Citing "Pure Legal Impossibility," NECC Defendants Seek Dismissal

By Walter F. Roche Jr.

Citing a comment by the presiding judge himself, three of the remaining defendants in the fungal meningitis probe, are asking for dismissal of a key conspiracy charge.
In motions filed this week in U.S. District Court in Boston, Mass., the group, headed by a part-owner of a defunct drug compounding company, is asking for dismissal of a charge that they conspired to defraud the U.S. Food and Drug Administration by evading regulation by that agency.
Gregory Conigliaro, who was a vice president of the New England Compounding Center, filed an 11-page memorandum contending that it was impossible for his firm to defraud the FDA because FDA officials didn't even believe at the time that they had clear jurisdiction over drug compounders.
Conigliaro is one of seven defendants charged with the conspiracy and a trial is expected in late Fall. In fact the conspiracy count is the only one Conigliaro has been charged with. Joining him in the motion to dismiss were defendants Alla Stepanets and Sharon Carter, former NECC employees.
Conigliaro's motion cites comments made by presiding U.S. District Judge Richard G. Stearns during the recent trial of NECC's president, Barry Cadden. Cadden was convicted on racketeering charges but cleared of 25 counts of second degree murder.
As the 10-week trial inched toward conclusion Stearns said it was hard to see just what it was that the FDA was defrauded of.
His comment followed the introduction by Cadden's lawyers of testimony by then FDA Commissioner Margaret Hamburg who told a congressional committee in 2012 that her agency did not believe it had clear legal authority to regulate compounders like NECC. She testified as the deadly fungal meningitis outbreak was still unfolding.
Conigliaro's motion also cites testimony by Janet Woodcock, then director of the Center for Drug Evaluation and Research, who expressed similar views.
The two regulators told congress that the FDA's authority over drug compounders was limited, unclear and contested.
Citing their comments, the motion states, "Thus it was impossible for the FDA to be defrauded in the manner the government has alleged."
Filed for Conigliaro by his attorney, Dan Rabinowitz, the memo adds, "Pure legal impossibility exists when actions which the defendant performs or sets in  motion, even if fully carried out, would not constitute a crime."
In addition to the lack of legal authority, the motion contends that there was no clear legal distinction at the time between drug compounders and drug manufacturers.
Prosecutors have charged that NECC, while licensed as a compounding pharmacy, was acting as a drug manufacturer and drug manufacturers were subject to direct FDA regulation.
The motion concludes by charging that the conspiracy to defraud charge "is entirely predicated on the faulty premise that the law drew a clear distinction between a compounding pharmacy and a manufacturer."
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FDA, Mass. Board Can be Found at Fault for Outbreak

By Walter F. Roche Jr.

A federal judge has ruled that the U.S. Food and Drug Administration and a state pharmacy board can be found at fault for the 2012 fungal meningitis outbreak that took the lives of some 77 patients who had been injected with fungus contaminated drugs.
In a nine-page ruling issued today U.S. District Judge Rya Zobel concluded that lawyers for a Tennessee pain clinic had presented sufficient evidence in her Boston, Mass. courtroom for the claims that the two agencies acted recklessly to go forward.
Zobel denied a motion filed by attorneys for some 20 Tennessee victims of the outbreak to dismiss claims by the Specialty Surgery Center in Crossville, Tenn. that the government agencies could be found at fault for failure to take action against the New England Compounding Center, the maker of the deadly spinal steroids.
Citing a "special duty" provision of Tennessee's comparative fault law, Zobel concluded that the clinic's lawyers presented "sufficient assertions to state an affirmative defense of comparative fault" against the FDA and the Massachusetts Board of Pharmacy.
Under Tennessee law, Zobel's ruling could clear the way for any damages awarded against the surgery center to be reduced by the percentage of fault found by a jury against the FDA and the Massachusetts board. However, the two agencies, who are not parties to the suit, could not be forced to pay anything to victims.
Chris Tardio, one of the clinic lawyers, said the ruling means "we may present the jury with a full picture of how the meningitis outbreak occurred, including how it could have been prevented by those responsible for monitoring NECC's activities."
Noting that the ruling is only a preliminary one,  a victims' attorney expressed confidence in the ultimate outcome, adding "We are confident that once we present this to the court on a full factual record that the court will find that the governmental agencies were not reckless."
Zobel did dismiss parallel comparative fault claims against the Tennessee Health Department and the Tennessee Board of Pharmacy.
Zobel cited the claims by the surgery center lawyers that the FDA received numerous complaints that NECC was violating the FDA's guidance on drug compounding but "nevertheless failed to take any subsequent action to address the serious nature of the complaints which proximately caused the alleged injuries."
She noted that as early as 2002 the FDA was made aware of problems at NECC and four years later issued a warning letter but then failed to act.
"Defendants allege the FDA acted recklessly because it knew NECC had sterility and potency issues but failed to take any substantive action," the ruling states.
As for the Massachusetts board, Zobel cited evidence presented by the clinic's lawyers showing the the board "was aware of NECC's failure to comply with applicable state and federal law and manufacturing guidelines, failed to inform other state pharmacy boards of  of the threat to public health caused by NECC's non-public track record of regulatory noncompliance with state and federal law."
In a footnote Zobel noted the November 2012 congressional testimony of then Massachusetts Health Commissioner Lauren Smith that the state pharmacy board's failure to take decisive action against NECC in response to the 2006 complaints "has contributed to these tragic events."
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Final Victims' Payments Due By Summer

