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
- 2 - 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.
- 3 - 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"
- 4 - 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
- 5 - 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
- 6 - 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
- 7 - 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.
- 8 - 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.
- 9 - 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.
- 10 - 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
- 11 - 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
- 12 - 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
- 13 - 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.
- 14 - 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
- 15 - 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.
- 16 -