Wednesday, May 12, 2021

AUSAs lacked standing to complain about court's comments on their credibility; US Attorney's office's appeal of results of investigation into its office dismissed for lack of jurisdiction and prudential ripeness

United States v. Carter, David Paxton Zabel; Sheri Catania; Kim I. Flannigan; Terra D. Morehead, Objectors – Appellants, v. Federal Public Defender, Movant - Appellee, 2021 WL 1743232 (10th Cir., May 4, 2021) (KS): What’s the matter with Kansas you may be asking. Here, the district court made statements reflecting “negatively” on four Assistant United States Attorneys, who testified in court about practices in their office. They appealed, arguing that the district court deprived them of due process. The panel dismissed their appeal for lack of standing. Specifically they did not have a “particularized and significant stake in the appeal.” The district court’s comments arose from a criminal case, in which the government investigated and then later charged 6 people in a drug conspiracy among detainees and employees at a Kansas detention facility. After the charges were filed the district court found out a prosecutor seized recordings of conversations between detainees and their attorneys. These included soundless videos of meetings and audio recordings of telephone calls. A lengthy investigation with a special master ensued which included an examination into the actions and conduct of the USAO and staff in “procuring, obtaining and using video and audio recordings of attorney-client meetings and phone calls.” The four AUSAs testified as fact witnesses in this investigation. From this investigation the district court concluded that all four were known to engage in “heavy-handed, unfair prosecutorial practices,” (like late disclosure of Giglio and Brady information), abusive charging practices in drug cases and “bait and switch” § 5K1.1 agreements. The court also found much of their testimony regarding what they knew about the seized recordings not credible. The panel said the court’s statements did not trigger appellate standing for these nonparty prosecutors. The four were not “directly aggrieved” by these statements. An adverse credibility finding is not a finding of misconduct. To have standing, a non party attorney must show the court ordered direct restrictions on the attorney. Here, the court did not disqualify them or impose sanctions or make a finding of misconduct. Even a referral for discipline does not confer standing. United States v. Carter, Federal Public Defender, Movant-Appellee, 2021 WL 1743235 (10th Cir., May 4, 2021) (KS): This case relates to the one above. Using Fed.R.Crim.P. 41(g), our fearless FPD colleagues in Kansas moved for the return of the recordings containing attorney-client communications that were seized by the United States Attorney’s Office. That motion lead to the investigation referenced above. In this appeal the USAO argued the investigation into its practices and the office was unlawful, the district court’s statements and findings regarding possible Sixth Amendment violations were incorrect, that court’s contempt findings were clearly erroneous and it also erred in stating it intended to be assigned to the post-conviction cases caused by the investigation’s results. The panel dismissed the USAO’s appeal for lack of jurisdiction and prudential ripeness. Just because the district court’s adverse statements and contempt findings may bolster more than 100 post conviction claims does not mean the USAO was “aggrieved” by those findings as a matter of law. The panel explained that the district court’s statements and findings do not necessarily mean the USAO will be precluded by collateral estoppel from relitigating the same issues in a 28 U.S.C. § 2255 context. And even if the court does rely on its earlier statements and findings in ruling on the § 2255 motions, the USAO can appeal those rulings. The court’s contempt findings were not part of its judgment, nor necessary for its final decision, in which it dismissed Carter’s indictment and ordered that the USAO give the FPD the recordings. Thus, the USAO does not have standing to challenge them in this appeal. Regarding possible Sixth Amendment violations by the USAO, the district court did not make a final determination on whether there were actual violations. It said it would assess each case individually and decide whether that particular person’s Sixth Amendment right was violated. Similarly, its comment that it intended to take on the post conviction cases, was just a comment. The USAO can challenge the reassignments in those cases, if they take place. Finally, the USAO complaint that the investigation was unlawful is moot. Even it had been improper, there is no “effectual relief” the panel could grant.

