Petition for Writ of Certiorari — Xiulu Ruan, Petitioner v. United States
Supreme Court briefApr 5, 2021
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No.
In the Supreme Court of the United States
DR. XIULU RUAN,
Petitioner,
v.
UNITED STATES OF AMERICA,
Respondent.
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Eleventh Circuit
PETITION FOR A WRIT OF CERTIORARI
LAWRENCE S. ROBBINS
Counsel of Record
RACHEL S. LI WAI SUEN
D. HUNTER SMITH
JEFFREY C. THALHOFER
ROBBINS, RUSSELL, ENGLERT,
ORSECK, UNTEREINER &
SAUBER LLP
2000 K Street, NW, 4th Fl.
Washington, DC 20006
(202) 775-4500
lrobbins@robbinsrussell.com
April 5, 2021
Counsel for Petitioner
QUESTION PRESENTED
A physician otherwise authorized to prescribe
controlled substances may be convicted of unlawful
distribution under 21 U.S.C. § 841(a)(1) if his
prescriptions “fall outside the usual course of
professional practice.” United States v. Moore, 423
U.S. 122, 124 (1975). To ensure that physicians are
not convicted for merely negligent conduct, however,
the federal courts generally permit doctors to advance
a “good faith” defense.
The question presented, on which the circuits are
deeply divided, is whether a physician alleged to have
prescribed controlled substances outside the usual
course of professional practice may be convicted under
Section 841(a)(1) without regard to whether, in good
faith, he “reasonably believed” or “subjectively
intended” that his prescriptions fall within that
course of professional practice.
(i)
ii
PARTIES TO THE PROCEEDING
Petitioner, defendant-appellant below, is Dr.
Xiulu Ruan.
Respondent is the United States of America,
appellee below.
Under this Court’s Rule 12.6,
Dr. John Patrick Couch, defendant-appellant below,
is also considered a respondent.
RELATED PROCEEDINGS
United States v. John Patrick Couch, No. 1616361, United States Court of Appeals for the
Eleventh Circuit. Judgment entered Aug. 15, 2017.
United States v. Xiulu Ruan, No. 19-11508,
United States Court of Appeals for the Eleventh
Circuit. Judgment entered Jan. 8, 2020.
United States v. Ling Cui, No. 19-12661, United
States Court of Appeals for the Eleventh Circuit.
Judgment entered May 11, 2020.
United States v. Lori L. Carver, No. 17-13402,
United States Court of Appeals for the Eleventh
Circuit. Judgment entered Oct. 17, 2018.
iii
TABLE OF CONTENTS
Page
QUESTION PRESENTED........................................... i
PARTIES TO THE PROCEEDING ........................... ii
RELATED PROCEEDINGS ...................................... ii
TABLE OF AUTHORITIES........................................ v
OPINIONS AND RULINGS BELOW ........................ 1
JURISDICTION .......................................................... 1
STATUTORY AND REGULATORY
PROVISIONS INVOLVED ......................................... 1
STATEMENT .............................................................. 2
A. Statutory Framework ................................. 4
B. Factual Background .................................... 5
C. The Court of Appeals’ Decision ................. 13
REASONS FOR GRANTING THE
PETITION ................................................................. 14
I. THE DECISION BELOW
CONFLICTS WITH DECISIONS OF
OTHER CIRCUITS AND IS
DIFFICULT TO RECONCILE WITH
DECISIONS OF THIS COURT ..................... 17
A. The Courts Of Appeals Are Deeply
Divided On The Meaning Of The
Good Faith Defense Under The
CSA ............................................................ 18
iv
TABLE OF CONTENTS—Continued
Page
B. The Court Of Appeals’ Decision Is
Difficult To Square With This
Court’s Case Law ...................................... 27
II. THE COURT OF APPEALS
WRONGLY DECIDED AN
IMPORTANT AND RECURRING
QUESTION ..................................................... 29
CONCLUSION .......................................................... 37
APPENDIX A: Opinion of the United States
Court of Appeals for the Eleventh Circuit
(July 10, 2020) ...................................................... 1a
APPENDIX B: Order Denying Petition for
Rehearing En Banc (Nov. 4, 2020) .................. 129a
APPENDIX C: Defendants’ Proposed Jury
Instruction Number 18 (Excerpt)
(Feb. 6, 2017) .................................................... 130a
APPENDIX D: Excerpt of Day 27 Trial
Transcript (Feb. 16, 2017) ............................... 132a
APPENDIX E: Excerpt of Day 28 Trial
Transcript (Feb. 17, 2017) ............................... 138a
v
TABLE OF AUTHORITIES
Cases
Page(s)
Arthur Andersen LLP v. United States,
544 U.S. 696 (2005) .............................................. 30
Bond v. United States,
572 U.S. 844 (2014) .............................................. 34
Boyd v. United States,
271 U.S. 104 (1926) ........................................ 28, 29
Gonzales v. Oregon,
546 U.S. 243 (2006) .............................................. 34
Jones v. United States,
529 U.S. 848 (2000) .............................................. 34
Linder v. United States,
268 U.S. 5 (1925) ............................................ 27, 28
McDonnell v. United States,
136 S. Ct. 2355 (2016) ............................................ 3
Rehaif v. United States,
139 S. Ct. 2191 (2019) .................................... 29, 30
United States v. Abovyan,
988 F.3d 1288 (11th Cir. 2021) .................... passim
United States v. Bass,
404 U.S. 336 (1971) .............................................. 34
United States v. Bourlier,
518 Fed. Appx. 848 (11th Cir. 2013) ..................... 4
United States v. Enmon,
686 Fed. Appx. 769 (11th Cir. 2017) ....... 16, 23, 25
vi
TABLE OF AUTHORITIES—Continued
Page(s)
United States v. Feingold,
454 F.3d 1001 (9th Cir. 2006) ............ 12, 15, 21, 22
United States v. Garrison,
888 F.3d 1057 (9th Cir. 2018) .............................. 22
United States v. Godofsky,
943 F.3d 1011 (6th Cir. 2019) .............................. 20
United States v. Hurwitz,
459 F.3d 463 (4th Cir. 2006) ........................ passim
United States v. Joseph,
709 F.3d 1082 (11th Cir. 2013) ...................... 13, 24
United States v. Kohli,
847 F.3d 483 (7th Cir. 2017) .......................... 22, 23
United States v. McIver,
470 F.3d 550 (4th Cir. 2006) ............................ 5, 17
United States v. Merrill,
513 F.3d 1293 (11th Cir. 2008) ...................... 25, 26
United States v. Moore,
423 U.S. 122 (1975) ...................................... passim
United States v. Purpera,
No. 19-4158, 2021 WL 406305 (4th
Cir. Feb. 5, 2021) .................................................. 19
United States v. Rottschaefer,
178 Fed. Appx. 145 (3d Cir. 2006) ....................... 12
United States v. Sabean,
885 F.3d 27 (1st Cir. 2018) ........................ 4, 17, 22
vii
TABLE OF AUTHORITIES—Continued
Page(s)
United States v. Singh,
390 F.3d 168 (2d Cir. 2004) ................................. 20
United States v. Smith,
573 F.3d 639 (8th Cir. 2009) ................................ 17
United States v. Tobin,
676 F.3d 1264 (11th Cir. 2012) .................... passim
United States v. Vamos,
797 F.2d 1146 (2d Cir. 1986) ......................... 11, 20
United States v. Volkman,
797 F.3d 377 (6th Cir. 2015) .............. 11, 13, 20, 24
United States v. Voorhies,
663 F.2d 30 (6th Cir. 1981) .................................. 21
United States v. Wexler,
522 F.3d 194 (2d Cir. 2008) ................. 5, 19, 20, 24
Statutes and Regulation
21 U.S.C. § 822(b) ........................................................ 4
21 U.S.C. § 823(f)................................................... 4, 35
21 U.S.C. § 841(a)(1) ......................................... passim
Harrison Anti-Narcotic Law of 1914,
Pub. L. No. 63-223, 38 Stat. 785
(repealed 1970) ................................................. 4, 27
21 C.F.R. § 1306.04(a) ................................................. 4
viii
TABLE OF AUTHORITIES—Continued
Page(s)
Miscellaneous
Christopher Brown, DOJ Keeps Up Pressure
on Doctors Who Prescribe Opioids
Illegally, Bloomberg Law, Jan. 24, 2020,
https://perma.cc/5WN2-YD2X ............................. 36
Ronald W. Chapman II, Defending
Hippocrates: Representing Physicians in
the Wake of the Opioid Epidemic, 43
Champion (Nat’l Ass’n of Crim. Defense
Law.) 40 (2019)..................................................... 33
Joseph Heller, Catch 22 (S&S Classic ed.
1999) (1961) .......................................................... 31
Deborah Hellman, Prosecuting Doctors For
Trusting Patients, 16 Geo. Mason L. Rev.
701 (2009) ....................................................... 17, 31
Letter of 30 State Attorneys General to
Administrator of DEA, 151 Cong. Rec.
6974 (2005) ..................................................... 32, 34
Brendan LoPuzzo, A Bitter Pill To Swallow:
The Need for a Clearly Defined Course of
Professional Practice When Prescribing
Opioids for the Legitimate Medical
Purpose of Treating Pain, 47 Hofstra L.
Rev. 1397 (2019) ................................................... 34
ix
TABLE OF AUTHORITIES—Continued
Page(s)
Ramesh Ponnuru, War on opioid abuse is
striking the wrong target, Pittsburgh
Post-Gazette, Mar. 26, 2019,
https://perma.cc/4PHS-RTS3 ............................... 32
Sally Satel, The Truth About Painkiller
Addiction, The Atlantic, Aug. 4, 2019,
https://bit.ly/3rIw0d1 ........................................... 33
Wesley J. Smith, Pain Doctors Face Greater
Scrutiny Than Death Doctors, National
Review, May 3, 2018,
https://perma.cc/84R5-S5W9 ............................... 33
Jacob Sullum, America’s War on Pain Pills Is
Killing Addicts and Leaving Patients in
Agony, Reason, Apr. 2018,
https://bit.ly/3rRtDVn .......................................... 33
U.S. Attorney’s Office for the Middle District
of Florida, Opioid Epidemic,
https://perma.cc/3VBT-NY4G .............................. 36
U.S. Attorney’s Office for the Northern
District of Alabama, Project Safe
Neighborhoods, https://perma.cc/P58HFYX4 ..................................................................... 36
U.S. Attorney’s Office for the Northern
District of Georgia, SCOPE Initiative,
https://perma.cc/826N-TRSS ............................... 36
U.S. Dep’t of Justice Drug Enf’t Admin.
Diversion Control Div., Criminal Cases
Against Doctors, https://bit.ly/3mgT5Cf .............. 35
x
TABLE OF AUTHORITIES—Continued
Page(s)
U.S. Dep’t of Justice Office of Public Affairs,
Attorney General Sessions Announces
New Prescription Interdiction &
Litigation Task Force (Feb. 27, 2018),
https://perma.cc/24UZ-BSS2................................ 35
United States Brief in Opposition,
Volkman v. United States, No. 138827 (Jul. 11, 2014) .............................. 3, 20, 24, 28
PETITION FOR A WRIT OF CERTIORARI
OPINIONS AND RULINGS BELOW
The opinion of the court of appeals is reported at
966 F.3d 1101. See Petitioner’s Appendix (“App.”),
infra, 1a-128a. The order of the Eleventh Circuit
denying rehearing is not reported. See App., infra,
129a.
JURISDICTION
The court of appeals’ judgment was entered on
July 10, 2020. The court of appeals denied rehearing
on November 4, 2020. App., infra, 129a. On
November 13, 2020, the Court issued guidance
reflecting that the 150-day extension “from the date of
the lower court judgment, order denying discretionary
review, or order denying a timely petition for
rehearing,” directed by the Chief Justice on March 19,
2020, remains in effect. This Court’s jurisdiction is
invoked under 28 U.S.C. § 1254(1).
STATUTORY AND REGULATORY
PROVISIONS INVOLVED
Section 841(a)(1) of the Controlled Substances
Act (“CSA”), 21 U.S.C. § 841(a)(1), provides:
(a) Unlawful acts
Except as authorized by this subchapter, it
shall be unlawful for any person knowingly or
intentionally—
(1) to manufacture, distribute, or dispense, or
possess with intent to manufacture,
distribute, or dispense, a controlled
substance[.]
(1)
2
21 C.F.R. § 1306.04(a) provides:
Purpose of issue of prescription.
(a) A prescription for a controlled substance to
be effective must be issued for a legitimate
medical
purpose
by
an
individual
practitioner acting in the usual course of his
professional practice. The responsibility for
the proper prescribing and dispensing of
controlled substances is upon the prescribing
practitioner, but a corresponding responsibility rests with the pharmacist who fills the
prescription. An order purporting to be a
prescription issued not in the usual course of
professional treatment or in legitimate and
authorized research is not a prescription
within the meaning and intent of section 309
of the Act (21 U.S.C. § 829) and the person
knowingly filling such a purported
prescription, as well as the person issuing it,
shall be subject to the penalties provided for
violations of the provisions of law relating to
controlled substances.
STATEMENT
The question in this case is whether and to what
extent a physician charged with prescribing
medication in violation of the CSA may assert a “good
faith” defense. To overcome a good faith defense in
the Second, Fourth, and Sixth Circuits, the
government must prove that the physician did not
reasonably believe that his prescriptions fell within
professional norms. To overcome a good faith defense
in the First, Seventh, and Ninth Circuits, the
government must prove that the physician
subjectively intended a prescription to exceed
3
professional norms. But neither of those “good faith”
defenses is available in the Eleventh Circuit. All it
takes to convict a physician under the CSA is a finding
that the doctor prescribed controlled substances
outside generally accepted medical standards.
The Eleventh Circuit’s decision deepens a circuit
split, is difficult to square with this Court’s cases, and
resolves a question of surpassing importance. It also
invites juries to convict doctors of drug dealing based
on nothing worse than simple malpractice.
This case is an ideal vehicle for resolving the
question presented. Petitioner objected to the district
court’s refusal to instruct that good faith is an actual
defense. He proposed, without success, a good faith
instruction taken nearly verbatim from ones approved
by conflicting circuits and, indeed, that even the
Solicitor General has endorsed as a “model of clarity
and comprehensiveness in defining the unlawful
distribution offense.” U.S. BIO at 12-13, Volkman v.
United States, No. 13-8827 (Jul. 11, 2014). Because
the jury was wrongly instructed on this crucial
defense—and because much of the proof at trial
consisted of ordinary malpractice—the jury “may have
convicted [Petitioner] for conduct that is not
unlawful.” McDonnell v. United States, 136 S. Ct.
2355, 2375 (2016).
The issue has now percolated to the boiling point:
At least six circuits have flatly rejected the Eleventh
Circuit’s rule (though they themselves conflict, 3-3, on
what the correct good faith defense should be); and
only six weeks ago, the Eleventh Circuit reaffirmed its
outlier position that a good faith instruction is
available only to those whose conduct already falls
4
within professional norms. The petition for a writ of
certiorari should be granted.
A.
Statutory Framework
The Controlled Substances Act makes it unlawful
for “any person knowingly or intentionally . . . to
manufacture, distribute, or dispense” a controlled
substance, “[e]xcept as authorized by this
subchapter.”
21 U.S.C. § 841(a)(1).
“[T]his
subchapter” authorizes persons who have registered
with the Attorney General to distribute controlled
substances “to the extent authorized by their
registration.” Id. § 822(b). The Act also directs the
Attorney General to accept the registration of a
medical doctor or other practitioner if he is
“authorized to dispense . . . controlled substances
under the laws of the State in which he practices.” 21
U.S.C. § 823(f).
In United States v. Moore, 423 U.S. 122 (1975),
this Court acknowledged that the CSA “does not spell
out . . . in unambiguous terms” when physicians may
be subject to prosecution for federal narcotics offenses.
Id. at 140. But, drawing on 21 C.F.R. § 1306.04(a) and
the CSA’s predecessor statute (the Harrison AntiNarcotic Law, 38 Stat. 785), the Court held that a
physician registered with the Attorney General may
be prosecuted under Section 841(a)(1) if her “activities
fall outside the usual course of professional practice.”
Id. at 124; see id. at 136 n.12, 138-143.
To prove that a physician’s activities meet that
standard, prosecutors typically present evidence
establishing the standard of care, coupled with proof
that the doctor’s prescriptions departed from it. See,
e.g., United States v. Sabean, 885 F.3d 27, 45 (1st Cir.
2018); United States v. Bourlier, 518 Fed. Appx. 848,
5
857 (11th Cir. 2013) (per curiam); United States v.
Wexler, 522 F.3d 194, 204 (2d Cir. 2008); United States
v. McIver, 470 F.3d 550, 560-561 (4th Cir. 2006). Lest
physicians be convicted based on mere negligence,
however, almost all circuits permit physicians to
present a defense of good faith.
But not the Eleventh Circuit.
B.
Factual Background
1. Petitioner Dr. Xiulu Ruan practiced medicine
as a board-certified interventional pain specialist in
Mobile, Alabama. He owned, along with his partner
Dr. John Patrick Couch, a pain clinic (Physicians’
Pain Specialists of Alabama (“PPSA”)) and an
affiliated pharmacy (C&R Pharmacy). App., infra, 5a6a. Each doctor treated patients at PPSA’s two
locations. App., infra, 6a.
On April 28, 2016, a grand jury indicted
Petitioner and Dr. Couch on charges of unlawful
distribution of controlled substances under 21 U.S.C.
§ 841(a)(1), as well as racketeering conspiracy, health
care fraud conspiracy, wire fraud conspiracy, and
related charges. App., infra, 3a-4a. Petitioner (but
not Dr. Couch) was also charged with money
laundering and conspiracy to commit laundering.
App., infra, 4a. The indictment included the Section
841(a)(1) violations as predicate offenses for the
majority of the non-narcotics charges. See Second
Superseding Indictment, Dkt. 269, at 19-20, 28, 41-42
(Apr. 28, 2018). Petitioner and Dr. Couch pleaded not
guilty and were tried together.
2. At trial, the government acknowledged “that
there were certainly instances where Dr. Ruan and
Dr. Couch did a really good job for their patients,” and
6
that, “[b]y and large, their patients were legitimate
patients.” App., infra, 84a. The prosecutors alleged,
however, that some of Petitioner’s prescriptions fell
outside of professional norms.
