United States v. Rothenberg

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 23, 2009
No. 08-20397 Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
GAYLE ROTHENBERG
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:07CR100
Before SMITH, OWEN, and HAYNES, Circuit Judges.
HAYNES, Circuit Judge:*
Appellant, Gayle Rothenberg, appeals her conviction on twelve counts of
mail fraud, misbranding of a drug, and making a false statement. For the
reasons set forth below, we VACATE her sentence, REVERSE her conviction,
and REMAND for a new trial.
*
Pursuant to 5TH CIR . R. 47.5, the Court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-20397
I. Facts
Dr. Rothenberg was a licensed Texas physician who, during the last
decade, operated an “aesthetic medicine” office in Houston, Texas. One of the
services she offered was Botox injections. Botox is the brand name for a drug
derived from botulinum toxin type A (“BTA”), manufactured by Allergan
Corporation (“Allergan”). It is undisputed that Botox is the only form of BTA
approved by the Food and Drug Administration (“FDA”). During several months
in 2004, Dr. Rothenberg began using a form of BTA that is not FDA-approved
and that was manufactured by an Arizona company called Toxin Research
International, Inc. (“TRI”). The Government alleges that Dr. Rothenberg, with
intent to defraud, told patients that she was using Botox, when in fact, she was
using the cheaper, unapproved TRI BTA. Dr. Rothenberg was charged with
thirteen counts that included conspiracy to misbrand and commit mail fraud,
substantive mail fraud and misbranding counts, and one count of making a false
statement (to the investigating FDA agent). After her first trial ended in a hung
jury, Dr. Rothenberg was retried and found guilty on all counts except for one of
the mail fraud counts. Dr. Rothenberg now appeals, challenging several of the
district court’s evidentiary rulings as well as the jury charge.
II. Standard of Review
This Court reviews the district court’s evidentiary rulings, when properly
objected to, under an abuse of discretion standard. United States v. Garcia, 530
F.3d 348, 351 (5th Cir. 2008). “‘A trial court abuses its discretion when its
ruling is based on an erroneous review of the law or a clearly erroneous
assessment of the evidence.’” Id. (quoting United States v. Yanez Sosa, 513 F.3d
194, 200 (5th Cir. 2008)). This Court heightens its review of evidentiary rulings
in criminal trials. Id. An abuse of discretion in admitting or excluding evidence
is subject to a harmless error review. Id. A properly preserved challenge to jury
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instructions is also reviewed under an abuse of discretion standard. United
States v. Dien Duc Huynh, 246 F.3d 734, 738 (5th Cir. 2008).
III. Discussion
The essence of much of the Government’s case against Dr. Rothenberg was
that she represented that the TRI BTA was, in fact, Botox-branded BTA and
that she did so with the intent to defraud her patients. Much of the evidence Dr.
Rothenberg challenges on this appeal was presented by the Government
ostensibly to show Dr. Rothenberg’s intent to defraud (which was relevant to all
but one of the counts against her).
A. The Florida Incident
Patricia McDonald, a former employee of Dr. Rothenberg, testified, over
vociferous objections, about reading an article discussing an incident in which
“somebody in Florida had been hurt.” She claimed that she brought this article
to Dr. Rothenberg’s attention and that Dr. Rothenberg decided not to use the
TRI BTA as a result of their conversation. While somewhat confusing, the
testimony from Ms. McDonald clearly implied that the BTA used in Florida came
from the same company as that used by Dr. Rothenberg – TRI – when this is
not the case. Also, the testimony is questionable because the Florida incident
did not occur until November 2004; Dr. Rothenberg stopped using the TRI BTA
in September 2004.1 The district court refused to instruct the jury that the
Florida incident did not involve TRI BTA or Dr. Rothenberg. The judge did give
a limiting instruction that this testimony was not admitted for the truth of the
matter asserted but instead to show Dr. Rothenberg’s state of mind and intent.
1
Allergan’s pharmaceutical representative, Ashley Linn, confronted Dr. Rothenberg
about her lack of Allergan orders in September 2004, threatening to report the doctor. Dr.
