Wednesday, May 5, 2010

Electronic Discovery

Twentieth Century discovery jargon has gone the way of daisy-wheel typewriters and seersucker suits. As bankers' boxes are replaced by mega-bytes, so too are the rules of discovery changing. Several recent cases demonstrate the newly recognized propriety of electronic discovery in today’s civil litigation.

As demonstrated in the case of Rowe Entertainment, Inc. v. The William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. Jan. 16, 2002), courts have now recognized the economic and strategic impact of the electronic transmittal of information on the civil discovery process. As noted in the opening lines of the Rowe Entertainment case, "[T]oo often, discovery is not just about uncovering the truth, but also how much of the truth the parties can afford to disinter. As this case illustrates, discovery expenses frequently escalate when information is stored in electronic form." Id. at 423.

In Rowe, which involved a federal lawsuit filed by a group of black concert promoters against booking agencies and other promoters, several of the defendants moved for a protective order, pursuant to Fed.R.Civ.P. Rule 26(c), which would have relieved them of their obligation to produce e-mail messages that may have been responsive to the plaintiffs' discovery requests. Specifically, "[e]ach of the moving defendants contend[ed] that it should be relieved of the obligation of producing e-mail responsive to the plaintiff's requests because the burden and expense would far outweigh any possible benefit in terms of discovery of additional information." Id. at 424. However, "[I]f production is nevertheless required," the defendants asked that "the plaintiffs bear the cost." Id.

Among other things, the Rowe defendants complained that the production of e-mail data would be "exorbitantly expensive" and a "technical impossibility." Id. at 424. The defendants alleged that compliance with plaintiffs' request would require a painstaking three-step process involving "cataloguing, restoring, and processing" the electronic data. Id. The cost estimates for such production ranged from $43,110 to $403,000. Id. at 424-26.

Undaunted, as litigants must often be, the plaintiffs reiterated their "critical" need for the electronic information and contended that the defendants' cost estimates were "wildly inflated." Id. at 426-27. Nonetheless, in the spirit of conciliation, plaintiffs agreed to reduce the cost of production by limiting the re-creation of the electronic information. The cost of production by plaintiffs' estimates, however, remained within a meaty range of $10,000 to $87,000.

Not surprisingly, given the liberality of Fed.R.Civ.P. 26(b)(1), the court found that the plaintiffs had "successfully demonstrated that the discovery they seek is generally relevant." Rowe, 205 F.R.D. at 428. Similarly, the court also found defendants' privacy concerns unavailing. Thus, the court reaffirmed the holding that "electronic documents are no less subject to disclosure than paper records." Id. at 428; see also Simon Property Group L.P. v. mySimon, Inc., 194 F.R.D. 639, 640 (S.D.Ind. 2000); United States Fidelity & Guaranty Co. v. Braspetro Oil Servs. Co., 2002 WL 15652 (S.D.N.Y. Jan 7, 2002)(Defendants required to produce all materials provided to their experts whether in paper or electronic form).

In allowing plaintiffs’ request for electronic discovery, the Rowe Court adopted a balancing test, consisting of eight factors, to determine whether discovery costs should be shifted to the requesting party:

1) the specificity of the discovery requests;
2) the likelihood of discovering critical information;
3) the availability of the information from other sources;
4) the purpose for which the responding party maintains the data;
5) the relative benefit to the parties of obtaining the data;
6) the total cost associated with the production;
7) the relative ability of each party to control costs and its incentive to do so; and
8) the resources available to each party.

Although this balancing test seems to modify the general presumption that a "responding party must bear the expense of complying with discovery requests," Oppenheimer Funds, Inc. v. Sanders, 437 U.S. 340, 358 (1978), it also seeks to protect the responding party from "undue expense." Id. (citing Fed.R.Civ.P. 26(c)).

The Rowe Court also set forth a "protocol" to guide the parties through the production of electronic discovery in order to protect any privileged information. Specifically, the court noted that the parties should designate an expert responsible for implementing search protocols, isolating responsive electronic mail content, and preparing the material for review.

In the case of Murphy Oil USA, Inc. v. Fluor Daniel, Inc., 2002 WL 246439 (E.D.La. Feb 19, 2002), the court confirmed the discoverability of e-mail messages contained on computerized 'backup tapes.' In Murphy Oil, the specific issue before the court was "which party should bear the cost of retrieval, production, and review of the responsive e-mail." Id. at *3. In that case, the court used the eight-factor balancing test set forth in Rowe to determine the proper operating protocols and cost shifting formula.

