United States v. Conigliaro

15 F.4th 26

• Court: Court of Appeals for the First Circuit
• Decided: September 27, 2021
• Docket: 19-1644P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 19-1644

UNITED STATES OF AMERICA,

Appellant,

v.

SHARON P. CARTER,

Defendant, Appellee.

No. 19-1645

GREGORY CONIGLIARO,

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

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

Before

Lynch, Lipez, and Barron, Circuit Judges.

Ross B. Goldman, Criminal Division, Appellate Section, United States Department of Justice, with whom Andrew E. Lelling, United States Attorney, Amanda P.M. Strachan, Assistant United States Attorney, Donald C. Lockhart, Assistant United States Attorney, Brian A. Benczkowski, Assistant Attorney General, and John P. Cronan, Principal Deputy Assistant Attorney General, were on brief, for appellant. Michael J. Pineault, with whom Clements & Pineault, LLP was on brief, for appellee Sharon P. Carter. Daniel M. Rabinovitz, with whom Shawn Lu and Murphy & King, P.C. were on brief, for appellee Gregory Conigliaro.

September 27, 2021 BARRON, Circuit Judge. These consolidated appeals are

the latest to reach us in connection with the federal criminal

investigation that ensued after patients across the country became

seriously ill or died in the fall of 2012 after having been

injected with a contaminated medication traced to the New England

Compounding Center ("NECC"). NECC was a licensed pharmacy based

in Framingham, Massachusetts. It combined drugs with other

substances to create specialized medications -- a practice known

as compounding.

Unlike in the other appeals that we have considered in

connection with the federal criminal investigation into NECC's

operations, see United States v. Stepanets, 989 F.3d 88 (1st Cir.

2021); United States v. Cadden, 965 F.3d 1 (1st Cir. 2020); United

States v. Chin (Chin I), 965 F.3d 41 (1st Cir. 2020), the appellant

here is the government. It challenges the post-verdict judgments

of acquittal that the District Court entered in favor of Sharon

Carter and Gregory Conigliaro, who were, respectively, NECC's

former Director of Operations and NECC's former Vice President,

Secretary, Treasurer, and General Manager.

Carter and Conigliaro were named along with twelve

others in a 131-count indictment that a grand jury in the District

of Massachusetts handed up in December 2014. Neither Carter nor

Conigliaro was charged with playing any direct role in the physical

compounding of the contaminated medication that was linked to

- 3 - patient illnesses and deaths. Instead, each was charged only with

counts that pertained to their roles in connection with other

aspects of NECC's operations. Among those charges was one that

alleged that each had, while working at NECC, conspired to defraud

the United States in violation of 18 U.S.C. § 371 "by interfering

with and obstructing" the ability of the United States Food and

Drug Administration ("FDA") to oversee the practices of NECC.

A jury found both Carter and Conigliaro guilty of

violating § 371 following their joint trial. Carter and Conigliaro

then each moved pursuant to Federal Rule of Criminal Procedure 29

for a post-verdict judgment of acquittal on the § 371 count for

which each had been found guilty.1 The District Court granted the

motions. The government now appeals the resulting judgments of

acquittal. We reverse.

I.

We describe the facts concerning the defendants' alleged

conduct as they are pertinent to our analysis. To set the stage

for that analysis, though, it is useful first to recount both the

involved procedural history that has brought us to this point and

some of the basic legal background that bears on the issues present

in these appeals.

1 Before and during the trial, both defendants had already filed multiple motions challenging the § 371 conspiracy charge against them, each of which the District Court had denied.

- 4 - A.

The indictment charged that between 1998 and

approximately October 2012, Carter, Conigliaro,2 and three of their

codefendants who also were employees of NECC at the time -- Barry

Cadden, Robert Ronzio, and Alla Stepanets3 -- had engaged in a

conspiracy to violate 18 U.S.C. § 371. That statute criminalizes

the "conspir[acy]" by "two or more persons . . . to commit any

offense against the United States, or to defraud the United States,

or any agency thereof in any manner or for any purpose" as long as

"one or more of such persons do any act to effect the object of

the conspiracy." Id. We have interpreted the "defraud" clause of

§ 371 to encompass conspiracies that seek to "interfere with

government functions." United States v. Goldberg, 105 F.3d 770,

773 (1st Cir. 1997); see also United States v. Morosco, 822 F.3d

1, 6 (1st Cir. 2016) (explaining that § 371 criminalizes

conspiracies to "obstruct[] the operation of any government agency

by any 'deceit, craft or trickery, or at least by means that are

2 Conigliaro began working at NECC in 2004 and was charged with joining the conspiracy then. 3 Ronzio was NECC's National Sales Manager. He ended up entering into a cooperation agreement with the government and pleading guilty to the § 371 conspiracy count that he faced. Stepanets was a pharmacist who worked in NECC's packing area. See Stepanets, 989 F.3d at 96. Cadden was NECC's founder and president. Stepanets and Cadden were both acquitted of the § 371 conspiracy count by their respective juries but found guilty of other counts that each faced. See id. at 93; Cadden, 965 F.3d at 8.

- 5 - dishonest'" (quoting Hammerschmidt v. United States, 265 U.S. 182,

188 (1924))); United States v. Barker Steel Co., 985 F.2d 1123,

1128 (1st Cir. 1993) ("The objective of the agreement is unlawful

if it is 'for the purpose of impairing, obstructing or defeating

the lawful function of any department of [g]overnment.'"

(quoting United States v. Hurley, 957 F.2d 1, 4 (1st Cir. 1992))).

In detailing the alleged § 371 conspiracy, the

indictment charged the defendants with "interfering with and

obstructing the lawful governmental functions of the FDA." In

support of this contention, the indictment alleged that Carter,

Conigliaro, and their co-conspirators had agreed to enter into a

conspiracy defraud the FDA by "purport[ing] to be operating NECC

as a state-regulated pharmacy, dispensing drugs pursuant to valid,

patient-specific prescriptions as required by Massachusetts law,

rather than as a drug manufacturer distributing drugs in bulk to

customers without prescriptions and thereby subject to heightened

regulatory oversight by the FDA" pursuant to its authority under

the Food, Drug, and Cosmetic Act ("FDCA").

Passed in 1938, the FDCA gave the FDA authority to

regulate "any new drug." Act of June 25, 1938, Pub. L. 75-717, 52

Stat. 1040 (codified at 21 U.S.C. § 301 et seq.); FDCA § 505(a)

(codified at 21 U.S.C. § 355(a)). During the time of the alleged

conspiracy, the FDCA defined "new drug" as "[a]ny drug . . . not

generally recognized . . . as safe and effective for use under the

- 6 - conditions prescribed, recommended, or suggested in the labeling

thereof." 21 U.S.C. § 321(p). It further provided that "[n]o

person shall introduce or deliver for introduction into interstate

commerce any new drug, unless an approval of an application filed

[with the FDA] is effective with respect to such drug." Id.

§ 355(a). In addition, it provided that any "new drug" must be

made in accordance with "current good manufacturing practice"

("GMP") -- a set of regulations that the FDA subsequently

promulgated to impose strict safety controls on manufacturers of

new drugs. Id. § 351(a)(2)(B); see also 21 U.S.C. § 371(a) ("The

authority to promulgate regulations for the efficient enforcement

of this chapter, except as otherwise provided in this section, is

vested in the [Commissioner of the FDA].").

Compounded drugs would appear to fit within the FDCA's

definition of a "new drug." After all, "[d]rug compounding is a

process [that] combines, mixes, or alters ingredients to create a

medication tailored to the needs of an individual patient . . .

that [is typically] not commercially available." Thompson v.

Western States Med. Cntr., 535 U.S. 357, 360-61 (2002).

Nevertheless, for the first fifty years after the FDCA's enactment,

"the FDA generally left regulation of compounding to the States."

Id. at 362.

"[E]ventually," however, the FDA "became concerned . . .

that some pharmacists were manufacturing and selling drugs under

- 7 - the guise of compounding, thereby avoiding the FDCA's new drug

requirements." Id. It then began to take a more proactive role

in the oversight of compounders -- at least those compounders that

the FDA concluded behaved as manufacturers. Id. at 362-63.

The indictment here centered on the role that the alleged

conspirators supposedly played in defrauding the FDA. In

particular, the indictment claimed that the defendants conspired

to prevent the FDA from being able to determine whether NECC was

a manufacturer or a pharmacy by intentionally misrepresenting the

nature of the company's operations. The indictment explained in

that respect that, as a "manufacturer," NECC would have been

subject to heightened regulatory oversight by the FDA pursuant to

its authority under the FDCA, while, as a "pharmacy," NECC would

have been primarily regulated by state pharmacy boards. By

conspiring to misrepresent to the FDA that NECC was operating only

as a pharmacy and not as a manufacturer, the indictment alleged,

the defendants conspired to interfere with the FDA's oversight

function with respect to NECC and thereby conspired to defraud the

United States in violation of § 371, given that such regulatory

oversight by FDA is a "government function."

