(May 2, 2022): The Supreme Court last addressed violations of 21 U.S.C. §841 by a medical practitioner in 1975. Since that time, several circuit courts have taken different approaches when construing the scienter requirements to prove a Controlled Substance Act violation, and how a jury may be instructed when deciding a case. Hopefully, clarification of these conflicting approaches is on the horizon. On March 1, 2022, the Supreme Court heard arguments in the case of Ruan v. United States. Simply put, the issue in the Ruan case is whether a physician charged with a violation of the Controlled Substances Act based on his opioid prescribing practices is entitled to assert a “good faith” defense.
Unfortunately, the way that a “good faith” defense has been handled, when instructing a jury, has varied from circuit to circuit. Some circuits have essentially applied a “subjective” good-faith standard. These circuits have instructed juries that a physician or other licensed practitioner cannot be convicted if they sincerely and honestly believed that their prescriptions were within the usual course of professional practice. A second group of circuits courts have adopted an “objective” good-faith standard and instructed juries that a prescribing physician cannot be convicted of a violation of the Controlled Substances Act if he or she “reasonably believed” that the prescription was within the usual course of professional practice. Finally, a small group of circuit courts have essentially rejected the good faith defense and have issued jury instructions that strictly hold a physician liable if he or she has failed to prescribe controlled substances for a legitimate medical need OR in the usual course of professional practice.
I. Overview of Xiulu Ruan v. United States:
For the first time in almost 50 years, the Supreme Court is poised to issue a decision in a case involving violations of the Controlled Substances Act against a physician (Xiulu Ruan, M.D.). To be clear, Xiulu Ruan, is no ordinary physician. In 2013, Dr. Ruan passed his 8th medical board / subspecialty board certification and was recognized for holding the world’s record for “Most Medical Board Certifications.” Dr. Ruan and his partner, John Patrick Couch, M.D. owned two pain management practices in Mobile, Alabama.
II. The DEA Conducts a Nationwide Crackdown on Pill Mills Known as “Operation Pilluted.”
In May 2015, the Drug Enforcement Administration (DEA) raided the two Mobile pain clinics owned by Dr. Ruan and Dr. Couch. The DEA’s raid was one of many conducted in connection with “Operation Pilluted”, a 15-month, multi-state investigation against “pill mills”, pharmacies, physicians, pharmacists, nurse practitioners and physician assistants who were alleged to be involved in improper prescribing practices and diversion. A total of 280 individuals were arrested as part of this national initiative.
III. Indictment and Superseding Indictments.
On April 30, 2015, a grand jury indicted Dr. Ruan and Dr. Couch charging them with conspiracy to distribute controlled substances, 21 U.S.C. § 846, and conspiracy to commit health care fraud, 18 U.S.C. § 1347(a). After conducting a raid on the defendants’ pain clinics in May 2015, federal prosecutors presented an initial Superseding Indictment and then a Second Superseding Indictment to the grand jury on April 28, 2016, for allegedly engaging in the unlawful distribution of controlled substances in violation of 21 U.S.C. §841(a). In the Second Superseding Indictment, the defendants were also charged with violations of racketeering conspiracy, health care fraud conspiracy, wire fraud conspiracy, and related charges. Dr. Ruan was further charged with money laundering and conspiracy to commit money laundering. Both defendants plead not guilty to the charges.
IV. Criminal Trial in United States v. John Patrick Couch, M.D. and Xiulu Ruan, M.D.:
At trial, the government conceded that "there were certainly instances where Dr. Ruan and Dr. Couch did a really good job for their patients." Moreover, the government noted that "[b]y and large, their patients were legitimate patients." Nevertheless, the government alleged (and the government’s medical experts testified that the defendants had prescribed medications "outside [the] standard of care . . . outside the usual practice"and supposedly failed to act upon “red flags” that were present. Dr. Ruan and Dr. Crouch called three of their own medical experts who testified that the defendants' prescribing practices were both appropriate and within the course of legitimate medical practice.
V. Jury Instructions Issued by the U.S. District Court:
After all of the evidence was presented, the defendants asked that the district court give the following instruction to the jury, arguing that this instruction had been approved by both the 2nd and 6th courts of appeal:
Good faith in this context means good intentions and the honest exercise of professional judgment as to the patient’s needs. It means that the Defendant acted in accordance with what he reasonably believed to be proper medical practice.
Not surprisingly, the district court refused to give the proposed instruction to the jury. While it did make reference to the concept of “good faith” in the second paragraph of the jury instructions, it continued to hold the defendants to the standard language of 21 U.S.C. §841:
"For a controlled substance to be lawfully dispensed by a prescription, the prescription must have been issued by a practitioner both within the usual course of professional practice and for a legitimate medical purpose. If the prescription was issued either, one, not for a legitimate medical purpose or, two, outside the usual course of professional practice, then the prescription was not lawfully issued.
A controlled substance is prescribed by a physician in the usual course of a professional practice and, therefore, lawfully if the substance is prescribed by him in good faith as part of his medical treatment of a patient in accordance with the standard of medical practice generally recognized and accepted in the United States. The defendants in this case maintain at all times they acted in good faith and in accordance with [the] standard of medical practice generally recognized and accepted in the United States in treating patients.
