U.S. v. Anderson, 99-MC-205-JWL.

• Decision Date: 07 May 1999
• Docket Number: No. 99-MC-207-JWL.,No. 99-MC-205-JWL.,99-MC-205-JWL.,99-MC-207-JWL.
• Citation: 55 F.Supp.2d 1163
• Parties: UNITED STATES of America, Plaintiff, v. Dan ANDERSON, et al., Defendants.
• Court: U.S. District Court — District of Kansas

55 F.Supp.2d 1163

UNITED STATES of America, Plaintiff, v. Dan ANDERSON, et al., Defendants.

No. 99-MC-205-JWL.

No. 99-MC-207-JWL.

United States District Court, D. Kansas.

May 7, 1999.

Tanya J. Treadway, Office of United States Attorney, Kansas City, KS, for United States of America, plaintiff.

Thomas G. Kokoruda, Shughart, Thomson & Kilroy, P.C., Kansas City, MO, John Jenab, Jenab & Kuchar, Olathe, KS, Ankur J Goel, McDermott, Will & Emery, Washington, DC, for Gina Kaiser, S Craig Holden and David Queen, movants.

MEMORANDUM AND ORDER

LUNGSTRUM, District Judge.

This matter comes before the court on a dispute collateral to the complex prosecution of two doctors, three hospital executives, and two lawyers in an alleged Medicare Kickback scheme. After a nine-week jury trial, the jury convicted the two doctors and two of the hospital executives on conspiracy and other charges.¹

The dispute now before the court stems from the government's act of naming three other lawyers as "unindicted coconspirators" in various pretrial papers and at trial. Attorney Gina Kaiser, who testified for the government at trial, seeks (1) an order expunging all references to her as an unindicted coconspirator in the Government's Memorandum In Support of Its Motion for Determination of Conflict (Doc. 96), (2) a finding that she was denied her due process rights, and (3) a finding that the government's evidence in this matter proved only that she acted in good faith and not that she was a member of an illegal kickback conspiracy. Attorneys S. Craig Holden and David Queen jointly seek (1) an order expunging from the record all references to them as "coconspirators" or "unindicted coconspirators," and (2) a finding that the proof at trial did not support the government's allegation that they participated in an unlawful conspiracy, but showed instead that they acted appropriately and legally. For the reasons set forth below, the petitioners motions are granted in part and denied in part.

I. Background

Proper framing of the issues here involved requires a brief procedural history recitation. On June 11, 1997, a federal grand jury indicted Drs. Robert and Ronald LaHue on charges of conspiracy and program fraud pursuant to 18 U.S.C. §§ 371, 666. The indictment alleged that the LaHues had conspired with unnamed coconspirators, both known and unknown to the grand jury. On March 18, 1998, this court dismissed the section 666-related charges on jurisdictional grounds, see United States v. LaHue, 998 F.Supp. 1182 (D.Kan.1998), aff'd, 170 F.3d 1026 (10th Cir.1999), but not before the LaHues had sought and obtained, under seal, a list of individuals whom the government considered unindicted coconspirators. While pursuing its appeal in the LaHue case, the government obtained an indictment against Dan Anderson, Dennis McClatchey, Ronald Keel, Ruth Lehr, Mark Thompson, and the Drs. LaHue on conspiracy and Medicare kickback charges pursuant to 18 U.S.C. § 371 and 42 U.S.C. § 1320a-7b(b).² See, e.g., United States v. Anderson, No. 98-20030-JWL, 1999 WL 84290 (D.Kan. Jan. 8, 1999). The new indictment, like the dismissed indictment, alleged the existence of unnamed, unindicted coconspirators.

While preparing for trial on the new indictment, the government sought disqualification of trial counsel for Dr. Ronald LaHue and Dr. Robert LaHue because it perceived an unsworn witness problem stemming from the appearance of trial counsel's names on some of the documents it intended to use at trial. The government also asked the court to discern whether any potential conflict arose out of any joint defense agreements or third party fee arrangements. See United States v. Anderson, 98-20030-JWL, 1998 WL 713934 (D.Kan. Sept. 28, 1998) (explaining court's findings concerning potential conflicts after individual collogues with each defendant). In its memorandum in support of this motion, the government, for the first time, publicly identified movants Gina Kaiser, S. Craig Holden, and David Queen as unindicted coconspirators. The government's identification of the movants as coconspirators was notoriously reported in the legal and healthcare community. See J. Duncan Moore, Jr., Baptist Probe Escalates: Unindicted Co-conspirators Named in Kickback Case, Modern Healthcare, Sept. 7, 1998, at 8; Kip Betz, Trial Dates Set in LaHue Kickback Case; Motion Names Unindicted Co-Conspirators, BNA's Health Care Fraud Report, Sept. 23, 1998, at 713; Healthcare Compliance Gets More Complicated — & More Risky: U.S. Indicts Attorneys in Hospital, Physician Kickback Case, Washington Insider's Focus, October 9, 1998, at 1; Peter Aronson, Health Care Fraud Rasies Ire: Three Lawyers Identified as Unindicted Co-Conspirators, National Law Journal, Nov. 23, 1998, at A01; Janet Novack, First, Indict All the Lawyers, Forbes, Jan. 25, 1999, at 62. The government's memorandum did not explain why the government felt compelled to identify the movants publicly as coconspirators. Later, on November 25, 1998 and at the defendants' request, the court ordered the government to provide all defendants with a complete list of unindicted conspirators under seal.³