The indictment also alleged how the defendants carried

out the alleged conspiracy to misrepresent the company's

operations. Specifically, it alleged that the defendants agreed

to participate in a conspiracy by which NECC would regularly

- 8 - misrepresent to the FDA that it was shipping its compounded

medications to customers (which were hospitals and medical

facilities rather than patients in their own right) pursuant to

valid, patient-specific prescriptions. Yet, in fact, the

indictment alleged, the company was processing the customers'

orders for those medications without there being any such

prescriptions. It then described three methods by which NECC

allegedly disguised the fact that it was shipping compounded drugs

in this manner before turning to the roles that that conspirators

allegedly each played in carrying out the deception.

One such alleged method involved "backfilling." Here,

NECC allegedly allowed customers to place their first order for

medications without supplying any prescriptions or patient names.

NECC then collected from customers the roster of patient names to

whom these customers ended up prescribing and administering the

medications on site. Thereafter, NECC allegedly attached such a

roster either retrospectively to that first order or used it to

process a subsequent order by the same customer -- thereby making

it look as if NECC had filled the orders only after it had received

valid, patient-specific prescriptions from a customer.

A second alleged method involved NECC's processing of

orders using prescriptions for fictitious patients. Sometimes,

according to the indictment, NECC processed orders using the names

of celebrities or fantasy characters that customers had supplied,

- 9 - such as "Michael Jackson" and "Wonder Woman." At other times, the

indictment alleged, NECC used the names of customers' staff members

or those of previous patients that customers had supplied. At

still other times, NECC allegedly fabricated the prescriptions

rather than relying on its customers to do so. And, finally,

according to the indictment, NECC sometimes used a given patient

name for multiple medications and for multiple units of the same

medication in a single order, applying a ratio that would look

plausible to regulators rather than filling a valid multidose

prescription.

Pursuant to yet a third alleged method of shipping the

drugs without a valid patient-specific prescription, according to

the indictment, NECC processed some customers' orders using just

the names of those institutional customers. NECC allegedly did so

even though the customer was a hospital or medical facility that

would then itself later dispense the drug to a patient and thus

was not itself a patient for whom a prescription had been issued.

Under this method, then, the drug was shipped by NECC to its

customers without there being any patient identified who had been

issued a prescription for it.

The indictment alleged that the defendants helped NECC

deploy these methods despite knowing that the company was

representing to the FDA that it was a compounding pharmacy that

dispensed drugs only pursuant to valid prescriptions for

- 10 - individual patients and therefore was not subject to the FDA's GMP

regulations that govern drug manufacturers. In setting forth this

allegation, the indictment highlighted several statements

allegedly made by the defendants that purportedly showed their

awareness of both the alleged scheme and the regulatory background

in which NECC's scheme was taking place.

The indictment included, for example, Conigliaro's

alleged statements to the FDA that NECC was a "compounding-only

pharmacy, not a manufacturer" and thus "not subject to GMP." Also

cited in the indictment was an email Carter shared with NECC's

order-processing staff, instructing them that "the MAX total

number of units . . . per patient must make sense," that "all names

must resemble 'real' names," and not to use "obviously fake names

[] (Mikey Mouse)" because she "must be able to logically explain

to a regulator why [NECC] processed x# of units per patient"

(emphasis added).

B.

The § 371 case against Carter and Conigliaro eventually

went to trial. They were tried along with the four other

defendants who were also charged with committing the § 371 offense.

At trial, the government presented documentary

evidence alongside testimony from twenty-nine witnesses, many of

whom were from the FDA or were former NECC employees. We summarize

the record presented at trial as it is relevant to the motions for

- 11 - judgments of acquittal by Carter and Conigliaro that are before us

Many of the documents that the government introduced at

trial were the product of two search warrants executed against

NECC and its sales-affiliate, Medical Sales Management. The

evidence introduced included order forms that NECC had filled for

its customers under various "patient" names, such as "Ted Bundy"

and "Barney Fife." The evidence also included an employee manual

that Carter signed that detailed the "FDA Modernization Act of

1997-Pharmacy Compounding Provisions" and "[h]ow to handle an FDA

inspection" (as well as many of the emails described in the

indictment).

In addition, the government introduced testimony from

several former employees who testified to Carter's and

Conigliaro's understanding of the importance to NECC of the company

being considered a pharmacy and not a manufacturer in the eyes of

regulators. Ken Boneau, for example, one such former sales

representative, testified that during his training as a new

employee, it was explained to him that "if the FDA regulated

[NECC], there would be a lot of limitations" and that it was

"important that the FDA not regulate NECC." Beth Reynolds, an

NECC licensing coordinator, further testified to conversations

that she had with Conigliaro and others about NECC needing to

comply with state laws requiring the compounder to meet state

- 12 - manufacturing guidance. As to Carter, the government introduced

testimony from former employees, including Boneau and Mario

Giamei, Jr., about emails that they had received from Carter about

what to do in the event that NECC's customers did not provide

patient names with orders. And, finally, FDA Agent Michael

Mangiacotti testified that during the search of NECC's offices, he

found signs posted in the sales staff's cubicles with instructions

from Carter warning NECC employees about the need to give

"regulators" the impression that NECC was compounding drugs after

receipt of real patient names.

C.

The jury was instructed with respect to the § 371 counts

that Carter, Conigliaro, and their co-defendants had been "charged

with conspiring to defraud the FDA by impeding its ability to

perform its regulatory function by misleading it into believing

that NECC was a Massachusetts regulated compounding pharmacy and

not operating as a drug manufacturer subject to FDA regulation and

oversight." The jury was further instructed that "[a] conspiracy

is an agreement between or among two or more persons to accomplish

an unlawful purpose," and that, "[t]o prove a defendant guilty of

a crime of conspiracy, the government must prove three essential

elements beyond a reasonable doubt": (1) "that the conspiratorial

agreement alleged in the indictment and not some other agreement

or agreements existed at or about the time specified"; (2) "that

- 13 - a defendant knowingly and willfully joined in that agreement with

the purpose of seeing it succeed in accomplishing its unlawful

goals"; and (3) "that one of the conspirators committed an overt

act, that is, took an affirmative step to further the purposes of

the conspiracy at some time during its existence."

The jury acquitted all the defendants of the § 371 counts

at issue other than Carter and Conigliaro, who were each found

guilty. Carter and Conigliaro each then then filed a motion for

a post-verdict judgment of acquittal supported by a memorandum.

The memoranda advanced three arguments for entering the judgments

of acquittal.

First, the memoranda argued that it was legally

impossible for either Carter or Conigliaro to have been part of

the alleged conspiracy due to what the record assertedly showed

about the FDA's authority, during the life of the alleged

conspiracy, to conduct the regulatory oversight of NECC with which

they were alleged to have interfered. Second, the memoranda

contended that Carter and Conigliaro could be convicted on the

counts of which the jury had found them guilty only by adopting an

overbroad and vague construction of § 371's "defraud" clause that

would deprive them of fair notice and thus violate their right to

due process under the Fifth Amendment of the United States

- 14 - Constitution.4 Third, and finally, the memoranda contended that

the evidence presented at trial was insufficient to support their

convictions under § 371, even assuming the defenses to those

convictions that we have just described failed.

At the same time that Carter and Conigliaro moved for

judgments of acquittal on the § 371 counts under Rule 29, they

also moved in the alternative pursuant to Federal Rule of Criminal

Procedure 33 for a new trial on those counts. Conigliaro argued

in support of his motion for a new trial that the District Court

had failed to sever his trial from that of four other defendants

named in the indictment with whom he and Carter were jointly tried

and that the District Court had also committed several prejudicial

evidentiary errors. Carter contended in her new trial motion that

the jury's verdict finding her guilty of violating § 371 was

contrary to the substantial weight of the evidence and that her

trial, too, was tainted in various ways by prejudicial evidence.

D.

The District Court held a hearing on the motions for

entering a post-verdict judgment of acquittal on the one § 371

4 Insofar as the defendants meant to argue not only that the construction of § 371's "defraud" clause on which their convictions are premised deprived them of fair notice in violation of the Due Process Clause, but also -- separately -- that § 371 is void for vagueness in violation of the Due Process Clause, the District Court rejected that argument and neither defendant renews it on appeal.

- 15 - count that Carter and Conigliaro each faced. The District Court

granted those motions in a written decision on June 7, 2019. It

thus did not rule on the then-still-pending Rule 33 motions for a

new trial on those same counts that were also brought by these

codefendants. The District Court determined that its ruling in

their favor on the motions to enter judgments of acquittal on their

§ 371 counts rendered their new trial motions moot.

The District Court issued a lengthy opinion setting

forth its reasoning for ruling as it did on the Rule 29 motions.

See United States v. Conigliaro, 384 F. Supp. 3d 145 (D. Mass.

