NOTE: This is a continuation of the memorandum found in the Civil Resource Manual at 136 Civil Resource Manual at 136.
IV.The Conspiracy Count Properly Alleges Both A Conspiracy To Defraud And A Conspiracy To Commit Offenses
The Conspiracy Count alleges that XXXXX conspired to:
a) commit offenses against the United States, more particularly,
* * *
(2) to violate Title 18, United States Code, Section 1505, by corruptly endeavoring to influence, obstruct, and impede the due and proper administration of the law under which a pending proceeding was being had before the Food and Drug Administration; and
b) defraud the United States, by using craft, trickery, deceit, and dishonest means to impede, impair, obstruct, and defeat the lawful government functions of the FDA in its administration of the FD&C Act and related regulations.
Indictment at 4. Thus, XXXXX is charged under both the "offenses" and the "defraud" prongs of 18 U.S.C. § 371.
Relying on discredited dicta from United States v. Minarik, 875 F.2d 1186 (6th Cir. 1989), XXXXX moves to strike the allegation that he conspired to defraud FDA. XXXXX contends that this allegation is confusing, and that it is redundant with the allegation that he conspired to obstruct FDA proceedings. Minarik does not support XXXXX's motion, however. Moreover, settled law holds that it is entirely appropriate to charge a conspiracy under both the "offenses" and "defraud" prongs.
In Minarik, the Sixth Circuit held that the defendant's conviction for conspiracy to defraud the IRS could not be sustained because the indictment, a bill of particulars, and the goverment's proof at trial had presented the jury with inconsistent theories of culpability. The court also suggested in dicta that it is preferable for the object of a conspiracy to be stated under the "offenses" prong of the conspiracy statute, rather than under the "defraud" prong.[FN12] See id. at 1194.
FN12. This suggestion is "contrary to established law," United States v. Bilzerian, 926 F.2d 1285, 1301 (2d Cir.), cert. denied, 502 U.S. 813 (1991), and thus has been rejected by several courts. See id. at 1301-02; United States v. Derezinski, 945 F.2d 1006, 1010 (8th Cir. 1991); United States v. Reynolds, 919 F.2d 435, 439 (7th Cir. 1990), cert. denied, 499 U.S. 942 (1991); United States v. Hurley, 957 F.2d 1, 3-4 (1st Cir.), cert. denied, 506 U.S. 817 (1992).
"Although some language in Minarik suggests that the sixth circuit thought it better practice to charge a conspiracy to violate a particular statute, the holding of that case is only that the prosecution's theory changed so often that the defendant lacked notice of the charge against which he had to defend." United States v. Reynolds, 919 F.2d 435, 439 (7th Cir. 1990), cert. denied, 499 U.S. 942 (1991); see also United States v. Hurley, 957 F.2d 1, 3 (1st Cir.), cert. denied, 506 S. Ct. 817 (1992) ("the primary problem in Minarik was not that the government charged defendants under the defraud clause, but that it repeatedly shifted its theory of the case"). That holding simply has no applicability in the present pre-trial setting. There has been no shifting of prosecution theories, as occurred at trial in Minarik. The Indictment states the theory, and nothing else has been said or done that possibly could have shifted that theory.
XXXXX's argument thus amounts only to this: he wishes he did not have to defend against allegations under both the "defraud" and the "offenses" prongs of the conspiracy statute.[FN13] Consistent case law holds, however, that a conspiracy count may include both sets of allegations. See United States v. Harmas, 974 F.2d 1262, 1266 (11th Cir. 1992); United States v. Bilzerian, 926 F.2d 1285, 1301-02 (2d Cir.), cert. denied, 502 S. Ct. 813 (1991); United States v. Smith, 891 F.2d 703, 711-13 (9th Cir. 1989); United States v. Berlin, 707 F. Supp. 832, 836 (E.D. Va. 1989). As the Fourth Circuit has noted: "When both prongs of § 371 apply to the conduct with which a particular defendant is charged, the government enjoys considerable latitude in deciding how to proceed." United States v. Arch Trading Co., 987 F.2d 1087, 1092 (4th Cir. 1993).
