7th Circuit largely affirms for law enforcement in Carmel ‘pill mill’ case

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Law enforcement who charged physicians and staff in an Indiana pill mill investigation will not face a suit from the cleared defendants, the 7th Circuit Court of Appeals has ruled, with the exception of an employee who worked as a parking lot attendant.

The Drug Opiate Recovery Network clinic, founded by Dr. Larry Ley of Carmel, treated opioid addiction through the prescribing of Suboxone. Law enforcement began an investigation into the medical practice in August 2013 after a former patient died. Ley and other DORN employees were arrested in 2014.

After the charges against them were ultimately dismissed and Ley was acquitted, the defendants filed federal civil-rights complaints. Their claims against lead Agent Gary Whisenand, other law enforcement agents and the City of Carmel included false arrest, false imprisonment, malicious prosecution and conspiracy.

In March 2019, the U.S. District Court for the Southern District of Indiana granted the government’s motion for summary judgment, holding that law enforcement had probable cause to arrest and charge the DORN employees under Indiana law. It reasoned that even in the absence of probable cause, the defendants had “arguable probable cause,” entitling them to qualified immunity.

In largely affirming the district court in a Monday opinion, the 7th Circuit Court of Appeals found one exception: summary judgment was not appropriate for the claims of Joseph Mackey, who worked as the parking lot attendant. And while the 7th Circuit found authorities lacked probable cause to arrest three nonproviders — Makcey, Ley’s son Eric, who worked as a part-time office assistant, and receptionist Felicia Reid.

“The undisputed facts developed at summary judgment do not show that (Eric) Ley and Reid knew that the prescriptions they were passing along were potentially invalid, especially when ‘cross-coverage situations’ do not require independent physical exams for prescription renewals,” Circuit Judge Joel Flaum wrote for the 7th Circuit. “…The probable cause affidavit was lacking even more regarding Mackey. Again, the DEA essentially accused Mackey of being a glorified valet, situating people and cars in the parking lot.”

The 7th Circuit noted that all the investigators and agents observed Mackey do was “walk in and out of the office with a clipboard, taking people’s names down and arranging them outside, on top of interacting with vehicles in the parking lot.”

However, it found there were no facts alleging that Mackey was ever armed, impeded investigations, handled money, or possessed narcotics. The appellate panel thus concluded that the affidavit left an “unmistakable impression” that Mackey, (Eric) Ley and Reid were caught in the crosshairs of the conspiracy and that the affidavit did not indicate the individuals’ intent to deal controlled substances.

“In sum, Agent Whisenand had to have some information from which a reasonable officer could conclude that (Eric) Ley, Reid, and Mackey knowingly conspired to deal controlled substances and knowingly corrupted business influence. But there was no evidence introduced at summary judgment from which Agent Whisenand could have inferred what those DORN employees knew — an indispensable element of the offenses,” the panel wrote.

However, the panel concluded qualified immunity protects Whisenand from Ley and Reid’s lawsuits after finding that officers of reasonable competence could disagree on whether arrest warrants should have issued based on Ley and Reid’s minimal knowledge of DORN’s physical exam practices. But the 7th Circuit found differently in Mackey’s case, concluding there was no evidence that Mackey ever dealt with the medical providers or ever knew of their alleged misconduct.

“One cannot be oblivious to the ongoing opioid epidemic. Indiana itself is no stranger to a recent outbreak of overdoses,” Flaum wrote. “We recognize the important part the police must play in responding to this public health crisis, and that physician-run pill mills perpetuate this plague. On the record before us, however, we cannot sustain Mackey’s arrest under the Fourth Amendment’s Warrant Clause.”

The 7th Circuit therefore affirmed the district court’s judgment in Andrew J. Dollard, et al. v. Gary Whisenand, et al., consolidated nos. 19-1602, 19-1604, 19-1605,  in all respects except as to Mackey, reversing and remanding the judgment pertaining to him.

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