Vakilian v. Shaw

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 08a0723n.06

Filed: November 24, 2008

No. 07-1576

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

S. A. VAKILIAN, Administrator of the Estate of )

Mohammad M. Vakilian, M.D., ) ON APPEAL FROM THE

) UNITED STATES DISTRICT

Plaintiff-Appellant, ) COURT FOR THE EASTERN

) DISTRICT OF MICHIGAN

v. )

) OPINION

WESLEY SHAW; RICHARD L. )

KOENIGSKNECHT; JOHN DOE, I; JOHN )

DOE, II, Jointly and Severally,

Defendants-Appellees.

BEFORE: BOGGS, Chief Judge; COLE and COOK, Circuit Judges

COLE, Circuit Judge. After criminal charges for Medicaid fraud were dismissed against

the late Mohammad Vakilian, M.D., the administrator of his estate, S.A. Vakilian, (decedent and

administrator collectively, “Vakilian”) sued Wesley Shaw (“Shaw”), an investigator in the Michigan

Attorney General’s Office, and Richard Koenigsknecht (“Koenigsknecht”), an Assistant Attorney

General for the State of Michigan, (collectively, “Defendants”) for violating Vakilian’s constitutional

rights during his investigation and prosecution. Vakilian alleged prosecution without probable cause

in violation of 42 U.S.C. § 1983 and ethnic and national origin discrimination in violation of 42

U.S.C. § 1985(3). The district court granted Koenigsknecht absolute prosecutorial immunity and

1

Vakilian v. Shaw

Case No. 07-1576

dismissed both claims against him. The district court denied summary judgment to Shaw based on

qualified immunity. On a previous appeal to this Court, we reversed the district court’s denial of

summary judgment to Shaw on the § 1983 claim and dismissed that claim. We affirmed the district

court’s denial of summary judgment on the § 1985(3) claim against Shaw, allowing that claim to

proceed to trial. Prior to trial, Vakilian moved to reinstate his § 1983 claims against both defendants

but was denied. At trial on the § 1985(3) claim, the jury returned a verdict for Shaw, finding no

equal protection violation. Vakilian appeals the denial of his motion to reinstate the § 1983 claims

and the grant of summary judgment to Koenigsknecht based on absolute immunity. He also seeks

a new trial based on an allegedly erroneous jury instruction. We AFFIRM the district court in all

respects.

I. BACKGROUND

A. Factual history—investigation and prosecution of Vakilian

1. Shaw’s investigation

During a 1993 investigation of Health Stop Medical Clinics (“Health Stop”), a group of four

clinics located in southeast Michigan, Shaw learned of an illegal kickback scheme involving the

payment of monthly bonuses to physicians based on the number of medical procedures and tests they

ordered—an arrangement in which physicians ordered unnecessary tests to increase their bonuses.

Search warrants were served and executed at Health Stop’s offices. Documents seized included

cancelled payroll and bonus checks and sheets tallying the number of tests ordered by each doctor.

Shaw interviewed non-physician employees who explained how the kickbacks had been calculated,

told Shaw that kickbacks had been paid to physicians at all four Health Stop clinics, and stated that

2

Vakilian v. Shaw

Case No. 07-1576

the clinic’s director and owner, Dr. Sharif Baig, had held at least one meeting, which he had

3

Vakilian v. Shaw

Case No. 07-1576

requested all physicians to attend, where the kickback scheme was discussed. The employees whom

Shaw interviewed did not specifically mention Vakilian.

In July 1996, Shaw prepared a draft arrest warrant request charging many of Health Stop’s

physicians with violating the kickback provisions of Michigan’s Medicaid False Claim Act

(“MFCA”), which provides:

A person who solicits, offers or receives a kickback or bribe in connection

with the furnishing of goods or services for which payment is or may be made

in whole or in part pursuant to a program established under Act. No. 280 of

the Public Acts of 1939, [] as amended, who makes or receives the payment,

or who receives a rebate of a fee or charge for referring an individual to

another person for the furnishing of the goods and services is guilty of a

felony . . . .