FN1X. XXXXX has not explicitly argued, but may be suggesting, that the defraud allegation is unconstitutionally vague. A similar claim was recently rejected in United States v. Najarian, No. Cr3-95-45 (D. Minn. Jan. 12, 1996) [relevant excerpt attached to this Memorandum].
XXXXX's motion to strike the "defraud" allegation in the Conspiracy Count should be denied.
V. FDA's Continuous Oversight Over Drugs It Has Approved Constitutes A Pending Proceeding Under 18 U.S.C. § 1505
XXXXX moves to strike the following highlighted language in Count Five, the Obstruction Count:
Between on or about October 4, 1991, and on or about May 19, 1992, in the State and District of Maryland, and elsewhere,
XXXXX X. XXXXX
corruptly endeavored to influence, obstruct, and impede the due and proper administration of the law under which a pending proceeding was being had before the Food and Drug Administration, to wit: review by FDA officials in Rockville, Maryland, of Prettybig Drug's approved NDA for Dilantin 30 and 100 mg Kapseals and of the company's pending NDA for Dilantin 300 mg Kapseals, by concealing from FDA information concerning Dilantin stability test failures and other GMP deficiencies.
Indictment at 11. XXXXX contends that FDA proceedings regarding Dilantin 30 mg and 100 mg concluded when FDA approved the drugs in 1976. Thus, he argues, during the 1991-92 period covered by the Obstruction Count, there was no "pending proceeding" regarding these drugs that XXXXX could have obstructed. Def. Memo at 37.
XXXXX's argument reflects an incorrect understanding of FDA's statutorily-prescribed role in NDA proceedings. Contrary to XXXXX's contention (and contrary to the opinion of Mr. Kaplan, the legal expert XXXXX has enlisted to assist him in this motion), FDA review of approved drugs does not end at the time of approval. Pursuant to statutory mandate, FDA continuously reviews the performance of the drugs it has approved, both to determine whether their approval may be sustained, and to ensure that such drugs are not adulterated or misbranded. This review process constitutes a "pending proceeding" within the meaning of the obstruction statute XXXXX is charged with violating, 18 U.S.C. § 1505.
Under the FDCA, FDA must withdraw its approval of an NDA if new evidence or information indicates the drug is not safe or effective. 21 U.S.C. § 355(e). FDA is also authorized to withdraw approval of an NDA, if, among other reasons, an applicant has failed to make reports, or maintain records, in accordance with FDA regulations.[FN14] Id. Thus, the FDCA requires that FDA continuously review its drug approvals to determine whether the approval should be sustained or withdrawn. FDA also monitors approved drugs to ensure they are not adulterated or misbranded.[FN15] See 21 C.F.R. § 314.170.
FN1X. XXXXX (and his expert) are incorrect in contending that the reporting obligations cannot affect the drug approval. See Def. Memo at 46. The statute is clear that FDA may withdraw a drug approval if the reporting obligations are not met. See also 21 C.F.R. § 314.81(d). Moreover, as explained below, the reporting obligations exist for the express purpose of enabling FDA to make a determination whether to withdraw a drug approval.
FN15. The FDCA's prohibitions against commerce involving adulterated or misbranded drugs, 21 U.S.C. § 331, are enforceable through drug seizures, actions for injunctions, and criminal prosecutions. See 21 U.S.C. §§ 332-334.
