The BLT: The Blog of Legal Times

DOJ Challenges Ruling That Restricted FDA Enforcement Authority

The U.S. Justice Department's consumer protection branch will ask a federal appeals court to overturn a judge's ruling in Florida that restricted the enforcement power of food and drug regulators to punish pharmacies that compound animal medication.

The department's legal team filed a notice of appeal Thursday in U.S. District Court for the Middle District of Florida, where a judge in September rejected the government's effort to shut down Franck’s Lab, Inc. over allegations the pharmacy was skirting food and drug laws in manufacturing new animal drugs.

Lawyers who practice in food and drug regulation said they expected the Justice Department to appeal the judge's decision, which criticized the U.S. Food and Drug Administration’s assessment of its authority to regulate pharmacies that engage in compounding. Medicine that is compounded is mixed together from other ingredients for a specific patient or animal.

The case against Franck’s Lab, represented by a King & Spalding team in Washington, marked the first time in more than seventy years the FDA tried to enjoin a state-licensed pharmacist from the practice of bulk-compounding of animal drugs. An injunction against Franck’s could have had a national ripple effect, potentially exposing hundreds of other pharmacies to civil or criminal enforcement.

A lawyer for Franck’s, King & Spalding partner Mark Brown, who practices in the firm’s FDA and life sciences group, declined to comment on the Justice Department’s appeal to the U.S. Court of Appeals for the 11th Circuit. A DOJ spokesman was not immediately reached for comment this morning.

Franck’s made international news in April 2009 when nearly two dozen polo horses died from a drug overdose in Florida. The state pharmacy board imposed a fine and reprimanded Franck’s, but state authorities allowed the pharmacy to continue its compounding practice without restriction.

DOJ lawyers, including the Civil Division’s John Claud, said the death of the horses led the FDA to inspect Franck’s laboratory in Ocala, Fla., three times in 2009. The horses died from a drug overdose, and not from compounded medication. The civil action against Franck’s was filed in April 2010.

At court hearings this year and in court papers, Claud argued the FDA had previously warned the pharmacy that its compounding practice was against the law. The government alleged Franck’s compounding practice was creating new drugs that were not subject to the rigors of the approval process.

D.C. Lawyer Nominated To Federal Circuit Bench

Richard Taranto, a name partner at the Washington firm Farr & Taranto, was nominated Thursday evening to a slot on the U.S. Court of Appeals for the Federal Circuit.

Taranto, a specialist in intellectual property and patent law, has argued 19 cases before the U.S. Supreme Court, the White House said. Taranto, who has taught patent issues at Harvard Law School, was not immediately reached for comment late Thursday.

The Federal Circuit, based in Washington, is a court of national jurisdiction that hears a range of cases, including patent and trademark disputes, international trade matters and veteran claims cases. There is only one vacancy on the court.

“Richard Taranto is a lawyer of exceptional legal ability and great personal and professional integrity,” President Barack Obama said in a statement. “I am pleased and honored to nominate him to the U.S. Court of Appeals to the Federal Circuit, and I am confident that his intelligence, independence, judgment, and temperament will make him a welcome addition to that court.”

Taranto is a 1981 graduate of Yale Law School and a former clerk for Judge Robert Bork of the United States Court of Appeals for the District of Columbia Circuit and, from 1983 to 1984, for then-Justice Sandra Day O’Connor of the Supreme Court.

Taranto joined the Washington firm Onek, Klein & Farr in 1984. (Former Justice Department antitrust division leader and New York City schools chancellor Joel Klein started the firm.) Taranto left after a couple of years to join the DOJ’s Solicitor General’s Office. He returned to the firm, now known as Farr & Taranto, in 1989.

Since 2009, Taranto has served as a member of the Appellate Rules Advisory Committee for the United States Judicial Conference.

Obama's announcement follows the news that Wilmer Cutler Pickering Hale and Dorr appellate partner Edward DuMont has withdrawn his nomination for a spot on the Federal Circuit. DuMont, nominated last year, would have been the first openly gay federal appeals court judge.

D.C. Superior Court Adopts New Rules on Using Electronic Devices

Hoping to stem the use of electronic devices in courtrooms, District of Columbia Superior Court Chief Judge Lee Satterfield issued a new administrative order (PDF) on Wednesday outlining an official court policy.

The court already has rules against bringing in sound or video recorders, but advances in technology that make it possible to record on nontraditional devices – phones and computers, for instance – meant that a new policy was necessary, Satterfield wrote.

People coming in to court are allowed to bring in cell phones, computers, tablets and MP3 players. Cameras or tape recorders have to be left with court security.

