Case o' The Week: Judge Graber Urges a "Liberal" Reading in a Criminal Case, Awad and Sufficiency of the Indictment

In Awad, Judge Susan Graber (left) urges a "liberal" approach in a criminal case. Honest. Unfortunately for Awad, however, Judge Graber is referring to a "liberal" reading of a deficient indictment; a reading which allows fraud convictions (and a 180 month sentence) to stand. United States v. Awad, __ F.3d __, 2009 WL 47054 (Jan. 12, 2009), decision available here.

Players: Decision by Judge Susan Graber.

Facts: Dr. Awad billed Medicare millions for the treatment of (mostly) mentally-ill patients in board and care facilities. Id. at *2. His billing forms, turns out, were predetermined and preprinted – 100% of patients seen “needed” the same services. Id. At times over 90 patients were “seen” in a day. Id. Awad was charged with a scheme to defraud Medicare (§ 1347) and money laundering using health care fraud proceeds (§ 1956 (a)(1)(A)). Id. at *3. After his conviction at trial, Awad moved for judgment of acquittal because the indictment did not use the word, “wilfully” with respect to the health care fraud allegations. Id.

Issue(s): “Defendant asserts on appeal that the indictment was insufficient; that the indictment was multiplicitous [and] that the jury instructions erroneously stated that the jury need not find that Defendant knew his actions were unlawful and that the error was prejudicial . . . .” Id. at *1.

Held: 1. Sufficiency of the Indictment: “[H]ere, an inference of willfulness is obvious because of the facts alleged in the indictment. . . . [A]lthough the word ‘willfully’ does not appear in the indictment, sufficient facts were pleaded so that any reader would infer that Defendant acted with a bad purpose.” Id. at *4. “Omission of the word ‘willfully’ was not fatal, as the indictment sufficiently informed Defendant of the charges against him because of the nature and specificity of the facts alleged.” Id.

2. Multiplicity: “[T]he indictment charging 24 counts of health care fraud was not multiplicitous.” Id. at *6.

Of Note: Judge Graber’s “liberal” reading of a deficient indictment traces back to an important Ninth Circuit decision, United States v. Du Bo, 186 F.3d 1177 (9th Cir. 1999). Du Bo’s rule is that, “if properly challenged prior to trial, an indictment's complete failure to recite an essential element of the charged offense is not a minor or technical flaw subject to harmless error analysis, but a fatal flaw requiring dismissal of the indictment.” Id. at 1179 (emphasis added). Apprendi litigation taught us that the timing of an indictment challenge is everything. If the defense doesn’t bring a challenge to the sufficiency of the indictment before trial, it loses the bite of structural error and the challenge will collapse into the deferential mush recited in Awad. See United States v. Velasco-Medina, 305 F.3d 839, 846-47 (9th Cir. 2002).

After the Supreme Court’s decision in Cotton, other circuits have held that failure to raise a challenge to the sufficiency of the indictment before trial demotes the attack to plain error review. See, e.g., United States v. Sink, 473 F.3d 1315, 1317 (10th Cir. 2007) (distinguishing United States v. Prentiss, 256 F.3d 971, 982 (10th Cir. 2001) (en banc)). This is a frustrating rule, from the defense perspective: we must teach AUSAs how to clean-up their shoddy indictments before trial, or (effectively) surrender our indictment challenges.

How to Use: The indictment here didn’t allege “willfulness,” and the jury instructions flatly screwed-up the “willfulness” definition. Id. at *7-*8. The conviction, however, still survives harmless error review! Nonetheless, among the harmless errors weeds there is a mens rea rose or two in this decision.

It was error for the district court to instruct, “[t]he government is not required to prove that the defendant knew that his acts or omissions were unlawful.” Id. at *8. Instead, a health-care fraud defendant is entitled to a general instruction that “‘willfully’ means that a defendant knew his or her conduct was unlawful.” Id. at *7. One must tease this principle out of the harmless error discussion of Awad, but the principle is there: a health care fraud defendant must know that his or her conduct was unlawful in order to have acted “willfully.”

For Further Reading: Judge Graber is generally seen as a tough defense draw. Her mens rea dissent in Heredia was thus particularly notable. In Heredia (that en banc willful blindness debacle, on the Jewell instruction) Judge Graber’s dissent was forceful, blunt, and persuasive: she would require proof of a “knowing or intentional” mens rea in federal drug cases. For a good summary of a great dissent, see a thoughtful blog here.


