US v. CR Bard, Inc., Cr. No. 93-10279-WF.

• Decision Date: 08 April 1994
• Docket Number: Cr. No. 93-10279-WF.
• Citation: 848 F. Supp. 287
• Parties: UNITED STATES of America v. C.R. BARD, INC.
• Court: U.S. District Court — District of Massachusetts

848 F. Supp. 287

UNITED STATES of America v. C.R. BARD, INC.

Cr. No. 93-10279-WF.

United States District Court, D. Massachusetts.

April 8, 1994.

Richard Cooper, Eva M. Petko, Betsy K. Wanger, Gerald A. Feffer, Williams & Connolly, Washington, DC, Ralph D. Gants, Palmer & Dodge, Boston, MA, for defendant C.R. Bard, Inc.

Michael K. Loucks, U.S. Attys. Office, Boston, MA, for U.S.

MEMORANDUM AND ORDER

WOLF, District Judge.

INTRODUCTION¹

There is in this case a binding plea agreement pursuant to Federal Rule of Criminal Procedure 11(e)(1)(C). The court is called upon to accept it, or reject it and give the defendant the opportunity to withdraw the plea. See Fed.R.Crim.P. 11(e)(3) and (4). I have decided to accept the plea agreement, and I will impose the sentence which it provides.

The court has discretion with regard to whether to accept a plea agreement that is binding. It is obligated to exercise that discretion in a reasoned way. When, as here, the joint sentencing recommendation is the result of arms' length negotiations between capable counsel, this court believes the agreement should be accepted if it is reasonable. To put it another way, it should be accepted unless there is a good reason to reject it. See United States v. Noble, 653 F.2d 34, 36 (1st Cir.1981) (involving a Rule 11(e)(1)(A) charge bargain); United States v. Ammidown, 497 F.2d 615, 622 (D.C.Cir. 1973). This is particularly true if the plea will save substantial prosecutorial and judicial resources, and implicitly reflects the prosecutorial assessment that a plea by one defendant will strengthen the investigation and prosecution of other present or potential defendants. See Ammidown, 497 F.2d at 622; United States v. Carrozza, 807 F.Supp. 156, 159-60 (D.Mass.1992), aff'd, 4 F.3d 70 (1st Cir.1993).

Nevertheless, I have scrutinized the plea agreement to determine whether it is reasonable. In considering the reasonableness of the agreement, I have considered the facts, the terms of the plea agreement, and the Sentencing Guidelines, which do not apply because this conduct occurred before their effective date, but provide a point of reference to assess reasonableness. I have also considered the factors established by statute to be considered in imposing any sentence. See 18 U.S.C. § 3553(a)(2).

As I will describe in detail, I find that the agreed sentence would be within the Guidelines if the Guidelines were applicable. The sentence is also sufficient to satisfy the purposes of sentencing set forth in 18 U.S.C. § 3553(a)(2). The sentence properly reflects the seriousness of the offense and serves the purposes of specific and general deterrence. It should forcefully send a message not only to Bard, but to other corporations and the individual human beings who act for them. It should also protect the public from further possible crimes by Bard, promote respect for the law, and provide just punishment for the offense. Id.

FACTS

The essential facts of this case are as follows. C.R. Bard, Inc. has pled guilty to 391 felonies. These are one count of conspiracy, in violation of 18 U.S.C. § 371; 17 counts of mail fraud involving submissions to the Food and Drug Administration ("FDA)", in violation of 18 U.S.C. § 1341; eight counts of submitting false statements to the FDA, in violation of 18 U.S.C. § 1001; 363 counts of shipping adulterated medical devices, in violation of 21 U.S.C. § 333(a)(2), including 75 counts of shipping medical devices from an unapproved facility, 108 counts of shipping products that had been changed without the required FDA approval of that change, and 98 counts of shipping devices for human testing where such testing had not been approved; and two counts of failing to submit required reports to the FDA, in violation of 21 U.S.C. § 333(a)(2).

These are serious criminal violations. In essence, Bard knowingly and willfully kept adverse information from the FDA, made product changes that affected the safety or effectiveness of angioplasty catheters produced by its USCI Division without the required FDA approval, and illegally did testing on human beings without the required exemption from the FDA.

There were reports of product malfunction, injuries, and deaths associated with the catheters identified in the Information. Two patients died during or shortly after a medical procedure involving a Mini Profile angioplasty catheter during the time period charged in the Information; 50 patients had the tip of the Probe B catheter break off inside them during a catheterization procedure; and at least 17 patients had coronary bypass surgery following a Probe B tip break.

