U.S. v. Caronia

• Decision Date: 11 September 2008
• Docket Number: No. 06-CR-229 (ENV).,06-CR-229 (ENV).
• Parties: UNITED STATES of America v. Alfred CARONIA, Defendant.
• Court: U.S. District Court — Eastern District of New York

576 F.Supp.2d 385

UNITED STATES of America v. Alfred CARONIA, Defendant.

No. 06-CR-229 (ENV).

United States District Court, E.D. New York.

September 11, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Jennifer Lynn McCann, Thomas F. Liotti, Law Offices of Thomas F. Liotti, Garden City, NY, for Defendant.

DECISION AND ORDER

VITALIANO, District Judge.

Defendant moves to dismiss the two-count misdemeanor information charging him with certain violations of the misbranding provisions of the Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq. The motion is denied in its entirety.

FACTUAL AND PROCEDURAL BACKGROUND

I. Factual History

The following facts are taken from the superseding misdemeanor information filed August 19, 2008 and, for purposes of this motion to dismiss, are accepted as true.

Orphan Medical, Inc. ("Orphan"), now known as Jazz Pharmaceutical, was a specialty pharmaceutical company focused primarily on the development of drugs to treat pain, sleep disorders, and central nervous system disorders. Orphan manufactured the drug Xyrem, a powerful sleep-inducing depressant whose active ingredient was gamma-hydroxybutryate ("GHB").¹ In July 2002, the U.S. Food and Drug Administration ("FDA") first approved Xyrem to treat cataplexy, a condition associated with narcolepsy. In November 2005, the FDA also approved Xyrem to treat excessive daytime sleepiness ("EDS") in patients with narcolepsy. Xyrem has been approved by the FDA only for these two uses, or "indications". Use of Xyrem has been associated with a number of serious potential side effects, and abuse of the drug can lead to dependence and withdrawal symptoms as well as serious medical problems including seizures, coma, and death. Overdosing on Xyrem could cause, among other things, a slow heart rate and coma. Xyrem's FDA-approved labeling contains a "black box" warning about the dangers of its side effects and possible abuse, which is the most serious warning the FDA can require to be placed on the labeling of a prescription drug. Its labeling states that Xyrem's safety and efficacy have not been established in patients under 16 years of age, that it was important to keep the drug away from children, and that there was "very limited" experience with the drug in elderly patients. Xyrem was designated a Schedule III Controlled Substance for medical use, meaning that it could not be sold, distributed or provided to anyone other than for a prescribed use.

Pursuant to the FDCA, manufacturers are restricted from marketing so-called "off-label" (i.e., non-FDA approved) uses of a drug. Such off-label marketing results in the drug being "misbranded" in violation of the statute.² Count one of the instant information alleges that, between March 2005 and March 2006, defendant Alfred Caronia, an Orphan sales representative, knowingly and intentionally conspired with others to misbrand a drug by marketing Xyrem for off-label uses in violation of 21 U.S.C. §§ 331(a), (k), 333(a)(1), and 18 U.S.C. § 371. Count two of the information charges Caronia with a substantive violation of misbranding a drug while it was held for sale after shipment in interstate commerce, violating 21 U.S.C. §§ 331(k) and 333(a)(1).

In particular, the information alleges that, on October 26, 2005, Caronia promoted Xyrem to a physician "John Doe" for fibromyalgia, EDS, muscle disorders, chronic pain and fatigue, which uses were for off-label indications. The information further alleges that, on November 2, 2005 Caronia introduced another physician, who was paid by Orphan, to "John Doe", and that the other physician promoted Xyrem for off-label indications, including fibromyalgia, EDS, sleepiness, weight loss and chronic fatigue.

II. Procedural History

The information supersedes a prior felony indictment against Caronia and Dr. Peter Gleason, who is the physician allegedly paid by Orphan to promote Xyrem for off-label uses. That indictment charged that Gleason and Caronia participated in a conspiracy with others to introduce a misbranded drug into interstate commerce with intent to defraud and mislead, 21 U.S.C. §§ 331 and 333(a)(2), and to make false statements in connection with the delivery of and payment for health care benefits, 18 U.S.C. §§ 1035(a)(1), (2). The indictment also charged a conspiracy to defraud public and private health care plans, 18 U.S.C. § 1349.

