Tuesday, May 3, 2011

Lauren Stevens Trial: Week Two. Where is the Coverage?

Here is a case of infinitely greater importance than the Rajaratnam insider trading farce, but one that is largely getting the silent treatment from our financial press. I haven't seen a real news story on the Lauren Stevens trial since the first day of trial. This is pathetic. One of the most thoughtful blogosphere commentaries comes here from my friend David Douglas at Shook, Hardy & Bacon. David says that the prosecution represents a "gotcha" game, because the government did not set out clear markers regarding what it would and would not tolerate from in-house counsel responding to FDA document requests.

But that is clearly not the story told by the United States in the charging instrument. The Indictment quotes a 10-29-02 letter from Stevens to the FDA in which she confirms an earlier pledge of GSK's best efforts to obtain and provide "materials and documents presented at GSK-sponsored promotional programs, even if not created by, or under the custody or control of GSK." (That sounds like a pretty clear marker to me.) Stevens then allegedly told the FDA that GSK's production was complete, although she had failed to produce numerous presentation slides containing "incriminating evidence of potential off-label promotion by GSK."

According to one of the defense's responsive pleadings, Stevens and her team, "reached a consensus decision not to produce the presentations immediately, but instead to seek a meeting with the FDA at which GSK would discuss the presentations." Ms. Stevens tried several times to set up such a meeting, but the FDA did not respond positiviely, "and the anticipated meeting never occurred." That isn't exactly a compelling defense.

My friend, DC criminal defense attorney Eugene Gorokhov, of Burnham & Gorokhov, attended the first day of testimony. Eugene's eyewitness account follows:

"The Stevens trial seems to be off to an interesting start.  We missed openings but saw the government's first witness.  He was a reviewer for the FDA and was the person chiefly responsible for communication with GSK and Ms. Stevens in particular.  The first part of his testimony focused on the basic rules - what is a package insert, indicated use, etc., and legality of off-label prescribing versus illegal off-label promotion.  He testified on direct that [the FDA] initially started to send inquiries to GSK based on an anonymous complaint by a doctor regarding off-label promotion at GSK-sponsored events.  The government had him read at length from correspondence between the FDA and GSK (authored by Stevens).  The point seemed to be to establish that GSK clearly sought wide-ranging materials on any and all off-label promotion, and that Stevens was therefore clearly on notice of what was expected and did not provide complete or truthful responses.  The prosecutor repeatedly asked whether this or that statement by Stevens could have influenced the FDA.
But on cross, the defense showed some of the non-sensical aspects of the prohibition on off-label promotion.  For example, if a paid speaker discusses a drug for 5 minutes and then is asked unsolicited questions the rest of the time about off-label use, it is perfectly legal.  It is also legal in any setting other than promotion, ie, academia, discussions with other physicians, etc.  In any of the above settings the speaker could use the same words regarding off-label use, and it is not criminalized.  On the other hand, if there is a groundbreaking discovery regarding off-label use the paid speaker must keep that a secret at any promotional event. The defense attacked the government's assertion that the documents sought concerned all off-label use, as opposed to just use for weight loss.  The defense confronted the government witness not only with multiple statements from GSK's correspondence with the FDA that reflected this understanding, but also the statement of the witness in a letter to the DOJ that specified off-label use for weight loss and made no mention of other uses.Finally, the government witness admitted that all of GSK's [advertising] promotional materials were in the FDA's files before they sent any document requests, and and that the FDA never previously took issue with any of these materials.  However, the FDA witness indicated that he did not remember reviewing any of these promotional materials before sending the document requests to GSK."


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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 communications. 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 with 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/she is doing now? This type of prosection, particularly in an environment of trillion dollar deficits and devastating budget gridlock, is simply disgraceful.

Posted by: kristov | Aug 11, 2011 3:30:17 PM

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