In November 2010, the Department of Justice (DOJ) issued a press release discussing a six-count indictment against Lauren Stevens that subjected her to a maximum of 60 years in federal prison. When she was indicted, Stevens was a retired vice president and former in-house attorney for GlaxoSmithKline (GSK).
The Maryland federal indictment charged Stevens with two counts of obstruction and four counts of making material false statements during a Food and Drug Administration (FDA) investigation into whether GSK improperly introduced a misbranded drug—Wellbutrin—into interstate commerce.
Tony West, the Assistant Attorney General for the Civil Division noted that, “[w]here the facts and the law allow, the Justice Department will pursue individuals responsible for illegal conduct just as vigorously as we pursue corporations.” A recent article from the Food and Drug Law Institute (FDLI) noted that DOJ “was vigorous indeed in its prosecution of Stevens.”
On May 10, 2011 United States District Judge Roger Titus dismissed the government’s indictment for the second time. Judge Titus’s Order granting Stevens’ Rule 29 Motion discussed the appropriate parameters of attorney-client privilege and the importance of advice of counsel extensively. The FDLI article recommended that, “All in-house and outside counsel should read Judge Titus’ Rule 29 Order dismissing the case for three important reasons.”
- First, it reminds us all of how important privileged and candid communications are between lawyer and client.
- Second, it demonstrates how aggressively and effectively the government can prosecute a case, including seizing clearly privileged documents against a company’s wishes.
- Third, it serves to illustrate that there are times when a zealous, albeit respectful, defense is the best tactic, particularly when confronted with some of the government’s theories concerning enforcement under FDCA and its implementing regulations.
In his Rule 29 Order, the Judge concluded that Stevens “should never have been prosecuted and that she should be permitted to resume her career.” It was the first time he had granted a Rule 29 Order in his almost eight years on the bench.
The FDA Investigation
The FDA began its investigation into whether GSK improperly promoted the anti-depressant drug Wellbutrin SR for weight loss, an off-label use, in late 2002, almost a decade before Stevens was indicted. On October 9, 2002, FDA sent GSK an initial letter requesting “copies of all slides . . . and other materials presented or distributed at any program or activity related to Wellbutrin” and “all compensation provided to individuals involved in programs or activities related to Wellbutrin.”
Stevens, GSK’s Vice President and Associate General Counsel for U.S. Legal Operations at the time, headed up the company’s response to FDA’s inquiries. GSK agreed to make a good faith effort to voluntarily provide FDA with materials presented at GSK-sponsored promotional programs, including those presented by outside consultants. Stevens, aided by in-house GSK lawyers and outside counsel, initiated an internal investigation. The legal team solicited documents from 550 out of over 2,000 consultants and received 40 responses from the doctors who worked with GSK.
Twenty-eight of the slide decks received from these doctors discussed off-label uses for Wellbutrin. Stevens and her team sent follow-up letters to these physicians stating that she had “reviewed the content of your presentations and determined that they contained material relating to GSK products (e.g. Wellbutrin SR) and uses that are not currently FDA-approved indications for those products. Any affirmative presentation in a GSK-sponsored non-independent program suggesting that a GSK product is effective in conditions that are not approved indications is inconsistent with FDA requirements, GSK policy and your contract with GSK.” GSK responded to FDA’s inquiry in a number of separate written communications in the first half of 2003. GSK, among many other things, represented that:
- GSK had not developed a program or activity to encourage the use of Wellbutrin as a means to achieve weight loss.
- GSK had not developed or maintained promotional plans to promote Wellbutrin for weight loss.
- GSK had two types of advisory boards: national and local (omitting any mention of GSK’s “special issues boards”).
- Attendees were not paid, reimbursed or otherwise compensated to attend GSK’s speaker programs, “with the exception of reimbursement for parking fees in some cases.”
The government charged all four of these statements as federal felonies. GSK’s initial letter to FDA in May 2003 included a spreadsheet containing titles of doctors’ presentations and noted that some appeared to contain information regarding of-label uses of Wellbutrin.
Stevens and her team of lawyers did not provide the actual physician presentations to FDA at that time. It is worth noting that Stevens signed all of the letters to FDA. Nevertheless, the first drafts were done by outside counsel, and the inal submissions were the yield of a collaborative process that included two other in-house lawyers and GSK’s outside counsel. The advice that she received from these lawyers would prove to be the most significant pillar of her defense strategy.
The Government’s Case
Before Stevens’ November 8, 2010 indictment was returned by a grand jury in Maryland, the government convinced a Massachusetts federal magistrate judge to order that attorney-client privileged documents from the time when GSK was interacting with FDA on the Wellbutrin matter be released to the government. This was ordered pursuant to the crime fraud exception to the attorney-client privilege.
