EFTA00592838.pdf

In re Wel!care Health Plans, Inc., 754 F.34 1234 (2014) 24 At L Weekly Fed. C 1422 status and order corresponding restitution. 18 U.S.C.A. § 3771(d)(3). 754 F•3d 1234 United States Court of Appeals, Cases that cite this headnote Eleventh Circuit. In re WELLCARE HEALTH [2] Mandamus PLANS, INC., Petitioner. Criminal prosecutions Because a writ of mandamus pursuant to the No. 14-12422—B. I June 13, 2014. Crime Victims' Rights Act (CVRA) is an action against the district court judge, it is Synopsis a drastic and extraordinary remedy reserved Background: After several of its officers were convicted of for really extraordinary causes amounting to a healthcare fraud and making false statements, a provider of judicial usurpation of power or a clear abuse of managed care services to government-sponsored health care discretion. 18 U.S.C.A. § 3771(d)(3). programs moved to be recognized as a victim of its officers' crimes and sought restitution under the Crime Victims' Cases that cite this headnote Rights Act (CVRA) and Mandatory Victims Restitution Act (MVRA). The United States District Court for the Middle District of Florida denied the motion. Provider then petitioned [3] Mandamus for writ ofmandamus declaring it a victim within the meaning 4- Nature and scope of remedy in general of the CVRA and MVRA, and directing the District Court to Three conditions must be satisfied before a act accordingly. writ of mandamus may issue; (1) the party seeking issuance of the writ must have no other adequate means to attain the relief he desires, thus ensuring that the writ does not replace the Holdings: The Court of Appeals held that: regular appeals process; (2) the petitioner must show that his right to issuance of the writ is clear [1] traditional, highly deferential mandamus standard of and indisputable; and (3) the issuing court, in the review applied, and exercise of its discretion, must be satisfied that the writ is appropriate under the circumstances. [2] provider was not a victim of its officers criminal conduct. Cases that cite this headnote Petition denied. [4] Sentencing and Punishment 4'- Power to award West Headnotes (10) A district court lacks inherent authority to order restitution but can derive such power if explicitly authorized by statute. [1] Mandamus Cr= Criminal prosecutions Cases that cite this headnote Mandamus Scope of inquiry and powers of court [5] Criminal Law Traditional, highly deferential mandamus 4- Civil liabilities to persons injured; standard of review, rather than normal appellate reparation standards of review, applies to petitions for To identify a victim under the Crime Victims' writs of mandamus filed pursuant to the Crime Rights Act (CVRA), the court must: (I) Victims' Rights Act (CVRA), which ask Court identify the behavior constituting commission of Appeals to direct district court to find victim of a Federal offense; (2) identify the direct and proximate effects of that behavior on WestlawNexts © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 EFTA00592838 In re Wellcare Health Plans, Inc., 754 F.34 1234 (2014) 24 Fla. L. Weekly Fed. C 1422 parties other than the United States; and (3) Provider of managed care services to determine whether the criminal behavior causes government•sponsored health care programs was a party direct and proximate harmful effects. 18 not a "victim" of the healthcare fraud committed U.S.C.A. § 3771(e). by several of its top-level executives, within the meaning of the Crime Victims' Rights Act Cases that cite this headnote (CVRA) and Mandatory Victims Restitution Act (MVRA); provider admitted to being a co- [6] Criminal Law conspirator in the underlying fraudulent conduct, iM Civil liabilities to persons injured; in exchange for the government's agreement to reparation defer prosecution, and it paid restitution and forfeited assets as a result of its participation in If the criminal behavior causes a party direct and these criminal offenses. 18 U.S.C.A. §§ 3663A, proximate harmful effects, the party is a "victim" 3771. under the Crime Victims' Rights Act (CVRA). 18 U.S.C.A. § 3771(e). 1 Cases that cite this headnote Cases that cite this headnote [10] Sentencing and Punishment V- Victims [7J Criminal Law Civil liabilities to persons injured; Under the Mandatory Victims Restitution Act reparation (MVRA), a victim does not exist without a perpetrator, and a perpetrator cannot be his own The Crime Victims' Rights Act (CVRA) does victim. 18 U.S.C.A. § 3663A(a)( I). not limit the class of crime victims to those whose identity constitutes an element of the 1 Cases that cite this headnote offense or who happen to be identified in the charging document; rather, the CVRA instructs the district court to look at the offense itself only to determine the harmful effects the offense has Attorneys and Law Firms on parties. 