Dollard v. Whisenand

Decision Date23 December 2019
Docket NumberNos. 19-1602,19-1604 & 19-1605,s. 19-1602
Citation946 F.3d 342
Parties Andrew J. DOLLARD, et al., Plaintiffs-Appellants, v. Gary WHISENAND, et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

James R. Fisher, Attorney, Miller & Fisher, Indianapolis, IN, for Plaintiffs - Appellants Andrew J. Dollard, Eric W. Ley, Larry Ley, and George Agapios

Jeffrey S. McQuary, Attorney, Brown, Tompkins, Lory & Mastrian, Indianapolis, IN, for Plaintiffs - Appellants Derek S. Tislow, Yvonne S. Morgan, and Cassy L. Bratcher, Ronald Vierk, and Luella Bangura

Shelese M. Woods, Attorney, Office of the United States Attorney, Indianapolis, IN, for Defendants - Appellees Gary Whisenand and United States of America

James S. Stephenson, Attorney, Stephenson Morow & Semler, Indianapolis, IN, for Defendants - Appellees City of Carmel, Indiana, and Aaron Dietz

Before Flaum, Rovner, and Hamilton, Circuit Judges.

Flaum, Circuit Judge.

In 2013, the Drug Enforcement Administration (DEA) began investigating Dr. Larry Ley and his opioid addiction treatment company, Drug Opiate Recovery Network, Inc. (DORN), for dealing a controlled substance. After conducting undercover surveillance, lead agent Gary Whisenand decided Dr. Ley did not have a legitimate medical purpose in prescribing Suboxone

, a drug used to treat opioid addiction.

After finding probable cause, two Indiana courts issued a series of warrants that culminated in twelve separate arrests of five medical providers (four physicians and one nurse) and seven non-provider DORN employees. In the ensuing prosecution, the Indiana courts quickly dismissed the charges against all the non-providers and the nurse. The State eventually proceeded to a bench trial against Dr. Ley, where an Indiana court ultimately acquitted him. Following this acquittal, the State dismissed the rest of the charges against the three remaining providers.

Together, DORN's providers and non-provider employees sued the DEA agent and others in federal court alleging false arrest, malicious prosecution, and civil conspiracy. The district court entered summary judgment for the defendants on all claims, holding probable cause supported the warrants used to arrest the plaintiffs. We affirm the district court's judgment as to every plaintiff except Joseph Mackey. With respect to Mackey, we reverse and remand the judgment because the undisputed facts at the summary judgment stage do not establish that officers had probable cause to arrest Mackey or even that reasonable officers could believe probable cause existed.

I. Background

Larry Ley graduated from medical school in 1971 and has worked in a variety of medical positions across central Indiana since. He is board-certified in addiction medicine by the American Society of Addiction Medicine. In 2002, he founded Living Life, an alcohol abuse treatment company. Dr. Ley ran Living Life out of four offices in central Indiana: Centerville, Noblesville, Muncie, and Kokomo.

A. DORN

Shortly after starting Living Life, Dr. Ley began prescribing Suboxone

, a drug commonly used to treat opioid addictions. In 2007, Dr. Ley expanded his practice and renamed it "DORN." He opened a new office in Carmel, and continued operations at the four existing satellite offices. Dr. Ley saw all his patients for their initial consultations at the Carmel location. He primarily worked out of that office, but he also spent time in Noblesville and Muncie.1

For follow-up appointments, patients went to the office closest to their homes. Other physicians staffed these satellite offices, including Dr. Ronald Vierk in Centerville, Dr. Luella Bangura in Kokomo, and Dr. George Agapios in Carmel. Yvonne Morgan is a registered nurse who directed the Centerville clinic and assisted the Muncie and Carmel clinics. She completed mostly clerical tasks for DORN, like answering the phone, conducting drug screens, and handing patients their prescriptions.

Several non-provider employees worked at the DORN clinics, too:

Derek Tislow was a part-time office assistant in Noblesville.
Eric Ley—Dr. Ley's son—was a part-time office assistant in Carmel and Kokomo.
Felicia Reid was a receptionist in Carmel.
Joseph Mackey was a part-time parking lot attendant in Kokomo.
Jessica Callahan was the part-time office manager in Muncie.
Cassy Bratcher was the Carmel office manager.
Andrew Dollard is an attorney and was the part-time Noblesville office manager.
B. Controlled Substance Laws

Indiana, like all other states, criminalizes dealing a controlled substance. Ind. Code § 35-48-4-2. Under state law, any "person who: (1) knowingly or intentionally ... (C) delivers; or (D) finances the delivery of; a controlled substance ... classified in schedule I, II, or III ... commits dealing ..., a level 6 felony." Id. Buprenorphine, the primary drug component in Suboxone

, is a Schedule III controlled substance. Indiana additionally proscribes conspiracies, id. § 35-41-5-2, and corrupt business influence, id. § 35-45-6-2.

