Court Opinion

ID: 9395229
Source: CourtListenerOpinion
Date Created: 2023-05-17 16:00:52.632266+00
Date Added: 2024-06-11T17:19:06.347145
License: Public Domain

United States Court of Appeals
          For the Eighth Circuit
      ___________________________

              No. 22-2864
      ___________________________

          United States of America

                    Plaintiff - Appellee

                       v.

            Abdul Naushad, M.D.

                Defendant - Appellant
      ___________________________

              No. 22-2865
      ___________________________

          United States of America

                    Plaintiff - Appellee

                       v.

               Wajiha Naushad

                  Defendant - Appellant
                ____________

  Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
                ____________

          Submitted: April 12, 2023
            Filed: May 17, 2023
               ____________
Before BENTON, GRASZ, and STRAS, Circuit Judges.
                           ____________

BENTON, Circuit Judge.

      Dr. Abdul Naushad and Wajiha A. Naushad injected their patients with
Orthovisc that was not approved by the Food and Drug Administration, while falsely
representing it as FDA-approved. A jury convicted them of healthcare fraud and
conspiracy to commit offenses against the United States. The Naushads appeal.
Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

                                         I.

       Dr. Abdul Naushad and Wajiha A. Naushad operate a collection of affiliated
pain clinics. From 2010 to 2017, they injected non-FDA-approved Orthovisc into
their patients while representing to Medicare and Medicaid that it was FDA-
approved Orthovisc. The non-approved Orthovisc costs less than half of FDA-
approved Orthovisc. The FDA and the Naushads’ own employees cautioned them
not to use the non-approved Orthovisc. Still, they continued to use it and submit
reimbursement claims for it.

       A jury convicted the Naushads of two counts: Count 1 (conspiracy to commit
offenses against the United States in violation of 18 U.S.C. § 371), and Count 24
(health care fraud in violation of 18 U.S.C. §§ 1347(a)(1) and (2)). The Naushads
appeal, alleging that the district court 1 erred by denying motions for judgment of
acquittal on both counts and committing several reversible errors that warrant a new
trial.

      1
       The Honorable E. Richard Webber, United States District Judge for the
Eastern District of Missouri.
                                   -2-
                                         II.

      The Naushads argue that the district court erred by denying their motions for
judgment of acquittal on both the conspiracy and fraud convictions. “In reviewing
a denial of a motion for a judgment of acquittal, we review the sufficiency of the
evidence de novo, evaluating the evidence in the light most favorable to the verdict
and drawing all reasonable inferences in its favor.” United States v. Almeida-
Olivas, 865 F.3d 1060, 1062 (8th Cir. 2017).

      The Naushads do not contest that the evidence establishes each statutory
element for each offense. See United States v. Golding, 972 F.3d 1002, 1005-06
(8th Cir. 2020) (reciting the elements of conspiracy to commit an offense against the
United States under 18 U.S.C. § 371 and the elements of health care fraud under 18
U.S.C. § 1347(a) the government must prove beyond a reasonable doubt). They do
argue that the jury instructions and the indictment required the government to prove
that non-approved Orthovisc is a “device” under the Federal Food, Drug, and
Cosmetic Act. See 21 U.S.C. § 321(h) (2023).

      The government counters that the classification of non-approved Orthovisc as
a device was not an element of either statute under which the Naushads were
charged. This court does not “assess sufficiency under the instructions given to the
jury. The Supreme Court has recently held that ‘a sufficiency challenge should be
assessed against the elements of the charged crime, not against the erroneously
heightened jury instructions.’” United States v. Ramos, 814 F.3d 910, 916 (8th Cir.
2016), quoting Musacchio v. United States, 577 U.S. 237, 243 (2016). “A reviewing
court’s limited determination on sufficiency review thus does not rest on how the
jury was instructed.” Musacchio, 577 U.S. at 243.

