Black Tuesday for the Government: The Lauren Stevens Case is Dismissed

By John R. Fleder –

In a stunning ruling on May 10, 2011, United States District Court Judge Roger W. Titus  ruled from the bench in Greenbelt, Maryland, granting a Motion for a Judgment of Acquittal filed by the defendant, Lauren Stevens. Ms. Stevens was formerly an in-house lawyer for GlaxoSmithKline (“GSK”).

The Judge stated that this was the first case in his seven and a half years as a jurist when he has granted such a motion.  Because jeopardy had already attached, this ruling is not appealable by the government and ends this criminal case against her.  

The Court's oral remarks are a broadside attack on the government's case. First, the Court criticized an earlier ruling by a judge in Massachusetts.  That ruling had given the government access to otherwise privileged GSK documents under the "crime-fraud" exception to the attorney-client privilege.  Judge Titus described that ruling as "unfortunate", saying that the government never should have been given access to GSK's privileged records.  He also ruled that the records themselves showed that Ms. Stevens "was not engaged to assist a client to perpetrate a crime or fraud."

Second, the Court stated that Ms. Stevens' former employer, GSK, "did not come to Ms. Stevens and say, assist us in committing a crime or fraud."  Judge Titus then concluded that Ms. Stevens "sought and obtained the advice of counsel of numerous lawyers.  She made full disclosure to them.  Every decision that she made and every letter she wrote was done by a consensus."

Third, the Judge stated that "only with a jaundiced eye and with an inference of guilt that's inconsistent with the presumption of innocence could a reasonable jury ever convict this defendant."

Fourth, he stated that "there are serious implications for the practice of law generated by this prosecution."

Fifth, Judge Titus concluded "that the defendant in this case should never have been prosecuted and she should be permitted to resume her career."

This ruling is hardly the end of the tale of woes for the government that this case has produced.  As we previously reported, in March, Judge Titus dismissed an earlier Indictment that had been returned against Ms. Stevens.  The Court ruled that the government had mischarged the grand jury which had indicted her.  That ruling was noteworthy because the Court took the highly unusual step of granting defense counsel access to the grand jury minutes.  The government could have appealed that ruling.  Instead, the government reindicted Ms. Stevens on the charges that were dismissed on May 10th.  Because the government reindicted her, it cannot appeal Judge Titus' March 23rd ruling.  As a result, that ruling stands as precedent for the proposition that defense counsel can request and perhaps obtain the transcripts of highly secretive grand jury proceedings.

The government has initiated many criminal and civil cases against companies and individuals who are alleged to have engaged in unlawful off-label marketing.  Indeed, the government has increasingly regulated these practices by criminal prosecution, settlement agreements and corporate integrity agreements that lay out the government's view as to what is and is not illegal off-label practices, rather than publishing regulations to spell out exactly what companies can and cannot do.  Few defendants have gone to trial in off-label cases, and there is very little judicial guidance on the subject. 

In the Stevens case, Judge Titus disagreed with the government's theory regarding what is illegal off-label activity.  According to a pleading filed by the government on May 9, 2011, the Court was prepared to instruct the jury on off-label use, which, according to the government, adopted the defense theory and disagreed with the government's theory regarding what is unlawful activity.  A judicial rejection of the government's legal theory on this subject is both stunning and significant.  It will be interesting to see if Judge Titus' views on off-label use will cause the government to reassess its views regarding what is legal and illegal conduct in this area.

Our firm has done a series of blog entries and other presentations regarding the government's publicly-stated intention to bring the so-called Park Doctrine back to life (see, e.g., here and here).  This case was not a Park prosecution.  Thus, we do not know if this ruling will impact the government's future use of the Park Doctrine.  However, the ruling is a severe blow to the government's highly touted efforts to threaten individuals with aggressive prosecution.

Comments

[KK]

Once the government targets attorneys (whether in-house or outside counsel) for obstruction-related charges, where the attorney has no involvement or interest in the alleged underlying misconduct, we need to ask serious questions. Client representation is, by its nature, rife with nuances and attorney client privileged communication. It is ill-advised for a government regulatory agency (in this case the FDA), to examine, after the fact, attorney client privileged communications in an effort to build a federal obstruction case against an attorney who did not benefit from the alleged underlying misconduct. That would make the attorney’s job impossible, as a good faith judgment decision made by the attorney during the course of the representation, which ultimately is found to be less than optimal from the government’s point of view (or, with hindsight, even proves to be incorrect) could result in criminal liability for the attorney. Attorneys are retained to represent their clients. They are not pseudo government investigators, and they cannot be expected to be prescient, or to possess divine intuition.
Ms. Stevens rightfully won this case, but I’m sure the judge’s statement that “this case should never have been brought” will provide her little solace at this point. She has been dragged through many years of painful federal criminal prosecution, having her reputation and career irreperably harmed in the process. Her personal life has likely been permanently affected. Taking on the DOJ is not a decision to be taken lightly – 95% of federal convictions result from pleas. Federal obstruction statutes carry maximum penalties of 20 years in prison, and the government has unlimited resources. To say that “this case should never have been brought” seems to belittle the courage that Ms. Stevens displayed in fighting for what’s right. I think we need to take a closer look at “prosecutorial discretion.” There apparently was reluctance by several US attorneys to sign off on this indictment. I wonder who ultimately signed it, and what he or she is doing now? This type of prosection, particularly in an environment of trillion dollar deficits and devastating budget gridlock, is pretty disgraceful.