Following Doctors’ Orders: SCOTUS Prescribes Subjective Scienter to Controlled Substances Act “As Authorized” Exception


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Eye on Enforcement

The U.S. Supreme Court’s decision in Ruan v. United States ups the ante for prosecutors who bring charges against doctors for unlawfully dispensing and distributing drugs under the Controlled Substances Act. Under the Supreme Court’s guidance, to secure a conviction, the government must now prove, beyond a reasonable doubt, that doctors knowingly and intentionally exceeded their authority to prescribe controlled substances. As discussed below, the Ruan decision may open the door to potential applications and defenses for healthcare professionals beyond the Controlled Substances Act. 

Factual Background

In Ruan, the Supreme Court considered a consolidated appeal of the convictions of two physicians who were accused of violating the Controlled Substances Act. Though Drs. Xiulu Ruan and Shakeel Kahn actively practiced medicine and possessed licenses permitting them to prescribe controlled substances, the government charged them with unlawfully dispensing and distributing drugs in violation of 21 U.S.C. § 841. Each physician proceeded to a jury trial.

At their separate trials, Ruan and Kahn argued that their dispensation of drugs was lawful because the drugs were dispensed pursuant to valid prescriptions and that, in any event, the doctors did not knowingly or intentionally deviate from the normal course of practice. The government argued that the doctors’ prescriptions were not written in the normal course of practice.

Additionally, in each trial, the parties disagreed on the proper mens rea to include in the court’s jury instructions. Both trial courts instructed the jury on an objective standard. After conviction, the physicians received 25-year and 20-year sentences respectively, which were affirmed on appeal by the Tenth and Eleventh Circuits. The doctors ultimately appealed to the Supreme Court.

A New Standard

Though the Supreme Court was unanimous in its decision to vacate the judgments, the justices disagreed on the correct standard to be implemented. The key to the disagreement was the “except as authorized” language in 21 U.S.C. § 841(a)(1), which states that:

[e]xcept as authorized . . . , it shall be unlawful for any person knowingly or intentionally to manufacture, distribute, dispense, or possess with the intent to manufacture, distribute, or dispense, a controlled substance.

Writing for the majority, Justice Stephen Breyer reviewed the objective standard applied by the trial courts and determined that it misstated the requirements under the Controlled Substances Act. In its place, the court applied a “knowing and intentional” mens rea to § 841’s “as authorized” exception, as well as a unique burden-shifting regime. In doing so, the Court held that:

[a]fter a defendant produces evidence that he or she is authorized to dispense controlled substances, the [g]overnment must prove beyond a reasonable doubt that the defendant knew that he or she was acting in an unauthorized manner, or intended to do so.

This new standard, however, was met with sharp criticism from the concurring judges. Characterizing the majority’s holding as “an obvious conceptual mistake,” Justice Samuel Alito’s concurrence, which reads more like a dissent, noted that the “as authorized” exception in §841(a) was not an element of the offense, but an affirmative defense, for which a defendant should have the burden of production and persuasion to prove by a preponderance of the evidence. While persuasive, Justice Alito was in the minority.

Deference to Doctors

A notable aspect of the Ruan decision was the unusual display of deference to doctors — a noticeable contrast to countless appellate court decisions upholding the government’s aggressive approach to healthcare fraud prosecutions in recent years. Specifically, the court referenced the “crucial role” that “authorization plays . . .  in separating innocent conduct — and, in the case of doctors, socially beneficial conduct — from wrongful conduct.” According to the court:

Defendants who produce evidence that they are “authorized” to dispense controlled substances are often doctors dispensing drugs via prescription. We normally would not view such dispensations as inherently illegitimate; we expect, and indeed usually want, doctors to prescribe the medications that their patients need.

Joined by Justices Clarence Thomas and Amy Coney Barrett, Justice Alito called the decision “a radical new course,” noting that:

[t]here are hints in the Court’s opinion that it has crafted a special rule for doctors . . . . But § 841(a) is not a doctor-specific provision. Section 841(a)’s provision presumably applies in the same way for all § 841(a) defendants—whether they are drug dealers accused of selling heroin or are physicians charged with abusing their authority to prescribe painkillers.

The majority’s comments in Ruan concerning the circumstances under which doctors prescribe controlled substances may signal a shift in the judiciary’s view of prosecutions against healthcare professionals involving prescriptions. Moving forward, it certainly opens the door for defense attorneys to challenge the government’s proof as to mens rea in healthcare prosecutions, including those beyond the Controlled Substances Act. Indeed, it is possible that, in prosecutions under other healthcare statutes, defense counsel will use the Ruan opinion for its burden shifting for statutory exceptions, as well as for the deference seemingly afforded to physicians in making clinical decisions.