Strogov v. The Attorney Gen. of NY

• Decision Date: 01 August 1998
• Docket Number: Docket No. 98-2382
• Citation: 191 F.3d 188
• Parties: (2nd Cir. 1999) EMILIA STROGOV, Petitioner-Appellant, v. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK, by the Special Prosecutor for Medicaid Fraud Control, Respondent-Appellee
• Court: U.S. Court of Appeals — Second Circuit

Page 188

191 F.3d 188 (2nd Cir. 1999)

EMILIA STROGOV, Petitioner-Appellant, v. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK, by the Special Prosecutor for Medicaid Fraud Control, Respondent-Appellee.

Docket No. 98-2382

August Term, 1998

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: December 3, 1998

Decided: September 09, 1999

Petitioner Emilia Strogov appeals from a judgment entered on April 15, 1998 in the United States District Court for the Eastern District of New York (Dearie, J.), denying her petition for a writ of habeas corpus with respect to her New York State conviction for grand larceny in the second degree, arising from her submission of fraudulent Medicaid billing claims for podiatric orthotic appliances.

Affirmed.

VIVIAN SHEVITZ, Katonah, New York (Jane Simkin Smith, Katonah, New York, of counsel), for Petitioner-Appellant.

ARTHUR G. WEINSTEIN, Special Assistant Attorney General, New York, New York (Dennis C. Vacco, Attorney General of the State of New York, Michael R. Berlowitz, Special Assistant Attorney General, New York, New York, of counsel), for Respondent-Appellee.

Before: VAN GRAAFEILAND, CARDAMONE, and CABRANES Circuit Judges

CARDAMONE, Circuit Judge:

Petitioner Emilia Strogov (petitioner or appellant) appeals from a judgment entered on April 15, 1998 in the United States District Court for the Eastern District of New York, before Judge Raymond J. Dearie, denying on the merits her petition for a writ of habeas corpus with respect to her State conviction for grand larceny in the second degree, arising from her submission of allegedly fraudulent Medicaid billing claims for podiatric orthotic appliances. Strogov's sole argument on this appeal is that her conviction should be vacated because the Medicaid billing code pursuant to which she submitted these claims failed to give her fair notice that it did not cover the claimed goods and services.

Petitioner insists that her State appellate briefs set out allegations that fairly put before the State courts her present contention that she was denied due process. Although there is some superficial similarity between her earlier arguments and her present ones, we conclude that these similar arguments were made in the service of distinct legal claims. Accordingly, we agree with the district court that Strogov has failed to exhaust her State judicial remedies for the claim she asserts in the federal habeas petition now before us. Because Strogov no longer has an opportunity to raise this claim in a State forum, and because she has not established any ground on which we may excuse her failure to exhaust her remedies, we affirm the denial of her petition.

BACKGROUND

The New York State Medicaid Program (Program) makes medical care from participating health care providers available to financially needy persons. The health care providers may submit claims for reimbursement to the Program for the specific services provided. Between October 1984 and February 1988 appellant Emilia Strogov, a podiatrist participating in the Program, submitted pursuant to Medicaid billing code 90473 (Code 90473 or the Code) over 4,500 claims requesting reimbursement for orthotic appliances she furnished patients. During the years in question, Code 90473 read, "Foot mold, balance inlay support (casting and fabrication) per pair, to include all necessary fittings and adjustments," and claims submitted pursuant to this Code entitled participating physicians to reimbursement at the rate of $46 per pair of orthotic appliances.

On July 11, 1994 Strogov was convicted of grand larceny in the second degree, see N.Y. Penal Law § 155.40 (McKinney 1999), following a bench trial in New York State Supreme Court for Kings County. A person is guilty of grand larceny in the second degree when she steals property, the value of which exceeds $50,000. Id. The claims petitioner submitted to the Program were in excess of $200,000. Under New York law, a person may only be found to "steal[] property and commit[] larceny" when he takes property "with intent to deprive another of property or to appropriate the same to himself or a third person." See N.Y. Penal Law §155.05 (emphasis added). At trial, the prosecution offered proof (1) that Code 90473 requires three-dimensional casting of patients' feet - to permit customized fabrication of orthotic appliances conforming to the "architecture" of individual feet - and (2) that Strogov, nevertheless, consistently employed two-dimensional footprint and tracing techniques that only permitted the prescription of stock or pre-fabricated appliances. In Strogov's defense, her counsel attacked the prosecution's proof on the issue of intent. Counsel argued, among other things, that Code 90473 was ambiguous and thus did not give Strogov clear notice of the casting requirement. Relying on the asserted ambiguity of the Code, together with other evidence supposedly indicating Strogov's good faith, counsel maintained that the evidence was insufficient to support a finding of larcenous intent. Counsel further contended that his client had changed her practices in November 1987 after being notified by a professional publication of the casting requirement. Following conviction, Strogov was sentenced in New York to a prison term of one to three years and fined $256,984.

