U.S. v. Eastern Medical Billing Inc.

• Decision Date: 13 October 2000
• Docket Number: 99-5490,Nos. 99-5489,99-5491,s. 99-5489
• Citation: 230 F.3d 600
• Parties: (3rd Cir. 2000) UNITED STATES OF AMERICA v. EASTERN MEDICAL BILLING, INC. (APPELLANT IN 99-5489) UNITED STATES OF AMERICA v. JOSEPH PODLASECK (APPELLANT IN 99-5490) UNITED STATES OF AMERICA v. DAVID PODLASECK (APPELLANT IN 99-5491)
• Court: U.S. Court of Appeals — Third Circuit

Page 600

230 F.3d 600 (3rd Cir. 2000)

UNITED STATES OF AMERICA v. EASTERN MEDICAL BILLING, INC. (APPELLANT IN 99-5489)

UNITED STATES OF AMERICA v. JOSEPH PODLASECK (APPELLANT IN 99-5490)

UNITED STATES OF AMERICA v. DAVID PODLASECK (APPELLANT IN 99-5491)

Nos. 99-5489, 99-5490, 99-5491

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued March 23, 2000

Filed October 13, 2000

On Appeal from the United States District Court for the District of Delaware, D.C. Criminal Nos. 96-cr-00098-4,-5,-6, District Judge: Honorable Joseph J. Longobardi

Counsel for Appellee United States of America: Luis M. Matos, Esq. [argued] Office of United States Attorney Federal Building 1201 Market Street P. O. Box 2046, Suite 1100 Wilmington, DE 19899-2046

Counsel for Appellants Eastern Medical Billing, Inc. (No. 99-5489) and David Podlaseck (No. 99-5491): Peter Goldberger, Esq. [argued] Law Office of Peter Goldberger 50 Rittenhouse Place Ardmore, PA 19003-2276

Counsel for Appellant Joseph Podlaseck (No. 99-5490): Raymond M. Radulski, Esq. [argued] Suite 301 1225 North King Street Legal Arts Building Wilmington, DE 19801

Before: McKEE and Rendell, Circuit Judges, and Debevoise,^* Senior District Judge

OPINION FOR THE COURT

Rendell, Circuit Judge.

In United States v. Fioravanti, 412 F.2d 407 (3d Cir. 1969), we announced a prophylactic rule prohibiting the use of Allen charges. This appeal requires us to apply our decision in Fioravanti and its progeny to the supplemental charge given by the District Court during the jury's deliberation.¹ The trial resulted in guilty verdicts on all counts against the three defendants: the Podlasecks, father Joseph and son David, and Eastern Medical Billing, Inc. ("EMB"). Since we believe that the supplemental charge contravened our precedent, and had definite potential for coercive effect on the jury, we will REVERSE and REMAND for a new trial.²

I.

David Podlaseck was president of EMB, a company the Podlasecks started in 1992 to provide billing services for health care providers. David's father, Joseph Podlaseck, was EMB's primary salesman, and David's mother, Phyllis Podlaseck, was its treasurer and office manager. In October 1993, EMB entered into a contract with Metro Ambulance ("Metro"), whereby EMB would provide billing services for Metro, an authorized Medicare and Medicaid provider of ambulance services, which regularly transported dialysis patients to renal care centers using ambulances and vans. Metro, its principal, Jane Pflumm, and employee Jerry Johnson, were also indicted by the grand jury, and they pled guilty to the charges.

The defendants were charged with: one count of conspiracy in violation of 18 U.S.C. S 371; eleven counts of submitting false claims to the Health Care Financing Administration ("HCFA") of the Department of Health and Human Services, in violation of 18 U.S.C. S 287; and four counts of mail fraud, in violation of 18 U.S.C. S 1341. The factual basis for each count was the government's contention that the defendants agreed to, and knowingly did, submit false claims to HCFA for single passenger, medically necessary ambulance trips. In fact, groups of patients had been transported together in vans, not ambulances, and the use of ambulances had not been medically necessary.

At trial, the government presented witnesses and documents to demonstrate that the Podlasecks had the necessary intent and knowledge to violate the law. The government focused especially on the meaning of certain coded run sheets that Metro drivers completed for each patient they transported, the form of which the Podlasecks had modified during the course of the allegedly illegal activity. Witnesses also testified about the Podlasecks' actions and about certain statements they made. Neither Jane Pflumm nor Jerry Johnson were called to testify.

