United States v. Chube, Charles R. ( 2008 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 06-3674 & 06-3675
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
DAVID DEMARET CHUBE II and
CHARLES RANDALL CHUBE,
Defendants-Appellants.
____________
Appeals from the United States District Court for the
Northern District of Indiana, Hammond Division.
No. 2:04-CR-00096—Rudy Lozano, Judge.
____________
ARGUED SEPTEMBER 28, 2007—DECIDED AUGUST 15, 2008
____________
Before ROVNER, WOOD, and EVANS, Circuit Judges.
WOOD, Circuit Judge. Responding to growing concerns
about widespread abuse of OxyContin, a Schedule II
narcotic opioid often prescribed to treat chronic pain, the
federal Drug Enforcement Administration (“DEA”) in 2001
launched a public campaign called the “OxyContin
Action Plan” to ferret out unlawful uses of the drug. Dr.
David Demaret Chube II and his brother Dr. Charles
Randall Chube (“Dr. David” and “Dr. Randy,” respec-
tively, or, collectively, “the Doctors”) were two of the
2 Nos. 06-3674 & 06-3675
hundreds of physicians investigated by the DEA for
possible illegitimate prescribing of the drug. On February
2, 2005, the Doctors were charged in a 33-count indict-
ment with unlawful distribution of controlled substances,
health care fraud, and conspiracy to commit each of those
offenses. After a two-week jury trial, the jury acquitted
Dr. Randy of 32 out of 33 charges, and acquitted Dr.
David of 27 out of 33 charges, rejecting both the conspiracy
charges and many distribution charges. It found Dr. Randy
guilty of one count of unlawful distribution and Dr. David
guilty of four counts of unlawful distribution and two
counts of defrauding a health benefit program.
After the sentencing hearing, at which relevant conduct
findings played a critical role in enhancing each brother’s
advisory Guidelines range, the district court sentenced
Dr. Randy to five years’ imprisonment and Dr. David to 15
years. Both men appeal. We affirm their convictions, but
we vacate both sentences and remand for resentencing.
I
The Doctors jointly owned a clinic, Great Lakes Family
Health Center, which opened its doors in 1998 in Gary,
Indiana; they opened a second office two years later in
nearby Munster, Indiana. Prior to starting the Great Lakes
clinic, the two had practiced medicine with their father
in Gary. During the years that the Doctors operated
their clinics, many patients came to them seeking relief
from severe chronic pain. Like many practitioners, the
Doctors treated some of these complaints with OxyContin,
a drug that has received praise from pain-management
organizations and specialists for its ability to alleviate
debilitating pain. From 1995 to 2001, the drug’s maker,
Nos. 06-3674 & 06-3675 3
Purdue Pharma, openly (and, we now know, falsely)
marketed OxyContin to physicians as a less-addictive
alternative to other pain-relieving drugs. Because of an
emerging realization that OxyContin was addictive and
thus prone to abuse, the drug eventually attracted the
DEA’s attention.
The DEA was led to the Doctors by one of their patients,
William Perry Mitchell, who lived in Benton Harbor,
Michigan, about 70 miles from the Great Lakes clinic in
Gary. He was one of several patients from that area.
Although the Doctors had several legitimate patients, the
proof at trial showed that others had no real medical
complaints and went to the Doctors’ clinic solely to obtain
OxyContin. Mitchell was arrested on September 17, 2001,
and charged in the U.S. District Court for the Western
District of Michigan with knowingly and intentionally
distributing OxyContin pills. Mitchell and his girlfriend
had obtained the pills in question using prescriptions
written by either Dr. David or Dr. Randy. In exchange
for a provision in his plea agreement offering a possible
reduction in his sentence, Mitchell agreed to name his
“suppliers,” to testify against them, and to bring more
witnesses to the Government who would do the same.
Mitchell fulfilled all parts of his bargain, as did the Govern-
ment.
The parties’ briefs present starkly different portraits of
the defendants and their conduct. (We note, however, that
at this stage we must view the facts in the light most
favorable to the jury’s verdict. See Jackson v. Virginia, 443
U.S. 307, 319 (1979); United States v. Thompson, 523 F.3d 806,
809-10 (7th Cir. 2008).) According to the Doctors, the
evidence demonstrated that they believed, in good faith
and with good reason, that their patients were seeking
4 Nos. 06-3674 & 06-3675
treatment for true medical complaints. The problem they
face is that the jury did not have to accept their protesta-
tions. But the Doctors also raise a legal argument: their
convictions, they argue, assess their actions by reference
to the standard of care applicable in a civil malpractice
suit, but the proper standard is the one found in the
Controlled Substances Act (“CSA”), which authorizes the
conviction of a registered practitioner only if the prescrip-
tion was written without a legitimate medical purpose
and outside the scope of professional practice. The Govern-
ment urges us to conclude that the evidence supports a
finding that the Doctors were not using their medical
licenses to treat patients with true complaints, but were
acting as common drug dealers, earning substantial
amounts of money by prescribing drugs to addicts whom
they knew had no legitimate medical complaints and
without conducting sufficient physical examinations,
diagnostic tests, or other appropriate inquiries or proce-
dures to determine that the prescriptions were war-
ranted. The jury found, the Government continues, that
this conduct violated the CSA and thus went beyond
simple malpractice. In other words, it found that the
Doctors were acting not as physicians, but as profiteering
pill-pushers.