Using electronic devices in court may not only run afoul of rules barring broadcasting from courtroom, Satterfield wrote in the order, but also “be disruptive to court proceedings.”

According to the order, anyone entering a courtroom is required to turn off any electronic devices and put them away. The order doesn’t apply to members of the D.C. Bar or other officials in court on business. Members of the media can get an exemption from the policy from the judge.

The order formalizes rules that are already being enforced unofficially in Superior Court. Judges, court employees and U.S. Marshals will often tell court observers or members of the media to put away phones, for instance, but according to Satterfield’s new order there was no policy on the books.

Anyone caught using a device without permission can be kicked out of the courtroom or the courthouse, and also face civil or criminal contempt sanctions.

Too Much Enforcement? Panel Explores Criminalization Of Business Conduct

The U.S. Justice Department's stepped up enforcement in the pharmaceutical industry has struck "the fear of God" in executives, a top lawyer at GlaxoSmithKline said today, addressing whether prosecutors have gone too far in building cases rooted in business conduct.

The Glaxo lawyer, Elpidio Villarreal, vice-president of global litigation at the pharmaceutical company, said the rhetoric coming out of DOJ in the last couple of years concerns the ability and intent of the government to hold accountable an executive for the person's mere position in the company.

Executives, Villarreal said, speaking generally at a panel discussion sponsored by DRI—The Voice of the Defense Bar, are now living “in fear of losing everything" not for personal conduct but for what someone else may have done.

“It does seem to be imposing an astronomical burden on a well-meaning, well-intentioned, competent executive,” Villarreal said. GlaxoSmithKline, he said, has “spent a fortune” building and strengthening what he called a “robust” corporate compliance program.

The notion that an executive who does the right thing but still could end up getting charged will foster cynicism and create a sense of distrust, Villarreal said. Both feelings, he added, could undermine the government’s legitimate interest in corporate compliance.

Still, Villarreal said the increased government scrutiny is welcomed, calling the pharmaceutical industry “vastly improved” since ten years ago.

The panel’s moderator, Jonathan Rosen, a white-collar defense partner in the Washington office of Shook, Hardy & Bacon, described what he called a “highly aggressive” enforcement environment.

Greenpeace Files Round Two Spying Lawsuit Against Chemical Companies

A Washington federal judge dismissed Greenpeace Inc.'s racketeering lawsuit against two major chemical companies in early September, but Greenpeace wants another shot in a local court.

The environmental advocacy group filed a new version of its lawsuit (PDF) against Dow Chemical Company and Sasol North American Inc. - minus the federal racketeering claims that got the case dismissed during the first go-around - on Friday in District of Columbia Superior Court.

Greenpeace has accused Dow and Sasol of working with their respective public relations firms to organize and carry out a secret spying campaign against the group more than 10 years ago. Greenpeace first filed suit in U.S. District Court for the District of Columbia in April, lodging claims under the federal Racketeer Influenced and Corrupt Organizations Act.

The alleged conspiracy included hiring private security agents to carry out illegal surveillance, infiltrating Greenpeace offices and stealing confidential data. Greenpeace claimed that the espionage was in response to the group’s negative public outreach campaigns against the chemical companies.

U.S. District Judge Rosemary Collyer dismissed the case in September, finding that Greenpeace had failed to lay out allegations that met the standard for a RICO claim.

Greenpeace senior investigator Mark Floegel said in a phone interview Monday that the group decided to refile because they felt Collyer’s ruling “really didn’t address the facts of the case.” Greenpeace is sticking with its original legal team from Cohen Milstein Sellers & Toll and Relman, Dane & Colfax.

Dow, in a statement, said that the company “continues to believe this case totally lacks merit and should have never been filed by Greenpeace.” The company is also keeping its original legal team from Weil, Gotshal & Manges, according to a spokesman.

D.C. Judge Behind Updated Judicial Science Guidelines

The Reference Manual on Scientific Evidence may sound dry, but considering that it's used by judges across the country in weighing expert testimony and scientific evidence produced at trial, the release of a new edition for the first time in 10 years is big news.

Now in its third edition since 1994, the manual is developed by the Federal Judicial Center and National Research Council. The latest edition, which is available for free online, is 1,038 pages, and features several new chapters on scientific evidence that weren't available 10 years ago.

U.S. District Judge Gladys Kessler, of the U.S. District Court for the District of Columbia, served as co-chair of the committee that oversaw the new manual's production. She said the text is designed to serve as a go-to-guide for judges presented with requests to enter expert testimony.

“The point is to give judges enough undisputed scientific background so that when the lawyers start filing all those motions, to either admit expert testimony or exclude expert testimony, that judge has the fundamentals under her belt, on the basis of proper science,” she said in a phone interview.

