Special Investigation No. 244, In re

Decision Date05 May 1983
Docket NumberNo. 117,117
Citation459 A.2d 1111,296 Md. 80
PartiesIn re SPECIAL INVESTIGATION NO. 244.
CourtMaryland Court of Appeals

M. Albert Figinski and Ira C. Cooke, Baltimore, for appellant.

Paul F. Strain, Deputy Atty. Gen. (Stephen H. Sachs, Atty. Gen., Stephen M. Schenning and Stefan D. Cassella, Asst. Attys. Gen., Baltimore, on brief), for appellee.

Argued before SMITH, ELDRIDGE, COLE, DAVIDSON, RODOWSKY and COUCH, JJ., and W. ALBERT MENCHINE, Associated Judge of the Court of Special Appeals (retired), specially assigned.

SMITH, Judge.

This is yet another case emanating from the Attorney General's ongoing investigation of Medicaid fraud in Maryland. A subpoena duces tecum was issued to the custodian of records of a joint venture, which is the landlord of a health care provider. The principal owners of the joint venture also own a significant interest in or participate in the management of two health care providers. The joint venture and its principal owners sought to quash the subpoena. They appealed from an unfavorable decision. We then granted their petition for a writ of certiorari before the case was heard by the Court of Special Appeals.

We are faced with the following questions: (1) Whether the denial of the motion to quash is appealable; (2) whether the Attorney General has the authority to act as prosecutor in this area; (3) whether the Grand Jury of Baltimore City has power to summon records of an entity located beyond the confines of Baltimore City; (4) whether procedures are required to prevent improper concurrent use of subpoenaed material by persons or entities other than the grand jury; and (5) whether the subpoena duces tecum here is defective in that part which in effect requires the recipient to construct a document. We shall hold the order appealable, that the Attorney General and the grand jury have not exceeded their authority, that there appears to be no improper concurrent use of materials here, and that the recipient of a subpoena may not be required to create a document.

The subpoena in question was issued on May 19, 1982, by the Grand Jury of Baltimore City at the instance of the Medicaid Fraud Unit of the office of the Attorney General. The motion to quash was heard and denied on July 2. An appeal was immediately entered to the Court of Special Appeals. The term of the grand jury has long since expired. No effort was made to enforce the subpoena pending the appeal. No effort was made to have the grand jury continued beyond its term. No similar subpoena has been issued by a subsequent grand jury. It follows, therefore, that there is now no one to whom the subpoena is returnable and the subpoena must be quashed. See In Re Special Investigation No. 229, 295 Md. 584, 458 A.2d 80 (1983), and In Re Special Investigation No. 195, 295 Md. 276, 454 A.2d 843 (1983). However, because there is likely to be a recurrence of the issues here presented and upon the recurrence the same difficulty which prevented the issues from being heard in time is likely to again prevent a resolution, we shall address the issues presented. See Equitable Tr. Co. v. State Comm'n, 287 Md. 80, 89, 411 A.2d 86 (1980); Reyes v. Prince George's County, 281 Md. 279, 300, 380 A.2d 12 (1977), and Maryland Rule 885. We shall set forth additional facts as we discuss the questions presented.

1. Appealability

The Attorney General has moved to dismiss the appeal on the ground that the denial of a motion to quash is not appealable. He relies heavily upon Cobbledick v. United States, 309 U.S. 323, 327-28, 60 S.Ct. 540, 542-43, 84 L.Ed. 783 (1940), and its progeny. In Cobbledick Justice Frankfurter stated for the Court, "Finality as a condition of review is an historic characteristic of federal appellate procedure." Id. at 324, 60 S.Ct. at 541. There the Court was faced with an order denying a motion to quash a subpoena duces tecum. The Court said, "The witness' relation to the inquiry is no different in a grand jury proceeding than it was in the Alexander case," Id. at 328, 60 S.Ct. at 542, referring to Alexander v. United States, 201 U.S. 117, 26 S.Ct. 356, 50 L.Ed. 686 (1906). In Alexander witnesses were directed to appear and produce documents before a special examiner designated by the circuit court to hear testimony in a suit brought by the United States to enforce the Sherman Act. Upon refusal to submit the documents called for in the subpoena, the United States petitioned the circuit court for an order requiring compliance. The petition was granted. An appeal followed to the Supreme Court. The appeal was dismissed for want of jurisdiction. In the course of its opinion, 201 U.S. at 121-22, 26 S.Ct. at 358, quoted in Cobbledick, 309 U.S. at 327, 60 S.Ct. at 542, the Court held that a right of review which would follow from an order holding a witness in contempt "is adequate for his protection without unduly impeding the progress of the case.... This power to punish being exercised the matter becomes personal to the witness and a judgment as to him. Prior to that the proceedings are interlocutory in the original suit."