The FDCA provides several means for FDA to monitor approved drugs. "[T]o enable [FDA] to determine, or facilitate a determination, whether there is or may be ground for invoking subsection (e)"--that is, whether grounds exist for withdrawing a drug approval--the FDCA authorizes FDA to issue regulations requiring NDA applicants to keep records, and to make reports to FDA, regarding essential aspects of drug performance.[FN16] 21 U.S.C. § 355(k)(1). Thus, manufacturers must file "annual reports" describing distribution data, labeling, the results of certain scientific tests (such as stability tests), changes in manufacturing processes, and other information "that might affect the safety, effectiveness, or labeling of the drug product." 21 C.F.R. § 314.81(b)(2). Manufacturers also must file "field alert reports," within three working days, regarding "any failure of one or more distributed batches of the drug product to meet the specifications established for it" in its NDA. 21 C.F.R. § 314.81(b)(1).
FN16. The failure to maintain records or make reports is an offense under the FDCA. 21 U.S.C. § 331(e).
The FDCA also specially authorizes FDA to conduct inspections of "records, files, papers, processes controls, and facilities" relating to approved prescription drugs. See 21 U.S.C. § 374(a)(1) (second sentence). The FDCA further provides that FDA must have access to any records the agency, by regulation, has required NDA applicants to maintain. See 21 U.S.C. § 355(k)(2). The importance of inspections to FDA's review of approved drugs is made clear in this case, because it was through inspections that FDA first discovered that Prettybig Drug had failed to report stability failures involving Dilantin 30 mg and 100 mg.
It is thus clear from the statutory scheme of the FDCA (and, as agency officials will testify, it is a fact), that FDA's review of a drug submitted for approval does not end when FDA approves the drug, but continues so long as the drug remains on the market. FDA continuously monitors the approved drug, through required reports and plant inspections, to ensure that it is safe and effective, and that it is not adulterated or misbranded. These proceedings would end only at such time as the drug approval is withdrawn.[FN17]
FN17. This points out a distinction between the instant case and the decision in United States v. Najarian, No. Cr3-95-45 (D. Minn. Feb. 13, 1996), upon which XXXXX relies. Najarian was charged with obstructing proceedings relating to FDA's approval of an "investigational new drug." See 21 U.S.C. § 355(i). The court dismissed the charge, finding that no proceedings were pending because FDA had withdrawn the investigational drug approval before Najarian engaged in the allegedly obstructive conduct. By contrast, in this case FDA never withdrew the approval of Dilantin. Thus, the Dilantin proceedings remained pending at the time of the offense alleged in Count Five.
XXXXX strains to avoid this obvious conclusion by suggesting that withdrawal of an NDA involves a separate proceeding. FDA's actions in determining whether to institute such a proceeding, XXXXX contends, are part of neither the withdrawal proceeding (which has not yet begun) nor the initial NDA proceeding (which has already ended). See Def. Memo at 46-47. This argument not only defies the reality of the drug approval process, but also is inconsistent with the concept of "pending proceeding" as it has been applied in cases interpreting the obstruction of justice statute.
The Fourth Circuit has approved the following definition of "proceeding":
Proceedings before a governmental department or agency simply mean proceeding in the manner and form prescribed for conducting business before the department or agency, including all steps and stages in such an action from its inception to its conclusion.
Rice v. United States, 356 F.2d 709, 712 (8th Cir. 1966), quoted in part in United States v. Mitchell, 877 F.2d 294, 300 (4th Cir. 1989). Here, by receiving and reviewing required reports, and by inspecting the Dilantin manufacturing facilities, FDA was "proceeding in the manner and form prescribed" for performing its role in drug approvals and oversight. Under the rule adopted in Mitchell, therefore, FDA's post-approval review of Dilantin 30 mg and 100 mg constituted a pending proceeding.
Even accepting, arguendo, XXXXX's contention that a withdrawal proceeding is separate from an approval proceeding, the steps FDA takes to determine whether to institute a withdrawal proceeding--that is, the agency's continuous review of a drug following approval--would be part of the withdrawal proceeding. This follows from consistent case law holding that the steps an agency takes preliminary to a proceeding are part of the proceeding for purposes of applying 18 U.S.C. § 1505.
