United States v. Stepanets

United States Court of Appeals
For the First Circuit

Nos. 16-2402
16-2403
16-2404

UNITED STATES OF AMERICA,

Appellant,

v.

ALLA V. STEPANETS; KATHY S. CHIN; MICHELLE L. THOMAS,

Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Torruella, Thompson, and Kayatta,
Circuit Judges.

Daniel Tenny, Attorney, Appellate Staff, Civil Division, U.S.
Department of Justice, with whom Chad A. Readler, Acting Assistant
Attorney General, William D. Weinreb, Acting United States
Attorney, Amanda P.M. Strachan, Assistant United States Attorney,
George P. Varghese, Assistant United States Attorney, Douglas N.
Letter, Attorney, Appellate Staff, and Scott R. McIntosh,
Attorney, Appellate Staff, were on brief, for appellant.
 John H. Cunha Jr., with whom Cunha & Holcomb, P.C. was on
brief, for appellee Stepanets. Michael C. Bourbeau, with whom
Bourbeau & Bonilla, LLP was on brief, for appellee Thomas.
Joan M. Griffin for appellee Chin.

January 12, 2018
 THOMPSON, Circuit Judge.

Preface

The government appeals from orders dismissing counts in

an indictment that charged Alla Stepanets, Kathy Chin, and Michelle

Thomas with "dispens[ing]" misbranded drugs in violation of the

Federal Food, Drug, and Cosmetic Act, see 21 U.S.C. §§ 353(b)(1),

331(a), and 333(a)(2) — a statute that often goes by the

unpronounceable initialism "FFDCA." Reviewing the matter de novo,

see United States v. Guerrier, 669 F.3d 1, 3 (1st Cir. 2011), we

think dismissal was not called for. And so we reverse and remand

for further proceedings.

FFDCA Primer

Here is what you need to know about the FFDCA (we

simplify a bit). Enacted many decades ago "to protect consumers

from dangerous products," see United States v. Sullivan, 332 U.S.

689, 696 (1948), the FFDCA bans "[t]he introduction or delivery

for introduction into interstate commerce of any . . . misbranded"

prescription drug, see 21 U.S.C. § 331(a). A prescription drug is

"misbranded" if it is "dispensed" without "a written prescription

of a practitioner licensed by law to administer such drug." Id.

§ 353(b)(1). "Dispensed" is an undefined FFDCA term, however.

Anyhow, anyone who violates this law "with the intent to defraud

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or mislead" commits a crime punishable with up to three years in

prison. See id. § 333(a)(2).

Case Background

Shifting from the general to the specific, we believe a

simple sketch of the key events suffices to put things in

perspective. A quick heads up, though: because the judge

dismissed the charges before trial, we describe the facts as though

the government had proved what the indictment alleged, see United

States v. Councilman, 418 F.3d 67, 71-72 (1st Cir. 2005) (en banc)

— which of course is not the case.

The Defendants

Stepanets, Chin, and Thomas were Massachusetts-licensed

pharmacists. That meant they could (among other things) dispense

drugs, but only through "valid prescriptions from a medical

practitioner."1 The trio worked as pharmacists for New England

Compounding Center ("NECC" for short), a now-defunct

Massachusetts-licensed pharmacy that specialized in "high-risk

compounding" — a process that involves "using non-sterile

ingredients to create sterile drugs." Assigned to NECC's "packing

area," they "check[ed]" drug "orders" before "shipment to NECC's

customers."

1 All quotations in this section come from the indictment
unless otherwise noted.
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 The Indictment

Eventually, Stepanets, Chin, and Thomas got swept up in

a 131-count indictment that included 11 other persons with NECC

ties. The gargantuan document catalogs an array of felonious

conduct — for example, it alleges that NECC failed to follow proper

sterilization procedures, opted to use expired or expiring

ingredients, and neglected to run proper tests. As relevant for

our purposes, the indictment alleges that our defendants dispensed

drugs in violation of the FFDCA, specifically by causing misbranded

drugs to be introduced into interstate commerce with the intent to

defraud or mislead. And the indictment charges them both as

principals and as aiders and abettors. See 18 U.S.C. § 2 (making

aiders and abettors punishable as principals for the offenses they

aided and abetted).

