U.S. v. Lindstrom

• Decision Date: 22 February 1983
• Docket Number: No. 81-5901,81-5901
• Citation: 698 F.2d 1154
• Parties: 12 Fed. R. Evid. Serv. 1006 UNITED STATES of America, Plaintiff-Appellee, v. Joanne LINDSTROM, Dennis Slater, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1154

698 F.2d 1154

12 Fed. R. Evid. Serv. 1006

UNITED STATES of America, Plaintiff-Appellee, v. Joanne LINDSTROM, Dennis Slater, Defendants-Appellants.

No. 81-5901.

United States Court of Appeals Eleventh Circuit.

Feb. 22, 1983.

James H. Thompson, Thompson & Lavandera, P.A., Tampa, Fla. (Court Appointed), for Lindstrom.

John A. DeVault, III, Bedell, Bedell, Dittmar & Zehmer, P.A., Jacksonville, Fla., for Slater.

Lee William Atkinson, Rodney W. Morgan, Asst. U.S. Attys., Tampa, Fla., for plaintiff-appellee.

Appeals from the United States District Court for the Middle District of Florida.

Before VANCE and ANDERSON, Circuit Judges, and SCOTT ^*, District Judge.

VANCE, Circuit Judge:

This case presents a question recently resolved by Greene v. Wainwright, 634 F.2d 272 (5th Cir.1981). Greene involved an identical issue of law and an almost identical array of facts. Also as in Greene, we must overturn convictions, obtained after a lengthy trial, because the trial court's rulings deprived criminal defendants of their fundamental rights of confrontation and cross-examination.

Dennis Slater and Joanne Lindstrom appeal convictions and sentences for mail fraud, 18 U.S.C. Sec. 1341 and Sec. 1342, and conspiracy to commit mail fraud, 18 U.S.C. Sec. 371. Neither appellant challenges the sufficiency of the evidence when viewed in the light most favorable to the government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942). Slater and Lindstrom raise six issues on appeal, ¹ but we conclude that it is necessary that we treat only two: whether preindictment delay deprived appellants of their right to due process and whether the district court erred in imposing restrictions on appellants' ability to review psychiatric information bearing on the credibility of the government's key witness and in limiting cross-examination of that witness. Because we find that the trial court's restrictions on access to documents and on cross-examination denied appellants the right to confront their accusers, we reverse.

The convictions centered around the activities of Bay Therapy, Inc., a Florida corporation purporting to provide physical therapy treatment to injured persons pursuant to doctors' prescriptions. Joanne Lindstrom was a legal secretary employed by Dennis Slater, who was a senior trial attorney with a Tampa law firm. Slater, Lindstrom and David Webster, also an attorney, formed Bay Therapy, Inc. in the summer of 1976, each owning a one-third interest. The three agreed that Lindstrom would oversee the clinic's operation. She leased a building, acquired the necessary equipment and employed Rosamond Sloan, a licensed practical nurse, to operate the clinic. In October 1976, Sloan was replaced by the person who became the government's star witness at trial.

After she had been operating Bay Therapy for about nine months, Sloan's replacement contacted her brother, a former FBI agent who was then employed by the Fraud Division of the Florida Insurance Commissioner's office. At the suggestion of the investigators, she began attempting to learn incriminating information from Lindstrom, Slater and Webster. She also initiated meetings with federal investigators.

Eventually, she became the key witness at the Bay Therapy trial. During 1978, 1979 and 1980, two successive federal grand juries heard extensive evidence on the operations of Bay Therapy before handing down an indictment. The indictment charged that the appellants, as part of a scheme to inflate medical costs and defraud insurance companies, caused patients to be sent to Bay Therapy for treatment they did not need and often did not even receive. The trial lasted for three weeks and involved the testimony of eighty-six witnesses.

The government's key witness testified that during the period when she was overseeing operations at Bay Therapy, she, Lindstrom and Slater had discussed alteration of records, that she and Lindstrom had in fact changed records, that Slater and Lindstrom had ordered her to duplicate billing cards and that patients signed up for treatments they did not receive. Other witnesses testified about Slater's attempts to secure business for the clinic, and a number of former patients related their divergent experiences with Bay Therapy. Insurance claims managers debated whether increased therapy bills would in fact result in higher settlements, and an attorney outlined the factors he customarily considered in settling personal injury cases. Both appellants testified at the trial, denying all charges.

The jury found Slater and Lindstrom guilty of conspiracy to commit mail fraud and seventeen substantive counts of mail fraud. The district court sentenced Slater to concurrent sentences of five years imprisonment on all counts, but the court suspended all but six months of the sentence and placed Slater on four years probation. Lindstrom was placed on three years probation.

