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United States v. Cadden

United States District Court, D. Massachusetts

March 17, 2017


         Instructions to the Jury

         Members of the Jury:

         Now that you have heard the evidence in the case and the closing arguments of the lawyers, the time has come for me to instruct you on the law. My instructions will be in four parts; first, some instructions on the general rules that define the duties of the jury in a criminal case; second, a brief review of what is and what is not evidence in a criminal trial, together with some guidelines that may assist you in evaluating the evidence that has been presented; third, I will give instructions defining the elements, or components, of the crimes charged; and finally, I will explain the rules that will guide the conduct of your deliberations.

         In defining the duties of the jury, let me first remind you of the general rules. It is your duty to find the facts from all of the evidence in the case. To the facts as you find them, you must apply the law as I will explain it to you. You must follow the law as I describe it, whether you personally agree with the wisdom of the law or not. You must do your duty as jurors regardless of any personal likes or dislikes, opinions, prejudices, or appeals to sympathy. That means that you must decide the case based solely on the evidence that is before you.

         In following my instructions, you must follow all of them and not single out some and ignore others; they are all equally important. And you must not read into these instructions, or into anything that I may have said or done during the course of the trial, any suggestion from me as to the verdict you should return - that is a matter entirely up to you. Even if I were to have an opinion as to what your verdict should be, my opinion would be utterly irrelevant. The verdict is yours, and yours alone, to render as the sole judges of the facts.

         At the beginning of the case, I explained some important rules that govern criminal trials. I will restate them for you now in more detail. There are three basic rules.

         The first rule is that a defendant is presumed innocent unless and until proven guilty, and this presumption alone is sufficient to acquit him. The Indictment brought by the United States against Mr. Cadden is an accusation, and only that; it is not proof of anything at all. A defendant is innocent in the eyes of the law, unless and until you, as the jury, decide, unanimously, that the government has proved his guilt beyond a reasonable doubt.

         That brings me to the second rule. In a criminal case, the burden of proving guilt is on the government. It carries that burden throughout the trial. A defendant never has the burden of proving his innocence. The right of a defendant to put the government to its proof is one of the most fundamental guarantees of our Constitution. This means that a defendant has no obligation to produce evidence, to call witnesses, nor can he ever be compelled to testify. Mr. Cadden has a constitutional right not to testify. Thus, you may not draw an inference of guilt from the fact that Mr. Cadden did not testify, or even discuss that fact in your deliberations. Nor should you infer guilt or draw a negative inference from any alleged refusal to voluntarily provide information to investigators. A person has no legal obligation to voluntarily provide information requested by investigators and there may be reasons to decline to do so. Again, the burden rests on the government and the government alone to prove Mr. Cadden's guilt beyond a reasonable doubt.

         Now, what is proof beyond a reasonable doubt? The term is often used, and is probably pretty well understood intuitively, although it is not easily defined. Proof beyond a reasonable doubt does not mean proof beyond all possible doubt, or proof to a mathematical certainty, for almost everything in our common experience is open to some possible or imaginary doubt. It does, however, mean that the evidence must exclude any reasonable doubt as to the defendant's guilt.

         A reasonable doubt may arise not only from the evidence produced but also from the absence of relevant evidence. Reasonable doubt exists when, after weighing and considering all of the evidence in the case, using your reason and common sense, you cannot say that you have a firm and settled conviction that a charge is true.

         A defendant is never to be convicted on suspicion or conjecture. If, for example, you were to view the evidence in the case as reasonably permitting either of two conclusions, one that Mr. Cadden is guilty of any one or more of the crimes charged, the other that he is not guilty of any one or more of these crimes, then it follows that you would be required to find him not guilty as to the particular charge at issue.

         It is not enough for the government to establish a probability, even a strong probability, that a defendant is more likely guilty than not. That is not enough. Proof beyond a reasonable doubt must be proof of such a convincing character that you can, consistent with your oath as jurors, conscientiously base your verdict upon it. If you so find as to any or all of the charges against Mr. Cadden, you will return a verdict of guilty as to any or all of the charges. If, on the other hand, you think there is a real possibility that Mr. Cadden is not guilty of any or all of the charges in the Indictment, you must give him the benefit of that doubt, and find him not guilty of any or all charges.

         Mr. Cadden was the President and Manager of Record for the New England Compounding Pharmacy, or NECC. He and his wife were also minority shareholders in the company. No matter how high his position in the corporate hierarchy, Mr. Cadden cannot be held criminally liable for the illegal acts of other corporate employees simply by virtue of his position. He can be held liable only for those acts in which he was personally involved.

         Evidence in a Criminal Trial

         Next I want to review with you what is meant by evidence in the context of a criminal trial.