In Murphy Oil, the court allowed the producing party to elect one of two proposed protocols. Id. at *8. Under the first option, the costs rested with the requesting party, but allowed them to review the evidence first. The second option followed the traditional rule requiring the producing party to bear the cost of producing the data if they wished to review the materials first.

In light of these recent decisions, it is significant to note that courts have now recognized the discoverability of electronic communications in today's high-tech world of civil litigation. However, depending upon the facts and circumstances of the request vis a vis the difficulty of retrieval, the requesting party may bear the potentially high cost of the production of the electronic material.

Wednesday, April 28, 2010

Opening the War Chest: Recent Federal Efforts Intensifying the Fight Against Health Care Fraud

On January 27, 2010, Michel De Jesus Huarte was sentenced to 22 years in prison in the Southern District of Florida for his role in a health care fraud conspiracy which operated in Florida, Georgia, Louisiana, North Carolina and South Carolina. Huarte’s co-defendants received lesser sentences ranging from 18 months to 15 years in prison for their part in a $100 million HIV infusion medication scam.[1]

Perhaps coincidentally, the very next day the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) held a National Summit on Health Care Fraud – an epidemic which has indeed become a national economic crisis. The summit was the latest initiative of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint HHS-DOJ program that was formally begun in May 2009 by Attorney General Eric Holder. The National Summit was an unprecedented event on the topic of health care fraud. Not only were HHS and DOJ involved, but also numerous other law enforcement agencies, as well as leading members of the private sector, including insurers. This impressive group of private and public entities came together as a part of the Obama Administration’s new initiative to promote the coordination and sharing of health care fraud data between the public and private sector.

In her opening remarks to the Summit, HHS Secretary Kathleen Sebelius emphasized the administration’s “zero tolerance stance” for criminals who cheat taxpayers and consequently endanger patients and the future of Medicare. Recognizing that all those in attendance have an interest in putting a stop to health care fraud, Secretary Sebelius issued a call to arms, stating:
Today, the President has asked us to put these criminals on notice. The problem of health care fraud is bigger than either government, law enforcement or the private industry can handle alone. We will need all of us working together to solve it. In the fight to prevent, find, catch, and prosecute these crooks, we want every good idea we can get.

Health care fraud is a national problem. It affects federal programs like Medicare, state programs like Medicaid, and private insurance companies. We’re all part of a health care system that has been undergoing rapid growth.” [2]

To illustrate her point concerning the rapid growth of fraud and abuse in the health care system, Sebelius noted that the annual amount spent combating health care fraud has increased from $75 million to over $2.5 billion from 1970 until the present. In the eyes of Secretary Sebelius this means that, “[t]he difference between catching fraud then and now is the difference between trying to find a penny in a bathtub and trying to find a penny in a swimming pool."[3]

In his own opening remarks, Attorney General Eric Holder described the summit as a critical step forward in the work being done by the Health Care Fraud Prevention and Enforcement Action Team (HEAT), HHS-DOJ joint task force programs initiated by the Department of Justice in May 2009. Attorney General Holder informed those in attendance that 2009 was “an all time high” in the number of health care fraud charges levied against defendants, with over 800 defendants charged and 580 convictions, due in large part to the HEAT program and its strike forces.[4] He also stated that DOJ civil enforcement of health care fraud laws recovered over $2.2 billion dollars under the False Claims Act.

Notwithstanding the positive news, Attorney General Holder described health care fraud as a serious problem whose scope is “simply shocking,” noting that more than $60 billion in public and private health care spending is lost to fraud each year. Like Secretary Sebelius, Attorney General Holder tacitly admitted that, due to the size and amount of money involved in the national health care system, “so long as health care fraud pays and these crimes go unpunished, our health care system will remain under siege.”[5]

Attorney General Holder’s Estimate of the Scope of Health Care Fraud May Be Too Low
The $60 billion dollar healthcare fraud figure cited by Holder may in fact be too conservative of an estimate, however. In May 2009, while testifying before the Senate Committee on the Judiciary: Subcommittee on Crime and Drugs, Malcolm K. Sparrow, a Harvard Professor of Public Management and expert in fraud detection and control strategy, stated:
The units of measure of losses due to health care fraud and abuse in this country are hundreds of billions of dollars per year. We just don’t know the first digit. It might be as low as one hundred billion. More likely it is two or three. Possibly four or five. But whatever that first digit is, it has eleven zeroes after it.[6]