By Walter F. Roche Jr.

The second and final payments to victims of the 2012 fungal meningitis outbreak should come this summer and the underlying court case should be nearing final resolution by August.
That's what a federal judge was told yesterday by attorneys involved in the civil litigation stemming from the deadly 2012 fungal meningitis outbreak.
The checks due this summer will come from a fund established under the bankruptcy of the New England Compounding Center, the now defunct firm blamed for the outbreak.
U.S. District Judge Rya Zobel called the report "very encouraging" and asked Kristen Johnson, one of the lawyers for victims, to provide a written version of the verbal report.
"There's not that much left come August," Johnson said of the underlying case. "We're just about done with this MDL (litigation)."
She noted that there will be an additional fee allotment to attorneys who performed work done for the benefit of all of the victims. The second payment is expected to total about the same as the first, $6 million.
Ben Gastel, one of the attorneys for Tennessee victims of the outbreak, told Zobel checks from a settlement with the owners of a Nashville clinic, the Saint Thomas Outpatient Neurosurgical Center, should be going out next month. The exact terms of that settlement have never been made public, but it is believed to be in excess of $20 million.
Gastel said victims will be getting an initial check that is estimated at about 90 percent of what each victim will ultimately receive. He said a small reserve will be held back to cover any final expenses.
Meanwhile mediation is expected in cases brought against the Select Surgery Center in Crossville, Tenn. The same mediator used in the Nashville cases is handling those cases.
Zobel also got reports on efforts to settle or bring to trial cases against a Maryland clinic.
Zobel said she would contact a judge in Maryland who is handling the cases brought against the Box Hill Clinic in state courts to coordinate a schedule for the cases remaining in her court.
"I will not try to run him over,"Zobel said, but she made clear that she intends to keep the cases now before her in federal court.
She also agreed to rescind an order she issued April 7, setting four Box Hill cases for trial.
"I acknowledge I was wrong," she said, adding that she jumped the gun.

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Seven NECC Defendants Seek November Trial

By Walter F. Roche Jr.

Seven remaining defendants in the federal criminal case stemming from the federal probe of a defunct Massachusetts drug compounding company are requesting a November date for their trial on fraud and conspiracy charges.
In a motion filed late last week, lawyers for the defendants who just had an April trial date canceled, said a November date would allow enough time for the completion of the scheduled trial of another codefendant, Glenn Chin, who has an August trial date.,
The Friday motion follows the recent completion of the trial of Barry Cadden, the former president and part owner of the New England Compounding Center, the Framingham, Mass. firm blamed for a deadly 2012 fungal meningitis outbreak.
Cadden was convicted of racketeering, conspiracy and mail fraud charges after a 10-week trial. The jury acquitted him on second degree murder charges.
Chin faces the same charges as did Cadden.
The motion filed by the seven remaining defendants opposes an open ended trial delay proposed by federal prosecutors. They proposed a delay until an appeals court rules on a prosecution motion to overturn a ruling by U.S. District Judge Richard G. Stearns dismissing several counts in the original 2014 NECC indictment.
The motion states a November date "would permit an interval period between the two cases and also provide a specific trial date that will assist with the scheduling complexities inherent in a multi-week multi-defendant trial.
The motion was filed in behalf of Gregory Conigliaro, Gene Svirsky, Christopher Leary, Joseph Evanosky, Scott Connolly, Sharon Carter and Alla Stepanets.
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Cadden Demands Jury Records Be Handed Over

By Walter F. Roche Jr.

