Traditionally, felony misbranding requires that a company or its employees gave false or misleading speech. A misdemeanor misbranding prosecution only requires the off-label promotion itself. So what happens to misdemeanor misbranding liability in the 2nd Circuit in light of U.S. v. Caronia?

“Under Caronia, which held that speech that is truthful and not misleading is lawful and protected under the First Amendment, it means you could still have felony liability if the government can prove false or misleading speech,” says Jonathan Sack, a partner at Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer. “But if they can't, the [off-label] activity would be protected under the First Amendment, and you would not have misdemeanor liability in that context.”

In December 2012, a federal judge for the Eastern District of New York approved a guilty plea and $762 million penalty by Amgen Inc. to resolve misdemeanor misbranding and civil False Claims Act liability. There, Sack says, the government crafted a misbranding theory that doesn't rely on false or misleading speech, and Amgen accepted it and pleaded guilty to it.

“There was no litigation about whether that was a viable theory,” Sack says, “but clearly the government took the position that [it] was. In the government's view, there is misdemeanor misbranding liability unaffected by Caronia.”

Traditionally, felony misbranding requires that a company or its employees gave false or misleading speech. A misdemeanor misbranding prosecution only requires the off-label promotion itself. So what happens to misdemeanor misbranding liability in the 2nd Circuit in light of U.S. v. Caronia?

“Under Caronia, which held that speech that is truthful and not misleading is lawful and protected under the First Amendment, it means you could still have felony liability if the government can prove false or misleading speech,” says Jonathan Sack, a partner at Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer. “But if they can't, the [off-label] activity would be protected under the First Amendment, and you would not have misdemeanor liability in that context.”

In December 2012, a federal judge for the Eastern District of New York approved a guilty plea and $762 million penalty by Amgen Inc. to resolve misdemeanor misbranding and civil False Claims Act liability. There, Sack says, the government crafted a misbranding theory that doesn't rely on false or misleading speech, and Amgen accepted it and pleaded guilty to it.

“There was no litigation about whether that was a viable theory,” Sack says, “but clearly the government took the position that [it] was. In the government's view, there is misdemeanor misbranding liability unaffected by Caronia.”