776 F.2d 678 (7th Cir. 1985), 84-1639, United States v. Keplinger

Docket Nº:84-1639.
Citation:776 F.2d 678
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Moreno L. KEPLINGER, Paul L. Wright, and James B. Plank, Defendants-Appellants.
Case Date:October 29, 1985
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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776 F.2d 678 (7th Cir. 1985)

UNITED STATES of America, Plaintiff-Appellee,


Moreno L. KEPLINGER, Paul L. Wright, and James B. Plank,


No. 84-1639.

United States Court of Appeals, Seventh Circuit

October 29, 1985

Argued April 25, 1985.

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Thomas D. Decker, Thomas D. Decker & Assoc., Harvey M. Silets, Silets & Martin, Chicago, Ill., for defendants-appellants.

Michael J. Shepard, Asst. U.S. Atty., Anton J. Valukas, U.S. Atty., Chicago, Ill., for plaintiff-appellee.

Before CUMMINGS, Chief Judge, CUDAHY, Circuit Judge, and GRAY, Senior District Judge. [*]

CUDAHY, Circuit Judge.

This criminal litigation involves laboratory studies, using rats as subjects, undertaken to determine the safety of certain products for human use. Alleged falsification of data and irregular procedures created doubts about the validity of the reported study conclusions. After a trial that lasted six months and produced more than 17,000 pages of transcript, several defendants associated with the laboratory were convicted of various counts of mail fraud, wire fraud and making false statements, although there were also acquittals on some of the counts charged. Over-length briefs totaling more than 500 pages were then added to this already voluminous mass of record material. 1 The defendants appeal, claiming insufficiency of the evidence, and a multitude of trial errors. We affirm.

Industrial Bio-Test Laboratories, Inc. ("IBT") is a contract research laboratory which conducts animal toxicity studies of various drugs, pesticides and chemicals for manufacturers in order to determine their safety and effectiveness. Defendant Moreno

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Keplinger was IBT's Manager of Toxicology. Paul Wright was Section Head of Rat and Dog Toxicology at IBT until October 1972, at which time he left IBT to become Manager of Toxicology for Monsanto Corporation and served as liaison to IBT. James Plank served as IBT's Group Leader of the Rat and Dog Toxicology Department and was later Assistant to Keplinger.

The defendants here were convicted of various counts involving fraud and false statements in connection with two studies run by IBT. 2 The first animal toxicity study was performed for Monsanto Corporation ("Monsanto") and concerned Trichlorocarbanilide ("TCC"), an ingredient in deodorant soaps. Defendants participated in preparing three allegedly fraudulent written documents, which came out of this research: (1) a final study report submitted by IBT to Monsanto and then by Monsanto to the FDA; (2) a written explanation to the FDA from IBT answering questions about the TCC final report; (3) and an early version (the first draft) of the final report, which was submitted to Monsanto with an explanation of the TCC study. The alleged fraud involved suppression of relevant information or falsification of data in the following categories: a) underreported mortality of research animals and commingling of original and later-started research animals; b) omission of histopathological data on research animals; c) omission of data on post-mortem examination of animals; d) failure to report the original opinion of a Dr. Gordon that TCC had a significant effect on research animals at the lowest dose level; e) failure to disclose a pathology report by a Dr. Ribelin with respect to the effect of TCC on the epididymis of research animals.

The second study involving allegations of mail fraud was performed by IBT on Naprosyn, an anti-inflammatory drug used in the treatment of arthritis. The alleged fraud here involved a report sent to Syntex Corporation ("Syntex") including blood and urine data and an Appendix II relating to gross pathology. The blood and urine data was allegedly wholly fabricated and Appendix II was allegedly falsified. A written explanation of the Naprosyn report submitted to the FDA also allegedly contained false statements.

