## Facts

- Michael Stanley Kaplan, a Nevada urologist, owned and operated two for-profit urology clinics that performed prostate needle biopsies.
- The biopsy procedure used a needle guide attached to an ultrasound probe to stabilize the biopsy needle.
- One clinic used a reusable stainless-steel needle guide; the other used single-use plastic needle guides labeled “for single use only” and packaged as part of biopsy kits.
- After problems with the reusable guide, Kaplan directed staff at both clinics to reuse the single-use plastic guides.
- Medical assistants warned Kaplan that the guides were labeled single-use only, but Kaplan and his office manager insisted on reuse.
- Staff attempted to clean the plastic guides with pipe cleaners and disinfectant, but the pipe cleaners could not fully pass through the guides; assistants observed residual blood and fecal matter inside.
- The reuse practice continued until assistants reported Kaplan to the Nevada State Medical Board, which referred the matter to federal authorities.
- Kaplan was charged with conspiracy to commit adulteration of medical devices under the FDCA, based on causing devices to become adulterated while “held for sale” after interstate shipment.

## Issues

1. Whether a physician’s use of consumable, single-use medical devices on paying patients satisfies the FDCA requirement that the devices be “held for sale” under 21 U.S.C. § 331(k).
2. Whether sufficient evidence supported the jury’s findings that Kaplan conspired to adulterate devices and acted with intent to defraud or mislead patients, the public, the FDA, and the state medical board.
3. Whether the district court erred by declining Kaplan’s requested jury instruction that off-label use of an unadulterated device is not unlawful.
4. Whether the district court plainly erred by declining a requested “practice of medicine” exemption instruction.
5. Whether an indictment omitting an express allegation of materiality for the fraud-based felony was defective, and if so, whether any defect required reversal.
6. Whether challenges to instructions and the verdict form distinguishing misdemeanor from felony FDCA liability were preserved, and whether any unpreserved error warranted reversal.

## Decision

- The Ninth Circuit affirmed Kaplan’s conviction.
- The court held that using a consumable, single-use device on a paying patient can satisfy § 331(k)’s “held for sale” requirement because the device is effectively sold as part of the paid medical service.
- The court found sufficient evidence that Kaplan knowingly caused devices to be held under insanitary conditions and acted with intent to defraud or mislead, supporting the felony conspiracy verdict and special findings.
- The court held the refusal to give Kaplan’s proposed off-label instruction was not error because the instructions already focused the jury on adulteration and fraud, not off-label use.
- On plain-error review, the court rejected a claimed implied “practice of medicine” exemption to FDCA adulteration enforcement.
- The court held any omission of a separate “materiality” allegation in the indictment was harmless because the charging allegations adequately set out the fraud theory and informed Kaplan of the charges.
- The court ruled Kaplan waived objections to the misdemeanor/felony distinction as presented to the jury and found no plain error requiring reversal.

## Legal Principles

- Under 21 U.S.C. § 331(k), a medical device may be “held for sale” when a provider uses a consumable device in a procedure performed for payment; a retail-style transfer of the device is not required.
- A device can be deemed adulterated when it is prepared, packed, or held under insanitary conditions such that it may be contaminated or harmful.
- Evidence that a defendant knew a device was labeled single-use, directed reuse despite contamination risks, and concealed the practice from patients or regulators can support findings of intent to defraud or mislead.
- A court need not give a requested jury instruction if the charge as a whole fairly covers the defense theory and accurately states the law.
- The FDCA’s adulteration provisions are not displaced by a broad, implied “practice of medicine” exception that would bar enforcement against unsafe handling of devices in clinical settings.
- An indictment error may be harmless if the charging instrument otherwise states the offense elements with sufficient detail to give notice and protect against double jeopardy.
- Failure to timely object to jury instructions or verdict forms can result in waiver, limiting review and making reversal available only for plain error affecting substantial rights.

## Conclusion

The Ninth Circuit upheld Kaplan’s felony FDCA conspiracy conviction, ruling that single-use devices used in paid procedures can be “held for sale” under § 331(k) and that knowingly reusing such devices under contaminating conditions, coupled with deceptive concealment, supports adulteration and fraud-based liability.


United States v. Kaplan, 836 F.3d 1199 (9th Cir. 2016)