The indictment is quite detailed — as a for-instance,

the indictment identifies particular drug shipments to particular

places on particular dates based on prescriptions for fake

patients, and it specifies the laws the defendants allegedly broke.

By way of illustration, just consider the following allegations

pulled from the indictment:

 on February 18, 2010, Stepanets caused 60 vials of

"betamethasone repository" to be delivered to Lincoln,

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 Nebraska, based on prescriptions for "Wonder Woman" and "Fat

Albert," among others;2

 similarly, on March 8, 2012, Chin caused 60 vials of

"betamethasone repository" to be delivered to Lincoln,

Nebraska, based on prescriptions for "Flash Gordon," "Tony

Tiger," and "Chester Cheeto," among others;

 and on March 20, 2012, Thomas and Stepanets caused 12 vials

of "betamethasone repository" to be delivered to Elkhart,

Indiana, based on prescriptions for "L.L. Bean," "Coco Puff,"

and "Filet O'fish," among others.3

2 Betamethasone is a steroid medication "with anti-
inflammatory and immunosuppressive properties." See Baldwin v.
White, No. 3:12CV210, 2013 WL 3893997, at *5 n.17 (E.D. Va. July
26, 2013).
3For anyone not up on pop culture: Wonder Woman is a made-
up superhero of comic book, television, and movie fame. Wonder
Woman, Wikipedia, https://en.wikipedia.org/wiki/Wonder_Woman
(last visited Jan. 3, 2018). So is Flash Gordon. Flash Gordon,
https://en.wikipedia.org/wiki/Flash_Gordon (last visited Jan. 3,
2018). Fat Albert is a cartoon character created by Bill Cosby.
Fat Albert and the Cosby Kids,
https://en.wikipedia.org/wiki/Fat_Albert_and_the_Cosby_Kids (last
visited Jan. 3, 2018). Tony Tiger — a/k/a "Tony the Tiger" — is
a cartoon spokesperson for Kellogg's Frosted Flakes cereal. Tony
the Tiger, https://en.wikipedia.org/wiki/Tony_the_Tiger (last
visited Jan. 3, 2018). Chester Cheeto — a/k/a "Chester Cheetah"
— is a cartoon spokesperson for Frito Lay's Cheetos snacks.
Chester Cheeto, https://en.wikipedia.org/wiki/Chester_Cheetah
(last visited Jan. 3, 2018). L.L. Bean is a Maine-based outdoor
clothing and equipment retailer. L.L. Bean,
https://en.wikipedia.org/wiki/L.L.Bean (last visited Jan. 3,
2018). Coco Puff — a variant spelling of "Cocoa Puffs" — is a
chocolate-flavored cereal made by General Mills. Cocoa Puffs,
https://en.wikipedia.org/wiki/Cocoa_Puffs (last visited Jan. 3,
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Also, the indictment notes the statutory bases for the charges —

21 U.S.C. §§ 353(b)(1), 331(a), and 333(a)(2), and 18 U.S.C. § 2

— and mimics their language in key respects.

The Dismissal Battles

Responding to the indictment, Stepanets, Chin, and

Thomas moved to dismiss the FFDCA charges against them — Stepanets

filed her own motion, and Chin and Thomas filed a joint motion.

Stepanets argued that she was not sufficiently involved in NECC's

process to have "dispensed" the drugs and that the pertinent FFDCA

provisions are unconstitutionally vague as applied to her. Chin

and Thomas argued that the FFDCA does not require prescriptions to

be "valid" for licensed pharmacists to fill them; that as a factual

matter they were not personally responsible for taking the steps

they deemed necessary for them to have "dispensed" the drugs; and

that the parts of the FFDCA covering their conduct are

impermissibly vague as applied to them. The government responded

that the FFDCA does not allow licensed pharmacists to fill

obviously fraudulent prescriptions; that the indictment's

allegations — which must be taken as true — support the charges;

2018). And Filet O'fish — a variant spelling of "Filet-O-Fish" —
is a fish sandwich sold by McDonald's, a fast-food restaurant
chain. Filet-O-Fish, https://en.wikipedia.org/wiki/Filet-O-Fish
(last visited Jan. 3, 2018).
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and that the FFDCA is sufficiently clear to withstand the

defendants' vagueness challenges.