On June 12, 1995 petitioner's conviction was affirmed on her direct appeal to the Appellate Division of the New York State Supreme Court, which stated that the evidence of larcenous intent was sufficient to sustain the conviction and rejected Strogov's remaining contentions as "without merit." People v. Strogov, 216 AD2d 424, 425 (2d Dep't 1995). The New York Court of Appeals affirmed. See People v. McDonald, 88 NY2d 281 (1996) (consolidated appeal). New York's highest court noted that the "expert evidence [indicates] that the term 'casting' has a universally recognized meaning within the podiatric profession: creating a three-dimensional cast or mold," and concluded that "code 90473 is not ambiguous and sufficiently conveyed to podiatrists the requirement to use a casting technique that will create a three-dimensional mold of the foot." Id. at 287.

The Court of Appeals went on to rule that there was sufficient proof of intent to sustain Strogov's conviction, reasoning that the unambiguous terms of Code 90473, together with plainly misleading billing instructions petitioner had given her intern, provided evidence of larcenous intent. See id. at 287-88. It explained that Strogov had "instructed an intern to misrepresent the measuring techniques on each Medicaid patient chart as C-F-D, that is, cast, fabricate and dispense," despite the fact that Strogov actually ordered pre-fabricated stock items from tracings and footprints. Id. at 288. Strogov's remaining contentions were rejected as "either unpreserved or without merit." Id. In short, the crime of larceny for which appellant stands convicted is defined by her wrongful intent to purloin money from the State Medicaid program for services that she did not provide.

On May 1, 1996 Strogov filed a petition in the Eastern District of New York for a writ of habeas corpus, pursuant to 28 U.S.C. § 2254 (1994 & Supp. II 1996). In denying the petition by a memorandum and order dated March 31, 1998, Judge Dearie rejected Strogov's assertions that (1) the evidence of larcenous intent was insufficient to support the conviction, (2) her conviction was void by reason of allegedly perjured testimony given by a witness for the prosecution, and (3) her Sixth Amendment right to effective assistance of counsel was denied her due to her trial counsel's alleged conflict of interest. See Strogov v. Attorney Gen., No. CV 96-2133, 1998 WL 229120, at *1-*5 (E.D.N.Y. Mar. 31, 1998). Judgment denying the writ of habeas corpus was entered on April 15, 1998. This appeal followed.

DISCUSSION

On appeal, we review de novo a district court's denial of a petition for a writ of habeas corpus. See Dorsey v. Kelly, 112 F.3d 50, 52 (2d Cir. 1997).

I Presentation of the "Fair Notice" Claim to the State Courts

On the merits of her appeal, Strogov argues that her conviction should be vacated because Code 90473 failed to give her fair notice, as required by the Fourteenth Amendment Due Process Clause, that her billing practices for the goods and services she furnished violated the law. See United States v. Matthews, 787 F.2d 38, 49 (2d Cir. 1986) ("When a person of ordinary intelligence has not received fair notice that his contemplated conduct is forbidden, prosecution for such conduct deprives him of due process."). Specifically, she asserts that Code 90473 failed to give her fair notice of the requirement that podiatric orthotic appliances had to be prepared from three-dimensional casts of patients' feet in order to qualify for reimbursement under the Code. The New York State Attorney General (Attorney General or respondent) contends, among other things, that appellant is barred from raising this argument in federal court on habeas review collateral to her conviction because she failed to present it to the State courts on direct appeal from her conviction.

A. The Exhaustion Requirement

Supreme Court precedent requires that "a state prisoner must normally exhaust available state judicial remedies before a federal court will entertain his petition for habeas corpus." Picard v. Connor, 404 U.S. 270, 275 (1971) (citing Ex parte Royall, 117 U.S. 241 (1886)); accord Dorsey, 112 F.3d at 52; Daye v. Attorney Gen., 696 F.2d 186, 191 (2d Cir. 1982) (in banc). This requirement, which derives ultimately from notions of comity between the federal and State judicial systems, is also codified by statute at 28 U.S.C. § 2254(b) and (c). See Dorsey, 112 F.3d at 52; Daye, 696 F.2d at 190-91. To satisfy the exhaustion requirement with respect to a particular legal claim, the petitioner must fairly present it to the State courts in order that our sister judicial system may...