Petition for Writ of Certiorari — Freedland v. Michigan

iB? gunreme Court, U.S.

> BILLED

a 0 ~j 67 JUL 29 1990

a SEPH F. SPANMOL, 4B

sai =o = a CLERK

In Che

Supreme Court of the United States

Mctober Cerm, 1990

JOEL EDWARD FREEDLAND,

Petitioner.

v.

PEOPLE OF THE STATE OF MICHIGAN,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE MICHIGAN COURT OF APPEALS

— AND APPENDICES —

NEIL H. FINK

(Counsel of Record)

2500 Buhl Building

535 Griswold

Detroit, Michigan 48226

(313) 963-9625

Attorney for Petitioner

Interstate Brief & Record Company, a division of North American Graphics, Inc

1629 West Lafayette Boulevard, Detroit, MI 48216 (313) 962-6230

1

QUESTION PRESENTED

WHETHER AN ACCUSED’S FOURTH AMENDMENT RIGHT

AGAINST UNREASONABLE SEARCHES AND SEIZURES IS

VIOLATED WHEN A PROSECUTOR SEEKS AND OBTAINS

A GRAND JURY SUBPOENA AND SEIZES DOCUMENTS

PURSUANT TO THAT SUBPOENA, WITHOUT THE IN-

TENTION OF PRESENTING THE DOCUMENTS TO THE

GRAND JURY, AND THEN USES THE DOCUMENTS AS

THE BASIS FOR PROCEEDING CRIMINALLY AGAINST

THE ACCUSED, THEREBY BYPASSING THE CONSTITU-

TIONAL WARRANT REQUIREMENT?

li

LIST OF PARTIES

The caption of the case in this Court contains the

names of all parties. !

' Detendant Griggs Clinic, P.C., is dissolved.

lll

TABLE OF CONTENTS

QUESTION PRESENTED ....................

ek ea doe cask ev evade ecec:

CONSTITUTIONAL PROVISION INVOLVED

a

waeeeermeiys OF BPE CASE ... 22.3. oc es cece.

REASONS FOR GRANTING THE WRIT:

THE MICHIGAN COURT OF APPEALS HAS

WRONGLY DECIDED AN IMPORTANT CONSTI.

TUTIONAL QUESTION INVOLVING THE FOURTH

AMENDMENT WARRANT REQUIREMENT WHICH

HAS NOT BEEN, BUT SHOULD BE, SETTLED BY

Os i

A. Grand Jury Subpoenas Are Subject To Mini-

mal Fourth Amendment Limitations. .....

B. Petitioner Had A Reasonable Expectation Of

Privacy In His Medical Records. ........

C. The Assistant Attorney General's Use Of The

Grand Jury Subpoena Duces Tecum Was An

Unreasonable Search And Seizure. ......

SoG RG” 0)

APPENDICES.

Appendix A —- Opinion of the Michigan Court of

Appeals — April 29 1986 ........

Appendix B — Opinion of the Michigan Court of

Appeals — August 7, 1989 ........

tr

tw

6

1V

Page

Appendix C — Order of the Michigan Supreme

Court — April 24, 1990 .......-. C-]

Appendix D — Order of the Michigan Supreme

Court — September 23, 1986 .... D-l

Appendix £ — Opinion of the Recorder's Court ot

the City of Detroit — June 26, 1984 E-]

Appendix F — Order of the Recorder's Court of

the City of Detroit — June 26, 1984 F-1

Appendix G — Grand Jury Subpoena —

February 16, 1982 ..........+-+- G-|

Appendix H — Grand Jury Authorization tor Re-

lease of Records — April 29,1982 .. H-1

TABLE OF AUTHORITIES

Cases:

Boyd v. United States, 116 US. 616 (1886) .... 6, il

Branzburg v. Hayes, 408 U.S. 665 1 2p) Bere nOr 1}

Bumper v. North Carolina, 391 U.S. 543 (1968) .. Y

Camara v. Municipal Court, 387 U.S. 523 (1967) 8

Coolidge v. New Hampshire, 403 U.S. 443 (1971) 1

Griffin v. Wisconsin, 483 U.S. 868 (1987) .....-. 10

Hale v. Henkel, 201 US. 43 (1906) .....-..--- 6, 1

In re Murchison, 349 U.S. 133 (1954) ...-.----- 1]

