The indictment last November of former GlaxoSmithKline (GSK) in-house counsel, Lauren Stevens, for purportedly obstructing a U.S. Food and Drug Administration (FDA) investigation into whether GSK marketed Wellbutrin, an antidepressant drug, off-label, falsifying and concealing documents, and making false statements sent shockwaves through the legal community. The federal government suffered two setbacks on 23 March 2011 in its efforts to prosecute Stevens. Ruling on a series of pending motions, the U.S. District Court for the District of Maryland rejected, as an initial matter, the government's efforts to deny Stevens the right to assert an advice-of-counsel defense to the charges against her. The district court then dismissed the indictment without prejudice because the government failed to instruct the grand jury correctly on the relevance of the advice of counsel defense before the grand jury decided to indict Stevens.

The indictment alleged that Stevens withheld documents and made numerous materially false statements in letter responses to an FDA inquiry. In particular, the indictment alleged that FDA asked GSK for materials from promotional programs relating to Wellbutrin. The indictment further alleged that Stevens knew that GSK had paid numerous doctors to promote Wellbutrin off-label at various events and had collected documents relating to these events. Notwithstanding this knowledge, Stevens purportedly sent a series of letters "that falsely denied the company had promoted the drug for off-label uses" and concluded that GSK's response to FDA was "final" and "complete."

Stevens defended her actions in responding to the FDA based on advice she received from other in-house attorneys and outside counsel. She specifically asserted that GSK hired King & Spalding to participate in preparing GSK's response, including the drafting, editing, and review of the letters sent to FDA. Stevens further asserted that while GSK identified materials that contained potentially off-label content, the legal team jointly determined that additional information was necessary to determine how or if the material was used and what, if anything, was said at the presentations. Stevens contended that, subsequently, a consensus decision was reached not to produce the material immediately but to seek a meeting with FDA to discuss the materials. The meeting never occurred, but GSK ultimately produced the materials in response to a subsequent Department of Justice investigation commenced in 2004.

Stevens is entitled to assert the advice of counsel defense to attempt to negate intent

Evidencing that the advice of counsel defense may be the dispositive issue in this case, the government filed a motion to preclude the use of an advice of counsel defense with respect to at least the obstruction charge brought under 18 U.S.C. § 1519. The government argued that good faith reliance on advice of counsel did not apply to a general intent crime, like 18 U.S.C. § 1519. The government essentially conceded that Stevens might be entitled to assert advice of counsel with respect to the other two charges but argued that Stevens would have to establish proof of some predicate facts – full disclosure of all pertinent facts, good faith reliance on the advice, and advice from personal counsel (as presumably opposed to company counsel) – before she could seek to rely on advice of counsel.

While the district court agreed that advice of counsel was relevant only to specific intent crimes, it rejected the government's argument that 18 U.S.C. § 1519 is a general intent crime to which advice of counsel was inapplicable. The district court stated in its opinion that

the most reasonable reading of Section 1519 is one which imposes criminal liability only on those who were conscious of the wrongfulness of their actions. To hold otherwise would allow § 1519 to reach inherently innocent conduct, such as a lawyer's instruction to his client to withhold documents the lawyer in good faith believes are privileged.

As a result, the district court held that Stevens was entitled to assert the advice of counsel defense with respect to all the charges.

The government's erronenous advice of counsel instructions to the grand jury required dismissal of the indictment

According to portions of the grand jury transcripts provided to Stevens in response to a motion to disclose the transcripts, prior to the grand jury's decision to indict Stevens, a grand jury member questioned the government about the fact that Stevens received advice and direction from others on how to respond to the FDA inquiry, asking: "Does it matter or is it not relevant?" In response, the government incorrectly instructed the grand jury that the advice of counsel defense was not relevant to the grand jury's indictment decision. The first prosecutor informed the grand jury that the advice of counsel defense could be raised "once the defendant has been charged," while the second prosecutor stated that it could be "relevant at trial."

As the district court stated, the "advice of counsel defense" label was something of a "misnomer." Advice of counsel was not an affirmative defense but rather "negates the defendant's wrongful intent, and therefore demonstrates an absence of an element of the offense – mens rea." Given the possibility that Stevens relied in good faith on such advice in responding to the FDA inquiry and that such reliance would negate the government's charges, it "went to the heart of the intent required to indict." The district court had "little doubt" that the prosecutors' instructions were "erroneous":

A proper instruction would have informed the grand jurors that if Stevens relied in good faith on the advice of counsel, after fully disclosing to counsel all relevant facts, then she would lack the wrongful intent to violate the law and could not be indicted for the crimes charged in the proposed indictment.

As a result, the district court held that the prosecutors' instructions "either substantially influenced the decision to indict or, at the very least, creates grave doubt as to that decision" and therefore the indictment had to be dismissed.

Although Stevens argued that dismissal should be with prejudice and suggested that there may have been some prosecutorial misconduct, the district court found no such evidence: "This is not a case in which the government attempted to affirmatively mislead the grand jury to obtain an indictment – rather it is a case in which prosecutors simply misinstructed the grand jury on the law." Under these circumstances, the district court determined that dismissal without prejudice was appropriate, allowing the government the right to seek "another indictment from a different grand jury that is properly advised" on the advice of counsel defense.

Conclusion

Because the dismissal is without prejudice, the government can seek to indict Stevens before a new grand jury, and the government has indicated that it intends to do so. Not only is the government intent on pursuing this case, but the government's filings here make clear that it vigorously will contest whether the advice of counsel defense should be available in any future proceedings.

The government's determined opposition to the advice of counsel defense in Stevens potentially portends that companies, particularly in highly-regulated industries like medical devices or pharmaceuticals, and their employees may not be impervious to criminal prosecution as a result of how they deal with FDA or government inquiries simply because they seek, obtain, and act on legal advice in taking such actions. The type of conduct relating to the review, production, and presentation of potentially responsive material to the government alleged in the indictment and further described by Stevens in her filings almost routinely arises in the context of company efforts to cooperate and appropriately respond to government inquiries. Importantly, if the government were to succeed in its position that advice of counsel applies only to communications between a client and his or her personal counsel, such a ruling would unduly hamper how corporations, and the individual employees through which corporations act, function when legal advice is needed.