Acting on the parties' submissions, the judge dismissed

the FFDCA counts against the defendants. Stripped to essentials,

the judge's reasoning went something like this: The indictment's

allegations, the judge wrote, show that the defendants "knew or

should have known that at least some of the shipping labels were

made out in the names of fictitious patients." But, the judge

added, that conclusion helped the government only so much. Relying

on a medical dictionary's definition of "dispense," the judge ruled

that "a pharmacist dispenses a drug when she acts in her role as

a licensed professional to fill (put together) a medical

prescription for delivery to a patient." From there, the judge

said that the FFDCA "as written clearly punishes pharmacists who

fill or take part in the filling of invalid prescriptions placed

into interstate commerce with the intent to defraud or mislead the

government." But he still thought the indictment did not provide

"fair notice." Explaining why, the judge wrote that "conduct

incidental to the distribution of prescribed drugs" — like

"checking a package" — falls outside the FFDCA's reach, and he

expressed his concern that "a reasonable pharmacist" would not

know "from the indictment that by matching orders to packages prior

to their being shipped, she was criminally liable for participating

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in the filling of a prescription that she had never approved (or

is even alleged to have seen)."

Sticking to his views, the judge later denied the

government's motion to reconsider. Two things about that ruling

stand out. First, the judge read the indictment as simply accusing

our defendants of committing a "clerical task" — a task, the judge

added, that does not rise to the level of dispensing under the

FFDCA. Second, responding to the government's argument that his

earlier order did not address aiding-and-abetting liability, the

judge said the indictment's allegations portrayed each defendant

as "mere[ly] presen[t]" at the scene of the crime — and mere

presence does not an aider and abettor make, the judge wrote, "even

when coupled with knowledge that a crime is being committed by

others."

The Appeal Taken

That brings us to today, with the government trying to

torpedo the judge's rulings and the defendants trying to save them.

Our jurisdiction secure thanks to 18 U.S.C. § 3731, we now offer

our de novo take on the case.

Analysis

Guiding Legal Principles

We begin with a few basics. The Constitution says that

a criminal defendant cannot "be held to answer for a capital, or

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otherwise infamous crime, unless on a presentment or indictment of

a Grand Jury," U.S. Const. amend. V, and that she has "the right

. . . to be informed of the nature and cause of the accusation,"

U.S. Const. amend. VI. Consistent with these commands, Federal

Rule of Criminal Procedure 7(c)(1) says that an indictment must

contain "a plain, concise, and definite written statement of the

essential facts constituting the offense charged" — though an

indictment's "count[s] may allege that the means by which the

defendant committed the offense are unknown." An indictment need

not say much to satisfy these requirements — it need only outline

"the elements of the crime and the nature of the charge so that

the defendant can prepare a defense and plead double jeopardy in

any future prosecution for the same offense." See Guerrier, 669

F.3d at 3. This means that an indictment that tracks a statute's

terms is legally sufficient if the indictment itself gives the

defendant adequate notice of the charges she must meet. See, e.g.,

Hamling v. United States, 418 U.S. 87, 117 (1974); United States

v. Savarese, 686 F.3d 1, 6 (1st Cir. 2012); United States v. Troy,

618 F.3d 27, 34 (1st Cir. 2010).

As you read on, keep in mind as well that "[t]he

government need not recite all of its evidence in the indictment."

See United States v. Innamorati, 996 F.2d 456, 477 (1st Cir. 1993).