Other experts mirror Sparrow’s conclusions, putting the estimated annual loss between $70 and $100 billion.[7] Regardless of the actual number, losses from health care fraud are massive, and everyone agrees that these losses are a major contributor to the escalating healthcare costs facing all Americans. Illustrated another way, some 10-20% of the annual Medicare and Medicaid budget is spent on fraudulent or false claims.[8]

Historical Data Concerning Civil Enforcement of Health Care Fraud

While this is disturbing news for prosecutors, lawmakers and taxpayers, such widespread fraud can present lucrative opportunities for plaintiffs and civil lawyers who are well versed in health care law. Pursuant to the False Claims Act, 31 U.S.C. § 3729, et seq., persons with evidence of fraud involving federal programs or contracts, known as “relators,” may file a civil qui tam suit against the wrongdoer on behalf of the United States. Such a law suit is initially filed under seal, and the Government has the right to intervene and join in the action against the defendant, if it sees fit. If a relator, or the government upon intervention, is successful in recovering money from the defendant, either through a judgment or a settlement, the False Claims Act provides that the Relator is entitled to 15-30% of the amount recovered.

Unlike a criminal fraud case, which requires proof beyond a reasonable doubt, in a civil qui tam the Government is only required to prove the existence of fraud by a preponderance of the evidence. Furthermore, where proof of knowing violations or submissions are made, the Government may recover three times the amount of loss suffered.

As of 2004, 80% of all qui tam cases filed were related to health care fraud.[9] This was nearly double the percentage of health care cases observed just seven years earlier.[10] Accordingly, much of the $2.2 billion in civil enforcement recoveries as well as the criminal prosecutions for health care fraud, described by Attorney General Holder at the National Summit, likely began with the filing of a qui tam complaint. It is not uncommon for the Government, when investigating a realtor’s claim to determine whether to intervene in their Complaint, to discover other fraudulent behavior unknown to the relator, which leads to both civil and criminal action on the part of the Department of Justice.

While a relator may continue to pursue his or her qui tam action against the defendant if the Government decides not to intervene, chances of success, as well as the size of any recovery, are largely influenced by whether the Government intervenes or not. This is clear upon reviewing the data maintained by the Department of Justice’s civil division concerning all qui tam actions, health care and otherwise, filed from 1986 through 2009.[11]

Not only does government intervention lead to an extraordinarily high success rate, but the Department of Justice data also reveals that Government intervention results in the relator’s 15-30% share historically being 28 times higher than if the Government declines to intervene. One explanation for the extraordinarily high success rate and high reward rates are that the Government is able to engage in a more thorough fact investigation than a whistle-blowing relator and, to that end, is able to determine more accurately how good a case is before they decide whether to intervene or not. Regardless of the reasons of their successes, the statistics make it abundantly clear that in order to succeed in a qui tam action, the Government’s intervention is all but required.

Furthermore, there is evidence that the returns for the Government are also greater where the qui tam case originates from a relator, as opposed to the Government’s own independent investigation. [12]

From the perspective of the civil litigators interested in qui tam cases, the increased government investment in health care fraud, both in terms of man power and funds, is likely to lead to increased rates of government intervention, to the benefit of your clients. From the perspective of the those lawyers representing health care providers, the increased investment will obviously require a corresponding increase in diligence on the part of your clients to avoid health care fraud issues. Unfortunately, since the Government’s investigations are no more focus on data trends to uncover fraud, the diligence necessary to uncover potential fraud may require some clients to invest in expensive and complicated audits of their electronic billing systems. Furthermore, the increased focus on health care fraud may also lead to a more combative and a more punitive environment as provider’s attorney attempt to resolve or settlement health care fraud matters.

A Review of the HEAT Program

Unfortunately for the typical qui tam relator, the Government historically only intervenes in 22% of all qui tam cases filed. It is in this context that one should consider the implications of the joint undertaking by HHS and DOJ, the Health Care Fraud Prevention and Enforcement Action Team (HEAT).

On May 20, 2009, in a joint press release,[13] Attorney General Holder and Secretary Sebelius announced the formal creation of HEAT and revealed the existence of the third and fourth joint Strike Teams that were investigating health care fraud under the auspices of both the DOJ and HSS. Through the HEAT program, HHS and DOJ are engaging in data-focused investigations of potential health care fraud, pooling their data to discover billing trends that may be indicative of fraud.