Kessler said the latest edition includes new chapters detailing advances in neuroscience research and on the especially hot topic of forensic science. The forensic science chapter details new advances in research on handwriting, microscopic hair and fingerprint evidence.

“It raises very significant questions about…some of the specific tests on which we have relied in the judiciary for many, many years,” she said.

Kessler co-chaired the committee with Jerome Kassirer, a professor with the Tufts University School of Medicine. The manual went through an “incredible review process,” according to Kessler, including a review by the committee, by internal reviewers at the National Academy of Science, an external review by experts outside of the academy, and a final review by U.S. District Judge D. Brock Hornby, of the U.S. District Court for the District of Maine.

The Legal Times’ sister publication, Law Technology News, reported yesterday that the committee decided against including a chapter on computer science, but aims to include one the next time around.

Post-Conviction DNA Testing Limited to 'Visible' Skin Cells, D.C. Appeals Court Rules

A District of Columbia law governing post-conviction DNA testing doesn't allow testing for skin cells that are invisible to the naked eye, the District of Columbia Court of Appeals ruled Thursday morning.

The city's Innocence Protection Act of 2001 allows for post-conviction DNA tests, but when it comes to skin tissue, limits testing to "visible" biological materials. Washington appears to be the only jurisdiction nationwide to deny tests of microscopic skin cells, according to the appeals court's opinion (PDF), but the judges wrote that they were bound to respect the text as it's written.

Charles Hood was appealing his first-degree murder conviction in the 1989 death of a 78-year-old woman. Hood unsuccessfully moved for DNA tests on evidence collected at the crime scene in the hopes of finding microscopic skin cells that might prove he was innocent.

Hood’s attorney, Washington solo practitioner Sydney Hoffmann, said Thursday that while she was disappointed, she believed the ruling showed that the judges were “not impressed that the D.C. Innocence Protection Act does not extend anywhere near the reaches of current DNA science.”

Hoffman said she is weighing whether to request a rehearing.

“I come at this from the perspective of representing guy who is 48 years old, incarcerated for 22 years, who’s been contesting consistently and vigorously his conviction,” Hoffman said. “There is a box of evidence in the case and it is available and he is simply seeking to have it tested.”

The Mid-Atlantic Innocence Project and the Innocence Network filed an amicus brief supporting Hood’s appeal, but a representative could not immediately be reached this afternoon. The U.S. attorney’s office, which prosecuted the case, declined to comment through a spokesman.

A jury found Hood guilty of first-degree murder in the death of Helen Chappelle, who died from injuries related to blunt force trauma to the head. Witnesses had reported seeing Hood run into Chappelle’s home, according to the opinion, and then heard yelling, which “turned to what sounded like screams of pain....Then there was silence.”

D.C. Appeals Court Splits on Evidence Disputes

A set of three 2-1 decisions this morning from the District of Columbia Court of Appeals show a court divided on what types of evidence can be introduced by prosecutors at trial and hearings.

In all three cases, the majority upheld the challenged convictions, but one attorney has already said he expects to petition for a rehearing before the full court, based in part on the dissenting opinion in his case.

That attorney, Washington solo practitioner Thomas Heslep, argued on behalf of Ricardo Jones, who was appealing his first degree murder and weapons convictions. In Jones’ case, the appeals court split (PDF) on whether evidence from another crime Jones was accused of committing could be introduced at trial.

Jones was accused of fatally shooting a man in July 2005, after the man exchanged words with Jones’ friend, Joseph Leaks, according to the opinion. Jones and Leaks then went to North Carolina, where they allegedly carried out an armed robbery in August of that same year.

In Jones’ appeal, he argued, among other things, that the trial judge should not have allowed prosecutors to introduce evidence relating to the North Carolina armed robbery, including a surveillance video that showed a security guard being shot.

Jones’ attorney argued that the evidence would prejudice the jury. Prosecutors argued that the North Carolina evidence would link Jones to the gun used in the July 2005 murder, and corroborate the testimony of Leaks’ jail cellmate, who claimed Leaks told him about both crimes.

Judges John Fisher and Michael Farrell agreed with prosecutors, writing that the evidence went directly to the issue of identity, and that the prosecutors were not misusing the evidence to prove a general point that Jones was predisposed to break the law. Judge Vanessa Ruiz disagreed, writing that the North Carolina evidence, especially the surveillance video, prejudiced Jones and warranted a new trial.

“As our cases throughout the years bear out, other crimes evidence may be unfairly prejudicial even where the prosecutor did not intend to use it to show a predisposition to commit a crime,” Ruiz wrote.