       The Musacchio case forecloses the Naushads’ argument that the jury
instructions added another element that the government was required to prove
beyond a reasonable doubt. See id. See also United States v. Gross, 23 F.4th 1048,
1053 (8th Cir. 2022) (“[W]here jury instructions ask the jury to find something not
                                         -3-
required by the statutory elements of an offense, we review the sufficiency of the
evidence based only on the statutory elements of the charged crime.”), citing
Musacchio, 577 U.S. at 243. “A defendant has no due process right . . . to proof
beyond a reasonable doubt of elements not necessary to constitute the crime charged,
including elements erroneously or unnecessarily charged to the jury.” United States
v. Inman, 558 F.3d 742, 748 (8th Cir. 2009). “If, for example, a jury is charged that
it must find three statutory elements and a fourth element not required by applicable
law, that the evidence is insufficient to prove the fourth non-statutory element does
not mean that a conviction that is properly supported under the applicable law
deprives the defendant of his right to due process.” Id.

        Musacchio left open the question “whether sufficiency of the evidence at trial
must be judged by reference to the elements charged in the indictment, even if the
indictment charges one or more elements not required by statute.” Musacchio, 577
U.S. at 244 n.2. And even though Gross and Inman focused on non-statutory
elements in the jury instructions, the Naushads may not be able to rely on non-
statutory elements in an indictment. Cf. Gross, 23 F.4th at 1053 (reviewing “the
sufficiency of the evidence based only on the statutory elements of the charged
crime” (emphasis added)); Inman, 558 F.3d at 748 (“A defendant has no due process
right . . . to proof beyond a reasonable doubt of elements not necessary to constitute
the crime charged . . . .”); United States v. Dennis, 19 F.4th 656, 671 (4th Cir. 2021)
(assessing sufficiency of the evidence against the elements of the underlying statute,
not the conjunctive indictment); United States v. Iverson, 818 F.3d 1015, 1026 (10th
Cir. 2016) (same). The Naushads offer no authority that the indictment may require
the government to prove elements of an offense beyond those required by the statute.
It is doubtful that sufficiency review exceeds the statutory elements of the offenses.

       Regardless, even if the non-statutory “device” element were an essential
element to each offense, the government presented sufficient evidence, viewed in
the light most favorable to the verdict, that non-approved Orthovisc is a device under
the FDCA. Two witnesses—Dr. Laurence Coyne, an FDA expert, and Mira
Leiwant, vice president of the non-approved Orthovisc manufacturer—testified that
                                         -4-
non-approved Orthovisc is a device. This expert testimony was sufficient to show
that non-approved Orthovisc meets the FDCA definition of device:

             The term “device” . . . means an instrument, apparatus,
      implement, machine, contrivance, implant, in vitro reagent, or other
      similar or related article, including any component, part, or accessory,
      which is—
             (A) recognized in the official National Formulary, or the United
      States Pharmacopeia, or any supplement to them,
             (B) intended for use in the diagnosis of disease or other
      conditions, or in the cure, mitigation, treatment, or prevention of
      disease, in man or other animals, or
             (C) intended to affect the structure or any function of the body of
      man or other animals, and

      which does not achieve its primary intended purposes through chemical
      action within or on the body of man . . . .

21 U.S.C. § 321(h) (2023).

      Dr. Coyne testified about a 2018 FDA Notice. See Notice of Intent to
Consider the Appropriate Classification of Hyaluronic Acid Intra-Articular
Products, 83 Fed. Reg. 64844 (Dec. 18, 2018). According to the Naushads, Dr.
Coyne’s testimony establishes that non-approved Orthovisc is a “drug,” rather than
a “device,” under the FDCA because it achieves its primary intended purpose
through chemical action. But Dr. Coyne testified that the Notice created only

      room for debate about the actual action by which hyaluronic acid
      injectables[2] achieve their effect. It did not state forthrightly that they
      act by chemical effect. If the agency had come to that conclusion, then
      these—then hyaluronic acid injectables would be—there would have
      been a proposed change to have these classified as drugs rather than
      devices.