To sustain that
allegation, the government devoted much of the trial
to evidence that, without careful jury instructions,
invited conviction based on simple malpractice.
For example, the government put on three
medical experts who testified at length that Petitioner
and Dr. Couch had prescribed medication “outside
[the] standard of care, . . . outside the usual practice.”
Tr. 2357:10-11; see also Tr. 661-1061 (Dr. Greenberg);
Tr. 2246-2542 (Dr. Vohra); Tr. 4328-4520 (Dr.
Aultman). Dr. Aultman testified that the defendants
too frequently “jumped to an opioid medication first”
when there are “a lot of other things that you can do
for patients with chronic pain.” Tr. 4437:4-5, 16-22.
She and the other experts identified patients who they
thought “should have been referred to a psychiatrist,”
Tr. 731:10-11, or for whom “[t]he ideal thing for the
doctor to have done would have been to transfer the
patient for detoxification at a licensed detoxification
facility,” Tr. 743:11-14. See also Tr. 730:24-731:2
(testifying that physical therapy “would have been
perfect for” a patient); Tr. 4429:16-17 (similar).
The government’s medical experts also faulted
Petitioner and Dr. Couch for not having identified or
acted upon certain so-called “red flags.” See Tr.
749:16-750:9; Tr. 4407:19-4408:15. For example, even
though the physician defendants regularly tested
patients to confirm that they had taken their
prescriptions (and not diverted them to the black
market), Dr. Greenberg criticized one such test as
“inadequate” and asserted that such testing protocols
7
demonstrated “the doctor’s [un]willingness to spend
the tiny bit more money and go ahead and protect his
patients the best that he can.”
Tr. 923:1-4.1
Greenberg also testified that Petitioner had made “a
major mistake” by failing to make further inquiries of
a patient who had tested negative for a prescribed
drug (a “red flag”). Tr. 735:6-8.2
The government’s medical experts also claimed
that Petitioner had mismanaged his medical practice,
through recordkeeping failures, see, e.g., Tr. 746:5-6,
2370:8-19, 4348:12-4349:15, 4518:8-16, and excessive
reliance on nurse practitioners and other “physician
extenders,” see, e.g., Tr. 681:12 (“I normally [examine
the patient] by myself.”); Tr. 688:17-21 (“it would
definitely be outside the usual practice of practicing
medicine in the state of Arizona” for a physician
extender to decide “what medications the individual
would receive”); Tr. 2375:20-24 (similar).
Petitioner and Dr. Couch sharply contested these
allegations of malpractice, calling three medical
experts of their own who offered a competing account
1 Shortly after Dr. Greenberg’s testimony, the government
alerted the district court that Greenberg “thought he had earlyonset dementia and was consulting a neurologist.” App., infra,
40a. The government stated that it would investigate to
determine whether a jury instruction was warranted, see Tr.
1068:13-24; Tr. 1070:16-1071:6, but never presented any further
information to the court, App., infra, 41a.
2 See also Tr. 2351:5-2352:18 (testimony that Petitioner had
not acted “within [the] standard of care” when he had continued
a course of medication after a patient screen had shown
“significant inconsistencies”); Tr. 2357:10-11 (testimony that it
“was outside [the] standard of care, it was outside the usual
practice” to have continued a course of medication for a
particular patient).
8
of Petitioner’s and Dr. Couch’s compliance with the
relevant professional standards. See Tr. 4763-4914
(Dr. Warfield); Tr. 6034-6078 (Dr. Gharibo); Tr. 52055341 (Dr. Gudin). Dr. Gharibo, for instance, reviewed
patient files and “found Dr. Ruan’s treatment in many
ways exemplary.” Tr. 6044:9. Dr. Gharibo also
testified that Petitioner’s patient care was “multimodal and multi-disciplinary” and “clearly in the
higher end of the standard of care.” Tr. 6049:10-17.
Dr. Gudin testified that for “each and every chart” he
had reviewed, Petitioner’s “prescribing seemed
appropriate and certainly within the course of
legitimate medical practice.” Tr. 5282:19-22. And Dr.
Warfield, addressing the role of physician extenders
in the practice of pain medicine, testified that “it’s not
uncommon for a visit to be conducted by a nurse
practitioner.” Tr. 4793:11-12.
Petitioner and Dr. Couch also took the stand
themselves to support their good faith defense.
Petitioner testified that he always made an
“individualized decision” as to “[w]hat medication to
use” “based on the patient’s best interest,” Tr. 5803:25, and that his decisions were always motivated by
“caring for [his] patients,” Tr. 5920:24-5921:2; Tr.
6032:14-17 (similar); Tr. 5627:17-24 (same for Dr.
Couch). Petitioner explained, for example, that he
had prescribed especially potent fentanyl medications
only for episodes of “very severe breakthrough pain,”
Tr. 5779:21-24, and that the medication was a
“lifesaver” for patients who would otherwise “have to
go to [the] ER” during such an episode, Tr. 5780:2225. And, with respect to patients exhibiting “red
flags,” Petitioner testified that he would “terminate
9
the relationship” once he “decide[d] [he] can no longer
help” the patient. Tr. 5838:23-5839:1.3
To be sure, some of the government’s proof was
unlikely to be conflated with evidence of simple
malpractice. Thus, for example, the government
presented evidence about defendants’ relationship
with pharmaceutical companies to suggest that
defendants had placed their financial interests over
the well-being of their patients.4 The government also
offered evidence purporting to show that the
defendants prescribed medications based on their
3 To buttress his good faith defense, Petitioner also sought
to introduce videos showing that he had declined to prescribe
opioids to patients who turned out to be undercover DEA agents.
Petitioner explained to one such “patient” that “it was not
appropriate to prescribe controlled substances because of better
alternatives.” App., infra, 85a. Petitioner also sought to call
several patients not identified by the government to confirm that
his treatment had been exemplary. See App., infra, 80a-89a. Cf.
Ruan Sentencing Tr. 31:1-11 (statement of former patient) (“[I]f
you’ve never had it, you can’t even understand how much
[chronic pain] changes you and ruins your life. When we were
under Dr. Ruan’s care, my husband and I were able to enjoy our
retirement. . . . Now we have to wait an hour for my husband’s
little bit of pain medication that he gets to kick in before we can
even do our own landscaping and trim our own hedges and just
live a normal life—forget about [going] camping and enjoying
things.”). The district court excluded both the videos and the
additional patient testimony as “not relevant.” Status Conf. Tr.
17:11-13 (Jan. 3, 2016); see App., infra, 19a-20a, 27a.
4 There was evidence that defendants had purchased stock
in a pharmaceutical company whose products they frequently
prescribed (Galena Biopharma), App., infra, 10a-11a, and that
they had participated in the paid speaker program of another
pharmaceutical company (Insys), which was allegedly designed
by Insys “not to educate others but to influence how many
prescriptions [they] wr[o]te,” App., infra, 13a (quotation marks
omitted).
10
availability at the affiliated pharmacy.
infra, 17a.
See App.,
But that evidence was also hotly contested.5 And
the fact remains that large swaths of the
government’s proof invited the jury to convict
Petitioner based on mere negligence. See, e.g., Tr.
675:19-680:5; 754:10-16; 2255:3-12; 2311:22-2312:3;
2352:10-18; 2357:9-19 (prosecution expert testimony
on standard of care).6
5 Petitioner, for instance, put on evidence that he had
bought stock in Galena because he had believed in the company’s
prospective vaccine for breast cancer. See Tr. 5798:13-5799:7
(discussing stock-analyst research on Galena’s value). What is
more, in the months following the stock purchase, most of
Petitioner’s prescriptions of Galena medication were under the
company’s voucher program, see Tr. 5794:5-5795:19, and, as a
former Galena rep acknowledged, those prescriptions “affected
[Galena] negatively because Galena paid for all the product in
the voucher program,” Tr. 1651:15-16; see App., infra, 12a
(Galena eventually abandoned the program as a result of these
prescriptions). One of defendants’ experts also testified that
physicians “commonly” give paid talks for pharmaceutical
companies, Tr. 4906:3-9, and that there is “nothing wrong” with
doing so for companies whose products the physician prescribes,
Tr. 4878:11-20. Further, some of the medications Petitioner
prescribed were “very specialized” and, thus, as Petitioner
testified, “[l]ocal pharmacies d[id] not carry them,” Tr. 5826:1718; availability at C&R, Petitioner testified, in no way affected
his “clinical judgment” as to whether they were appropriate for
his patients, Tr. 5828:3-6.
6 See also, e.g., Tr. 681:10-12; 686:4-696:3; 724:22-727:14;
737:25-740:1; 742:19-744:18; 746:12-750:18; 750:23-756:11;
794:4-797:6; 1053:19-1054:9; 1061:8-15; 2278:12-13; 2351:5-10;
2362:7-2364:7; 2538:25-2541:9; 4348:7-4348:15; 4357:7-4361:14;
4390:3-11; 4398:19-4401:7; 4407:19-4408:15; 4436:25-4437:22;
4514:15-17; 4519:22-4520:1 (expert testimony on “professional
practice”).
11
3. At the close of evidence, Petitioner requested
that the district court give the jury the same good
faith instruction that two courts of appeals have
approved. App., infra, 102a; see United States v.
Volkman, 797 F.3d 377, 387 (6th Cir. 2015); United
States v. Vamos, 797 F.2d 1146, 1152 (2d Cir. 1986).
Petitioner’s proposed instruction stated:
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.
App., infra, 131a.
The district court refused to give this instruction
because “good faith,” in its view, is “subjective,” and
“the standard should be an objective one.” App.,
infra., 134a. Instead, emphasizing that this was “as
far as I’m willing to go,” App., infra, 136a, and that it
would otherwise decline even to mention “good faith,”
ibid., the district court gave the jury the following
instruction over Petitioner’s objection (ibid.; Status
Conf. Tr. 42:3-6 (Jan. 3, 2016)):
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
12
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.
App., infra, 139a (emphasis added).7
In short, the district court mentioned “good faith”
in passing, but made clear that, regardless of
Petitioner’s purported good faith, the jury could
convict if it found that Petitioner had acted “outside
the usual course of professional medical practice.”8
7 In instructing that Petitioner could be convicted if his
actions were “either not for a legitimate medical purpose or were
outside the usual course of professional medical practice,” App.,
infra, 139a (emphasis added), the district court’s instruction
complied with Eleventh Circuit law. See App., infra, 106a-107a
(affirming this aspect of the instruction); United States v.
Abovyan, 988 F.3d 1288, 1305 (11th Cir. 2021) (same, citing the
decision in this case). As it happens, there is also a circuit split
as to whether the government must prove only one of the test’s
two prongs (as in the Eleventh Circuit) or both of them (as in the
Ninth Circuit). See United States v. Feingold, 454 F.3d 1001,
1008 (9th Cir. 2006); cf. United States v. Rottschaefer, 178 Fed.
Appx. 145, 147-148 (3d Cir. 2006) (suggesting that there may be
“no difference” between the test’s two prongs).
8 In contrast to its refusal to instruct on good faith with
respect to the controlled substances charges, the district court
told the jury that “[g]ood faith is a complete defense” to the wire
and health care fraud counts, and therefore “[a]n honestly held
opinion or an honestly formed belief . . . even if . . .mistaken”
precludes conviction. Tr. 6342:20-25.
13
4. Petitioner was convicted on all but two
counts in the second superseding indictment and
sentenced to 21 years of imprisonment. App., infra,
2a-3a. Dr. Couch was convicted on all but one charge
and sentenced to 20 years of imprisonment. App.,
infra, 3a. Seven of the counts on which Petitioner was
convicted were controlled substances charges.9 Most
of the remaining eight counts relied on the controlled
substances offenses as a predicate. See Tr. 6330:5-11
(racketeering conspiracy); Tr. 6344:3-13 & Second
Superseding Indictment, Dkt. 269, at 28 (Apr. 28,
2018) (health care fraud conspiracy); Tr. 6349:196351:6 (money laundering conspiracy and substantive
money laundering). The only convictions that were
independent of the controlled substances charges
were one count of wire and mail fraud conspiracy and
two counts of conspiracy to violate the Anti-Kickback
statute.10
C.
The Court of Appeals’ Decision
Petitioner and Dr. Couch appealed, raising,
among other issues, the district court’s treatment of
defendants’ good faith defense. See App., infra, 102a.
Acknowledging that the Eleventh Circuit had
previously rejected a good faith instruction like the
one they had proposed, see United States v. Joseph,
709 F.3d 1082, 1097 (2013), Petitioner urged the court
to revisit its precedent in light of conflicting case law
from other circuits. See Couch Reply 35 (citing United
Petitioner was acquitted on one count of unlawful
distribution of controlled substances. App., infra, 5a.
9
10 One of the Anti-Kickback convictions was reversed on
appeal for insufficient evidence.
App., infra, 60a.
The
government had initially brought three Anti-Kickback charges,
but it dismissed one at trial. Tr. 4524:24-4525:8.
14
States v. Volkman, 797 F.3d 377 (6th Cir. 2015)); see
also Ruan Reply iii (Petitioner’s adoption of this
argument).
“Bound by its [prior] holdings,” however, the
court of appeals affirmed. App., infra, 107a. It first
rejected Petitioner’s proposed good faith instruction
as “an incorrect statement of the law.” App., infra,
105a. Although the requested instruction expressly
focused on what Petitioner “reasonably believed,” the
panel held that the instruction would wrongly permit
an acquittal based only on Petitioner’s “subjective[]
belie[f].” App., infra, 106a.
The court of appeals next held that the
instruction actually given by the district court was
correct. In the panel’s view, a physician may assert
good faith only “as long as [his] conduct also was in
accordance with the standards of medical practice
generally recognized and accepted in the United
States.” App., infra, 107a. The court did not explain
what independent meaning a good faith defense has if
it applies only to physicians whose prescriptions
already fall within professional norms.
Seeking rehearing, Petitioner again called
conflicting circuit authority to the court of appeals’
attention. Couch Pet. for Reh’g 6-11; Ruan Pet. for
Reh’g iii. Rehearing was denied without comment.
REASONS FOR GRANTING THE PETITION
A medical doctor may be convicted under the
Controlled Substances Act, 21 U.S.C. § 841(a)(1), if
the government proves that he or she prescribed
drugs “outside the usual course of professional
practice.” United States v. Moore, 423 U.S. 122, 124
(1975). To ensure that doctors are not convicted of a
15
federal felony based on simple malpractice, however,
nearly all courts of appeals permit physicians to
assert a “good faith” defense.
Good faith is the central (and sometimes the only)
defense in the hundreds of reported cases charging
doctors with a Section 841(a)(1) violation. Indeed,
good faith was the central defense in Moore itself,
where the jury was specifically instructed that the
defendant could be convicted only if he prescribed
“other than in good faith” and did not make at least
“‘an honest effort’ to prescribe . . . in compliance with
an accepted standard of medical practice.” 423 U.S.
at 139, 142 n.20. And in United States v. Hurwitz, 459
F.3d 463 (4th Cir. 2006), the court of appeals reversed
a physician’s conviction precisely because the
instructions had deprived the defendant of a good
faith defense to Section 841(a)(1) charges. See id. at
479-482.
But, in the forty-six years since Moore was
decided, the courts of appeals have deeply divided on
what good faith means, and how a jury should be
instructed on it. The Second, Fourth, and Sixth
Circuits have held that a physician should be
acquitted if she “reasonably believed” that her
prescription was within the usual course of
professional practice. E.g., United States v. Hurwitz,
459 F.3d 463, 479-482 (4th Cir. 2006). By contrast,
the First, Seventh, and Ninth Circuits have held any
sincere belief (whether reasonable or not) that a
prescription was within the bounds of professional
practice is grounds for acquittal because a physician
holding such a belief lacks the scienter required for a
felony conviction. E.g., United States v. Feingold, 454
F.3d 1001, 1008 (9th Cir. 2006).
16
The Eleventh Circuit follows neither of those
approaches.
Under its idiosyncratic precedent,
“whether [a physician] had a good faith belief that he
dispensed a controlled substance in the usual course
of his professional practice is irrelevant.” United
States v. Enmon, 686 Fed. Appx. 769, 773 (2017) (per
curiam) (emphasis added); United States v. Tobin, 676
F.3d 1264, 1283 (2012). Instead, “[t]he appropriate
focus,” according to the Eleventh Circuit, is solely on
“whether the physician prescribes medicine in
accordance with a standard of medical practice
generally recognized and accepted in the United
States.” United States v. Abovyan, 988 F.3d 1288,
1305 (2021). There is no room for good faith mistakes,
reasonable or otherwise.
The present case illustrates the Eleventh
Circuit’s distinct approach. Two medical doctors, now
sentenced to two decades each in federal prison as
drug dealers, asserted a defense that would have been
submitted to the jury in New York, Virginia,
Tennessee, New Hampshire, Indiana, or Arizona.
But, because they practiced medicine in Alabama, the
court of appeals, “bound by its [prior] holdings”
making good faith irrelevant, App., infra, 107a,
affirmed. The court held that a physician charged
with narcotics violations may claim good faith only “as
long as the [physician’s] conduct also was in
accordance with the standards of medical practice
generally recognized and accepted in the United
States,” ibid.—which is of course a situation in which
the government has not met its burden in the first
place. That is no defense at all.
The Eleventh Circuit’s divergent understanding
of good faith is deeply mistaken. As that court has all
17
but acknowledged, stripping good faith of any
independent force effectively imposes criminal
liability on physicians for merely negligent conduct.
See Tobin, 676 F.3d at 1283 n.10. This Court should
grant certiorari to resolve the entrenched circuit split
and to ensure that physicians practicing in the
Eleventh Circuit are not convicted of drug trafficking
on a basis that would not pass muster in any other
part of the country.
I.
THE DECISION BELOW CONFLICTS WITH
DECISIONS OF OTHER CIRCUITS AND IS
DIFFICULT
TO
RECONCILE
WITH
DECISIONS OF THIS COURT
Nearly all circuit courts agree that a good faith
instruction is essential to “explain[] to the jury a
critical difference between” civil and criminal liability.
United States v. Sabean, 885 F.3d 27, 45 (1st Cir.