2019). That opinion included a substantial discussion of the legal

impossibility and due process defenses that Carter and Conigliaro

advanced. In granting the motions, the District Court did not

reach the contention that, even if those defenses were unavailing,

the Rule 29 motions still would have to be granted based on the

independent contentions Carter and Conigliaro both made that the

evidence was insufficient to support their conviction of the

charges.

Because the District Court's analysis of these defenses

engages in a detailed manner with the state of regulatory play

during the alleged conspiracy, it is useful to provide a relatively

fulsome description of some of the key regulatory milestones before

describing the District Court's analysis further. After providing

this historical background, we then turn to a review of the

- 16 - District Court's reasoning in its opinion, starting with its

discussion of the defense of legal impossibility.

1.

As we explained above, the FDCA authorizes the FDA to

regulate "any new drug," FDCA § 505(a) (codified at 21 U.S.C.

§ 355(a)), which was defined in the relevant period as "[a]ny

drug . . . not generally recognized . . . as safe and effective

for use under the conditions prescribed, recommended, or suggested

in the labeling thereof." 21 U.S.C. § 321(p). And, as we also

explained above, although compounded drugs would seem to fit within

that definition, for the first fifty years after the FDCA's

enactment, the FDA generally left regulation of compounding to

state pharmacy boards. Western States, 535 U.S. at 360-61. Over

time, however, as we have noted, the FDA grew concerned that some

pharmacists were manufacturing and selling large quantities of

drugs under the guise of compounding in an effort to evade the

FDA's "new drug" requirements. Id.

The FDA responded to the concerns about compounding by

issuing a Compliance Policy Guide in 1992. FDA Compliance Policy

Guide (CPG) Sec. 7132.16 (1992) (the "1992 CPG"). It explained

"that while retail pharmacies . . . are exempted from certain

requirements of the [FDCA], they are not the subject of any general

exemption from the [FDCA's] new drug, adulteration, or misbranding

- 17 - provisions." Western States, 535 U.S. at 360-61 (quoting the 1992

CPG).

The Guide announced that the FDA "may, in the exercise

of its enforcement discretion, initiate federal enforcement

actions . . . when the scope and nature of a pharmacy's activities

raise[] the kinds of concerns normally associated with a

manufacturer and . . . result[] in significant violations of the

new drug, adulteration, or misbranding provisions of the Act."

Id. (quoting the 1992 CPG). But, the Guide also announced that

the FDA otherwise would continue to exercise discretionary

abstention from the policing of prescription-based compounding

pharmacies as well as pharmacies that compounded drugs without

prescriptions in "very limited quantities" for buyers with whom

they could demonstrate an "established professional practitioner-

patient-pharmacy relationship." Id. at 363 (quoting the 1992 CPG).

Congress codified parts of the FDA's 1992 Guide

concerning compounding a number of years later in the Food and

Drug Administration Modernization Act of 1997 ("FDAMA"). See Pub.

L. 105-115, 111 Stat. 2296, § 127 (codified at 21 U.S.C. § 503A

(1997)). In particular, as the District Court noted:

[The FDAMA] created a safe harbor for compounded drugs, exempting them from the FDCA's "new drug" requirements provided that certain criteria were met, most pertinently, that they be compounded in response to a valid prescription or only in limited non- prescription quantities where an established

- 18 - relationship existed between the specific pharmacist, patient, and prescribing physician.

Conigliaro, 384 F. Supp. 3d at 160 (citing 21 U.S.C. § 353a(a)).

The next major development of note occurred in 2002.

That was when the Supreme Court of the United States struck down

adjacent provisions of the FDAMA in Thompson v. Western States on

the ground that they violated the First Amendment. See Western

States, 535 U.S. at 377. The Court did not reach the question of

severability in that decision. See id. at 360. But, thereafter,

a circuit split ensued as to what, if anything, remained of the

FDAMA and its provisions regulating compounders.

The Ninth Circuit held that the FDAMA as a whole was

invalid. See Western States Med. Ctr. v. Shalala, 238 F.3d 1090

(9th Cir. 2001). The Fifth Circuit held, in contrast, that the

FDAMA stripped of those unconstitutional provisions remained

viable after Western States. See Med. Ctr. Pharmacy v. Mukasey,

536 F.3d 383 (5th Cir. 2008). Our circuit did not weigh in on the

issue.

The FDA reacted to Western States in 2002 by issuing a

new CPG. See FDA Compliance Policy Guide Sec. 460.200 Pharmacy

Compounding (2002) (the "2002 CPG"). The 2002 CPG sought to head

off any uncertainty that might result from the Supreme Court's

decision in Western States with respect to the FDA's continued

- 19 - enforcement approach by, as the District Court explained,

"essentially reembrac[ing] the FDA's 1992 guidance." Conigliaro,

384 F. Supp. at 160.

The 2002 CPG reiterated that, for enforcement purposes,

the FDA would continue to draw a line between, on the one hand,

compounders that operated like traditional retail pharmacies in

that they produced and sold drugs "upon receipt of a valid

prescription for an individually identified patient from a

licensed practitioner," and, on the other hand, compounders that

operated like manufacturers in that they, for instance,

"receive[d] and use[d] large quantities of bulk drug substances to

manufacture large quantities of unapproved drug products in

advance of receiving a valid prescription for them." The FDA

assured compounders of the first kind, which operated as retail

pharmacies, that it would abstain from enforcement actions, but

warned compounders of the second kind, which operated as

manufacturers, that it would "seriously consider enforcement

action" against them. The FDA, moreover, specified that one of

the factors it would consider in determining whether a compounder

fell into this latter category of manufacturers was whether it

"compound[ed] . . . drugs in anticipation of receiving

prescriptions, except in very limited quantities in relation to

the amounts of drugs compounded after receiving valid

- 20 - prescriptions." This 2002 CPG, while not legally binding, remained

in effect through the end of the alleged conspiracy in 2012.

2.

Carter and Conigliaro drew on this regulatory history in

making their legal impossibility and due process arguments to the

District Court. They claimed that, during the relevant period,

there was "no discernible federal law" or regulation that

"defin[ed] any clear distinction between a compounding pharmacy

and a drug manufacturer." As a result, the defendants argued, it

was legally impossible to conspire to interfere with the FDA's

"government functions" overseeing compounders. Moreover, the

defendants argued that, in light of this history, it would violate

notions of fair warning embedded in the Due Process Clause of the

Fifth Amendment to find them criminally liable under § 371.

The District Court began its opinion assessing the

defendants' defenses with the defense of legal impossibility. It

then took up their due process-based contentions. We describe

each portion of the District Court's analysis in turn.

a.

A "pure legal impossibility" defense applies "when no

statute proscribe[s] the result that the defendant expected,

desired, and intended to achieve." United States v. Fernandez,

722 F.3d 1, 31 (1st Cir. 2013) (citation omitted). "Pure legal

impossibility is always a defense" -- including where, as here,

- 21 - the defendants were charged and convicted of the inchoate crime of

conspiracy. Id.

As the District Court explained, however, legal

impossibility is distinct from factual impossibility. Factual

impossibility "arises when an attempt is frustrated by a physical

circumstance of which the actor is unaware." Conigliaro, 384 F.

Supp. 3d at 153 (citing People v. Fiegelman, 33 Cal. App. 2d 100

(1939)). And, as the District Court also noted, "we long have

held that factual impossibility is not a defense to . . .

liability . . . for inchoate offenses such as conspiracy or

attempt." Id. at 153 (citing United States v. Dixon, 449 F.3d

194, 202 (1st Cir. 2006)).

Against this legal backdrop, the District Court

explained that, in its view, "if the FDA, even if mistakenly,

disavowed a legal right to regulate compounding pharmacies like

NECC, and if the evidence at trial showed that the FDA abstained

from regulating NECC as a result of its internal determination of

its own jurisdiction, a legal impossibility defense would plainly

be available." Id. at 158 (emphasis added). The District Court

added that it did not mean "to fault the FDA" insofar as it wrongly

disavowed legal authority that it possessed, as the court

"recognize[d] . . . that the dividing line between pharmaceutical

compounding and drug manufacturing had (prior to the NECC disaster)

never been drawn with any clarity by Congress," which, "in turn,

- 22 - created a regulatory lacuna in the borderland in which NECC

progressively came to operate." Id.

The District Court then noted that "another way to frame

a legal impossibility defense" in this case would be to base it

"on the proposition that the government failed to meet its burden

of proof on a required element of the crime -- namely, that the

'government functions' with which the conspirators sought to

interfere were in fact being exercised by the FDA." Id. at 159.

It explained that in identifying this framing of the legal

impossibility defense it was "influenced by basic principles of

lenity and due process," which "require that it be 'reasonably

clear at the relevant time that the defendant's conduct was

criminal.'" Id. (quoting United States v. Lanier, 520 U.S. 259,

267 (1997)).

