A Transplant Drug Case Taints the Mighty
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At2 T}IE MTIONAT LAW JOTJRNAL Monday,April I,1996 EXHTBITA INCIVILITY IN MINNEAPOLIS A Transplant Drug Case Taints the Mighty ieagues and had already billed the administration for experimental drugs. Renowned doctor, prosecutor, more than $1 million. Eventually, the university spent Mr. Lillehaug accused Dr. Najarian of lying about the $7 million defending itself in the Najarian case, with un- university's profits, failing to acquire informed consent lawyers, even a judge feel the specified millions going to Dorsey, as well as Hogan & from patients in the ALG trials and hiding at least nine Hartson L.L.P., of Washington, D.C. AlG-related deaths from the FDA. heat from a failed prosecution. lnto this swirl of ambitions, teetering careers and ln pursuing those charges, investigators learned that billable hours stepped U.S. District Judge Richard H. Dr. Najarian's appilent disinterest in federal regula- Kyie, who got the case because the district's chieffeder- tions extended to his bookkeeping. He allegedly divert- BY ToNY BRowN al judge, Paul Magnuson, withdrew. Judge Magnuson's ed $38,000 in royalties to his own bank sccount and al- SPECIAL TO TAE N TIONAL LAW IOURIAL wife had received a kidney under Dr. Najarian's care. legedly billed his offlce for such expemes as crystal HENEVER on. John Najarian is in Judge Kyle brought a measure of skepticism to the from Italy and a bus for his son's wedding. the newspapers or on television- cree, as well as a willingness to share that feeling in Dr. Najarian and his defense suggested that ALG was and that's not unusual in either the court when the jury wro sworn in in February. On sev- an effective, cheap drug that ssved people's lives, and Midwest or across the country-his eral occasions, for instance, he interrupted prosecutors that the FDA knew how the program was administered, neme is inevitably preceded by the wilh "Objection sustained!'before anyone at the de- made profits for 20 years and did nothing. The defense phrase "world-famous organ fense table h8d thought to raise the objection. also said the doctor's preoccupation with patients kept transplant sugeon," as if that were Judge Kyle eventually dismissed the core of the pros- him out of his ofiice's bookkeeping details. his title at the University of Mimesota, where he prac- ecution's case before the jury got a chance to thinl Still, the indictment came dom, and it looked as ticed and bught. about it. Then, afier the acquittal but before the jury though its ill effects weren't limited io the docton "The Dr. Najarian, 68, had his staff schedule press confer- was dismissed, the judge made a rare-and unexpect- way it happened," says Mr. Rosenbaum, 'there just ences after successful days in the operating room, and ed-peech from the bench, saying, in part, 'A criminal weren't going to be any winners here.' he makes himself available for photographs wheeling proceeding ofthis magnitude that we saw here, it seems No winners except the firm of Peter N. Thompson patients out ofthe hospital when they go home. He's not to me, went beyond the bounds ofcommon sense." and John Lundquist, the lawyers Dr. Najarian calls "just exactly the Mayo brothers, but he might be Minnesota's 'This was a battle of the titans, a trial to the death a couple of Swedes from south Mimeapolis." They suc- most famous practicing doctor, a big cuddly bear of a for some of these people," says Ronald S. Rosenbaum, cessfully defended lhe doctor, billing more than $1 mil- guy often in front of the cameras hugging kids who've of Tilton & Rosenbaum, a St. Paul defense lawyer who lion in the process, and enhanced their reputations. just been given new kidneys. represented one of the lower-level medical school o{n- Even the winning lawyers, however, were tripped up So it was a thundering public comment last year cials in the case. "lt was all about power in Minnesota." in the end, if only slightly. After their victory, they said when U.S. Attomey David L. Ullehaug accused Dn Na- they had never considered a plea bargain because, as jarian of literally hiding bodies from federal agencies, Exp€nim€ntal DnuEi Dr Najarian said, "l would have had to lie and say I did cashing in on illegal sales of experimental drugs-and, It all goes back to something called antilymphocyte something I didn't do." The prosecutors then took the by the way, double-billing travel expenses so he and his globulin, or AIG, an anti-rejection drug Dr. Najarian unusual step of revealirg 'paperwork" on plea negotia- wife could lly first class and lounge around posh hotel had developed in 1967 for transplant patients. It made tions and delails of meetings with the defense. Mr. rooms in Paris. Boca Raton. Fla.