The jury drew careful lines in its verdict. It exonerated
the Doctors on the great majority of the charges, but it did
convict Dr. Randy on one count of unlawful distribution,
and Dr. David on four counts of unlawful distribution
and two counts of health care fraud. On appeal, the
Doctors support their argument about the erroneous use
of the malpractice standard with an attack on two of the
Government’s expert witnesses, Dr. Theodore Parran and
Dr. Robert Barkin. Their testimony allegedly conflated the
Nos. 06-3674 & 06-3675 5
civil and criminal standards of care and thus created a
risk that the jury found liability not because it concluded
that the Doctors’ acts of prescribing medications fell
outside the scope of legitimate medical practice, but instead
because it thought they had been careless. The Doctors also
argue that the experts’ testimony should not have been
admitted because each impermissibly testified to legal
conclusions.
The Government’s case was not limited to these two
experts. The jury also heard from 15 patients, 11 of whom
testified that they were suffering from true medical prob-
lems when they consulted the Doctors; the other four
confessed that they fabricated their complaints solely to
obtain painkillers. All said that they reported severe
pain to the Doctors. Those who fabricated their com-
plaints said they did not tell the Doctors that they were
lying or that they were addicted to the drugs, for doing
so would have thwarted their efforts to obtain the pills. The
battleground of the litigation, then, was whether the
Doctors knew that no legitimate medical reason existed
for prescribing painkillers to these patients.
At sentencing, the district court’s relevant conduct
findings dramatically enhanced each defendant’s ad-
visory Guidelines range. Before adding the relevant
conduct, Dr. Randy was facing an advisory Guidelines
range of 0 to 6 months’ imprisonment; because this fell
within Zone A of the Guidelines grid, probation alone
would have been permissible. Dr. David was looking at
an advisory Guidelines range of 21 to 27 months in prison.
Relying primarily on spreadsheets of alleged unlawful
prescriptions compiled by the Government, which in-
cluded any prescription for a controlled substance found
in any of the 98 patient files seized in the Government’s
6 Nos. 06-3674 & 06-3675
searches of the defendants’ clinics, and on the expert
testimony of Dr. Parran, the district court found that each
defendant was responsible for all controlled sub-
stances—including (among others) OxyContin, Vicodin,
and Xanax—that either doctor had prescribed to the
patients whose charts had been admitted into evidence at
trial. The court then sentenced Dr. Randy to 60 months’
imprisonment, and Dr. David to 180 months. We discuss
below additional details of the sentencing proceedings,
where relevant.
II
We first address the arguments that the Doctors raise
against their convictions. They focus on the expert testi-
mony of two Government witnesses, Dr. Theodore Parran
and Dr. Robert Barkin. Dr. Parran, who specializes in
internal medicine and addiction medicine, evaluated all 98
patient files in the record. Based on that review, he con-
cluded that the prescribing “was not done consistent
with the usual standards of medical practice” and thus
was not done with a “legitimate medical purpose.” Dr.
Barkin was called as an expert on pharmacology. Though
not a medical doctor, Dr. Barkin received his doctorate
in clinical pharmacy in 1985 and is board-certified by
various associations for pain management and forensic
medicine. Like Dr. Parran, Dr. Barkin testified solely on
the basis of the patient charts, although he reviewed only
a selection. He, too, concluded that the prescriptions in
the charts that he reviewed were issued “[o]utside the
scope of medical practice, not for legitimate purposes.”
