United States v. Rattini, Case No. 1:19-cr-81

CourtUnited States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
Writing for the CourtJudge Matthew W. McFarland
PartiesUNITED STATES OF AMERICA, Plaintiff, v. ANTHONY RATTINI, et al., Defendants.
Decision Date05 March 2021
Docket NumberCase No. 1:19-cr-81

UNITED STATES OF AMERICA, Plaintiff,
v.
ANTHONY RATTINI, et al., Defendants.

Case No. 1:19-cr-81

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO WESTERN DIVISION - CINCINNATI

March 5, 2021


Judge Matthew W. McFarland

ORDER DENYING THE PHARMACY DEFENDANTS' MOTION TO DISMISS (DOCS. 72, 75) THE INDICTMENT

This case is before the Court on Defendant Devonna Miller-West's Motion to Dismiss (Doc. 72) the Indictment under Federal Rule of Criminal Procedure 8(b) on the grounds that Defendants have been impermissibly joined in one action. Defendant Samuel R. Ballengee moved to adopt Ms. Miller-West's Motion. (Doc. 75.) As the Indictment contains similar allegations regarding Ms. Miller-West and Mr. Ballengee, who both own and operate a pharmacy, Mr. Ballengee's motion is granted. For purposes of this Order, the Court collectively refers to Ms. Miller-West and Mr. Ballengee as the "Pharmacy Defendants."

Upon review, the Government has alleged a single conspiracy to violate the drug laws under 21 U.S.C. § 846. Moreover, even it had not done so, the proper remedy for improper joinder under Rule 8(b) is severance, not dismissal. Accordingly, the Pharmacy Defendants' Motion to Dismiss the Indictment is DENIED.

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FACTS

The Indictment alleges that, from January 2008 through December 2015, a pharmaceuticals distributor named Miami-Luken conspired with two pharmacists (and the pharmacies they each individually owned and operated) to distribute oxycodone and hydrocodone outside the scope of professional practice and not for a legitimate medical purpose. Defendants allegedly engaged in the conspiracy to profit from the unlawful distribution and dispensation of controlled substances, including distributing and dispensing large amounts of opioids to known pill mills, and facilitating the diversion of oxycodone and hydrocodone for illicit use.

Defendant Miami-Luken is the pharmaceuticals distributor. Now closed, it was located in Springboro, Ohio and supplied pharmaceuticals to over 200 pharmacies in Ohio, West Virginia, Kentucky, Indiana and Tennessee. During the relevant period, it generated more than $173,000,000 in consolidated sales per year, with 70% of its profits coming from wholesale distribution. Defendant Anthony Rattini was Miami-Luken's President and defendant James Barclay was its Compliance Officer.

Defendants Devonna Miller-West and Samuel R. Ballengee are both pharmacists licensed in the State of West Virginia. Ms. Miller-West owned and operated Westside Pharmacy in Oceana, West Virginia, and Mr. Ballengee owned and operated Tug Valley Pharmacy in Williamson, West Virginia. Both Westside Pharmacy and Tug Valley Pharmacy purchased controlled substances from Miami-Luken for sale to their customers.

The Controlled Substances Act (CSA) governs the manufacture, distribution, and

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dispensation of controlled substances in the United States. The DEA enforces the CSA and its implementing regulations by conducting audits and inspections, reviewing sales data and suspicious order reports, and issuing guidance to registrants as necessary.

A pharmaceuticals distributor, like Miami-Luken, must register with the DEA in order to distribute controlled substances. Medical professionals, including pharmacists, who want to distribute or dispense controlled substances are required to register with the United States Attorney General and are assigned a registration number by the DEA. All of the defendants in this case were registered to conduct their businesses.

ANALYSIS

Ms. Miller-West argues that Defendants were improperly joined in this action because the Indictment describes several conspiracies, each between an individual pharmacist and Miami-Luken; not one large general conspiracy among the group as a whole.

A. The Federal Rules of Criminal Procedure

Rule 8(b) of the Federal Rules of Criminal Procedure provides that an indictment may charge two or more defendants together "if they are alleged to have participated in the same act or transaction, or in the same series of acts or transactions, constituting an offense or offenses." Fed. R. Crim. P. 8(b). "As a general rule, especially in conspiracy cases, parties who are jointly indicted should be tried together." United States v. Dempsey, 733 F.2d 392, 398 (6th Cir. 1984). A different policy would pose problems for the criminal justice system, because "[s]eparate trials produce additional labor for judges and juries, which results from the unnecessary repetition of evidence and trial procedures." See

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United States v. Caver, 470 F.3d 220, 238 (6th Cir. 2006). Thus, under Rule 8(b), "the predominant consideration is whether joinder would serve the goals of trial economy and convenience." Swift, 809 F.2d at 322.

