NECC Judge Overturns Unanimous Jury Verdicts

By Walter F. Roche Jr.

Overturning unanimous jury verdicts a federal judge today acquitted two defendants, including a part owner, of conspiracy charges for their roles at the company blamed for a deadly 2012 fungal meningitis outbreak.
In a 51-page ruling U.S. District Judge Richard G. Stearns sitting in Boston, Mass. acquitted Gregory Conigliaro and Sharon Carter of charges they conspired to defraud the U.S. Food and Drug Administration. Conigliaro was vice president and 10 per cent owner of the now defunct New England Compounding Center. Carter was a pharmacy technician and NECC's director of operations.
They were among 14 people indicted in late 2014 following a two year probe of the 2012 fungal meningitis outbreak, which ultimately took the lives of more than 100 patients in more than 20 states.
Prior to Stearn's ruling late Friday, only one of the defendants was acquitted.
Citing an argument he himself had suggested, Stearns cited testimony that at the time of the outbreak FDA officials did not believe they had clear authority over a state licensed entity like NECC.
"The defendants rights to fair notice and due process were violated," Stearns wrote.
Calling the arguments of federal prosecutors "worrisome," Stearns granted the motions for acquittal filed in behalf of Conigliaro and Carter.
"Ultimately resting criminal liability on such a shaky foundation raises legitimate concerns of constitutional due process," Stearns concluded.
Federal prosecutors had argued that regardless of the FDA's authority over state licensed drug compounders, NECC was acting as a drug manufacturer and was thus subject automatically to stricter FDA regulation. Cited specifically was an Oct. 1, 2004 letter from Conigliaro in which he described NECC as a "small scale family run" pharmacy.
Carter and Conigliaro were among five convicted late last year by unanimous jury verdicts delivered on Dec.14 of last year following an eight week jury trial.
The argument that it was a legal impossibility for the FDA to be defrauded of a power it did not know it had was at center stage at a February hearing in Stearns' courtroom. The argument was raised by Daniel Rabinowitz, Conigliaro's lawyer, and Michael Pineault representing Carter.
Stearns said at that hearing that he particularly liked Pineault's argument that while the FDA may have had the authority to regulate NECC, it chose not to do so.
In the ruling issued today, Stearns recounted the arguments raised by defense lawyers about the confusion within the FDA itself after the U.S. Supreme Court struck down, at least in part, a new statute which would have given the agency clear regulatory authority.
"Confusion created a regulatory lacuna in the borderland in which NECC progressively came to operate," Stearns wrote. "The picture emerges of an agency struggling to make sense of a regulatory scheme."
Carter and Conigliaro, he concluded, "could not have defrauded the FDA by interfering with the relevant functions because there were none to speak of."
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