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Conviction in Beech-Nut Case Reversed : Technical Point; Charges Against Ex-Chief May Be Brought Again

From Reuters

A federal appeals court panel Thursday reversed the conviction of a former Beech-Nut Nutrition Corp. executive for distributing apple juice for babies that was basically water with added sugar.

But because the charges were dismissed for jurisdictional grounds, they could be brought again in Upstate New York where the criminal acts allegedly occurred.

In a 2-1 vote, a panel of the U.S. Court of Appeals in New York dismissed 350 counts against Niels Hoyvald, former chief executive of Beech-Nut. The court said the case should not have been brought in the Eastern district, which covers Brooklyn, Staten Island and Long Island, because the acts in question were not committed there.

Beech-Nut is a subsidiary of Swiss-based Nestle S.A. and after Gerber Products Co. is the second-largest baby food maker in the nation.

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The bogus baby apple juice case made headlines in 1986, when the charges become known. Parents were shocked that an old respected company such as Beech-Nut was selling a product that was basically made from beet sugar, or corn syrup, and containing little or no apple product, and calling it apple juice.

The court also dismissed 429 counts against John Lavery, who was the company’s vice president for operations from 1976 until 1986. The panel did uphold one count of conspiracy and 18 counts of mail fraud against Lavery.

But because the case was dismissed by a three-judge panel on jurisdictional grounds of venue, the U.S. Attorney for Brooklyn, where the case was originally brought, said he will ask the U.S. Solicitor General to try to have the full panel of 12 appeals court judges take another look it.

“Sure we’re disappointed, but the (appeals panel) court didn’t say they were innocent,” U.S. Attorney Andrew Maloney said in a telephone interview. “Basically, it was a very technical ruling . . . . They said the venue lay in Northern District of New York.”

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He said Beech-Nut is no longer making the adulterated apple juice.

A spokesman for Beech-Nut in Ft. Washington, Pa., did not have any comment on the appeals court decision. The two former executives took leaves of absence to defend themselves against the charges.

Justice Amalya Kearse, writing for the majority said neither of the two executives “was shown to have conducted business” from the Eastern District of New York.

The defendants were never in the Eastern district, Kearse said. They were either in Pennsylvania or the juice-making operation in Upstate New York in Canajoharie, northwest of Albany.

One option for Maloney is to have the case brought in the Northern District of New York in Albany, the locale of a Beech-Nut operation.

The two executives were sentenced in June after being found guilty in February, 1988.


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