Opinion ID: 159779
Heading Depth: 2
Heading Rank: 1

Heading: The District Court's Grant of a Judgment of Acquittal

Text: 14 This court gives no deference to a district court's decision to set aside a jury's guilty verdict and grant a defendant's post-verdict motion for judgment of acquittal. See United States v. Santistevan, 39 F.3d 250, 255 (10th Cir. 1994). We review that motion de novo, viewing the evidence in a light most favorable to the government to determine whether a reasonable jury could have found the defendant guilty beyond a reasonable doubt. See id. 15 In the instant case, the district court granted McClatchey's post-verdict motion on the basis that the evidence presented failed to support a reasonable finding that McClatchey possessed the requisite criminal intent to be convicted on either count. The parties agree that to convict McClatchey of both the conspiracy charge and the substantive charge of violating the Act, the government needed to prove beyond a reasonable doubt that McClatchey knowingly and willfully joined a conspiracy with the specific intent to violate the Act. 3 A defendant violates the Act when he 16 knowingly and willfully offers or pays any remuneration . . . to any person to induce such person . . . to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program . . . . 17 42 U.S.C. 1320a-7b(b)(2)(A). In instructing the jury, the district court defined willfulness as follows: 18 An act is done willfully if it is done voluntarily and purposely and with the specific intent to do something the law forbids, that is, with the bad purpose either to disobey or disregard the law. A person acts willfully if he or she acts unjustifiably and wrongly while knowing that his or her actions are unjustifiable and wrong. Thus, in order to act willfully as I have defined that term, a person must specifically intend to do something the law forbids, purposely intending to violate the law. 19 Neither party quarrels with this instruction. This court will therefore affirm the district court's grant of acquittal only if the evidence presented would not permit any reasonable jury to find beyond a reasonable doubt that McClatchey knowingly, voluntarily, and purposefully entered into an agreement with the specific intent to offer or pay remuneration to induce the LaHues to refer Medicaid patients to Baptist. 4 20 Although the district court correctly concluded that no reasonable jury could find beyond a reasonable doubt that McClatchey specifically intended to violate the Act based on the evidence of his involvement, or non-involvement, in the 1985 contract, the 1986 contract, and the loan of Eckard to BVMG, this court disagrees with the district court's assessment of the evidence concerning McClatchey's negotiation of the 1993 contract. The district court concluded that McClatchey repeatedly acted to insure that the 1993 contract was a legal one. Although it may be true that the 1993 contract appears to encompass a legal arrangement, the evidence supports a reasonable inference that McClatchey would never have supportted negotiating and entering into that contract absent his intent to induce the LaHues to continue referring their patients to Baptist. 21 Specifically, the evidence presented at trial reveals three important aspects of McClatchey's knowledge which inform on his intent. First, well before entering into the 1993 contract, McClatchey knew the LaHues had not performed substantial services required under the prior contracts. The LaHues themselves reported that fact to McClatchey and McGrath in late 1991 or early 1992, and McGrath's subsequent investigation revealed the LaHues were only reporting two hours per week of work at Baptist. Second, McClatchey knew that certain Baptist staff members were not even interested in having the LaHues perform some of these services. McGrath reported to McClatchey that the medical director of the Family Care Residency Program did not want the LaHues teaching residents and that the director of Social Services did not want the LaHues to make nursing home referrals to Baptist patients because her practice had always been to provide families the names of three doctors who could make such referrals. Third, McClatchey understood how important the LaHues' patient referrals were to Baptist's financial health. Eckard even testified that McClatchey placed substantial emphasis on Eckard's ability to maximize admissions and profitable outpatient visits to Baptist from BVMG business. Based on this knowledge, a reasonable jury could infer that McClatchey's very reason for negotiating a new contract with the LaHues, rather than terminating the relationship, was to induce them to continue their profitable referrals. 22 McClatchey makes two arguments against the reasonableness of such an inference. He first contends that his surprise at learning of the failure to provide services and his directive to McGrath and legal counsel to investigate and remedy that situation belies an inference of criminal intent. This argument, however, ignores the further evidence that McClatchey knew the hospital staff did not even want or need some of the services specified in the contract; based on that additional evidence, a jury could reasonably infer McClatchey did not really care whether the contractual services were needed or performed, but merely that the LaHues continued to refer their patients to Baptist. Given this evidence, a jury could also infer that McClatchey directed McGrath and legal counsel to address the service issue merely to insure that the final contract appeared on its face to constitute a legal arrangement. This possible explanation is supported by the inclusion in the 1993 contract of a provision requiring the LaHues to provide resident instruction, despite McClatchey's knowledge that the head of the residency program did not desire such services. 23 McClatchey also argues that his actions throughout the negotiation process cannot give rise to an inference of his criminal intent because they were entirely directed and controlled by legal counsel. McGrath testified, however, that he and McClatchey told the lawyers what services to include in the contracts, not visa versa. Thus, the jury could reasonably attribute to McClatchey and McGrath both the decision to remove a minimum hour provision from the contract after the LaHues objected to such a requirement and the inculpatory inference of intent that can be drawn therefrom. Moreover, it was not the attorneys but McClatchey, Anderson, and McGrath who made the important decision to negotiate a new contract rather than ending Baptist's relationship with BVMG. Finally, McClatchey did not always heed the attorneys' advice. For example, although Baltimore attorney Craig Holden stressed the importance of reassigning Tom Eckard to a new job within the hospital and even informed BVMG's attorney that this reassignment would occur by February 1, 1993, McClatchey personally delayed that move until March 1, 1993. The evidence, therefore, permitted the jury to reasonably reject McClatchey's good faith reliance on counsel defense and instead find he harbored the specific intent to violate the Act. 24 The evidence concerning McClatchey's involvement in negotiating the 1993 agreement thus gives rise to a reasonable inference that he knowingly, voluntarily, and purposefully entered into an agreement with the specific intent to induce the LaHues to refer their Medicaid patients to Baptist. The district court therefore erred in granting McClatchey's post-verdict motion for a judgment of acquittal. 25