- and Monte Carlo. millions for the uniyersity, even though the U.S. Food Thompson later acknowledged having plea discussions With Mr. Lillehaug's 21-count federal indictment- and Drug Adninistration never moved it from the list of but said they 'never got very specific.' conspiracy to defraud the govern- Mr. Lillehaug remained com- ment. mail fraud. theft. tax viola- mitted to his decision to prosecule tions, obstruction of justicFthe the case after the verdict, lament- doctor's image edged closer to the ing only the celebrity ofthe defcn- classic profile of medical arro- dant and what he calls the "ques- gance, the surgeon who comes l.o tionable" conduct of Judge Kyle believe his om myth. All this in a that'raises very big quesrions in slate where legislators resign ovcr our minds about what was really misdemeanor abuses of their of- going on in that courtroom." Iice phone privileges. But rather than a morality play, Goodwlll Enoded? the case became a very loud, pub- But while the prosecutors'de- Iic legal bartle among some of the fenders caution people not to state's most powerful law firms, judge him on two prominent cas- public institutions and individuals, es, it isn't just R€publicans who uith careers on the line. Dr. Najar' sa!, they believe Mr Lillehaug's ian owes his lawl,er more than $1 stature was diminished in the million in legal fees. and he is process. As Douglas A. Kelley, a about to institule administrallve fomer federal prosecutor, says, proceedings to have his university "When a U.S. attorney charges a pay them. very important case, he has to be His potential losses were obvi- aware that the outcome of the ous. But. Mr. Lillehaug, a former case will have an impact on good- real estate lawter, was also under will. It hrc been eroded il the a cloud. He was still trying+ome Shabazz and the Najarian cases." said through the Najarian indict- But there was just as much ment-to recover from his prose- speculation on Judge Kyle's ap- cution last year ol Qubilah E proach-not just during the trial, Shabazz, the daughter of slain cir - g but after the acquittal. when he il rights leader Malcolm X. He had i chose to deliver his public smma- charged her s'ilh conspiring to loves lhmonas Dr. John Najarian, center, is not especially shy before ctuneras.Ituneras. tion. lt was a withering denuncia- murder the Nation of Islam leader tion of the prosecution's case, louis Farrakhan. The murder-for-hire indictment fell made in the presence of a room full of reporters. To apart last year in pretrial hearings, however. some who follow Mimesota's federal district, the Ms. Shabazz was cleared with a promise that she un- GASE AT A GLANGE judge's style had echoes of former U.S. Districl Judge dergo counseling. Criticism of ML Lillehaug was uni- Miles Lord, a crony of Hubert Hmphrey who for many formly spread within the legal commuity, and among VENUE: U.S. District Court, Minneapolis years delighted in lectuing lawyers, plaintifTs and de- particularly with reporters in black leaders and politici&ns. DEFENDANT: Dr. John Najarian fendants from the bench, the room. Ethlcs Grcssflne pBosEcuroRi U.S. Attorney David L. In his 8oo-word summation, Judge Kyle said, 'l have Shortly after Dr. Najarian's indictmenl, the stakes es- I illehaug some question why we're here at all, quite frankly. Not weren't were wong with the calated exponentially. And while Minnesotans usually ATTORNEYS FOR TITE DEFENSE: PETET N. because there things t}lat comider civility part of their heritage, the case ended program, the FDA program...Converting all this, how- Thompson and John Lundquist, St. Paul up in a fierce crossfire of ethics allegations among the ever, to a criminal proceeding of the magnitude that we lawyers and the Minneapolis federal judge who over- sole practitioners saw here, it seems to me has gone or did go beyond the saw the c6e. U.S. u. Nojarian, 3-95-45. sUMMARY: The prosecution offamed bounds of common sense...an indictment probabll Because such a large chunk of the stale's polver transplant surgeon Dr. John Najarian should have focused oniy upon the ALG and FDA pro- structure nas involved, a corresponding roster of the has once again hurt the reputation ofthe gram, but was added on to with charges of tax fraud. Twin Cities mosl prominent legal talent was soon bill- mail fraud, embezzlement and stealing. I think in lbo1- Minneapolis U.S. attorney's office, still ing hours in the case. Not the least of these players u,as ball you kind of call the penalty for piling on.