Internet Doctor Gets Extra Jail Time for Using Website–US v. Hanny

By Eric Goldman

U.S. v. Hanny, 2007 WL 4322265 (8th Cir. Dec. 12, 2007)

Given its blatant illegality, I’m a little surprised that we don’t hear more about busts of companies and individuals selling prescription drugs over the Internet. I did a quick search in Westlaw and it looks like there have been a few dozen cases, but they don’t seem to get much mass-media attention. I also wonder if the enforcement actions have succeeded in actually reducing consumers’ ability to order prescription drugs over the Internet. I don’t see as many brazen spammed come-ons as I recall getting a few years ago, but I’m not sure how generalizable my experience is.

Today’s case involves the criminal prosecution of Dr. Thomas Hanny, a Connecticut-licensed doctor who retired after 30 years as a surgeon. He then hopped on the dot-com bandwagon, writing Internet-mediated prescriptions first for Pharmacon and then, after Pharmacon was shut down by law enforcement, for Jive. Hanny initially had doubts about the propriety of this line of work and even went so far as to hire his own attorney (who also expressed doubts), but Hanny either felt the issue was colorable enough or decided to look the other way, going so far as to ignore a cease-and-desist letter from Missouri prosecutors. Collectively, these proved to be poor decisions that will cost Hanny 33 months of his liberty.

It’s a little hard to feel sorry for Hanny renting out his doctor’s license, especially given that he doubled down after the Pharmacon flameout by going to another dot-com and double doubled down by persisting after the Missouri C&D. On the other hand, Hanny did get screwed on the issue decided in this opinion by the Eighth Circuit.

The issue is the 2 level sentencing enhancement for “the distribution of any controlled substance ‘through mass-marketing by means of an interactive computer service.'” The government did not appear to introduce any evidence that Pharmacon or Jive used spamming or other advertising methods to generate traffic to their websites. Instead, the government contended that the mere existence of an e-commerce website itself constitutes mass marketing. The Eighth Circuit signs off on this interpretation, invoking some moldy-oldy analogies when it says “A public, interactive website reachable by an ordinary web search engine is, at the least, a billboard on the information superhighway.” [If it were up to me, any Cyberlaw opinion invoking a tired and misused billboard metaphor would itself be subject to a 2 level enhanced penalty]

My problem with this is that the court conflated retailing with marketing. Simply operating a retail store without marketing to generate traffic cannot qualify as “mass marketing” under any reasonable interpretation of that phrase. As a result of this confused interpretation, every Internet retailer automatically qualifies as engaging in “mass marketing” for purposes of the sentencing enhancement.