In Rice v. United States, supra, for example, the defendants had assaulted and intimidated employees who had filed complaints with the NLRB. The intimidation worked, and the employees withdraw their complaints before the NLRB had taken any formal action on them. The court held that the defendant's behavior obstructed the aborted NLRB proceedings by preventing them from occurring:
Congress clearly intended to punish any obstruction . . . at any stage of the proceedings, be it adjudicative or investigative. Congress did not limit the term "proceeding" as used in 1505 to only those acts committed after a formal stage was reached, and we cannot so limit the term.
356 F.2d at 712.
The instant case is very similar to Rice. The Obstruction Count alleges that XXXXX concealed from FDA exactly the sorts of information the agency needed in order to determine whether to withdraw the Dilantin approval.[FN18] Thus, just as in Rice, XXXXX is charged with impeding an agency proceeding by preventing it from occurring. As Rice clearly holds, such conduct is prohibited under section 1505.
FN18. The Obstruction Count alleges that XXXXX obstructed FDA "by concealing from FDA information concerning Dilantin stability test failures and other GMP deficiencies." Indictment at 11.
To like effect is United States v. Leo, 941 F.2d 181 (3d Cir. 1991). In Leo, the defendant made false statements to an auditor who was conducting a routine post-award audit of a defense contract. The court held that the audit, although preliminary to any agency proceedings to revoke the contract, was part of such proceedings for purposes of section 1505.
Even though the Agency's investigatory audit comes at the preliminary stage of the investigation, it is crucial in departmental proceedings for the discovery of fraud. Without the Defense Contract Audit Agency's services, fraud might never be discovered.
Id. at 199.
Similarly, here, the investigatory steps FDA must take to monitor the drugs it has approved (reviewing required reports, conducting inspections) are "crucial in departmental proceedings" to withdraw drug approvals.[FN19] Without the monitoring, deficiencies in approved drugs "might never be discovered," and withdrawal proceedings therefore would not occur. Thus, as in Leo, XXXXX's obstruction of FDA's efforts to "audit" the approved Dilantin drugs is an offense under section 1505.
FN19. As already noted, FDA continually reviews an approved drug not only to determine whether to institute withdrawal proceedings, but also to ensure that the drug is not adulterated or misbranded. Thus, the review process is also preliminary to, and therefore a part of, proceedings to enforce the FDCA's prohibitions against commerce in adulterated and misbranded drugs. See, e.g., United States v. Vixie, 532 F.2d 1277, 1278 (9th Cir. 1976) ("An administrative investigation is a 'proceeding' within the meaning of 18 U.S.C. § 1505"); accord United States v. Schwartz, 924 F.2d 410, 422-23 (2d Cir. 1991); United States v. Browning, Inc., 572 F.2d 720, 724 (10th Cir.), cert. denied, 439 U.S. 822 (1978).
Rice and Leo convincingly refute XXXXX's contention that a proceeding cannot exist unless an agency has taken "specific steps" to commence one. Def. Memo at 41. As these cases sensibly hold, section 1505 reaches obstructive conduct that prevents an agency from commencing a proceeding. It would be "absurd" to hold otherwise. See Rice, 356 F.2d at 712.
In sum, the Obstruction Count properly charges that XXXXX obstructed pending FDA proceedings respecting Dilantin 30 mg and 100 mg. FDA's review of these drugs is part of the NDA process, and part of the agency's more general responsibility for keeping adulterated and misbranded drugs off the market. XXXXX's motion to strike the language in Count Five referring to FDA review of approved forms of Dilantin should be denied.
VI. XXXXX's Motion For A Bill Of Particulars Should Be Denied
XXXXX seeks specification in a bill of particulars of certain evidentiary details. For the reasons stated below, XXXXX's requests should be denied.
