United States v. Chube, Charles R.

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