Also keep in mind that courts must not inquire into the sufficiency

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of the evidence underlying the indictment — for when "a defendant

seeks dismissal of the indictment, the question is not whether the

government has presented enough evidence to support the charge,

but solely whether the allegations in the indictment are sufficient

to apprise the defendant of the charged offense." See Savarese,

686 F.3d at 7; see also Guerrier, 669 F.3d at 4 (noting that courts

"routinely rebuff efforts to use a motion to dismiss as a way to

test the sufficiency of the evidence behind an indictment's

allegations"). Keep in mind too that in seeing whether an

indictment is up to snuff, a court must reject arguments that

embrace technical niceties at the expense of common sense. See

United States v. Mubayyid, 658 F.3d 35, 69-70 (1st Cir. 2011); 1

Charles Alan Wright & Andrew D. Leipold, Federal Practice and

Procedure § 123 at 522-23 (4th ed. 2008). And definitely keep in

mind that a court must deny a motion to dismiss if the motion

relies on disputed facts. See, e.g., United States v. Covington,

395 U.S. 57, 60 (1969) (holding that a court can resolve a pretrial

motion to dismiss the indictment only when "trial of the facts

surrounding the commission of the alleged offense would be of no

assistance in determining the validity of the defense"); Fed. R.

Crim. P. 12(b)(3) (noting that a motion to dismiss for failure to

state a crime "must be raised by pretrial motion if the basis for

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the motion is then reasonably available and the motion can be

determined without a trial on the merits" (emphasis added)).

A Sufficient Indictment

Measured against these modest standards, the indictment

here easily passes muster — just as the government argues. After

all, and again: The indictment notes the statutory bases for the

counts, listing the crimes' key elements. The indictment also

provides the relevant factual backdrop, alleging for example that

each defendant-pharmacist approved specified drug shipments, on

specified dates, to specified locations, based on obviously

invalid prescriptions for specified fake patients (e.g., "Wonder

Woman" and "Coco Puff"). And the indictment connects the elements

and the facts. So the indictment gives the defendants enough info

to prepare a defense and to invoke double-jeopardy protections to

forestall a later trial on the same charges. The law requires no

more.4 See, e.g., Savarese, 686 F.3d at 6; Troy, 618 F.3d at 35.

4 The defendants scold the government for "[f]inding comfort
in [the indictment's] tracking the language of the [FFDCA]." But
we see nothing wrong with the government's approach, particularly
since we have long held that "the statutory language may be used
in the indictment to describe the offense," provided the indictment
lets the defendant know the "general factual scenario on which the
charges rest," see Troy, 618 F.3d at 34, 35 — a standard this
indictment meets, for reasons already explained.
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 No Persuasive Counterarguments

The reason why the judge's analysis veered off-track is

because he made some out-of-place fact-assumptions — assumptions

that devastate his conclusion about how the indictment

insufficiently charges principal or aider-and-abettor liability.

Unfazed, the defendants invite us to follow the judge's lead,

advancing a number of counterarguments aimed at defending the

judge's rulings. We decline the invitation — though before

explaining why, we must first recap some things we said earlier.

Recall that after focusing on the word "dispense" in the

FFDCA, the judge ruled that the statute "punishes pharmacists who

fill or take part in the filling of invalid prescriptions placed

in interstate commerce."5 Moving on, the judge then read the

5
We take a quick timeout to straighten something out. Taking
their cue from the judge below, the defendants say that
Commonwealth v. Brown, 925 N.E.2d 845 (Mass. 2010), is — to quote
their brief — "instructive in how to define 'dispense'" under the
FFDCA. Dealing with Massachusetts's controlled-substances act —
not with the FFDCA — Brown noted that the term "dispense" in the
state statute is defined and limited to "deliver[y]" to the
"ultimate user," and "ultimate user" is defined as someone who
"lawfully possesses a controlled substance for his own use or the
use of a member of his household." Id. at 855 (emphasis removed)
(quoting Mass. Gen. Laws ch. 94C, § 1). So according to Brown, a
drug is not "dispensed" under that statute if a person receives it
because of "an invalid prescription" — though in that situation,
because she "has devolved into a 'pusher,'" the physician can be
prosecuted for "the crime of 'distribution.'" Id. at 857-58.
Importantly for us, the FFDCA provisions in play here have no
lawful-possession requirement. And given this big-time difference
between the two statutes, there is no need to rely on Brown.
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indictment as alleging that the defendants simply performed a