II. Analysis

A. Legal Framework

There are no Tenth Circuit cases discussing the propriety of naming unindicted coconspirators. A number of courts, however, have followed the Fifth Circuit's lead in United States v. Briggs, 514 F.2d 794 (5th Cir.1975) (striking named unindicted coconspirators from an indictment) and In re Smith, 656 F.2d 1101 (5th Cir. 1981) (issuing a writ of mandamus that required district court to seal and strike the name of an unindicted coconspirator from a Rule 11 plea colloquy and related papers). See 1 Charles Alan Wright, Federal Practice and Procedure 3d § 110, at 464 n. 15 (1999). Briggs was a proceeding collateral to the high-profile prosecution of certain political demonstrators at the 1972 Republican National Convention in Miami, Florida. Briggs, 514 F.2d at 796-97. The indictment in Briggs named ten coconspirators, seven of whom were indicted and three of whom were not.⁴ Id. at 797. Two of the unindicted coconspirators sought an order expunging their names from the indictment. Id. The trial court denied the motion without comment. Id.

On appeal, the Fifth Circuit first determined that the unindicted conspirators' motion was justiciable. Id. Standing was appropriate, held the court, because the movants had alleged a concrete injury to their reputations and economic interests from the grand jury's action. Id. at 797-98. The court rejected the government's three theories related to standing: (1) that a person's interests are not adversely affected by being publicly branded a felon, (2) that the only injury the movants suffered came at the hands of the news media, and (3) that the acquittal of their alleged coconspirators was sufficient to remedy any injury they incurred. Id. at 799. The issues were not moot because the injury to the movants was "real, direct, and continuing." Id. at 800.

Moving to the merits of the case, the Fifth Circuit held it was beyond the power of a grand jury to name unindicted coconspirators:

The grand jury that returns an indictment naming a person as an unindicted conspirator does not perform its shielding function but does exactly the reverse. If the charges are baseless, the named person should not be subjected to public branding, and if supported by probable case he should not be denied a forum.

Id. at 803. Naming an unindicted coconspirator in an indictment offends due process because, when weighing the governmental interest in naming an unindicted coconspirator against the harm to the individual who is accused but not indicted, "the balance tips wholly in favor of the adversely affected appellants." Id. at 806.

In Smith, the Fifth Circuit extended the Briggs rule well beyond the grand jury context, and ordered other court filings and records naming an unindicted coconspirator sealed and struck. Smith, 656 F.2d at 1107. Smith arose out of bribery allegations concerning the Army and Air Force Exchange Service (AAFES). Id. at 1102. The AAFES purchases billions of dollars of merchandise each year for resale to military personnel through the military P.X. system. Id. The principal defendants in Smith pleaded guilty to a felony information charging one count of bribery of an AAFES purchasing agent. Id. at 1103. During the plea hearing, the Assistant United States Attorney read in open court and filed in the case record a factual resume prepared for purposes of the plea hearing. Id. "In addition to describing the events immediately involved in (the) plea of guilty, the resume went on to state that [the defendant] had paid sums to other unnamed AAFES employees, but also specifically named the head of AAFES, [Mr. Edward S. Smith,] among those other employees." Id. The news media picked up on this information, and reported that, "as a matter of official courtroom record, Mr. Smith had been paid bribe monies by various businesses dealing with AAFES." Id. at 1104. Mr. Smith sought relief in the district court, which was denied. Id. at 1105. He sought mandamus in the Fifth Circuit. Id. Simultaneously, the Commander of AAFES notified Mr. Smith that his retirement benefits would be reduced because of the accusations of wrongdoing. Id.

The Fifth Circuit granted mandamus, holding that the plea transcripts and documents must be sealed and stricken, and that they could not be used against Mr. Smith in any administrative benefits proceeding:

The government in this case urges us to accept the procedures followed regarding the factual resumes to be consistent with Briggs. The government argues that Briggs only forbids the naming of unindicted coconspirators by a federal grand jury. We cannot agree. The point made in the Briggs decision is that no legitimate governmental interest is served by an official public smear of an individual when that individual has not been provided a forum in which...