The second acquittal last week of former GlaxoSmithKline associate general counsel Lauren Stevens on charges of making false statements to investigators, obstruction of justice, and falsifying and concealing documents during an inquiry into that company’s promotion of a then-unapproved drug sounded a victory for in-house lawyers and their work. But if the Stevens case is the first instance of a DOJ trend toward investigating and indicting company lawyers tasked with responding to federal inquiries and how they do so, then will the number of internal investigations be multiplying like rabbits?
Stevens, who headed a legal team composed of two other in-house lawyers and three outside counsel, was originally indicted last fall in connection with her written responses to an FDA probe into whether GSK had off-label marketed the drug Wellbutrin. Her culpability was premised upon signed correspondence that the government claimed was false and misleading.
As reported in a Law.com article by Sue Reisinger, the Honorable Roger W. Titus of the U.S. District Court for the District of Maryland dismissed the original indictment of Stevens without prejudice on March 23, 2011, due to the prosecution’s failure to properly advise the grand jury of her anticipated advice-of-counsel defense.
Because of the lack of prejudice, the DOJ was allowed to present the evidence to a second grand jury that had been properly appraised of the aforementioned defense and did so, obtaining another indictment. In considering the case on its merits the second time around, Judge Titus again dismissed the indictment – this time with prejudice – and exonerated Stevens on May 10, 2011. As superbly chronicled at the White Collar Crime Prof Blog, Titus wrote in his opinion that:
"But they [privileged records] also show that this was a client that was not engaged to assist a client to perpetrate a crime or fraud. Instead, the privileged documents in this case show a studied, thoughtful analysis of an extremely broad request from the Food and Drug Administration and an enormous effort to assemble information and respond on behalf of the client."
"The responses that were given by the defendant in this case may not have been perfect; they may not have satisfied the FDA. They were, however, sent to the FDA in the course of her bona fide legal representation of a client and in good faith reliance of both external and internal lawyers for GlaxoSmithKline."
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"I conclude on the basis of the record before me that only with a jaundiced eye and with an inference of guilt that's inconsistent with the presumption of innocence could a reasonable jury ever convict this defendant."
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"There is an enormous potential for abuse in allowing prosecution of an attorney for the giving of legal advice. I conclude that the defendant in this case should never have been prosecuted and she should be permitted to resume her career."
While this decision strikes a victory for attorney-client privilege and best lawyering efforts, the notion that the government might begin investigating and indicting in-house counsels for analyses and advice given to their corporate employers might theoretically – and absurdly – add additional strata of inquiry to the internal investigations world.
If this exception became the rule, would it become necessary for companies to commence investigations of the work of their in-house counsel by outside investigations counsel? And then to double check the outside investigations counsel with other outside counsel? And on and on? This would surely put bread on the tables of many investigations attorneys, but where would the sequence end and at what cost?
Internal inquiries would reproduce like bunnies and how many times can or should a company be compelled to run down their burrows and ask, “What’s up, Doc?”