Rothenberg immediately stopped ordering the TRI BTA, placed an Allergan order that day and
began using the Allergan Botox after that time. The Government made no effort to prove that
Dr. Rothenberg ever used the TRI BTA after September 2004, and, indeed, its various charts
and analyses assumed the cessation of use in September.
3
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The Government similarly argues to this Court that this evidence is
relevant to Dr. Rothenberg’s state of mind. Dr. Rothenberg contends this
evidence is irrelevant; at the very least, she contends, any probative value is
substantially outweighed by its prejudicial effect. See F ED. R. E VID. 403; United
States v. Spletzer, 535 F.2d 950, 955-56 (5th Cir. 1976).
“The admission into evidence of facts that do not concern the defendants,
that are not inextricably intertwined with the overall criminal episode is
reversible error if the admission prejudices the defendants.” United States v.
Dillman, 15 F.3d 384, 391 (5th Cir. 1994). We see little, if any, relevance in an
article about patients Dr. Rothenberg did not treat, in a state in which she does
not practice, concerning a substance from a source other than TRI, at a time
after she stopped using the challenged TRI BTA substance. We further agree
with Appellant that any probative value of this information is substantially
outweighed by the prejudicial effect of telling the jury that people were hurt from
this product and the confusion engendered by suggesting that it was the same
product used by Dr. Rothenberg.2 Despite calling a number of patients as
witnesses and investigating the records of many more, the Government never
proved that any patient of Dr. Rothenberg was harmed by the TRI BTA.
We conclude that the district court abused its discretion in admitting this
evidence. It is unnecessary for us to determine whether this error by itself was
sufficiently prejudicial to necessitate a new trial because we conclude that this
error, coupled with the error discussed in the next section, definitely necessitates
a new trial.
2
The error in admitting this evidence then led to the defense’s having to respond to
this evidence by attempting to show, through TRI’s Chad Livdahl, that the substance in
Florida was not the same as the TRI BTA. This testimony, in turn, became confused, further
confusing the jury. While the Government contends that Dr. Rothenberg’s counsel took pains
to tie Mr. Livdahl to the Florida incident, it is clear that the questioning was designed to yield
just the opposite result.
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B. Chad Livdahl’s Testimony
Chad Livdahl was the head of TRI. It is undisputed that he neither met
nor spoke with Dr. Rothenberg. He also was not directly involved in shipping or
selling any of the products Dr. Rothenberg bought from his company. In more
than ninety pages of testimony elicited by the Government on direct, it is
difficult to find any testimony that is both relevant and not cumulative. Instead,
resplendent in prison garb,3 Mr. Livdahl gave testimony that is replete with
irrelevant, prejudicial and potentially confusing testimony. Examples of this
irrelevant and prejudicial evidence include several pages of testimony about how
Mr. Livdahl tested the TRI BTA by injecting it into guinea pigs until they died.
He also tested it on himself. He testified about the FDA clinical trials process,4
without any indication that he is an expert in or even knowledgeable about this
process, which he admittedly did not utilize. He testified extensively about his
own criminal conviction, which was highly prejudicial and irrelevant. Mr.
Livdahl also testified about what someone “would be told” if they called TRI, but
no evidence was presented by either side that Dr. Rothenberg ever called TRI or
spoke to Mr. Livdahl. The few relevant answers he gave were cumulative of
testimony by others more directly involved in the events in question.
The Government then heightened the prejudicial effect of this information
by making references to it in closing argument, telling the jury to “realize how
important it is to have oversight from the FDA, so you don’t have some witch
doctor like Mr. Livdahl concocting anything he wants and trying to distribute it
3
That Mr. Livdahl testified while attired in prison garb only heightened the prejudicial
effect of this testimony.
4
Mr. Livdahl’s testimony was not necessary to establish anything about the FDA
processes, even if some were relevant. The Government called Dr. Mark Walton, the Senior
Medical Policy Advisor for the FDA, on this subject.
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No. 08-20397
throughout the United States.” In its closing, the Government also made
reference to the highly prejudicial testimony concerning guinea pig testing.
The Government contends that Mr. Livdahl’s testimony was necessary to
establish that the materials accompanying the TRI BTA were marked “for
research only, not for human use.” However, Mr. Livdahl had no personal
knowledge about the actual boxes and invoices that were sent to Dr. Rothenberg.
