Malloy v. State

• Decision Date: 17 June 2013
• Docket Number: S13A0188
• Parties: MALLOY v. THE STATE.
• Court: Georgia Supreme Court

MALLOY v. THE STATE.

S13A0188

Supreme Court of Georgia

Decided: June 17, 2013

THOMPSON, Presiding Justice.

Appellant Tyrone Cecil Malloy, a Georgia gynecologist, was indicted along with his office manager on two counts of Medicaid fraud in violation of OCGA § 49-4-146.1 (b) (2).¹ Specifically, appellant was charged with knowingly and wilfully accepting medical assistance payments to which he was not entitled and in amounts greater than he was entitled from the State of Georgia Medicaid program because the services charged for were either "associated with the performance of elective abortions," or had not been performed. Prior to the indictment, the Program Integrity Unit of the Georgia Department of Community Health (DCH)² had conducted a review ofappellant's clinic looking for violations of the "Hyde Amendment" which prohibits the use of federal funds to pay for elective abortions. Based on its findings, DCH referred appellant's case to the State's Medicaid Fraud Control Unit for a full investigation, while concurrently instituting a "withhold" on reimbursements to appellant's Medicaid provider number.³

Appellant requested an administrative review of the withhold by DCH and, in response, received a letter informing him that based on its determination that appellant had billed abortion-related services to Medicaid the withhold would remain in effect. Appellant then requested and was granted an administrative hearing before an administrative law judge (ALJ) on the issue of the withhold. The ALJ subsequently issued an initial decision in favor of appellant reversing DCH's decision to maintain the withhold. Although notingthat the State's interpretation of the services as abortion-related was reasonable, the ALJ determined that the record did not support a conclusion that appellant wilfully misrepresented a material fact and thus could not support a finding of fraud or wilful misrepresentation under the Medicaid program.⁴ As DCH neither filed a motion for reconsideration or rehearing with respect to the ALJ's decision nor sought to reject or modify it pursuant to the provisions of OCGA § 50-13-41 (e) (1),⁵ the ALJ's decision was affirmed by operation of law, and effectively became the decision of DCH. See Alexander v. Dep't of Revenue, 316 Ga. App. 543 (728 SE2d 320) (2012). Thereafter, the "withhold" status was terminated and the withheld funds were released to appellant.

During the period appellant was challenging the withhold, the State's Medicaid Fraud Control Unit continued to conduct its own investigation into the fraud allegations, including executing a search warrant at appellant's clinic. Despite DCH's affirmance of the ALJ's decision finding no evidence that appellant had committed fraud or wilful misrepresentation under the Medicaid program, the State decided to seek criminal charges against appellant and his office manager and, on December 8, 2011, a DeKalb County grand jury issued indictments.

In response to the indictments, appellant filed a special demurrer and motion to strike surplusage, a plea in abatement based on collateral estoppel, and a motion to dismiss his indictment claiming the statute under which he was charged was unconstitutionally vague. Following separate hearings, the trial court denied each of appellant's motions via separate orders. After his application for certificate of immediate review was denied by the trial court, appellant filed a notice of appeal seeking review of the trial court's orders.

The State moved to dismiss the appeal arguing that the trial court's orders either were not appealable or that jurisdiction belonged in the Court of Appeals. For the reasons that follow, we deny the State's motion to dismiss and affirm thedecisions of the trial court.

1. Addressing the issue of jurisdiction, we find the instant appeal is properly before this Court. Appellant seeks review of three rulings made by the trial court: the denial of his plea in abatement based on collateral estoppel, the denial of his motion to dismiss in which he challenged the constitutionality of OCGA § 49-4-146.1 (b) (2) as applied to him, and the denial of his special demurrer and motion to strike surplusage in the indictment. First, we note that the trial court's denial of appellant's plea in abatement based on collateral estoppel, a motion which in essence constitutes a plea in bar based on double jeopardy, is directly appealable. See Patterson v. State, 248 Ga. 875, 876 (287 SE2d 7) (1982) (timely filed plea of double jeopardy is directly appealable). Second, given appellant's right to directly appeal the denial of that motion, he was entitled to seek appellate review of the trial court's denial of his other two motions. See OCGA 5-6-34 (d). Finally, because this Court has jurisdiction over appellant's claim that the trial court erred in rejecting his constitutional challenge to OCGA 49-4-146.1 (b) (2) as applied, this Court also has jurisdiction to consider the other allegations of error presented on appeal. See Ga. Const. of 1983, Art. VI, Sec. VI, Para. II (1); see also State v. Boyer, 270Ga. 701, 702 (512 SE2d 605) (1999).

