Court Opinion

ID: 7797858
Source: CourtListenerOpinion
Date Created: 2022-08-04 18:01:06.584399+00
Date Added: 2024-06-11T16:28:41.975075
License: Public Domain

Case: 22-30316     Document: 00516419559          Page: 1    Date Filed: 08/04/2022

              United States Court of Appeals
                   for the Fifth Circuit                        United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
                                                                  August 4, 2022
                                   No. 22-30316                   Lyle W. Cayce
                                                                       Clerk

   United States of America,

                                                             Plaintiff—Appellee,

                                       versus

   George M. Fluitt, III, also known as Trey Fluitt,

                                                            Defendant—Appellee,

                                       versus

   Hurricane Shoals Entities; Khalid Satary,

                                                       Respondents—Appellants.

                  Appeal from the United States District Court
                     for the Western District of Louisiana
                           USDC No. 3:20-CR-196-1

   Before King, Smith, and Willett, Circuit Judges.
   Per Curiam:*

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 22-30316      Document: 00516419559          Page: 2   Date Filed: 08/04/2022

                                    No. 22-30316

          Appellants Hurricane Shoals Entities and Khalid Satary move for a
   stay pending the outcome of the appeal in this case. Because none of the four
   traditional stay factors weigh in favor of Appellants’ motion, the motion is
   DENIED.
                                          I
          The United States brought criminal charges against more than a dozen
   defendants nationwide in an allegedly interrelated scheme of fraud. The
   Government alleges that these defendants—including Satary—engaged in
   schemes to bill Medicare and private insurance for genetic testing services
   that were unnecessary or ineligible for reimbursement, and for violating
   federal anti-kickback laws. In 2019, the Government seized a large volume of
   documents from Satary and Hurricane Shoals Entities—a company the
   Government alleges that Satary operated and controlled. In each of these
   genetic testing fraud cases, the Government has set up “protocol orders”
   that create a process for adjudicating claims that documents are privileged.
          Satary is not a party to this case. Rather, he is a defendant in another
   criminal prosecution pending in the Eastern District of Louisiana. George M.
   Fluitt, III, the defendant here, sought access to potentially privileged
   documents seized from Appellants. Consistently with the protocol order, the
   Government’s “Filter Team” gave Appellants a chance to make privilege
   objections to the documents the Government planned to produce to Fluitt.
   Appellants provided privilege logs to the Filter Team and Fluitt. But Fluitt
   and the Filter Team both found the privilege logs insufficient and sent
   written requests for clarification. Appellants refused.
          Fluitt then moved to compel Appellants to produce the allegedly
   privileged documents, arguing that they had waived any assertion of privilege
   by failing to provide adequate privilege logs. Appellants responded that
   because they were not parties, they were not bound by or subject to the
   protocol order and could not be compelled to produce the documents.

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Case: 22-30316      Document: 00516419559           Page: 3   Date Filed: 08/04/2022

                                     No. 22-30316

          The magistrate judge agreed with Appellants that they were not a part
   of the case, and that as a result the court lacked the authority to use the
   protocol to compel them to produce documents. But because Appellants
   asserted they were not subject to the court’s jurisdiction, the magistrate
   judge held that they did not have standing to challenge the sufficiency of the
   protocol or the motion to compel. The magistrate judge therefore reformed
   Fluitt’s motion to be addressed to the Government which, through its Filter
   Team, could provide the documents to Fluitt with a court order. Finally, the
   magistrate judge held that even if Appellants had standing to challenge the
   protocol, their failure to provide sufficient privilege logs meant that they had
   waived any right to assert privilege in that case. Thus, the magistrate judge
   granted Fluitt’s motion (as reformed). The district court denied Appellants’
   “appeal” of the magistrate judge’s order. Appellants then filed this appeal.
                                         II
          Appellants ask us to grant a stay of the magistrate judge’s order
   pending appeal. Whether to grant a stay pending appeal is committed to our
   discretion. Thomas v. Bryant, 919 F.3d 298, 303 (5th Cir. 2019). “We evaluate
   ‘(1) whether the stay applicant has made a strong showing that he is likely to
   succeed on the merits; (2) whether the applicant will be irreparably injured
   absent a stay; (3) whether issuance of the stay will substantially injure the
   other parties interested in the proceeding; and (4) where the public interest
   lies.’” Texas Democratic Party v. Abbott, 961 F.3d 389, 397 (5th Cir. 2020).
   “The first two factors are the most critical.” Valentine v. Collier, 956 F.3d
   797, 801 (5th Cir. 2020) (per curiam).
          Appellants are not likely to succeed on the merits because they have
   forfeited any challenge to the magistrate judge’s finding that their privilege
   logs were deficient. The magistrate judge did not reach the merits of
   Appellants’ claim that the materials were privileged. Rather, the magistrate

