A Medical Device Daily

Covance (Princeton, New Jersey), a drug development services firm, reported that it has filed suit against People for the Ethical Treatment of Animals (PETA) and its agent, Lisa Leitten, charging fraud, violation of employee contract and conspiracy to harm the company’s business by deceitfully infiltrating and videotaping the company’s facility in Vienna, Virginia.

Covance charges that when Leitten was hired by the company, she lied about her true intentions in that employment and then violated a confidentiality agreement with the company. Covance also charges PETA with engaging in a conspiracy with Leitten to harm the company’s business and that PETA interfered with Covance’s contract with Leitten.

“This type of malicious activity by PETA, in which it conspires with individuals to lie about their intentions, to videotape and potentially disrupt medical research, and to then launch vile disinformation campaigns against pharmaceutical research companies, has got to stop,” said James Lovett, Covance’s general counsel. He called this a deceit that will “do nothing to improve the care of research animals and only serve to impede the development of safe and effective new medicines.”

Covance is seeking return of all video, audio and other materials taken by PETA and Leitten “in light of their legal obligations, except copies already provided to the regulatory authorities.” It said that return of these materials is critical “so that it can be examined for evidence of both what Covance considers PETA’s unsubstantiated claims of misconduct and potential distortion by PETA to further its aim to end all animal-related research.”

In other legalities, Richard Scrushy, the former CEO of HealthSouth (Birmingham, Alabama), will cut no plea bargaining deal with prosecutors in his corporate fraud trial and is ready for a retrial if necessary, his lawyers said, as a deadlocked jury began its second week of deliberations on Monday.

The comments came in the midst of speculation that the jury’s difficulty in reaching a verdict will result in a mistrial.

The jury adjourned on Monday without reaching a verdict. A U.S. District Court official later said the seven male and five female jurors would not work Tuesday, Thursday or Friday, citing juror scheduling and vacation conflicts.

Scrushy has denied any involvement in a $2.7 billion accounting fraud at the medical rehabilitation group, claiming the massive conspiracy was carried out by former financial executives without his knowledge.

Scrushy is charged with conspiracy, mail and wire fraud, money laundering and other wrongdoing in connection with a scheme to inflate HealthSouth’s profits and stock price and allegedly enrich himself between 1996 and 2002.

He faces life in prison if convicted, with the final jury verdict considered an important initial test of Sarbanes-Oxley legislation holding a top executive accountable for his or her company’s financial accounting.