While HEAT may have been publicly announced in May 2009, HHS and DOJ had been engaging in data focused joint investigations through the creation of Medicare Fraud Strike Force teams since March 2007, when the first such team was created to investigate health care fraud in Miami-Dade County.[14] Later dubbed “Phase One” the Miami Strike Force has been a resounding success in its first three years of exists garnering more than $220MM in court-ordered restitution in 87 cases involving 159 defendants in criminal cases alone. Furthermore, based on a 12 month before and after analysis of claims in the Miami-Dade County area, it is estimated that Phase One’s acts have led to a reduction of $1.75BB in durable medical equipment claim submissions and $334 MM in durable medical equipment claims paid by Medicare.[15]

In light of these successes, DOJ and HSS created another Strike Force, Phase Two, which jointly investigated health care fraud in the Los Angeles Metro Area in March 2008. This program is responsible for $55MM in court-ordered restitution in 21 cases involving 37 defendants.[16] Phases Three and Four were announced in the May 20, 2009 release, though they had been operating since early 2009. Phase Three has already resulted in the prosecution of 14 cases $106MM.[17]

Along with the creation of HEAT, the proposed budget for fiscal year 2010 called for a 50% increase in spending on fraud and abuse enforcement and prevention, and a total of $1.7 billion in projected spending over the next five years.[18] In this manner, HHS and DOJ are seeking to “raise[] the stakes on health care fraud, with increased tools, resources and sustained focus by senior-level leadership.”[19] The statement further opined that HEAT program, along with the increase proposed spending, could save the United States over $2.7 billion over the next five years.[20]

Implications of the National Health Care Summit

With these statements as background, consider again the National Health Care Summit, which was held last January. At the conference, Attorney General Holder and Secretary Sebelius announced resounding successes of the HEAT program which began as the Medicare Strike Force in Miami some three years prior. Thus, in some respects, the National Summit can be viewed as an elaborate press conference, whose purposes may include deterring persons from engaging in health care fraud, as well as demonstrating the public that the proposed increased investment in the 2010 and 2011 budgets are justified and will pay dividends. To that end HEAT has announced the creation of Strike Force teams in the Brooklyn, New York, Baton Rouge, Louisiana, and Tampa, Florida areas.[21]

While the political motivations and the actual deterrent effect such a conference might have on health care fraud is debatable, the conference’s true purpose might be considered as an effort by the HHS and DOJ to involve the private sector in the fight against health care fraud. Indeed, a significant portion of the National Summit involved remarks by James Roosevelt, Jr., CEO at Tufts Health Plan and closed door, strategic break out sessions between government enforcement officials and members of the private sector.


FRAUD CASES

The number of prosecutions for health care fraud, by fiscal year. Most were for schemes to defraud Medicare. Considering the statistics which show that historically, cooperation between private individuals and the government in civil fraud enforcement leads to greater recoveries for all involved, it is no surprise that the National Summit also served as a well publicized invitation for the private sector to gent involved and join in the fight. By emphasizing the successes of the government’s new focus on health care fraud and by unveiling proposed budgetary increases the Government is can be said to be reminding the private sector that there is more than enough success, and money, to go around.

However, there are critics who disagree with the claimed successes of the HEAT program and would question the motivations of the National Summit. Consider recently published statistics[22] which indicate that despite the claims of increased successes, little has changed in terms of Medicare fraud enforcement after the creation of the HEAT program and the increased spending on antifraud provisions. While admitting that the HEAT program has scored some “high-profile” successes since 2007, the authors conclude that “[t]wo years after the federal government started its latest push to crack down on Medicare fraud, the number of people charged with ripping off health care insurers has barely changed.”[23]

The Future of Health Care Fraud Enforcement

Regardless of the extent of the HEAT programs successes, two facts are indisputable. First, fighting health care fraud is how a higher priority than it ever has been and health care fraud enforcement is being more aggressively pursued by local, state, and federal law enforcement. Second, the present administration is actively choosing to invest more money into health care fraud enforcement than any administration before it. Clearly, no fulsome debate about healthcare reform in this country can take place without proper consideration of the staggering effects of associated fraud and abuse. More, the economic realities of any system require vigilant detection and enforcement of such waste. These recent developments – involving an enormous injection of resources and money to combat healthcare fraud - provide some measure of optimism with respect to controlling the costs of our ever ballooning system of health care in this country.



Brian F. McEvoy is a former Assistant United States Attorney and Health Care Fraud Coordinator for the Southern District of Georgia. Brian is now a Partner at the law firm of Chilivis, Cochran, Larkins & Bever, LLP.

