Becker v. Kroll

494 F.3d 904

Taj BECKER, M.D., Plaintiff-Appellant-Cross Appellee, v. J. Denis KROLL, Jeff Wright, Terry Allen, Ph.D., Gordon Van Ballegoie, and Michelle Herbert, in their individual, official and representative capacities, Defendants-Appellees-Cross Appellants Gary R. Evans, Mark Shurtleff, David Gardner, John Does 1-20, in their individual, official and representative capacities, Defendants-Appellees The Association of American Physicians & Surgeons, Amicus Curiae.

No. 05-4070.

No. 05-4096.^*

United States Court of Appeals, Tenth Circuit.

July 19, 2007.

Robert R. Wallace, Kirton & McConkie, Salt Lake City, UT, for Plaintiff-Appellant-Cross Appellee.

Debra J. Moore, Assistant Utah Attorney General, Salt Lake City, UT, for Defendants-Appellees-Cross Appellants.

J. Clifford Petersen, Assistant Utah Attorney General, Salt Lake City, UT, for Defendants-Appellees.

Andrew L. Schlafly, Far Hills, NJ, on brief for Amicus Curiae.

Before TYMKOVICH, McWILLIAMS, Circuit Judges, and EAGAN, District Judge.^**

TYMKOVICH, Circuit Judge.

Taj Becker is a medical doctor in St. George, Utah, who participated in Utah's Medicaid program. Between 1998 and 2001, she was investigated by Utah's Medicaid Fraud Control Unit (MFCU) for alleged billing irregularities. The investigation culminated with the filing of a civil complaint and criminal charges. Those charges were later dismissed by state prosecutors concerned about the methods MFCU used to obtain records and assess Becker's billing practices.

After the charges were dismissed, Becker brought claims under 42 U.S.C. § 1983, alleging that the MFCU investigation was a sham to force her to pay civil penalties to avoid criminal prosecution. Her lawsuit was based on several federal and state theories, which she has distilled on appeal to the following: (1) malicious prosecution under the Fourth and Fourteenth Amendments; (2) outrageous conduct in violation of substantive due process under the Fourteenth Amendment; (3) retaliation under the First Amendment; and (4) libel under state law.

For the reasons discussed herein, we AFFIRM the district court's grant of summary judgment to the defendants as to the Fourth and Fourteenth Amendment claims, and we REVERSE and REMAND the First Amendment retaliation and state law libel claims.

I. Factual Background

Becker is a board-certified neurologist practicing in St. George, Utah. Her claims arise out of a criminal investigation and prosecution by MFCU, a task force assigned to combating Medicaid fraud in Utah. The MFCU investigation centered on a suspicion that Becker "up-coded" or over-billed the government for services performed for Medicaid patients in her care.¹ The facts of this case are best understood chronologically.

MFCU Begins an Investigation and Subpoenas Becker's Records

In early to mid-November 1998, Becker's billings to Medicaid were flagged by MFCU research analyst Terry Allen. Allen concluded that Becker's bills showed evidence of possible up-coding. Allen's work was the basis for an initial investigation by Sergeant Jeff Wright, the chief investigator for MFCU. Wright's investigation allegedly supported Allen's conclusion that Becker may have up-coded. As a result, J. Denis Kroll, the Assistant Utah Attorney General who served as MFCU's lead prosecutor, sought and received permission from a state judge to issue subpoenas for Becker's medical records.

On the morning of November 17, 1998, Wright and MFCU medical investigator Michelle Hebert-Snow arrived unannounced at Becker's office and demanded that she produce certain medical records for copying. The subpoena requested billing records for forty-seven randomly-selected patients between 1995 and 1998. Wright informed Becker that since she had signed a provider agreement with Medicaid, he was entitled to the records. Becker informed Wright that she would only produce the records pursuant to a subpoena. Wright then provided Becker with what appeared to be a facially valid subpoena for the records. The subpoena provided that Becker could refuse to turn over the records immediately and appear a few days later in Salt Lake City if she wanted to contest the subpoena.² After reviewing the subpoena, Becker chose not to challenge it and instructed her staff to produce the records immediately. Wright and others from MFCU removed and copied dozens of patient records, which they returned to Becker's office later that day. Hebert-Snow performed an initial review of the copied records and concluded that Becker had likely up-coded.