Medical practitioners may prescribe controlled substances, such as buprenorphine, but their authority is limited: They must have a legitimate medical purpose to issue a reasonable quantity in the usual course of business. 856 Ind. Admin. Code 2-6-3(a). Those who prescribe controlled substances outside the scope of their practice or without a legitimate purpose are subject to sanction under Indiana criminal law. Id. ; see also Alarcon v. State , 573 N.E.2d 477, 480 (Ind. Ct. App. 1991) (holding Indiana's controlled substance laws apply to licensed physicians who issue invalid prescriptions).

Furthermore, medical doctors may not prescribe controlled substances to a person whom they have never physically examined in person and diagnosed, unless it is a cross-coverage situation (or another exception applies) where multiple professionals may see a patient during her treatment by a practice group. 844 Ind. Admin. Code 5-4-1(a). Doctors must also ordinarily sign and date prescriptions on the day they issue them. 856 Ind. Admin. Code 2-6-4(a). To be sure, a secretary (or another authorized agent) may prepare and communicate prescriptions, leaving the practitioner responsible—indeed, liable—if the prescription does not conform to law or regulation. Id. 2-6-4(b); Id. 2-6-2(b); see also Ind. Code § 16-42-19-20(b). That is, unless the secretary (or other agent) knows the prescription is invalid; then they could be culpable too. 856 Ind. Admin. Code 2-6-3(a).

The United States also regulates a physician's ability to prescribe controlled substances. Specifically, the Drug Addiction Treatment Act of 2000 (DATA) caps the number of patients a physician may treat with buprenorphine

for addiction. See generally 21 U.S.C. § 823(g)(2)(B)(iii). In the beginning, newly certified providers may treat thirty patients; after one year, providers may treat up to 100 patients. Id. If a practitioner meets certain requirements, the number is 275. Id. § 823(g)(2)(B)(iii)(II)(dd). This maximum number of patients, however, only applies in the addiction context, meaning those receiving treatment for an off-label use, like pain, do not count toward the 100. See

id. § 823(g)(1).

C. Investigation

In 2013, the Madison County Deputy Coroner contacted Officer Aaron Dietz of the Carmel Police Department to discuss the death of one of Dr. Ley's former patients.2 Officer Dietz put the Deputy Coroner in touch with a sergeant, Marc Klein, who learned that the deceased's family expressed concerns about the care Dr. Ley once provided to the deceased. The Deputy Coroner also reached out to Adam Deitz, the director of the Hamilton and Boone County Drug Task Force, regarding the death.

Both officers began investigating Dr. Ley and DORN based on this information, leading to an interview with the deceased's family. In the interview, the family explained that Dr. Ley treated the deceased for addiction over six years. They identified the following concerns they had with Dr. Ley's medical care: The deceased rarely went into the doctor's office; Dr. Ley was not personally seeing him; other family members would pick up prescriptions for him; and he always paid in cash.

Around this time, the DEA began receiving complaints about DORN, which focused on the lack of medical care at the clinics and the ease with which patients could procure prescriptions for Suboxone

without being seen by a physician. Based on these complaints and the interview with the deceased's family, the DEA opened an investigation into Dr. Ley and DORN, which was assigned to Agent Gary Whisenand.

Agent Whisenand began his inquiry by looking into past complaints about DORN from practitioners, pharmacists, and former patients.3 Most of the complaints criticized Dr. Ley and DORN for not providing any medical treatment to their patients and simply handing out prescriptions for Suboxone

. The principal concern was that Dr. Ley was admitting people into his program without first conducting a full medical evaluation. The accusations related not only to Dr. Ley but also to DORN's satellite offices and other practitioners.4

These complaints led Agent Whisenand to research DORN on INSPECT, an online database that allows law enforcement to monitor controlled substance prescriptions. The data showed that each DORN physician issued a high number of Suboxone

prescriptions in 2011, 2012, and 2013.5 Agent Whisenand consequently interviewed patients and surveilled all four DORN offices. One then-current DORN patient described the Kokomo clinic parking lot as a place where people conducted drug deals and talked about how they planned to sell their medications. The patient also noted how no doctors saw any addicts; instead, patients obtained pre-signed prescriptions from the front desk. DEA surveillance confirmed that no doctors administered any physical exams at the clinics.

D. Undercover Agents and Experts

The state prosecutor assigned to the investigation, Andre Miksha,...

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