2. Next, we address appellant's contention that the trial court erred in denying his plea in abatement based on collateral estoppel. Appellant argues that the doctrine of collateral estoppel precludes the State from prosecuting him for Medicaid fraud as set forth in the indictment because the ultimate issue in the criminal prosecution, i.e., whether he knowingly and wilfully accepted medical assistance payments to which he was not entitled, was decided adversely to the State in the earlier administrative proceeding. Appellant claims that the trial court erred in applying a double jeopardy multiple prosecution analysis under Hudson v. United States, 522 U. S. 93, 98-99 (118 SCt 488, 139 LE2d 450) (1997) to his collateral estoppel claim and, more specifically, erred in determining that the doctrine of collateral estoppel did not apply.⁶

While we agree with appellant that the trial court should have analyzed the issue pursuant to the requirements for application of the doctrine of collateral estoppel rather than multiple punishment, the primary question presented, i.e.,whether a determination made in an administrative proceeding has preclusive effect in a subsequent criminal proceeding pursuant to the doctrine of collateral estoppel, is one which has not been conclusively addressed by this Court. Based on our consideration of this case, we find that the trial court's determination that the ALJ's civil ruling had no preclusive effect on the State's subsequent criminal prosecution of appellant is correct.

a. The United States Supreme Court has held that the doctrine of collateral estoppel is incorporated in the Fifth Amendment's guarantee against double jeopardy. Ashe v. Swenson, 397 U. S. 436, 443 (90 SCt 1189, 25 LE2d 469) (1970). Collateral estoppel "means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit." Id. Collateral estoppel may affect a later criminal prosecution in two ways: (1) it may operate to bar the introduction of certain facts necessarily established in a prior proceeding; or (2) it may completely bar a subsequent prosecution where one of the facts necessarily determined in the former proceeding is an essential element of the conviction sought. United States v. DeMarco, 791 F2d 833, 836 (11th Cir. 1986); United States v. Mulherin, 710 F2d 731, 740 (11th Cir. 1983). See Statev. Tate, 136 Ga. App. 181, 185 (220 SE2d 741) (1975).

Even before Ashe, Georgia courts recognized the doctrine of collateral estoppel in criminal, as well as civil cases.⁷ See Waldroup v. Greene County Hosp. Authority, 265 Ga. 864, 866 (2) (463 SE2d 5) (1995); Lindsey v. State, 227 Ga. 48, 52 (2) (178 SE2d 848) (1970); Harris v. State, 193 Ga. 109, 110 (17 SE2d 573) (1941). "The doctrine of collateral estoppel precludes the readjudication of an issue of law or fact already adjudicated between the parties or their privies, where that issue is essential to the judgment. [Cit.]" Jordan v. Board of Public Safety, 253 Ga. App. 339, 340 (559 SE2d 94) (2002). See Phillips v. State, 272 Ga. 840, 841 (537 SE2d 63) (2000). Moreover, the doctrine provides that "an issue previously litigated and adjudicated on the merits cannot be relitigated even as part of a different cause of action." Jordan, supra at 342.

Administrative decisions, however, are not generally given collateral estoppel effect by Georgia courts in subsequent judicial proceedings unlesscertain requirements are met. Swain v. State, 251 Ga. App. 110, 113 (552 SE2d 880) (2001). See Epps Air Svc. v. Lampkin, 229 Ga. 792, 795 (2) (194 SE2d 437) (1992); Blackwell v. Ga. Real Estate Comm., 205 Ga. App. 233, 234 (421 SE2d 716) (1992). Specifically, administrative decisions may have a collateral estoppel effect in a subsequent judicial proceedings where: (1) both proceedings involve the same parties or their privies; (2) the issue was actually litigated and determined in the first proceeding; (3) the determination was essential to the judgment in the first proceeding; and (4) the party against whom the doctrine is asserted had a full opportunity to litigate the issue in question. Swain, 251 Ga. App. at 113. Compare Allen v. Santana, 303 Ga. App. 844, 847 (1) (695 SE2d 314) (2010) (collateral estoppel did not apply where issue deemed not essential to first judgment).

Applying these requirements, Georgia courts have repeatedly held that questions of fact ruled upon by an administrative body are thereafter precluded from relitigation in civil suits by the doctrines of res judicata and collateral estoppel, see Jordan, supra at 342; Blackwell, supra at 234. Less clear, however, are rulings with respect to the collateral estoppel effect in subsequent criminal proceedings. See Swain, supra at 113-114; Culver v. State, ...