High Court Rules “State of Mind” Relevant in Prosecuting Prescribers under the Controlled Substance Act

Quarles & Brady LLP

Last week the Supreme Court ("the Court") released a decision holding that the Federal Controlled Substance Act (the "Act") provision that criminalizes the dispensing of a controlled substance “except as authorized” includes a mens rea requirement. The Court held that once a defendant prescriber produces evidence that he or she was authorized to dispense a controlled substance by issuing a prescription, prosecutors must prove beyond a reasonable doubt that the prescriber knew that they were acting in an unauthorized manner or intended to do so.

21 U.S.C. § 841(a) criminalizes the knowing or intentional distribution of a controlled substance, “except as authorized” by the subchapter. Per Drug Enforcement Administration (DEA) regulation, a prescription is only “authorized” when a prescriber issues it “for a legitimate medical purpose” while acting in the usual course of their professional practice. See 21 C.F.R. § 1306.04(a).

Petitioners, Ruan and Kahn, in this consolidated case were both medical doctors licensed to prescribe controlled substances. At their respective trials, the government contended that their prescriptions failed to comply with the requirement in 21 C.F.R. § 1306.04(a) that the prescriptions be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of their professional practice. The petitioners argued that their prescriptions complied with the standard and, even if that were not the case, they did not knowingly or intentionally deviate from it. Both Ruan and Kahn were ultimately separately convicted under the Federal Controlled Substances Act for prescribing in violation of 21 U.S.C. § 841. The petitioners challenged the mens rea component of the jury instructions at their trials but the convictions were affirmed by the Eleventh and Tenth Circuit respectively.

Justice Breyer, writing for the Court, held that the 21 U.S.C. § 841’s “knowing or intentionally” language applies to the concept of “authorization”. Thus, when prosecuting a prescriber for the unauthorized distribution of a controlled substance, the government must prove beyond a reasonable doubt that the prescriber “knowingly or intentionally” acted in an unauthorized manner.

In arriving at its decision, the Court noted that, as a general matter, criminal law seeks to punish the “vicious will” and, with a few exceptions, “wrongdoing must be conscious to be criminal.” Thus, criminal statutes ought to be interpreted to require the defendant to have possessed a culpable mental state, even when such statutes are silent on the matter of intent. Here, because the term “knowingly” was included in the statute, it should be read to modify other statutory terms that separate wrongful from innocent acts, such as the Act’s requirement that a prescription must be “authorized” before it is issued. Going forward, to obtain a criminal conviction under 21 U.S.C. § 841, once a defendant meets the burden of producing evidence that his or her conduct was “authorized” the government carries the burden of proving that the defendant knew or intended that his or her conduct was unauthorized. The Court remanded the respective cases for further proceedings.

This decision is a potential win for practitioners who may be facing increased scrutiny regarding their prescribing practices and is one in a long line of opioid crisis-related cases affecting numerous providers, manufacturers, and distributors of controlled substances.

It is less clear how this decision may affect corporations embroiled in opioid cases, but there is some speculation that this ruling may limit liability for corporate entities involved in opioid distribution. These entities may be able to argue persuasively that they also lacked the requisite intent and relied in good faith on third parties to ensure the prescriptions or purchases were valid. For example, they may argue that the government needs to prove that the prescribers acted with illegal intent before holding a pharmacy liable for filling allegedly illegal prescriptions.

For instance, one major national retailer won a stay on a case against it pending the Court’s decision in this case after arguing that this decision could frustrate the government’s theory of liability against the retailer.

It remains to be seen whether the Court’s holding in this case could extend to other areas of health care fraud, such as the Anti-Kickback Statute or the False Claims Act, given that such laws also require the government to prove knowledge or intent of wrongdoing. It also remains to be seen whether this might impact parallel state regulatory actions against prescribers, manufacturers, and distributors, especially if those states adopted language similar to the DEA regulation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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