Cigarette Companies Claim Graphic Labels Violate First Amendment

Five of the nation's largest cigarette manufacturers filed suit (PDF) Tuesday against the U.S. Food and Drug Administration challenging new regulations that require them to print graphic images depicting the health risks of smoking on cigarette packaging and advertisements.

First Amendment veteran Floyd Abrams of Cahill, Gordon & Reindel is representing the tobacco companies, which include R.J. Reynolds Tobacco Co., Lorillard Inc., Commonwealth Brands, Inc., Liggett Group LLC, and Santa Fe Natural Tobacco Company Inc.

"It violates the First Amendment to require the manufacturer of a lawful product to be required to use half of its package essentially to urge people not to buy the product," Abrams said in a phone interview this morning. "The issue is whether the government can do that and we think that the First Amendment bars anything like that sort of compelled speech."

A spokeswoman for the Food and Drug Administration said the agency does not comment on pending litigation.

In the complaint, filed in U.S. District Court for the District of Columbia, the companies note that they've never brought a legal challenge before against regulations requiring written warnings to be printed on cigarette packages and ads.

The difference between the traditional warnings and the new ones, they argue, is that the former represent "uncontroversial factual information," while the latter "cross the line into governmental anti-smoking advocacy."

Under the Family Smoking Prevention and Tobacco Control Act of 2009, the FDA created nine new written warnings that list a phone number for a quitting hotline and are accompanied by color pictures, including a side-by-side comparison of diseased and non-diseased lungs, a man with a hole in his throat and a body on an autopsy table.

The new regulations will go into effect in September 2012. In unveiling the new warnings in June, the agency said that the new warnings were needed to encourage adults to quit smoking and prevent children from starting. "These labels are frank, honest and powerful depictions of the health risks of smoking," Health and Human Services Secretary Kathleen Sebelius said in the statement.

The plaintiffs' legal team also includes attorneys from Jones Day, Latham & Watkins, Covington & Burling and O'Melveny & Myers. The case has been assigned to U.S. District Judge Richard Leon.

D.C. Circuit Vacates Prison Sentence in Health Care Fraud Case

A federal appeals court today unanimously vacated a doctor's 53-month prison sentence in a fraud case, saying the trial judge failed to provide a satisfactory reason for bumping up the prison sentence a year above the guideline range.

Federal prosecutors in Washington alleged the doctor, Ehigiator Akhigbe, defrauded the private insurance company Amerigroup Corporation through claims for visits and surgical procedures that did not take place or were misrepresented. Akhigbe, according to the government, created false progress notes to substantiate fraudulent billings.

Akhigbe’s lawyers, David Schertler and Veronica Jennings of Washington’s Schertler & Onorato, maintained any billing discrepancies stemmed from negligent oversight, not intentional fraud. Following a jury trial in Washington federal district court in December 2009, Akhigbe was convicted and faced a guideline sentence between 33 and 41 months.

The U.S. Court of Appeals for the D.C. Circuit today vacated the 53-month sentence but kept intact the jury’s verdict finding Akhigbe guilty on one count of health care fraud and 16 counts of false statements in health care matters.

In sentencing Akhigbe to a term above the guidelines, Senior Judge Sterling Johnson Jr. of Brooklyn federal district court, sitting by designation, said fraud in the health care system contributes to the rising cost of care.

“[A] sentence above the guidelines will promote respect for the law and provide just punishment for the offense,” Johnson said in a ruling. “It will provide adequate deterrence and protect the public.”

The appeals court panel—Judges Douglas Ginsburg, David Tatel and Janice Rogers Brown—said today that broad statements about the cost of health care would apply to any defendant and do not, on their own, provide sufficient reasoning for a 12-month increase in the prison sentence.

“Devoting most of its discussion at sentencing to its views about the severity of Akhigbe’s offense, the district court commented generally and somewhat hyperbolically about the negative consequences of health care fraud, which the court said generates ‘much of the cost’ in the United States health care system,” Tatel said.

The D.C. Circuit panel said Johnson’s “oral and written statements are clearly insufficient." The court, however, said it recognized trial judges do “necessarily and appropriately exercise professional judgment in determining how much reasoning to give when explaining discretionary sentencing decisions.”

Johnson, the appeals court, doesn’t need to “do the impossible” and provide a detailed reason why the court believes 12 months—and not, say, 11 or 13—is the appropriate increased above the top of the guideline.

Jennings, who argued the case for Akhigbe in the D.C. Circuit in April, said in an e-mail: “We are still in the process of reviewing the entire decision, but we are very pleased the Court recognized that Dr. Akhigbe’s original sentencing decision was not supported by the record and that he will have the opportunity for a new sentencing hearing.”