18 U.S.C.A. § 3771. •1235 Gregory William Kehoe, Greenberg Traurig, LLP, Cases that cite this headnote Tampa, FL, for Petitioner. [8J Criminal Law On Petition for Writ of Mandamus to the United States *a Civil liabilities to persons injured; District Court for the Middle District of Florida. reparation Before: HULL and JORDAN, Circuit Judges. Under the Crime Victims' Rights Act (CVRA), a party may qualify as a victim, even though it Opinion may not have been the target of the crime, as long as it suffers harm as a result of the crime's BY THE COURT: commission. 18 U.S.C.A. § 3771. Petitioner Wellcare Health Plans, Inc. ("Wellcare") seeks a Cases that cite this headnote writ of mandamus declaring it a "victim" within the meaning of the Crime Victims' Rights Act ("CVRA"), 18 U.S.C. § 3771, and the Mandatory Victims Restitution Act of 19% [9] Criminal Law ("MVRA"), 18 U.S.C. § 3663A, and directing the district P- Civil liabilities to persons injured; court to act accordingly. reparation Sentencing and Punishment After review of the record and the briefs of the parties, we P- Victims deny Wellcare's petition. WestlawNext" © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 EFTA00592839 In re Wellcare Health Plans, Inc., 754 F.3d 1234 (2014) 24 At L Weekly Fed. C 1422 that a co-conspirator is not a "victim" and cannot recover restitution). Ultimately, the district court denied Wellcare's I. BACKGROUND motion to be recognized as a crime victim and to be awarded A. Underlying Criminal Conduct restitution. The U.S. Attorney for the Middle District of Florida filed a criminal information charging petitioner Wellcare Wellcare now petitions this Court for a writ of mandamus with conspiring through its former officers and employees pursuant to the CVRA. See 18 U.S.C. § 3771(d)(3). 2 The to defraud Florida healthcare programs. That same day, CVRA does not provide an independent, substantive basis for Wellcare entered into a deferred prosecution agreement. In restitution. It does provide a victim Itlhe right to full and *1236 that agreement. Wellcare stipulated to a "Statement timely restitution as provided in law." Id. § 3771(a)(6). In of Facts," wherein it admitted, biter alio. that, "acting this case, the substantive basis for restitution is the MVRA, through its former officers and employees," it "knowingly and the parties do not dispute that the offenses fall within the and willfully conspired ... to execute ... a scheme and artifice MVRA's scope. to defraud" Florida healthcare programs of approximately $40 million. Wellcare also agreed to pay $40 million in Section 177 l(dX3) provides, in relevant pan: restitution and $40 million in civil forfeiture. And, Wellcare The district court shall take up and decide any agreed to "fully cooperate" with the government's ongoing motion asserting a victim's right forthwith. If the investigation into the fraudulent conduct. district court denies the relief sought. the movant may petition the court of appeals for a writ of After additional investigation, a federal grand jury indicted mandamus. The court of appeals may issue the defendants Todd Farha (Wellcare's former CEO, President. writ on the order of a single judge pursuant to and Chairman of the Board), Paul Behrens (Wellcare's former circuit rule or the Federal Rules of Appellate CFO and Senior Vice President), William Kale (Wellcare's Procedure. The court of appeals shall take up and former Vice President of Government and Regulatory decide such application forthwith within 72 hours after the petition has been filed. Affairs), Peter Clay (Wellcare's former Vice President of Medical Economics), and Thaddeus Bereday (Wellcare's In its present mandamus petition. Wellcare only pursues former Senior Vice President, General Counsel, Secretary, restitution from defendants Farha. Behrens, and Kale. and Chief Compliance Officer) with conspiracy, making false statements, and healthcare fraud. Before the defendants' trial, the government designated Wellcare as an un-indicted co- II. DISCUSSION conspirator in the defendants' fraud. A jury found defendants Farha, Behrens. and Kale guilty of healthcare fraud and found This mandamus proceeding is a free-standing cause of action, defendants Behrens, Kale, and Clay guilty of making false brought by Wellcare, who claims to be a victim of the crimes statements. of defendants Farha, Behrens, and Kale. It is an action against the district *1237 court judge who denied Wellcare the right 1 to victim status and corresponding restitution. That is, the The jury deadlocked on the conspiracy count and found proceeding is not an appeal of a district court judgment, nor the