The Doctors offer two reasons why both experts’ testi-
mony should have been excluded in response to their
Nos. 06-3674 & 06-3675 7
motion in limine. They have an uphill battle, because our
review is only for abuse of discretion. United States v. Watts,
95 F.3d 617, 619 (7th Cir. 1996). The scope of their
motion was the subject of some dispute. The Government
describes it as a “breathtakingly broad” motion that
sought to rule out all expert testimony that would sug-
gest a violation of the standard of care applicable in civil
medical malpractice cases. This, the Government argued,
went too far. While it conceded that the expert testimony
would not be conclusive on the question of the Doctors’
criminal liability, it argued that “such evidence was
relevant to circumstantially establishing that the defen-
dants had knowingly and intentionally distributed drugs
as mere pill-pushers rather than in the course of a profes-
sional medical practice.” For their part, the Doctors pro-
test that they have at all times recognized that the experts’
testimony had some relevance. The goal of their motion
was only somehow to limit the admissibility of such
evidence when it tended to conflate the civil and criminal
standards, not to exclude it entirely. But the memorandum
supporting the defendants’ motion offers more support
for the Government’s position:
[t]he purpose of this Motion in Limine is to request that
this Court enter a preliminary ruling prohibiting the
Government from introducing any evidence at trial
that the Chubes’ treatment of patients did not conform
to the “standards of medical practice”, or any other
evidence that would be suggestive of a violation of
the civil standard of care applicable in medical mal-
practice cases.
The district court was entitled to take the Doctors at their
word. On that understanding it did not abuse its discre-
tion in denying the motion in limine.
8 Nos. 06-3674 & 06-3675
The Doctors also argue that the district court committed
reversible error when it failed to exclude or strike the
evidence during the trial, once it became clear that the
testimony was creating precisely the type of confusion that
the motion in limine sought to prevent. The net result,
they assert, was effectively to reduce the Government’s
burden from the standard of criminal intent to the negli-
gence requirement that applies to civil malpractice. Fur-
thermore, they argue, the experts provided what amounted
to impermissible legal conclusions on the ultimate question
of the Doctors’ intent. We address these two points in turn.
A
In order to support a violation of the CSA, the jury had
to find that the Doctors knowingly and intentionally
acted “outside the course of professional practice” and
without “a legitimate medical purpose.” An implementing
regulation issued under the CSA, 21 C.F.R. § 1306.04,
reiterates this standard: “A prescription for a con-
trolled substance[,] to be effective[,] must be issued for a
legitimate medical purpose by an individual practitioner
acting in the usual course of his professional practice.” See,
e.g., United States v. Bek, 493 F.3d 790, 798 (7th Cir. 2007)
(“[T]o convict . . . a practitioner registered to distribute
controlled substances[] of violating § 841(a)(1), the gov-
ernment must show that he prescribed controlled sub-
stances outside ‘the course of professional practice.’”); see
also United States v. Moore, 423 U.S. 122, 138-43 (1975). As
one court summarized it:
[T]o convict a practitioner under § 841(a), the gov-
ernment must prove (1) that the practitioner distrib-
uted controlled substances, (2) that the distribution of
Nos. 06-3674 & 06-3675 9
those controlled substances was outside the usual
course of professional practice and without a legitimate
medical purpose, and (3) that the practitioner acted
with intent to distribute the drugs and with intent to
distribute them outside the course of professional practice. In
other words, the jury must make a finding of intent not
merely with respect to distribution, but also with
respect to the doctor’s intent to act as a pusher rather
than a medical professional.
United States v. Feingold, 454 F.3d 1001, 1008 (9th Cir. 2006)
(emphasis in original).
When all is said and done, we agree with the Govern-
ment that it is impossible sensibly to discuss the question
whether a physician was acting outside the usual course of
professional practice and without a legitimate medical
purpose without mentioning the usual standard of care. It
is true that the experts did not, every time, spell out the fact
that something more than conduct below the usual stan-
dard of care was needed to show an absence of a
valid medical purpose. Even the district court was not
always as clear as it might have been (although as far as
we can tell it never misspoke within the hearing of the
jury). During a pretrial motions hearing, for example, the
district court indicated its belief that reliance on the civil
standard of care could be a permissible theory of the
case for the Government:
[B]oth sides are entitled to put in their theory of the
case. And if [the prosecution’s] theory of the case is
that these doctors have dispensed drugs improperly
because they didn’t do the proper work-up, that may
be a question of fact for the jury. You may not like
the way they do it, but I don’t know that the gov-
ernment can’t do that.
10 Nos. 06-3674 & 06-3675
The following exchange at the trial, however, was more
typical:
Q. [by the prosecution]: Doctor, would you like me to
repeat the question?
THE WITNESS: I believe I recall it pretty well. . . . It
is never appropriate to write a prescription for the
spouse of a patient when that prescription is intended
for the patient; even more so when it’s a Schedule II
narcotic. . . . It’s not consistent with the usual course of
medical practice.
Q. And that would not be for a legitimate medical
purpose, correct?
A. Correct.
THE COURT: Counsel, this is being asked regarding
standard of care, not legality?
[PROSECUTION]: Absolutely, your Honor.