Todd P. Swanson is an Associate at the law firm of Chilivis, Cochran, Larkins & Bever, LLP.



[1] Jay Weaver, Miami man gets 22 year for Medicare clinic fraud, The Miami Herald, Jan. 27, 2010, available at MiamiHerald.com.
[2] Health and Human Services Secretary Kathleen Sebelius, Remarks at National Summit Health Care Summit (January 28, 2010) (transcript available at http://www.hhs.gov/secretary/speeches/sp20100128.html).
[3] Id.
[4] Attorney General Eric Holder, Remarks at National Summit Health Care Summit (January 28, 2010) (transcript available at http://www.stopmedicarefraud.gov/innews/holderremarks.html).
[5] Id.
[6] Malcolm K. Sparrow, Testimony at “Criminal Prosecution as Deterrent to Health Care Fraud” before Senate Committee on Judiciary: Subcommittee on Crime and Drugs (May 20, 2009) (transcript available at http://www.hks.harvard.edu/news-events/testimonies/sparrow-senate-testimony) [hereinafter “Sparrow Testimony”].
[7] Rudman, et al., Healthcare Fraud and Abuse, 6 Perspectives in Health Information Management 1 (Fall 2009); Association of Certified Fraud Examiners, Healthcare Fraud, available at www.acfe.com/resources/fraud-101-healthcare.asp (last visited February 23, 2009).
[8] Sparrow Testimony, supra.
[9] Jack A. Meyer, President, Economic and Social Research Institute, Fighting Medicare Fraud: More Bang for the Federal Buck, prepared for Taxpayers Against Fraud Education Fund (July 2006) available at http://www.taf.org/FCA-2006report.pdf (last visited February 27, 2010).
[10] John R. Phillips and Mary Louise Cohen, Failing to report Medicare billing errors: a very risky business, Journal of the Association of Healthcare Internal Auditor (Spring 1997).
[11] Taxpayers Against Fraud, Fraud Statistics – Overview, October 1, 1987 – September 30, 2009, Civil Division,, U.S. Department of Justice, available at http://www.taf.org/FCAstats2009.pdf.
[12] Taxpayers Against Fraud, The 1986 False Claims Act Amendments: A Retrospective Look at Twenty Years of Effective Fraud Fighting in America, p.5 (2006) (available at http://www.taf.org/retrospective.pdf) (last visited February 27, 2010).
[13] U.S. Dept. of Health & Human Services, Press Release, Attorney General Holder and HHS Secretary Sebelius Announce New Interagency Health Care Fraud Prevention and Enforcement Action Team (May 20, 2009), available at http://www.hhs.gov/news/press/2009pres/05/20090520a.html. [hereinafter “May 20 Press Release”].
[14] Fact Sheet: Phase One Medicare Fraud Strike Force Miami-Dade County, Fla., p.1 available at http://www.stopmedicarefraud.gov/heatsuccess/heat_taskforce_miami.pdf (last visited February 24, 2010).
[15] Id.
[16] Fact Sheet: Phase Two Medicare Strike Force Los Angeles Metro Area, p.1 available at http://stopmedicarefraud.gov/heatsuccess/heat_taskforce_losangeles.pdf.
[17] Fact Sheet: Phase Three Medicare Strike Force Detroit Metro Area, p.1 available at http://stopmedicarefraud.gov/heatsuccess/heat_taskforce_detroit.pdf; Fact Sheet: Phase Four Medicare Strike Force Houston Metro Area, available at http://stopmedicarefraud.gov/heatsuccess/heat_taskforce_houston.pdf.
[18] John J. Carney and Robert M. Wolin, Target Health Care Fraud, New York Law Journal, July 13, 2009.
[19] May 20 Press Release, supra.
[20] Id.
[21] U.S. Dept. of Health & Human Services, Press Release, Health & Human Services Secretary Kathleen Sebelius, Attorney General Eric Holder Convene National Summit on Health Care Fraud, Unveil Historic Commitment to Fighting Fraud in President’s FY 2011 Budget (January 28, 2010) (available at http://www.hhs.gov/news/press/2010pres/01/20100128a.html).
[22] Brad Heath, Little Progress Seen Against Health Insurance Fraud, USA Today (January 29, 2010) (available at http://www.usatoday.com/news/washington/2010-01-28-health-care-insurance-fraud_N.htm).
[23] Id.

