A federal appeals court has upheld the convictions of two medical device company executives on adulteration and misbranding charges stemming from their alleged off-label promotion of a device (United States v. Facteau, No. 21-1080, 2023 U.S. App. LEXIS 33089, 2023 WL 8641918 (1st Cir. Dec. 14, 2023)).

In its 83-page opinion, the U.S. Court of Appeals for the First Circuit rejected the defendants’ argument that their misdemeanor convictions under 21 U.S.C. §333(a)(1) violated the First Amendment, holding that the executives’ promotional speech constituted evidence of the device’s intended use.

Background

William Facteau served as the CEO of Acclarent Inc., and Patrick Fabian served as the company’s vice president of sales. Acclarent developed the Relieva Stratus Microflow Spacer, a medical device intended for the treatment of chronic sinusitis.

To obtain FDA authorization to market the device, the company decided to first gain premarket notification (510(k)) clearance for the device for use as a post-surgical spacer that could maintain an opening to the ethmoid sinus and that was capable of releasing saline into the sinuses. The company determined that it would later seek a second 510(k) clearance for the use of the device to deliver Kenalog, a topical steroid used to reduce sinus inflammation, to the ethmoid sinuses.

In August 2006, the company submitted its first 510(k) for the use of the Stratus device as a spacer. The following month, the FDA cleared the Stratus device for the use indicated in the 510(k).

In April 2007, Acclarent wrote to the FDA seeking to change the device’s labeling to add an indication for use of the product “to irrigate the sinus space for diagnostic and therapeutic procedures” and to inject either saline or some “other therapeutic agent.”

In May 2007, the FDA denied the company’s request, saying that the proposed use of the device with a therapeutic agent might render the device a drug-device combination product. In any event, the agency told Acclarent, the proposed indication would constitute a significant change to the device, meaning that the company would need to submit a new 510(k) and receive FDA clearance “prior to marketing [Stratus]” with the proposed changes to its indicated use.

By November 2007, the company determined that a successful 510(k) for use of the Stratus device to deliver a drug would need to be supported by clinical studies. However, the study that Acclarent was conducting at the time had to be halted in December 2007 when the FDA determined that the study posed a significant risk to its subjects. The FDA approved a new study in August 2008, but that study was halted in July 2009 following reports of adverse events.

Acclarent never completed an FDA-approved study to support the use of the Stratus device with Kenalog, and the company never filed a 510(k) for that intended use. Nevertheless, the company proceeded with a plan to begin promoting the Stratus device for that use in the second half of 2008.

District Court Proceedings

In April 2015, a grand jury of the U.S. District Court for the District of Massachusetts returned an 18-count indictment against Facteau and Fabian that included 10 counts of marketing an adulterated and misbranded device that were directed to the alleged off-label promotion of the Stratus.

Following a 30-day trial in June and July 2016, a federal jury returned misdemeanor convictions of Facteau and Fabian on the 10 counts.

The following month, the defendants moved for judgments of acquittal, arguing that:

• their convictions were based on truthful, non-misleading speech and therefore violated their rights under the First Amendment;
• the regulatory scheme under which they were convicted was unconstitutionally vague;
• the jury was improperly instructed on the evidence that might be considered in determining a device’s intended use;
• the two defendants lacked fair notice of the case against them and therefore were denied due process, because the government proceeded on a supposedly novel prosecutorial theory and relied on internal company communications as evidence of intended use; and
• the government had provided insufficient evidence of statements promoting off-label use made by the two executives or by Acclarent employees with respect to 10 shipments of the Stratus device upon which their convictions had been based.

In September 2020, the district court rejected these and other claims and denied the defendants’ motion (United States v. Facteau, No. 15-cr-10076-ADB, 2020 U.S. Dist. LEXIS 167169, 2020 WL 5517573 (D. Mass. Sept. 14, 2020)). Later the court imposed a $1 million fine on Facteau and a $500,000 fine on Fabian. The defendants appealed to the First Circuit.

