CSL invokes a mobster motion in fight over plasma cartel accusations

It has all the characteristics of any great true crime story: blood, Al Capone, gangsters, prohibition-era bootleggers and a star witness who could spill the beans on an alleged global conspiracy involving billions of dollars in ill-gotten gains.

But this is a modern day tale being played out in the corporate world involving one of Australia's most respected healthcare companies, CSL, and, although a long way from the mean streets of 1920s Chicago, the two worlds have now strangely coalesced.

For more than four years CSL, which produces and supplies blood plasma around the world, has faced allegations from a handful of hospitals that it orchestrated a cartel along with its major competitors to fix the price of plasma in the North American market. CSL has consistently said the claims are baseless and that it intends to vigorously defend the civil action.

CSL has linked arms with its competitor and alleged co-conspirator, Baxter International, to compel the powerful US Food and Drug Administration to present a star witness whose testimony they believe will prove their innocence.

The witness, named as Dr Mark Weinstein in US court documents obtained by Business Day, is a high-ranking official at the FDA in charge of regulating blood suppliers since the 1990s and is therefore, CSL and Baxter argue in their 188-page motion, able to provide first-hand evidence that could see the billion dollar lawsuit collapse.

"Plaintiffs are seeking in excess of a billion dollars from [CSL and Baxter], alleging that defendants conspired to reduce the supply of two [blood products] - immune globulin and albumin - over a seven-year period in violation of antitrust laws," lawyers for CSL and Baxter say in their documents.

"Many of the plaintiffs' allegations directly involve conduct by the FDA. Indeed, plaintiffs reference the FDA 17 times in their consolidated complaint."

But up until now the FDA has refused to allow Dr Weinstein to testify, placing CSL in the position of believing evidence exists that will prove its case but which they are unable to produce in court.

Enter 1920s Irish-American mobster and former Al Capone rival Roger Touhy. A bootlegger in the 1920s, Roger "The Terrible" Touhy and his brothers sold illegal beer and liquor in Chicago, ran a loan shark business and supplied beer to notorious Chicago mob boss Al Capone.

Touhy soon became a problem for Capone, and following running gun battles the mobster was eventually framed by corrupt cops loyal to Capone for the kidnapping of John "Jake the Barber" Factor, a brother of cosmetics manufacturer Max Factor.

From his cell, Touhy served a subpoena upon an FBI agent seeking the production of various Department of Justice files, which he claimed would prove his conviction was secured by fraud. When an FBI agent refused to hand over the evidence he was jailed for contempt.

Since then companies or individual seeking crucial information from US government departments, often to help in court cases, have used a procedure nicknamed a "Touhy request" to compel the release of information or testimony. And it is this mobster move that CSL has also now used.

CSL and Baxter served a detailed Touhy request on the FDA in April seeking Dr Weinstein's testimony regarding seven narrow topics that revolve around the allegations of the companies being involved in a blood plasma cartel.

"Despite defendants' [CSL and Baxter] offers to compromise, the FDA denied defendants' request on May 2 2013, objecting that producing the requested testimony would be unduly burdensome and not in the public's interest," lawyers say in the court documents. "Due to the importance of the issues in this high stakes lawsuit, and because the FDA's position is contrary to law, defendants are left with no choice but to move to compel."

The motion to compel it hopes will see Dr Weinstein emerge from the FDA bunker and offer up his knowledge of CSL's activity when the conspiracy to limit plasma supplies and push up prices allegedly occurred. Critically for CSL, it believes Dr Weinstein can testify to four key allegations aimed at it by the billion dollar lawsuit.

Namely, that an FDA data reporting system to monitor blood supplies was not used to "police the conspiracy" as claimed by the class action but rather implemented at the request of the FDA.

The class action claims CSL and Baxter misled the FDA by denying there was a plasma shortage in 2005-06. However CSL says documents show will the FDA performed independent analysis and concluded no shortage existed.

Hopefully CSL will have a better outcome than Roger Touhy. He spent 25 years in jail before the courts ruled the kidnapping was a hoax. A few weeks after his release he was cut down by five shotgun blasts by unknown killers.