The former drug company executive convicted on racketeering charges is asking a federal judge to order prosecutors to turn over copies of materials given to the jurors who found him guilty last month.
In an eight-page motion filed in U.S. District Court in Boston, Mass. lawyers for Barry J. Cadden charged that a binder full of test results on drugs produced by Cadden's company was improperly provided to the jury while it was deliberating.
The motion charges that the assistant U.S. Attorneys who prosecuted the case refused a request to provide a copy of the binder and a PowerPoint presentation that was provided to jurors just before they began their deliberations.
The motion follows Cadden's request to U.S. District Judge Richard G. Stearns to have the jury's guilty verdicts reversed or that he be granted a new trial.
Cadden was convicted on 58 counts of racketeering, conspiracy and mail fraud. The 12-member jury acquitted him on 25 counts of second degree murder.
Cadden was one of 14 people indicted following a lengthy federal probe of the 2012 fungal meningitis outbreak caused by drugs shipped from the New England Compounding Center. Cadden was president and part owner of NECC.
In the motion to compel, preserve and/or complete the trial record,"Cadden's attorneys said they were certain the binder had been given to jurors because it was among the materials returned after the jury finally adjourned.
"The government submitted a non-admitted binder to the jury," the motion states, adding that "it was only after the verdict that Cadden learned, as the government well knew, that the jury had the binder when it deliberated."
"Even now the government refuses to provide Cadden with a copy of that binder," the filing continues.
As the motion notes during the trial Stearns repeatedly assured Cadden's lawyers that the binder did not go the jurors,  even stating that he went into the jury room to make sure it wasn't there.
"The government had a duty to correct the court's misunderstanding, but instead allowed the error to continue," the motion adds.
Cadden's lawyers charged that through the use of the binder, prosecutors made a "surreptitious and successful" effort to provide jurors with a copy of a mycology report from the New York State Health Department  that was "highly prejudicial."
According to the motion the PowerPoint presentation included a compilation of test results that had never been provided to defense lawyers.
"The PowerPoint must be provided to clarify the record," the motion states, adding that the binder is also needed for Cadden to pursue his effort to have the charges overturned.
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Cadden Charges Prosecutors Gave Jury Improper Evidence

By Walter F. Roche Jr.

Attorneys for a former drug company executive are charging that federal prosecutors somehow gave a secret binder to jurors that gave one-sided information and may have led to their client's conviction on racketeering, conspiracy and mail fraud charge.
The charges against the prosecution were included in a massive 64-page memorandum submitted to support a motion to either acquit Barry Cadden on all charges or grant him a new trial.
The 64-page memorandum also accuses federal prosecutors of attempting to mislead the jury by presenting evidence that they knew or should have known was false.
"The government presented misleading and factually incorrect evidence to manipulate the chronology to falsely show Cadden knew of a problem with the methylprednisolone acetate sooner than he did," the memo states.
The memo was filed to back Cadden's motion for acquittal on the 58 counts he was convicted on last month by a 12-person jury sitting in Boston, Mass.
Cadden, who is scheduled for sentencing on June 29, was convicted of racketeering, conspiracy and mail fraud following a 10-week trial. The charges stem from a federal probe of the 2012 fungal meningitis outbreak that sickened 778 patients across the country, killing 77 of them.
The memo charges that despite repeated assurances from U.S. District Judge Richard G. Stearns to the contrary, prosecutors improperly gave jurors a binder full of evidence against their client without providing evidence showing his innocence.
"There is no question the non-admitted binder was, in fact, submitted to the jury," the filing states.
They also charged that prosecutors presented jurors with a summary testing chart that had never been introduced as evidence and excluded rebuttal evidence presented in Cadden's defense.
Repeating arguments presented in the acquittal motion, Cadden's lawyers said prosecutors improperly influenced the jury by presenting "a sea of prejudicial evidence" about the deaths of 25 patients who died after being injected with steroids from the New England Compounding Center, a company headed and part owned by Cadden.
The jury acquitted Cadden on the second degree murder charges. Although a majority voted for conviction on most of those counts, a unanimous vote was needed.
Prosecutors, the memo charges, "presented evidence in the hope -ultimately futile-that it could inflame the jury to hook Cadden on at least one or more of the murder charges,"the filing continues.
"For 10 weeks the government paraded witnesses before the jury to testify about heart wrenching stories of death and suffering," .
Prosecutors, the memo continues, tried to leave jurors with the impression that Cadden delayed disclosure of the discovery that NECC drugs were laden with a deadly fungus.
Citing conflicting testimony about a phone call Cadden made to an Indiana clinic, his lawyers said the government knew from telephone records that the call couldn't have been made on the date a clinic employee testified she took the call.
It was "improper for the government to present evidence it knows is false," the memo states.
Cadden's legal team, headed by Bruce Singal, said prosecutors repeatedly tried to mislead the jury by presenting false and misleading testimony and evidence.
"Barely a day went by in this trial in which the government did not mislead the jury with distorted, incomplete or inaccurate evidence," the brief states.
The memo asserts that there was insufficient evidence to prove the racketeering and mail fraud charges despite the jurors unanimous votes.
As for the conspiracy, the memo charges that the government never proved there was an agreement between Cadden and any of the other defendants to break the law.
Contact: wfrochejr999@gmail,com