2018) (quoting United States v. Smith, 573 F.3d 639,
650 (8th Cir. 2009) (quoting in turn United States v.
McIver, 470 F.3d 550, 560 (4th Cir. 2006))). The
circuit courts are deeply divided, however, on what
good faith means. As one commentator has observed,
most courts “vacillate between more subjective
standards—in which a doctor’s good faith attempt to
conform his conduct to what he believes is a generally
accepted standard of medical practice is sufficient—
and more objective standards in which the doctor’s
conduct in this regard must also be reasonable.”
Deborah Hellman, Prosecuting Doctors For Trusting
Patients, 16 Geo. Mason L. Rev. 701, 715 (2009).
If nothing else, the Eleventh Circuit cannot be
accused of “vacillating.” It has simply written good
faith out of existence. Once the government has
proved that a prescription falls outside the “standard
18
of medical practice generally recognized and accepted
in the United States,” the prescribing physician may
be convicted as a drug dealer. Full stop.
The Eleventh Circuit’s refusal to give the good
faith defense any independent content is in sharp
conflict with two competing lines of circuit court case
law. The court of appeals’ decision is also difficult to
square with this Court’s precedent. Further review to
resolve the conflict is warranted.
A.
THE COURTS OF APPEALS ARE
DEEPLY DIVIDED ON THE MEANING
OF THE GOOD FAITH DEFENSE
UNDER THE CSA
1. In the Fourth, Second, and Sixth Circuits,
physicians are entitled to acquittal if they “reasonably
believe” that their conduct complied with professional
norms.
In United States v. Hurwitz, 459 F.3d 463 (2006),
the Fourth Circuit reversed a physician’s conviction
precisely because the jury instructions had deprived
the defendant of a good faith defense to Section
841(a)(1) charges. Id. at 476; see id. at 480-482. As
in the present case, Dr. Hurwitz’s jury was told that
all it needed to find to convict the defendant was that
he had prescribed narcotics “beyond the bounds of
medical practice.” See Hurwitz Tr. 11:17-24, 15:6-9,
16:7-10, 17:12-15, 20:11-14, United States v. Hurwitz,
No. 03-cr-00467 (E.D. Va. Dec. 9, 2004). See also 459
F.3d at 475. The Fourth Circuit rejected that
instruction as fatally flawed. As the court explained,
“latitude must be given to doctors trying to determine
the current boundaries of acceptable medical practice”
and “a doctor should not be held criminally liable if
19
the doctor acted in good faith when treating his
patients.” Id. at 477. The Fourth Circuit therefore
held that some meaningful good faith instruction
must be given to the jury.
The Hurwitz panel then turned to the proper
standard for good faith. It first rejected the contention
that good faith “means the doctor acted according to
what he believed to be proper medical practice.” Id. at
478. Instead, because the good faith inquiry “must be
an objective one,” it cited with approval precisely the
rule for which Petitioner contended in the present
case—that a physician acts in good faith if he
prescribes “in accordance with what he reasonably
believed to be proper medical practice.” Id. at 478480.11 Just two months ago, the Fourth Circuit
reiterated that view, holding that a jury should be
“tasked with assessing what a physician should have
believed,” and rejecting as “legally incorrect” “a
standard for good faith that is entirely subjective.”
United States v. Purpera, No. 19-4158, 2021 WL
406305, at *7-8 (Feb. 5, 2021) (per curiam).
The Second Circuit follows the same approach as
the Fourth. The leading decision is United States v.
Wexler, 522 F.3d 194 (2008). In that case, the
physician’s jury was given substantially the same
good faith instruction that the Eleventh Circuit
rejected as “incorrect”: that the government must
prove that the defendant dispensed drugs “other than
in good faith,” and that “good faith” means “that the
doctor acted in accord with what he should have
11 Concurring only in the result, Judge Widener urged a
purely subjective good faith standard because “it is the intent of
the actor into which inquiry is made.” Id. at 483.
20
reasonably believed to be proper medical practice.” Id.
at 205. In sharp contrast to the court below, the
Second Circuit in Wexler held that this “reasonable
belief” instruction was “necessary.” Id. at 206.
Without it, the court reasoned, a physician might be
convicted “for a gross mistake or malpractice,” instead
of “as a ‘drug pusher.’” Ibid. A good faith instruction
focused on the doctor’s “reasonable belief” would
“shield [a physician] from criminal liability for any
mistake, however gross.” Id. at 205-206. Accord
United States v. Singh, 390 F.3d 168, 186 (2d Cir.
2004) (government must prove “the lack of good faith”
where “good faith” means that “defendant . . . acted in
accordance with what he reasonably believed to be
proper medical practice”); United States v. Vamos, 797
F.2d 1146, 1152 (2d Cir. 1986) (same).
The Sixth Circuit is in accord. It, too, has
approved “as a model of clarity and comprehensiveness” exactly the “reasonable belief”
instruction that the Eleventh Circuit held to be
“incorrect” in Petitioner’s case: that a physician
cannot be convicted if he “dispenses a drug in good
faith,” where good faith “means that the defendant
acted in accordance with what he reasonably believed
to be proper medical practice.” United States v.
Volkman, 797 F.3d 377, 387-388 (2015) (emphasis
added). The Solicitor General agreed. See No. 1318277 U.S. BIO 7, 12 (likewise calling this instruction
a “model of clarity and comprehensiveness”). Like the
Second and Fourth Circuits, the Sixth Circuit has also
rejected a purely subjective intent standard as too
permissive. See, e.g., United States v. Godofsky, 943
F.3d 1011, 1022, 1027 (2019) (rejecting as “extreme”
and “incorrect” the argument that a jury must acquit
if the doctor acted “in accordance with what he
21
believed to be proper medical practice,” and holding
that the instruction in Volkman is “a correct
statement of the law”); United States v. Voorhies, 663
F.2d 30, 34 (1981) (approving a good faith instruction
requiring “an observance of conduct in accordance
with what the physician should reasonably believe to
be proper medical practice” (emphasis added)).
2. The Ninth, First, and Seventh Circuits go
further: They require the government to prove that a
physician intentionally exceeded the bounds of
professional practice. Thus, they adopt the more
subjective standard for good faith that Judge Widener
approved in his separate opinion in Hurwitz, but
which the Fourth, Second, and Sixth Circuits have
rejected.
United States v. Feingold, 454 F.3d 1001, 1008
(2006), is the leading case in the Ninth Circuit. The
court of appeals held that “a practitioner who acts
outside the usual course of professional practice may
be convicted under § 841(a) only if he does so
intentionally.”
Id. at 1007 (emphasis added).
Accordingly, the Ninth Circuit explained, it does not
suffice (as it does in the Eleventh Circuit) “that the
distribution . . . was outside the usual course of
professional practice.” Id. at 1008. Rather, the court
held, the government must also prove “that the
practitioner acted . . . with intent to distribute [drugs]
outside the course of professional practice.” Ibid. “In
other words,” the court of appeals stated, the
prosecution must prove “the doctor’s intent to act as a
pusher rather than a medical professional.” Ibid.;12
12 The Ninth Circuit affirmed Dr. Feingold’s conviction
because his jury was expressly instructed that the government
22
accord United States v. Garrison, 888 F.3d 1057, 1064
(9th Cir. 2018) (reaffirming this analysis).
The First Circuit is in accord. In United States v.
Sabean, 885 F.3d 27 (2018), the court explained that
“a physician’s failure to adhere to an applicable
standard of care cannot, by itself, form the basis for a
conviction under Section 841(a).” Id. at 45 (emphasis
added). Accordingly, the First Circuit held, it was
“important” to instruct the jury that “‘a sincere effort
to act in accordance with proper medical practice,’
even if flawed, could not undergird a guilty verdict so
long as the defendant had acted in ‘good faith.’” Ibid.
(emphasis added). “Because good faith is a defense to
criminal charges under Section 841(a) but not to civil
liability for medical malpractice, ‘inclusion of a good
faith instruction is . . . a plainspoken method of
explaining to the jury a critical difference between the
two standards.’” Ibid. (citation omitted).13
The Seventh Circuit takes the same view. In
United States v. Kohli, 847 F.3d 483 (2017), the jury
was instructed that the prosecution must prove that
the physician had “intentionally prescrib[ed] the
controlled substance outside the usual course of
professional medical practice.” Id. at 488. Moreover,
the instructions emphasized, the defendant could not
must prove that he did not prescribe in good faith, where good
faith means “sincerity in attempting to conduct himself in
accordance with a standard of medical practice generally
recognized and accepted in the country.” Feingold, 454 F.3d at
1008.
13 Because the good faith instructions “lucidly explained the
government’s burden for proving criminal intent” and the
“distinction[] between intentional and negligent misconduct,” id.
at 45-46, the court of appeals affirmed.
23
be convicted “if he merely made an honest effort to
treat his patients in compliance with an accepted
standard of practical practice.” Id. at 489. Those
instructions, the Seventh Circuit held, “fairly and
accurately stated the law.” Id. at 494.
3.
The Eleventh Circuit rejects both the
“reasonable belief” instruction approved by the
Second, Fourth, and Sixth Circuits, and the more
defense-friendly “subjective intent” defense approved
by the First, Seventh, and Ninth Circuits. In the
Eleventh Circuit, “whether [a physician] had a good
faith belief that he dispensed a controlled substance
in the usual course of his professional practice is
irrelevant.” United States v. Enmon, 686 Fed. Appx.
769, 773 (2017) (per curiam) (emphasis added).
The leading case is United States v. Tobin, 676
F.3d 1264 (11th Cir. 2012). Acknowledging that its
prior case law had “not always been clear,” id. at 1282,
the court of appeals synthesized its precedents and
held that “a jury must determine from an objective
standpoint whether a prescription is made in the
‘usual course of professional practice.’” Id. at 1283.
The Eleventh Circuit dismissed the concern that such
an approach “will create a ‘strict liability offense,’”
speculating that “[t]he possibility that a practitioner
will unknowingly run afoul of the CSA is extremely
low.” Id. at 1283 n.10. Then, in a passage that
effectively writes good faith out of existence, the
Eleventh Circuit flatly held that “the CSA
incorporates the applicable state standard of
professional practice, and thus it holds practitioners
to standards to which they are already bound.” Ibid.
(emphasis added). The court therefore affirmed the
24
district court’s exclusion of “evidence of good faith” as
“consistent with [its] holdings.” Id. at 1283.
Building on that premise a year later, the
Eleventh Circuit held that the “reasonable belief”
instruction approved by the Second, Fourth, and Sixth
Circuits (and the Solicitor General) is legally
impermissible. In United States v. Joseph, 709 F.3d
1082 (11th Cir. 2013), the court rejected as an
“incorrect statement of the law” a proposed
instruction that good faith “means that the doctor
acted in accordance with what he reasonably believed
to be proper medical practice.” Id. at 1097. The
rejected instruction was identical almost word-forword to the instruction that the Sixth Circuit hailed
as a “model.” Volkman, 797 F.3d at 387-388; accord
No. 13-18277 U.S. BIO 7, 12. It was identical in
substance to those the Second Circuit had called
“necessary” in Wexler, 522 F.3d at 205-206, and the
Fourth Circuit had cited approvingly in Hurwitz, 459
F.3d at 478. But, relying on Tobin, the Eleventh
Circuit thought the proposed instruction insufficiently “objective.” Joseph, 709 F.3d at 1097. It
approved, instead, an instruction mentioning good
faith in passing, but not making it a separate
defense.14
14 The approved instruction provided:
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 a part of his
medical treatment for the patient in accordance with a standard
of medical practice generally recognized and accepted in the
United States.
Joseph, 709 F.3d at 1092.
25
A few years later, the Eleventh Circuit left no
doubt that it meant what it said. The Court sustained
an instruction that told the jury, in no uncertain
terms, that “whether [a physician] had a good faith
belief that he dispensed a controlled substance in the
usual course of his professional practice is irrelevant.”
Enmon, 686 Fed. Appx. at 773 (emphasis added). All
that matters, the court of appeals stated, is “whether
the doctor’s practice was ‘in accordance with a
generally-accepted standard of medical practice.’” Id.
at 772-773 (quoting United States v. Merrill, 513 F.3d
1293, 1306 (11th Cir. 2008)). That instruction would
have been plain error in the First, Second, Fourth,
Sixth, Seventh, or Ninth Circuits. Indeed, the Fourth
Circuit reversed a conviction precisely because the
district court had “informed the jury that it could not
consider good faith when deciding whether to convict
. . . under § 841.” Hurwitz, 459 F.3d at 476.
The present case is of a piece. Over Petitioner’s
objection, the district court gave the “same
instruction” that the Eleventh Circuit had approved
in Joseph—mentioning good faith, but making clear
that it has no independent force as a defense. App.,
infra, 106a. Purporting to “throw[] [Petitioner] a
bone,” App., infra, 136a, but emphasizing that was “as
far as I’m willing to go, given the state of the law on
this issue,” ibid., the district court adverted to “good
faith,” but in the very next breath instructed the jury,
in its summary paragraph, that good faith makes not
a dime’s worth of difference:
26
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.
App., infra, 139a (emphasis added). Affirming, the
Eleventh Circuit held that the instruction correctly
told the jury that “good faith was a defense to a
Controlled Substances Act violation,” but only “as
long as the appellants’ conduct also was in accordance
with the standards of medical practice generally
recognized and accepted in the United States.” App.,
infra, 107a (emphasis added). Such a defense—which
leaves no room for any kind of mistake (reasonable or
otherwise)—is no defense at all.
Petitioner called the panel’s attention to
conflicting out-of-circuit precedent; he urged the court
to revisit its decisions refusing to permit even a
“reasonable belief” instruction. See Couch Reply 35;
Ruan Reply iii; Couch Pet. for Reh’g 6-12; Ruan Pet.
for Reh’g iii. But the Eleventh Circuit stuck to its
guns.
And there is no prospect that, without this
Court’s intervention, the court of appeals will
reconsider its divergent position. Just six weeks ago,
the Eleventh Circuit restated its view that a
conviction under the CSA turns exclusively on
“whether the physician prescribes medicine in
accordance with a standard of medical practice
generally recognized and accepted in the United
States.” United States v. Abovyan, 988 F.3d 1288,
1305 (2021) (quoting Merrill, 513 F.3d at 1306); see
also Merrill, 513 F.3d at 1306 (rejecting physician’s
27
good faith instruction on these grounds). Accordingly,
the court held, “the law requires only that the jury
find the doctor prescribed a drug . . . not ‘in the usual
course of professional practice.’” Abovyan, 988 F.3d at
1308 (citing the present case) (emphasis added). In
the Eleventh Circuit, good faith—whether based on
subjective intent (as in the First, Seventh, and Ninth
Circuits), or based on a “reasonable belief” (as in the
Second, Fourth, and Sixth Circuits)—simply has no
independent role to play in CSA prosecutions.
B.
THE COURT OF APPEALS’ DECISION
IS DIFFICULT TO SQUARE WITH THIS
COURT’S CASE LAW
Although this Court has not had occasion to
decide whether and in what way a good faith defense
must be permitted under the CSA, its case law
strongly suggests that the Eleventh Circuit’s rule is
mistaken.
The Court’s earliest cases arose under the
Harrison Anti-Narcotic Law, 38 Stat. 785, “the
predecessor of the CSA.” United States v. Moore, 423
U.S. 122, 132 (1975). In Linder v. United States, 268
U.S. 5 (1925), a physician was charged under Section
2 of the statute with dispensing narcotics to an
addicted patient. The requirements of Section 2
extended to physicians unless they had acted “in the
course of . . . professional practice only.” Id. at 13
(quoting 38 Stat. at 786). Notably, a separate section
of the Act—Section 8, covering possession of
narcotics—expressly provided for a good faith defense,
whereas Section 2 did not. Id. at 14. Nevertheless,
this Court construed Section 2 to permit prescriptions
issued “in good faith.” Id. at 20. Applying that
standard, the Court vacated the defendant’s
28
conviction because the evidence showed that the
physician lacked any “conscious design to violate the
law.” Id. at 17 (emphasis added).
A year later, in Boyd v. United States, 271 U.S.
104 (1926), “[t]he disputed question was whether the
defendant issued the prescriptions in good faith.” Id.
at 105. This Court agreed that, if the jury had been
authorized to convict only because a prescribed dosage
exceeded medical standards (which suffices in the
Eleventh Circuit), that “would be plainly in conflict
with what this court said in the Linder Case.” Id. at
107. The Court affirmed the conviction, however,
because the instructions had appropriately advised
the jury to acquit if the physician had acted “honestly
and in good faith” in an “effort to cure disease.” Id. at
108.
Nothing in the CSA dilutes, much less abrogates,
the good faith defense recognized in both Linder and
Boyd. To the contrary, as the Court explained in
Moore, Congress (even while strengthening the drug
laws) was concerned that “physicians be allowed
reasonable discretion in treating patients and testing
new theories.” 423 U.S. at 143. And, consistent with
that principle, the Moore jury was expressly
instructed that it could convict only if the defendant
acted “other than in good faith” and did not make at
least “‘an honest effort’ to prescribe . . . in compliance
with an accepted standard of medical practice.” Id. at
139, 142 n.20. See No. 13-18277 U.S. BIO 12 (Moore
“implicitly endorsed the jury instructions given”).
The Eleventh Circuit’s treatment of the good
faith defense is difficult to reconcile with Linder and
Boyd. In the Eleventh Circuit, “[t]he appropriate
focus” is solely on “whether the physician prescribes
29
medicine in accordance with a standard of medical
practice generally recognized and accepted in the
United States.”
Abovyan, 988 F.3d at 1305.
Petitioner’s jury was therefore told, point blank, that
it could convict the defendant if it found that his
prescriptions had exceeded professional norms, no
matter whether they had been issued “for the purpose
of curing disease or relieving suffering” or whether
there was otherwise “reason or occasion for the
excess.” Boyd, 271 U.S. at 106-107. That is “plainly
in conflict with what this Court said” in Linder and
Boyd. Id. at 107.
II. THE COURT OF APPEALS WRONGLY
DECIDED
AN
IMPORTANT
AND
RECURRING QUESTION
A. The Eleventh Circuit’s refusal to recognize a
good faith defense is deeply mistaken.