The Crime Fraud Exception is designed to overcome the attorney-client privilege only when the evidence established that the client intended to perpetuate a crime or fraud and the communications at issue between the attorney and the client were made in furtherance of such crime or fraud.” Judge Titus noted that the use of the crime fraud exception to force disclosure of clearly privileged documents was an “illustration of how aggressively the government prosecuted this case.” Moreover, the government even declined to try the case in front of a judge, at the request of Stevens, and instead, insisted on its right to try the case to a jury.
When he dismissed the government’s case, Judge Titus said that, “with the 20/20 vision of hindsight . . . the Massachusetts Order was an unfortunate one.” He went on to say that the government should not have been “permitted to forage through confidential files to support an argument for criminality of the conduct of the defendant.” He further noted that the case had “profound implications for the free flow of communications
between a lawyer and client when the privilege is abrogated.” Consequently, the article pointed out two examples of attorney-client communications that the government viewed as part of a crime in this case.
First, the government attempted to prove the element of “corrupt intent” with excerpts from Stevens’ handwritten notes that weighed possible benefits of, and problems caused by, producing the doctors’ slide decks to the FDA. These were notes that she took in meetings with witnesses and with the lawyers with whom she was working to conduct the internal investigation. They reflected her thoughts and legal conclusions. They included summaries of information she received from other lawyers and how she viewed such information. These notes were actually quoted in the indictment against her.
Second, the government believed that the memorandum, which was developed by GSK’s outside counsel, demonstrated that Stevens knew she was obstructing justice. The memo balances the pros and cons of producing the slide decks.
Some Practical Recommendations
Ultimately, Judge Titus stated in his Rule 29 Order at the conclusion of the government’s case that “a lawyer should never fear prosecution because of advice that he or she has given to a client who consults him or her . . . . here is an enormous potential for abuse in allowing prosecution of an attorney for the giving of legal advice.”
This statement is directly tied to the very basic notion in the Preamble to the Model Rules of Professional Conduct that “it is a lawyer’s obligation to zealously protect and pursue a client’s legitimate interests, within the bounds of the law.” Judge Titus was quite clear that the life-line that drove his decision on Stevens’ Rule 29 Motion was her advice of counsel defense. The Judge concluded that Stevens was practicing law by zealously representing her client.
Moving forward, “the use of the crime fraud exception to the attorney-client privilege should be carefully considered by the life sciences industry. Vigilant communication must be practiced, even in written product that is clearly at the core of the privilege. The article concluded by noting that, life science companies and their in-house counsel should consider the following:
- Involve the company’s legal department.
- In complicated high-risk interactions with any agency, corporate lawyers should ensure they work “shoulder-to- shoulder” with a multi-disciplinary team of attorneys who understand the government entity with which they are dealing.
- Encourage company counsel to carefully consider whether outside counsel should sign any submission.
- Keep dialogue civil, even when company views the government as being unfair.
- Draft any written product with an eye toward how a criminal investigator would interpret writing with full benefit of hindsight. Particularly true of all submissions to government, although it is a warning that should be heeded for all documents, even those most lawyers would never expect to receive public scrutiny.
Additionally, a client alert from the law firm Ober Kaler offered some recommendations based on the Stevens case as well.
- Lesson 1: Know when to engage outside counsel. In house counsel should make clear to government officials from the outset that they will be relying, in good faith, on the advice of outside counsel throughout the investigation, since it appears that their own guidance as in house counsel may not be enough in the eyes of government investigators.
- Lesson 2: Engage Counsel Early On. When served with a formal or informal government investigatory demand, engage counsel and specifically outside counsel early on in the investigation to take advantage of the attorney-client privilege and the advice of counsel defense from the get go. Indeed, in house counsel should take these steps to alleviate the risk of government charges upon receiving an investigation inquiry.
- Lesson 3: Review the Engagement Letter Carefully. At the outset, the scope of representation by outside counsel should be well defined in a detailed engagement letter. To that end, in house counsel should ensure that the engagement letter with outside counsel defines the scope of the bona fide representation. Make sure to state explicitly in the letter the extent to which in house counsel will rely on the advice of outside counsel. For example, the letter should clearly state whether outside counsel will submit documents to the government on the client’s behalf.
- Lesson 4: Create a Paper Trail. Create a paper trail that documents the investigation process followed by in house counsel at the advice of outside counsel. Documentation alleviates the risk of an investigation going awry. In Stevens, the judge specifically relied on favorable evidence found in house counsel’s correspondence with outside counsel. The documents showed that outside counsel was intimately involved with GSK’s document production that triggered Steven’s indictment. For example, the judge pointed to letters and emails between in house counsel and outside counsel that showed that in house counsel was diligently relying on outside counsel’s advice. Taking Judge Titus’ reasoning at face value, in house counsel should heed his advice and be confident in making full disclosures to outside counsel as a matter of good public policy. Doing so will help to ensure that the free flow of information from in house to outside counsel is well documented.
- Lesson 5: General Counsel’s Must Educate Their In House Counsel. In light of Stevens, the advice of counsel defense is worthy of a refresher for in house counsel. Taking precautions on the front end and educating your in house attorney staff can protect against criminal allegations.