United States v. Ataya

• Decision Date: 02 March 2018
• Docket Number: No. 16-2611,16-2611
• Citation: 884 F.3d 318
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Hatem ATAYA, M.D., Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

884 F.3d 318

UNITED STATES of America, Plaintiff-Appellee,

v.Hatem ATAYA, M.D., Defendant-Appellant.

No. 16-2611

United States Court of Appeals, Sixth Circuit.

Decided and Filed: March 2, 2018

COUNSEL ON BRIEF: Michael J. Stengel, Stengel Law Firm, Memphis, Tennessee, for Appellant. Patricia Gaedeke, United States Attorney's Office, Detroit, Michigan, for Appellee.

Before: MERRITT, MOORE, and BUSH, Circuit Judges.

MOORE, J., delivered the opinion of the court in which MERRITT, J., joined. BUSH, J. (pp. 326–31), delivered a separate dissenting opinion.

Hatem Ataya pleaded guilty to one count of conspiracy to commit healthcare fraud and wire fraud. His plea agreement included a waiver of his appeal rights. During his plea colloquy, Ataya acknowledged that he understood that he was waiving these rights. The district court, however, failed to comply with Federal Rule of Criminal Procedure 11(b)(1)(J), (K), (L), and (O) during the colloquy. Ataya now seeks to vacate his conviction on the grounds that his plea was unknowing due to these Rule 11 omissions, and asserts that the appellate-waiver provision in his plea agreement is unenforceable because of these same errors. For the following reasons, we hold that Ataya's appellate waiver is unenforceable, deny the government's motion to dismiss, and REVERSE his conviction. We REMAND for further proceedings consistent with this opinion.

I. BACKGROUND

In March 2016, Ataya pleaded guilty to one count of conspiracy to commit healthcare fraud and wire fraud, in violation of 18 U.S.C. § 1349. R. 145 (Plea Agreement at 1) (Page ID #979). Ataya was a doctor in Michigan who operated Hatem M. Ataya, M.D., P.C. R. 245 (Plea Hr'g Tr. at 12) (Page ID #1943). Between 2009 and 2015, Ataya would refer Medicare beneficiary patients to entities owned or controlled by one of his co-defendants, purportedly for home health and hospice services that were, at times, "neither medically necessary nor provided." Id. at 12–13 (Page ID #1943–44). These referrals enabled Ataya's co-defendant to submit false and fraudulent claims to Medicare. Id. at 13 (Page ID #1944). In exchange for his referrals, Ataya received kickbacks. Id. at 12 (Page ID #1943).

At Ataya's plea hearing, the district court failed to address a number of considerations that are required under Federal Rule of Criminal Procedure 11(b)(1). First, "the district court did not inform Ataya, as Rule 11 requires, that the plea agreement required him to pay restitution and a special assessment and to forfeit the proceeds of his fraud." United States v. Ataya , 869 F.3d 401, 402 (6th Cir. 2017) (citing Fed. R. Crim. P. 11(b)(1)(J), (K), and (L) ). Second, "neither the plea agreement nor the district court seems to have mentioned that Ataya, who became a naturalized citizen after the alleged frauds, might face denaturalization as a result of his conviction." Id. (citing Fed. R. Crim. P. 11(b)(1)(O) ). The district court did, however, review with Ataya the provision of his plea agreement in which he waived his right to appeal and confirmed that Ataya had no questions about the appellate waiver. R. 145 (Plea Agreement at 11, ¶ 9) (Page ID #989); R. 245 (Plea Hr'g Tr. at 14–15) (Page ID #1945–46). The waiver states, in part: "Defendant waives any right he may have to appeal his conviction on any grounds. ... This waiver shall not be construed to bar a claim by Defendant of ineffective assistance of counsel." R. 145 (Plea Agreement at 11–12, ¶ 9) (Page ID #989–90).

The district court subsequently sentenced Ataya to ninety-seven months' imprisonment, followed by three years' supervised release. R. 205 (J. at 2–3) (Page ID #1595–96). Ataya was also ordered to pay $4,119,711.29 in restitution, forfeit specific property, and pay a $100 special assessment. Id. at 5–6 (Page ID #1598–99).

Ataya appealed the judgment against him, and the government moved to dismiss on the basis of the appellate waiver. Reviewing the government's motion to dismiss, we held that "[w]hile we agree with the government that Ataya knowingly waived his appellate rights, we are not convinced that Ataya entered into the plea agreement as a whole knowingly and voluntarily." Ataya , 869 F.3d at 402. We instructed the parties to address two issues in their merits briefs: "whether the plea agreement and the district court adequately informed Ataya of his plea's consequences, in particular any possibility of denaturalization, and if not whether any omissions constitute plain error." Id. We thus left for future resolution the government's motion to dismiss. Id.

