On Tuesday, Hon. Roger W. Titus of the District of Maryland granted defendant Lauren Stevens’ Rule 29 Motion for Judgment, acquitting her of all six charges  brought against her.  The opinion is notable as a hindsight analysis of the crime-fraud exception to the attorney-client privilege, the statutory safe harbor for advice of counsel in obstruction cases, and yet another example of good faith winning the day.  For attorneys, the opinion is also a ringing endorsement for zealous advocacy. 

Stevens, as GlaxoSmithKline (GSK) vice president and associate general counsel, was indicted for obstruction of a proceeding, falsification/concealment of documents and false statements arising out of an FDA investigation into the off-label marketing of Wellbutrin.  In 2002, the FDA began to investigate certain off-label marketing practices wherein GSK and physicians provided information on Wellbutrin as a weight-loss drug, when it had not been approved by the FDA for such use.  In response to the FDA’s inquiry, the government argued, Stevens signed and submitted letters from the company in 2003 that falsely denied that the company had promoted the drug for off-label use, and further failed to produce the FDA with slide sets used by physicians to promote the drug for this use. 

In one of several procedural twists and turns in the course of this litigation, a magistrate judge in the District of Massachusetts ordered Stevens and GSK to produce a large volume of documents that would otherwise be covered by the attorney-client privilege.  The Magistrate Judge held that these documents were to be produced under the Crime-Fraud Exception because evidence established that GSK intended to perpetrate a crime or fraud and the communications at issue between attorney and client were made in furtherance of such crime or fraud.   

A trial was held this month in Maryland, and the government put on a large amount of documentary evidence related to the off-label marketing, including communications between GSK and counsel related to the FDA inquiry.  In granting Stevens’ motion for a directed verdict, Judge Titus held that the communications should never have been disclosed to the government, and in hindsight, were squarely within the attorney-client privilege.  “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.”  Even though there were certainly misstatements made by Stevens and GSK, the responses were made in good faith reliance on both external and internal counsel.  18 U.S.C. § 1515(c), in turn, specifically provides a safe harbor for Stevens’ advocacy: “This chapter does not prohibit or punish the providing of lawful, bona fide, legal representation services in connection with or anticipation of an official proceeding.”  Based on this statute and the facts put on by the government, Judge Titus dismissed the Chapter 15 obstruction and falsification/concealment counts.

Stevens’ good faith, shown by the same documentary evidence, negated all six of the charges against her, including false statements under 18 U.S.C. § 1001.  Judge Titus said, “as to all counts relating to the question of advice of counsel, the evidence in this case can only support one conclusion, and that is that the defendant sought and obtained the advice and counsel of numerous lawyers.  She made full disclosure to them.  Every decision that she made and every letter she wrote was done by a consensus.  Now, even if some of these statements were not literally true, it is clear that they were made in good faith. . . .”    In this situation, as with other federal white collar indictments, good faith is a defense that remains difficult for the government to overcome.   

For lawyers, both in-house and outside (the international firm King & Spalding represented GSK in responding to the FDA’s request), the Stevens indictment and discovery rulings amounted to a scary invasion into the lawyer’s role and potentially made lawyers directly liable for the advice given to clients facing government investigations.  Judge Titus, after noting his comfort with punishing lawyers who assist clients in the commission of crimes, acknowledged the importance of protecting legal advice and preserving privilege: “a lawyer should never fear prosecution because of advice that he or she has given to a client who consults him or her, and a client should never fear that its confidences will be divulged unless its purpose in consulting the lawyer was for the purpose of committing a crime or a fraud.”