The District Court at that point undertook an extensive

analysis of the federal statutory, precedential, and regulatory

regime that governed compounding pharmacies during the time of the

alleged conspiracy -- reviewing much of the history discussed above

as well as additional statements made by FDA officials. The

District Court found that "the FDA itself" had "rejected" the

position that it had the authority to regulate compounding

pharmacies during those years. Id. at 162. The District Court

also found that the FDA in that time period repeatedly failed "to

- 23 - articulate a clear line between compounding and drug

manufacturing." Id.

According to the District Court, the FDA recognized over

that span of time that its "authority over compounding [was]

limited, unclear, and contested." Id. at 165 (citing Testimony

Before the House of Representatives Subcommittee on Oversight and

Investigations, Committee on Energy and Commerce, Nov. 14, 2012).

And, the District Court further noted, "the evidence [at trial]

plainly show[ed] that during the life of the charged conspiracy,

the FDA was not, and did not believe that it should be, in the

business of regulating companies like NECC that were engaged in

anticipatory pharmacy compounding." Id. at 165. "[T]he bottom

line," the District Court then concluded, was that "during the

critical times, these defendants (and NECC) could not have

defrauded the FDA by interfering with the relevant regulatory

functions because there were none to speak of." Id.

The District Court next considered the defendants' due

process-based defenses. The District Court had stated in the

introductory section of its opinion that the entry of judgments of

conviction of the defendants on the § 371 count that each faced

would "violate[]" their "rights to fair notice and due process."

Id. at 148. In the course of its due process analysis, though,

the District Court appeared to rely less on a conclusion based on

- 24 - the Fifth Amendment's Due Process Clause than on the related

concerns about "fair warning" rooted in the rule of lenity that it

had invoked in connection with its second framing of the legal

impossibility defense described above.

In that regard, the District Court explained that a

narrow construction of the "government functions" element of the

§ 371 offense might be appropriate based on such concerns. It

then stated that because the record showed that the FDA's

regulatory authority was uncertain in this area and that the agency

had not in fact exercised it, the "tie-breaking rule of lenity"

applied to § 371. See id. at 168.

The District Court elaborated on these conclusions

regarding due process and lenity as follows. It explained that if

the defendants' convictions were based on "the hypothetical

jurisdiction that the FDA might have asserted over 'new' drugs,

based on a 1938 statute, standing alone -- and irrespective of the

contrary positions since taken by the FDA itself -- . . . [they]

raise[d] legitimate concerns of constitutional due process and

fair notice." Id. at 168. The District Court then closed by

emphasizing that "[b]ecause the FDA did not believe it had the

statutory authority to regulate . . . new forms of pharmacy

compounders" like NECC, "people 'of common intelligence' in the

industry were left to guess as to the FDA's future enforcement

policies." Id. at 167. It also noted that "[p]revious judicial

- 25 - decisions had not 'fairly disclosed' to the industry that the FDA

was poised to insert itself as a hands-on overseer of compounding

pharmacies; to the contrary, the few cases that had been decided

mostly pointed in the opposite direction." Id. And, it finally

noted that "even if the argument could be made that the FDA had

never affirmatively and publicly renounced its residual authority

to regulate compounders, the contradictory nature of the public

pronouncements it did make on the subject would justify application

of the tie-breaking rule of lenity." Id.

The District Court did not specify to what provision of

law the "tie-breaking" rule of lenity that it invoked would apply.

It appeared to be concluding, however, at least given its earlier

statements, that the rule of lenity would apply to the "government

functions" element of the § 371 offense at issue.

In consequence of the narrow construction of that

element that it was thus required to adopt, the District Court

appeared to conclude, a juror could not find beyond a reasonable

doubt that the "government functions" with which the defendants

had been charged with conspiring to interfere existed. Here, it

seemed to suggest that such a finding would be precluded by the

lack of clarity in the record as to whether the FDA had the

regulatory authority with which the defendants allegedly conspired

to interfere in the years during which the conspiracy was alleged

to have been ongoing.

- 26 - Notably, though, the District Court did not appear to be

concluding at any point in its analysis that the rule of lenity

would apply to the FDCA itself, as opposed to the "government

functions" element impliedly incorporated into § 371 in a case

involving an alleged fraud of the sort at issue here. Thus, the

District Court did not appear to be holding that, due to the rule

of lenity, the term "new drug" in 21 U.S.C. § 321(p) would have

to be construed narrowly during the life of the conspiracy to

exclude either the practice of compounding altogether or, at the

least, that practice in the form in which NECC was alleged to have

engaged in it. In other words, the District Court at no point

held that the FDA would have been legally barred during the

relevant period of time from treating NECC as a "manufacturer"

under that statute, even for purposes of exercising its civil

regulatory enforcement powers and even if the agency had chosen to

assert such authority only after having provided due notice to

regulatory parties of its intention to do so.

E.

The District Court entered the post-verdict judgments of

acquittal four days after issuing its written decision granting

the motions for such judgments. The United States then timely

appealed.

- 27 - II.

We begin our analysis with the government's contention

that neither a legal impossibility defense (in either of the

formulations articulated by the District Court that we have just

described) nor a due process defense (including the variant of it

that appears to be premised on the rule of lenity that, as we have

just explained, the District Court seems to have embraced rather

than a variant premised on the Fifth Amendment itself) justifies

an affirmance of the District Court's post-verdict judgments of

acquittal in this case. We review a District Court's post-verdict

judgment of acquittal de novo. See United States v. Mubayyid, 658

F.3d 35, 47 (1st Cir. 2011).

In undertaking this review, we consider preserved

arguments putting forward the defense of legal impossibility de

novo. See Fernandez, 722 F.3d at 8. But, insofar as the District

Court's judgments of acquittal rested on factual determinations,

we "may uphold [them] only if the evidence, viewed in the light

most favorable to the government, could not have persuaded any

trier of fact of the defendants' guilt beyond a reasonable doubt."

Mubayyid, 658 F.3d at 47. Similarly, in considering the

government's challenge to the District Court's due process ground

for acquittal, our review is again de novo. See United States v.

Silva, 794 F.3d 173, 177 (1st Cir. 2015).

- 28 - Because we agree with the government's contention that

the District Court's grounds for granting the Rule 29 motions were

mistaken, we will also consider Carter's contention that we may

nonetheless affirm the District Court's judgment as to her because

the evidence was insufficient to support her conviction of the

charged offense. As we will explain, we find that contention

unavailing as well.

Here, as before, our review is de novo. United States v.

Velazquez-Fontanez, 6 F. 4th 205, 212 (1st Cir. 2021). The central

inquiry is “whether ‘any rational trier of fact could have found

the essential elements of the crime beyond a reasonable doubt.’”

Id. (quoting United States v. Bailey, 405 F.3d 102, 111 (1st Cir.

2005)). We engage in it by viewing the record "in the light most

favorable to the verdict and draw[ing] all reasonable inferences

in the verdict's favor." Id. (citing United States v. Meléndez-

González, 892 F.3d 9, 17 (1st Cir. 2018)).

Before explaining our reasons for agreeing with the

government's challenges to the District Court's ruling on the

defendants' Rule 29 motions, however, it is important to clarify

up front a critical point about the discussion of the defenses

just described that will follow. We thus start our analysis with

that clarification.

- 29 - A.

Questions implicating the FDA's authority to regulate

compounders as "manufacturers" under the FDCA in the relevant

period are of central import to the defenses at issue. We thus

emphasize up front that the analysis of those defenses that follows

adopts -- as we have explained above we understand the District

Court itself to have also adopted -- the premise (for which no

preserved challenge has been made) that, during the life of the

conspiracy, the FDA possessed the statutory authority under the

FDCA to regulate NECC as a "manufacturer" because a compounded

drug was a "new drug" within the meaning of the FDCA, see 21 U.S.C.

§ 321(p), whatever the FDA's own view (even if "mistaken") may

have been as to whether it possessed that authority.5

It is important to be clear about this premise for the

following reason. We do not dispute that, if the FDCA itself were

properly construed to be limited in a way that precluded the FDA

from exercising such regulatory power over NECC during the period

of the alleged conspiracy, even if the FDA sought to exercise such

authority after making known in advance its intention to do so, a

legal impossibility defense would be available to the defendants

5 We also note that no party has made the argument that NECC was an "outsourcing facility" as defined by 21 U.S.C. §§ 331(a), 333(a), and 353(b)(1) and thus eligible to be exempt from certain provisions of the FDCA if it satisfied several requirements, including registration with the FDA as such a facility and compliance with the current GMP.

- 30 - on that basis. Thus, in rejecting the defense of legal

impossibility here, we do not mean to suggest otherwise.

Moreover, we are aware that the defendants do attempt on

appeal to advance a defense of legal impossibility grounded in

that understanding of the legal limits on the FDA's regulatory

authority in the relevant time period -- due to the limited manner

in which they contend that the FDCA must itself be construed -- as

an alternative basis for affirming the District Court's rulings on

their Rule 29 motions. But, neither defendant developed that

argument below.