I. Sufficiency of the Evidence

In reviewing a conviction, "the factfinder's role as weigher of the evidence is preserved through a legal conclusion that upon judicial review all of the evidence is to be considered in the light most favorable to the prosecution." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (footnote omitted) (emphasis in original). Therefore, the decision facing this court is "whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Id. (emphasis in original). Only when the record contains no evidence, regardless of how it is weighed, from which a jury could find guilt beyond a reasonable doubt may an appellate court overturn a verdict. E.g., United States v. Brown, 739 F.2d 1136, 1149 (7th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 331, 83 L.Ed.2d 268 (1984). In applying this standard, the court must leave to the jury the weighing of the evidence, the drawing of reasonable inferences and determinations of credibility.

  1. Trichlorocarbanilide (TCC)

    We first examine the issue of underreporting of rat mortality in the TCC study. Accurate mortality data is important because it provides evidence of a substance's impact on test animals and also because it can provide evidence of environmental problems which might compromise the validity of a study. Apparently, the TCC

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    study was plagued from the outset by a high death rate, which, the government contended, defendants attempted to conceal.

    The government's proof that the mortality rate was falsified included evidence that the first draft of the TCC report and the version eventually forwarded to the FDA reported different mortality data for the same period of time. Another IBT document, an interim status report, contained still another set of mortality data for the same time period. The mortality shown in all of the documents made the subject of the charges in the indictment is lower than that shown in internal IBT documents from which mortality can be calculated. Further, laboratory technician Smith testified that during the first six months of the TCC study, he specifically observed animal deaths which were not accurately recorded. Laboratory technician Penner also testified that he observed deaths which were not reported during the same time period. Particularly when buttressed with contradictions in other data, these facts provide sufficient basis for the jury to find that the mortality data was false.

    The defendants argue that these facts do not provide adequate proof of fraud and that the government must prove the true rate of animal mortality in order to establish that the mortality figures in the TCC final report are false. Defendants argue that there was no testimony which established that the data "substantially underreported" mortality. They contend that the testimony of technicians Smith and Penner did not specifically tie the mortality rate in the problematic animal watering room (the "AWR") to the TCC study and that the witnesses' recollections of deaths were speculative. Defendants attempt to discount the contradictions in the data reported in the first draft, an interim status report and the version supplied to the FDA by focusing on the mortality rate over the entire course of the study, suggesting that there was no substantial intentional underreporting.

    The government contends that it does not have to prove the true rate of mortality, but rather only that the reported mortality rate was too low and the defendants' reports must have been false. Holdings in similar cases support the government's position that there is no need to show the "true" figures. See, e.g., Coil v. United States, 343 F.2d 573, 576 (8th Cir.), cert. denied, 382 U.S. 821, 86 S.Ct. 48, 15 L.Ed.2d 67 (1965). And defendants cite no authority for their proposition that the government must prove the real rate of mortality. The very nature of the allegations suggests the inherent impossibility of showing the "true" rate of mortality, since the accurate underlying data was never recorded. Smith and Penner, who worked on the TCC study, testified that they observed more deaths than were listed in the reports. In challenging the testimony given by Smith and Penner by characterizing it as recollection, impression and speculation, defendants attempt to reweigh credibility determinations that were properly left to the jury. We think that these technicians' testimony supports the inference that the mortality data supplied by the defendants was falsified, even if these witnesses cannot establish the true mortality rate. If totals for some periods were false (6 and 12 month status reports showing no deaths), then the tables including this data are necessarily false, at least in part. At the conclusion of the TCC study, the report included mortality data that was different from the 6 and 12 month status reports. The final report, submitted to the FDA, had still another set of mortality data. All three of these sets of data substantially underreported mortality. This evidence adequately supports a jury determination that the mortality data supplied by the defendants were false.

    The high mortality of rats in the TCC study presented concerns going beyond the alleged underreporting of mortality data, however. If an insufficient number of rats survived to the end of the study, IBT would be unable to make any valid evaluation of the safety of the tested substances. Given the unusually high mortality

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    rate, the government charged, defendants therefore chose to commingle with existing research animals new animals which had not been fed the...

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