Court emphasizes need to preserve issues in affirming pharmacist's convictions

United States v. Otuonye, 2021 WL 1743226 (10th Cir., May 4, 2021) (KS): Otuonye was a pharmacist that filled prescriptions at his pharmacy, Neighborhood Pharmacy, written by Dr. Henson for opioids and other control substances. The DEA investigated and Otuonye was indicted for conspiring to unlawfully distribute controlled substances; unlawfully distributing controlled substances; and Medicare and Medicad fraud. A jury convicted him on all four counts and the district court sentenced him to 150 months in prison. On appeal he challenged the admission of certain evidence, the sufficiency of the evidence and the unreasonableness of the court’s sentencing procedure. The panel rejected all of his arguments and stressed the importance of making precise objections and specific arguments in the district court in order to preserve an issue for appeal. Otuonye made 5 evidentiary arguments. First, he said the court incorrectly found Henson was his co-conspirator and therefore his statements were inadmissible under Fed.R.Evid. 801(d)(2)(E). The panel said the district court did not clearly err. A court decides whether these statements are admissible in hearing outside the jury’s presence. There it examines if there is some independent evidence linking the accused to the conspiracy. That evidence must be something other than the proffered co-conspirator statements, but that evidence need not be substantial. Here, there was evidence that a conspiracy existed in that Otuonye knew his pharmacy and Henson’s medical practice were benefitting from Henson’s prescriptions - which was the essential objective of the conspiracy. When other pharmacies rejected Henson’s scripts he referred them to Neighborhood. Naturally the number of prescriptions filled at Otuonye’s increased. Also, Henson and Otuonye communicated during the conspiracy, including when Otuonye asked Henson to also send him three non-controlled substances prescriptions. This he asked for to maintain a certain ratio of non-controlled to controlled sales and thereby avoid scrutiny from his wholesaler and regulators. He also instituted a policy of requiring 3 non-narcotic prescriptions to fill one narcotic prescription. Given this independent evidence, the panel ruled the district court did not clearly err in finding a conspiracy. Second, Otuonye argued the admission of text message exchanges between Henson and his patients violated the Sixth Amendment’s confrontation clause. The panel found that Otuonye had not preserved this issue for appeal because he did not specify whether his objection to this evidence was rooted in the Confrontation Clause or Fed.R.Evid. 802. Counsel said only that the witnesses will not “be on the stand to have any kind of cross-examination.” That is insufficient – counsel must state “the precise ground” for the objection. Third, Otuonye said the district court should not have let the jury hear from Henson’s patients what they did with the controlled substances they bought from Neighborhood. The panel held their testimony that they sold or abused their prescribed opioids was “probative of the fact that the prescriptions lacked a legitimate medical use, an element of the charge against Otuonye.” It also said the evidence was not unfairly prejudicial. It simply illustrated the “foreseeable consequences” of the charge crime. [That might be an argument to make when the government objects your controversial evidence]. Besides, many of the witnesses testified they did not tell Otuonye they were addicts or intended to sell their prescribed opioids. And the defense had the opportunity to question them about Otuonye’s knowledge of their later actions. If Otuonye’s defense was prejudiced, it was minimal, especially when there was more than enough other evidence for the jury to convict him. Fourth, Otuonye argued his case was prejudiced by the admission of cumulative evidence. The panel ruled that he had not shown any cumulative evidence was admitted nor that he was prejudiced by the admission of any such evidence. He also failed to acknowledge that the district court granted some of his cumulative evidence objections and limited the testimony of other witnesses. The panel held Otuonye waived his fifth argument. Since Otuonye raised a different ground for challenging the admission of certain summary exhibits than he did in district court, he forfeited that argument. And because he did not argue for plain error review, the panel finds he waived the issue on appeal. Regarding Otuonye’s sufficiency arguments, the panel holds there was enough evidence for a reasonable jury to find him guilty. Otuonye argued the evidence was insufficient to show that he knew any of Henson’s scripts were illegitimate. Not so, says the panel. Henson and Otuonye met in October 2014. Henson referred patients to Neighborhood when they had trouble filling his scripts at other pharmacies. After October, Otuonye began filling many more scripts for Henson patients and charging them more, thereby substantially increasing his revenue. There also were ‘red flags’ that should have alerted Otuonye that Henson scripts were “outside the usual course of professional medical practice and without a legitimate medical purpose.” Those included: the quantities, strength, types and combination of drugs Henson prescribed; that his patients often paid in cash; that they drove long distances to Neighborhood; and that Otuonye’s relief pharmacist raised these “red flags” with him. The panel said Otuonye’s challenge to the knowledge element of the distribution charge fails for a similar reason. Multiple pharmacists testified these “red flags” should have alerted Otuonye that Henson’s prescriptions did not have a legitimate medical purpose. Given this testimony, it was reasonable for the jury to conclude that Otuonye in dispensing these opioids, he was “willfully blind to the criminality of his behavior.” That evidence of deliberate ignorance was also enough to sustain the Medicare and Medicaid fraud convictions. The panel held that prescriptions that are issued without a legitimate medical purpose are not valid. In submitting them for reimbursement, when he knew or should have known they were illegitimate, Otuonye falsely represented that they were valid. He had no lawful claim to the money he received from these programs. Finally, the panel ruled Otuonye waived his sentencing issue. At sentencing and on appeal he argued that the district court failed to correctly calculate his guidelines because the court assumed all Henson’s scripts lacked a medical purpose despite trial testimony to the contrary. The district court never ruled on this issue but Otuonye did not object to its omission on Fed.R.Crim.P. 32(i)(3)(B) grounds, which requires a court to rule on “any controverted matter.” Thus, he forfeited the issue and by not arguing for plain error review, waived it on appeal.