(1)

Preindictment Delay

Lindstrom and Slater assert that the three-year period between the initiation of the investigation and the rendering of the indictment was excessive. Appellants contend that the delay, during which two witnesses died, deprived them of their fifth amendment right to due process and their sixth amendment right to speedy trial. We cannot agree.

The speedy trial guarantee of the sixth amendment does not apply to preindictment delay. United States v. Lovasco, 431 U.S. 783, 788, 97 S.Ct. 2044, 2047, 52 L.Ed.2d 752 (1977); United States v. Marion, 404 U.S. 307, 320, 92 S.Ct. 455, 463, 30 L.Ed.2d 468 (1971). The due process clause of the fifth amendment, however, requires dismissal of an indictment if a defendant makes a twofold showing: (1) that the delay caused actual prejudice to the conduct of his defense, and (2) that the delay was the product of deliberate action by the government designed to gain a tactical advantage. United States v. Marion, 404 U.S. at 324, 92 S.Ct. at 465; United States v. Townley, 665 F.2d 579, 581-82 (5th Cir.), cert. denied, --- U.S. ----, 102 S.Ct. 2305, 73 L.Ed.2d 1307 (1982); United States v. Hendricks, 661 F.2d 38, 39-40 (5th Cir.1981); United States v. Nixon, 634 F.2d 306, 310 (5th Cir.), cert. denied, 454 U.S. 828, 102 S.Ct. 120, 70 L.Ed.2d 103 (1981); United States v. Willis, 583 F.2d 203, 207-08 (5th Cir.1978).

Appellants urge that they have demonstrated prejudice and that they have been denied the ability to demonstrate prosecutorial bad faith. They argue that the deaths of two witnesses, Dr. L.J. Cordrey and William Hapner, caused them "actual prejudice and not merely 'the real possibility of prejudice inherent in any extended delay.' " United States v. McGough, 510 F.2d 598, 604 (5th Cir.1975), quoting United States v. Marion, 404 U.S. at 326, 92 S.Ct. at 466. We agree that appellants have made a prima facie showing of prejudice. Of the seven patient-clients who were the subject of the mail fraud counts, five were treated or examined by Dr. Cordrey. Slater had talked to Dr. Cordrey concerning his treatment of numerous patients whom the government alleged had been sent to Bay Therapy to unnecessarily boost their medical expenses. In many instances, Dr. Cordrey was the only physician to have examined these patients during their association with Bay Therapy. Further, appellants contend that William Hapner would have testified about his discussions with Slater on certain ethical and legal implications of Slater's involvement with Bay Therapy. Slater argues that Hapner would have testified as to why Slater referred numerous patients to certain defendants in the case and that Slater received no fees for the referrals.

Prejudice, however, is not enough: "proof of prejudice is generally a necessary but not sufficient element of a due process claim ... [T]he due process inquiry must consider the reasons for the delay as well as the prejudice to the accused." United States v. Lovasco, 431 U.S. at 790, 97 S.Ct. at 2048. An appellant's showing of prejudice triggers a "sensitive balancing of the government's need for an investigative delay ... against the prejudice asserted by the defendant." United States v. Brand, 556 F.2d 1312, 1317 n. 7 (5th Cir.1977), cert. denied, 434 U.S. 1063, 98 S.Ct. 1237, 55 L.Ed.2d 763 (1978). Delay caused by a good faith ongoing investigation will not offend "fundamental conceptions of justice," United States v. Lovasco, 431 U.S. at 791, 97 S.Ct. at 2049. Delay that prejudices a defendant will, however, require dismissal of an indictment if the delay was an intentional device to gain tactical advantage over the accused. United States v. Marion, 404 U.S. at 324, 92 S.Ct. at 465.

Appellants have not suggested what tactical advantage the government could have hoped to gain by delay. As in United States v. Hendricks, 661 F.2d 38, 40 (5th Cir.1981) appellants have produced "no evidence even tending to show that the delay was a deliberate tactical maneuver by the government." Lindstrom and Slater contend that they could have demonstrated the cause of the delay had they been given access to the files of the United States Attorney. Appellants had requested the court to subpoena the files of the government, pursuant to United States v. Surface, 624 F.2d 23, 25 n. 2 (5th Cir.1980), to determine whether the delays were for permissible reasons.

We do not know the extent to which Lindstrom and Slater were in fact granted access to the government's files. The United States tells us that "in response to defense requests, the Court allowed the defense to rummage through prosecution files to determine if preindictment delays were properly motivated." Appellants reply that "at no time did the Court permit the defense to 'rummage through prosecution files.' "

The government contended in its Answer to Motion to Dismiss for Pre-Indictment Delay that the period of time between investigation and indictment was reasonable. This was a complex case involving numerous documents and records. Acco...