         Evidence is produced at a criminal trial in one of three ways.

         First, through the sworn testimony of witnesses, both on direct and cross-examination.

         Second, through physical objects, or exhibits, identified by a witness, and admitted as such during the trial.

         Third, by stipulation, or agreement between the parties that certain facts are true and need not be independently proven as such at trial. An example is the lengthy stipulation that the parties entered regarding the authenticity of a number of laboratory tests of drugs compounded by NECC. You will find copies of the written stipulations in this book, which also contains a verbatim copy of these instructions and the official verdict slip.

         Certain things are not evidence and are not to be treated as such in your deliberations.

         1. Arguments and statements by lawyers, as I have previously cautioned, are not evidence. What the lawyers have said over the course of the trial you may find helpful, or even persuasive in reaching a verdict, but the facts are to be determined from your own evaluation of the testimony of the witnesses, the exhibits, and any reasonable factual inferences you choose to draw from the evidence that has been admitted.

         2. Questions to witnesses are not evidence. They can only be considered in the sense that they give context or meaning to a witness's answer. It is permissible, as I explained, for attorneys to use leading questions, that is, questions that suggest their own answer, when cross-examining an opposing or hostile witness. Leading questions can be a useful means of testing the credibility of a witness's statements, but you should be careful to separate the witness's answers from any assertions of fact the leading question might contain.

         3. Objections to questions are not evidence. Attorneys, as I explained at the beginning of the trial, have a duty to their clients to object when they believe that a question is improper under the rules of evidence. You should not be influenced by the fact that an objection was made or by the way I ruled on it. If I sustained the objection, you should ignore the lawyer's question, and any assertion of fact that the question might have contained. If the objection was overruled, you should treat the question and the witness's answer like any other. If I struck a portion of a witness's testimony, you are not to consider it.

         4. Anything you may have seen or heard outside the courtroom during the course of the trial is not evidence. This includes any publicity that preceded your empanelment as jurors and any news or social media accounts of the trial that you may have accidentally encountered during the past two and one-half months. You must decide the case solely on the evidence that was offered and received in open court.

         5. Both sides have been permitted to present complex evidence in the form of charts and summaries. These charts and summaries are admitted in order to save time and to simplify the inspection of the large number of documents they typically distill. It is, however, the underlying evidence, and the weight that you attribute to it, that gives the charts and summaries their evidentiary value. If you are not satisfied that they accurately reflect the underlying evidence, you are free to reject them.

         6. If you have kept notes, as most, if not all of you have, remember that your notes are not evidence. They are only an aid to be used during the deliberations to refresh your recollection of the testimony that was offered during the trial.

         Regardless of the way in which evidence is presented, it comes in one of two forms, either as direct or as so-called circumstantial evidence. Direct evidence is direct proof of a fact, usually offered through the testimony of a person who claims to have been an eyewitness to an event or a participant in a conversation. Circumstantial evidence is proof of a fact, or a set of facts, from which you could infer or conclude that another fact is true, even though you have no direct evidence of that fact.

         For instance, if you were to awake in the morning and, even though the day dawned bright and clear, see puddles of water on the street, you might draw the inference that it had rained during the night, even though your sleep had been uninterrupted. In other words, the fact of rain is an inference that can be drawn from the presence of water on a street. An inference may be drawn, however, only if it is reasonable and logical, and not if it is speculative or based on conjecture. If, for example, you observed puddles of water on your street, but not on any other street in your neighborhood, other facts, like a broken water main, or if you live in the suburbs, a neighbor's malfunctioning sprinkler system, might explain the presence of water. In deciding whether to draw an inference, you must look at and consider all of the facts in the case in the light of reason, common sense, and your own life experience.

         Neither type of evidence, direct or circumstantial, is considered superior or inferior to the other. Both types of evidence may be considered in reaching your verdict and may be given whatever weight you, as the finders of fact, deem that evidence to be worth.

         Most evidence received at trial is offered through the testimony of witnesses. As the jury, you are the sole judges of the credibility of these witnesses. If there are inconsistencies in the testimony, it is your function to resolve any conflicts, and to decide where the truth lies.

         You may choose to believe everything that a witness said, or only part of it, or none of it. If you do not believe a witness's testimony that something happened, that of course is not evidence that it did not happen. It simply means that you must put aside that testimony and look elsewhere for credible evidence before deciding where the truth lies.

         In deciding whether or not to believe a witness, keep in mind that people sometimes forget things, or get confused, or remember an event differently. Memory is not always reliable, and when someone recounts a story twice, it will seldom be identical in every respect, unless it is a memorized lie or the witness is possessed of extraordinary perception and recall. It is for you to decide whether any contradictions in a witness's testimony are innocent lapses of memory or intentional falsehoods. That may depend on whether important facts or small details are at issue, and how important the facts might have appeared to the witness at the time they were perceived.

