U.S. v. Chaney
| Decision Date | 11 April 2019 |
| Docket Number | Nos. 17-6167/6239/6240/6314/6315/6351,s. 17-6167/6239/6240/6314/6315/6351 |
| Citation | 921 F.3d 572 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. James Alvin CHANEY, M.D. (17-6239/6351); Lesa L. Chaney (17-6167/6314); Ace Clinique of Medicine, LLC (17-6240/6315), Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Robert L. Abell, ROBERT ABELL LAW, Lexington, Kentucky, for Appellant Lesa Chaney. Christy J. Love, LOVE LAW FIRM, PLLC, London, Kentucky for Appellants James Chaney and Ace Clinique of Medicine, LLC. Amanda B. Harris, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Robert L. Abell, ROBERT ABELL LAW, Lexington, Kentucky, for Appellant Lesa Chaney. Christy J. Love, LOVE LAW FIRM, PLLC, London, Kentucky for Appellants James Chaney and Ace Clinique of Medicine, LLC. Amanda B. Harris, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., Charles P. Wisdom, Jr., Roger West, UNITED STATES ATTORNEY’S OFFICE, Lexington, Kentucky, for Appellee.
Before: COLE, Chief Judge; SUHRHEINRICH and MOORE, Circuit Judges.
James Alvin Chaney ("Ace") and Lesa Chaney owned and operated a highly profitable clinic in Hazard, Kentucky called Ace Clinique of Medicine. Eventually, the clinic attracted suspicion that it was a "pill mill": a clinic that distributes addictive prescription pills without a legitimate medical purpose. Law enforcement obtained a warrant and searched Ace Clinique’s files, where they discovered evidence of many crimes—some related to the suspected pill-mill operation, and some distinct. The Chaneys and Ace Clinique were charged, convicted by a jury, and sentenced. They raise on appeal four issues: (1) the constitutionality of the warrant that allowed the search of the clinic; (2) the sufficiency of the evidence at trial; (3) whether jury misconduct occurred and whether it warrants a new trial; and (4) whether the district court correctly calculated the guidelines range at sentencing. For the reasons discussed below, we AFFIRM the district court on all grounds.
Ace and Lesa Chaney are a married couple who owned and operated Ace Clinique of Medicine, LLC, in Hazard, Kentucky. R. 190 (Second Superseding Indictment at 1–2) (Page ID #1877–78). Ace was a licensed physician in Kentucky; Lesa was the President and Chief Executive Officer of Ace Clinique. Id.
The government started paying attention to Ace Clinique and the Chaneys in June 2010. R. 71-2 (Warrant One at 5) (Page ID #658). An anonymous caller contacted Chris Johnson, an investigator for the Kentucky Cabinet for Health and Family Services, and told him that Ace presigned prescriptions for use at Ace Clinique while absent. Id. Johnson, assisted by state law enforcement, investigated the claims. Id.
The investigation revealed that Ace was out of town on the same day that several prescriptions signed by Ace and dated that day were filled at a nearby pharmacy. Id. at 5–6 (Page ID #658–59). Officers interviewed Ace Clinique employees, who admitted to using presigned prescription blanks, and the employees showed the officers three partial prescription pads of pre-signed blanks. Id. at 6–7 (Page ID #659–60). The state officers contacted the DEA, and investigators conducted multiple interviews of people who had worked for or with Ace Clinique, as well as former patients. Id. at 21–37 (Page ID #674–91). The investigation led to warrants to search Ace Clinique and the Chaneys’ home and airplane hangar for evidence of violations of 21 U.S.C. § 841(a)(1), which proscribes knowing or intentional distribution of controlled substances, and 18 U.S.C. § 1956(h), which proscribes conspiracies to commit money laundering. R. 71-2 (Warrant One) (Page ID #653).1
Eventually, a grand jury issued a 256-count indictment that charged Ace, Lesa, and Ace Clinique with various offenses. R. 190 (Second Superseding Indictment) (Page ID #1877–1920). The charges fell into three general categories: controlled substance charges (Counts 1–64), money laundering charges (Counts 65 and 235–55), and fraud charges (Counts 66–234 and 256). See Appellee Br. at 4–6.2
The defendants sought to suppress evidence seized pursuant to the warrants, but had only partial success. R. 71 (Joint Mot. to Suppress) (Page ID #611); R. 159 (May 26, 2015 Order at 24) (Page ID #1760). The evidence seized from the airplane hangar was suppressed, as was evidence seized from the clinic that dated to any time before March 2006. R. 159 (May 26, 2015 Order at 24) (Page ID #1760). The district court rejected the defendants’ arguments that the warrants’ enumeration of "patient files" as an item to be seized was overly broad and insufficiently particular. Id. at 10 (Page ID #1746).
A 25-day trial followed. Ultimately, the jury returned a mixed verdict. R. 281 (Verdict Form) (Page ID #2954–2984); see also Appellee Br. at 4–6.