Thus, what the jury heard was (1) an opinion from the
expert that no legitimate medical purpose existed for the
prescription in question; and (2) a clarification from the
court that the “standard of care” is an issue distinct from
the question of “legality.” The former was just what
defense counsel, during a sidebar immediately
preceding this exchange, had argued that Dr. Parran could
testify to, and the latter reflected the distinction that the
Doctors now claim was not properly drawn during the
trial. We are satisfied that the district court did not abuse
its discretion in permitting this line of questioning and
that a properly instructed jury could keep the relevant
concepts straight. Given this finding, we need not address
the Doctors’ failure at crucial points to object to this line
of inquiry.
Nos. 06-3674 & 06-3675 11
The Doctors also argue that the district court’s charge
to the jury was insufficient to cure the confusion created
by the experts’ testimony. Given the practical reading
we give to jury instructions, see United States v. Matthews,
505 F.3d 698, 704 (7th Cir. 2007), we find no merit in this
point either. The district court’s instructions to the jury
contained no inaccurate statements of the law. Viewing
the charge as a whole, we see several points at which
the instructions make clear that unlawful-distribution
liability cannot attach unless no legitimate medical pur-
pose existed for the prescription. The charge elaborated
on the meaning of the phrases “in the course of profes-
sional practice” and “no legitimate medical purpose”:
A controlled substance is prescribed by a physician
in the course of his professional practice, and there-
fore lawfully, if the substance is prescribed by him in
good faith in medically treating a patient.
Good faith means good intentions and the honest
exercise of good professional judgment as to a
patient’s medical needs. Good faith means an obser-
vance of conduct in accordance with what the physi-
cian should reasonably believe to be proper medical
practice.
In order to determine whether or not a prescription
or prescriptions were issued in the course of a defen-
dant physician’s professional practice, you may con-
sider all of the evidence of circumstances sur-
rounding the prescribing of the substance in question,
the statements of the parties to the prescription transac-
tions, any expert testimony as to what is the usual
course of medical practice, and any other competent
evidence bearing on the purpose for which the sub-
stances in question were prescribed.
12 Nos. 06-3674 & 06-3675
Unless you find beyond a reasonable doubt that an
act of prescribing charged in the Superceding Indict-
ment was not done in the course of his professional
practice, then you should find the defendant you are
considering not guilty of the charge you are consider-
ing.
In addition, the court permitted defense counsel to draw
out the distinctions between the civil and criminal burdens
during opening statements, cross-examinations, and
closing arguments.
Though it is true that the jury instructions did not
spell out the distinction between the civil and criminal
burdens of proof as expressly as the court did in a case
reviewed by the Fourth Circuit, see United States v. Alerre,
430 F.3d 681, 687 & n.5 (4th Cir. 2005), there is no one
right way to convey the governing standards. This is
particularly true where, as here, the defense made no
effort even to propose the desired instruction. If it were
vital to the defense that the jury receive further clarifica-
tion on this issue, then the defense should have sub-
mitted a proposed instruction. In sum, the district court did
not abuse its discretion in allowing this expert testimony.
Its instructions to the jury accurately described the gov-
erning standards, and the Doctors’ failure to make any
contemporaneous objection or to propose an alternative
or additional instruction was fatal to their claim on appeal
for reversible error.
B
The Doctors’ second challenge to the Government’s
expert witnesses is that their testimony invaded the
province of the jury by giving opinions on the ultimate
Nos. 06-3674 & 06-3675 13
legal question whether they knowingly violated the law.
After raising this objection in their motion in limine, the
Doctors did not repeat it during the trial. If the ruling on
the motion in limine was “definitive,” then this was enough
to preserve the argument. See FED. R. EVID. 103(a). Here,
the court did not signal any willingness to reconsider
its ruling during the trial, and so we apply the usual abuse
of discretion standard to this part of the case.
The question whether the district court improperly
allowed the prosecution’s experts to testify as to impermis-
sible legal conclusions boils down to an inquiry into the
court’s application of FED. R. EVID. 704, which permits an
expert to testify about an “ultimate issue to be decided by
the trier of fact,” Rule 704(a), but nonetheless prohibits
the expert from stating “an opinion or inference about
whether the defendant did or did not have the mental
state or condition constituting an element of the crime
charged or of a defense thereto,” Rule 704(b). We must
decide whether, in opining that the Doctors wrote pre-
scriptions with no legitimate medical purpose, the
experts in this case crossed the line established by Rule
704(b).
The Government argues that neither Dr. Parran nor Dr.