Mich. Comp. Laws § 400.604. The draft warrant also included a charge of conspiracy to violate the

MFCA. Shaw claims that for this initial draft, he included the physicians whom he believed had

been involved in the scheme based on the information he had gathered up to that point and that

Vakilian was not included because Shaw was not then aware that Vakilian had received kickbacks.

Shaw also did not include two white, female doctors—Dr. Karen Beasley and Dr. Nancy Sue

Eos—in his draft warrant, even though he was aware that each of them had received some kickbacks.

Dr. Eos informed Shaw that she had been aware of the kickback scheme, while Dr. Beasley claimed

that the bonuses were based on overtime work. Dr. Beasley worked at Health Stop for only about

three months and Dr. Eos for only four to five months. Of the physicians for whom there was

evidence of receipt of kickbacks, the two of them received the smallest amounts.

Koenigsknecht testified that among the reasons Drs. Beasley and Eos were not charged were

that the amount of kickbacks they had received was small and that they had agreed to cooperate with

4

Vakilian v. Shaw

Case No. 07-1576

the investigation. Although Koenigsknecht could not recall specifically, he said it likely would have

been his decision to approach these two physicians to ask whether they would cooperate, and this

decision would have been made prior to the writing of Shaw’s draft warrant on July 17, 1996.

Koenigsknecht thought he remembered that Dr. Beasley or Dr. Eos did testify later in a trial,

involving physicians other than Vakilian, stemming from the kickback investigation of Health Stop.

In August 1996, Shaw received a compilation of data from an Internal Revenue Service

(“IRS”) agent named Steven Moore who was assisting in the investigation. The compilation showed

the amount of kickbacks each physician had received by month, the amount of kickbacks to each

physician that could be proved using cancelled checks, and the total amount of kickbacks each

physician had received. This data revealed that Vakilian had received and cashed kickback checks

totaling approximately $4,600. In spite of the fact that this was a relatively small amount, and in

spite of the fact that Shaw did not investigate whether the tests Vakilian (or any other physician) had

ordered were medically unnecessary, Shaw included Vakilian and one other physician implicated

by Moore’s compilation in the warrant request. On January 21, 1997, Shaw submitted a final

warrant request to Koenigsknecht.

2. Koenigsknecht’s role in the case

Throughout the investigation, Koenigsknecht met with Shaw and other investigators to

discuss the status of the investigation, including who had been interviewed and what had been

learned, and to suggest areas for further investigation. Shaw occasionally went to Koenigsknecht

with legal questions relevant to the investigation. Koenigsknecht reviewed Shaw’s draft warrant

request and reviewed IRS agent Moore’s analysis. At some point, Shaw and Koenigsknecht

5

Vakilian v. Shaw

Case No. 07-1576

discussed the evidence and pared the number of suspects to be charged down to ten. Shaw testified

that Koenigsknecht instructed Shaw to add Vakilian and at least one other physician to the warrant

request based on Moore’s analysis. Koenigsknecht made the final decisions about whom to charge.

The doctors charged were all male and, with one exception, had names suggesting foreign origins.

At trial Shaw testified that he and Koenigsknecht had interviewed Dr. Beasley at her office

prior to Shaw’s drafting of the July 17, 1997 draft arrest warrant. Koenigsknecht stated at his

deposition and again at trial that he had not interviewed any witnesses prior to the issuance of the

arrest warrants. When confronted with notes showing that he had interviewed Dr. Beasley,

Koenigsknecht said he had no recollection of doing so and that it would have been out of keeping

with his normal practice. However, Koenigsknecht stated that in special circumstances in which a

potential defendant comes forward and wants to provide information, he may interview the witness

before an arrest warrants have been issued. Shaw testified that the decision not to charge Dr. Beasley

was made at some point after he and Koenigsknecht interviewed her. The purpose of the interview

was to determine what information she could provide and whether she would be a witness for the

prosecution.

