United States v. Cadden

United States Court of Appeals
For the First Circuit

Nos. 21-1602, 21-2003

UNITED STATES,

Appellee,

v.

BARRY J. CADDEN,

Defendant, Appellant.

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

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

Before

Barron, Chief Judge,
Selya and Howard, Circuit Judges.

Michelle R. Peirce, with whom Bruce A. Singal and Hinckley,
Allen & Snyder LLP were on brief, for appellant.
Chris Looney, Assistant United States Attorney, with whom
Rachael S. Rollins, United States Attorney, was on brief, for
appellee.

October 13, 2022
 BARRON, Chief Judge. Barry J. Cadden was convicted on

fifty-seven counts under the federal Racketeer Influenced and

Corrupt Organizations Act, 18 U.S.C. § 1961 et seq., the Federal

Food, Drug, and Cosmetic Act, 21 U.S.C. 301 et seq., and the

federal mail fraud statute, 18 U.S.C. § 1341. He was initially

sentenced for these crimes to a 108-month prison term, but the

government appealed, and we vacated and remanded that sentence.

United States v. Cadden, 965 F.3d 1, 40 (1st Cir. 2020). He now

appeals from the 174-month prison term that he received at his

resentencing. We affirm.

I.

We have described the circumstances underlying Cadden's

criminal conduct in prior cases. See United States v. Cadden, 965

F.3d 1 (1st Cir. 2020) (Cadden I), United States v. Chin, 965 F.3d

41 (1st Cir. 2020) (Chin I), United States v. Chin, 41 F.4th 16

(1st Cir. 2022), cert. denied, No. 22-5534, 2022 WL 6573283 (Oct.

11, 2022) (Chin II). Suffice it to say, Cadden was the founder

and partial owner of the New England Compounding Center ("NECC"),

a company that carried out pharmaceutical compounding operations

to produce medications used nationwide. In 2012, a deadly outbreak

of fungal meningitis was traced to methylprednisolone acetate

("MPA") that NECC produced. A federal criminal investigation

ensued. It resulted in Cadden, Glenn Chin, and other NECC staff

being indicted on federal charges, including charges arising under

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the Racketeer Influenced and Corrupt Organizations Act ("RICO"),

the Federal Food, Drug, and Cosmetic Act ("FDCA"), and the federal

mail fraud statute. Cadden and Chin were found guilty of the RICO

and mail fraud charges, as well as some of the FDCA charges.1

Cadden's first sentencing hearing was held in June 2017.

There, the District Court calculated Cadden's range under the

United States Sentencing Guidelines ("U.S.S.G.") to be 87 to 108

months of imprisonment and sentenced Cadden to a prison term of

108 months.

Chin's first sentencing, before the same judge as

Cadden's, was held in January 2018. The District Court calculated

Chin's Sentencing Guidelines range to be 78 to 97 months of

imprisonment. The District Court then imposed a prison term of 96

months.

During both Cadden's and Chin's initial sentencings, the

District Court determined that enhancements set forth in two

Sentencing Guidelines did not apply to either Cadden or Chin. See

Cadden I, 965 F.3d at 33-36; Chin I, 965 F.3d at 52-55. The two

enhancements are set out, respectively, in U.S.S.G.

§ 2B1.1(b)(16)(A), "which imposes a two-level increase in the base

offense level of those convicted of certain crimes '[i]f the

offense involved . . . the conscious or reckless risk of death or

1 Cadden was charged with other offenses but was acquitted on
those counts.

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serious bodily injury'" ("conscious or reckless risk

enhancement"), and U.S.S.G. § 3A1.1(b), "which imposes a two-level

increase in the base offense level '[i]f the defendant knew or

should have known that a victim of the offense was a vulnerable

victim' and an additional two-level increase if that enhancement

applies and 'the offense involved a large number of vulnerable

victims'" ("vulnerable victims enhancement"). Chin II, 41 F.4th

at 19 (alterations in original) (quoting U.S.S.G.

§§ 2B1.1(b)(16)(A), 3A1.1(b)).

The United States appealed from the sentences imposed on

both Cadden and Chin. We vacated Cadden's sentence in Cadden I,

while clarifying the circumstances in which the enhancements set

out in the two Sentencing Guidelines quoted above would apply.