Marshall v. Barlow’s, Inc., 436 U.S. 307 (1978) .. 8

Michigan v. Clifford, 464 U.S. 287 (1984) ...... 8,9

Page

New Jersey v. T.L.O., 469 U.S. 325 (1985) ....... 10

New York v. Burger, 482 U.S. 691 (1987) ....... 8, 9

Oklahoma Press Publishing Co. v. Walling, 327

US 16611ME «nn eee 6, ll

See v. City of Seattle, 387 U.S. 541 (1967) ...... 8

Skinner v. Railway Labor Executives Assn, —

iS —.. 200 SCe, TE IS cee ee 10

United States v. Miller, 425 U.S. 435 (1976) .... 6

United States v. Montova de Hernandez, 473

US. SSE (UGGS) 3. na ke cae oe ae ee 10

United States v. Place, 462 U.S. 696 (1983) ..... 10

United States v. Ross, 456 U.S. 798 (1982) ..... 10

U.S. Constitution:

Fourth Amendment 20.0.5. 6 6 css eee eee 2

Statutes and Rules:

TS USC. OURS TIA : Uc Seas oe ee ee ee 2

Mich. Comp. Laws § 400.111b ............---. 4,7

Mich. Comp. Laws § 400.111d 2.2... .....-4-. 8

Mich. Comp. Laws § 400.I]le...........-..-. 8

Mich. Comp. Laws § 400.601, et seg........--- 3

ee

Jn Che

Supreme Court of the United States

Mctober Cerm, 1990

Joe. Enwarp PREEDLAND,

Petitioner.

v

PrOPLE OF THE STATE OF MICHIGAN,

Respondent.

PE TITION FOR A WRIT OF CERTIORARI

TO THE MIC HIGAN | ( 20U RT OF APPE ALS

OPINIONS BELOW

The opimion of the Michigan Court of Appeals dated

April 29, 1986, is unreported and is reprinted at

Appendix |“App.”|} A-1. The opinion of the Michigan

Court of Appe:!. dated August 7, 1989, is reported at 178

Mich. App. 761; 444 N.W.2d. 250 and is reprinted at App.

B-1. The opinion of the Recorder's Court for the City of

Detroit 1s not reported and is reprinted at App. E-1.

2

JURISDICTION

Petitioner's conviction was affirmed by the Michigan

Court of Appeals on August 7, 1989. A timely Appli-

cation for Leave to Appeal was filed in the Michigan

Supreme Court. The Michigan Supreme Court denied

the Application on April 24, 1990. The jurisdiction ot

this Court is invoked pursuant to 28 U.S.C. § 1257 \a).

CONSTITUTIONAL PROVISION INVOLVED

The Fourth Amendment to the United States Consti-

tution provides:

The right of the people to be secure in their per-

sons, houses, papers, and ettects, against unrea-

sonable searches and seizures, shall not be

violated, and no Warrants shall issue, but upon

probable cause, supported by Oath or attirmation,

and particularly describing the place to be

searched, and the persons or things to be seized

—

STATEMENT OF THE CASE

On February &, 1982, a grand jury subpoena duces

tecum was issued at the request of an Assistant

Attorney General for the State of Michigan, and served

on Petitioner Joel Edward Freedland, D.O., and De-

fendant Griggs Clinic, P.C., lecated in Detroit, Mich-

igan. App. G-1. The subpoena commanded Petitioner

Freedland to appear before the grand jury and to produce

specified patient files and records of the Griggs Clinic.

In obedience to the subpoena, Petitioner produced the re-

quested files and records and forwarded them to the

grand jury on February 16, 1982. The Assistant Attorney

3

General, however, never submitted the case to the grand

jury. Rather, on April 28, 1982, the Assistant Attorney

General sought and obtained from the grand jury an

authorization for the release of the subpoenaed records

for use in a criminal prosecution of Defendants. App. H-1.

