By Ronald W. Chapman II

11th Circuit Grants New Trial For Ruan on Remand

11th Circuit Opinion Located Here: United States v. Ruan (11th Cir 2023)

For a brief refresher on the Ruan decision read this.

It has been over seven months since the Supreme Court sided for Dr's Ruan and Couch in the first high court decision to address controlled substance prescribing prosecutions against physicians since 1975. Ruan and Couch have remained in federal custody after the Supreme Court remanded the case back to the 11th Circuit. To the uninitiated court watcher - this may have seemed like a strange move. Stopping short of granting a new trial, the Supreme Court elected to allow the Circuits the ability to wrestle with how to handle Ruan and Couch and the other cases filtering up to the Circuit Courts. To experienced court watchers, the move was unsurprising given the Supreme Court’s reluctance to create wide shifts in the law. Remand permitted the Circuits to interpret the Ruan decision and further challenges can be launched if the Circuits once again get it wrong.

After seven months of baited breath - we finally got a decision out of the 11th Circuit and it was a mixed bag for Ruan and Couch.In a Per Curiam opinion, the 11th Circuit vacated in part and affirmed in part the defendant’s convictions. Recall, the District Court in Ruan gave the following instruction regarding “good faith”:

“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 11th Circuit was asked on remand whether this instruction was sufficient to account for the Supreme Court opinion that requires the government to prove that the physician knew he or she prescribed in an unauthorized manner.

On remand, the 11th Circuit determined that this instruction was not sufficient because it did not contain any qualification to make it clear that the physician must be judged on the subjective component. The Court next turned to the issue of whether the insufficient instruction was harmless. They found that it was not citing McDonnell v. United States, a Supreme Court case which held that omission of limiting language in the definition of “official act” was not harmless.

The Court next analyzed the other counts of conviction. The first was the conspiracy count under 21 U.S.C. 846. Strangely, the Court did not vacate the conspiracy conviction because the instructions provided for the conspiracy count contained a subjective component. This is strange because it ignores how traditional juries operate. If the jury thought the conduct was sufficient to find that Ruan and Couch unlawfully prescribed and conspiracy simply requires an agreement of two or more persons to unlawfully prescribe - the invalid instruction on the 841(a) counts would have led them to the same invalid conclusion.

Finally, the court also affirmed convictions for health care fraud, violating the Anti-Kickback Statute, money laundering and RICO violations. This is unsurprising given that the faulty 841(a) instruction had no impact on these convictions.

Where This Opinion Leaves Physicians Facing Controlled Substance Prosecutions

We now know that the 11th Circuit has rejected the “good faith as part of his medical treatment” instruction because it does not fully appraise the jury of the important subjective intent needed to convict. But just as the Supreme Court did, the 11th Circuit stopped short of completely answering the question. Despite a trip to the Supreme Court and a lengthly opinion on remand we still lack clarity on the appropriate instruction to provide a jury when a physician is facing a prosecution for unlawfully prescribing controlled substances.

Since Ruan, courts have been struggling with the application of the Court’s decision. Recent instructions have been a mixed bag - some more defense friendly than their predecessor instructions and strangely some less defense friendly. The 11th Circuit opinion did nothing to clear up this murky water and may have potentially added opacity.

Other circuits will weigh in on this issue. The 4th Circuit just issued a briefing schedule for Naum v. United States and other circuits will also issue opinions soon on their Ruan cases. Further updates to come.