Cadden I, 965 F.3d at 33-36. We specified that, if the District

Court found on remand "that the enhancements should have been

applied [to Cadden] and that the Guidelines range it originally

calculated requires modification," it should "update[] the

Guidelines range to account for the application of one or both of

these enhancements," then "of course consider the parties' updated

arguments for what Cadden's sentence should be in light of the

modified range." Id. at 36. We also specified that the "District

Court may not, however, reconsider on remand other enhancements or

aspects of its initial sentencing calculation beyond those issues

narrowly required by its reconsideration of the two enhancements"

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at issue in that appeal. Id. We similarly vacated Chin's sentence

in Chin I, while issuing similar instructions to the District Court

in that case about how to determine whether these two enhancements

should be applied on remand. Chin I, 965 F.3d at 56 ("In light of

the issues we have identified with the treatment of [the]

enhancements, the District Court may find on remand that

application of one or more of these enhancements is warranted and

that recalculation of Chin's sentencing range is necessary. If it

does, then the District Court may of course in imposing a final

sentence consider the parties' arguments about how the traditional

concerns of sentencing play out given the modified range.").

The District Court resentenced Cadden on July 7, 2021.

The District Court determined that both the conscious or reckless

risk enhancement and the vulnerable victims enhancement applied to

Cadden. The same sentencing judge then resentenced Chin over two

days of proceedings on July 8 and July 21, 2021, and determined

that each of the enhancements applied to him as well.

The District Court determined that the application of

the two enhancements to Cadden resulted in a six-level increase to

his base offense level under the Sentencing Guidelines. The

District Court reached the same conclusion as to Chin.

The District Court recalculated Cadden's Sentencing

Guidelines range, based on his increased offense level, to be 168

to 210 months of imprisonment, and imposed on Cadden a prison

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sentence of 174 months. The District Court similarly recalculated

Chin's Sentencing Guidelines range to be 151 to 188 months of

imprisonment, but chose to vary below that range and sentenced

Chin to 126 months.

Chin and Cadden each appealed the District Court's

determination that the conscious or reckless risk enhancement and

the vulnerable victims enhancement applied to them. On July 15,

2022, we affirmed Chin's sentence in Chin II. We now address

Cadden's.

II.

Much of Cadden's appeal focuses on whether the District

Court erred in applying the conscious or reckless risk and

vulnerable victims enhancements when calculating his base offense

level. But, as Cadden acknowledged at oral argument, the District

Court did not err in construing the Guidelines setting forth those

enhancements, at least given our decision in Chin II, which was

decided prior to oral argument in this case but after briefing had

been completed. Cadden also does not contend -- again, in

consequence of our ruling in Chin II -- that the District Court

erred in finding that the conscious or reckless risk enhancement

applied to Cadden.

Notwithstanding Chin II, Cadden does still appear to be

challenging the District Court's determination that the vulnerable

victims enhancement applied to him. Specifically, he appears to

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be contending that the government has failed to meet its burden to

show that he had the required knowledge that the victims of the

MPA contamination were vulnerable because the record does not

suffice to show that he "knowingly ship[ped] contaminated drugs."

The record's failure to show that he had such knowledge about his

offense, according to Cadden, necessarily means that it fails to

show that he had "reason to know that patients were receiving

contaminated MPA at all, let alone reason to know that [those

patients] were 'unusually vulnerable.'"

Because this argument was not raised below, our review

is only for plain error. As a result, Cadden must show "(1) that

an error occurred (2) which was clear or obvious and which not

only (3) affected the defendant's substantial rights, but also (4)

seriously impaired the fairness, integrity, or public reputation

of judicial proceedings." United States v. Duarte, 246 F.3d 56,

60 (1st Cir. 2001). But, he fails to do so, given our ruling in

Chin II. There, Chin contended that the "absence of record

evidence of his individualized knowledge of both who the end users

of NECC drugs would be and that the drugs that NECC shipped were

contaminated" precluded the District Court from applying the

vulnerable victims enhancement to him. Chin II, 41 F.4th at 29.

But, we upheld the District Court's application of the enhancement

because "evidence was presented at trial that tended to show that

Chin was aware of the particularly grave risks associated with

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injecting contaminated medication into a patient's spinal fluid,

as opposed to other routes of drug administration," and other

evidence "brought home the certainty that Chin and other of the

coconspirators were fully aware of the risks involved in the

distribution of defective drugs." Id.

The District Court likewise found here that Cadden "did

design and preside over what was, as he recognized[,] a high-risk

enterprise" and that he ignored "warnings [and] signals," at least

some of "which he had to have been aware," including issues with

"specification tests, incomplete testing, falsification of drug

lab cleaning reports, . . . [and] the appearance of mold and other

contaminants in the clean room." And, Cadden neither argues nor

points to anything in the record that shows, let alone clearly

shows, that he was any less aware than Chin either that MPA was

being administered via "injecti[on] . . . into a patient's spinal

fluid" or of the "particularly grave risks" associated with doing

so. Chin II, 41 F.4th at 29. Thus, we reject this aspect of his

challenge to the sentence that he received as well.