Two First Amendment Arguments

Facteau argued on appeal that the district court improperly rejected the two defendants’ proposed jury instruction that would have barred the jury from considering any truthful, non-misleading promotional speech as evidence of the intended use of the Stratus device.

He argued that:

• using promotion speech as evidence of a device’s intended use in effect criminalizes that speech — despite a growing body of law in the Second Circuit holding that truthful, non-misleading speech promoting off-label use is protected; and
• because the FDA had through guidance adopted a policy that shields certain nonpromotional speech from evidentiary use, allowing speech outside of this safe harbor to serve as evidence imposes an impermissible content-based burden on “disfavored” speech, especially off-label promotion.

Jury Instruction

The appeals court noted that, instead of providing the jury instruction about truthful, non-misleading speech that the defendants proposed, the district court had told the jury that, because “it is not illegal in and of itself for a device manufacturer to provide truthful, non-misleading statements about an off-label use,” the jury could not find a defendant guilty “based solely on truthful, non-misleading statements promoting an FDA-cleared or approved device, even if the use being promoted is not a cleared or approved use.”

Nevertheless, the district court had continued, the jurors could consider truthful, non-misleading speech promoting off-label use as “evidence” in determining “whether the government has proved each element” of the charged adulteration and misbranding offenses, “including the element of intent.”

The appellants objected to the district court’s “failure to instruct the jury that truthful speech cannot be considered as evidence of intended use.”

Use of Speech To Prove Intent

The First Circuit panel noted that the Supreme Court has held that as a general matter the First Amendment does not apply to the “evidentiary use of speech to establish the elements of a crime or to prove motive or intent” (Wisconsin v. Mitchell, 508 U.S. 476 (1993)).

Nevertheless, Facteau argued that the First Amendment does not permit a jury to consider off-label promotional speech as evidence of intended use.

He pointed to the Second Circuit’s decision in United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), and its progeny in Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196 (S.D.N.Y. 2015).

Applying Caronia

Caronia, the First Circuit panel noted, had for the first time limited the use of off-label promotional speech in the context of misbranding prosecutions — with the Second Circuit holding that the defendant’s conviction in that case violated the First Amendment because the prosecution “repeatedly argued that he engaged in criminal conduct by promoting and marketing the off-label use of … an FDA-approved drug,” leaving “the jury to understand that [the defendant’s] speech itself was the proscribed conduct.”

However, the First Circuit panel distinguished Caronia, saying that the Second Circuit’s decision was “meaningfully different” from the appeal before it.

“Unlike in Caronia,” the court said, “the government’s case here relied on a wide array of evidence, which included not only promotional speech about off-label uses but also internal communications regarding regulatory and marketing strategy and the product’s physical design.”

“It was not the case, as it was in Caronia,” the First Circuit continued, “that the government set out to punish appellants for what they said about the product; rather, what appellants said about Stratus simply shed light on how they intended it to be used.”

“The district court’s instructions made as much clear,” the court added, “specifying that ‘it is not illegal in and of itself for a device manufacturer to provide truthful, non-misleading information about an off-label use’ and that the jury may not find a defendant guilty ‘based solely on truthful, non-misleading statements promoting an FDA-cleared or approved device, even if the use being promoted is not a cleared or approved use.’”

The First Circuit also said that the government’s “successful theories” for the misbranding and adulteration charges “did not turn on whether Acclarent’s statements left Stratus without adequate directions for use, as was the case in Caronia. Though the government did present that theory of misbranding to the jury, the jury rejected that approach and instead found appellants guilty of misbranding because Stratus lacked the proper regulatory clearance — a theory of misbranding less intertwined with appellants’ speech.”

Moreover, the court noted, “unlike the defendant in Caronia, both Facteau and Fabian were high-level executives at Acclarent responsible not just for what was said about Stratus publicly but also for internal decisions on product design and regulatory strategy (in the case of Facteau), as well as sales strategy (in the case of both).”

