United States v. Jorgensen - 144 F.3d 550 (8th Cir. 1998)

Rule:

It is a felony under the Federal Meat Inspection Act (Act), specifically 21 U.S.C.S. § 676(a), for any person, firm, or corporation to violate any provisions of 21 U.S.C.S. § 610 with an "intent to defraud." 21 U.S.C.S. § 610(c) prohibits any person, firm or corporation from distributing in commerce meat or meat products capable of use as human food which are misbranded at the time of sale, transportation, offer for sale or transportation, or receipt for transportation. Meat or meat product is "misbranded" under the Act if its labeling is false or misleading in any particular. 21 U.S.C.S. § 601(n)(1). "Labeling" is defined as all labels and other written, printed or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article. 21 U.S.C.S. § 601(p).

Facts:

In the mid-1980s, Gregory Jorgensen conceived the idea of gathering a group of South Dakota cattle producers together to market and sell the processed beef derived from their own cattle, hoping to increase the net return from their raised cattle while enabling them to better control their own production. Acting on this idea, Gregory and his father, Martin Jorgensen, incorporated Dakota Lean, Inc., in South Dakota and began slaughtering cattle raised by them and their neighbors. Deborah Jorgensen became involved in the company after its initial organization. The company decided to concentrate on marketing and selling "heart healthy" meat products, produced from cattle raised on the Jorgensen ranch or from Jorgensen-bred animals. When Dakota Lean sold its meat to customers, the product was accompanied by brochures making various claims about the product. Included in these claims were statements that the cattle were "genetically selected," that "strict quality control [was] maintained through individualized tracking and processing of each animal," and that the cattle were "raised on a wholesome diet of native prairie grass and selected feed stuffs without any growth hormones or implants." In 1989, when demand for their products outstripped their capacity to fill the orders from slaughtering their own cattle and those of their neighbors having the same attributes as their own cattle, the Jorgensens decided to start buying commercial beef trim from outside suppliers. None of the outside suppliers claimed their beef trim was hormone or antibiotic free, or that the cattle producing the meat had been genetically bred or fed a special diet. The Jorgensens blended this ordinary commercial outside beef trim with their own Dakota Lean meat product. Dakota Lean then sold this blended product to its customers while at the same time making the representations outlined above to its customers in the accompanying brochures. The company did not tell its customers that it was blending outside beef trim with its own meat. All told, it purchased more than a million pounds of outside beef trim to blend with its own meat. Following a jury trial, the Jorgensens and the corporation were each convicted of conspiracy in violation of 18 U.S.C. § 371 (1994), and of several counts charging the fraudulent sale of misbranded meat in violation of 21 U.S.C. §§ 610 and 676. The jury acquitted each defendant of one or more counts of the 25-count indictment. Additionally, Gregory and Deborah Jorgensen and the corporation were each convicted of two counts of mail fraud and three counts of wire fraud in violation of 18 U.S.C. §§ 1341 and 1343. The district court sentenced Gregory to 24 months of imprisonment, Martin to 15 months, and Deborah to 12 months and one day. The court also imposed substantial fines and periods of supervised release on the individual defendants. The defendants appealed and the government cross appealed.

Issue:

Were the defendants’ convictions for conspiracy, mail fraud, wire fraud, and fraudulent sales of misbranded meat proper?

Answer:

Yes.

Conclusion:

The court affirmed the judgment. In so doing, the court held that the evidence supported the jury's verdicts because the brochures that accompanied the meat products were "labeling" under 21 U.S.C.S. § 601(p), the products were "misbranded" under 21 U.S.C.S. § 601(n)(1), and defendants caused the misbranded meat to be distributed in commerce. There was evidence that each defendant had the requisite intent to defraud because when tours were given of the processing plant, boxes of outside beef trim were hidden behind boxes of the marked product to create the illusion that it was all the corporation-bred beef. The court held that the district court had not erred in refusing to give defendants' proposed jury instruction because the proposed instruction misstated the law. Finally, the court found that the district court's calculation of the amount of loss caused by the fraud was not clearly erroneous because it was only required to be an estimate.