         Often it may not be so much what a witness says, but how he or she says it that might give you a clue whether or not to accept his or her version of an event as believable. You may consider a witness's character, his or her demeanor on the witness stand, his or her frankness or lack of frankness in testifying, whether the witness was contradicted by anything that he or she said before the trial, and whether the testimony appears reasonable or unreasonable, probable or improbable, in light of all the other evidence in the case. You may take into account how good an opportunity the witness had to observe the facts about which he or she testified, his or her mental and physical state at the time the observations were made, the degree of intelligence the witness shows, and whether his or her memory seems accurate. You may consider a witness's motive for testifying, whether he or she displays any bias in doing so, and whether as a result he or she has an interest in the outcome of the case. Now simply because a witness has an interest in the outcome of the case does not mean that the witness is not trying to tell you the truth as he or she recalls it or believes it to have been. But a witness's interest in the case is a factor that you may consider along with everything else. You may also consider the fact that a witness may be perfectly sincere in his or her account of an event and simply be mistaken as to the truth.

         Many of the witnesses that testified are government employees or law enforcement officers. These witnesses are entitled to no more or less credibility than any other witness by virtue of their employment.

         As a rule, a witness is not permitted to offer an opinion about the facts to which he or she testifies, unless it concerns an every-day matter falling within our common experience. An exception is made for those who are asked to testify as experts in their particular field of specialty - I will use Dr. Mary Brandt, the Chief of the Centers for Disease Control Mycotic Diseases Branch, as an example. An expert like Dr. Brandt is a witness, who by education or experience has acquired specialized knowledge - in her case knowledge acquired through study and laboratory investigations involving mycoses, or diseases involving fungal infections. She is permitted to testify not only about what she knows about these infections, but also to give opinions derived from that knowledge, and the reasons for these opinions. This type of testimony is allowed in the belief that the knowledge of certain experts is so specialized that the facts that they have mastered are beyond the collective knowledge of the court and the jury.

         The credibility of the testimony of an expert witness is, however, judged like that of any other witness. Simply because the law allows a witness to give an opinion does not mean that you must accept that opinion. If you decide that the opinion of an expert witness is not based on sufficient education or experience, or if you conclude that the reasons given for the opinion are not convincing or are outweighed by other evidence in the case, you may disregard the opinion entirely.

         Several times it has been pointed out to you that certain witnesses have testified previously under oath about the subject matter of this trial in ways that you might find consistent or inconsistent with their testimony during the trial. Because these statements were made under oath, you may consider them as if they were made here in the courtroom in evaluating the credibility of what these witnesses had to say during both direct and cross-examination.

         You have heard testimony from a witness, Robert Ronzio, who earlier pled guilty to crimes related to Count III of the Indictment. The fact that he has entered a guilty plea is not evidence that you may consider in assessing Mr. Cadden's guilt. Mr. Ronzio is presumed to have acted after considering his own best interest in this matter, for reasons that are personal to him. Thus, his guilty plea and the accompanying plea agreement are to be considered only in assessing his credibility.

         A witness who admits to committing a crime and testifies against others pursuant to a plea agreement almost always does so in the expectation of more lenient treatment as a reward for his cooperation. A witness testifying in such circumstances may, of course, be completely truthful, which is why the government is permitted to present the testimony of witnesses who have entered a plea bargain or who have testified pursuant to a promise from the government that their testimony will not be used against them in a criminal prosecution. Still, you should consider the testimony of a witness testifying pursuant to a plea agreement or under a grant of immunity with great care and caution. You should scrutinize the testimony carefully to be certain that it is not shaded or shaped in such a way so as to serve the personal interests of the witness or the witness's perception of the government's expectations rather than the interest of the truth.

         The weight of the evidence obviously does not depend on the number of witnesses testifying for one side or the other. You must determine the credibility of each witness who testified, and then reach a verdict based on all of the believable evidence in the case.

         The Indictment

         With these preliminary instructions in mind, let me turn to the Indictment in this case. Let me first remind you that an Indictment is not evidence of any kind against a defendant. It is simply an accusatory document notifying a defendant that he must answer to the criminal charges it sets out. An Indictment may allege more than one crime against a defendant; and when it does so, the different charges are stated separately in what we call counts. Mr. Cadden has been charged with 96 counts of violations of federal law.

         First, Mr. Cadden is charged in Count 1 with violating the Racketeer Influenced and Corrupt Organizations Act, or RICO as it is called by its acronym. As predicate acts of RICO, the Indictment alleges that Mr. Cadden committed 77 acts of racketeering in violation of state or federal law, namely 25 acts of state second-degree murder and 52 acts of federal mail fraud.