Barkin ever claimed to know the Doctors’ intent, and so
the opinions that they offered were not barred by Rule
704(b). Particularly since the defense raised no contempora-
neous objection, we agree with this position, though
we note that portions of Dr. Parran’s testimony come close
to a statement about the Doctors’ mental state. For exam-
ple, when testifying about various “red flags” that signal
drug-seeking behavior, Dr. Parran stated that these flags
result in a situation where a doctor is “knowingly,” rather
than “inadvertently,” “doing harm to a patient.” He then
14 Nos. 06-3674 & 06-3675
said that when enough red flags have appeared, one can
say that a doctor “knew or should have known that harm
was being done with these prescriptions.” But these
statements are phrased in general terms (“a” doctor in “x”
situation) and do not refer directly to the defendants. The
district court thus did not abuse its discretion when it
did not, on its own motion, intervene and halt this line
of inquiry.
The Doctors’ case is strikingly similar to one from the
Eighth Circuit, United States v. Katz, 445 F.3d 1023 (8th Cir.
2006). Notably, the expert whose testimony was at issue
in Katz was none other than Dr. Theodore Parran. In Katz,
the Eighth Circuit rejected the defendant’s argument that
Dr. Parran had impermissibly testified about Dr. Katz’s
criminal intent. Acknowledging that “Rule 704(b) ‘prohibits
experts from stating an opinion as to whether the defen-
dant had the requisite mental state for the crime charged,’”
the court was nevertheless satisfied that “Dr. Parran did
not testify regarding the subjective mental state of Dr. Katz
upon writing the prescriptions charged in the indictment.”
Id. at 1032. The same is true in this case, for while Dr.
Parran stated his opinion that no legitimate medical
purpose justified the prescriptions in the files he reviewed,
he repeatedly cautioned that he was looking only at the
files and that he had never had any contact with either the
patients or the Doctors. The same applies to Dr. Barkin’s
testimony.
The defense urges us to reject Katz, but we see no reason
to do so. Its reasoning is sound, and it is consistent with
similar decisions from this court. In United States v. Glover,
479 F.3d 511 (7th Cir. 2007), for example, we confronted a
challenge to testimony from a law enforcement official
that stated an opinion about the criminal nature of a
Nos. 06-3674 & 06-3675 15
defendant’s activities. We noted that this court has held
on multiple occasions that “ ‘such testimony should not
be excluded under Rule 704(b) as long as it is made
clear, either by the court expressly or in the nature of the
examination, that the opinion is based on the expert’s
knowledge of common criminal practices, and not
on some special knowledge of defendant’s mental pro-
cesses.’ ” Id. at 516 (quoting United States v. Lipscomb, 14
F.3d 1236, 1242 (7th Cir. 1994)). We also have upheld the
admission of expert testimony “to the effect that financial
transactions did not comply with regulations and appeared
to be fraudulent.” United States v. Davis, 471 F.3d 783, 789
(7th Cir. 2006) (citing United States v. Owens, 301 F.3d
521, 526-27 (7th Cir. 2002)).
We conclude that the district court did not abuse its
discretion in admitting the testimony of Drs. Parran and
Barkin. The court repeatedly told the jury that only the
court can instruct the jury on what is or is not legal, and
the expert witnesses in this case did not go so far as to
offer an opinion on the Doctors’ subjective intent.
III
We turn now to the Doctors’ challenge to their sen-
tences. They raise a single, though central, argument: that
the district court erred in its determination of relevant
conduct for purposes of U.S. Sentencing Guideline
(“U.S.S.G.”) § 1B1.3. At the sentencing hearing, the dis-
trict court concluded that although the jury had acquitted
the defendants on most of the charged offenses, the
Government had established by “clear and convincing
evidence” that the defendants were guilty of all of the
conduct described in the Presentence Investigation
16 Nos. 06-3674 & 06-3675
Reports (“PSRs”). The district court noted that the less
rigorous preponderance-of-the-evidence standard likely
would have been sufficient, but in light of lingering
doubt on this question at the time of the hearing, the
court opted for the higher clear-and-convincing threshold.
Since then, United States v. Reuter, 463 F.3d 792 (7th Cir.
2006), has made it clear that it is the preponderance
standard that applies to findings by a judge during sen-
tencing. But even when we apply the proper preponder-
ance standard to this record, we cannot conclude that the
Government’s evidence was sufficient to include as
“relevant conduct” all of the activities described in the
PSRs.