Thus a medical doctor has violated section 841 when the government has proved beyond a reasonable doubt that the doctor’s actions were either not for a legitimate medical purpose or were outside the usual course of professional medical practice.” (Emphasis added).
In other words, even though the district court permitted reference to “good faith” to be made in the second paragraph, the court continued to instruct the jury that a violation of 21 U.S.C. §841 occurred if either of the two prong requirements were not met, either the doctor’s actions were not for a “legitimate medical purpose” OR “were outside the usual course of professional medical practice.” The jury instructions issued by the district court were consistent with those approved by the 11th circuit.
VI. U.S. District Court -- Jury Verdict and Sentencing:
On February 23, 2017, the jury issued its decision, convicting Dr. Couch on all counts and Dr. Ruan on all counts except for Count 10. On May 25 and 26, 2017, the district court sentenced Dr. Ruan to 252 months and Dr. Couch to 240 months imprisonment. Dr. Ruan was ordered to pay $15,239,369.93 in restitution and Dr. Couch was ordered to pay $16,844,569.03.
VII. Petition to the 11th Circuit, U.S. Court of Appeals:
On appeal to the 11th circuit, the defendants contested a wide variety of errors supposedly made by the trial court. In this article, we have only focused on the 11th circuit’s consideration of the jury instructions given by the district court. As the 11th circuit court of appeals noted in its opinion, a district court’s rejection of a proposed jury instruction is assessed using an “abuse of discretion” standard. Ultimately, the circuit court of appeals did not find that the district court had abused its discretion when it refused to give the defendants’ proposed “good faith” instruction to the jury. Additionally, it held that the district court properly instructed the jury on the correct criminal standard for violations of the Controlled Substances Act.
VIII. Petition for a Writ of Certiorari to the U.S. Supreme Court:
On April 5, 2021, Dr. Ruan filed a Petition for a Writ of Certiorari with the Supreme Court. It was subsequently granted and oral arguments in the case were recently held on March 1, 2022. The issue before the Supreme Court is whether a physician alleged to have prescribed controlled substances outside the usual course of professional practice may be convicted under 21 U.S.C. 841(a)(1) regardless of in good faith, he “reasonably believed” or “subjectively intended” that his prescriptions fell within the usual course of professional practice.
The attorneys at Liles Parker are monitoring this case closely and will be keeping our clients informed of any holdings issued by the Supreme Court. Most importantly, we will be advising clients of how the anticipated decision impacts our client’s prescribing practices once it is issued.
If your controlled substance prescribing practices are being audited or investigated, give us a call. We can provide an assessment of your case and advise you of your options.
Robert W. Liles, Esq. is Managing Partner at the health law firm, Liles Parker PLLC. With offices in Washington, DC, Houston, TX, and Baton Rouge, LA, our attorneys represent health care providers and suppliers around the country in connection with DEA administrative appeals and DOJ prosecutions of Controlled Substances Act violations. Should you have any questions, please call us for a free consultation. Robert can be reached at: 1 (800) 475-1906.
-  United States v. Moore, 423 U.S. 122, 124 (1975).
-  Xiulu Ruan v. United States, No. 20-1410. The Ruan case was consolidated with Shakeel Khan v. United States, No. 21-5261.
-  For additional information on how the various circuit courts have looked at this issue, please see our article titled "The Criminalization of Pain – In 2022, DOJ is Aggressively Investigating and Prosecuting MDs, NPs, Pas for Violations of the Controlled Substances Act." (April 19, 2022).
-  World Record Academy (May 14, 2012). https://www.worldrecordacademy.com/medical/most_medical_board_certifications_Dr_%20Xiulu_Ruan_sets_world_record_112883.html
-  Journal of Drug Issues, “Prescription Drug Abuse & Diversion: Role of the Pain Clinic.” 2010; 40(3): 681–702. The term “Pill Mill” was reportedly first used in a blog post by Pia Malbran on May 31, 2007. (The blog post has now been removed). As discussed in the Journal of Drug Issues article, a pill mill is:
". . . typically used to describe a doctor, clinic, or pharmacy that is prescribing or dispensing controlled prescription drugs inappropriately."
-  The defendants were also charged with violations of racketeering conspiracy, health care fraud conspiracy, wire fraud conspiracy, and related charges. Dr. Ruan was further charged with money laundering and conspiracy to commit money laundering. A copy of the indictment further sets out the charges against the defendants.
-  Xiulu Ruan v. United States, No. 20-1410, Petition for a Writ of Certiorari (April 5, 2021). See Petitioner’s Appendix (App.), infra, 84a.
-  United States v. Volkman, 797 F.3d 377, 387 (6th Cir. 2015); United States v. Vamos, 797 F.2d 1146, 1152 (2d Cir. 1986).
-  United States v. Xiulu Ruan, No. 19-11508 (11th Cir. 2020).
-  Id. Page 109.