It
misconstrues the CSA and threatens doctors with
felony convictions merely for prescriptions that a
prosecutor (or lay jury) retroactively decides, typically
(as here) based on sharply divided expert opinions,
exceeded professional norms.
A meaningful good faith instruction helps ensure
that convictions under the CSA are consistent with
the “basic principle” that “an injury is criminal only if
inflicted knowingly.” Rehaif v. United States, 139 S.
Ct. 2191, 2196 (2019). “The cases in which [this
Court] ha[s] emphasized scienter’s importance in
separating wrongful from innocent acts are legion.”
Ibid.
Indeed, Section 841(a), by its terms,
criminalizes only “knowing[]” and “intentional[]”
conduct, 21 U.S.C. § 841(a)(1), and, under “a
longstanding presumption,” that requirement applies
30
to “each of the statutory elements,” Rehaif, 139 S. Ct.
at 2195.
But the Eleventh Circuit’s rule reads any
meaningful scienter requirement out of the statute. If
all it takes to convict a doctor of drug trafficking is
that she “knowingly or intentionally” dispensed a
controlled substance outside the course of professional
practice, 21 U.S.C. § 841(a)(1), the only physicians
who will get acquitted are those who prescribed
medicine in their sleep. Such a vacuous scienter
requirement is especially inappropriate where, as
here, “the act underlying the conviction”—a doctor
prescribing medicine—“is by itself innocuous.” Arthur
Andersen LLP v. United States, 544 U.S. 696, 703
(2005).
In the Eleventh Circuit good faith is merely “a
bone” to be “throw[n]” in the doctor’s direction. It
lacks any concrete significance. As the court below
emphasized, good faith applies only “as long as the
appellants’ conduct also was in accordance with the
standards of medical practice generally recognized
and accepted in the United States.” App., infra, 107a.
31
Put another way, good faith is an available defense in
the Eleventh Circuit only when it doesn’t serve any
purpose. That is a rule only Joseph Heller’s Major
Major would appreciate.15
There is, moreover, the question of basic fairness.
If Petitioner had been prosecuted in the Second,
Fourth, or Sixth Circuits, his jury would have been
told that a “reasonable belief” is sufficient grounds to
acquit. Had he been prosecuted in the First, Seventh,
or Ninth Circuits, his jury would have been told that
it could convict only if Petitioner subjectively intended
to exceed professional norms. Because he was instead
prosecuted in the Eleventh Circuit, Petitioner’s jury
was invited to convict based solely on a finding that
his prescriptions fell “outside the usual course of
professional practice.” App., infra, 105a.
Without this Court’s intervention, “federal case
law from around the country [will continue to]
exhibit[] no clear standard for criminal liability in the
context of doctors prescribing controlled narcotics.”
Hellman, 16 Geo. Mason L. Rev. at 715.
15 “What shall I say to the people who do come to see you
while you’re here?”
“Tell them I’m in and ask them to wait.”
“Yes, sir. For how long?”
“Until I’ve left.”
“And then what shall I do with them?”
“I don’t care.”
“May I send them in to see you after you’ve left?”
“Yes.”
“But you won’t be here then, will you?”
“No.”
Joseph Heller, Catch 22 100 (S&S Classic ed. 1999) (1961).
32
B. The circuit conflict implicated by this petition
also raises weighty questions of overdeterrence and
federalism.
1. As some thirty state attorneys general have
observed, “adequate pain management is often
difficult to obtain because many physicians fear
[federal] investigations and enforcement actions if
they prescribe adequate levels of opioids.” Letter of
30 State Attorneys General to Administrator of DEA,
151 Cong. Rec. 6974 (2005). What is at stake in
prosecutions of this sort is not just the liberty of
doctors, but also the well-being of patients suffering
debilitating pain.
Overdeterrence of prescribing
needed medication is a problem of considerable public
importance.
Depriving physicians of a meaningful good faith
defense to CSA charges leads to just such
overdeterrence and chills the practice of pain
medicine.
As this Court explained in Moore,
“Congress understandably was concerned . . . that
physicians be allowed reasonable discretion in
treating patients and testing new theories.” 423 U.S.
at 143. “[L]atitude” must therefore “be given to
doctors trying to determine the current boundaries of
acceptable medical practice.” Hurwitz, 459 F.3d at
477. A good faith instruction is a critical means by
which such “latitude” is given. Depriving doctors of a
meaningful good faith defense puts them at risk of
draconian prison sentences any time they approve a
course of treatment that might be said (with the
benefit of hindsight) to have departed from
professional norms.
In the process, “patients in pain” will increasingly
become “collateral damage.” Ramesh Ponnuru, War
33
on opioid abuse is striking the wrong target,
Pittsburgh
Post-Gazette,
Mar.
26,
2019,
https://perma.cc/4PHS-RTS3.
Physicians will
“reduce[ ] patients’ dosages or cut them off altogether,
leaving them in misery.” Sally Satel, The Truth About
Painkiller Addiction, The Atlantic, Aug. 4, 2019,
https://bit.ly/3rIw0d1.
For some patients—like
Petitioner’s, see note 3, supra—undertreated chronic
pain can make it impossible to live a normal life. See
Jacob Sullum, America’s War on Pain Pills Is Killing
Addicts and Leaving Patients in Agony, Reason, Apr.
2018, https://bit.ly/3rRtDVn (“[T]he doctors were
getting tired of all the scrutiny, so they were booting
all the opioid patients. . . . [E]very morning is a
challenge to get out of bed. . . . It’s horrible. I can’t
expect to live a life like this.”). Indeed, overzealous
enforcement can make physicians “so afraid of the
feds they leave some pain patients in the lurch,
thereby unintentionally pushing them toward
suicide—assisted and otherwise.” Wesley J. Smith,
Pain Doctors Face Greater Scrutiny Than Death
Doctors,
National
Review,
May
3,
2018,
https://perma.cc/84R5-S5W9.
And the daunting task faced by juries in such
cases compounds the problem.
“[F]ederal drug
trafficking cases against physicians are the only
realm in which juries are tasked with applying
complicated medical concepts to vague elements in
order to determine if a physician should be convicted
and sentenced to decades in prison due to a medical
disagreement.” Ronald W. Chapman II, Defending
Hippocrates: Representing Physicians in the Wake of
the Opioid Epidemic, 43 Champion (Nat’l Ass’n of
Crim. Defense Law.) 40, 41 (2019). In such cases, “it
is essentially up to a jury of untrained individuals to
34
make medical decisions as to what is appropriate
prescription practice.” Brendan LoPuzzo, A Bitter Pill
To Swallow: The Need for a Clearly Defined Course of
Professional Practice When Prescribing Opioids for the
Legitimate Medical Purpose of Treating Pain, 47
Hofstra L. Rev. 1397, 1430 (2019). The good faith
defense helps to ensure that juries distinguish
negligent, even grossly negligent, doctors from drug
pushers.
2. In addition to the risk of over-deterrence, the
court of appeals’ interpretation criminalizes malpractice law in a way that “intrudes on the police
power of the States,” Bond v. United States, 572 U.S.
844, 860 (2014), and “significantly change[s] the
federal-state balance,” Jones v. United States, 529
U.S. 848, 858 (2000). Doctors who prescribe controlled
substances inappropriately are a danger to the public;
so are incompetent surgeons, anesthesiologists, and
cardiologists, not to mention arsonists and felons
carrying firearms.
But States—not the federal
government—have the primary authority to protect
the public from those dangers. See Jones, 529 U.S.
848 (arsonists); United States v. Bass, 404 U.S. 336
(1971) (felons carrying firearms); Letter of 30 State
Attorneys General, supra.
Further, state medical boards, not federal
prosecutors, are best suited to police the boundaries of
professional competence.
“The structure and
operation of the CSA presume and rely upon a
functioning medical profession regulated under the
States’ police powers.” Gonzales v. Oregon, 546 U.S.
243, 270 (2006). Indeed, Congress required the
Attorney General to consider the “recommendation of
the appropriate State licensing board or professional
35
disciplinary authority” before taking even the
administrative step of denying a doctor authorization
to dispense controlled substances. 21 U.S.C. § 823(f).
It is therefore quite unlikely that it intended to have
lay jurors substitute for state medical officials at a
criminal trial. Yet that is just what the Eleventh
Circuit requires. See United States v. Tobin, 676 F.3d
1264, 1283 n.10 (2012) (holding that the “CSA
incorporates the applicable state standard of
professional practice, and . . . holds practitioners to
[its] standards”).
C. The question presented arises in virtually
every CSA prosecution of physicians and other
practitioners. A Westlaw search for “841(a) & doctor!
& ‘good faith’ & prescription!” returns 228 cases—
with well over half of them decided in the last ten
years. Westlaw Edge Search (March 28, 2021).
There is every reason to expect this trend to
continue.
In 2018, the then-Attorney General
announced the creation of the Department of Justice
Prescription Interdiction & Litigation (PIL) Task
Force with the mission of “fight[ing] the prescription
opioid crisis.”16 The Drug Enforcement Administration’s website lists fifty investigations that
resulted in the arrest and prosecution of a registered
physician for prescribing opioids in 2020 and a total of
more than one hundred such investigations since
2018.17 As a result, “[m]edical providers can find
16 U.S.
Dep’t of Justice Office of Public Affairs, Attorney
General Sessions Announces New Prescription Interdiction &
Litigation Task Force (Feb. 27, 2018), https://perma.cc/24UZBSS2.
17 U.S. Dep’t of Justice Drug Enf’t Admin. Diversion Control
Div., Criminal Cases Against Doctors, https://bit.ly/3mgT5Cf.
36
themselves stuck in the middle between aggressive
prosecutors and patients in need of pain treatment.”
Christopher Brown, DOJ Keeps Up Pressure on
Doctors Who Prescribe Opioids Illegally, Bloomberg
Law, Jan. 24, 2020, https://perma.cc/5WN2-YD2X.
The Eleventh Circuit is likely to be Ground Zero
for such prosecutions in the future. The Middle
District of Florida alone boasts “two full-time Opioid
Fraud Prescription Abuse Unit prosecutors.”18 The
U.S. Attorney’s Office for the Northern District of
Georgia runs an Operation SCOPE with a mission “to
prosecute those who are illegally prescribing, or
distributing, painkillers.”19 And the U.S. Attorney’s
Office for the Northern District of Alabama “combats
the opioid epidemic in Alabama by aggressively
pursuing enforcement against drug dealers,”20 which
is what, in the Eleventh Circuit, all doctors who
prescribe opioids beyond the usual course of practice
are.
These may all be commendable initiatives. But
their success should be tested by juries that are
correctly instructed on the law.
18 U.S. Attorney’s Office for the Middle District of Florida,
Opioid Epidemic, https://perma.cc/3VBT-NY4G.
U.S. Attorney’s Office for the Northern District of
Georgia, SCOPE Initiative, https://perma.cc/826N-TRSS.
19
20 U.S. Attorney’s Office for the Northern District of
Alabama, Project Safe Neighborhoods, https://perma.cc/P58HFYX4.
37
CONCLUSION
The petition for a writ of certiorari should be
granted.
Respectfully submitted.
LAWRENCE S. ROBBINS
Counsel of Record
RACHEL S. LI WAI SUEN
D. HUNTER SMITH
JEFFREY C. THALHOFER
ROBBINS, RUSSELL, ENGLERT,
ORSECK, UNTEREINER &
SAUBER LLP
2000 K Street, NW, 4th Fl.
Washington, DC 20006
(202) 775-4500
lrobbins@robbinsrussell.com
April 5, 2021
Counsel for Petitioner
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 17-12653
UNITED STATES OF AMERICA,
Plaintiff–Appellee,
v.
XIULU RUAN, JOHN PATRICK COUCH,
Defendants–Appellants.
Argued: Aug. 23, 2019
Decided: July 10, 2020
Appeal from the United States District Court
for the Southern District of Alabama
(No. 1:15-cr-00088-CG-B-2)
Callie V. S. Granade, Senior District
Judge, Presiding
(1a)
2a
Before: WILSON and NEWSOM, Circuit Judges, and
COOGLER,* District Judge.
COOGLER, District Judge:
Following a seven-week trial in the United States
District Court for the Southern District of Alabama,
pain management physicians Xiulu Ruan (“Ruan”)
and John Patrick Couch (“Couch”) (together, “the
appellants”) were convicted by a jury of conspiring to
run a medical practice constituting a racketeering
enterprise in violation of the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C.
§ 1962(d); conspiring to violate the Controlled
Substances Act, 21 U.S.C. §§ 846 & 841(a)(1), by
dispensing Schedule II drugs, fentanyl, and Schedule
III drugs outside the usual course of professional
practice and without a legitimate medical purpose;
conspiracies to commit health care fraud and mail or
wire fraud in violation of 18 U.S.C. §§ 1347(a) & 1349;
and conspiracies to receive kickbacks in relation to a
Federal health care program in violation of 18 U.S.C.
§ 371 and 42 U.S.C. § 1320a-7b(b). In addition, Ruan
and Couch were individually convicted of multiple
counts of substantive drug distribution in violation of
the Controlled Substances Act, 21 U.S.C. § 841(a)(1).
Ruan was further convicted of a money laundering
conspiracy in violation of 18 U.S.C. § 1956(h) and two
counts of substantive money laundering in violation of
18 U.S.C. § 1957. Ruan was sentenced to 252 months’
imprisonment, to be followed by four years of
supervised release, and ordered to pay over $15
million in restitution. Couch was sentenced to 240
* Honorable L. Scott Coogler, United States District Judge
for the Northern District of Alabama, sitting by designation.
3a
months’ imprisonment, followed by four years of
supervised release, and ordered to pay over $16
million in restitution.
In this broad-sweeping appeal, Ruan and Couch
challenge their convictions, various evidentiary
rulings at trial, and the district court’s jury
instructions. Ruan also challenges his sentence and
the district court’s order of restitution. After thorough
review and having had the benefit of oral argument,
we affirm in large part the decisions of the district
court, but we reverse the district court’s ruling that
sufficient evidence supported one of the illegal
kickback conspiracy convictions. We thus remand the
cases for resentencing.
I.
Background
Procedural History
A Southern District of Alabama grand jury
indicted Ruan and Couch on April 30, 2015, charging
conspiracy to distribute controlled substances, 21
U.S.C. § 846, and conspiracy to commit health care
fraud, 18 U.S.C. § 1347(a). After a raid of their
medical clinic and pharmacy by the Federal Bureau of
Investigation (“FBI”), a Superseding Indictment
issued on April 28, 2016, charging 22 counts. The
Superseding Indictment alleged that Ruan and
Couch’s medical clinic was essentially a “pill mill,”
which prescribed controlled substances for no
legitimate medical purpose or outside the usual
course of professional practice. Ruan and Couch were
both charged with one count of conspiracy to commit
racketeering, 18 U.S.C. § 1962(d) (Count 1); three
counts of conspiracies to violate the Controlled
Substances Act by dispensing Schedule II and III
controlled substances and fentanyl outside the usual
4a
course of professional practice and without a
legitimate medical purpose, 21 U.S.C. §§ 841(a)(1) &
846 (Counts 2–4); one count of conspiracy to commit
health care fraud, 18 U.S.C. § 1347(a) (Count 15);
three counts of conspiracy to violate the AntiKickback statute, 18 U.S.C. § 371 (Counts 16–18); and
one count of conspiracy to commit wire and mail
fraud, 18 U.S.C. § 1349 (Count 19). Couch was
charged with five additional counts of illegal drug
distribution
involving
prescribing
controlled
substances to named individuals, 18 U.S.C. § 2(a) and
21 U.S.C. § 841(a)(1) (Counts 5–7 and 13–14). Ruan
was charged with five additional counts of illegal drug
distribution
involving
prescribing
controlled
substances to named individuals, 21 U.S.C.
§ 841(a)(1) (Counts 8–12), and three counts of
conspiracy to commit money laundering and
substantive money laundering, 18 U.S.C. §§ 1956(h)
& 1957 (Counts 20–22). The Superseding Indictment
also contained numerous forfeiture provisions.
Ruan and Couch pled not guilty. Their joint trial
commenced in Mobile, Alabama, on January 6, 2017,
and lasted 31 days. The government called more than
50 witnesses, including 15 of their former patients or
their relatives; 12 of their former staff members,
including nurse practitioners with whom they had
worked closely; four pharmaceutical company
employees; seven representatives from various
medical insurance companies; three medical experts;
the director of the Alabama Department of Public
Health; and 12 law enforcement agents and analysts.
The government also introduced numerous charts
from insurers and the Drug Enforcement
Administration (“DEA”) reflecting the volume and
cost to insurers of prescriptions for controlled
5a
substances that Ruan and Couch had written,
compared to other physicians in Alabama and
nationally. Both Ruan and Couch testified in their
defense, and they also called five former patients, 11
additional former employees, and three medical
experts of their own. The government dismissed
Count 18 at the close of its case. Ruan and Couch
moved for judgments of acquittal under Federal Rule
of Criminal Procedure 29 at the close of the
government’s case, and again at the close of all the
evidence, and the district court denied their motions.
On February 23, 2017, the jury convicted Couch
on all counts against him. Ruan was acquitted on
Count 10 but convicted on all other counts. Ruan and
Couch renewed their motions for judgment of
acquittal or new trial, and the district court denied the
motions.
On May 25 and 26, 2017, the district court
imposed below-guidelines sentences of 252 (Ruan) and
240 (Couch) months of imprisonment, each to be
followed by four years of supervised release. Ruan was
ordered to pay $15,239,369.93 in restitution and
Couch $16,844,569.03. Ruan and Couch are currently
incarcerated. This appeal followed.1
Trial Evidence2
1.
The
Appellants’
Pharmacy
Clinic
and
The appellants were board-certified doctors
specializing in pain management. They co-owned a
1 As necessary, additional procedural details are set forth
with each issue below.
2 Because the appellants challenge the sufficiency of the
evidence against them at trial, the following facts have been
6a
medical clinic, Physicians Pain Specialists of Alabama
(“PPSA”), and a pharmacy, C&R Pharmacy (“C&R”).
PPSA had two locations in Mobile, Alabama, one on
Springhill Avenue and one on Airport Boulevard.