"clerical task," like checking the address on a drug package's

mailing label. And having done this, the judge concluded that the

defendants could not have understood from the indictment that their

conduct — helping fill prescriptions they never approved, much

less saw — infracted the FFDCA. More, the judge also read the

indictment as alleging that the defendants were merely present

when the crimes occurred, which as he saw it sinks any aiding-and-

abetting theory.

Recall too that the defendants — echoing the judge's

analysis — claim as a factual matter that they acted not as NECC

pharmacists but as NECC shipping clerks, performing "rotely

clerical" tasks, like checking addresses on packages. They also

insist that they did not "understand" from the FFDCA's language

that they could be criminally liable for helping fill prescriptions

they never signed off on, let alone caught sight of. And last but

not least, they too assert that the indictment's allegations show

only their mere presence at a crime scene, which in their telling

means the document inadequately alleges aiding-and-abetting

liability.

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 Taking first things first, we consider the indictment's

allegations that the defendants participated as principals in the

FFDCA crimes:

We agree with the government that the major flaw in the

judge's and the defendants' analyses is that the indictment says

nothing — zippo — about the defendants' having simply checked

addresses or worked as clerks. Rather, the indictments says that

each of them (1) was "a pharmacist licensed . . . to dispense drugs

pursuant to a valid prescription from a valid medical

practitioner," (2) "was employed as a pharmacist at NECC," and

(3) had caused misbranded drugs to be delivered into interstate

commerce — allegations that hardly suggest that they labored at

NECC as mere shipping clerks. Nor does the indictment say anything

about how a non-pharmacist could do the jobs each defendant-

pharmacist did at NECC.

Undaunted, the defendants note that the indictment

alleges that each of them worked "in the packing area checking

orders." And they insist — emphasis theirs — that "[i]t is

undisputed that [their] role checking orders in the shipping

department was limited to confirming that the correct drugs were

being sent to the correct facility and did not include checking

the prescriptions or patient names or any other aspect of the

dispensing process." But the government does dispute that

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contention, arguing for example that the "worked in the packing

area checking orders" allegations — viewed in context and with

common sense — connote the kind of checking that pharmacists

regularly do when filling prescriptions, i.e., confirming that

legit prescriptions triggered the drug shipments. Anyway, the

defendants cite nothing in the indictment to support their theory

that they did not check patient names or prescriptions.6 So at

best for the defendants, we have disputes of fact — disputes that

must be resolved at trial rather than on pretrial motions to

dismiss. See Covington, 395 U.S. at 60; Guerrier, 669 F.3d at 3-

4.

And what we have just said undermines the judge's and

the defendants' no-fair-notice analyses as well. Even putting to

6 Interestingly, the defendants later admit that they did do
more than check addresses, conceding in a footnote that NECC
"use[d] a pharmacist . . . to check that the name and dosage of
the drug on the shipping label [was] the same as the name and
dosage on the order form." No big deal, they say, because NECC's
use of a pharmacist was "a surfeit" and "hardly means that a non-
pharmacist could not easily have performed the task." To their
minds, "a pharmacist would only be required" — again, emphasis
theirs — "if some sort of testing was performed," which "was not
done, or alleged." This line of argument is full of holes, the
most notable ones being: The defendants do not explain why they
think NECC's use of a pharmacist was a surfeit (surfeit is
basically a fancy word for excessive) — perhaps because the
indictment does not allege non-pharmacists could have done what
the defendants did. Also and critically, the indictment nowhere
says that NECC needed pharmacists only when "some sort of testing"
was required.
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the side that no one cites a case — and we know of none — holding

any key FFDCA provision void for vagueness,7 the no-fair-notice

thesis depends on fact-assumptions about how the defendants did

not know that they could be on the hook criminally for taking part

in filling prescriptions they neither approved nor saw. But as

the government notes, the indictment says nothing about the

defendants' not approving or seeing the prescriptions. Properly

understood then, the no-fair-notice theory depends on contested

"facts surrounding the commission of the alleged offense" — facts

no court may consider before trial. See Covington, 395 U.S. at

60; see also Guerrier, 669 F.3d at 3.