Tuesday, May 04, 2021

Court addresses FRE 414 and trial issues; expands applicability of obstruction of justice enhancement

United States v. Perrault, No. 19-2184, 2021 WL 1556616 (10th Cir. Apr. 21, 2021) Defendant Arthur Perrault was a pedophile priest who abused many boys over the course of his priesting career, which spanned three decades. Then in the early 1990s, when he became the subject of some investigative journalism, Mr. Perrault fled to Morocco for 25 years. The Moroccans made an exception to their typical no-extradition policy in 2017 and Perrault came back to face seven counts of sex abuse. o The conviction and sentence were affirmed. FRE 414 issues: There were several 414 witnesses where fewer could have made the same point--the Tenth said that the number of witnesses "gave them pause" but they still allowed it. Jurors are presumed to understand instructions to tailor use of excessive propensity evidence in a legally sound manner. Unlike the Eighth Circuit, the Tenth won’t set maximum number of Rule 414 witnesses that district courts can allow. Jury selection: The jury selection process had several issues, including the denial of a motion for mistrial after one juror shared that she was a survivor of sex abuse herself, a confession that garnered applause from the venire. In addition, many jurors were familiar with the case because of the publicity, and some were disappointed Catholics, but everyone promised they could be fair and impartial, which satisfied the Tenth. The fact that at least 1/3 of the prospective jurors were excused for cause doesn’t mean the remaining ones couldn’t do the job and stay impartial. Jury Instructions: No plain error existed with jury instructions that lumped multiple counts into a single instruction. The district court was supposed to submit the indictment with the first jury instruction, but it was somehow mysteriously omitted when actually submitted to the jury. The Court held that the error was not invited because defense counsel thought it was included, but eventually says that defense counsel still could have objected to the omission. Moreover, defense counsel agreed to the other instructions that combined counts. The Tenth disagreed that the instructions presented jury unanimity problems and/or double jeopardy problems even while admitting they “weren’t ideal” because the court read the indictment aloud twice during trial and the government’s closing clarified distinct acts. Obstruction of Justice Enhancement: Perrault’s flight to Morocco didn’t fall within USSG 3C1.1’s definition of obstruction, which requires obstructive conduct “during the investigation, prosecution, or sentencing” with commentary specifically noting that the adjustment cannot apply based on a defendant’s “avoiding or fleeing from arrest.” So the Tenth decided to adopt a new, unargued application consistent with the 7th and 2nd Circuits—"failure to return voluntarily to stand trial." Denial of motions to continue and for mistrial: No abuse of discretion where the district court denied a 3rd motion to continue. This huge trial occurred within 6 months of the indictment. Also, no abuse of discretion where the district court denied mistrial after the government, in attempting to impeach a character witness, made reference in questioning to the fact that Mr. Perrault was incarcerated. Curative instructions heal all wounds!