A. Drugs And Stability Test Failures
The Conspiracy Count charges that XXXXX conspired "to fail to make required field alert reports to FDA regarding stability test failures for marketed prescription drugs," Indictment at 5, and refers specifically to stability test failures involving Euthroid, Proloid, Parsidol, and Dilantin. Id. at 5-7. The Obstruction Count also alleges that XXXXX concealed Dilantin stability failures. Id. at 11. XXXXX requests specification of the particular stability failures which occurred, complaining that "Prettybig Drug conducted literally hundreds of such tests in the period covered by the Indictment." Def. Memo (Bill of Particulars) at 4.
XXXXX has already received through discovery documentation of the stability failures involving Euthroid, Proloid, Parsidol, and Dilantin that underlie the government's charges. Those failures did not number in the "hundreds," as XXXXX misleadingly suggests. The several failures that occurred for each product were more than enough to drive home to XXXXX the need for a report to FDA, but they were not so numerous that they must now be specially cataloged for XXXXX, so he can prepare his trial defense.
"A bill of particulars is not to be used to provide detailed disclosure of the government's evidence in advance of trial." United States v. Automated Medical Laboratories, Inc., 770 F.2d 399, 405 (4th Cir. 1985). "Rather, it is intended to give the defendant only that minimum amount of information necessary to permit the defendant to conduct his own investigation." United States v. Smith, 776 F.2d 1104, 1111 (3d Cir. 1985). Thus, if a defendant can derive the information he desires from the indictment and/or discovery, there is no need for an order to file a bill. See United States v. Society of Independent Gasoline Marketers, 624 F.2d 461, 466 (4th Cir. 1979), cert. denied, 449 U.S. 1078 (1981); United States v. Schembari, 484 F.2d 931, 935 (4th Cir. 1973).
Here, the Indictment and discovery fully inform XXXXX of the stability failures that are at issue in this case.[FN20] XXXXX's request for formal particulars regarding stability failures thus should be denied. See generally United States v. Addonizio, 451 F.2d 49, 64 (3d Cir. 1971) (government is not required to "weave the information at its command into the warp of a fully integrated trial theory for the benefit of the defendants"), cert. denied, 405 U.S. 936 (1972).
FN20. XXXXX's complaint that he must "root through vast quantities of documents" to identify the stability failures at issue here is completely unfounded. In the main, the relevant stability failures are identified in a handful of summary documents that were prepared by XXXXX's principal assistant. XXXXX's counsel had access to these summary documents even before this case was indicted.
B. GMP Deficiencies
XXXXX seeks needless particulars concerning the adulteration allegation in the Dilantin Counts. As already reviewed, see section II.A., supra, these counts charge that Dilantin was adulterated because the process used to manufacture the drug was inadequate to assure that the drug would meet its stability dissolution specifications. Why the Dilantin manufacturing process was inadequate is unimportant (and probably inexplicable, in any event). Requiring the government to answer that question for XXXXX would be like requiring the prosecution in a traffic case to explain why the light was red.
C. Unnamed Individuals
The government has identified to XXXXX his alleged co-conspirators. XXXXX demands that the government also identify other individuals to whom reference is made in the Indictment. In essence, XXXXX is demanding that the government produce its witness list. A bill of particulars is not appropriate for that purpose. See, e.g., United States v. Pena, 542 F.2d 292, 294 (5th Cir. 1976).
For the foregoing reasons, XXXXX's pre-trial motions should be denied.
DATED: March 28, 1996
LYNNE A. BATTAGLIA United States Attorney
_____________________________ RAYMOND A. BONNER Assistant U.S. Attorney Trial Bar No. 07447 6500 Cherrywood Lane United States Courthouse Suite 400 Greenbelt, Maryland 20770 (301) 344-4030
______________________________ JEFFREY B. CHASNOW Attorney
Office of Consumer Litigation U.S. Department of Justice Room 950N, National Place P.O. Box 386 Washington, D.C. 20044 (202) 307-0101
[updated November 1998] [cited in Civil Resource Manual 136]