Gleason moved to dismiss the misbranding counts of the original indictment on various grounds, including that the misbranding provisions of the FDCA were unconstitutional restrictions of his right to free speech under the First Amendment and that they were unconstitutionally vague and overbroad. Caronia joined in Gleason's motion insofar as it applied to him and separately moved to dismiss the entire indictment on other grounds as well. Briefing on those motions was completed and the motions submitted for decision on May 12, 2008. While those motions were sub judice, on August 8, 2008, the government filed a superseding information against Gleason charging him with a single misdemeanor misbranding violation pursuant to 21 U.S.C. §§ 331(a) and 333(a)(1). Gleason pled guilty to that charge the same day and awaits sentencing. On August 12, 2008, the government filed a superseding information against Caronia containing a similar single misdemeanor misbranding charge. Then, on August 19, 2008, it filed this second superseding information, charging the two misdemeanor counts now at issue.

At that time, the Court requested supplemental briefing by Caronia and the government as to which portions of the original motion to dismiss still remained for the Court to determine and as to any new or modified grounds for dismissal. Recognizing the superseding information had rendered the pending motion moot, Caronia, essentially, reincorporated in the current motion Gleason's original arguments that the misbranding provisions of the FDCA as applied to the charged conduct are unconstitutional.

Procedurally, as a result of Gleason's guilty plea and the superseding information filed against Caronia, the original motions to dismiss filed by Gleason and Caronia are both denied as academic. The Court addresses now only the grounds, including those reincorporated, that Caronia raises on his new motion to dismiss.

DISCUSSION

I. Standard for Dismissal

Federal Rule of Criminal Procedure 12(b)(2) permits a criminal defendant to raise by pretrial motion "any defense, objection, or request that the court can determine without a trial of the general issue." A court faced with a motion to dismiss must ask, first, whether the information states an offense, and second, whether the information is sufficiently specific to provide notice and allow the defendant to plead double jeopardy in a subsequent case. United States v. Kramer, 499 F.Supp.2d 300, 305 (E.D.N.Y.2007); United States v. Sierra-Garcia, 760 F.Supp. 252, 258 (E.D.N.Y.1991). The court is limited to the face of the information and all the facts it alleges must be accepted as true. United States v. Blasius, 230 F.Supp. 995, 997 (S.D.N.Y.1964); United States v. Goldberg, 756 F.2d 949, 950 (2d Cir.1985). The motion court may consider additional documents that have been submitted, but cannot give any weight to contrary factual assertions made by the defendant. United States v. Martino, No. S1 00 CR 389(RCC), 2000 WL 1843233, at *1 (S.D.N.Y. Dec.14, 2000).

II. Whether Caronia Misbranded Xyrem

Caronia argues that the allegations in the information actually establish that he did not misbrand Xyrem within the meaning of 21 U.S.C. § 331(k) and, therefore, that count two of the information must be dismissed.

He first claims that, at the time the information alleges he marketed Xyrem for off-label uses, the drug was not "held for sale ... after shipment in interstate commerce" within the meaning of § 331(k). In particular, he argues that Xyrem was dispensed only via a central pharmacy in Missouri and shipped directly to the consumer—which he claims, takes it out of the scope of subsection (k). See Kordel v. United States, 335 U.S. 345, 351, 69 S.Ct. 106, 110, 93 L.Ed. 52 (1948) (noting that § 331(k) is "restricted to cases where the article is held for sale after shipment in interstate commerce; and, unlike [§ 331(a)], it does not reach situations where the manufacturer sells directly to the consumer."). The government counters that the proof at trial will demonstrate Xyrem was manufactured in stages in Pennsylvania and South Carolina, then shipped to a Missouri company, SDS/Express Scripts, which, during the relevant time period, acted as a warehouse, centralized pharmacy and distributor for all Xyrem prescriptions nationwide.³ In other words, that Xyrem was "held for sale" by SDS/Express after its shipment in interstate commerce and that Caronia promoted Xyrem for off-label uses while the drug was held at SDS/Express. Since these allegations of fact must be accepted as true on the motion, the Court finds that Caronia's charged conduct falls within the plain language of 21 U.S.C. § 331(k). See United States v. Sullivan, 332 U.S. 689, 697, 68 S.Ct. 331, 335-36, 92 L.Ed. 297 (1948) (The purpose of the FDCA is to "safeguard the consumer by applying the Act to articles from the moment of their introduction into interstate commerce all the way to the moment of their delivery to the ultimate consumer.").

Caronia next argues that, assuming the lawful reach of the FDCA, he did not misbrand Xyrem within the meaning of 21 U.S.C. § 352(f) because he administered adequate warnings to the cooperating physician in October and November 2005.⁴ Somewhat confusingly, Caronia claims that no matter whether Xyrem is prescribed for on or off-label indications, it is administered in the same manner and in the same dosage, and, therefore, the potential dangers are identical for all. Accordingly, Caronia says, his duty to provide adequate directions was satisfied when he provided the...