3. Disposition of the criminal prosecution of Vakilian

After receiving Koenigsknecht’s approval, Shaw obtained arrest warrants on February 11,

1997. To obtain the warrant for Vakilian, Shaw swore that his investigation had

[r]evealed that [Vakilian] received additional money above what he’s supposed to

get; ordering excessive amounts of tests. And records were kept each month on the

amount of tests that they were performing and a separate check was written to these

doctors for these services . . . . There was agreement between the doctor and the

6

Vakilian v. Shaw

Case No. 07-1576

owner, Dr. Baig, to per - - perform these services and that he would receive money

for his services.

(Joint Appendix (“JA”) 568.) After Vakilian was arrested, he maintained his innocence, claiming

he had been unaware that the monthly bonuses bore any relation to the number of tests or other

procedures he ordered. He successfully moved to quash the information against him for lack of

evidence, and the criminal case was dismissed. The State appealed, and the Michigan Court of

Appeals affirmed, holding that the prosecution had failed to put forth evidence that Vakilian was

aware the monthly bonuses were kickbacks.

Vakilian died in 2000. S.A. Vakilian, his son, maintains that Vakilian never knew about the

kickback scheme and that Dr. Baig told Vakilian the bonus payments were based on overtime hours

and the clinic’s productivity. Vakilian’s estate filed the complaint in this action against Shaw and

Koenigsknecht under §§ 1983 and 1985(3) in the Eastern District of Michigan claiming that the

Defendants made misrepresentations to obtain the arrest warrant, and that the unfounded prosecution

severely damaged his father’s career and hastened his death.

B. Procedural history

1. Summary judgment

Defendants moved for summary judgment claiming that both Shaw and Koenigsknecht were

entitled to absolute and qualified immunity. The district court found that Shaw was entitled to

neither and denied his motion but that Koenigsknecht was entitled to absolute prosecutorial

immunity. Defendants took an interlocutory appeal on the denial of summary judgment to Shaw.

This Court reversed in part, finding that Shaw was entitled to qualified immunity on the §1983 claim

7

Vakilian v. Shaw

Case No. 07-1576

but that the district court had properly denied him summary judgment on the § 1985(3) claim.

Vakilian v. Shaw, 335 F.3d 509 (6th Cir. 2003) (“Vakilian I”). In dismissing the § 1983 claim

against Shaw, we held that probable cause would have existed for the warrant even if Shaw had not

made the allegedly false statements because Michigan law at the time did not require knowledge of

or intent to receive kickbacks—it only required receipt of kickbacks. Vakilian I, 335 F.3d at 518.

Vakilian cross-appealed the finding of absolute immunity for Koenigsknecht. We exercised pendent

jurisdiction only as to the § 1983 claim, affirming that Koenigsknecht could not be liable for the

same reason Shaw could not. Vakilian I, 335 F.3d at 521-22. We declined to exercise pendent

jurisdiction to review whether Koenigsknecht was entitled to absolute immunity protecting him from

Vakilian’s § 1985(3) claim. Id. at 522.

Following our decision, Vakilian moved the district court to reinstate his § 1983 claim

against Shaw, pointing to statements by Defendants, some post-dating our decision, that they

believed at the time they obtained the warrant that they were required to show that Vakilian knew

of the kickback scheme. Vakilian also claimed Defendants’ counsel had misled the Sixth Circuit

in oral argument by denying that Defendants had personally believed they were required to show

knowledge to obtain a warrant for Vakilian’s arrest. The district court denied the motion. The case

proceeded to trial on the equal protection claim against Shaw, and the jury found in Shaw’s favor.

Vakilian again moved the district court to reinstate both the § 1983 and § 1985(3) claims against

Koenigsknecht, claiming that testimony elicited at trial showed that Koenigsknecht was not entitled

to absolute immunity. The district court denied the motion.