Image of Judge Susan Graber from http://www.abovethelaw.com/susan_graber/


Steven Kalar, Senior Litigator N.D. Cal FPD. Website at www.ndcalfpd.org

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Case o' The Week: Ninth Burns Jewell While "Clearing Underbrush," Heredia en banc

While "clearing the underbrush" around the Ninth Circuit's deliberate ignorance instruction (Jewell), Judge Kozinski's en banc decision also incinerates the few protections that were formerly part of this area of law. United States v. Heredia, __ F.3d __, No. 03-10585, Slip. Op. at 3715 (9th Cir. April 2, 2007) (en banc), decision available here. A disappointing en banc opinion that seems to have split the Right.

Players: Kozinski (right) authors en banc decision that reverses good Bybee decision; Kleinfeld concurs but really dissents; and Graber dissents (?) with Pregerson and others. (These splits alone makes the case worth a read).

Facts: Carmen Heredia got caught at a near-border bust with a car that smelled like dryer sheets, and 349 pounds of pot. Id. at 3719-20. At trial she testified that she borrowed the car, noticed the odd smell, but by the time she suspected that drugs were in the car she was at a spot on a freeway that was too dangerous to stop and check. The district court gave a Jewell deliberate ignorance instruction over defense objection: she was convicted of 21 USC § 841(a)(1). Id. at 3721.

Issue(s): “On appeal, defendant asks us to overrule Jewell and hold that section 841(a)(1) extends liability only to individuals who act with actual knowledge. Should Jewell remain good law, she asks us to reverse her conviction because the instruction given to the jury was defective and because there was an insufficient factual basis for issuing the instruction in the first place.” Id. (footnote omitted).

Held: “[W]e recognize that many of our post-Jewell cases have created a vexing thicket of precedent that has been difficult for litigants to follow and for district courts—and ourselves—to apply with consistency. But, rather than overturn Jewell, we conclude that the better course is to clear away the underbrush that surrounds it.” Id. at 3723. [There is no requirement that] “the jury . . . be instructed that defendant’s motive in deliberately failing to learn the truth was to give himself a defense in case he should be charged with the crime.” Id. at 3723-26. “We . . . re-adopt the normal rule applicable to jury instructions by reviewing the decision to give a deliberate ignorance instruction for abuse of discretion. Opinions to the contrary [requiring de novo review]. . . .are overruled.” Id. at 3728. “Some of our opinions have commented on how [infrequently ] Jewell instructions should be given . . . . Whether the instruction is given depends solely on the state of the evidence in the case . . . . Cases suggesting the contrary are, to that extent, overruled.” Id. at 3732 & n. 16.

Of Note: The defense had hoped to eliminate the hated Jewell instruction – instead, this Kozinski opinion makes it worse. The Court still requires the two prongs found in the old Ninth instruction. Id. at 3726. It rejected, though, the “motive to provide a defense” prong that had made its way into some analyses. It also disavowed very useful language that cautioned against the Jewell instruction and urged limited use. Id. at 3723 & n. 16. Worst of all – and this is really the most dangerous aspect of the decision – it scrapped de novo review of whether the instruction was appropriate, and adopted the (more-deferential) “abuse of discretion” standard. Put bluntly, the district court now has greater deference on whether to give the government a Jewell instruction. (“We will second guess [the district court’s] decision only in those rare cases where we find an abuse of discretion.”) Id. at 3732. That greater deference is bad news for the defense.

How to Use: Lemonade is a challenge from this lemon of an opinion. Here’s a stab: Kozinski emphasizes that a district court retains the power to tailor the Jewell instruction to fit the facts of the case. Here, for example, the judge could have instructed the jury that it could find Heredia did not act deliberately if the jury believed that her failure to investigate was motivated by safety concerns. Id. at 3726. Jewell will now be largely fought in the trenches, with trial court litigation over the breadth of the deliberate ignorance instruction. (As a corollary, the quirks of the particular district court judge involved are now far more important than the Circuit law on deliberate ignorance).

For Further Reading: It’s not just (alleged) drug mules that hate Jewell – the deliberate ignorance instruction played a prominent role in the Enron trials as well. See article here. White collar folks, take note: Heredia just clobbered your C.E.O.’s defense.

Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org

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