C&R was connected to PPSA’s Airport Boulevard
location, and its sole business was dispensing drugs
prescribed at PPSA. The Springhill office contained
an in-office dispensary for workers’ compensation
patients. Ruan worked primarily at the Airport
location and Couch primarily at Springhill, but once a
week they would switch locations. In May 2015, when
an FBI raid shut down PPSA and C&R, they had 57
employees and served over 8,000 patients.
The appellants’ medical practice was lucrative.
From January 2011 to May 2015, the period covered
by the Superseding Indictment, Couch made over $3.7
million from PPSA, and Ruan made over $3.9 million.
C&R received a service fee for each prescription it
filled—more than 70,000 during those years—netting
Ruan and Couch each more than $555,000 from their
pharmacy.
2.
The Controlled Substances Act
On the first day of trial government witnesses
told the jury that the Controlled Substances Act
categorizes controlled substances into five schedules,
based on their abuse potential and medical value. The
Act makes it a crime for anyone to, among other
things, dispense a controlled substance, with the
exception that licensed health care professionals may
dispense Schedule II, III, and IV controlled
established by viewing the evidence presented at trial in the light
most favorable to the government. See United States v. Schlei,
122 F.3d 944, 952 (11th Cir. 1997).
7a
substances with a prescription. See 21 U.S.C.
§§ 841(a)(1), 828. However, such prescriptions are
only lawful if they are issued for a legitimate medical
purpose in the usual course of the licensed health care
professional’s professional practice. See 21 C.F.R.
§ 1306.04.
From January 2011 to May 2015, the appellants
wrote nearly 300,000 prescriptions for controlled
substances, over half of which were Schedule II drugs.
Schedule II drugs are the most powerful and
dangerous drugs that can be lawfully prescribed, and
they include many pharmaceutical opioids such as
fentanyl,
hydrocodone,
morphine,
oxycodone,
methadone, hydromorphone, and oxymorphone.
Opioids are dangerous because, while they can help
mask pain, their use can create physical and
psychological dependence that can lead to addiction.
Side effects from opioid use include lethargy,
confusion, falls, and depressed breathing.
Opioids can be particularly dangerous when
combined with two Schedule IV controlled substances:
benzodiazepines and carisoprodol. Benzodiazepines,
such as Xanax and Valium, are psychoactive drugs
that treat a wide range of conditions including
insomnia or anxiety. Carisoprodol is a muscle
relaxant marketed under the brand name Soma. The
combination of these three types of drugs—which the
government referred to as the “Holy Trinity” at trial—
is popular among substance abusers because of its
euphoric effect, yet it is highly addictive and can
increase the chances of the user’s death. Together, the
appellants prescribed nearly 12.5 million units of
Schedule II opioids, and opioid prescriptions
accounted for nearly 75% of their total controlled-
8a
substance prescriptions. Most of the rest of their
controlled-substance
prescriptions
were
for
benzodiazepines and Soma, the other components of
the “Holy Trinity.”
3.
Ruan
and
Couch
Prescribed
Millions of Doses of Opioids Based
on Their Financial Interests
The government sought to prove that Ruan and
Couch prescribed millions of doses of opioids and other
controlled substances outside the usual course of
professional practice and, thus, illegally. Over Ruan
and Couch’s objection, the government used
Alabama’s
Prescription
Database
Monitoring
Program (“PDMP”), a database of all controlled
substance prescriptions dispensed statewide that is
available to doctors and other health personnel, to
pull Ruan and Couch’s prescribing data. The
government focused especially on Ruan and Couch’s
frequent prescribing of a version of fentanyl called
transmucosal immediate-release fentanyl (“TIRF”),
which the Food and Drug Administration (“FDA”) had
approved in 2011 to treat “breakthrough pain in adult
cancer patients who are already receiving and who are
tolerant to around-the-clock opioid therapy.” The two
types of TIRFs that Ruan and Couch prescribed were
Subsys, manufactured by Insys Therapeutics
(“Insys”), and Abstral, manufactured by Galena
Biopharma (“Galena”). Subsys is an under-the-tongue
oral spray, and Abstral is an under-the-tongue
dissolving tablet, but both penetrate the blood-brain
barrier more quickly than medications absorbed
digestively, working in five minutes compared to 45
minutes for most other opioids. Not surprisingly,
TIRFs are expensive, with average doses costing
9a
anywhere from $3,000 to over $20,000 per month. And
although it is not illegal for a doctor to prescribe
TIRFs “off-label” to patients who do not have cancer,
insurers would usually only pay for on-label uses of
TIRFs. From January 2011 to May 2015, Ruan and
Couch prescribed more than 475,000 doses of TIRFs
to over 1,000 patients. From 2012 to 2014, they
sharply increased both the number of patients
receiving TIRF prescriptions and the dosages
prescribed. This practice placed the appellants among
the top TIRF prescribers nationwide: they often
surpassed the next highest prescriber by more than
double. Despite these high numbers of TIRF
prescriptions, no more than 15% of PPSA patients had
cancer.3
One of the ways in which the government sought
to prove that Ruan and Couch’s prescribing of Abstral
and Subsys deviated from the usual course of
professional practice was that their prescribing habits
tracked financial incentives rather than their
patients’ medical needs. One of the government’s
medical experts, Dr. Tricia Aultman (“Dr. Aultman”),
testified that prescribing drugs based on one’s own
financial interest is outside the usual course of
professional practice.
3 For each doctor, the government used prescription records
to identify the 25 patients receiving the most Abstral and Subsys
prescriptions. Comparing those lists to PPSA’s medical records
showed that more than half of those patients—14 on each list—
did not have cancer and were thus receiving TIRFs off-label. For
those 28 patients, insurers paid more than $5.5 million for
Abstral and Subsys during the time covered by the Superseding
Indictment.
10a
i.
The Appellants’ Investments in
Galena Stock
A DEA agent created a line chart showing the
micrograms4 of Abstral prescribed by Ruan and Couch
each month from January 2011 to May 2015. Ruan
and Couch prescribed very little Abstral until late
2013—the most Couch prescribed was 76,800 mcg one
month, and some months he did not prescribe any,
and Ruan’s prescriptions maxed out at 128,000 mcg
per month. However, in April 2013, Galena initiated
a study to gather data on how Abstral was working on
patients. As former Galena sales representative David
Corin (“Corin”) testified, Galena offered doctors $500
per patient to enroll in the study but limited it to 25
patients per doctor. Couch negotiated with Galena for
an exception to enroll up to 75 of his patients for a fee
of $2,500 per patient. Immediately after Galena
approved that arrangement, Couch began prescribing
over 1.5 million mcg of Abstral per month.
Similarly, in September 2013, Ruan prescribed
only 25,600 mcg of Abstral. But in October 2013, his
prescriptions rose to 192,000 mcg. Around that time,
a Galena sales representative visited PPSA in Mobile.
Shortly thereafter, Couch and Ruan began purchasing
Galena stock. Between November 2013 and January
2014, they purchased more than $1.3 million of stock,
both individually and through PPSA. In a February 2,
2014, email to Couch, Ruan wrote that they could
“play a big role” in increasing the value of Galena
stock. A few day later Ruan emailed another doctor,
writing that although he had never purchased stock
4 Fentanyl is so powerful that, unlike other opioids, it is
measured in micrograms (one millionth of a gram) (“mcg”), not
milligrams (“mg”).
11a
before, he decided to invest in Galena to help
“generate enough profit to pay for [his] divorce
settlement.” And in a February 17, 2014, email
between Ruan and a colleague, Ruan indicated that
he suspected Galena would have a “substantial
market share growth at the end of March.” Ruan’s
prescribing of Abstral greatly increased during this
time. For example, in January 2014, Ruan prescribed
over 1.4 million mcg; in February he prescribed over
2.3 million mcg; and in March his prescriptions rose
to over 2.6 million mcg. Galena’s stock price increased
dramatically from October 2013 to the start of 2014,
more than tripling in price.
However, Corin testified that in January 2014,
members of Galena’s board of directors were given a
“blackout period” in which they were briefly permitted
to sell their stock; they did so—“millions of dollars’
worth”—and the price “dropped dramatically.” Ruan
and Couch “were very upset,” and a Galena
representative flew to Mobile in February 2014 to
calm them down because they were “important
individuals for Galena” and the company’s “highest
Abstral prescribers.” Ruan and Couch demanded that
Galena fire its CEO and board. Between March and
October 2014, their Abstral prescribing plummeted.
Ruan reached a low of 624,000 mcg in August 2014,
but that month, Galena fired its CEO, and in
November, the new CEO came to Mobile to meet Ruan
and Couch at Ruan’s demand. After that visit, their
Abstral prescriptions again spiked, with Couch
prescribing over 2 million mcg and Ruan prescribing
over 1.8 million mcg in November. A similar dip in
Ruan and Couch’s Abstral prescribing in February
2015 matched a significant dip in Galena’s stock price
in February 2015, followed by another visit by the
12a
CEO to Mobile, and a rebound in Ruan and Couch’s
prescribing.
Corin also explained that Galena initiated a
voucher program in August 2013, where patients
could receive up to three vouchers for 32 tablets of
Abstral. Because TIRFs were so expensive, the
purpose of the program was to help patients afford the
drugs while they awaited insurance approval and to
allow doctors to titrate patients onto the medication,
with one voucher being issued at a time until an
appropriate dose was found for a full prescription.
However, Ruan and Couch would use all three
prescriptions at once. Galena started losing money as
a result of this practice because Galena would pay for
all 96 pills instead of whatever vouchers were needed
to titrate the patients, and Couch and Ruan were the
top two prescribers in the country, accounting for 30%
of the total prescriptions for Abstral. Under the
voucher program, the pharmacy filling the
prescriptions got paid the same as if the prescription
was fully covered by insurance. And 91% of the Subsys
and Abstral prescriptions Ruan and Couch wrote were
filled by their patients at their own pharmacy, C&R.
Galena had to abandon the voucher program in March
2014, and Ruan and Couch slowed their prescribing of
Abstral in response to the cessation of the voucher
program.
When PPSA was shut down in May 2015,
national Abstral sales dropped “significantly.” In fact,
Galena was forced to sell its license for Abstral
because it could not make up the lost revenue.
13a
ii.
The Appellants’ Participation
in Insys’s Speaker Program
Natalie Perhacs (“Perhacs”), a former sales
representative for Insys, testified that Insys also
sought to influence Ruan and Couch’s prescribing
with money. Perhacs first met Ruan and Couch when
she was a sales representative for a respiratory
equipment company. Eventually, Ruan recommended
Perhacs for a job at Insys. Perhacs became the Insys
drug representative for Ruan and Couch. She
explained that Insys had created a speaker program
in August 2012 in which it paid doctors to talk about
Subsys to other doctors, usually over a meal at a
restaurant.
Pharmaceutically-funded
speaker
programs are lawful, but payments made to doctors
are required to be disclosed to the public. Both Ruan
and Couch had been speakers for Insys since before
she started. The stated goal of the speaker program
was to educate doctors and get them to write more
prescriptions, but Perhacs stated that Ruan and
Couch would do speaker programs when no other
prescribers showed up. She stated that PPSA was one
of the top ten prescribers of Subsys, and Ruan and
Couch were “whales” (the top prescribing doctors).
She indicated that the actual purpose of the speaker
program was to influence Ruan and Couch into
continuing to prescribe Subsys, and Ruan and Couch
were paid for their involvement in these dinners. In
2013, Ruan and Couch were each paid to host one
program per week, and although no prescribers, or the
same prescribers, would show up to speaking
programs, they were rarely canceled because the point
was not to educate others but to “influence how many
prescriptions [the appellants] write.” If a program was
14a
canceled, Perhacs could be fired or face a financial
penalty.
In November 2013, Ruan approached a Galena
sales representative about becoming a speaker for
Abstral because of his high-prescribing of TIRF
medications, generally. However, Galena decided it
would not make sense to have Ruan be a speaker
because there were no other doctors in the area
prescribing TIRF medications, and the purpose of the
speaker program was to educate other doctors.
In early 2014, after the appellants started
prescribing more Abstral, the competing TIRF
medication, Insys employees grew concerned about
losing market share. On an email including top Insys
executives, the Vice President of Sales said that “Dr.
Ruan and Dr. Couch are killing us.” In April 2014,
Insys reduced, but did not stop, the appellants’
speaking programs.
A few months later, in June 2014, Ruan learned
that a Michigan doctor, the top national Subsys
prescriber, had been indicted for receiving kickbacks
from Insys in part related to his acceptance of
honoraria received from the speaker program. In that
criminal complaint, which Ruan saw, Ruan and Couch
are identified by prescriber number as the number
three and five prescribers, respectively. The next day,
Ruan began planning for Insys to donate all of his
subsequent speaker fees to universities, in one case
establishing a scholarship in his name.
Nonetheless, Insys paid Couch more than
$100,000 and Ruan over $166,000 for speaking
engagements from 2013 until the FBI raided PPSA in
May 2015. In 2016, Perhacs pled guilty to conspiracy
15a
to violate the Anti-Kickback statute by paying
kickbacks to the appellants to prescribe Subsys
through the speaker program.
iii.
The
Appellants
Ordered
Unnecessary Drug Tests and
Used
Their
Pharmacy
Inappropriately
Prescribing certain drugs when they had a
financial self-interest to do so was not the only
example of illegal conduct by Ruan and Couch: the
government also sought to prove that they ordered
unnecessary drug tests for patients solely because
they would generate revenue. Government expert Dr.
Rahul Vohra (“Dr. Vohra”) explained that in pain
management, drug testing patients can be a valuable
clinical tool because it can tell a doctor whether the
patients are not taking the drugs prescribed or are
taking other drugs that they should not be. This
testing comes in two forms: an in-office “cup”
screening, which is instantaneous but less accurate,
and an off-site test with gas chromatography and
mass spectroscopy (GC-MS), which takes longer but is
more accurate. In 2013, Ruan began ordering off-site
GC-MS testing for every patient because, in his words,
off-site testing “generates revenue,” while in-office
urine tests “pays nothing.” Ruan negotiated with the
off-site drug testing company, threatening to work
with a competitor unless the company could start
immediately because he was “losing about $8,000 a
day from not testing and ... cannot just wait.” Later
that year, when PPSA switched to an electronic
medical records system, and nurses forgot to order the
GS-MS tests in the system for every patient, Ruan
forwarded to Couch a discussion from the testing
16a
company about the missing orders, estimating an
annual lost profit of over $800,000. He told Couch, “[I]f
we do not run GC-MS, there is no revenue.”
Dr. Aultman and Dr. Vohra also explained that
the proper way for a doctor to use drug screening is to
counsel patients whose tests are inconsistent,
indicating potential diversion or abuse of drugs, or to
eventually “fire” them as patients. Yet the
government presented evidence that Ruan and Couch
rarely fired patients whose drug screens were
inconsistent because they would lose the revenue. For
example, a patient who was selling his medications
was released from the practice only after his sixth or
seventh inconsistent drug test using his five-year-old
son’s urine. Another patient, a former felon with
numerous drug screens not showing prescribed drugs,
was also continuously prescribed more opioids. An
email Ruan wrote to a medical student was
introduced, in which Ruan stated that “[i]n private
practice the more you fire, the more revenue you lose.”
Instead, he opined, “when one patient tests positive
for street drugs, that gives you more reason to do more
frequent urine drug screens, which pays three times
more than an office visit.” While Ruan and Couch did
not often fire patients with inconsistent drug screens,
they did fire patients whose insurance would no
longer pay for their TIRFs. For example, despite a
history of drug abuse and three trips to the emergency
room caused by her overusing TIRFs, Ruan dismissed
patient Kathleen Burns only after her insurance
stopped covering Subsys.
The government also put on evidence that Ruan
and
Couch
used
their
pharmacy,
C&R,
inappropriately. Insys helped them prescribe more
17a
Subsys by ensuring it would be in stock at C&R. C&R
was “having trouble filling [Subsys] as often as it was
written.” This was even though, in 2014, C&R was
ordering from wholesalers more than 42 times as
much Subsys as the average U.S. pharmacy. Insys’s
owner and its CEO came to Mobile, and it was
arranged that C&R would purchase Subsys directly
from Insys, cutting out the wholesalers. Ruan and
Couch also asked Galena to cut out the wholesalers
and ship Abstral directly to C&R, but it refused.
However, Galena did offer a rebate program under
which C&R received 8.75% of the purchase price for
all Abstral it dispensed. C&R dispensed nearly $13
million of Abstral, approximately half of which
occurred after the rebate agreement, making its
rebate to C&R more than half a million dollars.
Additionally, Ruan and Couch often prescribed
medications based solely on what was in stock at
C&R, rather than on the patient’s medical needs.
Nurse practitioners testified that Ruan “strongly
encouraged” patients to use C&R and that staff took
patients’ prescriptions directly to C&R. One testified
that Ruan “wanted to know what we [C&R] had in
stock” before writing prescriptions. Dr. Greenberg
opined that Ruan and Couch should have disclosed to
patients that they owned C&R, but they rarely did.
4.
Ruan and Couch Often Prescribed
Opioids Without Seeing Patients,
Obtaining Informed Consent, or
Keeping Accurate Records
Another way that the government sought to
establish that PPSA operated outside the usual course
of professional practice was to show that Ruan and
Couch prescribed powerful opioids without actually
18a
seeing patients. The government’s medical experts
testified
that
before
prescribing
controlled
substances, a doctor should see the patient, take a
medical history, and do an exam. A doctor who
conducts a thorough evaluation of each patient can
normally see 20 to 25 patients per day, but PPSA
routinely processed 150 to 200 patients daily, often
quadruple-booking patients for the same time. This
worked because many PPSA patients never saw
Couch and rarely saw Ruan. In fact, one patient for
whom Couch signed multiple prescriptions and
another patient’s wife who came to half of her
husband’s appointments could not identify Couch in
court because they had never met him. Others said
they had met him only once, despite multiple PPSA
visits during which he signed prescriptions for them.
Instead, patients were seen by nurse practitioners
who were not doctors, namely Justin Palmer, Stacy
Madison, Bridgette Parker, Matt Bean, and Sharon
Noland.
