United States v. Stepanets

• Citation: 879 F.3d 367
• Decision Date: 12 January 2018
• Docket Number: 16-2404,Nos. 16-2402,16-2403,s. 16-2402
• Parties: UNITED STATES of America, Appellant, v. Alla V. STEPANETS; Kathy S. Chin; Michelle L. Thomas, Defendants, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

879 F.3d 367

UNITED STATES of America, Appellant,
v.
Alla V. STEPANETS; Kathy S. Chin; Michelle L. Thomas, Defendants, Appellees.

Nos. 16-2402
16-2403
16-2404

United States Court of Appeals, First Circuit.

January 12, 2018

Daniel Tenny, Attorney, Appellate Staff, Civil Division, U.S. Department of Justice, with whom Chad A. Readler, Acting Assistant Attorney General, William D. Weinreb, Acting United States Attorney, Amanda P.M. Strachan, Assistant United States Attorney, George P. Varghese, Assistant United States Attorney, Douglas N. Letter, Attorney, Appellate Staff, and Scott R. McIntosh, Attorney, Appellate Staff, were on brief, for appellant.

John H. Cunha Jr., with whom Cunha & Holcomb, P.C., Boston, MA, was on brief, for appellee Stepanets. Michael C. Bourbeau, with whom Bourbeau & Bonilla, LLP, Norwell, MA, was on brief, for appellee Thomas.

Joan M. Griffin, Dublin, NH, for appellee Chin.

Before Torruella, Thompson, and Kayatta, Circuit Judges.

THOMPSON, Circuit Judge.

Preface

The government appeals from orders dismissing counts in an indictment that charged Alla Stepanets, Kathy Chin, and Michelle Thomas with "dispens[ing]" misbranded drugs in violation of the Federal Food, Drug, and Cosmetic Act, see 21 U.S.C. §§ 353(b)(1), 331(a), and 333(a)(2) —a statute that often goes by the unpronounceable initialism "FFDCA." Reviewing the matter de novo , see United States v. Guerrier, 669 F.3d 1, 3 (1st Cir. 2011), we think dismissal was not called for. And so we reverse and remand for further proceedings.

FFDCA Primer

Here is what you need to know about the FFDCA (we simplify a bit). Enacted many decades ago "to protect consumers from dangerous products," see United States v. Sullivan, 332 U.S. 689, 696, 68 S.Ct. 331, 92 L.Ed. 297 (1948), the FFDCA bans "[t]he introduction or delivery for introduction into interstate commerce of any ... misbranded" prescription drug, see 21 U.S.C. § 331(a). A prescription drug is "misbranded" if it is "dispensed" without "a written prescription of a practitioner licensed by law to administer such drug." Id. § 353(b)(1). "Dispensed" is an undefined FFDCA term, however. Anyhow, anyone who violates this law "with the intent to defraud or mislead" commits a crime punishable with up to three years in prison. See id. § 333(a)(2).

Case Background

Shifting from the general to the specific, we believe a simple sketch of the key events suffices to put things in perspective. A quick heads up, though: because the judge dismissed the charges before trial, we describe the facts as though the government had proved what the indictment alleged, see United States v. Councilman, 418 F.3d 67, 71-72 (1st Cir. 2005) (en banc)—which of course is not the case.

The Defendants

Stepanets, Chin, and Thomas were Massachusetts-licensed pharmacists. That

879 F.3d 370

meant they could (among other things) dispense drugs, but only through "valid prescriptions from a medical practitioner."¹ The trio worked as pharmacists for New England Compounding Center ("NECC" for short), a now-defunct Massachusetts-licensed pharmacy that specialized in "high-risk compounding"—a process that involves "using non-sterile ingredients to create sterile drugs." Assigned to NECC's "packing area," they "check[ed]" drug "orders" before "shipment to NECC's customers."

The Indictment

Eventually, Stepanets, Chin, and Thomas got swept up in a 131-count indictment that included 11 other persons with NECC ties. The gargantuan document catalogs an array of felonious conduct—for example, it alleges that NECC failed to follow proper sterilization procedures, opted to use expired or expiring ingredients, and neglected to run proper tests. As relevant for our purposes, the indictment alleges that our defendants dispensed drugs in violation of the FFDCA, specifically by causing misbranded drugs to be introduced into interstate commerce with the intent to defraud or mislead. And the indictment charges them both as principals and as aiders and abettors. See 18 U.S.C. § 2 (making aiders and abettors punishable as principals for the offenses they aided and abetted).