“In short,” the appeals court concluded, “Caronia does not render appellants’ proposed instruction an accurate statement of law that properly captured the nuances of the First Amendment interests at stake in this case. Calculated to cut off any evidentiary use of off-label promotional speech, appellants’ preferred instruction would have removed this case from the teachings of Mitchell and placed it within the domain of Caronia without the facts to justify such a move. We discern no error in the district court’s refusal to take that step, nor in the instructions it ultimately handed down, which better respected the sensitive balance between protecting promotional speech without shielding such speech from evidentiary value.”

Safe Harbor Policy

Facteau’s other First Amendment argument focused on FDA guidance explaining when truthful, non-misleading speech regarding off-label uses will not be considered evidence of a product’s intended use.

He pointed to two agency guidance documents as the source of the safe harbor policy:

• the 2011 draft guidance “Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices”; and
• the 2014 revised draft guidance “Distributing Scientific and Medical Publications on Unapproved Uses — Recommended Practices.”

The argument relied in part on the Supreme Court’s decision in Sorrell v. IMS Health Inc., 564 U.S. 552 (2011), in which the Court held unconstitutional a Vermont law that required drug marketers to obtain a physician’s consent before they could use data about the physician’s prescribing practices to inform their marketing strategy but imposed no similar requirement on using the data for other purposes, such as for research or patient education.

“Facteau contends that the FDA’s safe harbor operates in similar fashion by using the content of a medical product manufacturer’s speech to determine whether that speech will bear the burden of potentially being used as evidence of intended use,” the First Circuit panel noted.

His argument, the court said, was that “although it is generally permissible for a jury to consider promotional speech as evidence of intent, any evidence so presented to the jury because it is not protected by the safe harbor would be the product of a government policy that unequally foists the burden of potential evidentiary use upon certain speech based on its content. Thus, the court should have instructed the jury to exclude all evidence derived from appellants’ promotional speech, as appellants requested.”

The appellate panel, however, rejected Facteau’s safe harbor argument, agreeing with the government that Facteau had forfeited this argument because it had not been raised in the district court.

“Although appellants made general First Amendment objections to the court’s instruction that the jurors may consider promotional speech as evidence of intent, and at times couched their arguments in terms of content-and-viewpoint-based discrimination,” the court said, “they never suggested that the FDA’s safe harbor guidance constituted such discrimination. Indeed, Facteau’s trial counsel insisted — over the government’s objection — that the court adopt an instruction modeled on one of the guidance documents, hardly suggesting that appellants viewed the safe harbor as odious to protected speech.”

In the end, the court held that, because Facteau’s safe harbor argument failed to clear the threshold hurdle of demonstrating that the safe harbor policy “burdens” protected speech within the meaning of the First Amendment, the court need not analyze whether the safe harbor policy imposed such a burden by drawing content-based distinctions or whether those distinctions would satisfy heightened scrutiny.

“Facteau’s argument fundamentally misconstrues the nature of the FDA safe harbor,” the First Circuit panel added. “Far from burdening what device manufacturers may say, the safe harbor guidance expands, rather than contracts, the domain of speech that the government shields from being used as evidence. If, as a general matter, the evidentiary use of speech discussing off-label use does not raise First Amendment concerns, then presumably a policy that limits the consideration of such speech as evidence of intended use does not raise First Amendment concerns either.”

“It is of course true that medical device sellers, aware that their speech may become evidence of intended use, will necessarily choose their words carefully when promoting their products,” the court said. “But such efforts do not amount to a ‘burden’ on free expression when it is conduct — in this case, introducing misbranded or adulterated devices into commerce — and not speech that the law aims to control.”

“We thus find no merit in Facteau’s apparent contention that, because the FDA’s safe harbor policy shields some speech from evidentiary use, the jury should have been instructed to disregard all promotional speech as evidence of intended use,” the First Circuit concluded. “And, having rejected the Caronia argument as well, we conclude that Facteau’s First Amendment arguments fail to support departing from Mitchell’s long-standing rule that using speech as evidence of intent does not implicate the First Amendment. Accordingly, neither the district court’s rejection of appellant’s proposed instruction nor its decision to instead instruct the jury that it could consider speech for evidentiary purposes was in error.”