MFCU Threatens Prosecution and Proposes Settlement of the Charges

Becker was then asked to come to Salt Lake City to meet with Kroll to discuss the investigation. On January 20, 1999, Becker traveled to Salt Lake City and met with Kroll, Wright, and Hebert-Snow. According to Becker, this meeting was first an interview and then an impromptu settlement conference. Specifically, Becker claims she was told that if she did not pay $107,000 to MFCU within two weeks, she would face criminal prosecution. In his own words, Kroll testified that he informed Becker of the "parade of horrors" and "how bad it could get" if MFCU filed criminal charges. Supp.App. Aple. Kroll, et al. 294-97.

Becker maintained she was innocent of any up-coding and refused to settle with MFCU. Becker argued to Kroll that the medical experts who had reviewed her billing practices were not neurologists and therefore had no expertise to determine the validity of her billing statements. Following this exchange, and without telling Becker, MFCU contracted with Dr. Vine, an independent neurologist, to review Becker's records. Vine concluded that Becker's billing practices were appropriate.

In April 1999, Kroll again contacted Becker and offered to waive any criminal prosecution if Becker would pay $49,605 to MFCU. Kroll provided Becker with a draft criminal complaint against her seeking $646,000 in damages. Becker again maintained her innocence and refused to settle.

MFCU Files and Withdraws Civil Suit

On June 24, 1999, Kroll filed a civil suit against Becker, asking for $25,000 in damages plus fines and investigative costs. According to Kroll, he filed the suit as part of settlement discussions with Becker, and he dismissed the civil action less than two weeks later on July 7, 1999 when settlement failed to materialize.

Following the dismissal of the civil action, Becker began to publicly respond to the MFCU investigation. First, in November 1999, she filed a Notice of Claim against MFCU.³ She and her husband also initiated a letter-writing campaign in which they contacted the Governor, federal and state legislators, and other officials, detailing what Becker believed were unprofessional investigative practices and bullying tactics of MFCU. Only one letter in the record, sent to the Chairman of the Utah Senate Appropriations Committee, and copied to the Chairman of the Utah House Appropriations Committee and the Utah Governor, is dated prior to the filing of criminal charges against Becker.

The state decided in 1999 to transfer oversight of MFCU from the Utah Department of Public Safety to the Attorney General's Office, a transfer the district court attributed to political pressure from rural doctors claiming maltreatment by MFCU. In December 1999, David Gardner took over Kroll's position as the lead prosecutor for MFCU. Kroll became interim director of MFCU.⁴

MFCU Files a Criminal Complaint

On January 11, 2000, MFCU filed felony charges in state court concerning Becker's billing practices. That same day, Becker's husband testified before a state legislative committee about MFCU's alleged prosecutorial abuses. According to Gardner, he made the decision to file criminal charges based in part on an information and affidavit signed by Wright, one of the original MFCU investigators on the case. Gardner also discussed the case with several other prosecutors, including his supervisors, before he decided to file charges against Becker. Shortly after the criminal charges were filed, Wright was transferred out of MFCU to a different department although he later testified at Becker's preliminary hearing.

At the preliminary hearing on July 11, 2000, the prosecution presented evidence in support of the charges. Prior to the defense presenting any evidence, the court stated, "I believe the State has provided sufficient evidence on each of those elements and, accordingly, I bind you over." Supp.App. Aple. Kroll, et al. 580. After making this statement, the court then acknowledged that the court "probably acted prematurely in doing this bind over" because Becker was not given an opportunity to testify. Id. Becker, through her attorney, then chose not to present any evidence at the preliminary hearing given the court's earlier statement.⁵

MFCU Withdraws Criminal Complaint Due to Irregularities in Investigation

Shortly after the preliminary hearing, Gardner became aware of several irregularities in the investigation. In particular, Gardner learned that Becker's medical records were not obtained voluntarily as Wright had originally led him to believe. Gardner also discovered that there never had been a return of service filed with the court with respect to the subpoenas, as required under Utah law, and that key meetings between Becker and MFCU members had not been documented, including the January and April 1999 settlement offers. Gardner further discovered that MFCU had consulted with Dr. Vine, and that Dr. Vine had found no irregularities in Becker's billing and Medicaid coding practices. Dr. Vine's review and conclusions regarding Becker's billing records were not documented in the MFCU case file and were never provided to Becker as potential exculpatory evidence. Because of these irregularities, Gardner concluded that the key evidence would likely be suppressed prior to trial and dismissed the criminal case with prejudice on September 6, 2000.

Becker Cleared at Administrative Hearing...