## Facts

- Purdue manufactured and marketed OxyContin, a Schedule II opioid pain medication.
- The government charged that, from approximately 1995 to 2001, Purdue employees and supervisors promoted OxyContin with intent to defraud or mislead by representing it as less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal than other pain medications.
- The charging document alleged deceptive sales training and marketing statements, including claims about abuse resistance and reduced addiction and withdrawal risk, despite contrary internal information and lack of supporting research or FDA approval for those claims.
- Purdue agreed to plead guilty to one felony count of misbranding with intent to defraud or mislead under the Food, Drug, and Cosmetic Act (FDCA).
- Three senior executives agreed to plead guilty to misdemeanor misbranding under the responsible corporate officer doctrine, without allegations of personal knowledge or intent to defraud.
- The plea resolution required substantial monetary payments (over $600 million total), including earmarked amounts for government programs and contemplated settlements with private health-care payors; the executive pleas included significant monetary payments but no incarceration.
- Individuals and entities claiming victim status (including private payors and an addicted individual) objected, sought to be heard, and moved for restitution.
- The district court’s task was to decide whether to accept the negotiated plea agreements and how victim-participation and restitution provisions affected that decision.

## Issues

1. Whether the court should accept the negotiated plea agreements under Federal Rule of Criminal Procedure 11, given the seriousness of the alleged conduct and the agreements’ sentencing terms (including no incarceration for the individual defendants).
2. Whether, and to what extent, the Crime Victims’ Rights Act (CVRA) required additional procedures, permitted victims to affect acceptance of the pleas, or required restitution beyond the negotiated payments.
3. Whether broad restitution should be ordered despite the diffuse victim pool and the practical difficulty of determining causation and loss amounts in sentencing.

## Decision

- The court accepted the plea agreements and entered judgments consistent with the negotiated dispositions.
- The court found an adequate factual basis for Purdue’s felony misbranding plea and for the executives’ misdemeanor pleas as responsible corporate officers.
- The court held that objecting parties received notice and a reasonable opportunity to be heard, satisfying the CVRA.
- The court concluded the CVRA did not give victims authority to direct charging decisions, require rejection of otherwise lawful plea agreements, or mandate broad restitution in these circumstances.
- The court declined to order expansive restitution beyond the negotiated resolution, citing the burdens of identifying victims and calculating losses and the existence of substantial earmarked settlement funds.

## Legal Principles

- A district court may accept a plea agreement under Rule 11 if the plea is knowing and voluntary and supported by a factual basis; the court generally respects prosecutorial charging and bargaining choices absent illegality or clear conflict with the public interest.
- Under the FDCA, felony misbranding requires proof of intent to defraud or mislead; a corporation may be liable for misbranding through its employees’ and supervisors’ conduct.
- Under the responsible corporate officer doctrine (as applied to FDCA misdemeanors), a corporate officer may be convicted without proof of personal knowledge or intent if the officer had authority and responsibility to prevent or correct violations and failed to do so.
- The CVRA secures victims’ rights to notice and to be reasonably heard at plea and sentencing proceedings, but it does not confer control over prosecution decisions or a veto over plea agreements.
- Restitution may be limited or declined when determining victims or calculating losses would unduly complicate or prolong sentencing, especially where causation and loss attribution are difficult in a large, diffuse victim population.

## Conclusion

The court approved a negotiated FDCA misbranding resolution that imposed a felony conviction and substantial financial penalties on the corporation and misdemeanor convictions on senior executives under the responsible corporate officer doctrine, while holding that the CVRA guaranteed victims participation rights but did not allow them to block the pleas or require broad court-ordered restitution given the practical limits of victim identification and loss calculation.


United States v. Purdue Frederick Co., 495 F. Supp. 2d 569 (W.D. Va. 2007)