The Podlasecks argued that they acted as dupes of Metro, and challenged the honesty and accuracy of the government's witnesses at trial. One of the principal witnesses, Angela DeFelice, who testified on behalf of the government, was attacked as being essentially dishonest and biased.³ Other witnesses were similarly impeached.⁴

Joseph Podlaseck also testified, and in its ruling on post-trial motions, the District Court sustained the verdict based in part on its view that Podlaseck's testimony lacked credibility. In light of the predominantly circumstantial nature of the evidence, the credibility issues on both sides, and the absence of testimony from the principal Metro officers directly involved in the offense conduct, we do not believe that the evidence at trial was "overwhelming."

Following nine days of testimony, the jury commenced deliberations on a Tuesday. After two days of deliberations, on Thursday morning, the panel submitted a question: "Can the jury be `hung' on one defendant of the indictment and not the others?" One of the prosecutors mentioned the possibility of giving an Allen charge, but defense counsel and the Assistant United States Attorney agreed with the District Court's decision to simply write "yes" on the jury note, which it did. Within one-half hour, the jury communicated a second question to the Court: "As a follow-up to the above question, is it also possible for the jury to be `hung' on one of the counts for a particular defendant and not on the other counts?"⁵

The Court asked counsel whether an Allen charge might be appropriate at this time. After a moment to consult with each other, defense counsel initially concluded that an Allen charge should be given, explaining to the Court that simply answering the question "yes" might be coercive. The Assistant United States Attorney disagreed, but said he would not oppose it vigorously. The District Court decided to give the charge. Defense counsel then asked what charge the Court would give. The Court answered: "The one I've been doing for 15 years and the one that has been approved. Why don't you look at it?" Acknowledging the Court's view that the charge had been approved, the government dropped its objection: "Your Honor, if it's the one you've been giving for 15 years, we're not going to oppose it." However, after reviewing the charge, defense counsel changed their position. Counsel for David Podlaseck and EMB explained the defendants' concern.

Counsel: Your Honor, I'm reversing my decision because there's, of course, in the courthouse various Allen charges and I didn't remember the Court's specific Allen charge, and I understand it's been approved. What I'm worried about is that it's a long Allen charge and then I think that it will sound at this stage, given the length of it, that it's kind of telling them that they have to reach a verdict.

The Court disagreed, noted counsel's objection, and rejected counsel's subsequent proffer of a different, shorter, Allen charge.

The Court: I don't think so. Okay. That's the difference. Eventually what I tell them is don't surrender your conscientious views.

Counsel: But --

The Court: Well, that's all right. You're on record, you object to it. I'm going to give it and your objection is on the record. You are protected.

Counsel: And you Honor, I in fact had someone run back to my office to propose perhaps a possible alternative instruction. And I take it that the Court is not going to consider it?

The Court: Yes, I'm going to give this one I have given repeatedly.

Counsel: I do have a shortened version.

The Court: I'm going to give this one.

Counsel: Okay.

The Court then brought the jury into the courtroom, and addressed them. We quote the instruction in its entirety.

In response to your last question, the answer is yes. I want to read you another charge.

The Court wishes to suggest a few thoughts which you may desire to consider in your deliberation along with the evidence and the instructions previously given to you.

This is an important case. The trial has been time consuming and burdensome both to the Government and to the defendants. If you should fail to agree upon a verdict, the case is left open and undecided. Like all cases, it must be disposed of sometime. There appears to be no reason to believe that another trial would not be equally time consuming and burdensome to all persons involved, nor does there appear to be any reason to believe that the case can be tried again better or more exhaustively that it has been in this trial. Any future jury must be selected in the same manner and from the same source as you have been chosen. So there appears to be no reason to believe that the case could ever be submitted to 12 men and women more intelligent, more impartial or more competent to decide it or that more or clearer evidence could be produced on behalf of either side.

Of course, these matters suggest themselves, upon brief reflection, to all of us who have sat through the trial. The only reason they are mentioned is because some of them may have escaped your attention which must be fully occupied up to this time in reviewing the evidence of the case. They are matters which, along with other and perhaps more obvious ones, remind us how important and desirable it is for you to unanimously agree upon a verdict, if you can do so without violence to your individual judgment and conscience.

It is unnecessary to add that the Court does not wish any juror to surrender his or her conscientious convictions. However, it is your duty as jurors to consult with one another and to deliberate with a view to reaching an agreement, if you can do so without violence to your individual judgment. Each of you must decide the case for yourself but you should do so only after consideration of the evidence with your fellow jurors and, in the course of your deliberations, you should not hesitate to change your opinion when convinced that it is erroneous.

In order to bring 12 minds to a unanimous result, you must examine the questions submitted to you with candor and frankness and with proper deference to and regard for the...