Thursday, September 10, 2009

Smiling Foes: The Government and Downward Departures Based on Substantial Assistance

The post-Enron, HealthSouth world of White Collar Criminal Litigation is marked by an increasing Government zeal to indict matters that were once typically handled only by civil and regulatory agencies. This expansive approach is frequently drawing career civil attorneys into the fray of federal criminal litigation. Before entering into the lair of a United States Attorney’s Office, however, a litigator must be armed with a strong bow of knowledge and a quiver of insightful arrows.

Of particular importance in the federal criminal arena is the implementation of the now advisory United States Sentencing Guidelines.[1] The source of much controversy, these guidelines help shape the fate of a criminal defendant who has pleaded or been found guilty of a federal offense - which in most federal jurisdictions is nine out of ten defendants.

At the sentencing hearing, a Judge determines the guideline range (assigning the length of incarceration) based on several factors associated with a defendant’s guilt and crime. After the guideline range is determined, if the court finds that there is a factor that the guidelines did not adequately consider, it may “depart” – up or down - from the guideline range.

One unique type of departure is the “substantial assistance” departure. This downward departure may be granted if the offender has provided “substantial assistance” in the investigation or prosecution of another offender. Though not specifically defined by statute, assistance is considered to be substantial when such conduct leads to the indictment of another individual.

This article addresses the various and sundry pitfalls associated with encouraging a client to provide ‘substantial assistance’ to the Government for the purpose of obtaining a reduced sentence. While the prospect of cooperating with the Government in exchange for spending less time in federal custody may seem appealing, receiving a downward departure based on substantial assistance may prove perilous. In fact, the harm done to a client by making herself available to the Government may outweigh the likelihood of receiving a reduced sentence.

Significantly, a motion to depart downward based on substantial assistance must be made by the prosecution. U.S.S.G. § 5K1.1.[2] Thus, for sentencing purposes, the Government is, in a sense, both the hangman and the bondsman. Quite frequently, a criminal defendant agrees to - and in fact does - provide substantial assistance in a federal criminal investigation within the meaning of 18 U.S.C. § 3553(e), but, despite such assistance, the Government fails to make a motion for downward departure within the terms of a negotiated plea agreement. Under these circumstances, federal judges are typically without a mechanism to compensate for the Government’s failure to make a motion for downward departure.

‘The Deal’

After a client has decided to ‘purge her soul’ and plead guilty to a federal offense, an effective way to limit her exposure to a lengthy term of incarceration is to draft a favorable Negotiated Plea Agreement. For instance, by providing substantial assistance, a defendant’s sentence may be reduced significantly. There are many reported federal criminal cases, some involving millions of dollars of alleged loss, which have been greatly affected by the defendant’s willingness to provide substantial assistance to the Government. Defendants’ sentences have been reduced from lengthy terms exceeding 40 months down to levels of less than twelve months (and in some cases probation) based on the fulfillment of the terms of a Negotiated Plea Agreement – including an agreement to provide substantial assistance. Unfortunately, for purposes of downward departures, ‘substance’ is in the eye of the beholder – the Government.

A typical Negotiated Plea Agreement (often drafted by an Assistant United States Attorney) may include the following language:

The defendant agrees to make herself available to the Government to provide substantial assistance pursuant to U.S.S.G. § 5K1.1 with respect to matters other than the conduct at issue in this case. If the assistance is completed prior to sentencing, the Government agrees to consider whether such cooperation qualifies as “substantial assistance” pursuant to 18 U.S.C. § 3553(e) and/or Section 5K1.1 of the Sentencing Guidelines warranting the filing of a motion at the time of sentencing recommending a downward departure from the applicable guideline range.

This seemingly innocuous language is an Ace in the well worn sleeve of the Government. Rather than agreeing to a ‘bargained for exchange’ in which both parties may rely on the benefit of the bargain, the Government may use sufficiently illusory language which obligates it to do far less than what may be assumed by the defendant.

Imagine a situation in which a defendant does everything that is asked of him in cooperation with a Federal Government investigation. A co-operating defendant may give up names, help locate fugitives, give information against a co-defendant, help disrupt ongoing criminal conspiracies, participate in surreptitious recordings which advance and often trigger federal investigations – all of which put him at risk.

As a result of these efforts, at sentencing, the defendant and his attorney rest assured that the terms of the plea agreement have been fulfilled as the crucial time for the Government to make its motion for a downward departure based on substantial assistance comes . . . and goes. In an instant, the client’s hopes are dashed.

