253 F.3d 256 (6th Cir. 2001), 00-4352, Subpoena John Doe, D.P.M. v United States

Docket Nº:00-4352
Citation:253 F.3d 256
Party Name:In re: Administrative Subpoena John Doe, D.P.M., Petitioner-Appellant, v. United States of America, Respondent-Appellee.
Case Date:June 14, 2001
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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253 F.3d 256 (6th Cir. 2001)

In re: Administrative Subpoena John Doe, D.P.M., Petitioner-Appellant,

v.

United States of America, Respondent-Appellee.

No. 00-4352

United States Court of Appeals, Sixth Circuit

June 14, 2001

Argued: April 27, 2001

Appeal from the United States District Court for the Northern District of Ohio at Cleveland, No. 00-MC-00053, Patricia A. Gaughan, District Judge.

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Leonard W. Yelsky, YELSKY & LONARDO, Cleveland, Ohio, for Appellant.

Subodh Chandra, ASSISTANT UNITED STATES ATTORNEY, Cleveland, Ohio, for Appellee.

Before: SILER and MOORE, Circuit Judges; STAGG, District Judge. [*]

OPINION

KAREN NELSON MOORE, Circuit Judge.

Petitioner-Appellant John Doe ("Doe" or "petitioner") appeals the district court's order denying his motion to quash an administrative subpoena issued by the Department of Justice pursuant to a health care fraud investigation. Doe, a podiatrist, is under investigation for an alleged kickback arrangement with two medical testing laboratories. The administrative subpoena, issued pursuant to the Department of Justice's authority under §248 of the Health Insurance Portability & Accountability Act ("HIPAA"), ordered Doe to turn over a number of documents, including: records relating to his professional education and ethical training; personal and business financial records; records evidencing any asset transfers by Doe to his children; and various patient files.

We AFFIRM the district court's order denying Doe's motion to quash the administrative subpoena and compelling compliance therewith.

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I. BACKGROUND

John Doe, D.P.M., a podiatrist operating a clinic in the Cleveland metropolitan area, is under investigation by the FBI and a federal grand jury for an alleged "kickback" arrangement with two medical testing laboratories. More specifically, it is alleged that Doe received payments from these labs for referring his patients to them for medically unnecessary vascular and electrodiagnostic tests. The government alleges that these kickbacks were disguised as rental payments that the labs made to Doe for the periodic use of one room in his clinic. The government has obtained documents through previous subpoenas evidencing lease agreements with the labs that show that, in less than three years, approximately $10,000 was paid to Doe for the use of a single room in his clinic for a few hours each month. By contrast, Doe himself only paid about $16,800 in rent for the entire office over that same period of time. The government claims that, based on information discovered thus far, Doe may have aided one of the laboratories in submitting false claims approximating $150,000 to various health care benefit programs. These programs paid approximately $57,000 on the claims.

The government also has evidence from independent medical experts stating that one of the labs to which Doe referred patients was performing a grossly excessive amount of electrodiagnostic testing. Furthermore, the government has evidence that one of the medical conditions for which Doe referred his patients for further testing could not have been accurately diagnosed by this lab's technicians, as it required medically invasive and non-routinized testing, testing which the Ohio State Medical Board has concluded may not, under Ohio law, be performed by technicians.

Pursuant to the DOJ's investigation, a series of subpoenas were issued to Doe requesting various documents. In the first subpoena, issued August 5, 1998, the DOJ requested lease agreements between Doe and the labs, any payments made to Doe by any medical service provider, including laboratories, and information on tests performed on patients by any medical service provider. The second subpoena, issued May25, 1999, requested information on various patients. The third subpoena, an administrative subpoena and the subpoena at issue in this case, was ordered pursuant to the DOJ's authority under §248 of the HIPAA, which allows the Attorney General or her designee to issue subpoenas requiring the production of records "which may be relevant to" a "Federal health care offense" investigation. 18 U.S.C. §3486(a)(1)(A). 1

The administrative subpoena ordered Doe's records custodian to turn over a number of documents by August 28, 2000. The documents requested were divided into the following nine categories:

1)all professional journals, magazines, and newsletters subscribed to or received by Doe from January 1990 through March 1998;