A
We begin by emphasizing that the burden in the sen-
tencing proceedings was on the Government to show that
a given prescription had no legitimate medical purpose
and was not dispensed in the usual course of medical
practice. To meet that burden, the Government produced
spreadsheets that listed every prescription for a con-
trolled substance contained in the 98 patient files in
evidence. The spreadsheets listed the patient’s name, the
date of the prescription, the type of pill prescribed, and
the dose. The probation officer used the spreadsheets and
the pill totals that they tallied for the PSRs’ relevant
conduct calculations. Those totals were as follows:
• Dr. David prescribed 30 (5 mg) Percocet pills; 50 (7.5
mg) Percocet pills; 180 MS Contin (30 mg) pills; 1,624
OxyContin (10 mg) pills; 3,930 OxyContin (20 mg)
pills; 10,255 OxyContin (40 mg) pills; 2,543
OxyContin (80 mg) pills; 3,408 Vicodin pills; 31
Nos. 06-3674 & 06-3675 17
Tussionex pills; 5,427 Xanax pills; 180 Adipex-P pills;
and 3,280 Valium pills. Converting the weights of
those pills to marijuana, as provided in U.S.S.G.
§ 2D1.1, resulted in a marijuana equivalent of
4,756.59 kilograms of marijuana.
• Dr. Randy prescribed 40 Percocet (5 mg) pills; 270 MS
Contin (30 mg) pills; 231 OxyContin (10 mg) pills;
1,697 OxyContin (20 mg) pills; 3,488 OxyContin (40
mg) pills; 6,010 OxyContin (80 mg) pills; 5,033
Vicodin pills; 24 Tussionex pills; 4,067 Xanax pills;
1,305 Adipex-P pills; 5,285 Valium pills; and 148
Triazolam pills. The marijuana equivalent of these
pills was 4,409.6 kilograms of marijuana.
After adding a two-point enhancement to each doctor’s
offense level for the use of a special skill, see § 2D1.1 app.
note 8, the probation officer assigned an offense level of
36 for each defendant. Paired with each one’s criminal
history category of I, both calculations resulted in an
advisory Guidelines range of 188 to 235 months’ incarcera-
tion. The district court adopted those calculations in full
and explained that it found both doctors responsible for all
of the prescriptions in all of the files “because the Court
finds by clear and convincing evidence that a conspiracy
existed in that the prescriptions were written in furtherance
of that conspiracy, and that both of these doctors were
members of the conspiracy.” The court found that the
Doctors jointly owned and operated their practice,
shared profits, and participated together in the treatment
of more than half of the 98 patients whose files were
examined. Each defendant therefore was held responsible
not only for the prescriptions that he wrote, but also
for those that his co-defendant wrote.
Relying on those findings, the district court sentenced Dr.
Randy to the statutory maximum, 60 months’ imprison-
18 Nos. 06-3674 & 06-3675
ment, for his single count of conviction (count 10). Dr.
David received a sentence of 188 months’ imprisonment on
count 5, a term of 60 months on each of counts 10-12, and
120 months on the health fraud counts, 20-21, all to be
served concurrently. Each doctor was also ordered to pay
a special assessment and a fine: $100 and $40,000 for
Dr. Randy; $600 and $60,000 for Dr. David. Without the
relevant conduct enhancements, Dr. Randy’s base offense
level would have been 6; the two-point enhancement for
special skill would have increased it to 8, resulting in an
advisory sentencing range of 0 to 6 months in prison. Dr.
David’s offense level before relevant conduct was 14,
which would become 16 with the special-skill enhance-
ment, for an advisory sentencing range of 21 to 27 months
in prison.
B
Section 1B1.3 defines as relevant conduct “all reasonably
foreseeable acts and omissions of others in furtherance
of the jointly undertaken criminal activity.” This includes
conduct of which the defendant was acquitted, see United
States v. Watts, 519 U.S. 148, 156 (1997), and conduct for
which he was never charged, see United States v. Anderson,
517 F.3d 953, 963 (7th Cir. 2008). Nevertheless, the relevant
conduct must be unlawful. United States v. Frith, 461 F.3d
914, 917-18 (7th Cir. 2006); United States v. Schaefer, 291 F.3d
932, 937-40 (7th Cir. 2002) (holding that it is “not enough”
to show that defendant’s conduct is “disreputable and
unethical”; to qualify as relevant conduct under the
Guidelines, the conduct must be unlawful). In calculating
relevant conduct, the sentencing court must make its
findings by a preponderance of the evidence. The sentenc-
ing record before us, however, does not distinguish
Nos. 06-3674 & 06-3675 19
between conduct that is unlawful and conduct that is
the result of mistake or inadvertence. Inattention or
negligence could lead a doctor to prescribe medication that
is “medically unnecessary”; there is nothing necessarily
criminal about such behavior. The PSRs did not offer any
explanation why the prescriptions in the 98 files were not
merely unnecessary, but indicative of illegal drug-pushing.
They simply take the data in the Government’s spread-
sheets and duplicate the figures as the findings of the
probation officer.