As the now convicted client ponders his future life in a federal prison, and you consider your defenses to an imminent § 2255 motion based on ineffective assistance of counsel, all is quiet at the Government’s table.

Everything that seemed so cordial and pleasant while negotiating the terms of the plea agreement – the suggestions of a lighter sentence, the mutual cooperation - has been soured. Although the implicit understanding may have been that the Government would make a motion for downward departure in exchange for the defendant’s substantial assistance, the terms of the actual plea agreement are often more slippery. In the example cited above, for instance, the Government merely “agrees to consider whether such cooperation qualifies as ‘substantial assistance.’” Because the Government is the arbiter of what constitutes substantial assistance, such an assurance is problematic, if not altogether hollow.[3]

‘Keeping the Faith’

Because a Federal District Court cannot compel the Government to make a motion for downward departure based on substantial assistance, a criminal defendant has little appellate recourse. In fact, only under very limited circumstances may a jilted defendant obtain relief based on alleged Government bad faith. In Wade v. United States, 504 U.S. 181 (1992), the United States Supreme Court held that federal district courts have authority to review a prosecutor's refusal to file a substantial-assistance motion and to grant a remedy if they find that the refusal was based on an unconstitutional motive.

In Wade, the Supreme Court stated that under 18 U.S.C. § 3553(e) and U.S.S.G. § 5K1.1, the Government has "a power, not a duty, to file a motion when a defendant has substantially assisted." Wade, 504 U.S. at 185. The Court limited the exercise of that power only to the extent that the Government cannot fail to exercise that power based on an improper unconstitutional motive. Id. at 186 (citing race and religion as examples of unconstitutional motive).

Relying on this decision, the Eleventh Circuit also noted that judicial review of such a decision is appropriate only "when there is an allegation and a substantial showing that the prosecution refused to file a substantial assistance motion because of a constitutionally impermissible motivation, such as race or religion." United States v. Forney, 9 F.3d 1492, 1502 (11th Cir. 1993) (footnote omitted). Thus, absent a showing of unlawful discrimination, courts are rue to second guess the Government’s decisions concerning motions for downward departure based on substantial assistance.

The ray of hope for criminal defense attorneys comes, of course, from a dissenting opinion. In his lengthy dissent in Forney, Judge Clark refers to the seminal case of Santobello v. New York, 404 U.S. 257 (1971),[4] and argues that contract law should control and urges for the creation of “a bad faith exception for judicial review in cases involving plea agreements, where the Government has reserved discretion to file a 5K1.1 motion.” Forney, 9 F.3d at 1507. The dissent asserts that “under Santobello, a district court is obligated to enforce the Government's promise to file a 5K1.1 motion just as it is obligated to enforce other promises in plea agreements. There is no dispute over this general principle.” Id. at 1505.

“Since Wade,” Judge Clark continued, “every circuit that has addressed the issue in a published opinion has either specifically decided or assumed that the principles announced in Santobello are applicable to the Government's conditional promise in a plea agreement to file a 5K1.1 motion.” Judge Clark concluded his discussion by noting that “As a trustee of the people, the Government is held to a higher standard in carrying out our common duties, including the prosecution of crimes. This higher standard requires the sovereign to perform its contractual duties with a sharpened sense of good faith and fair dealing. The fact that the other party to the contract is a criminal defendant does not alter the Government’s duty.” Forney, 9 F.3d at 1509.
Judge Clark’s dissent notwithstanding, defense attorneys must be prepared to navigate the slippery slope of plea negotiations in a federal criminal case. The semantics and illusory language associated with negotiated plea agreements, for instance, are effective tools in the Government’s arsenal. Therefore, before entering into plea negotiations with the Government, tighten your bow, sharpen your arrows, and don’t be fooled by the smiling foe.

[1] In 1984, Congress passed the Sentencing Reform Act. This Act created a new federal agency, the United States Sentencing Commission, and instructed it to develop uniform guidelines for sentencing in federal cases. Accordingly, the United States Sentencing Guidelines became effective November 1, 1987, and apply to all federal felonies and most serious misdemeanors. Under United States v. Booker, 543 U.S. 220 (2005), a district court is not bound to apply the federal sentencing guidelines, but must consult those guidelines and take them into account to formulate a reasonable sentence.

[2] If the substantial assistance is provided after sentencing, a motion for downward departure may be made pursuant to Rule 35(b) of the Federal Rules of Criminal Procedure.