The jury was able to see this practice firsthand as
DEA task force officer Patrick Kelley (“Kelley” or
“Officer Kelley”) went undercover to PPSA as a
patient under the alias “Shawn Brennan” in August
2014. Kelley testified, and undercover videos of his
PPSA office visits were played for the jury. The DEA
arranged for a local chiropractor to refer Kelley to
Couch with medical records, including normal MRI
results. Although Kelley was first turned away from
PPSA because he did not have insurance, he was
admitted later that same day after the chiropractor
called PPSA to vouch for him. Rather than see Couch,
Kelley saw a nurse practitioner, Stacy Madison
(“Madison), who took a brief medical history from
Kelley but did not question him about his pain levels,
19a
even though he had deliberately left that question
blank on the new patient form. Kelley was asked to
bend forward as far as he could without pain, and he
was able to touch the floor. Nonetheless, he was asked
whether he had previously taken anything that
helped with his pain. Kelley started his answer with
the caveat that he was “going to have to admit to some
criminal activity” and said that he had “blue” pills
called “Roxy”— purposefully using street names for
Roxicodone 30 mg, an “immediate release” version of
oxycodone that is popular among substance abusers.
Couch made a 42-second appearance at the end of that
visit and signed a 90-pill prescription for Roxicodone
30 mg. Kelley returned for four more visits, never saw
Couch again, and received Roxicodone prescriptions
each time. At his third visit, the nurse practitioner,
now Bridgette Parker (“Parker”), increased his dose to
110 pills. Kelley never filled the prescriptions, which
a check of Alabama’s PDMP would have revealed, and
urine tests did not show the drugs in his system, but
no one at PPSA ever discussed that with him. Parker
also gave Kelley signed prescriptions, dated for a
month later than his visit, although regulations
provide that physicians must write a separate
prescription for each 30-day supply of a Schedule II
drug and prohibit a single prescription with refills.
The prescriptions Kelley received at three of these
visits to PPSA were the basis for Couch’s convictions
for illegal drug distribution on Counts 5–7.
Two undercover DEA agents posed as patients of
Ruan’s as well, but Ruan never prescribed either
patient opioids. The government moved in limine to
exclude videos of these visits, arguing that they did
not show anything illegal and Ruan was merely trying
20a
to prove that he practiced “good medicine.” The
district court agreed, so the jury never saw them.
Nurse practitioner Justin Palmer (“Palmer”) also
offered extensive testimony for the government,
particularly about Couch’s practice. Palmer had
worked at PPSA since July 2010, first working with
both Couch and Ruan but after about a year working
almost exclusively with Couch. Palmer stated that he
would see roughly 30 patients a day on Couch’s behalf,
often starting hours before Couch arrived at the office.
Some patients believed Palmer was a doctor, referring
to him as “Dr. Justin.” Palmer’s visits were billed to
insurance as if Couch was the one seeing the patients.
Palmer also wrote prescriptions for opioids under
Couch’s signature, even though Palmer was not
authorized to prescribe Schedule II drugs. When
Couch went on vacation, “he would leave prescription
pads that were presigned so [Palmer] could write
what [he] needed to.” Couch continued doing this even
after PPSA’s practice administrator told him it was
illegal and risky. In time, Palmer began forging
Couch’s signature on prescriptions. PPSA and C&R
staff knew Palmer was doing this, and nurses and the
pharmacist would ask him to sign Couch’s name on
prescriptions and records. At one point, Couch caught
Palmer forging his name on a prescription for
Adderall, a Schedule II drug, and fired him—but only
for “10 minutes”—before deciding to give him a second
chance and rehiring him. Palmer stated that he
believed that Couch continued to be aware of his
forgery because Palmer was seeing patients when
Couch was on vacation or out of the office. Palmer
estimated that, between 2011 and 2012, he had forged
Couch’s signature 15 to 20 times a day.
21a
Palmer also purchased Galena stock when Ruan
and Couch did. After that, he and Couch discussed
candidates that they believed could be suitable for
Abstral, and it was suggested that Palmer find people
to put on the drug. Palmer also confirmed that he
prescribed TIRF drugs to non-cancer patients for
breakthrough pain, such as migraines that did not
respond to other medication.
Palmer testified that, while at PPSA, he observed
what he believed to be drug-seeking behavior from
patients, such as patients needing more and more
medication, saying that they had lost medication,
coming back early for refills, or saying that they had
new pain. He stated that he would often have to argue
with patients because he believed that their pain was
not as severe as they were reporting. The government
asked:
Q:
Did you feel like you were overwriting?
A:
I did.
Q: Approximately what percentage of the
patients did you feel like were overwritten?
A:
At least—at least half, half to maybe more.
Palmer also stole and abused medications from
PPSA while working there. After a PPSA employee
caught Palmer actively injecting drugs while at work,
Couch suspended him with pay for two weeks.
According to Palmer, nurse practitioners Parker and
Madison also used drugs while working for Couch.
Prior to trial, Palmer pled guilty in this action to
conspiracy to distribute controlled substances outside
the usual course of professional practice and without
a legitimate medical purpose.
22a
Nurse practitioner Sharon Noland (“Noland”)
also testified for the government. She had worked at
PPSA since November 2011, working solely for Ruan
until May 2014. She testified that Ruan would
prescribe certain drugs—which Noland called the
“flavor of the day”—based on what speaker programs
he was doing and what was being pushed by “drug
reps,” even if the patient’s pain was controlled on an
existing regimen. She described that Ruan was “very
involved with the practice,” agreeing with the
government’s characterization that he tended to
“micromanage.” Noland said that she witnessed
Palmer signing prescriptions as Couch.
Nurse practitioner Parker also testified. She had
worked at PPSA from September 2012 to January
2015, working solely for Couch since December 2013.
Parker testified that although TIRF medications were
indicated for cancer, Ruan used it off-label “for
anything we could use it on.” Parker also testified that
Ruan would change patients’ medications, adding
TIRF medications to their regimen, when their prior
medications were working. Ruan would also change
patients from one TIRF medication to another without
explanation. Parker confirmed that Palmer would
sign Couch’s name on prescriptions, and she stated
that she believed that half of the patients at PPSA
were overmedicated, basing her opinion on the fact
that the patients “looked ... overmedicated, wanted
more medication.” Parker also abused prescription
drugs while at work, even going into withdrawal, and
Couch agreed to help pay for her treatment. Like
Palmer, Parker pled guilty prior to trial in this case to
conspiracy to distribute controlled substances.
23a
Ruan was aware of Couch’s practice of permitting
Palmer and others to see patients and write
prescriptions on Couch’s behalf. In July 2014, for
example, Ruan sent an email to Couch asking Couch
to “talk to Justin [Palmer] on cutting down” the
amount of Roxicodone 30 mg he prescribed in light of
news reports that Alabama had the most opioid
prescriptions in the country, which Ruan feared could
increase regulatory scrutiny of PPSA.5 Couch
responded that “[w]e,” meaning he and Palmer, would
not “write triple digit dispentions [sic] of short acting
opioids.” And although Ruan usually signed his own
prescriptions, he often did so without seeing patients.
Several nurse practitioners testified that they would
line up at Ruan’s office for him to sign prescriptions.
One patient testified that he did not meet Ruan until
5 The full email reads as follows:
I noticed you have quite a few [patients] on Roxicodone
30mg ... and Oxycontin 80mg.
Based on the diversion study done in FL pill mills, these
two are the most[ ] thought of in South FL, therefore [they are]
considered [the] biggest reg [sic] flag[s]. I think you should talk
to Justin [Palmer] on cutting down Roxicodone 30mg usage,
especially [because] we are trying to convince [the] AL board of
medical examiners that we have a great system to keep
[patients] satisfied[ ] and addicts out. We [do not] want
Roxicodone 30mg [to] mess things up, or at least contradict[ ] ..
what we promote. I believe I have two [patients] on oxycodone
30mg, one of them is a W/C, cannot handle all others. Also, try to
use Oxycontin 60mg instead of 80mg may also help.
Now, everyone in the nation knows that AL state prescribes
the most pain killers in the nation, [so] we will need to adjust our
routine regimen a bit. One of the things I have done is to wean
off on [benzodiazepines], or ask their [primary care physician] to
write their [benzodiazepine], as [benzodiazepine] prescription is
also one of the things they look at and[ ] [w]e would rather be
careful than sorry. Please remind [Palmer] about this stuff.
24a
his “fourth or fifth visit” when Ruan “stuck his head
in the door” to introduce himself.
The government’s experts also explained to the
jury that the usual course of professional practice is to
obtain
patients’
informed
consent
before
administering drugs and to have accurate records
supporting every prescription. But there was evidence
presented that many patients received no warnings
before receiving prescriptions for powerful opioids.
And many PPSA records contained numerous errors,
including not listing all prescriptions written or
explaining why a prescription was changed. Patients
testified that exams and tests listed in their medical
records did not occur.
5.
Specific Prescriptions Were Illegal
Aside from evidence pertaining to how Ruan and
Couch operated PPSA, the government also put on
evidence that Ruan and Couch treated approximately
three dozen specific PPSA patients outside the usual
course of professional practice or prescribed them
medications for no legitimate medical purpose.
Fourteen patients, or their family members, testified
at trial, criticizing the care they received. The
government’s three medical experts, Dr. Aultman, Dr.
Vohra, and Dr. David Greenberg (“Dr. Greenberg”),
reviewed other patients’ files and offered their
opinions that the appellants’ treatment of those
individuals did not meet the usual course of
professional practice standard. Evidence was
presented that Ruan and Couch rapidly increased
patients’ opioid dosages beyond the minimum
necessary for pain control and failed to refer patients
for mental-health treatment, surgery, or physical
therapy that their records indicated would have been
25a
appropriate. They prescribed powerful opioids to
people displaying red flags for diversion and abuse,
like criminal records, inconsistent drug screens, and
drug-seeking behavior. Some patients testified that
they were overmedicated on opioids, making their
lives worse.
For example, patient Randall Blackmon
(“Blackmon”) testified that he saw Couch on his first
visit to PPSA but only saw Palmer on subsequent
visits. Blackmon was prescribed
morphine,
methadone, and Subsys, even though he did not have
cancer; a physical examination was never conducted;
and no one warned him that Subsys could interact
negatively with his existing medications. He took
1600 mcg of Subsys four times a day for eight months,
and he claimed that it made him lethargic and ruined
his quality of life. Towards the end of the eight
months, he presented to his primary care physician in
such a dire state on Subsys that he was taken directly
to the emergency room. At that point he learned that
Subsys was only recommended for cancer patients,
and his insurance stopped covering it. By that time his
insurance had paid over $21,500 per month for his
Subsys.
Similarly, patient Joyce Barber (“Barber”) was
never treated by Couch, only Madison. She was
prescribed Subsys with no warnings of the risks, and
although she did not have cancer, PPSA staff reported
to her insurer that she had uterine cancer so that her
Subsys prescription would be covered. Barber testified
that Subsys made her feel like she was in a fog, and
when Madison increased her prescription from 200
mcg to 400 mcg, she became addicted, slept all day,
and had no quality of life.
26a
Patient Tina Goellner never saw Couch as a
patient of PPSA. She recounted that, although she
told staff at her first visit that she did not want to be
prescribed narcotics for her pain because she was
worried about becoming addicted, she was prescribed
Subsys anyway and told that she should not worry
because she did not have an “addictive personality.”
Subsys made her sleepy within two minutes of taking
it, and when her dosage was increased rapidly from
200 mcg four times a day, to 400 mcg four times a day,
to 800 mcg four times a day, she began sleeping all
day.
Patient Tamison Blanks (“Blanks”) testified that
she saw Couch once for five minutes despite going to
regular appointments at PPSA for over 11 months.
Although she was already taking Soma and
hydrocodone (brand name Norco), she was prescribed
600 mcg of Subsys to use four times a day on her first
visit, with no warnings. She described her dosage as
“very strong” and said that she became a “monster” on
Subsys. She described an instance where the Subsys
numbed her to the point that she lay on a heating pad
for so long that it burnt her breast, requiring a visit to
the emergency room. She also said that at one of her
appointments at PPSA, nurse practitioner Parker had
abused opioids to the point that she was talking
incoherently and fell asleep for about 10 minutes.
Blanks commiserated with Parker’s predicament
because she had been in the same situation, and left
that appointment and immediately checked in to a
rehabilitation center.
In an attempt to contrast testimony like the
foregoing, Ruan and Couch sought to call patients who
would have testified that they approved of their
27a
treatment by Ruan and Couch and that their
treatment enabled them to have a better quality of
life. However, the district court ruled that because the
appellants were not charged with illegally prescribing
medication to all of their patients, and the
government acknowledged that they had many
patients to whom they provided legitimate care,6 this
“good patient” evidence was irrelevant to the charges
and would waste time in an already lengthy trial.
They were thus prohibited from calling patients not
identified in the Superseding Indictment or otherwise
presented throughout the government’s case, but they
were, however, able to call as witnesses patients
whose files were discussed by the government’s
experts.
6.
The Appellants Engaged in Fraud,
Accepted Kickbacks, and Ruan
Laundered the Proceeds
Aside from violating the Controlled Substances
Act, the government also presented evidence that the
appellants engaged in fraud. Ruan and Couch lied to
insurers, telling them that some patients had cancer
so that insurers would pay for their TIRF
prescriptions. BlueCross BlueShield of Alabama
(“BCBS”), which insured a large portion of PPSA’s
patients, paid less for nurse practitioner visits than
for doctor visits and had a policy requiring a physician
to actually see a patient before billing for services
under the physician’s name, yet Ruan and Couch
routinely billed BCBS for office visits conducted
entirely by nurse practitioners under the doctor’s
6 Indeed, despite the Superseding Indictment calling PPSA
a “pill mill,” by the time of trial the government began referring
to it as a “money mill” instead.
28a
identification number. The appellants also billed for
more complex office visits than they actually
conducted, resulting in more revenue.
To support the charges alleging conspiracies
involving kickbacks, Perhacs testified that the fees
Ruan and Couch received from the Insys speaking
engagements were solely to induce them to prescribe
more Subsys. Separately, the government sought to
prove that the company that managed PPSA’s inhouse workers’ compensation dispensary gave illegal
kickbacks to Ruan and Couch in exchange for
referring their patients. Christopher Manfuso
(“Manfuso”) testified that Ruan and Couch treated
patients with work-related injuries covered by
workers’ compensation insurance, which most
workers get through a state program. For patients’
convenience, Alabama’s workers’ compensation
program permits doctors to have an in-office
dispensary for workers’ compensation patients.
Unlike a pharmacy, a dispensary provides only
prepackaged medication. Insurers, including the
workers’ compensation program, “apply a steep
discount” to medication dispensed at a pharmacy and
billed electronically. But in a dispensary, the state
sets the prices for medications, and Alabama’s fee
schedule is “quite generous compared to commercial
insurance.” Accordingly, “there’s more money to be
made” with a dispensary than sending workers’
compensation patients to a pharmacy, even one owned
by the doctor; the revenues can be “about a hundred
percent higher.”
The appellants ran such a dispensary at PPSA’s
Springhill location to dispense drugs to patients
covered by workers’ compensation insurance. In 2011,
29a
Industrial
Pharmacy
Management
(“IPM”)
approached the appellants about taking over the
management of their dispensary. When working with
an outside company like IPM to manage a dispensary,
the management company usually fronts the money
to purchase the medications under the doctor’s DEA
number and then reimburses itself from the gross
receipts. The management company then deducts its
management fee, usually 30%, and any additional
costs, and the doctor is left with the remaining profit.
With their previous management company, Ruan had
been receiving around $40,000 a month in profit from
PPSA’s dispensary. To “induce [the appellants] to sign
up with” IPM, Manfuso, an IPM representative,
offered to deviate from the standard payment model
and guarantee Ruan $45,000 a month—regardless of
how much or how little the dispensary actually
profited—because it was “the only way [he] could get
the business.” Over the next two years, Ruan executed
several variations of this contract with IPM,
negotiating on behalf of both himself and Couch.
Ruan’s guarantees fluctuated between $45,000 and
$53,000 a month. Couch received guaranteed
payments in the $15,000-to-$20,000 range. To hide
this difference from Couch, Ruan insisted that
Manfuso send the checks to his house, not to PPSA.
After several years, the FBI raided and shut
down IPM for paying kickbacks, and Michael Drobot,
Manfuso’s direct boss at IPM, pled guilty to providing
kickbacks in a California prosecution. Manfuso then
opened his own company, Comprehensive RX
Management (“CRM”). Ruan demanded even higher
guarantees from CRM, upwards of $80,000 a month
at one point. All told, Ruan received more than $2.4
30a
million and Couch received nearly $1 million from
IPM and CRM.
Manfuso recalled that his interactions with Ruan
were “[e]xtremely atypical” of the hundreds of other
doctors with whom Manfuso worked. In determining
how to stock the formulary (the dispensary’s
inventory of drugs), Ruan was interested in the profit
margins of various drugs, not clinical information.
Manfuso also ultimately pled guilty to violating the
Anti-Kickback statute.
Finally, to support the three money laundering
counts, the government presented evidence that Ruan
had 23 different bank accounts and used proceeds
from illegal activities to purchase two luxury cars,
worth over $100,000 each.
7.
The Defense Case
Ruan and Couch testified in their defense, both
stating that their various policies and practices were
within the usual course of professional practice.
Couch denied ever giving Palmer permission to sign
his name on a prescription. On cross-examination, the
government asked Ruan about the email that he sent
to Couch regarding Palmer writing fewer Roxicodone
prescriptions. The following exchange occurred:
Q: Okay. Now, is this one of the things you told
[Couch] is: Please remind [Palmer] about
this stuff.
A:
That’s what it said.
Q: Because you knew that [Palmer] was writing
[prescriptions for Roxicodone]; correct?
A: He was initiating, I thought, not that he
was—he saw the follow up and he initiated
31a
it. Dr. Couch had to approve. So if he
initiated it, Dr. Couch do [sic] not want to
turn it down.
Q: But you had knowledge that [Palmer] was—
you wanted [Palmer] to cut down the
[Roxicodone]; is that correct?
A: Initially, yes. That’s my intention; that’s
right.
Q: And Dr. Couch told you back that he
reviewed it with [Palmer] and it says: We do
not write triple digits; is that correct?
A:
Yes, that’s what it says.
Q:
It says “we?”
A:
Right.
