Judge Dismisses Case Against Former GSK Attorney, Citing “Serious Implications” For the Practice of Law

On Tuesday, District Court Judge Roger Titus dismissed the government’s case against former GlaxoSmithkline Associate General Counsel, Lauren Stevens—and he did so in resounding fashion. “I believe that it would be a miscarriage of justice to permit this case to go to the jury,” Titus said from the bench. “The defendant in this case should never have been prosecuted.” Titus went on to say that “serious implications for the practice of law” were raised by prosecution of Stevens. “There is an enormous potential for abuse in allowing prosecution of an attorney for the giving of legal advice,” he cautioned.

After two weeks of hearing the government’s case against Stevens, Titus granted the defense’s motion for dismissal under Rule 29 of the Federal Rules of Criminal Procedure. Titus noted that such motions are “routinely made and rarely, if ever, granted.” In fact, it marked the first time he had ever granted such a motion in more than seven years on the bench. The Judge took sharp exception with the manner in which the case was prosecuted. Because of an erroneous decision by a magistrate judge in the District of Massachusetts, he said, prosecutors were permitted to forage through confidential files to support an argument for criminality.

However, the Judge went even further, saying that those documents show that Stevens was not engaged to assist a client to perpetrate a crime or fraud. “Instead,” he said, “the privileged documents in this case show a studied, thoughtful analysis of an extremely broad request from the Food and Drug Administration and an enormous effort to assemble information and respond on behalf of the client.” 

“Judge Titus’ decision was the perfect ending to a nightmare of a case,” remarked William Hassler, of Steptoe and Johnson, one of Stevens’ attorneys. “We are delighted for Lauren’s sake.” Defense co-counsel, Colleen Conry, of Ropes & Gray, said the evidence at trial demonstrated that Stevens vigorously enforced the company’s policies. “The court’s ruling appropriately reflects that,” she said. Former FDA attorney and head of Sidley Austin’s FDA regulatory practice, Coleen Klasmeier, says Tuesday’s action calls into question the wisdom, in a complex regulatory setting, of using non-administrative tools – and particularly criminal process—to secure individual compliance. 

It remains to be seen whether the opinion will encourage anyone at FDA or DOJ to reconsider enforcement against individuals, says Klasmeier, although it might have the effect of shifting more individual actions toward administrative sanctions. 

Other OIG Actions 

The collapse of the government’s case against Stevens puts even sharper focus on the OIG’s exclusion authority as perhaps the most effective means of targeting pharmaceutical executives and it makes the OIG’s recent effort to exclude Forest Laboratories CEO, Howard Solomon, an even more important gambit on the part of the government. 

Solomon represents the OIG’s first attempt to exclude a senior pharmaceutical executive who has not been personally implicated in the underlying matter the exclusion is related to, in this case Forest’s $313 million settlement in September 2010 to resolve criminal and civil charges that it marketed three drugs for off-label uses, distributed a drug that was not FDA-approved, and obstructed the government’s investigations.

(Note: On May 10, the OIG issued a fact sheet on the agency’s exclusion authorities and facts related to the criminal convictions of a subsidiary of Forest Laboratories, to correct what is called “some inaccuracies that have appeared in the media.”) 

The demise of the case against Stevens also puts the spotlight back on the government’s ongoing investigation of GSK’s alleged off-label promotion of numerous drugs. Qui tam advocate, Patrick Burns, says the scope of that investigation was laid bare during the prosecution of Stevens. “GSK just took a $3.49 billion litigation charge in expectation of having to settle cases dealing with the illegal marketing and pricing of Avandia, Avandamet, and Avandaryl,” says Burns. “Add to that a likely off-label Wellbutrin settlement somewhere north of $400 million, and you’re knocking on the door of $4 billion in liabilities – and those are just the investigations we know about.” 

Stevens was originally indicted last November. That indictment was dismissed two months ago, but DOJ secured a new indictment that contained essentially the same charges that were originally brought against Stevens – one count of obstructing an official proceeding, one count of concealing and falsifying documents to influence a federal agency, and four counts of making false statements to the FDA. 

The government’s case against Stevens included “to put it mildly, a large volume of documentary evidence,” said the Judge. But he was quick to point out that “very significant portions” of that evidence would otherwise be attorney-client privileged documents had the government not obtained them when a magistrate judge in the District of Massachusetts ordered them produced under the Crime Fraud Exception. “With the 20/20 vision of hindsight, and that’s always the place to be in terms of wisdom, the Massachusetts Order was an unfortunate one,” said Titus. “Prosecutors were permitted to forage through confidential files to support an argument for criminality of the conduct of the defendant.” 

The Crime Fraud Exception is designed to overcome the privilege only when the evidence establishes that the client intended to perpetrate a crime or fraud and the communications at issue between the attorney and the client were made in furtherance of such crime or fraud, he explained. 

According to Titus, access should not have been granted to these documents in the first place. Ironically, he said the documents proved exculpatory. In short, Stevens was not engaged to help perpetrate a crime or fraud, he said. Titus said the responses that were given by Stevens may not have been perfect and may not have satisfied the FDA. “They were, however, sent to the FDA in the course of her bona fide legal representation of a client and in good faith reliance of both external and internal lawyers for GlaxoSmithKline,” he said.

Titus was unequivocal about the consequences of this action. Regarding the first two counts against Stevens – Obstruction of a Proceeding and Falsification/Concealment of a Document – the Safe Harbor Provision creates “an absolute bar,” he said.

“GlaxoSmithKline did not come to Ms. Stevens and say, ‘Assist us in committing a crime or fraud’,” said the Judge. “It came to her for assistance in responding to a letter from the FDA.”

Profound Implications

The Judge sent a strong message that this case has potentially broad implications. “There are profound implications for the free flow of communications between a lawyer and client when the privilege is abrogated, as it was in this case,” he said.

“Concerning the role of lawyers and advice of counsel, the Safe Harbor Provision is designed specifically to protect an attorney who is acting in accordance with the obligation that every lawyer has to zealously represent his or her client and place their position in the most favorable possible light.”

“As to all the counts relating to the question of advice of counsel, the evidence in this case can only support one conclusion, and that is that the defendant sought and obtained the advice and counsel of numerous lawyers,” he said. “She made full disclosure to them. Every decision that she made and every letter she wrote was done by a consensus.”

Even if some of these statements were not literally true, he added, it is clear that they were made in good faith which would negate the requisite element required for all six of the crimes charged in this case.

Titus was quick to point out that lawyers are not above the law in his court room. “Lawyers do not get a free pass in front of me,” he said. “However, a lawyer should never fear prosecution because of advice that he or she has given to a client who consults him or her, and a client should never fear that its confidences will be divulged unless its purpose in consulting the lawyer was for the purpose of committing a crime or a fraud.”

“Only with a jaundiced eye and with an inference of guilt that is inconsistent with the presumption of innocence could a reasonable jury ever convict this defendant,” Titus concluded. Former DOJ attorney, John (Jay) Darden, says it is also significant that the Judge granted the defense motion when he did. “Because he granted the motion at the end of the government’s case, the government has no right to appeal, and double jeopardy prevents the defendant from being retried,” he explains. “The Judge no doubt wanted to put an end to this matter once and for all.”

Guest Author: Matthew Hay, Publisher, RX Compliance Report

www.rxcompliancereport.com