III.

We turn, then, to Cadden's separate contention that,

even if the District Court rightly applied the two enhancements in

question when determining Cadden's base offense level, the

resulting sentence still cannot stand. He contends that is so for

two distinct reasons, neither of which we find persuasive.

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 A.

Cadden first contends that, in resentencing him, the

District Court "improperly and inexplicably stated its belief that

it had no discretion to impose the sentence it determined was

reasonable." Again, we review for plain error, as Cadden did not

raise this contention below.

Cadden does not specify whether this challenge that the

District Court misapprehended its discretion is to the procedural

or substantive reasonableness of the sentence to which he was

subject. See United States v. Matos-de-Jesús, 856 F.3d 174, 177

(1st Cir. 2017) ("Appellate review of claims of sentencing error

entails a two-step pavane. Under this framework, we first address

any assignments of procedural error. If the sentence passes

procedural muster, we then address any challenge to its substantive

reasonableness." (internal citations omitted)). But, we do not

see how the challenge could succeed as a challenge to the

sentence's substantive reasonableness if it could not succeed as

a challenge to the sentence's procedural reasonableness. And, as

we will explain, it fails on plain error review as a procedural

reasonableness challenge, given the nature of the four statements

that the District Court made that Cadden relies on to support this

ground for challenging his sentence.

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 First, Cadden points to a statement that the District

Court made when determining that the conscious or reckless risk

enhancement applied to him:2

I know counsel understand that I am
constrained in a number of respects by the
First Circuit's decision [in Cadden I]. I may
disagree with the decision in some respects,
but that does not matter, in that I owe
deference to them and am required to follow
their dictates as I understand them. . . . To
begin with the first of the rulings, the First
Circuit appeared to take the view that I did
not recognize that the [vulnerable victims]
enhancement is phrased in the subjunctive
rather than the conjunctive sense. I do not
think that is a correct statement of my
findings in that regard. . . . But that is,
as I understand it, the law as the First
Circuit now has defined it. I do recognize
that the First Circuit was correct, and,
therefore, I was incorrect in my belief that
the enhancement applied only if it was
anchored in an actual count of conviction
rather than through an assessment of a
defendant's conduct as a whole. It is clear
that the First Circuit takes the latter
position and disagreed with me on the former.
So with these two considerations in mind, I am
constrained to agree that the enhancement does
apply . . . . I have to conclude that
[Cadden's] conduct did and does fit within the
definition of "recklessness" as set out in the
new First Circuit test.

2 Cadden's briefing contained shorter excerpts of the first
and second statements by the District Court than we include here.
We include longer excerpts to demonstrate the context in which the
statements were made.

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 Second, Cadden points to the statement that the District

Court made in determining that the vulnerable victims enhancement

also applied to him:

With respect to the second enhancement
involving victims, here I think the First
Circuit has essentially decided the issue for
me, so I will go directly to their decision.
. . . Given the First Circuit's explicit
ruling in the Cadden decision, I have no
choice but to say, yes, the enhancement
applies.

Third, Cadden points to the statement that the District

Court made after announcing his newly calculated Sentencing

Guidelines range but prior to imposing his sentence:

I do also recognize that the Court of Appeals
was of at least the implicit, if not explicit,
view that my prior sentence was excessively
lenient. I do not personally agree, but so it
is with many of the things that I am required
to do as a judge.

Finally, Cadden points to the statement that the

District Court made in announcing Chin's sentence on July 21:

The First Circuit, though, has clearly, very
clearly, made clear its belief that whatever
I may have thought about the justice of the
original sentence, that, under their formula,
the sentence I imposed was too lenient, and I
do recognize that I have to abide by their
judgment in that regard.

The first and second statements fail to support Cadden's

contention that the District Court plainly erred in imposing the

sentence that it did. Each statement is nothing more than a

correct statement of the law that the District Court was required

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to apply. So, neither statement shows that the District Court

mistakenly thought that, due to Cadden I, it lacked the discretion

to impose a prison sentence as short as the one that it had

previously imposed.