Turning then to the indictment's allegations that the

defendants acted as aiders and abettors in the FFDCA crimes:8

Generally speaking, an aider and abettor is one who

knowingly helps another commit a crime. See United States v.

Urciuoli, 513 F.3d 290, 299 (1st Cir. 2008) (explaining that an

7See generally United States v. Girod, No. 5:15-87-S-DCR,
2017 WL 760742, at *1 (E.D. Ky. Feb 2, 2017) (stressing that "the
courts have repeatedly upheld the constitutionality of the
[FFDCA's] misbranding provisions . . . in the face of vagueness
challenges").
8We should first say that the defendants imply that the
government cannot go the aiding-and-abetting route because it
debuted that theory in a motion for reconsideration. But the judge
did not reject the issue on lateness grounds, opting instead to
address the issue head-on. So we consider the issue preserved for
appellate review. See Trenkler v. United States, 536 F.3d 85, 96
(1st Cir. 2008).
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aider and abettor is one who "associate[s] himself with the

venture, . . . participate[s] in it as in something that he wishes

to bring about," and "seek[s] by his action to make it succeed"

(quoting United States v. Peoni, 100 F.2d 401, 402 (2d Cir.

1938))). In outlawing "aiding and abetting, Congress used language

that 'comprehends all assistance rendered by words, acts,

encouragement, support, or presence.'" Rosemond v. United States,

134 S. Ct. 1240, 1246 (2014) (quoting Reves v. Ernst & Young, 507

U.S. 170, 178 (1993)).

As the government notes, the indictment specifically

cites to the aiding-and-abetting statute, even though such a cite

is not automatically required for the government to proceed on an

aiding-and-abetting theory. See United States v. Sanchez, 917

F.2d 607, 611 (1st Cir. 1990) (holding that "the government may

rely on an 'aiding and abetting' theory, although the indictment

neither alleges nor adverts to it, except on a showing of unfair

surprise"). And despite what the judge thought and the defendants

think, we believe a common-sense reading of the indictment's

allegations suggests that each defendant-pharmacist performed

NECC-assigned tasks that caused misbranded drugs to be introduced

into interstate commerce — allegations that indicate that the

defendants were not merely present, but were culpably present.

See Urciuoli, 513 F.3d at 299. So once again, the defendants,

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tracking the judge's line of reasoning, rely here on disputed facts

that they want found in their favor — a situation that calls for

a trial, not a dismissal on pretrial motions.9 See Covington, 395

U.S. at 60; Guerrier, 669 F.3d at 3-4.

Wrap Up

Our work over, we reverse the judge's dismissal of the

FFDCA charges against the defendants.

9 Two loose ends dangle. Focusing on the scienter element
for aiding-and-abetting liability, the defendants suggest that the
indictment does not allege that they knew the names on the
prescriptions were phony. Even the judge below did not buy that
argument, as he accepted for purposes of deciding the dismissal
motions that the defendants had the requisite knowledge. And the
defendants offer no persuasive basis for second-guessing the
judge's reasoning.
Without citing any authority, the defendants also suggest
that we should affirm the judge's aiding-and-abetting ruling
because the indictment (in their minds) fails to specifically
identify who the principals were (if not these defendants, that
is) — a ground not relied on by the judge. The suggestion is
waived, however — they neglected to make it below; and if that
were not enough, they neglected to adequately brief it here. See,
e.g., Ayala-Sepúlveda v. Municipality of San Germán, 671 F.3d 24,
30 n.4 (1st Cir. 2012); Muñiz v. Rovira, 373 F.3d 1, 8 (1st Cir.
2004).
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