[3] The Government may also contend, with success, that while a defendant’s assistance is ‘significant,’ it is not ‘substantial.’

[4] Santobello addressed the Government's failure to keep an oral promise to the defendant that it would not make a sentence recommendation if the defendant would plead guilty to a lesser-included offense.

ABOUT THE AUTHOR


Brian McEvoy is a Partner at the Atlanta law firm Chilivis, Cochran, Larkins & Bever LLP. Brian is a former federal prosecutor with a practice focus on white collar criminal defense and a special emphasis in health care fraud matters.

After graduating from Boston College, cum laude, in 1994, Brian attended Georgia State University College of Law. While at Georgia State, Brian was the lead oralist for the school's National Competition moot court team, the coach for the school's ABA National Appellate Advocacy Competition team, and the captain of the school's Jessup International Moot Court Team. Brian also spent a semester studying in Madrid, Spain through the International Law Program of William & Mary College of Law.

After his law school graduation in 1997, Brian entered into a clerkship with the Honorable John E. Dougherty, United Stated Magistrate Judge, Northern District of Georgia. Upon completion of his clerkship with Magistrate Judge Dougherty, Brian began a clerkship with the Honorable Orinda D. Evans, Chief Judge, Northern District of Georgia. Brian joined the firm in 2001, and was involved in representing clients in a wide variety of matters, including both civil and criminal litigation, investigation of claims, and administrative matters. He focused his practice on business litigation, representing both business entities and individuals in a variety of business and commercial disputes.

In 2004, Brian left the firm for the United States Attorney's Office for the Southern District of Georgia in Savannah. During his service as a federal prosecutor, Brian represented the United States in criminal matters involving bank fraud, mail and wire fraud, health care fraud, mortgage fraud, securities fraud, obstruction of justice, perjury, tax fraud, Social Security fraud, money laundering, false claims, asset forfeiture, immigration and employment document fraud, threats to federal officials, and conspiracy.


In 2007, Brian received special commendation from the Department of Health and Human Services for his work prosecuting Health Care Fraud matters. In 2008, he was named as the District's Health Care Fraud Coordinator and started the District's first Health Care Fraud Task Force.

Brian rejoined Chilivis, Cochran, Larkins & Bever as a Partner in 2009, and focuses his practice on white collar criminal defense, business litigation, and government and internal corporate investigations. As a former federal prosecutor, Brian has extensive criminal trial experience and an expertise in civil and criminal health care fraud, mortgage fraud, securities fraud, government contracting, environmental and other civil and criminal regulatory matters.

Areas of Practice:



  • White Collar Criminal Defense

  • Health Care Fraud

  • Mortgage Fraud

  • Banking and FDIC Enforcement

  • Medicare & Medicaid

  • Civil and Criminal Litigation

Litigation Percentage: 100% of Practice Devoted to Litigation

Bar Admissions:
Georgia, 1998
U.S. Court of Appeals 11th Circuit, 1998
U.S. District Court Northern District of Georgia, 2002
U.S. District Court Southern District of Georgia, 2003

Education:
Georgia State University College of Law, Atlanta, Georgia, 1997 J.D.
Honors: Lead Oralist, National Competition Moot Court Team
Honors: Coach, ABA National Appellate Advocacy Competition Team
Honors: Captain, Jessup International Moot Court Team

William and Mary School of Law, Williamsburg, Virginia

Boston College, Chestnut Hill, Massachusetts, 1994 B.A.
Honors: Cum Laude, National Honors Society

Classes/Seminars Taught:



  • Effective Trial Techniques in Health Care Fraud Litigation, Medicare/Cahaba GBA, 2008

  • Litigating Parallel Proceedings in Fraud Cases, Georgia CLE, 2008

  • Detecting Government Fraud and Abuse, Federal Law Enforcement Training Center, 2007

  • Investigation and Trial Techniques in Prosecuting Economic Crimes, Prosecuting Attorney's Council of Georgia, 2007

  • Defending Federal Criminal Cases, Savannah Bar Association, 2007

  • Detecting Money Laundering Activity, FDIC, 2006

Past Employment Positions:
United States Attorney's Office, Southern District of Georgia, 2004 - 2009
Chilivis, Cochran, Larkins & Bever LLP, Associate, 2001 - 2004
Hon. Orinda D. Evans, Chief Judge, Northern District of Georgia, Clerk, 1999 - 2001
Hon. John E. Dougherty, United States Magistrate Judge, Northern District of Georgia, Clerk, 1997 - 1999