Are Executives About to Get a Severe Paper Cut from DOJ Yates Memo? Case Study Johnson & Johnson Ethicon Acclarent
September 21, 2015
U.S. Department of Justice (DOJ) released a memo stating they’re getting tougher on the individuals of corporate fraud, signed by Deputy Attorney General Sally Yates, known in the media now as the Yates Memo. We’ll walk through the Yates Memo with an active Johnson & Johnson Case Study to help illustrate the points.
Daniel P. Chung notes in his new piece Individual Accountability for Corporate Wrongdoing:
The high-profile roll-out of the Yates Memorandum—above-the-fold coverage in major newspapers, a speech by Yates at New York University—obscures the fact that DOJ leaders, at increasingly higher levels of seniority, have been making similar statements for months, even years (and ones that echo similar statements made during Eric Holder’s tenure as Attorney General).
- For instance, in a speech on September 17, 2014, Principal Deputy Assistant Attorney General for the Criminal Division Marshall Miller explained that “when [corporations] come in to discuss the results of an internal investigation to the Criminal Division … expect that a primary focus will be on what evidence you uncovered as to culpable individuals, what steps you took to see if individual culpability crept up the corporate ladder, how tireless your efforts were to find the people responsible.”
It appears criminal defense attorneys are trying to manipulate the facts while not recognizing the rights of others without shame, remorse, guilt or accountability while shifting blame on free speech. Illegal acts are not protected acts even under free speech. If what someone is saying is illegal then it’s not protected. The upside to this though is that the criminal defense attorneys are driving up their client’s bills.
Executives at health care companies are increasingly pushing back against the Food and Drug Administration’s ability to regulate them, and two Minnesota men are on the front lines of the high-stakes legal fight.
But the two executives — former Acclarent sales executive Patrick Fabian and current Vascular Solutions CEO Howard Root — have joined a burgeoning movement challenging what they see as the FDA’s unconstitutional restrictions on commercial speech.
Both Minnesota men are trying to expose secret grand jury hearings and undermine the indictments because they believe prosecutors inaccurately portrayed what devicemakers can and cannot tell doctors and hospitals.
Fabian and Facteau are fighting back, saying that the 6 million pages of documents in evidence don’t show prosecutors’ true intentions. They’re trying to force the government to reveal more about its case and pry loose grand jury materials, which could undermine the indictment if prosecutors misinstructed jurors on the law, court filings say. Fabian is chief commercial officer at Maple Grove-based NxThera today.
A judge heard oral arguments on Fabian’s grand jury concerns last week. The judge in Root’s case is in the process of deciding whether to dismiss the case based on what has already been revealed. Joel Carlson StarTribune
This tactic previously worked for a sales rep who was told what to say but should not work for executives who generate the talk track, business plans, etc for the company. This again, as a former employee, is another reason why I would never work with or recommend to any of my clients to work with Patrick Fabian who is currently NxThera a company focused on BHP.
Guess who’s lobbying for this change: The Medical Information Working Group
- Similarly, in a speech on January 20, 2015, Deputy Assistant Attorney General for the Criminal Division Sung-Hee Suh stated that “corporations do not act criminally, but for the actions of individuals … the Criminal Division intends to prosecute those individuals, whether they are sitting on a sales desk or in a corporate suite.”
This is where DOJ does wrong: Much like in the Hobby Lobby case where a corporation was personified so can a company now be personified sociopathically.
- More recently, in a speech on April 17, 2015, Assistant Attorney General for the Criminal Division Leslie Caldwell stated that, for her Division, “[t]rue cooperation … requires identifying the individuals actually responsible for the misconduct—be they executives or others—and the provision of all available facts relating to that misconduct.”
The DOJ’s transparency via the Yates Memo opens them up to unfair criticism for not getting all the criminals in one swoop; but, it’s better to get a few than none. It doesn’t make anyone on the target food chain any less guilty but it does put a very unpleasant target on their backs.