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United States v. Vascular Solutions, Inc.

Citations: 181 F. Supp. 3d 342; 2016 U.S. Dist. LEXIS 133717; 2016 WL 5475999Docket: Case No. SA-14-CR-926-RCL

Court: District Court, W.D. Texas; January 26, 2016; Federal District Court

Narrative Opinion Summary

In this case, the defendants, sellers of the Vari-Lase medical device, faced a superseding indictment involving five counts, including misbranding under the Federal Food, Drug, and Cosmetic Act (FDCA). The device was approved by the FDA solely for superficial veins, yet the defendants failed to notify the FDA of its intended use for perforator veins, leading to inadequate labeling claims. The defendants moved to establish trial ground rules concerning First Amendment protections, arguing that truthful promotion of off-label uses should be constitutionally shielded. The court, however, applied existing legal standards, affirming that speech could establish criminal intent or motive without infringing on First Amendment rights. The court rejected the defendants' motions to exclude evidence of subjective intent, emphasizing that objective intent could be derived from external communications per 21 C.F.R. 801.4. The court also noted that while the Lanham Act requires proving misleading communication to a substantial audience, such standards do not apply to the FDCA. The defendants' motions were ultimately denied, allowing the government to use promotional speech as evidence in the conspiracy charge, while also deferring any decision on potential misbranding implications from truthful off-label promotion. The court's rulings underscore the distinction between protected speech and its admissibility as evidence of intent in regulatory and criminal contexts.

Legal Issues Addressed

Conspiracy and Overt Acts

Application: Lawful actions can still constitute an overt act in furthering a conspiracy, and promotional speech may be considered as evidence in such charges.

Reasoning: The prosecution for conspiracy does not equate to prosecuting the overt act itself, which may not be unlawful.

First Amendment and Criminal Prosecution

Application: The court found that the First Amendment does not preclude using speech as evidence to establish criminal intent or motive.

Reasoning: Legal standards indicate that the Supreme Court has affirmed that the First Amendment does not prevent the use of speech in establishing criminal intent or motive (Wisconsin v. Mitchell).

Lanham Act vs. FDCA Standards

Application: The court differentiated the requirements for proving misleading communications under the Lanham Act from those under the FDCA.

Reasoning: The Court points out that this requirement is explicit in the Lanham Act but not in the Federal Food, Drug, and Cosmetic Act (FDCA) and finds no basis for imposing the Lanham Act's standards onto the FDCA.

Misbranding Under the FDCA

Application: The defendants were charged with misbranding for failing to notify the FDA of a new intended use for the Vari-Lase device and inadequate labeling directions.

Reasoning: The misbranding allegations assert that the defendants failed to notify the FDA of a new intended use for the device involving perforator veins and that the device's labeling did not provide adequate directions for this use.

Objective Intent in Device Labeling

Application: The court discussed how 'objective intent' for device labeling can be established through external communications and marketplace representations.

Reasoning: They argue that the 'intended use' of the Vari-Lase device must be established through their external communications and marketplace representations, as defined by 21 C.F.R. 801.4, which specifies that 'objective intent' cannot be inferred from internal communications.

Off-Label Promotion and Misleading Speech

Application: The court addressed the defendants’ argument that truthful off-label promotion should be constitutionally protected unless proven misleading beyond a reasonable doubt.

Reasoning: They propose that truthful promotion of off-label uses should be constitutionally protected and set forth several specific legal standards for determining misleading speech, including that protection is maintained unless proven misleading beyond a reasonable doubt.