U.S. v. Barile

• Decision Date: 18 April 2002
• Docket Number: No. 00-4926.,00-4926.
• Citation: 286 F.3d 749
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Michael BARILE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 749

286 F.3d 749

UNITED STATES of America, Plaintiff-Appellee, v. Michael BARILE, Defendant-Appellant.

No. 00-4926.

United States Court of Appeals, Fourth Circuit.

Argued December 6, 2001.

Decided April 18, 2002.

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ARGUED: Joseph Sedwick Sollers, III, King & Spalding, Washington, D.C., for Appellant. Bryan Edwin Foreman, Assistant United States Attorney, Greenbelt, Maryland; Steven Neil Gersten, Trial Attorney, Office of Consumer Litigation, United States Department of Justice, Washington, D.C., for Appellee. ON BRIEF: Eugene M. Pfeifer, Jeffrey S. Bucholtz, King & Spalding, Washington, D.C., for Appellant. Stephen M. Schenning, United States Attorney, Greenbelt, Maryland, for Appellee.

Before WILKINS and WILLIAMS, Circuit Judges, and HAMILTON, Senior Circuit Judge.

Remanded with instructions by published opinion. Judge WILLIAMS wrote the opinion, in which Judge WILKINS and Senior Judge HAMILTON joined.

OPINION

WILLIAMS, Circuit Judge.

Michael Barile was convicted of making materially false statements to the Federal Food and Drug Administration (FDA), in violation of 18 U.S.C.A. §§ 1001 and 2. Barile challenges his conviction on the grounds that the district court erred by excluding impeachment evidence and by not permitting opinion testimony regarding the materiality of Barile's false statements. Because we conclude that the district court erred in its determination that prior statements of a key government witness were consistent, we remand for further proceedings. We discuss each challenge in turn.

I.

Barile and three co-workers, Haryash Gugnani, Amrik Sikand, and Theodore Milo, were indicted by a grand jury in May 1999. All four defendants were employed by the Patient Monitoring Division of Datascope Corporation, a manufacturer of medical devices. Gugnani was president of Patient Monitoring, Sikand was vice president of operations, and Milo was director of engineering. Both Sikand and Milo reported to Gugnani. Barile, director of quality assurance and regulatory affairs, reported to Sikand. Datascope manufactures and markets a diverse range of medical devices, including cardiac monitors. A cardiac monitor measures the electric current traversing the heart and displays the data as an electrocardiogram (ECG). Cardiac monitors also measure numerous other vital signs. For example, the Datascope Passport Monitor, released in 1991, in addition to functioning as an ECG, also records heart rate, invasive blood pressure, non-invasive blood pressure, pulse rate, pulse oximetry, temperature, and respiration rate. While each cardiac monitor has multiple functions, it operates as a single unit, taking simultaneous readings of many vital signs. Datascope's cardiac monitors are complex, software-driven devices that are continuously being improved.

Under § 510(k) of the Federal Food, Drug, and Cosmetic Act, when Datascope makes an enhancement it must notify the FDA prior to marketing the product. See 21 U.S.C.A. § 360(k) (West 1999). The pre-market notification, known as a 510(k) submission, must demonstrate that the medical device is "substantially equivalent" to a device that is already on the market. See 21 U.S.C.A. § 360c(f)(1)(A)(ii) (West 1999). If a medical device is not substantially equivalent to a device already on the market, it is subject to the more rigorous pre-market approval process. See 21 U.S.C.A. § 360e(c) (West 1999). The trial below stemmed from allegedly false statements made on 510(k) submissions for three of Datascope's cardiac monitors.

First, on December 1, 1992, Datascope made a 510(k) submission for a 6000 Point of View Monitor (Point of View). This device was similar to the original Passport monitor, released in 1991, but added an "ST segment," which measures marginal changes in portions of the ECG to detect arrythmic heartbeat patterns. This new component, which was a fully tested and approved feature, was purchased from a company called PCI. The FDA cleared the Point of View monitor on August 6, 1993, and Datascope began distributing it in March 1994. The second 510(k) submission, on January 11, 1994, was for an advanced version of the Point of View, called a 6000 Point of View Monitor with Cardiac Output (Point of View with Cardiac Output). The cardiac output component enhanced the Point of View monitor by adding a means of measuring the flow of blood through the heart. This submission later was withdrawn by Datascope. The third 510(k) submission was filed on May 31, 1994, and related to a monitor called Passport with ST. This monitor added the ST segment, which had already been incorporated into the Point of View, to its existing Passport monitor. This 510(k) submission also was withdrawn by Datascope.