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Case: 22-30316      Document: 00516419559           Page: 4   Date Filed: 08/04/2022

                                     No. 22-30316

   judge denied Appellants’ motion because (1) as non-parties they did not have
   standing to challenge the protocol order or Fluitt’s motion and (2) they
   forfeited any privilege by filing inadequate privilege logs and refusing to
   provide more detailed information when requested by the Filter Team and
   Fluitt. While on appeal Appellants continue to maintain that the documents
   are privileged, they do not argue that their privilege logs were in fact
   adequate. As a result, this argument is forfeited. See, e.g., Procter & Gamble
   Co. v. Amway Corp., 376 F.3d 496, 499 n.1 (5th Cir. 2004) (“Failure
   adequately to brief an issue on appeal constitutes [forfeiture] of that
   argument.”). And because this argument is forfeited, we review the
   magistrate judge’s holding that Appellants’ privilege logs were inadequate
   only for plain error. “To prevail on plain error review, an appellant must
   show a forfeited error that is clear or obvious and that affects his substantial
   rights.” United States v. Stoglin, 34 F.4th 415, 417 (5th Cir. 2022) (citing
   Puckett v. United States, 556 U.S. 129, 135 (2009)).
          At the very least, any error by the magistrate judge was not “clear and
   obvious.” A party asserting that information is privileged must “provide
   sufficient information to permit courts and other parties to ‘test[] the merits
   of’ the privilege claim.” EEOC. v. BDO USA, L.L.P., 876 F.3d 690, 697 (5th
   Cir. 2017) (alteration in original) (quoting Bowne, Inc. v. AmBase Corp., 150
   F.R.D. 465, 474 (S.D.N.Y. 1993)). The magistrate judge held that
   Appellants’ logs were inadequate because they merely included notations
   like “attorney-client communication” or “attorney work product” with no
   further explanation. The magistrate judge found that these logs failed to give
   Fluitt and the Filter Team enough information to understand the nature of
   Appellants’ claim of privilege. We are not left with a firm conviction that this
   holding was erroneous. While Appellants raise multiple issues, their
   contention that the documents are privileged is the linchpin to their appeal.
   Because Appellants are not likely to prevail on the merits of this foundational

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                                     No. 22-30316

   issue, they are not likely to succeed on the merits generally—even if we
   assume they have legitimate complaints with the Government’s method of
   seizure and the protocol order.
          Next, Appellants have not shown that they would be irreparably
   injured absent a stay. Appellants are concerned that if the allegedly privileged
   materials are given to Fluitt they will end up in the hands of the Government
   and will be used against Satary in his case. But the protective order forbids
   Fluitt from disclosing the materials “to anyone else . . . without further Order
   of this Court.” Appellants respond that Fluitt’s only reason for wanting the
   documents is so that he can use them in his defense, which would require that
   he disclose the documents to the prosecution. But according to the district
   court’s order, Fluitt would have to submit the documents for in camera
   review before using them at trial. As a result, Appellants have—at most—a
   speculative fear of injury. And “[s]peculative injury is not sufficient; there
   must be more than an unfounded fear on the part of the applicant [for a
   stay].” Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d 992, 997 (5th Cir.
   1985) (quoting Carter v. Heard, 593 F.2d 10, 12 (5th Cir. 1979)).
          The third and fourth factors—the possibility of injury to third parties
   and the public interest—also strongly weigh against issuing a stay. A criminal
   trial in this case is set for October 17, 2022—just a few weeks away. Staying
   the order would force the parties to choose between swiftly resolving this case
   and depriving a criminal defendant of potentially relevant, exculpatory
   evidence. A stay would also run counter to the public’s “societal interest in
   providing a speedy trial.” Barker v. Wingo, 407 U.S. 514, 519 (1972).
                                      *       *       *
          For the reasons discussed above, we DENY Appellants’ motion for a
   stay pending appeal.

                                          5