         Count 2 alleges that Mr. Cadden conspired, that is, entered an agreement with others, to violate the RICO statute. Under both state and federal law, a conspiracy is a separate and distinct crime.

         Count 3 charges Mr. Cadden with conspiring with others to defraud the United States, by impeding the ability of the Food and Drug Administration or FDA, to carry out its regulatory mission.

         The Indictment in Counts 4-39, and 41-56 charges the 52 RICO predicate acts of mail fraud as separate substantive crimes. Mr. Cadden is also charged in Counts 57-90 with violations of the Food, Drug and Cosmetic Act for allegedly introducing drugs into interstate commerce that had been prepared in insanitary conditions; in Counts 91-94 with introducing drugs into interstate commerce bearing false or misleading labels; and finally, Counts 95 and 99-100 of the Indictment charge Mr. Cadden with dispensing drugs into interstate commerce without valid prescriptions.

         While the Indictment alleges various time frames in which the crimes are said to have occurred, the government's proof need not identify the exact date or dates of an alleged offense. It is sufficient if the evidence establishes beyond a reasonable doubt that an offense was committed by a defendant on a date that is in reasonable proximity to the date or dates alleged.

         Theories of the Defense

         In response to the allegations of the Indictment, Mr. Cadden states that he did not commit these crimes. He has also raised several specific defenses. I will describe some of these to you now, but you must keep in mind that Mr. Cadden has no burden to prove his defenses, and it is the government's burden to prove each and every element of the crimes charged beyond a reasonable doubt. By explaining some of these defenses Mr. Cadden cannot be held to have assumed that burden.

         With respect to the second-degree murder counts, Mr. Cadden contends that he could not have been acting with an awareness that his conduct would likely result in death. Based on the longstanding safety record of NECC in producing preservative-free methylprednisolone acetate (MPA) and other sterile injectables, Mr. Cadden contends that he had every reason to believe that the three MPA lots in question would be injected safely as had all those that preceded them. Second, he maintains that he did not cause the contamination of one or more of the three lots at issue, or portions of them, nor did he do anything that caused the deaths of any of the 25 persons named in the murder racketeering acts. He further contends that the government has failed to prove what actually caused some of the vials at issue to become contaminated, and therefore, has failed to prove what he did to cause the deaths of the 25 individuals named. Third, he maintains that he reasonably relied on the expertise of Analytical Research Laboratories (ARL) to ensure that NECC was performing testing within the parameters of the United States Pharmacopeia (USP) and, if there was substandard testing, it was because of the incorrect advice that ARL give him. Fourth, he contends that he could not have conspired to defraud the FDA into believing that NECC was a compounding pharmacy rather than a manufacturer when the FDA itself was uncertain about how these terms were to be defined for regulatory purposes. Mr. Cadden further contends that there was no agreement among the alleged co-conspirators about whether to register with the FDA as a manufacturer. Fifth, Mr. Cadden maintains that NECC's environmental monitoring results should be evaluated using the USP-797 standards and not the more stringent and voluntary Standard Operating Procedures (SOP) standards that Mr. Cadden contends applied to NECC's previous Clean Room. And finally, Mr. Cadden maintains that in shipping certain drugs without patient-specific prescriptions, he relied in good faith on often confusing state laws that permitted office use - a practice that allowed doctors in some states to order certain quantities of drugs without patient names, in order to maintain supplies in their offices to treat patients as needed.

         The United States Pharmacopeia

         Let me return briefly to the subject of the United States Pharmacopeia, or USP standards. As I explained at the outset of the trial, these standards are formulated and published by a Council of Experts chosen by the United States Pharmacopeia Convention (USPC), a nonprofit organization that owns the copyright to the USP compendium of drug information. The USPC was founded in 1820 by doctors who, as declared in their founding statement, “recognized an essential need for a national lexicon of drug names and formulas in the United States.” The Convention is composed of volunteer members. A Board of Trustees oversees the staff of employees and volunteers who assemble and publish the USP and related materials. Pharmacy Compounding Chapter 797 of the USP, on which the Indictment heavily draws, was promulgated by the USPC in its official version in 2004, and revised in 2008.

         It is important to remember that the standards contained in the USP are not drafted by the United States government. However, when Congress drafted the Food, Drug and Cosmetic Act, it referenced the USP as a source for defining best practices for the compounding and drug manufacturing industries. While the USP standards may be considered by you in determining the standard of care that Mr. Cadden may or may not have followed, a deviation from a provision of the USP, by itself, is not a criminal violation. Congress did not, in other words, enact the Pharmacopeia as a criminal statute.

         Racketeer Influenced and Corrupt ...

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