The indictment charged Barile, Gugnani, Sikand, and Milo on four different counts related to the 510(k) submissions described above. Count one charged all defendants with conspiracy to defraud the FDA by making false statements in 510(k) submissions for all three monitors, a violation of 18 U.S.C.A. § 371 (West 2000). Count two charged all defendants except Milo with making false statements on 510(k) submissions for the Passport with ST monitor, in violation of 18 U.S.C.A. §§ 1001 and 2 (West 2000). Counts three and four accused all defendants except Milo of violating 21 U.S.C.A. §§ 331(a) and 333(a)(2) (West 2000), and 18 U.S.C.A. § 2 (West 2000), by marketing an adulterated and misbranded medical device, the Point of View monitor. After a five-week trial, the jury acquitted Gugnani, Sikand, and Milo on all counts and Barile on counts one, three, and four. The jury convicted Barile on count two, which charged specifically that Barile represented in a 510(k) submission that a completed Passport with ST existed and that testing had been conducted on such a completed device when he knew that no such completed device existed.

Barile appeals from his conviction, challenging the district court's exclusion of impeachment evidence and expert testimony. We examine each challenge in turn, reviewing both of the district court's rulings for abuse of discretion. See United States v. Gravely, 840 F.2d 1156, 1163 (4th Cir.1988) ("A district court's determination that a witness' prior statements are not inconsistent with trial testimony will not be reversed absent an abuse of discretion."); United States v. Harris, 995 F.2d 532, 534 (4th Cir.1993) ("The exclusion of expert testimony under Rule 702 is within the sound discretion of the trial judge."). Under this standard, "[a] district court by definition abuses its discretion when it makes an error of law." United States v. Stitt, 250 F.3d 878, 896 (4th Cir.2001) (internal quotation omitted).

II.

Barile first challenges the district court's exclusion of documents that he offered for the purpose of impeaching Marion Kroen, a witness for the Government. The documents with which Barile sought to impeach Kroen were created by the FDA's Office of Criminal Investigation (OCI) during its inquiry into the fraudulent statements in Datascope's 510(k) submission for the Point of View monitor. Specifically, Barile sought to introduce statements reflected in a Memorandum of Meeting, which detailed a July 26, 1995 meeting between OCI and FDA's Office of Device Evaluation (ODE) regarding the significance of the false statements, and a Report of Investigation, summarizing the OCI's investigation (collectively, the FDA documents). Our review of the record indicates that the district court ruled that the proffered impeachment evidence was not specifically inconsistent with Kroen's testimony. (J.A. at 531.) Moreover, the district court concluded that Barile was attempting to admit the documents to reveal that after the July 26, 1995 meeting, the FDA decided to end its investigation of Datascope's 510(k) submissions, a fact that the district court, before trial, determined to be irrelevant. (J.A. at 529.) To analyze Barile's challenge to the exclusion of this impeachment evidence, we first must set forth the relevant points of dispute at trial.

At trial, Barile did not dispute that the tests reflected in the 510(k) submission for the Passport with ST were not conducted on a completed device. Instead, he asserted that any representation to the contrary on the 510(k) submission was not material. Barile contended that it is industry practice to make a 510(k) submission while a medical device is still being developed and therefore "[t]esting on parts of the device, which is known as component testing, is absolutely acceptable." (J.A. at 157-58.) Barile admitted that the tests were performed on components and, as Barile's counsel pointed out at oral argument, there was no allegation in count two that false test data were submitted, only that the 510(k) submission for the Passport with ST falsely represented that it reflected testing of a "completed" cardiac monitor. Falsely representing on a 510(k) submission that a completed medical device exists and purporting that tests were run on the completed device, when in fact they were conducted on the individual components, Barile argued, are not materially false statements or representations as required under 18 U.S.C.A. § 1001, which provides, in pertinent part, that "whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully ... makes any materially false, fictitious, or fraudulent statement or representation ... shall be fined under this title or imprisoned not more than 5 years, or both."

The Government, on the other hand, asserted that component testing is inappropriate for cardiac monitors. The key evidence supporting the Government's contention was the testimony of Marian Kroen, who works in the ODE and reviewed Datascope's 510(k) submission for the Passport with ST. When asked at trial whether the FDA would grant a 510(k) clearance based on component...