alleged unsanitary
operations at a meat and poultry storage warehouse. Count One charges
Stewart, Faucher, and Smith with conspiracy to violate the Meat and
Poultry Acts, 21 U.S.C. § 458(a)(3), 461(a), 610(d) and 676(a), as
well as the Food, Drug and Cosmetic" Act, 21 U.S.C. § 331 (b),
333(a)(2), and 343(a)(4). Count Two charges Stewart, Faucher, Smith, and
LaGrou Distribution System, Inc. ("LaGrou") with felony violation of the
Poultry Act. Count Three charges Stewart, Faucher, Smith, and LaGrou with
felony violation of the Meat Act. Count Four charges Stewart, Faucher,
Smith, and LaGrou with felony violation of the Food, Drug and Cosmetic
Act. Count Five charges Smith with a misdemeanor violation of the Meat
Act. Presently before the Court are
Stewart's Motion to Dismiss the Indictment and Motion to Suppress
Evidence, and Faucher's Motion to Dismiss the Indictment.
A. Stewart's Motion to Dismiss the Indictment
A proper indictment serves three functions. It states in plain and
concise language the essential facts and all the elements of the charged
offense, informs defendants of the nature of the charge, and enables
defendants to avoid repeated prosecution for the same offense. United
States v. Gironda, 758 F.2d 1201, 1209 (7th Cir. 1985). In
evaluating the sufficiency of an indictment, common sense and reason
prevail over technicalities. See United States v. Climatemp,
Inc., 482 F. Supp. 376 (N.D. Ill. 1979). The indictment is not
tested on the strengths or weaknesses of the government's case,' but
rather is examined solely for its sufficiency in charging the offense.
United States v. Risk, 843 F.2d 1059, 1061 (7th Cir. 1988).
Here, Stewart argues that the indictment should be dismissed because
the facts show "entrapment by estoppel." In support of this claim,
Stewart states that from 1992 to 2002 federal inspectors gave the
warehouse acceptable ratings, even though such inspectors were
purportedly aware of the rodent problem. In essence, Stewart argues that
such purportedly favorable reports amount to "affirmative misleading
conduct" that Stewart reasonably relied upon in determining that the
rodent control practices at the
warehouse did not violate federal law. Relying on United States
v. Levin, 973 F.2d 463 (6th Cir. 1992), Stewart claims that he is
entitled to the doctrine of "entrapment by estoppel" as a means to escape
The government responds by arguing that the doctrine of "entrapment by
estoppel" is an extremely rare affirmative defense that applies only
where a government official affirmatively assures a defendant that
certain conduct is legal and the defendant reasonably relies upon this
assurance. See United States v. Rector, 111 F.3d 503 (7th Cir.
1997). Here, the government argues, Stewart provides no support that the
federal inspectors were actually aware of the severity of the
rodent-control problems at the warehouse, much less that they
affirmatively approved of Defendants' practices. The government notes
that the indictment charges Defendants with concealing evidence of the
alleged infestation problems. Moreover, the government claims that even
if Stewart had some evidence on this issue, a pretrial motion to dismiss
is not the proper vehicle for addressing the sufficiency of the evidence.
The government has the better argument here. In his motion, Stewart
fails to provide any support for his allegations that federal inspectors
affirmatively approved of the same type of rodent-infestation conditions
for which Stewart is now being prosecuted. Stewart asks for a hearing on
this motion "where the
factual issues can be properly developed." However, Rule 12(b)
does not allow this Court to provide such a preliminary hearing to
resolve disputed factual issues that are at the heart of this case.
See United States v. Pergler, 1998 WL 887113 (N.D. Ill. 1998);
United States v. King, 581 F.2d 800 (10th Cir. 1978). Instead, a
trial is the proper vehicle for developing factual issues pertaining to
the affirmative defense of entrapment estoppel. Stewart will undoubtedly
be afforded that opportunity should this case reach trial.
B. Faucher's Motion to Dismiss the Indictment
Faucher argues that the indictment should be dismissed because it fails
to (1) "identify the objective source" of Faucher's alleged duty to
maintain sanitation standards, (2) "identify, with sufficient
particularity, the thing[s] the defendants allegedly intended" to take;
and (3) alleged materiality. Faucher also argues that Counts Two and
Three must be dismissed because they are duplicitous and that the word
"improperly" should be stricken from these Counts.