The Government laboriously went over TRI invoices with Dr. Rothenberg’s office
personnel, Patricia McDonald and Jana Metoyer, who read this language from
these invoices and similar documents. Ms. Metoyer also testified to Dr.
Rothenberg’s possession of a Material Safety Data Sheet for the TRI BTA which
contained the “not for human use” language. Randy Rakes, a pharmaceutical
sales representative for another company, testified to seeing a bottle, as well as
a TRI flyer, in Dr. Rothenberg’s office with the “not for human use” language.
The investigating agent, James Miller, also testified at length that Dr.
Rothenberg admitted to seeing this “not for human use” language in the
materials accompanying the TRI BTA. Finally, the defense conceded this point
in its opening statement and never disputed that this language was contained
in the TRI materials sent to Dr. Rothenberg.
We conclude that, overall, this irrelevant and cumulative evidence was
misleading and confusing as well as highly prejudicial to Dr. Rothenberg. When
combined with the irrelevant and prejudicial testimony about the Florida
incident, these errors constitute harmful error and necessitate a new trial.5 See
United States v. Riddle, 103 F.3d 423, 434-35 (5th Cir. 1997).
5
The Government contends that, because Dr. Rothenberg subpoenaed Mr. Livdahl for
the first trial (that ended in a mistrial), she has somehow waived her objections to his
irrelevant and prejudicial testimony elicited by the Government. To state this argument is
to show its fallacy.
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C. Standards of Care and Administrative Regulations
Mindful that there will be a retrial, we address the remaining points of
error raised by Dr. Rothenberg. Dr. Rothenberg challenges the admission of
evidence from the Director of Enforcement from the Texas Medical Board, Mari
Robinson, and three physicians to the effect that Dr. Rothenberg violated several
Texas administrative rules and laws governing doctors and failed to follow
appropriate medical procedures. The district court gave the following limiting
instruction in connection with the admission of this evidence: “Furthermore, if
the defendant has violated a rule or regulation of the Texas State Board of
Medical Examiners, or if her conduct has shown to have differed from that of
other physicians under like or similar circumstances, such did not necessarily
establish that she committed the separate and distinct criminal offenses charged
in the indictment.”
Dr. Rothenberg contends that the admission of this type of evidence
violates United States v. Christo, 614 F.2d 486 (5th Cir. 1980). We disagree. As
explained in United States v. Ramos, 537 F.3d 439, 459-60 (5th Cir. 2008), cert.
denied (U.S. Mar. 23, 2009) (Nos. 08-755 & 08-756), the problem in Christo was
that the civil standards were equated with the criminal standards. The district
court’s limiting instruction in this case made clear that the two are not the same.
With appropriate limiting instructions, civil regulations and standards can
sometimes be relevant to the question of intent. See, e.g., United States v.
Brown, 553 F.3d 768, 791-92 (5th Cir. 2008). Thus, we agree with the
Government that civil regulations and standards, generally known to doctors
practicing in the same or similar areas as Dr. Rothenberg, could bear upon her
intent in connection with the TRI BTA. The question then becomes whether the
actual evidence admitted was appropriate or strayed too far from that which is
admissible.
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Ms. Robinson testified about the rules and regulations governing Texas-
licensed doctors. The district court allowed Robinson to testify about her
understanding of how the Board interprets its rules, relying on our decision in
United States v. Griffin, 324 F.3d 330, 347-48 (5th Cir. 2003), and the Seventh
Circuit’s decision in United States v. Davis, 471 F.3d 783, 788-89 (7th Cir. 2006).
We agree with the Seventh Circuit that, in cases where it is relevant, an expert
can opine about how a board charged with administering a regulation actually
interprets that regulation, subject to the court’s conducting an appropriate Rule
403 balancing. See Davis, 471 F.3d at 789. However, we note, as Griffin stated,
that opinion testimony about “what the law is” or some expert’s “understanding”
about what the law means is impermissible. See Griffin, 324 F.3d at 348.
Having reviewed Ms. Robinson’s testimony, we conclude that the district
court carefully held her to the areas permitted by Griffin and Davis. We find no
error in the admission of her testimony.
