A federal district court has dismissed the indictment of a former in-house counsel at pharmaceutical company GlaxoSmithKline (“GSK”), Lauren Stevens, who was charged in November 2010 with obstruction of a proceeding, false statements, and falsifying or concealing documents, for her role in responding to a document request from the Food and Drug Administration (“FDA”).
The case stems from an FDA investigation of allegations that GSK had promoted the prescription antidepressant Wellbutrin for unapproved uses, such as to treat obesity. Stevens led the legal team responding to the FDA’s document requests. Among other things, the indictment alleged that Stevens withheld documents showing that GSK promoted off-label use of Wellbutrin and compensated attendees at Wellbutrin promotional events. At the same time, the indictment alleged, Stevens sent letters to the FDA on behalf of GSK falsely stating that GSK had not developed, devised, established, or maintained any program or activity to promote Wellbutrin as a weight-loss drug and had not compensated attendees at the promotional events. In responding to the FDA inquiry, Stevens was assisted by both in-house counsel from GSK, and outside counsel from the firm of King & Spalding.1 Her primary defense to prosecution is that she relied in good faith on the advice of counsel in guiding her response to the FDA’s inquiry.
Stevens filed a motion to dismiss the indictment in the federal district court for the District of Maryland, on the ground that the DOJ prosecutors who convened the grand jury had erroneously instructed the grand jurors with respect to the advice of counsel defense and failed to present critical exculpatory evidence. In connection with litigating the motion to dismiss, it was revealed that one of the grand jurors had asked: “Does it matter that . . . Lauren Stevens was getting direction from somebody else about how to handle this? Does it matter or is it not relevant?” Memorandum Opinion, United States v. Stevens, 8:10-cr-00694-RWT (March 23, 2011), at 11. In response, one prosecutor stated that advice of counsel “is a defense that a defendant can raise, once the defendant has been charged,” and the other stated that “it can be relevant at trial,” but “if you find probable cause for the elements here that the attorney Lauren Stevens reasonably knew that she was making false statements and the elements . . . then that’s sufficient to find probable cause [to indict].” Id. at 12. Thus, the prosecutors told the grand jurors that advice of counsel is not relevant at the charging stage.
In opposing Stevens’ motion to dismiss, the government argued the prosecutors’ responses to the grand jury correctly stated the law on the advice of counsel defense or, if it did not, that the erroneous instruction was not significant enough to warrant dismissal of the indictment. But the district court, relying on appellate case law from the Fourth and Fifth Circuits, concluded that the advice of counsel “defense” is not an affirmative defense at all, but a factor that can negate an element of the crime, i.e., mens rea. Id. at 13-15. As a result, the district court held, the prosecutors’ statement of the law to the grand jury was plainly erroneous, since the prosecutors informed the grand jury that advice of counsel is not relevant at the charging stage. Id. at 16. Moreover, the misstatement of law was sufficiently serious to warrant dismissal because “[t]he grand juror’s question was not just any question, but rather was much akin to asking about an elephant in the room. The grand jury was well aware of the Defendant’s role as the leader of a team of lawyers and paralegals. . . . The question went to the heart of the intent required to indict.” Id. at 18.
The court concluded that although the prosecutors did not engage in willful misconduct, there was grave doubt as to whether the grand jury’s decision to indict was free from the substantial influence of the erroneous instruction. As a result, the court dismissed the indictment, albeit without prejudice, thereby permitting the government the ability to seek a new indictment before another grand jury, provided they instruct the grand jury correctly on the advice of counsel defense. Id. at 19.
This decision represents a rare dismissal based on prosecutorial error in the grand jury. Whether the government will appeal the district court’s dismissal, or seek to obtain a new indictment, remains unknown. What is certain is that the matter will continue to be closely watched given its significance for both in-house and outside counsel who handle government investigations and issues such as the appropriate response to government requests for documents and information, the risks if the government perceives that information it receives is incorrectly represented to be accurate or complete where represented to be so, and the respective roles of in-house and outside counsel in navigating those risks.