On February 26, 2016, a federal jury in Texas returned not guilty verdicts with respect to charges brought against Vascular Solutions Inc. (“VSI”) and its CEO by the U.S. Department of Justice (“DOJ”), dealing a decisive blow in a case brought before the Yates Memo was issued but touted even then as an effort to enforce corporate and individual accountability.
By way of background, in November 2014, DOJ’s Civil Division obtained an indictment charging VSI and its CEO with counts of introducing adulterated and misbranded medical devices into interstate commerce in connection with a sales campaign related to the Vari-Lase product line. The Vari-Lase system was designed to treat varicose veins by sealing them with a laser.
In the press release announcing the case, the Acting AAG for DOJ’s Civil Division stated “[w]e will take action to hold corporations and their leaders responsible when they violate laws intended to protect public health.”
In a November 2014 statement regarding the grand jury indictment, VSI pointedly stated at the outset: “The allegations against us are false and we will contest them vigorously,” adding that it was confident of prevailing at trial. VSI specifically noted that it did not plan to make any changes to its business operations or personnel as a result of the indictment and the Chairman of its Board of Directors made a statement in support.
VSI has now clearly been vindicated. Moreover, following VSI’s success, other companies and their executives may be emboldened to defend a case through trial. At the very least, it is apparent that DOJ’s success in these matters is not a foregone conclusion and that government theories and evidence bear scrutiny and testing.
Much has been said since the Yates Memo about individual accountability having always been a DOJ priority. That is likely true in many respects and the VSI case may above all be a reminder that sometimes a theory of prosecution may be sorely lacking in substantial evidentiary support.