2)copies of recent bank and other financial records showing the current location, amount, and value of all Doe's personal and health care-related business

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assets, whether jointly or individually held;

3)copies of recent bank and other financial records showing the current location, amount, and value of all Doe's children's assets insofar as those assets were provided or derived from the individual or jointly held assets of Doe;

4)all documents and patient files evidencing Doe's referral of patients for certain electrodiagnostic tests after April 2, 1998;

5)all documents and patient files after January 1, 1993 evidencing Doe's referral of patients to a specific medical testing laboratory for certain diagnostic ultrasound tests;

6)complete academic transcripts and records from medical or podiatric school, as well as any other post-graduate training;

7)all documents concerning the extent of Doe's continuing medical education, including a list and description of courses taken, credit hours earned, and any materials provided in those courses;

8)all documents concerning ethics, professional responsibility, and medical-billing issues in Doe's custody; and

9)retained copies of federal, state, and local tax returns both for Doe and any of his businesses from 1993 to the present.

Joint Appendix ("J.A.") at 11 (Admin. Subpoena). Doe did not turn over these documents. Instead, on August 29, 2000, Doe filed in the district court a motion to quash the subpoena, or, in the alternative, to issue a protective order. In this motion, Doe called the government's latest document request "unreasonably burdensome" and questioned its relevance. J.A. at 6-7 (Mem. in Supp. of Mot. to Quash).

On October 10, 2000, following the government's combined motion in opposition to Doe's motion to quash and countermotion to compel Doe to comply with the subpoena, the district court denied Doe's motion to quash the subpoena and granted the government's motion to compel compliance with the subpoena. The district court denied the motion to quash because "the subpoena was issued within the authority of the U.S. Attorney General, the records sought [were] relevant to the government's health-care fraud investigation, the materials [were] not already in the possession of the Department of Justice, and [because the] Court's process would not be abused by enforcement of the subpoena." J.A. at 56 (Dist. Ct. Order Den. Mot. to Quash).

Doe now appeals the denial of his motion to quash the administrative subpoena to this court.

II. ANALYSIS

We first take note of our jurisdiction to hear this appeal. Although a party served with a subpoena typically cannot appeal the denial of a motion to quash the subpoena until he has resisted the subpoena and been held in contempt, the Supreme Court has treated subpoenas issued by government agencies differently. In the case of administrative subpoenas, parties may immediately appeal district court orders enforcing these subpoenas, as the Supreme Court has deemed them to be "self-contained, so far as the judiciary is concerned[.]" Cobbledick v. United States, 309 U.S. 323, 330 (1940); see also19 James Wm. Moore et al., Moore's Federal Practice §202.11[2][c].

Our review of the district court's interpretation and application of 18 U.S.C. §3486, as well as the case law relating to enforcement of administrative subpoenas,

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is de novo. United States v. Markwood, 48 F.3d 969, 975 (6th Cir. 1995).

A.The Government's Motion to Close Oral Argument to the Public

Before proceeding to an analysis of the administrative subpoena at issue in this case, we briefly note that, ruling from the bench, we denied the government's motion to conduct oral argument in a closed courtroom in this case. The government, concerned about revealing sensitive matters that could jeopardize its ongoing criminal investigation of other medical professionals and service providers, filed a motion, in advance of oral argument and unopposed by Doe's counsel, to close oral argument to the public.

While we deliberate in private, we recognize the fundamental importance of "issu[ing] public decisions after public arguments based on public records. The political branches of government claim legitimacy by election, judges by reason. Any step that withdraws an element of the judicial process from public view makes the ensuing decision look more like fiat, which requires compelling justification." Union Oil Co. v. Leavell, 220 F.3d 562, 568 (7th Cir. 2000). To the extent the government believes that it must reveal sensitive information to the court as part of its argument, it can "submit arguments in writing under seal in lieu of the in camera oral argument." New York Times Co. v. United States, 403 U.S. 944 (1971).

B.Background on the Enforcement of Administrative Subpoenas

As noted in its heading, 18 U.S.C. §3486 authorizes the Attorney General or her designee to issue "[a]dministrative subpoenas in [f]ederal health care investigations[.]" Doe claims that, by enforcing the DOJ's administrative subpoena in this case, his Fourth Amendment right to be...

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