United States v. Hofstetter

Decision Date11 April 2022
Docket Numbers. 20-6245/6426/6427/6428
Citation31 F.4th 396
Parties UNITED STATES of America, Plaintiff-Appellee, v. Sylvia HOFSTETTER ; Holli Womack; Cynthia Clemons; Courtney Newman, Defendants-Appellants.
CourtU.S. Court of Appeals — Sixth Circuit

ARGUED: Loretta G. Cravens, CRAVENS LEGAL, Knoxville, Tennessee, for Appellant in 20-6245. Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio, for Appellant in 20-6426. Randall E. Reagan, THE LAW OFFICE OF RANDALL E. REAGAN, Knoxville, Tennessee, for Appellant in 20-6427. Christopher J. Oldham, Knoxville, Tennessee, for Appellant in 20-6428. Brian Samuelson, UNITED STATES ATTORNEY'S OFFICE, Knoxville, Tennessee, for Appellee. ON BRIEF: Loretta G. Cravens, CRAVENS LEGAL, Knoxville, Tennessee, for Appellant in 20-6245. Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio, for Appellant in 20-6426. Randall E. Reagan, THE LAW OFFICE OF RANDALL E. REAGAN, Knoxville, Tennessee, for Appellant in 20-6427. Christopher J. Oldham, Knoxville, Tennessee, for Appellant in 20-6428. Brian Samuelson, Tracy L. Stone, UNITED STATES ATTORNEY'S OFFICE, Knoxville, Tennessee, for Appellee.

Before: SILER, COLE, and NALBANDIAN, Circuit Judges.

COLE, Circuit Judge.

Between 2009 and 2015, Sylvia Hofstetter managed three "pain-management clinics" in Florida and Tennessee on behalf of three clinic partners. Hofstetter also co-owned and managed an additional clinic in Tennessee from 2012 to 2015 without those partners. Cynthia Clemons, Courtney Newman, and Holli Womack were employed as nurse practitioners at these clinics in 2013 and 2014. The clinics displayed numerous indicators of illegal opioid prescription practices, so the government investigated all four women and eventually indicted them on multiple charges. A four-month trial ensued, and the jury convicted each defendant of maintaining at least one drug-involved premises. Hofstetter was also found guilty of conspiring to distribute controlled substances, distributing controlled substances, and money laundering.

On appeal, the defendants challenge their maintaining-a-drug-involved-premises conviction, arguing that: (1) the underlying statute is unconstitutionally vague as applied to them; (2) the district court erred when instructing the jury; (3) insufficient evidence supported the jury's verdict; and (4) the jury's verdict was inconsistent. Hofstetter separately raises additional issues specific to her convictions, including that: (1) the district court abused its discretion when it denied three evidentiary challenges; (2) the district court erred when instructing the jury about her distribution-of-a-controlled-substance charge; and (3) she did not receive a fundamentally fair trial due to spoliation, Brady obligations, and the government's improper remarks during closing arguments. Finding no error, we affirm on all issues.

I. BACKGROUND

Beginning in 2008 or 2009, three partners ran a medical clinic in Hollywood, Florida. The Florida partners hired Sylvia Hofstetter to work at the clinic's front desk, and she soon became the office manager. One of the partners admitted that, over time, pain management dominated the clinic's business, so much so that the other practice areas dwindled, and the clinic eventually became a "pill mill." During this period, the Florida partners suspected Hofstetter of embezzling funds from the clinic, and they fired her. A few months later, following a year-long investigation, the Drug Enforcement Administration ("DEA") raided the Hollywood clinic and seized approximately 1,900 patient files. The U.S. Attorney's Office for the Southern District of Florida declined to prosecute the case due to its already high workload.

A few months before the raid, the Florida partners decided to open another pain clinic in Knoxville, Tennessee on Gallaher View Road. The partners asked a new employee, Christopher Tipton, to help them expand. They also re-hired Hofstetter and put her in charge of day-to-day operations at the Gallaher View clinic, despite her suspected history of embezzlement. The next year, in 2011, the Florida partners opened a third clinic in Lenoir City, Tennessee, and Hofstetter ran this clinic too. One of the Florida partners testified that the partners did not intend Gallaher View or Lenoir City to be legitimate clinics, and that Hofstetter was involved in discussions about their intent "to open pill mills in Tennessee." (Trial. Tr., R. 936, PageID 74947–48.)

