For The Defense, October 2010 - DRI Today

D R U G A N D M E D I C A L D E V I C ECrime and PunishmentBy Kai Petersand Andrew CaryHandling LitigationWhen CriminalActivity Is InvolvedWith the promiseof increased FDAprosecution, it is wise tobecome aware of potentialor actual criminal aspectsof civil litigation.With zealous plaintiffs’ attorneys, massive document productions,numerous witnesses, punitive damages, and theinvolvement of complex and cutting-edge medical and scientificproducts and issues, defending pharmaceutical andmedical device manufacturers in productliability and other actions can be, to saythe least, complex. That representation becomeseven more complex when potentialor actual criminal action against employees,executives, and a company is involved.Corporate criminal actions intertwinedwith civil litigation are nothing new, andwe have plenty of recent examples of pharmaceuticaland medical device companiesthat have become embroiled that way, compellingcorporations, sales representatives,and executives to pay substantial monetarypenalties. These criminal actions haveoften involved prison time as well. In thecoming years, the Food and Drug Administration(FDA) plans to increase prosecutionsof pharmaceutical and food industryexecutives in efforts to refocus its criminaldivision, and this threat promises toincrease the frequency with which civil litigatorswill need to contend with potentialor actual criminal acts when defending clients,which makes understanding how tobest handle civil matters warranted whenthe specter of criminal actions loom.Exemplar Criminal Prosecutionsin Recent YearsThere has been a plethora of criminal actionsinvolving pharmaceutical and medicaldevice companies in recent years. Recentindictments of companies and executivesserve as cautionary examples because theypromise to continue in the future.For example, in October 2009, a criminalindictment was brought against a biotechlimited liability company, StrykerBiotech, LLC, and four top-level executives,including the president, the national salesdirector, the Western regional manager, andthe Southeast regional manager of sales oncharges of wire fraud, conspiracy, distributionof a misbranded device, and makingfalse statements. The defendants potentiallyface up to 20 years in prison and substantial■ Kai Peters and Andrew Cary are partners in the San Francisco office of Gordon & Rees LLP and membersof the firm’s drug and medical device group. Mr. Peters has extensive experience in and specializes in complexlitigation, including product liability and mass torts, and pharmaceutical and medical device law. Mr.Cary’s practice involves representing businesses in a broad range of litigation matters with a primary focuson product liability cases involving pharmaceuticals and medical devices. Both are members of DRI’s Drugand Medical Device Committee.For The Defense n October 2010 n 49