Indeed, consistent with that finding of forfeiture,

there is no indication that the District Court understood any such

contention to have been advanced. The opinion of the District

Court not only did not address such a contention but also appeared

to premise its own analysis on the understanding that the FDCA

conferred such regulatory authority on the FDA. See, e.g., id.

at 159. Thus, we, like the government, do not understand the

District Court, with respect to either variant of the legal

impossibility defense that it laid out, to have held that such a

legal limit on the FDA's authority was then in place. The result

is that any defense to the charges at issue before us on appeal

that is premised on the contention that the scope of the FDCA

itself did not reach pharmacies engaged in compounding during the

life of the alleged conspiracy -- because the term "new drug" in

- 31 - the FDCA did not encompass compounded drugs -- would have to

satisfy the demanding plain error standard to succeed. See United

States v. Pinkham, 896 F.3d 133, 136 (1st Cir. 2018). But, the

defendants cannot meet that standard, at least given the contrary

circuit case law regarding the meaning of the FDCA during that

time frame. See Med. Ctr. Pharmacy, 536 F.3d 383, 395, 400; see

also United States v. Rivera-Morales, 961 F.3d 1, 13 (1st Cir.

2020) ("[A] criminal defendant generally cannot show that a legal

error is clear or obvious in the absence of controlling precedent

resolving the disputed issue in his favor." (citing United

States v. Delgado-Sánchez, 849 F.3d 1, 10-11 (1st Cir. 2017);

United States v. Amaro-Santiago, 824 F.3d 154, 163 (1st Cir.

2016))).

For these reasons, our discussion of the legal

impossibility and due process defenses that will follow adopts as

its sole focus the focus of the District Court, the government,

and the defendants in their preserved arguments to us on appeal.

It thus considers only how the FDA's own understanding of its

regulatory authority -- as reflected in part in its own public and

internal statements regarding it -- bears on Carter’s and

Conigliaro’s criminal liability under § 371 on the understanding

that the FDCA is best construed to have authorized the FDA to treat

a compounded drug as a "new drug" and thus a compounding pharmacy

as a "manufacturer" under the FDCA during the years in question.

- 32 - B.

With that background in place, we are -- at last -- well

positioned to take up the government's argument that, given the

state of regulatory play during the life of the conspiracy, neither

variant of the legal impossibility defense that the District Court

described as being available to the defendants was available. The

government further contends that any fair-warning-based defense

(whether rooted in the Fifth Amendment's Due Process Clause or the

application of the rule of lenity to the "government functions"

element of § 371) is also -- given the relevant regulatory history

-- unavailing. We agree with the government in both respects.

We start with the government's arguments as to the

District Court's first way of framing the legal impossibility

defense. Here, the government appears to treat the District Court

as having held that the defendants made out a viable legal

impossibility defense because, even if the FDCA would have

authorized the FDA to have asserted regulatory authority over NECC

as a manufacturer during the alleged conspiracy, the record

established that the agency had disavowed any authority to do so

during the relevant time frame and thereby had barred itself from

doing so. On this understanding, then, the District Court held

that, due to what the record showed regarding the FDA's own

understanding of its own regulatory power, mistaken though it may

- 33 - have been, there were no "government functions" with which the

defendants could conspire to interfere and hence the charged crime

was one that it was legally impossible for the defendants to

commit.

It is not entirely clear to us that the District Court

did in fact embrace the holding regarding the defense of legal

impossibility that the government attributes to it. The District

Court stated that a disavowal-based variant of that defense would

"plainly be available" if the record showed that the agency had

made such a disavowal. Conigliaro, 384 F. Supp. 3d at 158. But,

it is not evident to us that the District Court then actually held

that judgments of acquittal must be entered on the basis of the

variant of the legal impossibility defense that it described that

was predicated on the record showing that the agency had in fact

made such a disavowal of its legal authority. The District Court

appeared instead to hinge its ruling vis-a-vis legal impossibility

on the second variant of that defense that it described, and which

we next address.

Nevertheless, the defendants, like the government,

appear to treat the District Court as having relied on the first

variant of the legal impossibility defense and not solely the

second, and, in any event, they urge us to embrace it ourselves.

We thus proceed on the understanding that the District Court did

- 34 - so hold, and we conclude that, insofar as it did, it erred, just

as the government contends.

As a threshold matter, we are dubious that, even if the

FDA had disavowed its legal authority during the life of the

conspiracy, it would follow that the offense charged here was

legally impossible to commit. And that is so because the offense

charged here was conspiracy to defraud the FDA by means of

deceptive practices that were designed to prevent the agency from

determining that the company was operating as a manufacturer.

An agency's "mistaken" disavowal of authority is not

written in stone. See FCC v. Fox Television Stations, Inc., 556

U.S. 502, 513 (2009); Massachusetts v. EPA, 549 U.S. 497, 532

(2007). Thus, the FDA would appear to have been entitled at any

time to reverse course and assert the authority that (for purposes

of evaluating the existence of this variant of the legal

impossibility defense) we understand the FDCA itself would have

entitled it to assert vis-a-vis compounders like NECC, at least so

long as the FDA in reversing course did so on a going-forward basis

and after providing due notice. Indeed, it is hard for a disavowal

of authority to be "mistaken" -- as the District Court plainly

indicated it was assuming any disavowal here might have been -- if

the authority in fact does not exist. See Conigliaro, 384 F. Supp.

3d at 158.

- 35 - Thus, even if there had been a mistaken disavowal of

authority by the FDCA vis-a-vis its power to treat compounders

like NECC as manufacturers, we do not see why such a mistaken

disavowal would provide the basis for a legal impossibility defense

that would bar a finding that Carter and Conigliaro violated § 371.

Regulated parties who conspire to trick an agency into thinking

they are conducting themselves other than they are -- and in a

manner that would be material to an agency's decision about whether

it may wish to assert regulatory authority that it had previously

disavowed but legally might be capable of asserting upon rethinking

the disavowal -- may easily be understood to have defrauded the

United States, notwithstanding that during the period that the

conspiracy was ongoing the agency had wrongly construed its power

too narrowly. The deception by the alleged conspirators could be

found to have prevented the agency from rethinking its authority

in light of how regulated parties were in fact operating and

thereby lulled the agency into not determining that it needed to

reverse course and, on a prospective basis after providing due

notice, assert the regulatory authority that it had previously

disclaimed.

There is, however, also a more record-specific reason in

this case for rejecting this disavowal-based ground for crediting

a defense of legal impossibility to the charges at issue. The

- 36 - record fails to support a finding that the claimed disavowal

occurred.

The District Court offered a lengthy account of its

understanding of what the record showed about the extent of FDA

authority over compounders during the period of the alleged

conspiracy. In the course of that account, the District Court

addressed the government's contention that the complex regulatory

history revealed that, during the life of the conspiracy,

"compounding pharmacies would be subject to the drug approval,

manufacturing, and inspection provisions of the FDCA" and that

"NECC was making new drugs, as defined in the FDCA, and was subject

to the jurisdiction of the FDA." Conigliaro, 384 F. Supp. 3d

at 161 (quoting the government).

The District Court explained that "[t]he difficulty

with" the government's contention was that, in its view, "the most

significant actor rejected it: the FDA itself." Id. The District

Court indicated that it was relying for that critical finding on

"internal memoranda, testimony by senior FDA officials before

various House and Senate committees as part of Congress's

investigation into the fungal meningitis outbreak, in-court

testimony and exhibits offered at the trial" it oversaw. Id.

(footnote omitted).

But, the materials that the District Court identified as

support for its findings do not support a finding that the alleged

- 37 - disavowal occurred. It is true that, from that collection of

evidence, as the District Court found, "the picture emerge[d] of

an agency struggling to make sense of a statutory regime that

Congress had not updated since 1938 and that had been overwhelmed

by the rapidity of the advances in modern medicine and pharma."

Id. at 162. The District Court also supportably found that the

FDA was "under considerable pressure" due to developments in the

pharmaceutical industry itself that had resulted in a "demand

vacuum" for generics and specialty drugs that "compounding

pharmacies like NECC stepped in to fill." Id. Nor do we disagree

with the District Court that the record shows "the FDA recognized

that an overly robust enforcement posture on its part towards

compounders could jeopardize hospitals' and clinics' supplies of

potentially life-saving medications." Id.

But, the District Court did not identify any statement

in which the FDA during the time period in question publicly or

internally disavowed that it possessed regulatory power to treat

a compounding pharmacy as a manufacturer, including even one

engaged in practices not unlike those in which the government

asserts the record suffices to show that NECC was then engaged.

The District Court did note statements in which FDA officials

expressed concerns about the fit between the existing regulatory

structure and compounding. Id. It noted as well expressions of

concern within the FDA about whether it did have the authority to

- 38 - treat compounders as manufacturers and the circumstances in which

it could do so. Id. at 163. But none of those statements support

the conclusion that the FDA in fact disavowed its legal authority

to so treat them.