Cobbledick was reaffirmed by the Supreme Court as recently as in United States v. Ryan, 402 U.S. 530, 91 S.Ct. 1580, 29 L.Ed.2d 85 (1971). In Ryan Justice Brennan referred for the Court to the exception expressed in Perlman v. United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950 (1918), where the subpoena directed a third party to produce exhibits which were not the property of the person to whom the subpoena was issued and the owner claimed immunity from the production order. The Supreme Court there allowed immediate review stating that to have denied such review would have left Perlman "powerless to avert the mischief of the order," Id. at 13, 38 S.Ct. at 419, for, as Justice Brennan put it for the Court in Ryan, "the custodian could hardly have been expected to risk a citation for contempt in order to secure Perlman an opportunity for judicial review." 402 U.S. at 533, 91 S.Ct. at 1582. Technically the subpoena here may be to a third party since it does not clearly appear whether the recipient is an employee. In Perlman the recipient was not an employee. Thus, if "the custodian of records," the title used in the subpoena, is an employee, he is under the direction and control of his employers, his duties may be changed at will, and he may not be in actual control of the records.

Cases which appear to follow Cobbledick include: United States v. Harrod, 428 A.2d 30 (D.C.1981); State v. Grover, 387 A.2d 21 (Me.1978); Commonwealth v. Winer, 380 Mass. 934, 404 N.E.2d 654 (1980); and In Re: Petition of Arlen Spector, 455 Pa. 518, 519-20, 317 A.2d 286 (1974).

Appellants counter with the rule laid down in New York in such cases as Mtr. Cunningham v. Nadjari, 39 N.Y.2d 314, 317, 347 N.E.2d 915, 383 N.Y.S.2d 590 (1976), and Matter of Boikess v. Aspland, 24 N.Y.2d 136, 138-39, 247 N.E.2d 135, 299 N.Y.S.2d 163 (1969). Those cases carry little weight here, however, because the reasoning is that they were final orders in special proceedings on the civil side of the docket in a court vested with civil jurisdiction. The orders here were in the Criminal Court of Baltimore (now the Circuit Court for Baltimore City) which at the time in question was vested only with criminal jurisdiction.

As in the federal system, with certain limited exceptions not applicable to this case, appeals from circuit courts in this State are limited to ones from final judgments by Maryland Code (1974) § 12-301, Courts and Judicial Proceedings Article. Our consistent holding has been that a final judgment from which an appeal will lie is one which settles the rights of the parties or concludes the cause. In Re: Special Investigation No. 231, 295 Md. 366, 455 A.2d 442 (1983), and cases there cited. The proceeding here consisted only of a petition to quash the subpoena duces tecum.

In another of the cases involving the Attorney General's investigation of Medicaid fraud, In Re Special Investigation No. 185, 293 Md. 652, 655-56 n. 2, 446 A.2d 1151 (1982), Judge Rodowsky recently wrote for the Court, after noting that the trial court directed production forthwith of documents enumerated in a subpoena duces tecum:

"Following the order of September 3, 1981 nothing remained before the Criminal Court of Baltimore. Thus the order was appealable as a final judgment. See Randall Book Corp. v. State, 49 Md.App. 131, 430 A.2d 624 (1981), applying to a case of this type the principle enunciated in Fred W. Allnutt, Inc. v. Comm'r of Labor and Indus., 289 Md. 35, 421 A.2d 1360 (1980). Cf. In re Special Investigation No. 186, 293 Md. 304, 443 A.2d 120 (1982) (appeal entertained without discussion)."

In Specter, 455 Pa. 518, 317 A.2d 286, there was a dissent by Justice Nix in which he said:

"I recognize that the ordinary route for challenging a subpoena is through contempt. However, I am in fundamental disagreement with such an approach where there is substantial question concerning the authority to issue the subpoena. In such a case, a party with real doubt as to his legal status is forced to act upon that status at his peril. If he refuses to obey the subpoena and his challenge is not sustained, he will be subject to criminal sanction. If he obeys the subpoena, his challenge may well be moot because the harm he sought to avoid--be it unreasonable search and seizure, self-incrimination or a general invasion of privacy--has already occurred.

"A civil litigant in such a dilemma would be allowed the assistance of a declaratory judgment in order to avoid future litigation. See generally, Friestad v. Travelers Indemnity Co., 452 Pa. 417, 306 A.2d 295 (1973). The primary thrust of our criminal law is to prevent crime. It is fundamentally inconsistent to force a citizen to commit a crime in order to preserve his right to appeal, while at the same time affording civil litigants access to the courts." 455 Pa. at 521, 317 A.2d 286.

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