Faucher's initial attack on the indictment is that it claims that he is
responsible for "maintaining sanitation standards" at the warehouse, but
fails to describe the "objective source of the duty." The crux of
Faucher's argument here is that the indictment lacks sufficient
particularity regarding the purported source of Faucher's duty. As a
result, Faucher claims that he is "unable to
ascertain the nature and cause of the accusations, or prepare a
The government responds by arguing that an indictment need not identify
with particularity the factual basis of every allegation. In addition,
the government states that there is ample legal and factual basis upon
which Faucher can locate his duty to maintain sanitation standards. The
government cites United States v. Park, 421 U.S. 658, 666 (1975)
for the proposition that a defendant who is in a position of authority
and responsibility can be held criminally liable for violation of FDA
sanitation standards, even though such a defendant did not personally
participate in the criminal conduct. The government also attaches as an
exhibit an application for USDA inspection where Faucher apparently
certified under penalty of perjury to conform to certain sanitary laws
The government's argument prevails here. In Park, the United
States Supreme Court held that persons in Faucher's position had an
affirmative duty to abide by food sanitation laws. There can be no higher
"objective source" for this duty than the United States Supreme Court.
The indictment is otherwise sufficient to inform Faucher of the nature of
the charges and allow him to present a defense. (The Court does not need
to consider the exhibit that the government attaches to reach its
Faucher next argues that the indictment should be dismissed because it
fails to identify with particularity the things that he allegedly
intended to take from the alleged victims. The government responds by
stating that it is "quite clear from a plain reading of the indictment"
that Defendants intended to take money from their victims by, among other
things, misrepresenting and concealing the true condition of their
The Court finds that a fair reading of the indictment clearly shows
that the government is alleging, among other things, that Defendants
engaged in a scheme to defraud paying customers by failing to provide a
sanitary storage place for customers' products. This purportedly resulted
in the spoilage of significant amounts of products. The unmistakable
inference is that Defendants sought to profit by taking customers' money
and yet providing only inadequate services. It is well established that
an indictment need not spell out every allegation in excruciating detail
and Faucher cannot claim that he is not on notice of the alleged
Finally, Faucher argues that the indictment is deficient because it
fails to include the term "materiality" with regard to the statutory
charges that include an "intent to defraud." Faucher relies on Neder
v. United States, 527 U.S. 1 (1999) and United States v.
Gee, 226 F.3d 885 (7th Cir. 2000) for the proposition that
materiality must be a component of an "intent to defraud"
charge. The Court, however, disagrees with this interpretation of
the case law and agrees with the government's position that the concept
of materiality is inapplicable to the statutory scheme at issue here.
Specifically, the statutory scheme here asks only whether Defendants'
conduct included, among other things, an intent to defraud. Unlike the
fraud statutes at issue in Neder, here affirmative statements of
falsehood are not necessary, and thus the concept of materiality is
inapplicable. Accordingly, Neder and its progeny should not be
read as imposing elements that render the statutory scheme at issue here
Faucher also claims that Counts Two and Three must be dismissed because
they are duplicative. Specifically, Faucher argues that Counts Two and
Three are duplicitous because the statutes at issue address both
transportation and storage of adulterated food products. Because acts of
storage and transportation are discrete and identifiable, Faucher argues
that separate counts are required. Thus, as presently drafted, Counts Two
and Three leave him with "no way of determining the particular acts of
food transportation/storage at issue" more than a 3.5 year time period.
Faucher also argues that the present indictment runs the risk that a jury
could find him-guilty based on a non-unanimous verdict because different
subgroups of the jury could rely on different acts to reach their
The government counters by stating that it is charging defendants only
with the storage and not shipment of adulterated meat and
poultry products. Thus, there is no risk of duplicity on that basis. The
government also claims that Counts Two and Three pertain to a continuing
course of conduct, namely storing products over the course of 3.5 years,
that cannot be parsed into distinct and separate events. The government
relies primarily on United States v. Berardi, 675 F.2d 894,
899-900 (7th Cir. 1982) for this position.
The Court agrees that the indictment pertains to the storage
and not shipping of the alleged adulterated products. In
addition, the Court agrees that the reasoning and policy behind
Berardi control here. The events at issue here can be fairly
considered as part of a continuing course of conduct and it would be
extraordinarily difficult to parse out each storage act into a separate
count. The charges here provide Faucher with adequate notice about the
course of conduct at issue and also foreclose the possibility that he
will either be prosecuted again for the same acts or that a non-unanimous
verdict could be reached as to the essential elements of the crime.
Finally, Faucher argues that the Court should strike the word
"improperly" from the sentence "improperly stored food products" because
none of the statutes named in the indictment use such terms. In essence,
Faucher argues that the phrase "improper
storage" creates an unconstitutionally vague standard that would
permit jurors to decide Faucher's guilt or innocence based on subjective
notions of good food storage. The government, in turn, responds that the
indictment alleges that the "improper storage" merely describes, in a
more-specific manner, the "act" that purportedly violates the statute's
prohibition of products "held under unsanitary conditions."