Moreover, the guidance documents that the FDA issued

during the relevant time period concerning its authority to treat

compounded drugs as "new drugs" under the FDCA affirmed rather

than disclaimed the FDA's legal authority over compounders under

that statute's "new drug" authority. See Western States, 535 U.S.

at 362 ("[W]hile retail pharmacies . . . are exempted from certain

requirements of the [FDCA], they are not the subject of any general

exemption from the [FDCA's] new drug, adulteration, or misbranding

provisions." (quoting 1992 CPG). To be sure, in 2002, the FDA

issued guidance that stated that "section 503A" -- the section of

the FDAMA that codified the FDA's 1992 CPG to compounders -- "is

now invalid" in light of the Supreme Court's decision in Western

States and the Ninth Circuit's determination that § 503A was not

severable. See Shalala, 238 F.3d 1090. But, that statement -- at

least in context -- cannot be read to be a disavowal of authority

over compounders. In that same guidance, the FDA explained that

"when the scope and nature of a pharmacy's activities raise the

kinds of concerns normally associated with a drug manufacturer and

result in significant violations of the new drug, adulteration, or

misbranding provisions of the [FDCA], [the] FDA has determined

- 39 - that it should seriously consider enforcement action" under the

FDCA.

The FDA did also define a safe harbor from its regulatory

oversight over compounding pharmacies in the guidance it publicly

supplied. But, it defined that safe harbor as encompassing

compounding pharmacies that produced and sold drugs "upon receipt

of a valid prescription for an individually identified patient

from a licensed practitioner."

Indeed, in another case pending before this Court also

stemming from the NECC disaster, United States v. Chin (Chin II),

No. 20-1050 (1st Cir. ___), the government has made clear that the

safe harbor defined in the 2002 CPG extended to only "the

compounding of drugs prior to the receipt of valid, patient-

specific prescriptions under specified circumstances, not shipping

them before the receipt of a valid prescription." Therefore, even

if NECC's compounding practices were in compliance with the safe

harbor, its delivery practices were not. The announcement of the

safe harbor is thus at odds with the notion that the FDA disavowed

authority to regulate compounders outright or even to regulate

compounders alleged to have engaged in the practices that NECC was

alleged to have engaged in here.

At most, then, the record supports a finding that the

FDA publicly rejected the notion that its regulatory authority to

treat compounders as manufacturers was clear or without caveats.

- 40 - But, that is not a finding of an actual disavowal by the FDA of

its authority to treat NECC as a manufacturer under the FDCA,

insofar as that company was engaging in practices that did not

entitle it to claim the protection of the safe harbor that the

agency had publicly identified in the 2002 guidance. Thus, while

the District Court did state that "the bottom line" was that

"during the critical times, these defendants (and NECC) could not

have defrauded the FDA by interfering with the relevant regulatory

functions because there were none to speak of," Conigliaro, 384

F. Supp. 3d at 166, we cannot agree that the record supports such

a finding.

This conclusion is not undermined by the support in the

record for the District Court's finding that "the evidence plainly

show[ed] that during the life of the charged conspiracy, the FDA

was not, and did not believe that it should be, in the business of

regulating companies like NECC that were engaged in anticipatory

pharmacy compounding." Id. at 165. That finding does not

establish that the FDA understood itself to lack the power under

the FDCA to treat a compounding pharmacy like NECC as a

manufacturer. It establishes only that, at that time, the FDA was

of the view that a certain type of dispensing by compounding

pharmacies -- because of the bounded way in which it was undertaken

-- was not something that the FDA "should" be in the "business" of

policing. That is not itself evidence of a disavowal of authority,

- 41 - let alone a disavowal of authority to regulate the practices in

which NECC was engaged.

The defendants nevertheless insist that the District

Court was correct in finding that the FDA had disavowed its

authority over compounders like NECC by the time the alleged

conspiracy took place. In support, they point to the testimony of

Samia Nasr, who led FDA's Center for Drug Evaluation and Research

Compounding Team from 2011 to 2016. Nasr testified at trial that

the FDA put all inspections of compounding pharmacies on hold from

2009 to 2012.

With respect to NECC, the defendants contend, this hold

became manifest in the FDA's 2011 and 2012 correspondence with the

Colorado Board of Pharmacy that the defendants introduced into

evidence. There, the Colorado regulators notified the FDA that

NECC was shipping drugs in bulk quantities across state lines and

the FDA, in response, referred the Colorado regulators to the

Massachusetts Board of Pharmacy rather than investigating the

allegation. According to the defendants, the "national

moratorium" on inspections compels the conclusion that the FDA

"affirmatively disclaimed its authority" to regulate compounders.

The evidence to which the defendants point, however,

shows at most that the FDA made an internal policy decision not to

exercise its authority over compounders -- a decision that lacked

legally binding force that would preclude the FDA from reversing

- 42 - course (after giving proper notice) on even a prospective basis.

Cf. Fox Television Stations, 556 U.S. at 515. The defendants thus

fail to show that the evidence compelled a reasonable jury to

conclude that the FDA disavowed its legal right to regulate

compounders, such that it understood itself to be as powerless

legally during the period of the alleged conspiracy as if the FDCA

had been amended during that period of time to strip the FDA of

exercising the power it was not exercising. And, for that reason,

the first ground on which the District Court based its conclusion

of legal impossibility -- or, at least, the first ground the

parties treat the District Court as having based that conclusion

on -- does not hold up.

The government also challenges the District Court's

other formulation of the legal impossibility defense. In that

formulation, the District Court focused on the FDA having abstained

from exercising its regulatory authority over compounders as a

result of its uncertainty about its own authority, even assuming

that the agency did not in doing so actually disavow the existence

of such regulatory authority. The District Court reasoned as

follows in justifying its decision to grant the Rule 29 motions

based on a defense of this kind.

The District Court began this aspect of its analysis by

finding, on the basis of the FDA's conflicting public statements

- 43 - about its authority to regulate compounders as well as its

inability to clearly distinguish compounding manufactures from

compounding pharmacies, that "the FDA's 'authority over

compounding [was] limited, unclear and contested.'" Conigliaro,

384 F. Supp. 3d at 165 (quoting congressional testimony). In

particular, the District Court noted that "the FDA was unable under

[c]ongressional questioning to articulate a clear line between

compounding and drug manufacturing." Id. at 162. The District

Court pointed to testimony by Dr. Janet Woodcock, an FDA official,

before Congress, that described the FDA's understanding of "how

much product . . . a drug compounder [could] make without being

designated a manufacturer" as "blurry" and that there "[was] no

bright line in the statute that says when you cross that line and

become a manufacturer." Id. at 163 (quoting congressional

testimony).

Next, the District Court addressed the import of that

finding. It explained that the ambiguity in these statements was

such that, even if the FDA had authority under the FDCA to treat

compounders like NECC as manufacturers during the years of the

alleged conspiracy, the "contrary position[] . . . taken by the

FDA itself [at that time] . . . raises legitimate concerns of

- 44 - constitutional due process and fair notice."6 Id. at 166. It then

appeared to hold, based on that conclusion, that those due process

and lenity concerns warranted a narrow construction of the

"government functions" element of the § 371 offense with which the

defendants were charged. Finally, the District Court appeared to

wrap up its analysis by holding that this narrow construction

precluded the "government functions" element of § 371 from

encompassing regulatory authority of the uncertain type that the

District Court had found that the FDA possessed.

Here, too, we agree with the government that this chain

of reasoning is mistaken. As an initial matter, we do not find

persuasive the notion that it was legally impossible for the

defendants to have conspired to interfere with a government

function just because it was unclear during the life of the

conspiracy whether the government had that function or understood

itself to have it. That it is unclear to alleged conspirators

whether the government will assert a regulatory function because

it is convinced that the government is uncertain of its authority

6 The District Court noted as well that a federal district court in the Eleventh Circuit had found that "though [the FDA] certainly has the statutory authority to do so, the FDA has chosen not to draw the line between manufacturing and traditional compounding with formal regulations. Nor has it sought to distinguish traditional pharmacy compounding from pharmacists who are manufacturing under the guise of compounding." United States v. Franck's Lab, 816 F. Supp. 2d 1209, 1248 (M.D. Fla. Sept. 12, 2011) (vacated pursuant to the parties' join motion).

- 45 - to assert it provides no basis for concluding that such a function

does not exist. Thus, if the government function was one that the

government had the legal authority to exercise -- and we have no

reason not to assume that was the case, at least with respect to

prospective exercise after the provision of due notice -- then we

do not see how it would be legally impossible for the defendants

to conspire to trick the government into wrongly concluding through

misrepresentations about NECC's means of operating that it could

not be regulated pursuant to that function.

