In our local appeals court, wayward doctors are having a moment. In two recent opinions, the Eleventh Circuit has refined the levels of proof required to convict physicians accused of drug crimes. We start there, then narrate one last opinion related to health care fraud.
We want our doctors to prescribe us medication when we need it—no matter how often or how much. We may not know any better, but the law says our doctors should. In US v. Heaton, the jury convicted a physician of unlawfully dispensing controlled substances to patients and aiding and abetting the acquisition of controlled substances by deception. On appeal, Dr. Heaton argued that the jury instructions given at trial were flawed. The district court instructed the jury that the government could prove Dr. Heaton dispensed the prescriptions unlawfully if they were either “outside the course of professional practice” or “for no legitimate medical purpose.” Dr. Heaton argued the government had to prove both—not just one. Citing caselaw and the plain language of the Code of Federal Regulations, the Eleventh Circuit disagreed. The jury instructions also stated that an objective standard should be used in determining whether Dr. Heaton acted “outside the course of professional practice.” Dr. Heaton argued this too was error. Because the Supreme Court had just issued an opinion in Ruan v. US (see below) explaining that this standard should be subjective, the Eleventh Circuit agreed. But it was harmless error. Why? The Court found there was extensive evidence that Dr. Heaton subjectively knew his prescriptions were issued outside the usual course of professional practice; the jury would have found that Dr. Heaton was guilty—and he should have known better—even under the subjective standard.
Can even the most well-intentioned doctors be guilty of violating 21 U.S.C. § 841(a), which prohibits the “knowing or intentional” dispensing of controlled substances “[e]xcept as authorized”? Decades of Eleventh Circuit precedent said yes. The rule has always been this: To defeat a drug charge, a doctor must act with “objective good faith” when prescribing controlled substances; “subjective good faith” is not enough. Before you ask: No, we don’t know what “objective good faith” means and, thankfully, we no longer have to. In Ruan v. US, 142 S. Ct. 2370 (2022), the Supreme Court recently eviscerated the Eleventh Circuit rule and held that a doctor’s subjective good faith can defeat an § 841(a) charge. Unfortunately, the attorneys representing Ruan may have to re-cork their champagne bottles. When the case returned to the Eleventh Circuit, the panel in US v. Ruan dutifully reversed the § 841(a) distribution convictions. But the conspiracy convictions stuck. Why? Because the standard conspiracy jury instructions, unlike the erroneous jury instructions for the substantive drug offense, do require the government to prove that a doctor acted with subjective bad faith when conspiring to commit the substantive offense. Query: Is it possible for someone to agree in subjective bad faith to do something with subjective good faith? Is a conspiracy to do X still a conspiracy to do X when X is erroneously defined as Y? Ponder these questions at your next Zen meditation retreat but know that the Eleventh Circuit has answered yes. And here we thought defining “objective good faith” was hard!
A jury found Philip Esformes, the owner of several Miami medical facilities, guilty of health care fraud. The court sentenced him to prison. On appeal, he argued that his indictment should have been dismissed due to prosecutorial misconduct. During its investigation of Esformes, the government seized privileged documents from his attorney. For four months, the government reviewed these documents and used them to unsuccessfully convince a co-conspirator to cooperate against Esformes. Esformes filed and lost a motion to dismiss. In US v. Esformes, the Eleventh Circuit rejected the claim because Esformes failed to prove demonstrable prejudice. That is, the violation of the attorney-client privilege did not support the criminal charges, the government did not use evidence from the intrusion at trial, and the intrusion did not lead to a strategic advantage for the government. The panel refused to adopt the Ninth Circuit’s burden-shifting approach where prosecutors deliberately violated a defendant’s attorney-client privilege—that approach requires the government to make an affirmative showing of harmlessness. One noteworthy post-script: During the appeal, former President Trump commuted Esformes’ 240-month prison sentence to time-served.
Contributors: Vidhi Joshi, Sean Young, and Stephen Johnson.