United States District Court, E.D. Tennessee
MEMORANDUM OPINION AND ORDER
A. VARLAN CHIEF UNITED STATES DISTRICT JUDGE
criminal matter is before the Court on the government's
Appeal of Magistrate Judge's Order Appointing Co-Counsel
[Doc. 159]. The government appeals Magistrate Judge C.
Clifford Shirley, Jr.'s March 1, 2017, Order appointing
Mike McGovern as co-counsel for the defendant, Sylvia
Hofstetter [Doc. 117], and Judge Shirley's April 14,
2017, Memorandum and Order (the “M&O”) [Doc.
135] denying the government's Motion to Reconsider Order
Appointing Co-Counsel and for Immediate Stay of Said Order
[Doc. 118]. The government filed a sealed ex parte
supplement in support of its appeal [Doc. 166], and
Hofstetter filed a response to the appeal [Doc. 204]. On June
28, 2017, the Court held a hearing to address the appeal
[Doc. 221]. For the reasons that follow, the Court will grant
the government's appeal [Doc. 159], affirm in part and
reverse in part Judge Shirley's orders [Docs. 117, 135],
and remand the issue of appointment of new co-counsel for
Hofstetter to Judge Shirley.
the former operator of three healthcare clinics in Tennessee,
was first indicted for alleged crimes in connection with a
large-scale pill-mill conspiracy on March 4, 2015 [Doc. 3].
She retained attorney David Eldridge, who represented her at
her detention hearing on March 13, 2015 [Doc. 18]. Hofstetter
then discharged Eldridge and retained attorney Richard
Escobar [Doc. 34]. Escobar became Hofstetter's counsel of
record on April 9, 2015 [Id.]. Hofstetter also
retained two additional attorneys, DeeAnne Athan and Dino
Michaels, from Escobar's law firm, Escobar &
Associates [Docs. 40, 41]. On October 2, 2016, the Grand Jury
returned a superseding indictment against Hofstetter [Doc.
70]. Escobar and the other members of his firm then moved to
withdraw as counsel on November 3, 2016 [Doc. 102]. Judge
Shirley held a hearing on the motion and determined that
Hofstetter qualified for court-appointed counsel [Doc. 105].
government represents that Judge Shirley asked Assistant
United States Attorney (“AUSA”) Tracy Stone to
assist the Court's Clerk's Office in working through
potential attorney conflict issues to find competent counsel
for Hofstetter [Doc. 159 p. 3]. By the time Escobar moved to
withdraw, close to 130 defendants had been charged in related
cases [Id.]. The government identified Charles Burks
and Chris Oldham as two conflict-free attorneys
[Id.]. At that time, neither Burks nor Oldham
represented any of the defendants in the related cases, and
Judge Shirley appointed Oldham to represent Hofstetter's
co-defendant, Courtney Newman [Id. at 3 n.4].
January 6, 2017, Judge Shirley granted Escobar's motion
to withdraw and appointed Burks as counsel for Hofstetter
[Doc. 108]. Judge Shirley told Hofstetter that he was looking
for a second lawyer to represent her [Doc. 159 p. 4]. During
this time, AUSA Stone continued to work with the Clerk's
Office to identify attorneys with no or minimal conflicts
March 1, 2017, Judge Shirley granted Hofstetter's request
for the appointment of a second attorney, finding that the
appointment of co-counsel is necessary in the interest of
justice [Doc. 116]. Judge Shirley appointed attorney Mike
McGovern as co-counsel for Hofstetter [Doc. 117].
March 2, 2017, the government filed a Motion to Reconsider
Order Appointing Co-Counsel and for Immediate Stay of Said
Order [Doc. 118]. In support of its motion, the government
argued that McGovern has an actual conflict of interest in
his representation of Hofstetter [Id. at 1].
McGovern previously represented Scott Stockton in a related
matter, Case No. 3:15-CR-45. Stockton's plea agreement
indicates that he sponsored patients at one of
Hofstetter's clinics in exchange for narcotics, which he
subsequently sold [No. 3:15-CR-45, Doc. 25].
Shirley held a hearing on the motion for reconsideration on
March 8, 2017 [Doc. 122]. At the hearing, the government
represented that it is highly likely that it will call
Stockton as a witness in Hofstetter's trial to testify
about the clinic and about his relationship with
Hofstetter's co-defendant, Newman. The government argued
that McGovern has a conflict warranting disqualification due
to his successive representation of Stockton and Hofstetter.