      2
          Orthovisc is a hyaluronic acid injectable.
                                            -5-
             What the [Notice] actually stated was that, for new indications
      for use or new formulations of hyaluronic acid injectables, that the
      applicant is recommended to submit a request for a designation or a pre-
      request for designation to the Office of Combination Products. So it’s
      not a decision terming these products to be drugs.

        The Notice did not definitively conclude that Orthovisc achieves its primary
intended purpose of the treatment of pain through chemical action. The Notice, in
fact, reflects uncertainty about how hyaluronic acid products like Orthovisc work:

      Because the current published scientific literature supports that
      [hyaluronic acid] achieves its primary intended purpose of the
      treatment of pain in [osteoarthritis] of the knee through chemical action,
      and therefore, [hyaluronic acid] for this use may not meet the definition
      of a device, sponsors of [hyaluronic acid] products who intend to
      submit a [premarket approval application] or a supplement to a
      [premarket approval application] for a change in indications for use,
      formulation, or route of administration are encouraged to obtain an
      informal or formal classification and jurisdictional determination
      through a Pre-[Request for Designation] or Request for Designation,
      respectively, from FDA prior to submission.

Notice, 83 Fed. Reg. at 64845 (emphases added). The Notice thus shows that
“scientific literature supports” the finding that hyaluronic acid “achieves its primary
intended purpose . . . through multiple mechanisms . . . .” Id. at 64844 (emphases
added). Dr. Coyne’s uncontradicted testimony confirms this. The Naushads misread
the Notice and misunderstand Dr. Coyne’s testimony.

      The district court properly denied the motions for judgment of acquittal.

                                         -6-
                                          III.

       The Naushads believe a new trial is needed as a result of four other errors by
the district court that denied: FDCA-device evidence; their theory-of-defense jury
instruction; their FDCA-device argument; and their advice-of-counsel instruction.

       First, the Naushads generally requested to present expert testimony that non-
approved Orthovisc achieves its primary intended purpose through chemical action.
They, however, cannot cite any specific attempt to introduce such testimony. They
say only: “The court emphasized this ruling throughout the trial.” But Federal Rule
of Evidence 103(a) requires the district court to make a definitive ruling. See United
States v. Morales, 684 F.3d 749, 755 (8th Cir. 2012) (“The district court in this case
made no such definite ruling. . . . [Defendant’s] failure to seek a final ruling at trial
waived the issue.”). The Naushads waived this issue.

       Even if the Naushads had not waived this first issue by failing to secure a
definitive ruling, the district court did not abuse its discretion. See Davis v. White,
858 F.3d 1155, 1159 (8th Cir. 2017) (“The admission or exclusion of evidence is
reviewed for abuse of discretion; evidentiary rulings are reversed only for a clear
and prejudicial abuse of discretion.”). The district court found, as discussed in Part
II, that the Naushads had misunderstood the Notice to definitively conclude that
Orthovisc achieves its primary intended purpose through chemical action. The
district court concluded that these arguments about the Notice could mislead the
jury. See id. (“Federal Rule of Evidence 403 allows a district court to exclude
evidence ‘if its probative value is substantially outweighed by a danger of . . .
confusing the issues, misleading the jury . . . .”). The Naushads fail to identify any
probative value in communicating to the jury their misunderstanding of the Notice.
See United States v. Wilcox, 487 F.3d 1163, 1173 (8th Cir. 2007) (District courts
“may prohibit arguments that misrepresent the evidence or the law . . . or otherwise
tend to confuse the jury.”).

