United States v. Aegerion Pharmaceuticals, Inc.

United States District Court for the District of Massachusetts · 2017 · Corporations

CorporationsCorporate criminal procedureRule 11(c)(1)(C) pleasSentencingRule 11(c)(1)(C)C pleacorporate plea agreementpublic interest

Facts

Aegerion developed Juxtapid, an expensive cholesterol drug, and the Information alleged that the company engaged in unfair, deceptive, and fraudulent conduct to increase Juxtapid's use where it was not medically indicated. The proposed Rule 11(c)(1)(C) agreement included a negotiated fine and forfeiture, a compliance program, probation, and a promise by the government not to undertake further prosecution of Aegerion. The agreement also contemplated immediate sentencing without a presentence report, limited the court's ability to impose conditions beyond those in the agreement, and provided no restitution to non-governmental victims. Although the court noted much to commend in the plea, including management changes and extraordinary cooperation, it found the record incomplete and the agreement too restrictive.

Issue

Whether the district court should accept Aegerion's Rule 11(c)(1)(C) corporate plea agreement. More specifically, whether acceptance would be in the public interest when the agreement left substantial unknowns, provided no restitution to actual victims, and constrained the court's independent sentencing role.

Rule

In the corporate criminal context, a Rule 11(c)(1)(C) plea should not be accepted unless the court can conclude on an adequate record that acceptance is in the public interest and does not unduly hobble the court's independent constitutional and sentencing responsibilities. Where the agreement leaves material unknowns, restricts judicial discretion, and perpetuates unequal treatment between corporate and individual defendants, the court may reject it.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Boston, federal prosecutors charge Harbor Vale Medical Devices, LLC with misdemeanor misbranding offenses. The company and the government submit a Rule 11(c)(1)(C) plea that requires immediate sentencing the same day, waives a presentence report, and offers only counsel's assurances that the agreed fine is appropriate in light of the company's finances.

Should the district court accept the agreement?

Explanation. The majority held that a corporate Rule 11(c)(1)(C) plea should not be accepted unless the court can conclude on an adequate record that acceptance is in the public interest and does not unduly hobble the court's independent sentencing role. A same-day sentencing arrangement without a presentence report, coupled with sparse factual support, leaves too many unknowns for the judge to exercise independent judgment. The problem is not illegality or bad faith alone; it is the court's inability to perform its sentencing responsibility on an adequate record.