At several points in the proceedings, the district court
made remarks suggesting it was confused or uncertain
about the role that civil standard-of-care evidence
should play in the relevant conduct determinations. For
example, at the pretrial stage, the Government moved in
limine to prohibit the defense from introducing testimony
that other physicians had treated the Doctors’ patients in
the same way as the defendants had treated them. The
Government argued that the other doctors “are not
capable of making that assessment whether or not these
physicians were prescribing outside the scope of medical
practice and procedure” because they, unlike Drs. Parran
and Barkin, had not evaluated the patient charts. In
response, the district court asked, “doesn’t any doctor have
the right to say whether or not a patient that they’re
treating within their field, whether the doctor beforehand
was treating the patient within the standard of care?” (Em-
phasis added.) The Doctors argue that while the district
court may have been correct that any doctor is capable of
opining about whether another physician met the standard
of care when treating a particular patient, “the problem
here is that the government was discussing the criminal
standard (’outside the scope of medical practice’) and the
20 Nos. 06-3674 & 06-3675
district court responded with the civil standard (’the
standards of care’).”
During the sentencing hearing on September 6, 2006, the
district court indicated that it may have relied on devia-
tions from the civil standard of care in determining rele-
vant conduct. The court stated, for instance: “My recollec-
tion, and again, I want to take a look at the evidence, was
that some of these patients came in and gave an excuse as
to why they needed the drug, not that there was actual
necessity.” As we have already said, an absence of med-
ical necessity falls short of the criminal standard for
prescribing outside the scope of medical practice alto-
gether. We recognize the diligence of the district court in
devoting substantial time to review all of the files and
testimony from this long, complex trial. Even so, if the
court evaluated the evidence with an eye for detecting
failures to live up to the civil standard of care, then it
clearly erred. On this record, we are not convinced that the
district court properly distinguished between the prosecu-
tion’s oft-repeated statements about “medically unneces-
sary” or “careless” prescribing and the applicable crim-
inal standard of prescribing without a legitimate medical
purpose. The blurring of that line becomes even more
apparent when we examine the transcript from September
28, 2006, which was when the court articulated its
findings and announced the defendants’ sentences.
To support its relevant conduct findings, the district
court relied almost exclusively on the testimony and
conclusions of Dr. Parran. In effect, the court adopted the
position of the Government that classified every prescrip-
tion for the identified drugs in all 98 files as unlawful. The
court discussed only 10 of those 98 files at the hearing,
noting how, according to Dr. Parran’s testimony, those
Nos. 06-3674 & 06-3675 21
files offered evidence that the drugs dispensed to those
patients were not prescribed for a legitimate medical
purpose. This nearly-exclusive reliance on Dr. Parran’s
testimony is troublesome, especially given his role as a
“standard-of-care” expert.
Summing up its findings, the district court stated:
The Court has also taken the opportunity to review
each of the 98 patient files in evidence. Numerous files
contained evidence that the defendants were put on
notice by pharmacies, organizations that monitor
what prescriptions people get, and other entities
regarding the patient’s drug seeking behavior. Trou-
bling to the Court is that the records illustrate that the
defendants turned a blind eye to these notices and
continued to prescribe controlled substances to these
patients without question. Moreover, there is evidence
that nearly one-half of the 98 patients whose files were
reviewed, came from the State of Michigan. There was
evidence that sometimes two or more Michigan pa-
tients would travel together to the defendant’s [sic]
medical practice. Of these Michigan patients, most of
them were prescribed controlled substances. This is
more than coincidental and yet ignored and never
acknowledged or considered by the defendants.
This explanation is problematic for two reasons. First,
stating that “[n]umerous files” contained evidence sug-
gesting illicit prescribing is not sufficient to sweep every
pill in all 98 files into the relevant conduct calculation. The
same goes for the court’s account of Dr. Parran’s testimony,
during which it made statements such as: “Dr. Parran
found many files had red flags that were totally ignored by
the defendants”; and “According to Dr. Parran, diagnostic
work-ups were present in very few charts and he noticed
22 Nos. 06-3674 & 06-3675
that even when consultations were ordered, they were
rarely ever followed up” (emphasis added). Such statements
are too imprecise and indefinite to establish the illegality
of all the prescriptions in all of the files.
Similarly, the fact that “most” of the patients from
Michigan were prescribed controlled drugs also provides
no concrete foundation for including every pill dispensed
to a Michigan patient as relevant conduct. The trial testi-
mony revealed that many patients—from Michigan and
Indiana alike—complained of and in fact experienced true
medical problems. The court’s assumption of a lack of
legitimate medical purpose for every prescription in 98 files
after discussing only 10 files with any specificity was not
enough to support its findings.