On that same date, April 28, 1982, the Assistant

Attorney General filed a criminal complaint against

Petitioner Freedland and Defendant Griggs Clinic. Fol-

lowing a preliminary examination, the Defendants were

bound over to the Recorder’s Court for the City of

Detroit on eighty counts of violating the State of Michi-

gan’s Medicaid Faise Claim Act. Mich. Comp. Laws

§ 400.601, et seg. The Assistant Attorney General subse-

quently filed an information reducing the number of

counts against Detendants to sixty-four.

Pricer to trial, Detendants moved to suppress all evi-

dence and truits obtained through the issuance of the

grand jury subpoena. Defendants argued that the

Assistant Attorney General abused the grand jury’s

power by tssuing a subpoena for various records, when,

in fact, there was no intention to submit the evidence to

the grand jury. by doing so, the Assistant Attorney Gen-

eral was able to frustrate the protections of the Fourth

Amendment by, in effect, seizing-evidence without a

warrant.

On June 26, 1984, the Recorder’s Court for the City of

Detroit issued an opinion and order granting Defendants’

Motion to Suppress Evidence. The court accepted De-

tendants’ contention that “the prosecution subpoenaed

the documents ... without any legitimate grand jury

purpose in mind.” App. E-5. Based on the foregoing, the

court held

The aspect of this case which triggers the most

concem derives from the fact that the prosecution

4

through its use of the grand jury was able to

obtain from the defendants evidence against them

which it could not have obtained by means of a

search warrant which would have required a

showing of probable cause before a magistrate

who was duly authorized, upon such showing, to

‘issue a search warrant. In the opinion of this

Court, this constituted a violation of ... the

Fourth Amendment to the Federal Constitution

which undertake|s|] to protect our citizens

from unreasonable search and seizure. App. E-6

The Attorney General appealed to the Michigan Court

of Appeals. In an unpublished opinion, issued on April

39 1986, the Michigan Court of Appeals reversed. App

A-1. Although the court viewed the procedure used by

the Assistant Attorney General “with distavor,” App

A-7, it found no violation Of a protected Fourth Amend

ment privacy interest. The court reasoned that because

medicaid providers are statutorily required to maintain

records and make those records available for examina-

tion by the Attorney General, Mich. Comp. Laws

§ 400.111b, Defendants had no reasonable expectation

of privacy in the records released by the grand jury

App. A-6

A

Defendants tiled an Interlocutory Application tor

Leave to Appeal to the Michigan Supreme Court On

September 24, 1986, the Michigan Supreme Court denied

leave to appeal, Justice Charles L. Levin dissenting

App. C-1

The case proceeded to a jury trial. Defendants were

convicted on one count of conspiracy to defraud and

twenty-two counts of medicaid fraud. By the time of

sentencing, Defendant Griggs Clinic, P.C., was dissolved.

Petitioner Freedland was fined $50,000.00 and sentenced

to five to ten years imprisonment for the conspiracy con-

viction and concurrent terms of two to four years impris-

onment for the medicaid fraud convictions.

The Michigan Court of Appeals affirmed Defendants’

conviction on August 7, 1989. In a published opinion,

App. B-1, the Michigan Court of Appeals declined to re-

view Defendants’ claim that the trial court erred by al-

lowing evidence at trial which was obtained in violation

of the Fourth Amendment. The court held that appellate

review was precluded by the law of the case doctrine and

ruled that Defendants’ only recourse was to seek leave to

appeal to the Michigan Supreme Court. App. B-10.

Petitioner filed an Application for Leave to Appeal to

the Michigan Supreme Court on August 22, 1989. Peti-

tioner contended, inter alia, that his convictions should

be reversed where the prosecution introduced evidence

at trial seized in violation cf Petitioner’s Fourth Amend-

ment rights. On April 24, 1990, the Michigan Supreme

Court denied leave to appeal, Justices Charles L. Levin

and Michael F. Cavanagh, dissenting. App. C-1.

