United States v. Arny

• Decision Date: 01 August 2016
• Docket Number: No. 15-6130,15-6130
• Citation: 831 F.3d 725
• Parties: United States of America, Plaintiff-Appellant, v. Stephen C. Arny, M.D., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

831 F.3d 725

United States of America, Plaintiff-Appellant,
v.
Stephen C. Arny, M.D., Defendant-Appellee.

No. 15-6130

United States Court of Appeals, Sixth Circuit.

Argued: June 15, 2016
Decided and Filed: August 1, 2016

ARGUED: John Patrick Grant, United States Attorney's Office, Lexington, Kentucky, for Appellant. Kent Wicker, Dressman Benzinger Lavelle PSC, Louisville, Kentucky, for Appellee. ON BRIEF: John Patrick Grant, Charles P. Wisdom, Jr., United States Attorney's Office, Lexington, Kentucky, for Appellant. Kent Wicker, Dressman Benzinger Lavelle PSC, Louisville, Kentucky, for Appellee.

Before: GIBBONS, GRIFFIN, and DONALD, Circuit Judges.

OPINION

JULIA SMITH GIBBONS, Circuit Judge.

After a three-day jury trial, Stephen Arny, M.D., was convicted of conspiracy to distribute and unlawfully dispense several prescription pain medications in violation of 21 U.S.C. §§ 841(a)(1) and 846. Approximately three months after the verdict, but before sentencing, Arny secured new counsel, who later moved for a new trial pursuant to Federal Rule of Criminal Procedure 33 based on trial counsel's constitutionally ineffective assistance. The district court granted the motion based on its finding that Arny's Sixth Amendment right to counsel had been violated. The government appeals. We affirm.

I.

A federal grand jury indicted Arny for his alleged participation in a conspiracy to distribute and unlawfully dispense Oxycodone, Hydrocodone, and Xanax while employed at Paintsville Auto Accident Healthcare (“PAAH”), which was owned and operated by co-defendants Ray and Tina Stapleton. The Stapletons opened PAAH in early 2009, though neither of them were medical doctors, registered nurses, or had prior medical training. At some point, the clinic accepted only cash for its services; a patient's first visit cost $250 and subsequent visits were $200. The Stapletons used a recruiting agency to hire its first doctor, Doina Saxman, M.D., who started in March 2009. They paid Saxman $120 per hour for a forty-hour workweek and provided her with an all-expenses-paid apartment. Saxman resigned from the clinic in July 2010. Saxman was never indicted and is still practicing medicine.

After Saxman resigned, the Stapletons offered Arny the same $120 per hour salary and all-expenses-paid apartment. Arny graduated from medical school in 1979 and served as a medical doctor in the armed forces, practicing occupational medicine, aerospace medicine, and eventually pathology. By 2010, he had retired but wanted to return to work. Because he could not find work in pathology, he accepted the Stapletons' offer to serve as their interim pain medicine doctor until they could hire a Board-certified pain management doctor. Arny started at the clinic in August 2010. He inherited most of Saxman's patients, and Arny typically continued Saxman's treatment plans for returning patients, although he would sometimes decrease the dosages that she had prescribed. After only a month, Arny gave the contractually-required 90-day notice, leaving in December 2010, based on his realization that he was not a “good fit” for the job and because he felt that he could not spend enough time with his patients to adequately treat them. DE 308, Trial Tr., Page ID 2313. Arny soon returned, however, when the Stapletons offered to double his pay to $240 per hour and agreed to make changes so he could better serve his patients. He stayed until September 2011.

831 F.3d 729

In August 2012, a grand jury indicted Arny, the Stapletons, and Arny's successor, Emmanuel Acosta, M.D. The Stapletons pled guilty.¹ Arny hired attorneys Stephen Owens and Wesley Varney (“trial counsel”). More than two years later, in September 2014, Arny went to trial. The government had the burden of proving that Arny conspired with others to distribute controlled substances “outside the course of ordinary medical practice.” DE 279, Jury Instructions, Page ID 1436. “To show that drugs were distributed outside the ordinary course of medical practice,” the government was required to “prove beyond a reasonable doubt that when the drugs were distributed they were not distributed (1) for a legitimate medical purpose, and (2) in the usual course of medical practice.” Id. at 1439.