Shirley denied the motion for reconsideration on April 14,
2017 [Doc. 135]. In doing so, he determined that “any
conflict of interest in this case is potential, rather than
actual” [Id. at 8]. He also found that both
Hofstetter and Stockton validly waived the right to
conflict-free counsel [Id.]. In light of these
circumstances, Judge Shirley deferred to Hofstetter's
Sixth Amendment right to counsel of choice and provided that
“McGovern may continue to represent Defendant
Hofstetter” [Id. at 10].
9, 2017, the government filed an Appeal of Magistrate
Judge's Order Appointing Counsel [Doc. 159]. The Court
held a hearing to address the appeal on June 28, 2017 [Doc.
221]. On July 7, 2017, the Grand Jury returned a second
superseding indictment against Hofstetter and others
defendants [Doc. 224]. At an initial appearance and
arraignment held before Judge Shirley on July 13, 2017, one
of Hofstetter's newly indicted co-defendants moved for a
continuance of the trial [Doc. 237].
Standard of Review for Appeal
magistrate judge entered the orders [Docs. 117, 135] at issue
in this appeal pursuant to 28 U.S.C. § 636(b). Section
636(b) allows district judges, subject to certain exceptions,
to “designate a magistrate judge to hear and determine
any pretrial matter pending before the court.” 28
U.S.C. § 636(b)(1)(A). A district judge may reconsider
any pretrial matter determined under “subparagraph (A)
where it has been shown that the magistrate judge's order
is clearly erroneous or contrary to law.” Id.
government argues that this Court should reconsider the
magistrate judge's orders [Docs. 117, 135] because: (1)
the Sixth Amendment presumption in favor of counsel of choice
does not apply; (2) McGovern has an actual or serious
potential conflict; (3) the magistrate judge underestimated
the negative effect McGovern's representation of
Hofstetter will have on the public's perception of
administration of justice and the judicial system; (4)
Stockton and Hofstetter's waivers are invalid; and (5)
there is no good reason to run the dangerous risks created by
McGovern's appointment. The Court will first set forth
the applicable law on successive representation. As the
government asserts that the magistrate judge erred in
applying the presumption in favor of counsel of choice, the
Court will address that argument within its discussion of the
applicable law. The Court will then analyze the
government's remaining arguments in support of its
Law on Successive Representation
Sixth Amendment's right to counsel encompasses two
distinct rights-a right to effective assistance of counsel
and a right to counsel of choice. See Daniels v.
Lafler, 501 F.3d 735, 738 (6th Cir. 2007). While all
defendants enjoy the right to effective assistance of
counsel, id., “[d]efendants with the ability
to hire their own attorney also have a right to counsel of
their own choosing.” United States v. Basham,
561 F.3d 302, 324 (4th Cir. 2009) (citing United States
v. Gonzalez-Lopez, 548 U.S. 140, 151-52 (2006)). Where a
defendant has the right to counsel of choice, courts must
recognize “a presumption in favor of a
[defendant's] counsel of choice.” Wheat v.
United States, 486 U.S. 153, 164 (1988). In contrast,
indigent defendants that rely on court-appointed counsel have
no constitutional right to counsel of choice.
Daniels, 501 F.3d at 740.
guarantee of effective assistance of counsel includes
representation which is free of conflicts of interest.”
McNeal v. United States, 17 F. App'x 258, 261
(6th Cir. 2001). “Successive representation occurs
where defense counsel has previously represented a
co-defendant or trial witness.” Moss v. United
States, 323 F.3d 445, 459 (6th Cir. 2003). Such
representation carries the risk for two types of conflicts of
interest- actual and potential. See United States v.
Swafford, 512 F.3d 833, 839 (6th Cir. 2008). “An
actual conflict of interest exists when the attorney's
and the defendant's interests diverge with respect to a
material factual or legal issue or to a course of action, or
when the attorney's representation of the defendant is
impaired by loyalty owed to a prior client.” United
States v. Jones, 381 F.3d 114, 119 (2d Cir. 2004). A
potential conflict arises “if the interests of the
defendant could place the attorney under
inconsistent duties in the future.” Id.
M&O states “[a]lthough the Court ‘must
recognize a presumption in favor of [the defendant's]
counsel of choice, . . . that presumption may be overcome not
only by a demonstration of actual conflict but by a showing
of a serious potential for conflict'” [Doc. 135 p.
5 (second alteration in original) (citing Wheat, 486
U.S. at 160)]. In its appeal, the government asserts that
Judge Shirley incorrectly applied the ...