                                          -7-
       Second, the Naushads allege that the district court improperly struck one
sentence from their theory-of-defense instruction: “The Orthovisc delivered to [the
pain clinics] was not a ‘device.’” The district court rejected this sentence fearing it
would mislead the jury to believe it included FDA-approved Orthovisc, rather than
only the non-approved Orthovisc. This court reverses only “if the failure to properly
instruct the jury was prejudicial.” United States v. Leon, 924 F.3d 1021, 1026 (8th
Cir. 2019). See United States v. Cornelison, 717 F.3d 623, 629 (8th Cir. 2013) (An
instruction “is not necessary if it is merely duplicative of the district court’s other
instructions.”). If, as the Naushads argue in Part II, the jury instructions and
indictment required the government to prove that the non-approved Orthovisc is a
device, then this sentence from the theory-of-defense instruction duplicates other
instructions submitted to the jury. The Naushads cannot identify any prejudice in
excluding this misleading, duplicative sentence.

       Third, the Naushads argue that district court precluded them from arguing that
non-approved Orthovisc is not a device under the FDCA. To the contrary, the
district court allowed them to argue and present evidence about it (including the
Notice). The district court expressly allowed the Naushads to argue to the jury that
Dr. Coyne testified that hyaluronic acid operates through chemical action. Counsel
for the Naushads said, “We have no issue, Your Honor. As long as we can make
that argument, then we’re fine.”

        The district court did not abuse its discretion by prohibiting further argument
that misrepresents the Notice. The Naushads repeatedly claim the district court erred
by preventing them from arguing that the Notice definitively concluded that
Orthovisc is a “drug” under the FDCA. But that is not what the Notice said, and the
district court found that Orthovisc remained a “device” under the FDCA. The
district court properly “prohibit[ed] arguments that misrepresent the evidence or the
law . . . .” Wilcox, 487 F.3d at 1173.

       Fourth, the Naushads allege that the district court abused its discretion by
rejecting their advice-of-counsel instruction. “[T]o rely upon the advice of counsel
                                         -8-
in his defense, a defendant must show that he: (i) fully disclosed all material facts to
his attorney before seeking advice; and (ii) actually relied on his counsel’s advice in
the good faith belief that his conduct was legal.” United States v. Wolfe, 781 Fed.
Appx. 566, 568 (8th Cir. 2019) (alteration in original), quoting United States v. Rice,
449 F.3d 887, 897 (8th Cir. 2006). “[A] defendant is not immunized from criminal
prosecution merely because he consulted an attorney in connection with a particular
transaction.” United States v. Petters, 663 F.3d 375, 384 (8th Cir. 2011) (alteration
in original), quoting Rice, 449 F.3d at 896-97. “A district court need not give any
defense instruction where the facts do not support the defense.” Rice, 449 F.3d at
897.

       As the district court found, the Naushads did not fully disclose all material
facts to their attorney. According to testimony of that attorney, the Naushads did
not disclose:

      • their compliance officer told them to stop using the non-approved
        Orthovisc;
      • the FDA had previously seized a shipment of foreign hyaluronic
        acid injections destined for their pain clinic because they were
        unapproved;
      • the FDA sent them a “seizure” letter explaining the seizure;
      • their chief of purchasing told them not to use non-approved
        injections; and
      • the non-approved Orthovisc included on its labeling indications for
        use that were not approved by the FDA.

       The Naushads rely on United States v. DeFries, 129 F.3d 1293 (D.C. Cir.
1997), but it is not persuasive. The district court there “obviously believed that there
was at least the requisite ‘foundation’ for appellant’s advice-of-counsel defense but
was under the incorrect understanding that appellants instead were obliged to satisfy
a preponderance of the evidence standard in order to be entitled to the instruction.”
Id. at 1308. In contrast, the district court here denied the instruction because the
Naushads lacked the requisite foundation. By failing to disclose all material facts to
their attorney, the Naushads “failed to establish a factual basis necessary to support
                                          -9-
such an instruction . . . .” Rice, 449 F.3d at 897. The district court properly denied
the advice-of-counsel instruction.

      None of these claims warrant reversal or a new trial.

                                    *******

      The judgment is affirmed.
                      ______________________________

                                        -10-