In 2012, after receiving many complaints from neighboring businesses and pressure from their landlord, the Florida partners closed the Gallaher View clinic and transferred its patients to the Lenoir City clinic. When the Gallaher View clinic closed, Hofstetter approached Tipton about opening their own clinic together but without the Florida partners. Tipton agreed, and he and Hofstetter opened a "secret clinic" on Lovell Road.1 (Trial Tr., R. 918, PageID 64999.) To identify new patients for the Lovell Road clinic, Hofstetter instructed her staff to call patients who had been discharged from other pain clinics for exhibiting signs of drug abuse. The FBI began investigating all the Tennessee clinics in 2013 or 2014 and eventually shut down both the Lenoir City clinic and the Lovell Road clinic on March 10, 2015.

Cynthia Clemons, Courtney Newman, and Holli Womack were nurse practitioners at the Lenoir City and Lovell Road clinics in 2013 and 2014. During their tenures at the clinics, Clemons, Newman, and Womack each wrote hundreds of prescriptions, only three percent of which were for non-opioids and non-benzodiazepines.

The government filed the first indictment in this case on March 4, 2015. Over the next three years, the government filed a series of superseding indictments and eventually filed the fourth and final superseding indictment on May 1, 2018. The final 21-count indictment charged all four defendants-appellants2 —Hofstetter, Clemons, Newman, and Womack—with maintaining a drug-involved premises and conspiring to distribute and dispense controlled substances. Additionally, Clemons, Hofstetter, and Newman were charged with illegally distributing and dispensing controlled substances. Hofstetter was also charged with a RICO conspiracy, two counts of conspiring to launder money, and five counts of money laundering.

On October 21, 2019, the four defendants proceeded to a four-month jury trial. At trial, the government's witnesses included one of the Florida partners, Tipton, and the clinics’ former medical directors, employees, patients, and neighbors. Collectively, they testified that the owners and medical directors knew the clinics were not legitimate pain management clinics, as did some staff and patients. They also testified that Hofstetter prioritized profit over patient care by soliciting and accepting patients who had been discharged from other clinics for addiction-related behaviors; restricting the length of appointments to maximize fee collection; and instructing non-qualified staff to see patients and fill out patient charts.

The government's expert witnesses, including nurse practitioners, anesthesiologists, and pain-management physicians, also testified that Clemons, Newman, and Womack failed to maintain adequate patient charts, and that they prescribed opioids at extremely high doses after incomplete medical examinations and diagnoses that fell below the standard of care. Witness testimony also portrayed the clinics as displaying numerous "red flags" indicative of criminal activity. See infra parts II.C.i and II.D.

After the government closed its case-in-chief, the defendants each moved for judgments of acquittal. The district court initially reserved ruling on these motions but later denied them, finding that "the government ha[d] presented sufficient evidence for a rational jury to return a verdict of guilty [on] all counts." (Trial Tr., R. 885, PageID 60982–90.)

The jury issued its verdict on February 13, 2020. It found all four defendants guilty of maintaining a drug-involved premises at Lovell Road, and it convicted Hofstetter and Clemons of maintaining a drug-involved premises at Lenoir City. The jury also acquitted Clemons, Newman, and Womack of multiple charges, including drug conspiracy charges and distribution-of-controlled-substances charges.

Hofstetter was separately found guilty of maintaining a drug-involved premises at Gallaher View, a RICO conspiracy charge, two drug conspiracy charges, two money laundering conspiracy charges, two counts of money laundering, and one count of illegally distributing and dispensing controlled substances. She was acquitted of two distribution charges.

The defendants renewed their motions for acquittal following the verdict, and they also requested a new trial. The district court denied these motions without a hearing on September 14, 2020.

Hofstetter was sentenced to 400 months in prison, Clemons to 42 months, Newman to 40 months, and Womack to 30 months. The defendants timely appealed their judgments of conviction and sentences. This Court has appellate jurisdiction under 28 U.S.C § 1291.

II. ANALYSIS
A. The Constitutionality of 21 U.S.C. § 856(a)(1)

Clemons, Newman, and Womack superficially challenged the constitutionality of 21 U.S.C. § 856(a) —the maintaining-a-drug-involved-premises statute—in their motions for acquittal, asserting summarily that the statute is void for vagueness. Hofstetter did not raise this challenge at all before the district court. The district court ruled that the defendants had waived the argument but nevertheless analyzed its merits when the court denied the motions. The district court's merits analysis preserves this argument for appeal. See United States v. Clariot , 655 F.3d 550, 556 (6th Cir. 2011). We therefore review de novo the question of whether § 856(a) is unconstitutionally vague. United States v. Hart , 635 F.3d 850, 856 (6th Cir. 2011) (citing United States v. Suarez , 263 F.3d 468,...

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