defendants not guilty of the remaining counts. is it an interlocutory appeal of an intermediate order. The question the petition presents is whether Wellcare is a victim B. Motion for Victim Status and Restitution of the criminal conduct of defendants Farha, Behrens, and Petitioner Wellcare moved to be recognized as a victim of Kale who is entitled to restitution. the defendants' crimes and sought restitution under the CVRA and MVRA. The defendants opposed Wellcare's motion. The government neither endorsed nor opposed Wellcare's motion. A. Legal Principles To answer that question, we must first decide what standard The district court concluded that Wellcare was not a "victim" of review applies to a petition for a writ of mandamus filed as that term is defined in the CVRA and MVRA because pursuant to the CVRA. 3 Wellcare was "harmed collaterally but not directly." The district court also noted that it was persuaded by United States t'. Lazarenko, 624 F.3d 1247, 1251 (9th Cir.2010) (holding WestlawNexts © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 EFTA00592840 In re Wellcare Health Plans, Inc., 754 F.3d 1234 (2014) 24 Fla. L. Weekly Fed. C 1422 3 This Court previously left open the question of whether both writs of mandamus (with respect to the victim's ability traditional mandamus or normal appellate standards of to seek immediate review of the district court's denial of review apply to CVRA petitions. See In re Stewart. relief under the statute) and appeals (with respect to the 641 F.3d 1271. 1274-75 (11th Cir.20I I). In a string government's ability to seek review of that denial), indicates cite, the D.C. Circuit listed this Court's 2008 Stewart that Congress was aware of, and actually intended, different opinion as one that did not use the traditional mandamus avenues of relief—each with its own corresponding standard standard. See United States v. Monzel, 641 F.34 528. of review. See Sosa R Alvarez—Machain, 542 U.S. 692, 711 532 (D.C.Cir.201I ) (citingIn re Stewart. 552 F.3d 1285. n. 9, 124 S.Ct. 2739, 2754 n. 9, 159 L.Ed.2d 718 (2004) 1288-89 (11th Cir.2008)). However, in a later, related ( "RV Then the legislature uses certain language in one part Ste wan opinion, this Court stated that our 2008 Stewart of the statute and different •1238 language in another, the opinion "did not explicitly indicate the standard ... used court assumes different meanings were intended." (quotation in setting aside the district judge's ruling that petitioners marks omitted)). were not CVRA victims." Stewart. 641 F.3d at 1274 (footnote omitted). Thus, the plain text of the statute and its other compelling [1] Where a district court denies a request for restitution as textual clues support our conclusion that the traditional provided in law, the CVRA allows that purported victim to mandamus standard of review applies to petitions for writs of "petition the court of appeals for a writ of mandamus." 18 mandamus filed pursuant to the CVRA. Accord United States U.S.C. § 3771(d)(3). Given Congress's express authorization t'. Monzel, 641 F.3d 528, 533 (D.C.Cir.2011); Inre Acker, 596 to file for a writ of mandamus, review under mandamus F.3d 370, 372 (6th Cir.2010); In re Antrobus, 519 F.3d 1123, principles is appropriate absent contrary direction from 1127-30 (10th Cir.2008); In re Dean, 527 F.3d 391, 394 (5th Congress. See Morissette v. United States, 342 U.S. 246, Cir.2008). 263, 72 S.Ct. 240, 250. 96 L.Ed. 288 (1952) ( "[W]here Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it B. Traditional Mandamus Standard presumably knows and adopts the cluster of ideas that were [2] Because a writ of mandamus is an action against the attached to each borrowed word in the body of learning from district court judge, it "is a drastic and extraordinary remedy which it was taken and the meaning its use will convey reserved for really extraordinary causes" amounting to "a to the judicial mind unless otherwise instructed."); see also judicial usurpation of power" or a "clear abuse of discretion." In re Antrobus, 519 F.3d 1123, 1128 (10th Cir.2008) ("[I]t Cheney v. U.S. Dist. a for the Dist of Columbia, 542 U.S. seems to us relevant that Congress well knows how to 367, 380, 124 S.Ct. 2576, 2586-87, 159 L.Ed.2d 459 (2004) provide for ordinary interlocutory appellate review, rather (quotation marks and citations omitted). than mandamus review, when it wishes to do so."). [3] Three conditions must be satisfied before a writ of We find no such contrary direction from Congress in the mandamus may issue. Id. "First, the party seeking issuance CVRA. Quite the opposite—our text-based conclusion that of the writ must have no other adequate means to attain the traditional mandamus review applies in cases such as