United States v. Aegerion Pharmaceuticals, Inc.
280 F. Supp. 3d 217 (2017)
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Rule of Law:
A district court retains the independent authority to reject a Rule 11(c)(1)(C) plea agreement, particularly in corporate criminal prosecutions, if the agreement fails to adequately address the public interest, provide full restitution to all victims, or perpetuates a two-tiered justice system that undermines judicial independence and public confidence.
Facts:
- Aegerion Pharmaceuticals, Inc. (Aegerion) developed Juxtapid, an expensive medicine for high cholesterol in people with a rare genetic disease, costing over $330,000 per patient per year.
- Aegerion engaged in unfair, deceptive, and fraudulent acts, including corporate management fraud, to increase Juxtapid use in medically unindicated circumstances.
- Aegerion knowingly induced the prescription of Juxtapid to many patients for whom it would do no good, potentially crowding out more promising therapies.
- Numerous patients, including elderly and pediatric individuals, suffered adverse events like liver toxicity and gastrointestinal distress, requiring them to discontinue Juxtapid use.
Procedural Posture:
- The government charged Aegerion Pharmaceuticals, Inc. with two misdemeanor counts of introducing misbranded drugs into interstate commerce.
- Aegerion Pharmaceuticals, Inc. sought to plead guilty to these charges pursuant to a Rule 11(c)(1)(C) plea agreement with the government, which included an agreed-upon sentence.
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Issue:
Does a district court have the discretion to reject a Rule 11(c)(1)(C) plea agreement in a corporate criminal prosecution when the court finds the terms do not adequately serve the public interest, ensure restitution for all victims, or uphold judicial independence, despite the agreement of the prosecution and the corporate defendant?
Opinions:
Majority - William G. Young, District Judge
Yes, a district court retains discretion to reject a Rule 11(c)(1)(C) plea agreement in a corporate criminal prosecution when it determines the agreement does not adequately serve the public interest, ensure restitution for all victims, or uphold the independence and legitimacy of the judicial function. Judge Young rejected Aegerion's plea agreement, citing numerous concerns. These included the lack of a Pre-Sentence Report, potentially improper Sentencing Guidelines calculations (e.g., no enhancement for vulnerable victims or sophisticated means), a fine significantly below the recommended range without sufficient economic justification, and, most critically, the complete absence of restitution for actual medical victims (despite a proposed settlement with third-party payors). The court also found the proposed cooperation agreement pallid and the internal compliance program lacked independent judicial oversight. Fundamentally, the court found that the prevalence of 'C' pleas for corporations, contrasted with their rare use for individuals, creates a 'two-tier criminal justice system' that mocks 'equal justice under law,' diminishes the legitimacy of the independent judiciary, and deprives society of the moral force and transparency of public trials. The court emphasized its constitutional duty to 'do equal right to the poor and to the rich' and that accepting the plea would perpetuate an improper system eroding public confidence.
Analysis:
This case profoundly reinforces the judiciary's independent role in scrutinizing plea agreements, particularly Rule 11(c)(1)(C) pleas involving corporate defendants. It serves as a strong warning to prosecutors and corporate defendants that courts will not merely rubber-stamp negotiated settlements perceived to undermine equal justice, victim restitution, or judicial oversight. The opinion highlights a growing judicial concern about a 'two-tier' justice system and may lead to increased demands for transparency, more robust sentencing justifications, greater emphasis on individual victim restitution, and more public accountability in corporate criminal resolutions, potentially shifting some leverage back to the judiciary in plea negotiations.
