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Dollard v. Whisenand

United States Court of Appeals, Seventh Circuit

December 23, 2019

Andrew J. Dollard, et al., Plaintiffs-Appellants,
Gary Whisenand, et al., Defendants-Appellees.

          Argued November 5, 2019

          Appeals from the United States District Court for the Southern District of Indiana, Indianapolis Division. Nos. 16-cv-01721 & 16-cv-01908 - Richard L. Young, Judge.

          Before Flaum, Rovner, and Hamilton, Circuit Judges.


         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-l(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 Dierz 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 Deirz, 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, recommended Agent Whisenand enlist undercover officers to provide a firsthand account from the insides of the clinics. On March 25, 2014, two DEA special agents posed as new patients at the Carmel clinic. Cassy Bratcher, the office manager, greeted the agents and instructed them to fill out some paperwork.[6] She then showed the agents into a conference room where they met with Dr. Ley and discussed addiction treatment for about one hour.

         Then, for another hour, Dr. Ley questioned the prospective patients about what types of drugs they were taking, in what doses, and whether they had any conditions causing pain. At the end of the second hour, Dr. Ley prescribed Suboxone for "chronic pain/pain management" and directed the agents to the front to pick up their prescriptions. DORN ultimately charged the agents a $300 program fee at their initial sessions. Dr. Ley gave them the contact number for "Andrew" and assigned the agents to the Noblesville office for all future appointments.

         The use of undercover agents for initial visits continued at the Carmel clinic, following the pattern set by the first: Dr. Ley led a two-hour group discussion; he did not conduct a physical or meet with any patient one-on-one; and each patient left the clinic with a prescription of Suboxone after paying a $300 program fee.[7] Each of the agents' prescriptions (and corresponding taper schedules) were different and individualized to them, based on their reported drug histories.

         The undercover agents reported to the various clinics for their follow-up appointments and corroborated many of their earlier findings: The appointments generally lasted a few minutes; the agents received their Suboxone prescriptions without a doctor assessing them (they submitted to urine screening[8]); and many prescriptions were pre-signed because there was often no doctor present at the facility.[9] On the prescriptions, the reasons for additional medication often changed without explanation; so, one agent received a Suboxone prescription for "dependency" even though his initial prescription was for "pain management."

         The DEA retained two medical doctors to opine on Dr. Ley and DORN. First, Dr. Tim E. King, a pain expert and practicing anesthesiologist, stated that it was unrealistic for a physician to treat 80-100 patients in a three-hour period and highly unconventional to assume that one person could perform an initial pain or addiction evaluation (not in any actual examination room) and then assign the patient to another provider for exclusive treatment. Dr. King felt like Dr. Ley was running DORN as a "pill mill" because Dr. King thought Dr. Ley was not issuing prescriptions for controlled substances in the usual course of practice or for a legitimate medical purpose.

         Second, Dr. R. Andrew Chambers, an associate professor of psychiatry at Indiana University School of Medicine and a practicing addiction treatment doctor, echoed Dr. King. Dr. Chambers believed it was unusual for Dr. Ley to care for that many patients in that short of time. Dr. Chambers, like Dr. King, found it abnormal for one doctor to conduct an initial examination and then "farm out" the subsequent ones. Dr. Chambers ultimately shared Dr. King's conclusion that DORN was an illegal dealing operation and the physicians involved "conspired to use their professional authorities and reputations, and the cover of medical practice an authority to maximize financial gains at the expense of clinical standards."[10]

         E. Probable Cause Affidavit and Arrests

         Agent Whisenand prepared a probable cause affidavit to support the arrests of all DORN staff and the search and seizure of certain property.[11] Relevant here, the allegations against the non-provider employees[12] were:

• Two undercover agents and one former patient received suspected pre-signed prescriptions (suspected because the patients did not observe doctors on the premises) for continued treatment from Jessica Callahan at the Muncie office on at least three separate occasions. Two investigators surveilled Callahan at the Muncie office two other times.
• Investigators surveilled Eric Ley or his vehicle at the Carmel and Kokomo offices eight different times. They also observed him printing prescriptions for Dr. Agapios to sign in person those days, without first seeing the actual patients on four separate occasions. The officers confirmed Ley resided with his father, Dr. Larry Ley, in Noblesville.
• Investigators and agents observed Felicia Reid or her vehicle at the Kokomo office four times. In one instance, an undercover agent received a Suboxone prescription from Reid signed by Dr. Bangura, who was in the office but did not meet with the agent. Reid also ...

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