To prove these elements, the government presented the videotaped deposition of expert witness David Paul Harries, M.D., who is a physician licensed to practice medicine in Kentucky and who works at a pain management facility. Dr. Harries reviewed Arny's records and testified that Arny did not examine his patients, did not have valid doctor-patient relationships, did not have a “legitimate medical practice,” and prescribed “near toxic” doses and potentially deadly combinations of medications. DE 284-1, Harries Dep., Page ID 1579, 1630. The government also called four of Arny's patients, who testified that they were drug addicts or dealers and did not have a legitimate need for pain medication. The government provided at least one patient witness, Kimberly Preston, with immunity. “In total, the government called 15 witnesses, including the Stapletons, two detectives, and an official from the Kentucky Board of Medical Licensure (“KBML”).” United States v. Arny , 137 F.Supp.3d 981, 985 (E.D. Ky. 2015).

Arny's trial counsel called only three witnesses in his defense, including Arny, who testified that he usually continued Saxman's treatment plans for returning patients. Although he repeatedly asked trial counsel to call Saxman as a witness to explain her treatment plans, trial counsel failed to do so. In fact, Varney misrepresented to Arny that “Saxman has either a deal in place or soon will be indicted” and that “her Lexington clinic was searched.” DE 405-1, Emails, Page ID 2818–19. Although Owens was copied to this email, he never replied to it or clarified that, as he later testified, this information was false. Trial counsel eventually agreed to serve Saxman with a subpoena, but the process server reported that she was out of the country. According to Arny, trial counsel misrepresented to him that Saxman would not return to the country or be available for trial, although Saxman actually returned to the United States weeks before Arny's trial started. At an evidentiary hearing following trial, Owens explained that they failed to call Saxman to testify because, unlike Arny, she personally examined all of her patients and because her testimony could have harmed Arny's case.

Trial counsel also called William Ackerman, M.D., a specialist in pain medicine, as an expert witness for Arny. Ackerman testified that KBML rules did not require Arny to see every patient during every visit and opined that Arny was not involved in the criminal conspiracy. However, Ackerman also provided damaging testimony to Arny, such as his statement that Arny “had no standard of care” and that a doctor engaged in pain treatment should “definitely” be trained in pain management. DE 281, Ackerman Dep., Page ID

831 F.3d 730

1499–1500, 1512–13.²

The other witness called by trial counsel was Tina Stapleton's mother, Ivory Castle, who had worked at the clinic with Arny. Trial counsel had not met with Castle prior to calling her to the stand. Additionally, trial counsel failed to interview or call to the stand any of Arny's former patients. After the trial, however, Arny was able to produce six affidavits from former patients whose testimony would have helped his defense.

After the three-day trial, the jury convicted Arny, and the district court denied Arny's motion for a judgment of acquittal under Rule 29. After conviction, but prior to sentencing, Arny hired new attorneys, who filed a Rule 33 motion for a new trial based on trial counsel's ineffective assistance. After ordering supplemental briefing and conducting an evidentiary hearing, the district court issued a thorough and well-written opinion, granting Arny's motion for a new trial.

II.

A.

We review a district court's decision to grant or deny a motion for a new trial for abuse of discretion. United States v. Soto , 794 F.3d 635, 645 (6th Cir. 2015). A district court abuses its discretion “when it relies on clearly erroneous findings of fact, uses an erroneous legal standard, or improperly applies the law.” United States v. Dado , 759 F.3d 550, 559 (6th Cir. 2014) (quoting United States v. White , 492 F.3d 380, 408 (6th Cir. 2007) ).

However, we review ineffective assistance of counsel claims de novo , as they present mixed questions of law and fact. United States v. Munoz , 605 F.3d 359, 366 (6th Cir. 2010) (quoting Railey v. Webb , 540 F.3d 393, 415 (6th Cir. 2008) ). As this court has explained:

It is of no consequence that the ineffective-assistance claim in this case is presented in the atypical context of an overarching new-trial-motion determination, which ... is reviewed for abuse of discretion. This is because mixed questions of law and fact involve the application of law to fact, and an improper application of the law constitutes an abuse of discretion.

Id. (quotation marks and internal citations omitted). Although the district court was in a unique position to assess the errors of counsel and the effect of those errors on the outcome of the case, we review the district court's Sixth Amendment determination de novo .

B.

Rule 33 provides that...