III. May 5 and June 21, 1989: Labatt’s deceptive presentations to the FDA and its less-than-complete cooperation with the FDA on scientific research.

Labatt met with the FDA on May 5 and June 21, 1989, seeking amnesty for itself and its orange juice business.  In a gesture intended to bolster the appearance of its bona fides, Labatt agreed to cooperate with FDA research on adulterated orange juice.  The cooperation fell short in at least two important respects.

A. The deceptive presentations. 

Labatt’s presentations to the FDA, which were summarized in memorandums prepared by FDA staff,[1] were deceptive in three respects. 

First: Labatt had a duty to report Everfresh’s violations of the FD&C Act within a reasonable time after February 21-22, when it completed its internal investigation.  See Memorandum 3-C, §III.  Instead, it waited 72 days before meeting with the FDA on May 5.  If there had been any economically adulterated products that were subject to recall as of February 21-22, those products would no longer be subject to recall on May 5; their shelf life would have expired.

Second: As we explained earlier, Labatt had a duty to tell the FDA about Everfresh’s practice of adding an unsafe additive (Oleum 320/IDEA) to its juice products, even if those hygienically adulterated products were no longer in the stream of commerce.[2]  Labatt did not tell the FDA about the additive, however. 

Third: Labatt finagled a blanket amnesty without telling the FDA about Holiday Juice’s role in the conspiracy to distribute adulterated COJM.[3]  As a result of this silence, Holiday Juice’s co-conspirators (Flavor Fresh and Peninsular Products) were able to continue that conspiracy, and cheat consumers, for two more years.

B. Labatt’s less-than-complete cooperation. 

At the May 5th meeting David Murray, Labatt’s chief scientist, mentioned that he and his staff had “a good deal of analyses of authentic orange juice.”  The FDA thought that those analyses would be “very useful to the Agency,” so Murray agreed to provide those analyses at a later date.

Murray returned to the FDA on June 21, accompanied again by Appler, and Mervin Shumate, a former high-ranking FDA official turned private consultant.[4]  Murray gave the FDA “summaries of a number of analyses of orange juice” performed by independent consultants, including Dr. Alan Brause, Grove Fresh’s expert. 

In the course of discussing these analyses the “visitors,” as the FDA referred to the Labatt representatives, mentioned that they were sponsoring “research on fermentation analyses to detect adulteration with beet sugar.”  The FDA expressed interest in this research and offered to “provide some authentic [orange juice] samples” for this research.  The visitors concluded the meeting by inviting the FDA “to ask for any additional information [the agency] might need or want.”

Measured by what it knew and what it shared with the FDA, Labatt’s cooperation fell short in at least two important respects. 

First:  Prior to the June 21st meeting Labatt unearthed recipes that Everfresh had used to make more than 3,190,000 gallons of adulterated orange juice.[5]  Because these recipes were designed to defeat government tests for authenticating orange juice, the recipes would have been an invaluable resource to scientists seeking to improve those tests.  Labatt and Appler didn’t share the recipes with the FDA, however.  If they had, the dates on some of the recipes would have exposed the false narrative they had presented at the May 5th amnesty meeting.[6] 

Second: Prior to the June 21st meeting Labatt learned that for many years, Holiday Juice and Flavor Fresh had conspired to distribute adulterated COJM to the tertiary market. See Conspiracy Claims §F-1; Memorandum 3-C §II-C. At the June 21st meeting Labatt told the FDA “that adulterated orange juice concentrate could also be purchased in the United States but [they] identified no specific sources of such concentrate.”[7] 

Labatt didn’t disclose Holiday Juice’s role in the conspiracy because it couldn’t without implicating Flavor Fresh.  Since Appler and his firm represented Flavor Fresh as well as Labatt and Holiday Juice, they couldn’t seek amnesty for the latter at Flavor Fresh’s expense.

McDermott Will & Emery’s conflicts of interest were the reason why the visitors “identified no specific sources of [adulterated] concentrate.”

[1] Copies of these memorandums are in Appendices K-L. Copies are also posted on the website at FDA Memo of Amnesty Meeting with Labatt—May-5-1989 and at FDA Memo of Second Amnesty Meeting with-Labatt—June-21-1989.

[2] See Memorandum 3-C, §§III-C, D, and E.

[3] The COJM conspiracy is discussed in Memorandum 3-C, §II-C and on the website at Conspiracy Claims §F.

[4] See §XV-A, below

[5] See §XI-P, below.

[6] Id.

[7] Appendix L (emphasis added), a copy of which is posted on the website at FDA Memo of Second Amnesty Meeting with-Labatt—June-21-1989