this is relief he desires," thus ensuring that the writ does not replace bolstered by other portions of the CVRA. the regular appeals process. Id. at 380-81, 124 S.Ct. at 2587 (quotation marks omitted) (alterations adopted). Second, the First, the CVRA requires this Court to decide the mandamus petitioner must show that his right to issuance of the writ petition within a compressed, 72—hour time period. See 18 is "clear and indisputable." Id. at 381, 124 S.Ct. at 2587 U.S.C. § 3771(d)(3). This tight timeline is consistent with our (quotation marks omitted). Third, "the issuing court, in the conclusion that we should apply a highly deferential standard exercise of its discretion, must be satisfied that the writ is of review. appropriate under the circumstances." Id. Second, in contrast to a purported victim's right to petition We now apply this traditional mandamus standard to this Court for a writ of mandamus when the district court Wellcare's petition and examine whether the district court denies restitution relief, the CVRA allows the government to clearly abused its discretion in denying Wellcare's motion to seek review of that same denial of relief "in any appeal in be recognized as a victim and to be awarded restitution. a criminal case." Compare 18 U.S.C. § 3771(d)(3), with id. § 3771(d)(4) (emphasis added). Congress's clear reference to WestlawNexts © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 EFTA00592841 In re Wellcare Health Plans, Inc., 754 F.3d 1234 (2014) 24 At L Weekly Fed. C 1422 C. Statutory Framework for Restitution [4] A district court lacks inherent authority to order D. Application to Wellcare's Petition restitution but can derive such power if explicitly authorized [9] Here, we conclude that the district court did not clearly by statute. United States v. Brown, 665 F.3d 1239, 1252 abuse its discretion in denying Wellcare's motion to be (11th Cir.201I). As to Wellcare's motion, the district court's recognized as a crime victim and to be awarded restitution. authority to award the requested restitution is found, if at all, in the CVRA and MVRA. Wellcare is not a "victim" within the meaning of the CVRA or the MVRA. Indeed, Wellcare admitted that it was a 151 [6] The CVRA provides a "crime victim" the "right to co•conspiirator in the underlying fraudulent conduct and full and timely restitution as provided in law." See 18 U.S.C. that. "acting through its former officers and employees," it § 377I (a)(6). The CVRA defines "crime victim" as "a person "knowingly and willfully" conspired to commit the fraud directly and proximately harmed as a result of the commission at issue in the underlying case. These facts support ow of a Federal offense." 18 U.S.C. § 3771(e).4 However, the conclusion: (I) Wellcare admitted its participation in the CVRA explicitly provides that "Ial person accused of the fraud conspiracy, (2) the government designated Wellcare crime may not obtain any form of relief under this chapter." as an un-indicted co-conspirator in the fraud, and (3) 18 U.S.C. § 3771(d)(I) (emphasis added). Wellcare paid restitution and forfeited assets as a result of its participation in the criminal offenses. Given these facts, 4 Wellcare is not a victim but an admitted perpetrator of a This Court previously articulated the analytical framework for determining whether a purported victim scheme to defraud the govemment. 5 is. in fact, a victim within the meaning of the CVRA. See Ste wan, 552 F.3d at 1288. To identify a CVRA "victim." 5 The jury's inability to reach a verdict on the conspiracy the court must (1) "identify the behavior constituting counts in the defendants' trial does not vitiate Wellcare's 'commission of a Federal offense' ": (2) "identify admission that it participated in the conspiracy. the direct and proximate effects of that behavior on parties other than the United States": and (3) determine To the extent that Wellcare relies on the CVRA for its whether "the criminal behavior causes a party direct and victim status, the CVRA explicitly prohibits any restitution proximate harmful effects." Id. "If the criminal behavior to Wellcare because the criminal information filed against causes a party direct and proximate harmful effects, the Wellcare accused it of participating in the fraud conspiracy. party is a victim under the CVRA." Id. See I8 U.S.C. § 3771(d)(I) ("A person accused of the crime may not obtain any form of relief under this chapter."). In turn, the MVRA not only allows, but requires, the district court to order restitution if the defendant is convicted of an offense "in which an identifiable victim or victims has [10] The MVRA, on its own, similarly precludes Wellcare's request for restitution based on its participation in the fraud suffered a ... pecuniary loss." 18 U.S.C. § 3663A(a)(I), (c) (1)(8). The •1239 MVRA defines "victim" as "a person conspiracy. Through its textual references to a "defendant" directly and proximately harmed as a result of the commission and a "victim," the MVRA contemplates at least two distinct classes of individuals: perpetrators and victims. The MVRA of an offense." 