First Circuit Poised to Deflate Verdict on Meningitis Outbreak

BOSTON (CN) – A drug-company owner convicted in a 2012 nationwide meningitis outbreak pushed the First Circuit for a reversal Tuesday by accusing prosecutors of having prejudiced the jury with “gruesome, grisly and emotional” testimony about victim suffering.

The testimony had “no probative value,” said Bruce Singal, an attorney with Barrett & Singal, noting that his client Barry Cadden had already stipulated that some 751 patients were sickened by mold-tainted steroid injections produced by his New England Compounding Center.

Considered the worst public health crisis in recent U.S. history, the outbreak caused 64 deaths — many of whose details were relayed in excruciating detail at the trials of Cadden and pharmacist Glenn Chin.

In his appellate brief for Cadden, Singal described the government as having relayed “devastating descriptions with visuals of how the fungus ate away at [victims’] brains and other parts of their bodies.”

Even the trial judge noted how testimony from next of kin made an emotional impact on the jury, Singal said.

Indeed, the brief emphasizes, when pharmacists and other defendants not charged with murder went on trial, the judge opted to exclude testimony from CDC doctor Benjamin Park, saying the evidence was “so heinous or shocking as to invite an emotional reaction from the jury.”

Citing the jury’s rejection of the second-degree murder charges against Cadden, Singal said the government brought the counts solely as a basis to introduce graphic and inflammatory evidence that would prejudice the jurors on the less serious counts of fraud and mislabeling.

The argument seemed to curry favor with U.S. Circuit Judge David Barron, an Obama appointee. “I’m not following why the testimony was relevant, given that there was no dispute” that the drugs caused the disease, Barron said.

Justice Department lawyer David Lieberman shot back that the government is not under any obligation to accept the defendant’s stipulation.

“We can go ahead and prove it ourselves,” Lieberman said.

“OK,” replied Barron, “but what is the story you can tell us as to why this is useful?”

U.S. Judge Kermit Lipez, a Clinton appointee, made a similar point.

“You can reject the stipulation, but then you run the risk of being overturned for unfair prejudice,” he said.

Lieberman replied that there was no reason to think the jury was unfairly prejudiced given that it also acquitted Cadden on some of the mislabeling counts.

Singal next argued that the government deliberately confused the jurors by implying that the safety standards the New England Compounding Center had to follow were not the national standards known as USP, but its own stricter internal standards. In addition, Singal said the government prejudiced the jury by calling the lab a “filthy mess” and a “fungal zoo.”

Lieberman countered that the internal standards were relevant to the mail-fraud charges because Cadden’s lab had distributed advertising collateral suggesting that its standards exceeded the USP.

But Singal said the mail-fraud convictions were also suspect because the government never proved that the hospitals and clinics that bought the contaminated drugs received the marketing materials.

Lieberman noted that the government had called 10 witnesses who said they believed the drugs from Cadden’s lab complied with the USP.

“But there were 57 mail-fraud counts,” said Lipez. “You don’t have to prove that they all got the materials?”

“Right,” Lieberman answered, suggesting that the jurors could simply infer that everyone got the collateral.

“But the problem I’m having,” responded Barron, is that you didn’t show any reliance on the stricter internal standards as opposed to the USP.

In addition to Cadden’s appeal, the First Circuit is considering a challenge by the government to the total mail-fraud damages of $1.4 million determined by the trial court.

Lieberman faced an uphill battle Tuesday, however, in arguing that the figure should have been over $70 million, or the value of all 7,400 types of products, including low-risk creams and ointments, sold by Cadden’s lab over a two-year period.

That’s “obviously overbroad,” Barron said. Lipez likewise said, “I have trouble understanding what’s wrong.”

Lieberman suggested that the government should be allowed to go back and tweak its $70 million figure because “we had no idea” that the company sold creams and ointments.

Chin, the pharmacist, was convicted in a separate trial presided over by the same judge.

His lawyer, James Sultan of Rankin & Sultan, ridiculed the government’s claim. “You thoroughly investigated this company,” Sultan said. “You had a six-week trial with exhibits up to the ceiling telling the jury all about how it operated. How can you claim now that you had no idea it sold ointments?”

The cases were unusual in that the government brought them under federal anti-racketeering law. Originally intended for use against the Mafia and other types of organized crime, the law requires proof of an ongoing scheme involving a pattern of criminal conduct.

Chin argues on appeal that RICO law is inappropriate because the misdeeds that occurred were simply the result of cost-cutting efforts as the lab tried to keep up with a sudden increase in product demand. Far from a deliberate and ongoing Mafia-like scheme, he claimed, this was a onetime, short-term mistake that ended as soon as the contaminated products were recalled.

Singal argued that the use of RICO was due to prosecutors believing that “a draconian conviction is so deserved that the end justifies the means.”

Judge Norman H. Stahl, an 88-year-old George H.W. Bush appointee, rounded out the panel. The judges gave no indication when they would issue a ruling.

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