That is not to say the lack of clarity about the

existence of that function -- especially if fostered by the

government's indications of its own doubts about the existence of

that function -- would have no bearing on whether the evidence in

a given case suffices to prove the elements under § 371 beyond a

reasonable doubt. It is only to say that the lack of clarity about

the existence of a government function does not equate to its non-

existence.

Thus, such lack of clarity cannot in and of itself make

it legally impossible for the defendants to have conspired to

interfere with a government function, insofar as the function's

existence is not disputed as a matter of law and there is no basis

for concluding that the function could not be asserted after the

provision of due notice prospectively. For, if that is the case,

then so long as the evidence is otherwise sufficient the fact that

- 46 - the FDA's authority was less than clear during the alleged

conspiracy -- and that the FDA itself understood it to be unclear

during that time frame -- is of no moment for purposes of assessing

the availability of the defense of legal impossibility to the § 371

charges at issue. After all, those charges concern an alleged

conspiracy to trick the FDA into thinking that a company subject

to its regulatory authority was operating differently than it was

in order to conceal the fact that its actual manner of operating

would make it subject to more intensive regulatory oversight.

Nor is there force to the contention that the defendants'

legal impossibility defense to their § 371 charges has merit

because -- due to concerns about fair warning -- the high degree

of uncertainty about which compounders were subject to FDA's

regulations pertaining to drug manufacturers during the period of

time at issue itself precluded the FDA from lawfully exercising

regulatory authority over NECC as if it were a manufacturer even

if the FDA otherwise would have had such authority under the FDCA.

The defendants were not charged with violating the FDCA based on

evidence showing that NECC was operating as a manufacturer. They

were charged with violating § 371 for conspiring to interfere with

the FDA's ability to determine whether to regulate NECC as such by

misleading the FDA about practices of the company that could bear

on just that determination.

- 47 - Thus, absent the FDA lacking the legal power to do so

even on a going forward basis -- and after having given the

requisite degree of fair warning of its intention to do so -- we

see no basis for concluding that the ambiguity about the FDA's

authority that the District Court identified precluded it from

being "reasonably clear at the relevant time that the defendant's

conduct was criminal." Lanier, 520 U.S. at 267. We appreciate

the District Court's concern with the "worrisome position that, in

this context, what is not affirmatively permitted by the law is

criminally prohibited." Conigliaro, 384 F. Supp. 3d at 166. But,

because the defendants were charged with conspiring to defraud the

FDA by impeding its ability to determine NECC's status through

misrepresentations about the company's operations, we do not find

that "worrisome position" implicated here. As we have explained

above, the precise contours of the "government functions"

implicated in a § 371 conspiracy -- assuming the agency has the

authority to engage in those functions in the first place -- do

not have to be defined before defendants can formulate the

requisite agreement to interfere with those functions. The

defendants here could have been mistaken as to whether NECC's

compounding practices would have run afoul of the FDA's regulations

under the FDCA while still conspiring to interfere with the FDA's

ability to draw such a conclusion. After all, a conspiracy does

not need to be successful in order to be illegal.

- 48 - In support of the District Court's finding of legal

impossibility, the defendants make the related argument that it

was legally impossible for them to obstruct the FDA in deeming

NECC to be a manufacturer because the FDA did not actively make

such determinations concerning compounding manufacturers in the

indictment period. The defendants point to testimony suggesting

that the agency was, at the very least, hesitant to enforce its

regulations concerning drug manufacturers against compounders and

that it even abstained from conducting inspections of compounders

for a period.

But, for purposes of a defense of legal impossibility,

the FDA's actual exercise of its legal authority over compounders

in general and over NECC specifically is irrelevant. That is so

because the FDA's exercise of its legal authority can at most show

the factual impossibility of actually interfering with the FDA's

oversight function during the time of the alleged conspiracy. The

defendants, however, were convicted of conspiring to defraud the

United States by interfering with the FDA's oversight function,

not of actually interfering with its oversight function. And,

because, as the District Court correctly stated, "factual

impossibility is not a defense to . . . liability . . . for

inchoate offenses such as conspiracy or attempt," the literal

inability of the defendants to actually interfere with the FDA's

enforcement actions cannot be a defense. Conigliaro, 384 F. Supp.

- 49 - 3d at 153 (quoting Dixon, 449 F.3d at 202). Or, to put it

differently, if a juror could find the defendants guilty of

conspiring to interfere with the FDA's oversight function

regardless of whether they succeeded in interfering with it, then

that juror could also find them guilty of doing so even if the FDA

did not actually engage in oversight over compounders during that

time. See United States v. Jimenez Recio, 537 U.S. 270, 274

(2003).

Conigliaro raises one final argument in support of the

District Court's finding of legal impossibility: he contends that

it was legally impossible for him to have violated § 371 because

§ 371 only criminalizes conspiracies to defraud the federal

government and that here the object of the conspiracy was a state

agency. See Tanner v. United States, 483 U.S. 107, 130 (1987).

Conigliaro is correct that a conspiracy to defraud a state agency,

such as a state pharmacy board, would not violate § 371. But, the

question of whether the object of the conspiracy charged here was

the federal government is a factual one for the jury. At its root

then, his argument is that there was insufficient evidence for a

juror to have concluded that he conspired with others to defraud

the FDA. As Conigliaro has not brought such a challenge, we do

not consider whether the evidence is sufficient to support his

conviction under § 371. To the extent that this argument is raised

- 50 - by Carter, we consider its merits in the course of our evaluation

below of the sufficiency of the evidence supporting her conviction.

3.

We come, then, to the government's challenge to the

District Court's due process ground for acquittal. In determining

whether the defendants' convictions comported with the due process

requirement of fair notice, "the touchstone is whether the

[relevant] statute, either standing alone or as construed, made it

reasonably clear at the relevant time that the defendant's conduct

was criminal." Lanier, 520 U.S. at 267. The defendants contend,

and the District Court agreed, that such clarity was absent in

this case. In support, the defendants reassert:

• That the FDA's statutory authority to regulate compounding

pharmacies as manufacturers under the FDCA was at best

"contested" and "unclear" -- especially in the wake of

Western States;

• That the FDA disclaimed whatever authority it had, thus again

depriving the defendants of fair notice;

• That because the FDA did not exercise whatever authority it

had over compounders, the defendants were not on notice that

there were "government functions" with which their activities

could "interfere," Goldberg, 105 F.3d at 773;

• That because neither the FDCA nor the FDA's construal of that

statute drew a clear line in the relevant respect, it was

- 51 - unclear that NECC's compounding activities constituted

manufacturing and, thus, for that reason, too, the defendants

lacked fair notice that their alleged conspiracy to cover up

those activities would make them guilty of conspiring to

interfere with the FDA's "government functions" in violation

of 18 U.S.C. § 371.

For much the same reasons that we have already given in explaining

why the legal impossibility defenses are not available here, we

also conclude that there is no due process-based bar to the

defendants being convicted under § 371.

We do not dispute the District Court's finding that

the FDA did not in fact exercise its legal authority over

compounders that operated as manufacturers during the time of the

alleged conspiracy. But, the defendants fail to show that this

fact is relevant to the defendants' due process right of fair

notice (or even to an application of the rule of lenity).

The defendants' contention in this respect appears to

be that, due to notice concerns rooted in the guarantee of due

process, we must construe the meaning of "government functions"

for purposes of the "defraud clause" of § 371 narrowly to refer to

functions that the government is actually carrying out rather than

those that it merely has the legal authority to carry out. And

that is so, the defendants appear to contend further, because this

court noted in United States v. Goldberg, 105 F.3d 770 (1st Cir.

- 52 - 1997), that the "defraud clause" has "a special capacity for abuse

because of the vagueness of the concept of interfering with a

proper government function." 105 F.3d at 775.

But, neither Goldberg nor our other due process

precedents supports this construction of the "defraud" clause.

"[T]he touchstone" for determining whether a conviction comported

with the due process requirements of fair notice and lenity, as we

noted, "is whether the [relevant] statute, either standing alone

or as construed, made it reasonably clear at the relevant time

that the defendant's conduct was criminal." Lanier, 520 U.S.

at 267. If the defendants had been charged and convicted of

interfering with the FDA's oversight function over compounders

that operated as manufacturers, we may assume that it would matter

for due process purposes whether it was reasonably clear that the

FDA possessed the function to regulate NECC's activities as a legal

matter. But, here, as we noted in our discussion of legal versus

factual impossibility, the defendants were not so charged. They

were charged with the distinct offense of conspiring to interfere

with the FDA's oversight function over compounders that operated

as manufacturers. And, with respect to that offense, the

uncertainty that the District Court described regarding FDA

authority does not preclude it from being reasonably clear that a

conspiracy to pass off NECC as a kind of compounding pharmacy that

it was not -- through the stratagems detailed in the indictment -

- 53 - -- was one prohibited by § 371. Or, at least, that uncertainty

does not do so if we find -- as we must, given the arguments made

to us -- that the FDA remained free throughout the life of the

conspiracy to choose to regulate compounders as manufacturers

under the FDCA in accord with the 2002 CPG insofar as it gave

notice of its intention to do so.

