United States v. Michael Kaplan
2016 U.S. App. LEXIS 16570
| 9th Cir. | 2016Background
- Dr. Michael Kaplan, Nevada urologist, ordered staff to reuse single-use plastic needle guides for prostate biopsies after his reusable stainless-steel guide was unavailable. The plastic guides were labeled single-use only.
- Staff cleaned guides using a Cidex-based protocol intended for reusable stainless-steel guides; cleaning procedures were inconsistent, not validated for the plastic guides, and staff observed blood, scratches, and discoloration persisting after cleaning.
- Reuse continued from December 2010 into March 2011 despite objections from staff and a warning call from Dr. Golden; patients were not notified. FDA agents and the Nevada Medical Board investigated in March 2011.
- A grand jury indicted Kaplan for conspiracy to commit adulteration under the FDCA (21 U.S.C. § 331(k)) with a special finding that he acted with intent to defraud or mislead (making it a felony). After a nine-day jury trial Kaplan was convicted; he was sentenced to 48 months’ imprisonment on appeal.
- Kaplan appealed, arguing (inter alia) that § 331(k)’s “held for sale” element does not cover physician use on patients, that evidence was insufficient to prove conspiracy/intent, that certain jury instructions should have been given, that the indictment was deficient, and that sentencing was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of § 331(k) "held for sale" | Gov: § 331(k) was intended to reach distribution to the ultimate consumer (patient); physician use of consumable single-use devices on paying patients falls within “held for sale.” | Kaplan: "Held for sale" requires a sale/transfer of title; physician use is not a sale and thus outside § 331(k). | Court: "Held for sale" includes a physician’s use of a consumable single-use device on paying patients; commercial context and consumable nature bring device within § 331(k). |
| Sufficiency of evidence for conspiracy to adulterate (intent and intent to defraud) | Gov: Circumstantial and direct evidence (orders to reuse, observed contamination, lack of validated cleaning, concealment, PR statements) support agreement, overt acts, intent to adulterate, and intent to defraud. | Kaplan: He believed cleaning worked; lacked specific intent to adulterate; reuse was cost-saving/off-label medical judgment, not criminal. | Court: Evidence, viewed in govt’s favor, was sufficient to support agreement, overt acts, intent to put devices through an untested protocol that likely adulterated them, and intent to defraud (nondisclosure and misleading statements). |
| Exclusion of proposed jury instructions (off-label use; practice of medicine) | Kaplan: Jury should be instructed that off‑label use and practice‑of‑medicine protections permit reuse of devices and negate per se illegality. | Gov: Off‑label/use defenses already covered by instructions requiring a finding of adulteration and intent; requested instructions were duplicative/misleading. | Court: No error; instructions as a whole covered Kaplan’s defense; proposed instructions were unnecessary or duplicative; no prejudice shown. |
| Indictment sufficiency and materiality element | Kaplan: Indictment failed to allege intent to defraud/materiality expressly; thus inadequate notice of felony charge. | Gov: Indictment cited the felony statute and alleged facts (concealment, false statements) giving notice; any omission of the word "material" was harmless. | Court: Indictment adequate; omission of explicit "materiality" was harmless because the record uncontrovertibly established materiality. |
| Challenge to felony sentencing based on jury instructions/verdict form | Kaplan: Jury instructions/vernict form defined only a misdemeanor, so felony sentence improper. | Gov: Defense waived or approved the instructions and verdict form at trial; any objection was forfeited/waived. | Court: Kaplan waived objections by affirmatively approving instructions and verdict form; claim is forfeited. |
Key Cases Cited
- United States v. Bacto-Unidisk, 394 U.S. 784 (1969) (FDCA should be interpreted broadly to protect public health)
- United States v. Sullivan, 332 U.S. 689 (1948) (FDCA protects consumers; coverage extends until ultimate consumer)
- United States v. Evers, 643 F.2d 1043 (5th Cir.) (physician use of regulated drugs/devices can be "held for sale" in distribution process)
- United States v. Diapulse Corp. of Am., 514 F.2d 1097 (2d Cir.) (devices used in patient treatment may be considered "held for sale")
- United States v. Geborde, 278 F.3d 926 (9th Cir. 2002) ("held for sale" contemplates commercial transactions; noncommercial free distribution outside § 331(k))
- Regenerative Scis., LLC v. FDA, 741 F.3d 1314 (D.C. Cir. 2014) (FDA may regulate unsafe products used in medical procedures without improperly regulating the practice of medicine)
- Neder v. United States, 527 U.S. 1 (1999) (materiality is an element of fraud; omission of an element from an indictment is subject to harmless-error analysis)
- Jackson v. Virginia, 443 U.S. 307 (1979) (standard for reviewing sufficiency of evidence)