The defendants argue now that the trial was infected by jury misconduct. During the trial, an alternate juror reported to court staff some "concerns about how serious[ly] the jury was taking their duty," and the staff reported those concerns to the district court. R. 371 (Sept. 30, 2016 Op. at 18) (Page ID #5925) (alteration in original) (quoting R. 291 (Apr. 20, 2016 Tr. at 3) (Page ID #3028)). The district court told the jury that if any issues related to the jury instructions arose they should report those to the court, but the court did not tell counsel that a juror had raised concerns. Id. at 19 (Page ID #5926). After the entry of the verdict, the same alternate juror—who did not participate in deliberations—contacted defense counsel to complain of misconduct; defense counsel contacted the court, and the court conducted an in camera interview with the alternate. R. 371 (Sept. 30, 2016 Op. at 20) (Page ID #5927). The defendants moved for a new trial following the interview, but the district court denied their motions. R. 297 (Mot. for New Trial [Lesa] ) (Page ID #3246); R. 299 (Mot. for New Trial [Ace] ) (Page ID #3279); R. 371 (Sept. 30, 2016 Op. & Order) (Page ID #5908).
Prior to sentencing, the district court conducted a two-day evidentiary hearing regarding the drug quantity and loss amount that would be used to calculate the sentencing guidelines range. R. 459 (Aug. 17, 2017 Tr. at 1) (Page ID #9443); R. 460 (Aug. 18, 2017 Tr. at 1) (Page ID #9572). Put simply, the defendants argued that drug quantity and loss amount should be calculated from the counts of conviction only; the government argued that every Schedule II or III prescription drug Ace prescribed during the relevant time period and every billing to Medicaid from Ace Clinique or a pharmacy filling an Ace Clinique prescription should be used to calculate drug quantity and loss amount. R. 460 (Aug. 18, 2017 Tr. at 44–66) (Page ID #9615–37); R. 459 (Aug. 17, 2017 Tr. at 10–11, 64–66) (Page ID #9452–53, 9506–08).
The Presentence Report ("PSR") for each defendant used the government’s method to calculate a guidelines range, and the defendants objected. At sentencing, the district court refused to adopt wholesale either proposed method and instead found that 60 percent of the drugs and billings the government used to calculate drug quantity and loss amount were fraudulent. R. 508 (Sentencing Tr. at 25–29) (Page ID #10066–69). The district court varied downward from the guidelines-recommended life sentences for Ace and Lesa and sentenced Ace to a total sentence of 180 months in custody and Lesa to a total sentence of 80 months in custody. Id. at 86–87, 98–99 (Page ID #10126–27, 10138–39). Ace Clinique was sentenced to five years’ probation. Id. at 103 (Page ID #10143).
These appeals followed.
All defendants appeal the district court’s determination that the search warrants were constitutional. They focus their appeals on the warrants’ enumeration of "patient files" as an item to be seized. When considering a motion to suppress, we review a district court’s legal conclusions de novo and its findings of fact for clear error. United States v. Richards , 659 F.3d 527, 536 (6th Cir. 2011).
On September 9, 2013, the government applied for and was granted three search warrants: one to search the premises of Ace Clinique of Medicine, one to search James and Lesa Chaney’s home, and one to search their airplane hangar. R. 71-2 (Warrant One) (Page ID #653); R. 71-3 (Warrant Two) (Page ID #700); R. 71-4 (Warrant Three) (Page ID #745). All three warrants expressly incorporate a detailed affidavit describing Special Agent Thad Lambdin’s investigation of Ace Clinique and the Chaneys.
Each warrant contains a list of items to be seized. The list opens with the preamble: "The items to be seized are evidence of violations of Title 21, United States Code Sections 841(a)(1), 846 and 856, as well as Title 18 United States Code, Section 1956(h)." R. 71-2 (Warrant One at 46) (Page ID #698). The warrants then list various sorts of items, including "[p]atient files for patients." R. 71-2 (Warrant One at 47) (Page ID #699). The agents who executed the warrant to search the clinic seized nearly all the patient files. R. 317 (Mar. 23, 2016 Trial Tr. at 31) (Page ID #3839).
The defendants moved to suppress evidence seized from the searches. R. 71 (Joint Mot. to Suppress) (Page ID #611). They argued the warrants were insufficiently particular and were overbroad, among other things. R. 71-1 (Mem. in Supp. of Mot. to Suppress at 19) (Page ID #635). The district court referred the motion to a magistrate judge, who recommended suppression of evidence that existed prior to March 2006 and of evidence seized from the airplane hangar, but otherwise rejected the defendants’ arguments that the warrants’ instruction to seize "[p]atient files" was improper. R. 125 (R. & R. at 39, 46–47) (Page ID #1267, 1274–75). The defendants entered objections to the Report and Recommendation, R. 134 (Objs. to...
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