As for the scarcity in the files of results from diagnostic
tests, such as MRIs and CAT scans, we need only repeat
the district court’s own observation that, for many
patients, such tests were ordered (sometimes repeatedly)
and were not completed; for others, records of completed
tests were in the patient’s file. Many patients testified that
they failed to comply with testing requests from the
Doctors because they could not afford the expensive tests
like MRIs. See BlueCross BlueShield Ass’n, “How Much
Things Actually Cost,” available at http://
www.bcbs.com/coverage/basics/cost (stating the “average
national cost of an MRI is nearly $2,000,” and for those
insured by BlueCross BlueShield, “your cost for an MRI” is
$378); Three Rivers Endoscopy Center, “Magnetic Reso-
nance Imaging (MRI),” http://www.gihealth.com/
html/education/mri.html (“The cost of an MRI study can
range from $400 to more than $2,000, with a typical cost
being about $800.”).
We also note that while the 98 patient files at issue
were part of the trial record, we initially did not receive
Nos. 06-3674 & 06-3675 23
them as part of the appellate record, because, it seems,
the defendants did not have access to them. We ob-
tained them (with some effort) from the Government,
which sent us six boxes. Two boxes contained the 98
files; one contained miscellaneous trial exhibits; three
contained nothing but rubber-banded stacks of prescrip-
tion forms. A prescription form contains only scanty
information, usually no more than drug name, dose,
date, doctor signature. Very little (if anything) about a
prescription form indicates whether it was written “with-
out any legitimate medical purpose.” To the extent that
the Government’s spreadsheets and relevant conduct
calculations relied on the prescription forms, a better
explanation of why any reliable information could be
gleaned from them and how it fit into the ultimate deci-
sion about relevant conduct was necessary.
The final troublesome part of the sentencing record is the
district court’s failure to address evidence tending to
suggest a legitimate medical purpose for several prescrip-
tions in the 98 files. For example, the district court specifi-
cally inquired during the first date of the sentencing
hearing “whether there was any evidence in the trial of
the Chubes’ lowering their patient’s [sic] dosages of
OxyContin.” In response to that inquiry, the defendants
produced excerpts from 19 patient charts showing reduc-
tions in each patient’s dosage. Many of those decreases
were accompanied by chart notes stating that the doctor
was weaning the patient from OxyContin in an effort to
avoid tolerance or addiction. These notes are reinforced
by the testimony of several patients, who stated that the
Doctors seemed concerned for the patients’ well-being
and at times were working to wean the patient off of a
strong drug being prescribed to avoid dependence. Any
24 Nos. 06-3674 & 06-3675
legitimate prescriptions must be deducted from the pill
totals before a final determination of relevant conduct is
possible.
IV
Thus, while we uphold the Doctors’ convictions, we
must remand for resentencing. To establish relevant
conduct, the Government bears the burden of showing
that a particular prescription was dispensed with no
legitimate medical purpose. Presenting only a spreadsheet
or a prescription form filled out by one of the defendants is
insufficient. This is not a situation, moreover, in which the
district court may rely on sampling or extrapolation. Here,
unlike other cases we have reviewed under § 841(a), the
drug quantity used at sentencing was expressly based on
the 98 patient files and the finite set of prescriptions
contained within them. These are not defendants who,
from a period of “y” to “z,” were dealing drugs on the
street to an unclear number of people on an unknown
number of occasions. Compare United States v. Noble, 299
F.3d 907, 911 (7th Cir. 2002) (“A judge has leeway to
extrapolate quantities from witnesses’ [sic] statements of
minimum sales over several occasions . . . .”); United States
v. Durham, 211 F.3d 437, 444-45 (7th Cir. 2000) (“[I]t is also
permissible for a court to take witness’ [sic] estimates of
the amount of drugs they purchased and multiply that by
the minimum quantity sold on each occasion, as well as
extrapolate drug quantities from the amount of money
used to purchase the drugs.”); United States v. Gaines,
7 F.3d 101, 103-06 (7th Cir. 1993); United States v. Martz,
964 F.2d 787, 790 (8th Cir. 1992).
In this case, a defined set of concrete data formed the
sole basis for determining the quantity of illegally pre-
Nos. 06-3674 & 06-3675 25
scribed drugs. For a prescription to be included in rele-
vant conduct, the court must evaluate the facts surround-
ing that particular prescription and explain why those facts
render it unlawful. Generalizing from “numerous” files
will not suffice. When the district court revisits relevant
conduct on remand, it must explain its findings with
respect to each patient and make a reasoned determination
whether or not the Government has carried its burden of
establishing that each prescription was dispensed outside
the scope of medical practice and without a legitimate
medical purpose.
The convictions of David Demaret Chube II and Charles
Randall Chube are AFFIRMED. Both sentences are VACATED,
and we REMAND for resentencing each defendant in
accordance with this opinion.
8-15-08