Ruan and Couch also called various PPSA
employees and five patients identified by the
government who testified favorably as to their course
of treatment at PPSA. They called three experts, Dr.
Carol Warfield (“Dr. Warfield”), Dr. Christopher
George Gharibo, and Dr. Jeffrey A. Gudin. Dr.
Warfield opined that Dr. Couch’s prescribing habits
were within the usual course of professional practice
and for a medical purpose. Specifically, Dr. Warfield
reviewed files for five of Couch’s patients, and she
testified that the medications Couch prescribed were
in the usual course of medical practice and for a
legitimate purpose. The other experts testified
similarly.7
7 Where necessary below, additional trial evidence is
discussed regarding some issues.
32a
Forfeiture and Ruan’s Sentence
Immediately following the verdict, Ruan signed a
forfeiture agreement, stipulating that he “w[ould] not
oppose the entry of a Preliminary Order of Forfeiture,
forfeiting the above-listed assets and sums of money.”
He agreed to forfeit various bank accounts, two real
properties, and 18 cars, and to the entry of a money
judgment “for a sum of money of at least $5,000,000.”
The following week, the district court entered a
Preliminary Order of Forfeiture pursuant to this
agreement. This order became final at sentencing.
In Ruan’s presentence investigation report
(“PSR”), the probation officer applied a base offense
level of 38 under U.S.S.G. § 2S1.1, based on an
underlying offense of drug conspiracy for which the
government asserted that Ruan was accountable for
the equivalent of 309,872 kilograms of marijuana.
Ruan then received a two-level enhancement under
U.S.S.G. § 2S1.1(b)(2)(B) because he had been
convicted of violating 18 U.S.C. § 1956. He received
another two-level enhancement for abusing a position
of public trust, pursuant to U.S.S.G. § 3B1.3. Finally,
Ruan received a two-level obstruction-of-justice
enhancement for testifying falsely at trial pursuant to
U.S.S.G. § 3C1.1. The PSR calculated the adjusted
offense level as 44, but because the offense level
exceeded the maximum level used in the guidelines,
which is 43, the PSR treated Ruan’s total offense level
as 43. Because Ruan had no criminal history, he was
attributed a criminal history category of I.
Based on an offense level of 43 and a criminal
history category of I, the PSR noted that the guideline
imprisonment range was simply “life.” However, the
statutorily-authorized maximum sentences for each of
33a
the convictions were less than the applicable range.
Specifically, the PSR noted that the maximum term of
imprisonment was: (1) 20 years for each of Counts 1,
2, 4, 8, 9, 11, and 12; (2) 40 years for Count 3; (3) 10
years for each of Counts 15, 18, 19, 20, 21, and 22; and
(4) 5 years for each of Counts 16 and 17. Pursuant to
U.S.S.G. § 5G1.2(b), the probation officer converted
the statutory maximum penalties to months and
added them together, arriving at a guideline range of
3,000 months. The probation officer also determined
that Ruan owed restitution totaling $17,261,859.14 to
various insurance companies that had paid for illegal
prescriptions.
Ruan objected to the PSR and filed a sentencing
memorandum, and the government responded to his
objections. Ruan first objected that the government’s
drug-quantity calculation grossly overestimated the
number of relevant prescriptions. The government
responded that the district court needed only to
approximate the quantity of controlled substances
that were within the scope of the criminal activity that
Ruan jointly undertook. The government explained
that to reach that total drug quantity, the government
requested data of all controlled substances that PPSA
prescribed during the relevant period, and then
reduced the list to only morphine, oxycodone,
methadone, hydromorphone, oxymorphone, and
fentanyl. The government then calculated the total
number of grams prescribed of each individual drug
by first multiplying the number of units of the drug
prescribed by its strength and converting that result
to grams. Then, the government calculated the total
amount of each drug and converted these totals to
their marijuana equivalents. In determining how
many of those prescriptions were illegal, the
34a
government acknowledged that not all prescriptions
were illegal. However, the government noted that
there was testimony from several witnesses, including
nurse practitioners Palmer and Parker, who roughly
estimated that 50% of the patients were illegally
prescribed controlled substances. However, the
government also stated that the ascribed offense level
would still have been appropriate even if only 10.6%
of the prescriptions written by Ruan and Couch were
illegal. The government argued that sufficient
evidence at trial was presented for the court to find
that at least 10.6% of the prescriptions were written
outside the usual course of professional practice,
including: the manner in which Ruan and Couch
prescribed opioids was consistent across time and
patients; Couch rarely saw patients during follow up
office visits; prescriptions were written in Couch’s
name by Palmer, which both doctors knew about;
5,793 prescriptions were written in Couch’s name
when he was out of the state or country; patients were
seen and prescribed opioids before Couch would arrive
to work at PPSA; and Couch and Ruan prescribed
medication when they had a financial self-interest to
do so.
Ruan disagreed, contending that the drug
quantity should have been based on what was proven
at trial through expert or patient testimony, and he
argued that any reliance on Palmer’s or Parker’s
statements as to 50% of the prescriptions being
unlawful would be improper because (1) there was no
established basis for their opinions, (2) they worked at
a different location than Ruan, and (3) they lacked the
ability or expertise to reach their conclusions. Ruan
also offered DEA publications, which he stated
35a
showed that the average sentence for cases with
between 1 and 5 distribution counts was 83.4 months.
Ruan also adopted Couch’s arguments at
sentencing, among them that other circuits followed a
more nuanced approach in calculating drug quantities
attributed
to
physicians
because
doctors’
prescriptions were presumed to be legal. He also
asserted that courts should exclude any prescriptions
that merely breach the civil malpractice standard
because that standard did not establish criminality.
He noted that, despite the government having Palmer
on the stand for several hours, the reference to the
50% figure lasted mere seconds, and the government
could have elicited more details from Palmer, such as
explaining whether the term “overmedicated” referred
to a breach of the civil standard of care or to
prescriptions outside the usual course of professional
practice.
Ruan’s second objection to the PSR was to the
restitution calculation. The government explained
that it calculated restitution by taking the total paid
for medications by insurers BCBS, United
Healthcare, Medicare, and Tricare, and first deducted
the payments each made for non-controlled
substances and Schedule IV and V controlled
substances. Then, the government deducted 15% of
the total each insurer paid for TIRF prescriptions,
based on testimony that no more than 15% of PPSA
patients were cancer patients. The government finally
deducted 50% from the amounts each insurer paid for
the remaining Schedule II prescriptions based on the
testimony that 50% of PPSA patients were
overmedicated. Ruan responded, with regard to the
illegal TIRF prescription percentage of 85%, that off-
36a
label TIRF prescriptions were not inherently illegal.
He pointed out that insurance companies, including
BCBS, sometimes approved such prescriptions, and
that Dr. Aultman had agreed that prescribing offlabel is not illegal. He also argued that the 50% figure
as to the remaining Schedule II drugs was
speculative, and the government should provide
specific evidence as to why each prescription paid for
by each insurer was fraudulent.
Ruan’s third objection was to the obstruction-ofjustice enhancement. In response, the government
stated that Ruan testified falsely when he stated that
he was unaware that Palmer was forging Couch’s
prescriptions. In an email, Ruan reminded Couch to
talk to Palmer about not prescribing “red flag” drugs,
and testimony from other PPSA employees and
patients established that nearly everyone was aware
that Palmer was prescribing controlled substances in
Couch’s name. The government pointed out that Ruan
had a financial interest in that activity because
prescriptions forged by Palmer could be filled at C&R.
At
sentencing,
Ruan
reiterated
these
8
arguments. He also argued that: (1) he prescribed
half the number of drugs that Couch did; (2) he
exercised greater oversight over his nurse
practitioners than Couch had; (3) he had an excellent
national reputation; and (4) despite some mistakes, he
practiced good medicine and legitimately helped
patients. The government responded that: (1) Ruan
was the leader of PPSA and that every aspect of the
8 The district court ruled on the appellants’ common
objections at Couch’s sentencing, which was the day before
Ruan’s. Ruan’s attorney participated in these portions of Couch’s
sentencing.
37a
illegal activity was led and directed by him; (2) he
made a variety of decisions in his practice based on
whether he would make money off of them rather than
whether it would benefit the patient being treated;
and (3) he had a variety of valuable assets that he
attempted to hide.
The district court found that Ruan was the leader
of the fraud offenses and racketeering enterprise. The
court noted that Ruan was the “better doctor”—
insofar as he had more board certifications and
degrees—but it was his making the business decisions
that necessitated a higher sentence. The district court
stated that it recalled testimony that 50% of the
prescriptions written were not for a legitimate
medical purpose and stated that using this testimony
was a reasonable way for the government to calculate
the drug-quantity and restitution amounts. The court
found that the government had showed that at least
10.6% of the prescriptions were written outside the
usual course of professional practice, and it concluded
that the appropriate base offense level was 38. The
district court also found that the obstruction-of-justice
enhancement was appropriate because it concluded
that the email from Ruan to Couch about Palmer was
a clear indication that Ruan was aware of Palmer
forging prescriptions. The court sentenced Ruan to
252 months’ imprisonment, varying downward
because Ruan did not have a criminal history and
because the court believed that the sentence reflected
the seriousness of the offense and the need for
punishment, deterrence, and incapacitation. It also
ordered Ruan to make restitution as described in the
PSR. Lastly, the district court finalized a preliminary
order of forfeiture as to Ruan.
38a
II. Discussion
Sufficiency of the Evidence
Ruan challenges the sufficiency of the evidence
on all counts against him. Couch joins Ruan’s
arguments as to their joint convictions—Counts 1–4,
15–17, and 19.9
This Court “review[s] the sufficiency of the
evidence de novo, viewing the evidence and all
reasonable inferences and credibility choices in favor
of the government and the jury’s verdict.” United
States v. Ignasiak, 667 F.3d 1217, 1227 (11th Cir.
2012). “A conviction must be affirmed unless there is
no reasonable construction of the evidence from which
the jury could have found the defendant guilty beyond
a reasonable doubt.” Id. As we explain below, we
conclude that the evidence presented at trial was
sufficient to convict the appellants on all of the counts
that are challenged, except Count 16 charging both
appellants with conspiring to violate the AntiKickback statute based on their operation of PPSA’s
in-house workers’ compensation dispensary.
1.
Counts 8, 9, 11, and 12: Substantive
Drug Distribution Against Ruan10
Counts 8, 9, 11, and 12 of the Superseding
Indictment alleged that Ruan’s prescribing of opioids
9 Couch does not challenge on appeal the sufficiency of the
evidence on Counts 5–7, substantive drug distribution charges
based on the prescriptions he wrote for Officer Kelley, or on
Counts 13 and 14, substantive drug distribution charges based
on prescriptions he wrote for his patients Kenneth Daves and
Patrick Chausse.
10 We discuss the various counts of conviction slightly out
of order for ease of analysis.
39a
to four specific patients violated 21 U.S.C. § 841(a)(1),
and 18 U.S.C. § 2. In the medical context, drug
distribution in violation of § 841(a)(1) requires proof
that either “1) the prescription was not for a
‘legitimate medical purpose’ or 2) the prescription was
not made in the ‘usual course of professional
practice.’” United States v. Joseph, 709 F.3d 1082,
1102 (11th Cir. 2013) (quoting United States v. Tobin,
676 F.3d 1264, 1282 (11th Cir. 2012)). “The mens rea
required for a conviction under section 841(a)(1) is
‘knowledge, not willfulness.’” Id. (quoting Tobin, 676
F.3d at 1279–80). Ruan was charged and convicted as
both a principal, 21 U.S.C. § 841(a)(1), and an aider
and abettor, 18 U.S.C. § 2. To sustain a conviction
under 18 U.S.C. § 2, “the prosecution must show that
‘the defendant associated [him]self with a criminal
venture, participated in it as something [ ]he wished
to bring about, and sought by [his] actions to make it
succeed.’” Id. (quoting United States v. Pantoja-Soto,
739 F.2d 1520, 1525 (11th Cir. 1984)).
i.
Count 8: Prescriptions Ruan
Wrote on February 26, 2015 for
Diane Greathouse
Count 8 charged that six prescriptions Ruan
wrote for patient Diane Greathouse (“Greathouse”) on
February 26, 2015—two for 400 mcg each of the TIRF
medications Abstral and Subsys, one for 40 mg of
OxyContin (an extended release oxycodone), and one
for 10 mg of Norco—amounted to unlawful drug
distribution. Government expert witness Dr.
Greenberg reviewed Greathouse’s file and testified at
trial that those prescriptions were not for any
legitimate medical purpose and that Ruan’s overall
treatment of Greathouse, including prescribing them,
40a
was outside the usual course of professional practice.
In support, Dr. Greenberg stated that Ruan
prescribed Greathouse Abstral and Subsys, two TIRF
medications that are intended for cancer treatment,
although she did not have cancer. Additionally, in his
opinion, Ruan’s choice to prescribe both Abstral and
Subsys, different formulations of the same drug,
“makes no sense.” Dr. Greenberg further explained
that Ruan was already prescribing Greathouse such
high doses of opioids that she could be “in a stupor and
ready to fall into a coma”, but then had tried to
counteract those effects, not by discontinuing the
opioids but by improperly prescribing Provigil, an
amphetamine, to the mixture of drugs. He also noted
that Ruan had previously prescribed Greathouse a
naloxone (brand name Narcan) injector, which is used
as an antidote for fentanyl overdoses, without her
informed consent and without ensuring that her
family members, who would be the ones using it in
case of her overdose, had CPR or other relevant
training.
Ruan’s principal argument in support of his claim
that the evidence was insufficient to convict him on
Count 8—as well as on Counts 9, 11, and 12—is that
Dr. Greenberg’s testimony was unreliable. Ruan
draws our attention to the fact that on the Monday
following Dr. Greenberg’s testimony at trial, which
had concluded the previous week, government counsel
alerted the district court and defense counsel, through
a motion filed under seal, that Dr. Greenberg had
notified them over the weekend that he thought he
had early-onset dementia and was consulting a
neurologist. During a hearing outside the presence of
the jury, government counsel expressed misgivings
about some of Dr. Greenberg’s testimony, represented
41a
that he had offered to refund monies and not charge
for his trial testimony and that the government
intended to accept his offer, but indicated that the
government wanted to gather more information
before deciding whether to ask for a specific jury
instruction on the issue.
Despite this troubling circumstance, Ruan cannot
succeed on his insufficiency of the evidence argument.
Neither Ruan nor Couch asked the district court to
provide the jury with the government’s disclosure
concerning Dr. Greenberg’s mental health. Rather, at
the in-chambers hearing, Couch’s attorney noted that
the standard for competency is “fairly liberal,”
recounted that Dr. Greenberg had been crossexamined, and mentioned that “we don’t think that
there’s anything there.” Ruan’s attorney said nothing.
The district judge stated, “I don’t think there’s any
question that he was competent to testify,” suggested
that the issue merely related to Dr. Greenberg’s
credibility, and decided to await more information
from the government, if any materialized. No further
information was presented by the end of trial.
Considering the foregoing, to the extent Ruan
asserts that the jury should have been made aware
that Dr. Greenberg thought he may have a mental
health issue, our review of that claim is limited to
plain error because Ruan never preserved the issue.
See Fed. R. Crim. P. 52(b) (“A plain error that affects
substantial rights may be considered even though it
was not brought to the court’s attention.”). And
although Dr. Greenberg was the sole government
expert witness relating to the four substantive drug
distribution counts charged against Ruan, defense
counsel rigorously cross-examined him, during which
42a
time, as discussed in further detail below, he admitted
to several errors and omissions in his testimony and
even changed his opinion on several points. Thus, the
jury was aware that Dr. Greenberg’s testimony was
not infallible. We thus cannot say that, even if the
jurors had known of Dr. Greenberg’s disclosure to
government counsel, they “could not have found
[Ruan] guilty under any reasonable construction of
the evidence.” Ignasiak, 667 F.3d at 1229 (quoting
United States v. Merrill, 513 F.3d 1293, 1299 (11th
Cir. 2008)).
Aside from Dr. Greenberg’s credibility, Ruan also
argues that the evidence was insufficient to convict
him on Count 8 because the jury heard during Dr.
Greenberg’s
cross-examination
that
(1)
the
medications Ruan prescribed Greathouse alleviated
her pain and enabled her to continue working, (2) the
Centers for Disease Control and Prevention
recommend Narcan when a patient is at risk for opioid
overdose, and (3) the FDA authorizes the manufacture
of larger doses of Subsys and Abstral than what Ruan
prescribed. We are not persuaded that reasonable
jurors could not have found guilt after hearing this
evidence. Dr. Greenberg testified that if Greathouse
was able to work it would only be because of the
amphetamines Ruan prescribed her and prescribing
those was “simply way below the rational standard of
care for dealing with people who are in a near
overdose state.” He further explained that subsequent
studies had shown that Narcan did not always work
as intended when given by a family member instead
of a medical professional and would not help a patient,
like Greathouse, who was also taking other drugs with
sedative effects, including benzodiazepines. The jury
was entitled to credit Dr. Greenberg’s testimony.
43a
Sufficient evidence supports Ruan’s conviction on
Count 8 for drug distribution.
ii.
Count 9: Prescriptions Ruan
Wrote on April 27, 2015 for Kim
Lowe
Count 9 was based on three prescriptions Ruan
wrote on April 27, 2015, to patient Kim Lowe (“Lowe”)
for 600 mcg of Fentora, which is a fentanyl lozenge,
and 80 mg and 15 mg of the opioids OxyContin and
oxycodone, respectively. Dr. Greenberg reviewed
Lowe’s file and testified at trial that those
prescriptions were not for any legitimate medical
purpose and that Ruan’s overall treatment of Lowe
since January 2009 was outside the usual course of
professional practice. Dr. Greenberg specifically
stated that Ruan acted outside the usual course of
professional practice when he: (1) failed to take down
Lowe’s history of illnesses and medications; (2) failed
to refer her for mental health treatment despite her
general complaints of “severe pain over her entire
body” lasting more than 20 years, which Dr.