II. DISCUSSION

A. Waiver of the Right to Appeal

The government moved to dismiss this appeal on the basis of the appellate-waiver provision in Ataya's plea agreement. Gov't Mot. to Dismiss at 2. In response, Ataya argues that his waiver was not "knowing and intelligent," and thus it is unenforceable. Def. Resp. at 2.

"We will enforce an appeal waiver included in a plea agreement when the agreement is made knowingly and voluntarily." United States v. Morrison , 852 F.3d 488, 490 (6th Cir. 2017). Ataya "may challenge his waiver of appeal rights only ‘on the grounds that it was not knowing and voluntary, was not taken in compliance with Fed. R. Crim. P. 11, or was the product of ineffective assistance of counsel.’ " Id. (quoting United States v. Detloff , 794 F.3d 588, 592 (6th Cir. 2015) ).

We previously held that "Ataya knowingly waived his appellate rights. His plea agreement included a broad waiver provision, and the district court confirmed that Ataya understood and accepted the waiver's consequences." Ataya , 869 F.3d at 402. But, "[f]or an appellate waiver to be knowing and voluntary, the defendant ... must have entered into the plea agreement as a whole knowingly and voluntarily." Id. Because "[a] defendant decides to waive the right to challenge his conviction in light of his understanding of the conviction's key consequences[,] [i]f he misunderstands any of those consequences, that undermines the knowingness of the appellate waiver." Id.

Normally, we must first determine whether a defendant's appeal is barred by an appellate-waiver provision before considering the defendant's arguments on the merits. See, e.g. , Morrison , 852 F.3d at 490. But here Ataya's argument for why his appeal is not barred by his waiver of appeal rights is the same as why his conviction should be vacated: He did not enter into the plea agreement knowingly due to the district court's Rule 11 error. Appellant Br. at 9. Because the enforceability of the appellate waiver stands or falls with the validity of the agreement, Ataya , 869 F.3d at 402, we must consider whether the plea agreement as a whole was knowing and voluntary in order to determine whether Ataya's appeal is barred by his waiver. United States v. Portillo-Cano , 192 F.3d 1246, 1250 (9th Cir. 1999) ("[The defendant] is challenging the soundness of his plea allocution under Rule 11, which goes to the heart of whether his guilty plea, including the waiver of appeal, is enforceable. Thus we must determine whether the plea was valid in order to determine if appeal is permitted."); United States v. Rollings , 751 F.3d 1183, 1189–90 (10th Cir. 2014) (collecting cases in which courts analyzed "the totality of the plea agreement—both the appellate waiver and the plea provisions—in determining whether the plea agreement was knowing and voluntary" and collapsing the analysis of whether the appellate waiver, and thus whether the circuit court could hear the appeal on its merits, into an analysis of the merits); United States v. Puentes-Hurtado , 794 F.3d 1278, 1284 (11th Cir. 2015) (same); cf. In re Acosta , 480 F.3d 421, 422 (6th Cir. 2007) ("[I]n cases where a defendant argues that his plea was not knowing or voluntary ... it would be entirely circular for the government to argue that the defendant has waived his right to an appeal or a collateral attack when the substance of his claim challenges the very validity of the waiver itself.").

B. Standard of Review

Because Ataya "let[ ] Rule 11 error[s] pass without objection in the trial court ... [he] has the burden to satisfy the plain-error rule and ... [we] may consult the whole record when considering the effect of any error on substantial rights." United States v. Vonn , 535 U.S. 55, 58–59, 122 S.Ct. 1043, 152 L.Ed.2d 90 (2002). Plain-error review "involves four steps, or prongs." Puckett v. United States , 556 U.S. 129, 135, 129 S.Ct. 1423, 173 L.Ed.2d 266 (2009).

First, there must be an error or defect—some sort of [d]eviation from a legal rule—that has not been intentionally relinquished or abandoned, i.e., affirmatively waived, by the appellant. Second, the legal error must be clear or obvious, rather than subject to reasonable dispute. Third, the error must have affected the appellant's substantial rights, which in the ordinary case means he must demonstrate that it affected the outcome of the district court proceedings. Fourth and finally, if the above three prongs are satisfied, the court of appeals has the discretion to remedy the error—discretion which ought to be exercised only if the error seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.

Id. (alterations in original) (internal citations and quotation marks omitted). The third prong—that the error affected the defendant's substantial rights—"in most cases ... means that the error must have been prejudicial: It must have affected the outcome of the district court proceedings." United States v. Olano , 507 U.S. 725, 734, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993). "However, for a defendant seeking reversal of his conviction, plain error requires a heightened showing of prejudice."¹ United States v. Lalonde , 509 F.3d 750, 759 (6th Cir. 2007).

To "obtain[ ] relief for an unpreserved Rule 11 failing ... a defendant is obliged to show a reasonable probability that, but for the error, he would not have entered the plea."² United States v. Dominguez Benitez , 542...