8

Vakilian v. Shaw

Case No. 07-1576

2. The contested jury instruction

At trial, during arguments over Shaw’s motion for a directed verdict, a dispute arose as to

whether Defendants had conceded that Drs. Beasley and Eos were American-born. Vakilian’s

counsel argued,

[t]he claim has always been and there has never been a denial that

[Drs. Beasley and Eos] were American born, and Shaw testified that

from his interview with them they were both Caucasian and neither

one of them had an accent. The reasonable inference is, in the

absence of evidence to the contrary, that they were different in their

national origin than Dr. Vakilian.

(JA 1168.) The district judge denied the motion for a directed verdict, but the issue arose again in

arguments over jury instructions. Shaw’s attorney requested an instruction stating that, contrary to

Vakilian’s attorney’s statements in his closing argument, Defendants had never conceded that Drs.

Beasley and Eos were American-born. Vakilian’s counsel, in turn, requested an instruction stating

that Plaintiffs consistently had asserted that Beasley and Eos were American-born and that

Defendants had never denied it. The judge proposed an instruction stating “whether Beasley and Eos

were American born cannot be what? Determined on arguments.” (JA 1186.) Shaw’s attorney then

proposed an instruction that facts “[cannot] be established by [Vakilian’s attorney’s] argument.”

(Id.) Vakilian’s attorney objected and proposed the instruction: “[y]ou should determine it from the

evidence in the case.” (Id.) The judge agreed with this suggestion, and Vakilian’s attorney stated

“[t]hank you.” (Id.) The record suggests that both attorneys were satisfied with this resolution.

9

Vakilian v. Shaw

Case No. 07-1576

The jury instruction was given as agreed:

Statements and arguments by the lawyers are not evidence. The lawyers are

not witnesses. What they have said in their opening statements, closing arguments,

and at any other times or at other times [sic] is intended to help you interpret the

evidence, but it is not evidence.

There was argument here about whether Beasley and, Drs. Beasley and Eos

were American born. It cannot be established by counsels’s [sic] argument that they

were American born. But must be determined from evidence received in the case.

(Id. 1063.) The jury began deliberations in the afternoon. The following morning, Vakilian’s

counsel submitted a motion seeking new jury instructions to the effect that Vakilian was not required

to prove the ethnicity of Drs. Beasley and Eos and that discrimination could be based on perceived

ethnicity, regardless actual ethnicity. Before the judge had an opportunity to read the motion, the

jury returned a verdict in favor of Shaw.

II. ANALYSIS

A. Motion to reinstate Fourth Amendment claim

Vakilian appeals the denial of his motion to reinstate his Fourth Amendment claims.

Vakilian’s motion asked the district court to grant relief from this Court’s decision in Vakilian I

based on “new” evidence as well as alleged misrepresentations made to the Sixth Circuit during oral

argument in Vakilian I. Although the mandate rule requires a district court to adhere to the decisions

of the court of appeals within a given case, there are limited exceptions that allow the district court

to reopen an issue decided on appeal. See Mitchell v. Rees, 261 F. App’x 825, 828 (6th Cir. 2008)

(relief from court of appeals mandate may be granted where “substantially different evidence [is]

raised on subsequent trial” (internal quotation marks omitted)). We construe the motion as one

under Federal Rule of Civil Procedure 60(b) for relief from a final order, see, e.g., id., and therefore

10

Vakilian v. Shaw

Case No. 07-1576

apply an abuse of discretion standard. See Futernick v. Sumpter Twp., 207 F.3d 305, 313 (6th Cir.

2000); see also McCormick v. City of Chicago, 230 F.3d 319, 326-27 (7th Cir. 2000) (reviewing

denial of motion to reinstate claim for abuse of discretion).

