The indictment last November of former GlaxoSmithKline (GSK)
in-house counsel, Lauren Stevens, for purportedly obstructing a
U.S. Food and Drug Administration (FDA) investigation into whether
GSK marketed Wellbutrin, an antidepressant drug, off-label,
falsifying and concealing documents, and making false statements
sent shockwaves through the legal community. The federal government
suffered two setbacks on 23 March 2011 in its efforts to prosecute
Stevens. Ruling on a series of pending motions, the U.S. District
Court for the District of Maryland rejected, as an initial matter,
the government's efforts to deny Stevens the right to assert an
advice-of-counsel defense to the charges against her. The district
court then dismissed the indictment without prejudice because the
government failed to instruct the grand jury correctly on the
relevance of the advice of counsel defense before the grand jury
decided to indict Stevens.
The indictment alleged that Stevens withheld documents and made
numerous materially false statements in letter responses to an FDA
inquiry. In particular, the indictment alleged that FDA asked GSK
for materials from promotional programs relating to Wellbutrin. The
indictment further alleged that Stevens knew that GSK had paid
numerous doctors to promote Wellbutrin off-label at various events
and had collected documents relating to these events.
Notwithstanding this knowledge, Stevens purportedly sent a series
of letters "that falsely denied the company had promoted the
drug for off-label uses" and concluded that GSK's response
to FDA was "final" and "complete."
Stevens defended her actions in responding to the FDA based on
advice she received from other in-house attorneys and outside
counsel. She specifically asserted that GSK hired King &
Spalding to participate in preparing GSK's response, including
the drafting, editing, and review of the letters sent to FDA.
Stevens further asserted that while GSK identified materials that
contained potentially off-label content, the legal team jointly
determined that additional information was necessary to determine
how or if the material was used and what, if anything, was said at
the presentations. Stevens contended that, subsequently, a
consensus decision was reached not to produce the material
immediately but to seek a meeting with FDA to discuss the
materials. The meeting never occurred, but GSK ultimately produced
the materials in response to a subsequent Department of Justice
investigation commenced in 2004.
Stevens is entitled to assert the advice of counsel defense to
attempt to negate intent
Evidencing that the advice of counsel defense may be the
dispositive issue in this case, the government filed a motion to
preclude the use of an advice of counsel defense with respect to at
least the obstruction charge brought under 18 U.S.C. § 1519.
The government argued that good faith reliance on advice of counsel
did not apply to a general intent crime, like 18 U.S.C. §
1519. The government essentially conceded that Stevens might be
entitled to assert advice of counsel with respect to the other two
charges but argued that Stevens would have to establish proof of
some predicate facts – full disclosure of all pertinent
facts, good faith reliance on the advice, and advice from personal
counsel (as presumably opposed to company counsel) –
before she could seek to rely on advice of counsel.
While the district court agreed that advice of counsel was relevant
only to specific intent crimes, it rejected the government's
argument that 18 U.S.C. § 1519 is a general intent crime to
which advice of counsel was inapplicable. The district court stated
in its opinion that
the most reasonable reading of Section 1519 is one which imposes criminal liability only on those who were conscious of the wrongfulness of their actions. To hold otherwise would allow § 1519 to reach inherently innocent conduct, such as a lawyer's instruction to his client to withhold documents the lawyer in good faith believes are privileged.
As a result, the district court held that Stevens was entitled
to assert the advice of counsel defense with respect to all the
charges.
The government's erronenous advice of counsel instructions
to the grand jury required dismissal of the indictment
According to portions of the grand jury transcripts provided to
Stevens in response to a motion to disclose the transcripts, prior
to the grand jury's decision to indict Stevens, a grand jury
member questioned the government about the fact that Stevens
received advice and direction from others on how to respond to the
FDA inquiry, asking: "Does it matter or is it not
relevant?" In response, the government incorrectly instructed
the grand jury that the advice of counsel defense was not relevant
to the grand jury's indictment decision. The first prosecutor
informed the grand jury that the advice of counsel defense could be
raised "once the defendant has been charged," while the
second prosecutor stated that it could be "relevant at
trial."
As the district court stated, the "advice of counsel
defense" label was something of a "misnomer." Advice
of counsel was not an affirmative defense but rather "negates
the defendant's wrongful intent, and therefore demonstrates an
absence of an element of the offense – mens rea."
Given the possibility that Stevens relied in good faith on such
advice in responding to the FDA inquiry and that such reliance
would negate the government's charges, it "went to the
heart of the intent required to indict." The district court
had "little doubt" that the prosecutors' instructions
were "erroneous":
A proper instruction would have informed the grand jurors that if Stevens relied in good faith on the advice of counsel, after fully disclosing to counsel all relevant facts, then she would lack the wrongful intent to violate the law and could not be indicted for the crimes charged in the proposed indictment.
As a result, the district court held that the prosecutors'
instructions "either substantially influenced the decision to
indict or, at the very least, creates grave doubt as to that
decision" and therefore the indictment had to be
dismissed.
Although Stevens argued that dismissal should be with prejudice and
suggested that there may have been some prosecutorial misconduct,
the district court found no such evidence: "This is not a case
in which the government attempted to affirmatively mislead the
grand jury to obtain an indictment – rather it is a case
in which prosecutors simply misinstructed the grand jury on the
law." Under these circumstances, the district court determined
that dismissal without prejudice was appropriate, allowing the
government the right to seek "another indictment from a
different grand jury that is properly advised" on the advice
of counsel defense.
Conclusion
Because the dismissal is without prejudice, the government can seek
to indict Stevens before a new grand jury, and the government has
indicated that it intends to do so. Not only is the government
intent on pursuing this case, but the government's filings here
make clear that it vigorously will contest whether the advice of
counsel defense should be available in any future
proceedings.
The government's determined opposition to the advice of counsel
defense in Stevens potentially portends that companies,
particularly in highly-regulated industries like medical devices or
pharmaceuticals, and their employees may not be impervious to
criminal prosecution as a result of how they deal with FDA or
government inquiries simply because they seek, obtain, and act on
legal advice in taking such actions. The type of conduct relating
to the review, production, and presentation of potentially
responsive material to the government alleged in the indictment and
further described by Stevens in her filings almost routinely arises
in the context of company efforts to cooperate and appropriately
respond to government inquiries. Importantly, if the government
were to succeed in its position that advice of counsel applies only
to communications between a client and his or her personal counsel,
such a ruling would unduly hamper how corporations, and the
individual employees through which corporations act, function when
legal advice is needed.
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