The District Court's reference in the third statement to

Cadden I's "implicit, if not explicit" view about the leniency

that the District Court showed during Cadden's first sentencing

also fails to support Cadden's challenge, at least given that we

are reviewing only for plain error. The statement need not be

understood as a statement that the District Court believed itself

to be barred by Cadden I from imposing the same length of prison

sentence at Cadden's resentencing as it had imposed at his initial

sentencing when it was relying on a different and -- as Chin II

revealed, given the facts that the District Court found at Cadden's

resentencing -- mistaken calculation of his Sentencing Guidelines

range. Instead, this third statement can fairly be read merely as

recognizing that Cadden I's legal reasoning (both express and

implied), when applied to the facts that the District Court found

at the resentencing, required the District Court to apply the

enhancements to Cadden at resentencing that it had declined to

apply to him at his original sentencing. Thus, we cannot say from

this statement that it is clear or obvious that the District Court

imposed the sentence that it did here because it concluded that it

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lacked the discretion to do otherwise once it applied the

Guidelines in the manner Cadden I required.

The fourth statement was made at Chin's sentencing, not

Cadden's. So, for that reason alone, it is hard to see how it

plainly shows that the District Court thought that it lacked the

relevant quantum of discretion when it sentenced Cadden. But,

even setting that feature of the statement aside, it is not

different in substance from the third statement. Considered in

context, it, too, may be understood as a commentary about the

effect of our earlier rulings on how the relevant Guidelines must

be interpreted (and, given the facts found at the resentencing,

that the enhancements set forth in those Guidelines must have been

applied at that proceeding) rather than as a bald statement that

we had denied the District Court the discretion to vary downward

from the Sentencing Guidelines range calculated after a proper

analysis of the two Guidelines at issue. Thus, here as well it

cannot be said that it is clear or obvious from this statement

that the District Court was laboring under such a misimpression

about what we had held in our earlier rulings. And, that being

so, Cadden cannot find support for his claim of plain error in

this statement any more than he can in any of the other three.

Simply put, none of the four statements, when read in

context, support the claim of plain error. Nor do the statements

do so when read as a whole, given that nothing about their

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interaction with one another yield a sum greater than zero. We

therefore see no basis for overturning Cadden's sentence in these

statements.

B.

Cadden's remaining challenge to his 174-month prison

sentence concerns the disparity between his newly imposed sentence

and Chin's newly imposed sentence. Specifically, Cadden argues

that the "[D]istrict [C]ourt inexplicably widened the gap between

Cadden’s and Chin’s sentences, creating an unwarranted and

unreasonable sentence disparity" when it increased the gap between

Cadden's and Chin's sentences from 12 months (11 percent of

Cadden's original 108-month sentence) at the first sentencing to

48 months (28 percent of Cadden's new 174-month sentence) at the

second sentencing.3 Cadden argues that this unexplained disparity

is both a procedural and substantive error.

But, even assuming this challenge is preserved, such

that our review of the District Court's "discretionary judgments"

is for "abuse of discretion, its findings of fact for clear error,

and its conclusions of law de novo," United States v.

Reyes-Santiago, 804 F.3d 453, 468 (1st Cir. 2015), the challenge

3Cadden frames his argument in the same relative terms we
use to present it here. He does not argue that the District Court
should have maintained the same 12-month differential between his
sentence and Chin's, only that the District Court should have left
the percentage disparity between the sentences undisturbed.

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still fails. And that is so for the simple reason that we do not

confront here an "apples to apples" comparison. United States v.

Candelario-Ramos, 45 F.4th 521, 526 (1st Cir. 2022) (quoting United

States v. González-Barbosa, 920 F.3d 125, 131 (1st Cir. 2019)).

As the government points out, Chin gave an allocution at

his second sentencing proceeding that explained his efforts to

"better [him]self" in prison, including through "counsel[ing]

other inmates about drug addiction and recidivism." Chin also

stated that he "fe[lt] responsible for what happened because [he]

made the drugs that made . . . people terribly sick, including

those who have died" and apologized to the victims and their

families. And, the District Court explained in imposing Chin's

sentence that it was "happy to have heard" Chin's allocution,

because it was a "showing [of] genuine contrition and, more

importantly, genuine self-reflection." The District Court also

explained that, in its view, Chin was on the day of his

resentencing "a different man than the portrait that was painted

at trial" because he had engaged in "introspection and examination

of his own responsibility for what occurred." By contrast, when

the District Court asked if Cadden wished to make an allocution at

his resentencing, Cadden declined and chose instead to

communicate, through counsel, that "the sentiments he expressed"

during his "extensive allocution at his initial sentencing" were

unchanged. Thus, because Chin and Cadden were differently

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positioned from one another as of the time of their respective

resentencings, relative to how they were positioned at the time of

their respective initial sentencings, we see no basis for finding

Cadden's sentence to be impermissibly disparate from Chin's, even

though the gap between their sentences increased at their

resentencings.

IV.

For these reasons, Cadden's sentence is affirmed.

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