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.
Yates Memo Point 1: To be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.
Yates Memo Point 2: Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.
Yates Memo Point 3: Criminal and civil DOJ attorneys handling corporate investigations should be in routine communication with one another
Yates Memo Point 4: Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals.
Yates Memo Point 5: Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized
Yates Memo Point 6: Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay
If the Yates Memo is truly to be believed then it’s reasonable to suspect that companies like Johnson & Johnson & VC NEA will flip on executives like Alex Gorsky, Gary Pruden, Bridget Ross, Josh Makower and John Chang. And at the very least we can boycott companies supporting unethical behavior & unethical executives.
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.
Citizen Petition is a special interest group funded by big pharma & med device
Guess who’s lobbying for this change: The Medical Information Working Group
These names should look familar:
Pfizer, Johnson & Johnson, Lilly, & Amgen paid the largest federal fines and now are funding Medical Information Writing Group that feel their first amendment rights are being hurt? Criminals trying to rewrite laws.
- 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.
derek stocker
My knowledge of US politics and corporations is sketchy though I am an avid follower of world affairs.
Am I naive to think it does appear as if the Democrat administration is at least making an effort to reign in the excesses of Corporations and leaning a little on the more obvious crooks who lead them?
If so, is a change of Administration to a Republican Government, especially if the Commander in Chief is a self confessed businessman with little political acumen going to go back on this?
As an interested outside observer it does appear that whenever a change of leader occurs there are also many changes of political appointees. This often leads to the ‘flavour of the month’ changing and what was deemed important by one Attorney General, the incumbent AG can either influence for the better, worse or drop altogether.