Severance is the proper remedy for improper joinder under Rule 8(b). United States v. Lloyd, 10 F.3d 1197, 1214 (6th Cir. 1993). Where a court permits the misjoinder of defendants, reversal is required only if the misjoinder results in actual prejudice because it "had substantial and injurious effect or influence in determining the jury's verdict." United States v. Lane, 474 U.S. 438, 449 (1986) (quoting Kotteakos, 328 U.S. at 776).

B. The Relevant Caselaw

Many courts have grappled with the question of who may be charged with participating in a conspiracy. In this case, the Pharmacy Defendants specifically rely on Kotteakos v. United States, 328 U.S. 750 (1946), Blumenthal v. United States, 332 U.S. 539 (1947), and Poliafico v. United States, 237 F.2d 97 (6th Cir. 1956). The Court discusses each of these cases in turn before turning to the parties' arguments below.

1. Kotteakos v. United States, 328 U.S. 750 (1946)

The Pharmacy Defendants argue that the conspiracy alleged in this case is most analogous to the conspiracy in Kotteakos. In that case, "[t]he gist of the conspiracy, as alleged, was that the defendants had sought to induce various financial institutions to grant credit, with the intent that the loans or advances would then be offered to the Federal Housing Administration for insurance upon applications containing false and fraudulent information." Kotteakos, 328 U.S. at 752.

The indictment named thirty-two defendants, but the central figure was the broker

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who placed loans under the National Housing Act. The broker's alleged co-conspirators were applicants who lied about the purpose of their loans and applied for loans using fictitious names. The broker knew, at the time of their placement, that the loans were not going to be used for their stated purposes. The evidence did not show any connection between the loan applicants, other than that they used the same broker.

It was undisputed in Kotteakos that the evidence established several conspiracies. The only question was whether—applying the "harmless error" statute—defendants suffered substantial prejudice from being tried for engaging in a single general conspiracy. Id. The Supreme Court held that they did.

The Supreme Court began its analysis with Berger v. United States, 295 U.S. 78 (1935). In Berger, four defendants were charged with engaging in a single conspiracy to pass counterfeit money. At trial, however, the evidence established two separate conspiracies involving a common defendant, not the single conspiracy alleged in the indictment. Despite this error, the defendants' substantial rights were not prejudiced. The Court found the evidence generally conformed to the conspiracy charge—the government proved two conspiracies to pass counterfeit money—and the improper charge did not prejudice the defendants' preparation for trial.

In contrast, in Kotteakos the Supreme Court concluded that charging a single conspiracy had prejudiced the defendants' substantial rights. The "essential difference" between the two cases was the number of conspiracies and defendants involved. Kotteakos, 328 U.S. at 766. In Berger, where no prejudice was found, there were two conspiracies involving four individuals. In Kotteakos, eight separate conspiracies were

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shown to have existed involving, at the outset, thirty-two individuals. The Supreme Court explained, "the burden of defense to a defendant, connected with one or a few of so many distinct transactions, is vastly different not only in preparation for trial, but also in looking out for and securing safeguard against evidence affecting other defendants, to prevent its transference as 'harmless error' or by psychological effect, in spite of instructions for keeping separate transactions separate." Kotteakos, 328 U.S. at 766-67.

The Supreme Court rejected the government's argument that any error was harmless because the evidence was sufficient to convict each defendant, even if they had been separately tried. It noted that the trial court had instructed the jury that the evidence must establish the defendants' participation in only one conspiracy—"You cannot divide it up." Id. at 767. The trial court's instruction was based on its erroneous view that one conspiracy could be established by showing each loan applicant was linked to the broker and the "similarity of purpose presented in various applications for loans." Id. at 768-69. This view confused "the common purpose of a single enterprise with the several, though similar, purposes of numerous separate adventures of like character." Id. at 769.

Due to the complexity of the evidence and trial court's erroneous instructions, the Supreme Court could not assume the jury understood the law well enough to disregard the court's charge and find the defendants guilty of the separate conspiracies in which they participated. The defendants' substantial rights were therefore prejudiced—namely, "the right not to be tried en masse for the conglomeration of distinct and separate offenses committed by others as shown by this record." Id. at 775.

When considering the import of Kotteakos in this case, the Court is mindful that the

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parties did not dispute that the government's evidence proved...

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