In other words, the defendants could have reasonably

understood that agreeing to make material misrepresentations to

the FDA about how NECC operated so as to shield it from being

deemed a manufacturer under the FDCA could have impeded the FDA's

ability to make a determination regarding NECC's status as a

manufacturer under that same statute. And, as the making of that

determination is itself an oversight function of the FDA -- and as

there is no preserved argument to us supporting the conclusion

that the FDA was legally barred from exercising that function even

prospectively and after giving notice of its intent to exercise it

during the conspiracy -- the defendants were on notice that the

conspiracy's alleged stratagems could interfere with the FDA’s

exercise of that function. We consequently agree with the

government that the District Court erred in finding that the fair

notice concerns -- whether rooted in the Due Process Clause or

precedent concerning when the rule of lenity applies -- precluded

the defendants’ convictions.

- 54 - C.

Having found no merit to the defendants' legal

impossibility and due process arguments, we have left only the

separate ground on which Carter asks us to affirm her post-verdict

judgment of acquittal. Here, she contends that the record does

not contain sufficient evidence to permit a reasonable juror to

find beyond a reasonable doubt that she knowingly and willfully

joined the alleged conspiracy.7

Carter asks us to remand this issue to the District

Court, which did not previously reach her sufficiency challenge.

But, we routinely resolve such challenges on appeal and see no

reason to deviate from that practice in this case. See, e.g.,

Stepanets, 989 F.3d at 97, 101, 112. Reviewing de novo and

construing the evidence in the light most favorable to the verdict,

see id. at 95, we find that a reasonable jury could have found

beyond a reasonable doubt that Carter conspired to violate § 371.

We therefore conclude that Carter's sufficiency argument has no

merit.

7 Conigliaro made a similar sufficiency argument below, but does not renew it on appeal. Insofar as Conigliaro does mean to renew his insufficiency of the evidence challenge when he contends in his surreply brief that "there is no evidence in the Record that [he] ever misrepresented anything to the FDA about prescriptions or anything else," he has failed to adequately develop that challenge. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).

- 55 - At trial, the government introduced an email into

evidence that Cadden sent Carter on May 21, 2012, and that Carter

forwarded on that same day to other NECC employees with the words:

"New confirming guidelines in regards to patient names. (please

see Barry’s e-mail below). When an order is received that does

not have the correct number or format of patient names, then we

need to show Barry the order. At that time, he will determine how

to proceed.” Cadden's email below those words instructed NECC

employees who processed orders for medications that "[t]he MAX

total number of units (vials, syringes, etc.) per patient must

make sense. I must be able to logically explain to a regulator

why we processed x# of units per patient. . . . All names must

resemble 'real' names . . . no obviously false names! (Mickey

Mouse[)]." (emphases added).

On the basis of this email thread, a juror could find

that Carter was familiar with NECC's practice of pretending to

process drugs pursuant to valid, patient-specific prescriptions

and also familiar with the target of that pretense:

"regulator[s]." The jury could likewise find that Carter took

deliberate actions to promote that pretense -- in this case, by

forwarding Cadden's instructions to other staff.

Moreover, the record includes internal emails in which

Carter admitted that she and her colleagues had processed orders

without valid prescriptions and instead used patient names from

- 56 - previous orders -- admissions that again support the finding that

she knowingly and willfully joined the § 371 conspiracy. In

September 2011, for instance, Carter notified an NECC sales

representative that "[w]e processed [the order of a customer] using

old p[atient] names." And in June 2012, Carter similarly emailed

her alleged co-conspirator Ronzio that she had "used the old names

in the file that we had not used previously," and that "[w]e are

still processing the order for today so [the customer] will not

need to send in more names."

Carter seeks to resist the weight of this evidence by

arguing that even if the evidence was sufficient to support a

finding that she knowingly and willingly helped to process orders

without valid prescriptions and also that she knowingly and

willingly helped to cover up that practice, the evidence did not

suffice to support the further finding that she did so to interfere

with the regulatory function of the FDA. That further finding, as

she rightly contends, is necessary because for a conspiracy

conviction to stand, "the evidence must establish that the

defendant . . . intended to effectuate the objects of the

conspiracy." United States v. Burgos, 703 F.3d 1, 11 (1st Cir.

2012) (internal quotations and citation omitted). However, there

was in fact sufficient evidence to support that further finding in

this case.

- 57 - At trial, a law enforcement agent testified that he had

found a folder entitled "Tech Manual" at Carter's workstation.

That folder included a document labeled "compounding legally."

The jury could thus reasonably infer that Carter was aware of the

FDA's regulatory authority and enforcement approach and therefore

also aware that NECC, given its practice of compounding large

quantities of drugs without valid prescriptions, was subject to

that authority and enforcement, and that covering up that practice

by, for instance, using fictitious patient names, would interfere

with the FDA's ability to exercise its oversight over NECC.

Other circumstantial evidence added support to this

inference by showing that some of Carter's closest colleagues made

that awareness explicit. The jury, for instance, heard testimony

by Ronzio that Cadden had considered and rejected the possibility

of officially registering NECC as a manufacturer with the FDA in

internal conversations because he worried that NECC was "very far

from . . . current Good Manufacturing Practices, which the FDA

required." The record also contained communications between NECC

and its regulators -- both at the FDA and at the state level -- in

which Carter's colleagues represented that NECC was a pharmacy

that produced drugs only pursuant to valid prescriptions and was

therefore not subject to the FDA's stricter regulations for

manufacturers.

- 58 - For example, Conigliaro claimed in a faxed letter to the

Missouri State Board of Pharmacy on March 23, 2009, that "[a]ll of

[NECC's] compounding activities are carried out in compliance with

applicable local, state and federal rules and regulations as well

as . . . the FDA's Compliance Policy Guide Sec. 460.200 Pharmacy

Compounding," which is the FDA's 2002 CPG (emphases added). A few

years earlier, on October 1, 2004, he claimed in an email to the

FDA that NECC "compounds numerous different sterile and non-

sterile preparations to fill patient specific, physician

prescriptions," that it "always compound[s] only the amount [it]

anticipate[s] will be required based on prescribing physician's

historical prescribing patterns," and, finally, that it is a

"small-scale, family-run, compounding-only pharmacy, not a

manufacturer. As such we are not subject to GMP [current good

manufacturing practice]."

Similarly, Cadden wrote to the FDA on January 5, 2007,

to deny allegations that the FDA had made in its warning letter to

NECC -- namely, that NECC "told physicians that [it] would fill

prescriptions written in the name of a staff member rather than in

the name of an actual patient." Cadden assured the FDA that this

alleged practice "contradicts all of [NECC’s] standard operating

procedures." He claimed that "NECC dispenses compounded

medications upon the receipt of valid prescriptions. We are

- 59 - engaged in the practice of pharmacy and comply with the

Massachusetts Board of Registration in Pharmacy’s laws and rules."

Based on this evidence as a whole, a reasonable juror

could find that Carter, who occupied a supervisory role within

NECC and worked closely with Cadden and Conigliaro, shared her

alleged co-conspirators' intention of interfering with the

regulatory functions of the FDA. See United States v. McDonough,

727 F.3d 143, 156 (1st Cir. 2013) ("[A]n agreement to join a

conspiracy may . . . be proved by direct or circumstantial

evidence." (internal citations and quotation marks omitted)); see

also Mubayyid, 658 F.3d at 57 ("[A] conspiracy may be based on a

tacit agreement shown from an implicit working relationship."

(citations and quotation marks omitted)); United States v.

Serrano, 870 F.2d 1, 7 (1st Cir. 1989) (concluding that evidence

of fraudulent intent was sufficient in part because of the

defendant's "supervisory responsibilities"). Finding sufficient

evidence in the record to support Carter’s conviction, we reject

Carter’s argument that the District Court’s judgment of acquittal

can be affirmed on these alternative grounds and reverse.

III.

Because, as we have concluded, the District Court's

post-verdict judgments of acquittal must be reversed, there

remains to address the alternative request that Carter and

Conigliaro both made for a new trial. Deeming this request moot,

- 60 - the District Court did not rule on it below, even though Federal

Rule of Criminal Procedure 29(d)(1) provides that "[i]f the court

enters a judgment of acquittal after a guilty verdict, the court

must also conditionally determine whether any motion for a new

trial should be granted if the judgment of acquittal is later

vacated or reversed." Because we review a district court's new-

trial ruling for an abuse of discretion, see, e.g., United States

v. Gonzalez, 949 F.3d 30, 34 (1st Cir. 2020), and because we do

not have full briefing on the defendants' arguments in support of

their request for a new trial, we remand this request to the

District Court, in accord with the requests of the parties.

IV.

We thus reverse the District Court's post-verdict

judgments of acquittal, reinstate the jury's convictions, and

remand to the District Court for further proceedings consistent

with this opinion.

- 61 -