We cannot say the same about the three doctors called by the
Government on this point – Drs. Kronberg, Hamilton and Bruce. None of these
doctors were qualified as experts on Texas medical regulations. Indeed, Dr.
Hamilton repeatedly disclaimed any real knowledge of such rules and
regulations. The other two doctors stated that they were generally familiar with
medical rules but provided no basis upon which to conclude that they were
experts on the subject. Thus, their testimony about rules and regulations was
improper.
Additionally, the doctors testified about whether they would use a drug on
humans that was labeled “not for human use” and what their practice was in
keeping records. The Government suggested that evidence about the standard
of care would be relevant to Dr. Rothenberg’s intent to the extent she deviated
from it. While the standard of care for a doctor could, in some instances, be
relevant in a criminal case (with proper limiting instructions), these doctors did
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not testify about the standard of care. Instead, they testified what they did or
would do.6 Even in a civil malpractice case, that evidence is irrelevant. What
a random doctor in Houston might do does not establish the standard of care for
Dr. Rothenberg that then, in turn, can be probative of her intent. See Whittley
v. Heston, 954 S.W.2d 119, 123 (Tex. App.–San Antonio 1997, no pet.) (“A
testifying expert cannot establish the standard of care by simply stating the
course of action he would have taken under the same or similar circumstances.”).
Further, in violation of Griffin, these doctors testified to their understanding of
the law. See Griffin, 324 F.3d at 348. Admission of that testimony was error.
At oral argument, the Government stated that the doctors’ testimony is
relevant because Dr. Rothenberg claimed that she consulted with “colleagues”
about the “not for human use” language and continued to use the TRI BTA after
receiving reassurance from those “colleagues.” No evidence indicated that Dr.
Rothenberg claimed to have spoken to these three colleagues about this
language. Tellingly, although all three testifying doctors were acquainted with
Dr. Rothenberg, all denied having a conversation with Dr. Rothenberg about this
language or whether she should use TRI BTA.7 Randomly picking three doctors
from the thousands who practice in this field to testify about what they would
6
Dr. Kronberg received a mailing from TRI containing the “not for human use”
language and indicated that such a warning would keep her from using the product. She also
gave her “understanding” of Board rules and what the law requires. She also testified about
how she keeps records. Dr. Hamilton indicated that he would not knowingly use a drug that
is not FDA-approved. Dr. Bruce also got a flier from TRI and was concerned about the fact
that it was not FDA-approved. She said that she would not use a product labeled “not for
human use” on her patients. The closest she came to “standard of care” evidence was her
testimony that it was “standard practice” to keep records regarding the lot numbers and
related information for drugs administered to her patients.
7
Dr. Hamilton stated that he had a conversation with Dr. Rothenberg after the FDA
investigation in which she said that she had used a substitute product for Botox and made an
“error in judgment.” However, they did not discuss the “not for human use” language.
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do cannot possibly bear on what Dr. Rothenberg was told by the “colleagues”
with whom she allegedly spoke.8
Because of our resolution of other issues, we need not decide if the
admission of the three doctors’ testimony was harmful error. We trust that on
remand, the improper questioning will not occur.
D. Other Issues
Dr. Rothenberg also challenges the district court’s refusal to allow her
expert to testify that the term “Botox” was used generically in articles and
speeches in the 1980’s. There is no showing that this generic use of “Botox”
continues to the present or that Dr. Rothenberg was practicing in this area of
medicine at that time or would have had any exposure to the articles or speeches
in question in the 1980’s. We agree with the district court that the testimony
was irrelevant and find no error in the district court’s ruling in this regard.
We also find no reversible error in the court’s charge on good faith reliance
on counsel because the instructions fairly and adequately covered this issue. See
United States v. St. Gelais, 952 F.2d 90, 93 (5th Cir. 1992).
IV. Conclusion
For the forgoing reasons, we VACATE Rothenberg’s sentence, REVERSE
her conviction, and REMAND this case for a new trial consistent with this
opinion.
8
In opening statement, Dr. Rothenberg’s attorney identified a Dr. Humble from
California as the “colleague” Dr. Rothenberg consulted about the “not for human use”
language.
10