Supreme Court Ruling Finds "Strong" Mens Rea Requirement for Prosecution Under the CSA
- In Ruan v. United States, the U.S. Supreme Court on June 27, 2022, dealt a blow to the U.S. Department of Justice by vacating convictions of two physicians convicted of violating 21 U.S.C. §841(a) of the Controlled Substances Act (CSA), which proscribes the illegal manufacture, distribution or dispensing of controlled substances.
- At issue were two provisions of the CSA and its implementing regulations.
- The Court's holding is noteworthy both as to the guidance it gives with respect to the government's spate of prosecutions of opioid prescribers (and perhaps pharmacies and others in the supply chain) specifically, and also with respect to its commentary on criminal intent more generally.
In Ruan v. United States, the U.S. Supreme Court on June 27, 2022, dealt a blow to the U.S. Department of Justice by vacating convictions of two physicians convicted of violating 21 U.S.C. §841(a) of the Controlled Substances Act (CSA), which proscribes the illegal manufacture, distribution or dispensing of controlled substances.
The Issues and Court's Decision
At issue were two provisions of the CSA and its implementing regulations. Section 841(a) of the CSA states, "except as authorized by [the CSA], it shall be unlawful for any person knowingly or intentionally to . . . distribute or dispense. . . a controlled substance" (emphasis added). Additionally, a physician's prescription of controlled substances (including opioids and other pain management drugs) is only authorized if it is "for a legitimate medical purpose . . . acting in the usual course of his professional practice." 21 CFR § 1306.04(a).
The Court confronted the question of whether a prescriber could be found guilty under the CSA if the prescriber subjectively believed that a prescription was for a legitimate medical purpose (i.e., "authorized by the [CSA]") but by objective standards was not doing so. That is, whether the "knowingly or intentionally" mens rea requirement applied to the "except as authorized by [the CSA]" clause and consequently, whether a prescriber must have subjectively known that a prescription was not for a legitimate medical purpose in order to be convicted.
The Court vacated these convictions because the jury instructions at each of the trials did not use a subjective knowledge or intent standard, but instead used an "objectively reasonable good-faith" standard (i.e., outside the recognized standards of medical practice).
Justice Stephen Breyer authored the opinion of the Court, which held that: "once a defendant meets the burden of producing evidence that this or her conduct was 'authorized,' the Government must prove beyond a reasonable doubt that the defendant knowingly or intentionally acted in an unauthorized manner." Id. at 5. The Court explained that "a lack of authorization [to prescribe controlled substances] is often what separates wrongfulness from innocence." Id. at 6. The Court's holding that criminal liability under the statute must turn on the prescriber's subjective beliefs about what is "authorized," as opposed to whether the conduct was different from that of a hypothetical reasonable doctor, ought to make such prosecutions more targeted and more tethered to the particular facts of the situation at hand, rather than to the government's view of what is generally acceptable.
Conclusion and Takeaways
The Court's holding is noteworthy both as to the guidance it gives with respect to the government's spate of prosecutions of opioid prescribers (and perhaps pharmacies and others in the supply chain) specifically, and also with respect to its commentary on criminal intent more generally. As to the general point, the Court found that a "strong scienter requirement helps to diminish the risk of 'overdeterrence,' i.e., punishing acceptable and beneficial conduct that lies close to, but on the permissible side of, the criminal line." Id. at 7. In an era in which the opioid epidemic renders certain prescribers and others in the supply chain unpopular in the public eye, an emphasis on a "strong scienter requirement" helps to ensure that the criminal laws are fairly enforced.
The Ruan ruling raises several questions as to its impact on other healthcare enforcement actions. For instance, many healthcare laws, including the federal Anti-Kickback Statute, incorporate the "knowing and willful" standard as well as specific exceptions to the prohibited conduct. Additionally, it is not clear whether this ruling impacts civil enforcement of healthcare laws, including when criminal statutes, such as the Anti-Kickback Statute, are enforced through civil vehicles, such as the False Claims Act. Stakeholders should monitor how the Ruan case is interpreted by the lower courts, whether specifically in the context of the CSA or other healthcare enforcement actions.
For more information or questions on the Supreme Court's ruling and its impact, contact the authors or another member of Holland & Knight's Healthcare White Collar Defense and Investigations Team.
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