The Court finds that the use of the word "improper" in the present
context does not create an unconstitutionally vague standard. The statute
clearly identifies the standard at issue here and the government's use of
"improper storage" merely specifies the controlling standard of "any
act . . . which is intended to cause or has the effect of causing such
products to be adulterated or misbranded." See, e.g.,
21 U.S.C. § 458(a)(3).
C. Stewart's Motion to Suppress
Stewart seeks to suppress "all evidence seized" during inspections that
occurred after May 30, 2002. Stewart claims that although the initial
inspections of May 28 through May 30, 2002 were lawful pursuant to
administrative and regulatory authority, the focus of federal inspectors
changed to criminal investigation once the Order of Detention effectively
"shut down" the warehouse on May 30, 2002. Thus, Stewart claims there
were no regulatory or administrative interest in protecting the public
health and welfare at the point. As a result, Stewart contends that
inspections that occurred for at least eight days after May 30,
2002 required a warrant. Stewart asks for a hearing on these issues, as
well as an order suppressing this evidence.
The government responds by arguing that, as a threshold matter, Stewart
has no standing to raise this issue because he does not and
cannot allege that "he had a reasonable expectation of privacy in
the expansive food storage areas" of the warehouse, much less that
society would recognize such an expectation of privacy. Even if Stewart
had standing, the government contends that defendant Smith testified in a
plea agreement that he gave consent to the inspections at issue. The
government also attaches a June 19, 2002 letter purportedly written by
Stewart requesting an FDA inspection to show consent.
It is well established that a business owner's expectation of privacy
in commercial property is significantly less than such expectation in a
private home. See New York v. Burger, 482 U.S. 691 (1987).
Further, any expectation of privacy is even further attenuated in
commercial property that is used in a "closely regulated" industry.
See id. In a closely regulated industry, such as the food
storage and shipping industry, warrantless searches do not violate the
Fourth Amendment, provided that such searches are within the regulatory
scheme. See, e.g., United States v. New England Grocers Supply
Co., 488 F. Supp. 230, 237
(D. Mass. 1980); see also United States v. Gel Spice Co.,
Inc., 601 F. Supp. 1214 (E.D.N.Y. 1985).
Here, Stewart admits that the inspections that commenced on May 28,
2002 and continued through May 30, 2002 "were admittedly lawful and in
furtherance of  regulatory duties." Stewart Mem. at 3. However, such
purposes allegedly ended on May 30, 2002, when the warehouse was
purportedly "shut down." Although Stewart cites New England Grocers
Supply Co., 488 F. Supp. at 239, for support for the proposition
that the inspections here exceeded the regulatory scheme, the case
actually supports the government's position here. In New England
Grocers Supply Co., defendants argued that evidence gained during
two warrantless administrative inspections which occurred six
months apart should be suppressed because such inspections were
"fishing expeditions" and unreasonable. See id. Defendants also
argued that the evidence from the second inspection should have been
suppressed because the focus of the investigation by then, six months
down the road, had changed from a routine administrative inspection to a
criminal investigation. See id. at 237. The court dismissed
defendants' motion to suppress, noting that "FDA agents were not required
to suspend the valid warrantless inspections and secure a warrant once
they had reason to suspect violations of the Act, so long as the searches
were otherwise reasonable in time, manner and scope." Id. at
239. Although each inspection extended over a period of
approximately five days, the court found that such a duration was
not unreasonable in light of the "very large size" of the warehouse.
Here, Stewart makes no showing either through affidavit or any other
means that the 8-day (or longer) inspection period was unreasonable,
especially in light of the size of the warehouse here (500,000 square
feet) and the fact that multiple administrative bodies were conducting
investigations. Stewart also does not indicate that he (or any other
defendant) objected in any form to the inspections at issue here.
Further, Stewart offers no support for his contention that the continuing
inspections beyond May 30, 2002 had no relationship to the
purposes of the regulatory scheme. See New England Grocers Supply
Co., 488 F. Supp. at 239; see also Gel Spice Co., Inc.,
601 F. Supp. at 1218 (refusing an evidentiary hearing on a motion to suppress
on the grounds that defendants failed to make a "meaningful factual
showing" that the FDA "had conducted searches not in furtherance of
administrative purposes, but rather to obtain evidence for a criminal
prosecution that was already planned").
Nor does Stewart provide authority for the proposition that if ongoing
warrantless administrative inspections provide reason to suspect a
potential criminal violation, a warrant must then issue in midstream. In
fact, Stewart's own cited authority holds otherwise. See id.
Thus, Stewart's argument fails on these
grounds. As a result, the Court need not address whether Stewart
has standing to raise these issues of or whether he consented to the
For the foregoing reasons, Stewart's Motion to Dismiss the Indictment
and Motion to Suppress Evidence, and Faucher's Motion to Dismiss the
Indictment are DENIED.
IT IS SO ORDERED.
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