CA6: Medical clinic wasn’t “permeated with fraud” justifying an “all records” seizure, but SW was particular enough for a substantial seizure

The district court held that the defendant’s medical clinic was “permeated with fraud” justifying an “all records” seizure. The court of appeals disagrees. There was a fair amount of potential fraud, but it wasn’t obvious. Still, the warrant had particularity authorizing a substantial seizure of records, and it’s important here that the defendants didn’t seek return of records. United States v. Chaney, 2019 U.S. App. LEXIS 10723 (6th Cir. Apr. 11, 2019):

Turning back to the Chaneys and the Clinique, the question remains whether there was pervasive fraud justifying an all-records search. The first relevant factor is the quantity of fraud. The affidavit accompanying and incorporated into the warrants showed that anywhere from one half to 90 percent of its patients were pain patients—that is, potentially fraudulent. Next, the separability of the fraudulent from the legitimate: although it is uncontested that the clinic saw some legitimate patients, there is no indication that the pain practice was at all separate. Ace Clinique did not have a “pain clinic” separate from the rest of its practice; it was one clinic. On the other hand, there is nothing to suggest that evidence of fraud might “infect” the files of non-pain patients. Finally, the central-purpose inquiry. It cannot be said with certainty that the central purpose of Ace Clinique was to operate as a “pill mill.” Certainly it did operate as such, but the conceded non-negligible amount of legitimate patients at least suggests a dual purpose. The evidence is close, but there is not quite enough evidence to suggest that Ace Clinique was permeated with fraud. This means that there was not probable cause to seize all of its records wholesale based on the “permeated with fraud” theory.

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b. Particularity

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The third formulation—limit the seizure to “those 50% of patients receiving controlled substance prescriptions that the government had some basis to conclude were [not] legitimate or probably legitimate”—is a gross misreading of the warrant affidavit. One person told an agent that 50 or 60 percent of Ace Clinique’s patients were pain patients; there was never a distinction between a legitimate 50 percent and an illegitimate 50 percent. Therefore, this would not have been a valid formulation for the warrant.

We are left with the first proposed formulation: limit the warrant to patients who had been prescribed a controlled substance. This does not render illegitimate the warrant because it is no more particular than the warrant issued, which authorized the officers to seize evidence of drug-distribution crimes. It is, if anything, more broad—rather than restricting officers to only those patient files that are evidence of crimes, the defendants would authorize officers to seize every file of a person who was prescribed a controlled substance, regardless of the apparent legitimacy of the prescription. The defendants’ failure to propose a more particular warrant formulation reveals the truth of the matter here: the warrant was as particular as was possible, in the circumstances. “When a more specific description of the items to be seized is unavailable, a general description will suffice.” Blakeney, 942 F.2d at 1027. True, this formulation required the executing agents to use their judgment to determine whether a particular file could be seized, but that is not a fatal flaw. See Bruce, 396 F.3d at 710; Ables, 167 F.3d at 1034; cf. United States v. Hanna, 661 F.3d 271, 286 (6th Cir. 2011) (“We have allowed the search of electronic files beyond their titles, recognizing the risk of ‘shielded’ evidence otherwise.”).

A final point deserves emphasis: the defendants do not challenge on appeal the execution of the warrant. Rather, they focus their arguments on the constitutionality of the warrant. Therefore, the manner in which the agents executed the search—namely, that they took all of the clinic’s files, seemingly without review to see whether they constituted evidence of the named crimes—is of no moment. The defendants could have objected to the introduction of specific pieces of evidence as seized beyond the scope of the warrant, and, had the district court ruled against the defendants on those objections, we could have considered that on appeal. Those arguments, however, were not made below. We consider only the facial constitutionality of the warrant, and on those grounds the defendants’ arguments all fail.

In sum, the warrant, as written, was constitutional.