The court need not and will not make findings as to whether or not these deaths, or any injuries resulting from the tip breaks, were proximately caused by Bard's criminal violations. It is sufficient to recognize that these are the kinds of foreseeable consequences that violations of laws designed to protect the public health and safety may have. The people at Bard who had responsibility for making products important to the care of seriously ill patients failed in their responsibility to comply with these laws.

It appears to this court that as a result of the subversion of the FDA process designed to assure that medical products are safe and effective, Bard made inherently risky procedures more dangerous. As Mrs. Linda Talbott eloquently explained,² patients must rely primarily on their doctors to decide if procedures are sufficiently safe to be warranted. Doctors, in turn, must rely on the FDA and the company for the information necessary to make such decisions on a properly informed basis. Bard's crimes deprived the FDA, doctors, and their patients of the benefit of crucial information. See United States v. Dotterweich, 320 U.S. 277, 280, 64 S.Ct. 134, 136, 88 L.Ed. 48 (1943). In doing so, Bard betrayed an important trust.

Each of the 391 criminal violations was committed intentionally. The false statement violations were committed knowingly and willfully. The mail fraud violations, the shipping violations, and the failure to submit required reports were done with the intent to defraud or mislead.

These were not isolated violations. They involved several Bard products, and extended over more than two years.

THE PLEA AGREEMENT

The sentence to be imposed as a result of the plea agreement is $30,500,000 payable within 30 days as part of the civil settlement;³ $15,250,000 payable in one year as part of the criminal fine; $15,250,000 payable within two years as the remainder of the criminal fine; and a $78,200 mandatory special assessment.

The plea agreement also provides, although it is not part of the sentence, that Bard will implement specified corporate remedial measures and keep them in effect for four years. Bard is also obliged to cooperate fully and truthfully in the investigation and prosecution of its present and former officers and employees. Six have been indicted, including the former Chairman of the Board and Chief Executive Officer, who has been removed from his position, but continues to be paid by Bard.

THE PLEA AGREEMENT IS REASONABLE

There are a number of factors which together influence the court to conclude that the plea agreement is reasonable. First among these is the fact that the six individuals who allegedly acted for the defendant in conspiring to subvert the FDA process intended to assure the safety and effectiveness of inherently risky medical instruments are being prosecuted. I would not have accepted this plea without this provision.

Often, in my experience, companies will offer to plead guilty if the investigation or prosecution of its individual employees is dropped. I would have found that particularly inappropriate in this case. A corporation is a legal fiction. Individuals act for a corporation. Individuals commit crimes on behalf of a corporation. In this case, Bard's crimes have heightened risk to human life.

It is essential, in my view, that the law seek to hold individuals responsible for those crimes. They are properly presumed innocent. An individual's guilt will have to be proven beyond a reasonable doubt in a criminal case. It is, however, essential in a case like this, that individuals as well as corporations be the targets of criminal prosecution.

For, in a case like this, it is inadequate, and indeed somewhat frustrating, to seek to punish only a corporation. Sentences are, among other things, intended to address the defendant's conscience and influence future behavior. It is difficult to deal with what is essentially a legal abstraction in seeking to do that.

This is a fundamental and enduring problem. As my learned colleague, Judge Douglas Woodlock, had occasion to note in an opinion several years ago, when the Lord Chancellor of England sentenced a corporation centuries ago, he remarked: "Did you ever expect a corporation to have a conscience when it has no soul to be damned and no body to be kicked?" Securities and Exchange Commission v. John Adams Trust, 697 F.Supp. 573, 579 n. 6 (D.Mass.1988) (quoting Edward, First Baron Thurlow (1731-1806), as quoted in M. King, Public Policy and the Corporation 1 (1977)); see also J. Coffee, Jr., "No Soul to Damn: No Body to Kick: An Unscandalized Inquiry Into the Problem of Corporate Punishment," 79 Mich.L.Rev. 386 (1981).⁴

There is a poignant echo of Baron Thurlow's observation in the Presentence Report. Another of Mrs. Beavers' relatives, one of her adult granddaughters, wrote about her love for her grandmother and what she feels she and her family have been cheated of because of Mrs. Beavers' death. She ended her submission to the Probation Department by saying:

I know this probably won't mean anything to you, but while I have a chance to put in my two cents worth, just call it a healing thing, I would like to see those S.O.B.'s tried for murder. And I'm sure if the word was out, there are many, many more. But I know this is not possible, and their

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