Vakilian’s argument for reinstatement is meritless because the new facts and fraudulent

representations he alleges do nothing to alter this Court’s prior ruling on this very issue. In Vakilian

I, we explained that to overcome Shaw’s entitlement to qualified immunity, Vakilian was required

to establish: (1) a substantial showing that Shaw stated a deliberate falsehood or showed reckless

disregard for the truth, and (2) that the allegedly false or omitted information was material to the

finding of probable cause. Vakilian I, 335 F.3d at 517. We assumed, for the sake of argument, that

Vakilian had made a showing that Shaw lied in his testimony in support of the warrant request when

he stated that Vakilian knew of the illegal kickback scheme. Id. at 518. We went on to find that

under Michigan law at the time the warrant was obtained, the MFCA contained no requirement of

knowledge that the kickback being received was in fact a kickback—rather, it simply required a

showing that the defendant received a kickback. Therefore, all of the “new” statements showing that

Defendants believed they were required to show knowledge of the kickback scheme are immaterial,

as are the comments of Defendants’ counsel at oral argument discussing what Defendants believed

at the time they obtained the warrant. Id. Under law-of-the-case doctrine, both the district court and

we are precluded from revisiting our prior holding, and the district court did not abuse its discretion

in denying Vakilian’s motion to reinstate his Fourth Amendment claim. See McKenzie v. BellSouth

Telecomms., Inc., 219 F.3d 508, 513 n.3 (6th Cir. 2000) (law of the case is binding absent

substantially different evidence, a change in controlling law, or clear error and manifest injustice).

11

Vakilian v. Shaw

Case No. 07-1576

B. Absolute prosecutorial immunity

The district court granted summary judgment for Koenigsknecht based on absolute

prosecutorial immunity. In Vakilian I, we affirmed summary judgment as to the § 1983 claim but

declined to exercise pendent jurisdiction as to the § 1985(3) claim. For the reasons stated in the

preceding section, Vakilian does not have a § 1983 claim against Koenigsknecht. We review the

grant of absolute immunity to Koenigsknecht only with respect to the § 1985(3) claim.

1. Standard of review

A denial of a motion for reconsideration of a grant of summary judgment is reviewed de

novo. Hansmann v. Fid. Invs. Inst. Servs. Co., 326 F.3d 760, 766-67 (6th Cir. 2003). Defendants

claim that Vakilian is appealing not the grant of summary judgment to Koenigsknecht, but the denial

of his post-trial motion for reinstatement of claims based on evidence adduced at trial. Defendants

claim this denial is subject to abuse-of-discretion review as to factual determinations and de novo

review only as to legal determinations. We construe Vakilian’s appeal as challenging the grant of

summary judgment to Koenigsknecht and therefore review it de novo. See Cattin v. Gen. Motors

Corp., 955 F.2d 416, 428 (6th Cir. 1992) (“[A]n appeal from a final judgment draws into question

all prior non-final rulings and orders [including grants of partial summary judgment].”).

Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ.

P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The moving party bears

the burden of showing the absence of any genuine issues of material fact. Plant v. Morton Int’l, Inc.,

12

Vakilian v. Shaw

Case No. 07-1576

212 F.3d 929, 934 (6th Cir. 2000). Once the movant has satisfied its burden, the nonmoving party

must produce evidence showing that a genuine issue remains. Id. We will take into account all

evidence adduced by the parties in determining whether a genuine issue of material fact exists.

2. Merits

Prosecutors generally enjoy absolute immunity for acts taken “in initiating a prosecution and

in presenting the State’s case.” Imbler v. Pachtman, 424 U.S. 409, 431 (1975). We use a

“functional” approach to determine when absolute immunity applies, looking to “the nature of the

function performed, not the identity of the actor who performed it.” Forrester v. White, 484 U.S.

219, 229 (1988). “Searching for clues and corroboration that might give [the prosecutor] probable

cause to recommend that a suspect be arrested” is not protected by absolute immunity, but “the

professional evaluation of the evidence assembled by the police” is so protected. Buckley v.

