United States v. Enriquez

United States v. Enriquez, ___ F.4th ___, No. 23-4424, 2025 WL 838279 (9th Cir. March 18, 2025)

Indictment for violation of the anti–kickback statute need not negate the “bona fide employment” safe harbor affirmative defense Code section 1278.5 does.

Pharmacy technician Juan Enriquez was indicted by federal prosecutors for receiving, and conspiring with his employer to receive, kickbacks in exchange for referring Medicare and Medi-Cal beneficiaries to his employer’s pharmacies in violation of the anti-kickback statute (AKS), 18 U.S.C. § 371. He moved to dismiss the indictment for lack of specificity and failure to state an offense because it did not negate the AKS safe harbor exception for a bona fide employment relationship. 42 U.S.C. § 1320a-7b(b)(3)(B). After the district court denied the motion, Enriquez pleaded guilty while reserving his right to appeal and appealed to the Ninth Circuit.

The Ninth Circuit affirmed, rejecting Enriquez’s reliance on Ruan v. United States, 597 U.S. 450 (2022). The court distinguished Ruan because it concerned a safe harbor provision in the Controlled Substances Act (CSA). The CSA prohibits the knowing or intentional manufacture, distribution, or dispensing of controlled substances, “except as authorized,” a clause that protects doctors who lawfully prescribe them for medical purposes. Thus, the CSA includes its authorization exception, mens rea clause, and prohibited act in a single provision, while the AKS has a separate subsection listing numerous safe harbor provisions distinct from the prohibited conduct.  Therefore, while the CSA exception functions as an element that the government must prove beyond a reasonable doubt, the AKS exceptions are affirmative defenses that need not be pleaded in an indictment. Thus, the government was not required to disprove, at the indictment stage, the bona fide employment relationship exception to the AKS offense that was adequately charged against Enriquez.

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson, Peder K. Batalden, and Lacey Estudillo at the appellate firm Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800 or htwatson@horvitzlevy.com.

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