The indictment is quite detailed—as a for-instance, the indictment identifies particular drug shipments to particular places on particular dates based on prescriptions for fake patients, and it specifies the laws the defendants allegedly broke. By way of illustration, just consider the following allegations pulled from the indictment:

• on February 18, 2010, Stepanets caused 60 vials of "betamethasone repository" to be delivered to Lincoln, Nebraska, based on prescriptions for "Wonder Woman" and "Fat Albert," among others;²

• similarly, on March 8, 2012, Chin caused 60 vials of "betamethasone repository" to be delivered to Lincoln, Nebraska, based on prescriptions for "Flash Gordon," "Tony Tiger," and "Chester Cheeto," among others;

• and on March 20, 2012, Thomas and Stepanets caused 12 vials of "betamethasone repository" to be delivered to Elkhart, Indiana, based on prescriptions for "L.L. Bean," "Coco Puff," and "Filet O'fish," among others.³

879 F.3d 371

Also, the indictment notes the statutory bases for the charges— 21 U.S.C. §§ 353(b)(1), 331(a), and 333(a)(2), and 18 U.S.C. § 2 —and mimics their language in key respects.

The Dismissal Battles

Responding to the indictment, Stepanets, Chin, and Thomas moved to dismiss the FFDCA charges against them—Stepanets filed her own motion, and Chin and Thomas filed a joint motion. Stepanets argued that she was not sufficiently involved in NECC's process to have "dispensed" the drugs and that the pertinent FFDCA provisions are unconstitutionally vague as applied to her. Chin and Thomas argued that the FFDCA does not require prescriptions to be "valid" for licensed pharmacists to fill them; that as a factual matter they were not personally responsible for taking the steps they deemed necessary for them to have "dispensed" the drugs; and that the parts of the FFDCA covering their conduct are impermissibly vague as applied to them. The government responded that the FFDCA does not allow licensed pharmacists to fill obviously fraudulent prescriptions; that the indictment's allegations—which must be taken as true—support the charges; and that the FFDCA is sufficiently clear to withstand the defendants' vagueness challenges.

Acting on the parties' submissions, the judge dismissed the FFDCA counts against the defendants. Stripped to essentials, the judge's reasoning went something like this: The indictment's allegations, the judge wrote, show that the defendants "knew or should have known that at least some of the shipping labels were made out in the names of fictitious patients." But, the judge added, that conclusion helped the government only so much. Relying on a medical dictionary's definition of "dispense," the judge ruled that "a pharmacist dispenses a drug when she acts in her role as a licensed professional to fill (put together) a medical prescription for delivery to a patient." From there, the judge said that the FFDCA "as written clearly punishes pharmacists who fill or take part in the filling of invalid prescriptions placed into interstate commerce with the intent to defraud or mislead the government." But he still thought the indictment did not provide "fair notice." Explaining why, the judge wrote that "conduct incidental to the distribution of prescribed drugs"—like "checking a package"—falls outside the FFDCA's reach, and he expressed his concern that "a reasonable pharmacist" would not know "from the indictment that by matching orders to packages prior to their being shipped, she was criminally liable for participating in the filling of a prescription that she had never approved (or is even alleged to have seen)."

Sticking to his views, the judge later denied the government's motion to reconsider. Two things about that ruling stand out. First, the judge read the indictment as simply accusing our defendants of committing a "clerical task"—a task, the judge added, that does not rise to the level of dispensing under the FFDCA. Second, responding to the government's argument that his earlier order did not address aiding-and-abetting liability, the judge said the indictment's allegations portrayed each defendant as "mere[ly] presen[t]" at the scene of the crime—and mere presence does not an aider and abettor make, the judge wrote, "even when coupled with knowledge that a crime is being committed by others."

879 F.3d 372

The Appeal Taken

That brings us to today, with the government trying to torpedo the judge's rulings and the defendants trying to save them. Our jurisdiction secure thanks to 18 U.S.C. § 3731, we now offer our de novo take on the case.

Analysis

Guiding Legal Principles

We begin with a few basics. The Constitution says that a criminal defendant cannot "be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a...