Greenberg opined was a “red flag” for a psychiatric
problem given that there are few diseases that can
cause such symptoms; (3) failed to obtain Lowe’s
informed consent prior to prescribing her a
combination of oxymorphone (brand name Opana),
OxyContin, Xanax, oxycodone (brand name Percocet),
Lunesta sleeping pills, and Soma; (4) prescribed Lowe,
who did not have cancer, the fentanyl lozenge, which
Dr. Greenberg described as an “end-of-life drug that is
only approved by the FDA for people who are in the
last stages of their lives with cancer”; (5) failed to
counsel her when she ran out of medications
prematurely, which suggested that she was either
44a
taking more than what was prescribed or diverting
medications; and (6) ignored positive urine screening
test results for hydrocodone and fentanyl at a time
when Ruan was not prescribing her those
medications.
Ruan points out that on cross-examination, Dr.
Greenberg was shown a part of Lowe’s medical file
dating back to 2008 that he had never seen before that
revealed that Ruan did in fact do an initial exam,
record Lowe’s medical history, and review information
from her referring physician when he first saw her as
a patient. Dr. Greenberg was also shown where Lowe
kept a pain diary and communicated her perceived
levels of pain to Ruan. Additionally, Lowe herself
testified for the defense, stating that Ruan did more
than just prescribe opioids; his treatment of her
included a back brace, various nerve and facet blocks,
injections, epidurals, physical therapy, and
ointments. Although Lowe believed that the
medications Ruan prescribed medically benefited her,
she also had trouble remembering that she had been
a patient of Ruan’s since 2009, believing instead that
she had only seen him for the past three years. The
jury was entitled to credit Dr. Greenberg, a physician,
over Lowe, and even if Lowe felt that she benefitted
from the medications Ruan prescribed, a reasonable
jury could nonetheless conclude that the manner in
which Ruan prescribed them was outside the usual
course of professional practice. Sufficient evidence
supports Ruan’s conviction on Count 9 for drug
distribution.
45a
iii.
Count 11: Prescription Ruan
Wrote on November 25, 2014 for
Deborah Walker
Count 11 addressed a prescription for the opioid
Opana that Ruan wrote for patient Deborah Walker
(“Walker”) on November 25, 2014. Dr. Greenberg
testified that Walker came to Ruan 11 months earlier,
in January 2014, seeking pain medication shortly
after completing a 19-month prison sentence. Dr.
Greenberg considered prison time a “giant red flag”
for drug-seeking behavior but noted that he did not
see any indication that Ruan had asked Walker
whether she was incarcerated due to a drug-related
crime. He also criticized Ruan’s failure to refer Walker
to a psychiatrist when it was noted in her file that she
had bipolar disorder with schizophrenic features. Dr.
Greenberg also opined that Ruan should have
suspected diversion and counseled Walker on such
matters when a urine test performed during that
January 2014 visit did not detect Soma and
hydrocodone, drugs that he thought Ruan had
recently prescribed her. In Dr. Greenberg’s view, it
was improper for Ruan to have prescribed Opana
because it is the “most sought[ ]after prescription drug
by people who are heroin addicts or other I.V.-type
abusers of I.V. opioid drugs.” He also condemned
Ruan’s addition of prescriptions for Soma and
hydrocodone at subsequent visits.
During a visit to Ruan in April 2014, Walker
tested positive for several drugs, including
hydromorphone, that Ruan had not prescribed, which
suggested to Dr. Greenberg that Walker was receiving
opioids from other doctors or off the street. Dr.
Greenberg testified that he did not believe that Ruan
46a
was checking the PDMP, which would have revealed
that Walker was indeed receiving pain medications
from 12 or 13 different doctors. Dr. Greenberg opined
that the prescription Ruan wrote for Walker for
Opana in November 2014 was merely the last in a long
line of medically illegitimate prescriptions that were
written by Ruan outside the usual course of
professional practice.
Dr. Greenberg was subject to extensive crossexamination related to his review of Walker’s file. He
admitted that he had missed that Walker had been a
patient of Ruan’s in 2011, before going to prison, and
that Ruan had prescribed the Soma and hydrocodone
before her period of incarceration, which could have
explained why those drugs were not present in the
drug screen in January 2014, after she had been
incarcerated for 19 months. Dr. Greenberg was also
shown portions of Walker’s physical file from 2008,
before PPSA migrated to electronic record-keeping,
showing that she had been advised about the dangers
of developing a dependency on opioids and mixing
opioids with alcohol. Dr. Greenberg admitted that
such warnings and informed consent were within the
scope of professional medical practice.
The jury also heard from Walker’s husband,11
who testified that his wife had a drug addiction and
served time for burglary and stealing to support her
drug habit. He described how Ruan rapidly increased
her opioid dosages beyond the minimum necessary for
pain control, stating that her prescribed medications
11 By the time of trial, Walker had died. Prior to Walker’s
husband’s testimony, the jury was informed of her death and told
that there were no allegations that Ruan or Couch was
responsible.
47a
would put her in an “almost comatose” state, that the
dosages were so great that she would immediately fall
asleep after taking the medications, and that she
routinely fell asleep while cooking and he would come
home from work to find their home filled with smoke.
Given this testimony, we find that the totality of the
evidence was sufficient for the jury to determine that
Ruan dispensed controlled substances to Walker
outside the usual course of professional practice as
charged in Count 11.
iv.
Count 12: Prescription Ruan
Wrote on October 10, 2012 for
John Bosarge
Count 12 alleged that a prescription Ruan wrote
for morphine sulfate (brand name MS-Contin) on
October 10, 2012, to patient John Bosarge (“Bosarge”)
was for no legitimate medical purpose and outside the
usual course of professional practice. Dr. Greenberg
considered Bosarge, who was an opioid-dependent 50year-old, a “high risk” patient because he suffered
from psychiatric and cardiac problems as well as high
blood pressure. Dr. Greenberg opined that Ruan’s
treatment of Bosarge was outside the usual course of
professional practice because, rather than prescribe
the “absolute minimum” dose of opioids that would
have helped his pain yet addressed his opioid
dependence, he combined the opioid prescriptions
with prescriptions for Xanax, a “sedative-hypnotic”
drug, which created a risk of an “accidental
respiratory arrest,” and butorphanol, an “agonistantagonist” drug, which could cause, if a patient is not
detoxed from opioids first, the patient to go into a
painful withdrawal. Dr. Greenberg emphasized that
48a
the warning labels on those medications warned
against prescribing them together.
Ruan argues that the charged prescription was
merely a continuation of Bosarge’s prior treatment
with his referring physician, but the jury heard
evidence that morphine like Ruan prescribed Bosarge
is a stronger opioid than the hydrocodone he was
previously taking before the referral to Ruan. The jury
was entitled to credit Dr. Greenberg’s opinion that
Ruan’s treatment of Bosarge fell outside the usual
course of professional practice, and sufficient evidence
supports Count 12.
2.
Counts
2,
3,
and
4:
Drug
Distribution Conspiracies Against
Couch and Ruan
Counts 2, 3, and 4 charged the appellants with
conspiracies to dispense Schedule II drugs, fentanyl,
and Schedule III drugs, respectively, in violation of 21
U.S.C. §§ 846 and 841(a)(1). “In order to secure a
conviction
for
unlawful
dispensation
under
§ 841(a)(1), the government must prove that the
defendant ‘dispensed controlled substances for other
than legitimate medical purposes in the usual course
of professional practice, and that he did so knowingly
and intentionally.’” United States v. Azmat, 805 F.3d
1018, 1035 (11th Cir. 2015) (quoting Ignasiak, 667
F.3d at 1227). “To establish a conspiracy in violation
of § 846,” the government must prove that: “(1) there
was an agreement between two or more people to
commit a crime (in this case, unlawfully dispensing
controlled substances in violation of § 841(a)(1)); (2)
the defendant knew about the agreement; and (3) the
defendant voluntarily joined the agreement.” Id.
(footnote omitted). “A conspiracy conviction will be
49a
upheld if ‘the circumstances surrounding a person’s
presence at the scene of conspiratorial activity are so
obvious that knowledge of its character can fairly be
attributed to him.’” Id. (quoting United States v.
Figueroa, 720 F.2d 1239, 1246 (11th Cir. 1983)).
v.
Counts 2 and 4: Schedule II and
III Drugs
The appellants argue that the prescriptions they
wrote for these drugs were legitimate, but the
evidence at trial indicated significant activities by
Ruan and Couch that were outside the course of
professional practice. They altered their prescribing
habits where they had a financial interest, like when
they increased their Abstral prescriptions after
purchasing stock in the company, decreased their
Abstral prescriptions after a drop in stock price and a
change in voucher rules, and increased them again
after C&R entered a rebate agreement with Galena.
Insys maintained Ruan and Couch as weekly
speakers in order to influence their prescription
habits. Palmer was forging prescriptions with Couch’s
signature, and he did this for his patients and for
those of other PPSA nurses, something that Ruan was
aware of and acquiesced to. Couch and Ruan would
leave blank prescription pads, which sometimes only
had the doctors’ signatures on them, for use by the
nurses when the doctors were out of the office.
Additionally, the patient files examined for trial by
the government’s experts suggested that there were
serious gaps in patients’ quality of care, including
taking insufficient steps to safeguard high-risk
patients, ignoring signs of potential drug diversion,
and failing to get adequately informed consent before
prescribing drugs, including for off-label use. The jury
50a
was free to disbelieve Ruan and Couch and reasonably
could infer that the appellants were participating in a
conspiracy to unlawfully distribute controlled
substances.
vi.
Count 3: Fentanyl
Count 3 charged a conspiracy to distribute
fentanyl, also a Schedule II drug.12 The jury was
asked to find whether the conspiracy involved more
than 40 grams, a quantity triggering a 5-year
mandatory minimum sentence under 21 U.S.C.
§ 841(b)(1)(B)(vi). The only argument the appellants
raise regarding this count is that there was
insufficient evidence to support the jury’s finding that
they prescribed over 40 grams of fentanyl in a manner
outside the usual course of professional practice or for
no legitimate medical purpose.
The government’s chart listing the appellants’
top 28 patients receiving the most Subsys or Abstral
prescriptions without a cancer diagnosis showed that
the appellants prescribed a total of 67.311 grams of
fentanyl to those patients off-label. The appellants
claim that the jury could not consider the full 67.311gram amount because the government only presented
testimony specifically addressing 10 of those patients,
who were prescribed a total of 33 grams. More
specifically, government expert Dr. Greenberg
testified about five patients who were prescribed a
total of 14.958 grams, the fentanyl prescribed to the
patients who testified was 16.621 grams, and the
fentanyl prescribed to patients whose relatives
testified was 1.487 grams. However, government
12 The Schedule III conspiracy involved hydrocodone, which
was reclassified to Schedule II in 2014.
51a
experts Dr. Aultman and Dr. Vohra testified about an
additional five patients who were prescribed fentanyl
not included in the chart and testified that the
appellants’ treatment of them was outside the usual
course of professional practice. The government points
to PDMP data showing that these five patients
received 8.83 grams of fentanyl, which, combined with
the 33 grams, surpasses the 40-gram threshold.
While the jury was shown PDMP data
throughout the trial, we do not think that they were
sufficiently presented with the specific data showing
that these five patients received 8.83 grams of
fentanyl. But even if the jury erred in finding that
over 40 grams was prescribed, the error was harmless
because the 5-year mandatory minimum sentence was
well below the sentences the appellants received. We
find no error with the jury’s guilty verdict with regard
to Count 3.
3.
Count 15: Health Care Fraud
Conspiracy Against Couch and
Ruan
Count 15 alleged that the appellants engaged in
a conspiracy to fraudulently obtain money from a
health care benefits program in violation of 18 U.S.C.
§ 1347(a). A health care fraud conspiracy exists when
defendants agree to submit false claims to health care
benefit programs. United States v. Gonzalez, 834 F.3d
1206, 1214 (11th Cir. 2016). The defendants must
have known that the claims submitted were actually
false. Id. “A person makes a false claim if the
treatments that were billed were ‘not medically
necessary[ ] or were not delivered to the patients.’” Id.
(quoting United States v. Medina, 485 F.3d 1291, 1304
(11th Cir. 2007)). To sustain a conviction, the
52a
government “had to establish beyond a reasonable
doubt that: (1) a conspiracy existed to commit health
care fraud under 18 U.S.C. § 1347; (2) [the appellants]
knew of the conspiracy; and (3) [the appellants]
knowingly and voluntarily joined it.” Id.
The Superseding Indictment alleged and the
government sought to prove at trial that the
appellants agreed to commit health care fraud in four
ways: (1) falsely certifying to insurers that some
patients had cancer so that the insurers would pay for
their TIRF prescriptions; (2) billing BCBS for office
visits conducted by nurse practitioners using Couch’s
physician identification number; (3) billing insurers
for drug tests that were medically unnecessary; and
(4) billing insurers for PPSA office visits at which
patients were prescribed medically unnecessary
drugs. If sufficient evidence supports any one of these
methods, we must uphold the health care fraud
conspiracy conviction. See United States v. Ross, 131
F.3d 970, 984 (11th Cir. 1997).
First, the evidence was sufficient to convict the
appellants of conspiring to defraud a health care
benefits program by falsely certifying to insurers that
some patients had cancer so that insurers would pay
for their TIRF prescriptions. See Gonzalez, 834 F.3d
at 1215–16 (submitting a false claim to an insurer
encompasses lying about a patient’s condition to the
insurer). DEA Special Agent Michael Burt testified
that Ruan signed a letter to Cigna confirming that his
patient Kathleen Burns’s prescription for Subsys had
been “for breakthrough cancer pain,” when she did not
have cancer.13 Similarly, Perhacs, the former
Dwight Burns, Kathleen Burns’s husband, confirmed
Burt’s testimony. By the time of trial, Kathleen Burns had died.
13
53a
pharmaceutical sales representative for Insys,
testified that Couch signed a form sent to Insys to get
insurance approval for Abstral,14 listing patient
Ronald Ivy’s diagnosis as bladder cancer, yet his
medical file had no mention of any cancer. Several
witnesses, including DEA Diversion Investigator
Michelle Penfold and Couch’s nurse practitioner
Palmer, discussed how a Subsys prescription for Joyce
Barber listed a diagnosis of “[u]terine cancer.” Barber
herself testified that when her insurance company
later called her to verify that she had cancer and she
told them truthfully that she did not, they stopped
covering Subsys. And Dr. Aultman, when testifying
regarding her review of several patient files, noted
that a prescription Couch wrote for Brenda Ward had
“cervical cancer” written on it even though her
medical record contained no verification of that
diagnosis.
We also find that the evidence was sufficient to
convict the appellants for conspiring to defraud BCBS.
Cindy McKenzie, a BCBS employee who oversees and
manages fraud activities, testified that the appellants
routinely billed for office visits conducted entirely by
nurse practitioners, like Palmer, under Couch’s
identification number. This practice is called incident
to billing, and while some insurers allow it,15 BCBS
Prior to her husband’s testimony, the jury was informed of her
death and told that there were no allegations that Ruan or Couch
was responsible.
14 Insys had a unit in its home office, called the “Internal
Reimbursement Center,” to assist physicians in obtaining
insurance approval for Insys.
Medicare, TriCare, and others allowed “incident to
billing,” allowing submission of bills under a doctor’s provider
15
54a
did not. Rather, BCBS paid about 30% less for nurse
practitioner visits than for doctor visits, and it
expressly required a physician working with a nurse
practitioner to also “see[ ] and render[ ] services to the
patient” to bill BCBS under the doctor’s name. In
October 2014, BCBS clarified its policy, effective
January 1, 2015, to permit only the “provider who is
physically conducting or affirming the [patient’s
history] and performing an in-person examination” to
submit a bill. BCBS notified providers of this change,
and Ken Cross, PPSA’s practice manager, testified
that he told the appellants that they at least needed
to see their patients every visit. Yet Palmer saw
dozens of BCBS patients every day without Couch.
BCBS found no records of PPSA visits billed under
Palmer’s name, only those billed under Ruan’s and
Couch’s. McKenzie testified that “[t]hat’s a false
claim.”
Although Ruan testified that he personally saw
all of his patients, he acquiesced in Couch’s practice of
permitting Palmer and others to see patients
independently. This is evidenced by the July 2014
email in which Ruan asked Couch to “talk to Justin
[Palmer]on cutting down” the amount of Roxicodone
30 mg he prescribed in light of news reports that
Alabama had the most opioid prescriptions in the
country. Couch responded that “[w]e,” meaning he and
Palmer, would not “write triple digit dispentions [sic]
of short acting opioids.”
We also find that the evidence was sufficient to
convict the appellants for conspiring to defraud a
number if the doctor was involved in the treatment, through
participation or oversight.
55a
health care benefits program by billing for expensive
off-site urine screen tests that were medically
unnecessary. Ruan ordered them for every patient
because they generated more revenue than in-house
tests. And the jury heard from several sources that the
appellants rarely discussed inconsistent test results
with patients, whether to counsel them into
compliance or fire them as patients. Ruan himself had
stated that “[i]n private practice the more you fire, the
more revenue you lose.” Instead, he opined, “when one
patient tests positive for street drugs, that gives you
more reason to do more frequent urine drug screens,
which pays three times more than an office visit.”
Finally, because we have already found that the
evidence is sufficient to convict the appellants of
illegally prescribing drugs, like Abstral and Subsys,
outside the course of professional practice, we find
that their billing insurers for PPSA office visits at
which patients were prescribed these drugs that C&R
then dispensed, is an alternative object of the health
care fraud conspiracy. Indeed, for Abstral and Subsys,
the appellants were either the top or among the top
billers of BCBS, Medicare, Tricare, and United
Healthcare. While not all of these prescriptions were
illegal, some were. In sum, the evidence was sufficient
to convict Ruan and Couch for health care fraud
conspiracy.
4.
Counts 16 and 17: Conspiracies to
Receive Kickbacks Against Couch
and Ruan
Counts 16 and 17 charged the appellants with
conspiring, in violation of 18 U.S.C. § 371,16 to violate
16 That statute provides:
56a
the Anti-Kickback statute in two different ways. The
statute provides in part that:
Whoever knowingly and willfully solicits or
receives any remuneration (including any
kickback, bribe, or rebate) directly or indirectly,
overtly or covertly, in cash or in kind ... in return
for referring an individual to a person for the
furnishing or arranging for the furnishing of any
item or service for which payment may be made
in whole or in part under a Federal health care
program ... shall be guilty of a felony and up
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