18 U.S.C. § 3663A(a)(2). highlights the perpetrator-victim distinction when it states, [7J [8] Additionally, the CVRA "does not limit the class of "the defendant [must] make restitution to the victim." See 18 U.S.C. § 3663A(a)(I); see also id. (stating that a "victim" crime victims to those whose identity constitutes an element of the offense or who happen to be identified in the charging is "any person directly harmed by the defendant's criminal document." Stewart. 552 F.3d at 1289 (noting that CVRA conduct"). Thus, given the MVRA's text, a victim does not exist without a perpetrator, and a perpetrator cannot be his "victims" need not be mentioned in the indictment). Rather, the CVRA "instructs the district court to look at the offense own victim.6 itself only to determine the harmful effects the offense has on parties." Id. "Under the plain language of the statute, a party 6 Because the MVRA's text forecloses Wellcare's may qualify as a victim, even though it may not have been the argument that it is a "victim" within the meaning of target of the crime, as long as it suffers harm as a result of the the MVRA. we need not decide—and, indeed, do not crime's commission." Id. decide—whether the CVRA's prohibition against an accused seeking relief under the CVRA. see 18 U.S.C. WestlawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 EFTA00592842 In re Wellcare Health Plans, Inc., 754 F.3d 1234 (2014) 24 Fla. L. Weekly Fed. C 1422 § 3771(d)(I), also applies to an accused's attempt to for the actions of its top-level executives. Wellcare made this seek restitution under the MVRA. See id. § 3771(a)(6) admission in exchange for the government's agreement to (allowing "restitution as provided in law"). defer prosecution. Consequently, an entity that admits to engaging in illegal In short, Wellcare is responsible for the acts of its top- fraud cannot be a "victim" of that fraud for purposes of level executives, and the company admitted to being a co- the CVRA and MVRA. Accord United States v. Lazarenko. conspirator. It cannot now deny those undisputed facts. By 624 F.3d 1247, 1249, 1251-52 (9th Cir.2010) (holding that, asking for restitution from its top-level executives, Wellcare "in the absence •1240 of exceptional circumstances, a co- seeks restitution for its own conduct—something it cannot do. conspirator cannot recover restitution"); United States v. Reifler, 446 F.3d 65, 127 (2d Cir.2006) ("[Alny order entered For these many reasons, petitioner Wellcare's admitted under the MVRA that [treats] coconspirators as `victims,' and participation as a co-conspirator precludes it from attaining thereby requires 'restitutionary' payments to the perpetrators victim status under the CVRA or MVRA. Thus, at a of the offense of conviction, contains an error so fundamental minimum, Wellcare has not met its burden to show that and so adversely reflecting on the public reputation of the its claimed "right to issuance of the writ is 'clear and judicial proceedings that we may, and do, deal with it sua indisputable.' " See Cheney, 542 U.S. at 381, 124 S.Ct. at sponte."). 2587. Wellcare contends that it is not a co-conspirator because the fraud was perpetrated by "a small group of top-level Wellcare employees ... without the involvement, knowledge III. CONCLUSION or approval of the board of directors or the vast majority of Wellcare's employees." That observation, however, does Given Wellcare's admitted role in the criminal conspiracy, the nothing to erase Wellcare's unqualified admission in the district court did not clearly abuse its discretion in denying deferred prosecution agreement that the company was, in fact, Wellcare's motion to be recognized as a crime victim and to a co-conspirator. be awarded restitution. Consequently, Wellcare's petition for mandamus is denied. Further, a corporation only acts or wills by virtue of its employees. See United States v. Dotterweich, 320 U.S. PETITION DENIED. 277, 281, 64 S.Ct. 134, 136, 88 L.51. 48 (1943); N.Y. Cent & Hudson R.R. Co. v. United States, 212 U.S. 481, All Citations 492-93, 29 S.Ct. 304, 306, 53 L.Ed. 613 (1909). That is apparently why Wellcare admitted to criminal responsibility 754 F.3d 1234, 24 Fla. L. Weekly Fed. C 1422 End of Document O2015 Thomson Reuters. No claim to original U.S. Government Works. WestlawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 EFTA00592843