Fitzsimmons, 509 U.S. 259, 273 (1993) (internal quotation marks omitted). “Absolute prosecutorial

immunity will attach to administrative or investigative acts necessary for a prosecutor to initiate or

maintain a criminal prosecution.” Ireland v. Tunis, 113 F.3d 1435, 1446-47 (6th Cir. 1997). “The

decision to file a criminal complaint and seek issuance of an arrest warrant are quasi-judicial duties

involved in initiating a prosecution” and are protected by absolute immunity. Id. (internal quotation

marks omitted).

This case is governed by Ireland v. Tunis, a § 1983 case involving a claim of prosecution

without probable cause, in which a prosecutor was granted absolute immunity where he received

informal reports on the status of the investigation, attended staff meetings, concurred in the

recommendations of subordinates that charges be filed, and concurred in the decision to seek an

13

Vakilian v. Shaw

Case No. 07-1576

arrest warrant. 113 F.3d at 1444. Koenigsknecht is plainly entitled to absolute immunity for the

bulk of his acts, including staying informed of the investigation’s progress, reviewing Shaw’s draft

arrest warrant, and deciding which suspects to charge. Koenigsknecht’s interview of Dr. Beasley

comes closer to the line between core prosecutorial functions and investigatory functions that are not

“intimately associated with the judicial phase of the criminal process.” Because Vakilian has failed

to produce evidence to counter Koenigsknecht’s statement that his purpose in interviewing Dr.

Beasley was to determine whether to use her as a cooperating witness, Vakilian has not raised a

genuine issue of material fact as to whether Koenigsknecht stepped outside his protected role as an

advocate for the state in the judicial process. Furthermore, Vakilian’s § 1985(3) claim is not based

on Koenigsknecht’s conduct at his interview with Beasley, but on Koenigsknecht’s “decision to seek

to seek issuance of an arrest warrant” for Vakilian—this is a core prosecutorial decision as to which

Koenigsknecht is entitled to absolute immunity. Ireland v. Tunis, 113 F.3d at 1446.

C. Jury Instruction

Under the Federal Rules of Civil Procedure, the parties must be given an opportunity to

object to the jury instructions before they are delivered to the jury, and if a party fails to object, the

instructions are reviewed for “plain error . . . if the error affects substantial rights.” Fed. R. Civ. P.

51(b)(2), (d)(2). An objection to a jury instruction must “stat[e] distinctly the matter objected to and

the grounds for the objection” and must be made on the record. Fed. R. Civ. P. 51(c)(1).

Vakilian did not object to the jury instruction which he now disputes. In fact, the disputed

instruction consisted of language proposed by Vakilian’s attorney. The judge gave both sides an

opportunity to express concerns regarding the instruction, and neither of them did so. Because

14

Vakilian v. Shaw

Case No. 07-1576

Vakilian cannot make a colorable argument that the complained of instruction was plainly erroneous

or that it affected his substantial rights, he is not entitled to a new trial.

Vakilian’s other challenges to the jury instructions are also meritless. Vakilian argues that

the jury was not instructed that perceived ethnicity could be a basis for discrimination, but nothing

in the jury instructions forbade the jury from using such perceptions to find Shaw liable. The

instructions on the equal protection claim merely required the jury to determine whether Vakilian

had been discriminated against because of his status as a foreign-born individual. This instruction

allowed the jury to find for Vakilian if they believed he had been targeted because Shaw perceived

him as different from Drs. Eos and Beasley. Vakilian’s arguments regarding burden-shifting carry

no weight. The court correctly explained Vakilian’s burden, and Vakilian never requested a

McDonnell Douglas burden-shifting instruction so cannot complain that one was not given. See Fed.

R. Civ. P. 51(d)(1)(B).

IV. CONCLUSION

For the foregoing reasons, we AFFIRM the judgments of the district court in full.

15