REASONS FOR GRANTING THE WRIT

THE MICHIGAN COURT OF APPEALS HAS WRONGLY

DECIDED AN IMPORTANT CONSTITUTIONAL QUES-

TION INVOLVING THE FOURTH AMENDMENT WAR-

RANT REQUIREMENT WHICH HAS NOT BEEN, BUT

SHOULD BE, SETTLED BY THiS COURT.

This case presents a question of first impression: does

the Fourth Amendment to the United States Constitu-

tion permit a prosecutor to use the grand jury’s subpoena

power to gather evidence and, rather than presenting that

evidence before the grand jury, use the evidence as a

basis for proceeding criminally against the accused by

6

way of complaint and warrant without a neutral and de-

tached magistrate finding that there was probable cause

to seize the evidence? Petitioner contends that, under

the circumstances of this case, the subpoena duces

tecum was an improper substitute for a search warrant

and therefore was an “unreasonable” search and seizure

within the meaning of the Fourth Amendment.

A. Grand Jury Subpoenas Are Subject To Minimal

Fourth Amendment Limitations.

It is long settled that the grand jury subpoena duces

tecum, the process by which the production of evidence

is compelled to aid grand jury investigations, is subject

to only very minimal Fourth Amendment limitations.

Hale v. Henkel, 201 U.S. 43, 76-77 (1906); Boyd v.

United States, 116 U.S. 616, 633-35 (1886). In Ok lahoma

Press Publishing Co. v. Walling, 327 U.S. 186, 208 (1946),

this Court said that “the Fourth [Amendment], 1f appli-

cable [to subpoenas for the production ot business

records and papers}, at the most guards against abuse

only by way of too much indetiniteness or breadth in the

things required to be ‘particularly described,’ if also the

inquiry is one the demanding agency is authorized by

law to make and the materials specified are relevant,” as

quoted in United States v. Miller, 425 U.S. 435, 445-446

(1976). These minimal protections, however, have no ap-

plication to the facts of this case.

In this case, Petitioner does not contend that the

Grand Jury subpoena was, on its face, objectionable.”

| Petitioner does not contend that the grand jury subpoena failed

to comply with the requirements outlined in Oklahoma Press Pub-

lishing Co. v. Walling

2 Thus, in obedience to the subpoena, Petitioner complied and

surrendered the subpoenaed records to the grand jury. Petitioner had

no reason, at that time, to believe that any grounds for an objection

existed

>

Rather, Petitioner contends that the manner in which

the subpoena was used violated the Fourth Amendment.

The trial court determined that the Assistant Attorney

General had no intention of presenting the seized

records to the grand jury. Petitioner contends that the

Assistant Attorney General used the grand jury subpoena

power to gather criminal evidence, thus making an “end

run” around the Warrant Clause of the Fourth Amend-

ment. Petitioner submits that the Fourth Amendment

prohibits a prosecutor from using the grand jury sub-

poena power as a tool to gather criminal evidence, absent

a warrant issued by a neutral and detached magistrate

upon probable cause.

B. Petitioner Had A Reasonable Expectation Of Pri-

vacy In His Medical Records.

The Michigan Court of Appeals viewed the procedures

used by the Assistant Attorney General “with disfavor.”

App A-7. Nevertheless, it held that because Petitioner

was a medicaid provider and was statutorily required to

maintain and keep records available for examination by

the Attorney General,’ Petitioner had no legitimate ex-

pectation ot privacy in the records surrendered. App. A-6,

A-7. The Court of Appeals’ rationale is flawed in several

respects.

First, Petitioner had not been a participant in the

medicaid program since October 9, 1981, approximately

four months prior to the issuance of the subpoena duces

tecum.* Second, the statutory sanctions for refusing to

provide records for inspection by the Attorney General

* Mich. Comp. !aws § 400.11 1b.

* In his Statement of Facts, p. 2 of the Attorney General's Brief on

Appeal in the Michigan Court of Appeals, filed January 14, 1985. the

Attomey General acknowledges that Petitioner had been “suspended

... from participation in the Medicaid Program” at the time

8

include probation, suspension, OF denial or termination

of the provider's participation in the program. There is

no provision in the statute for a warrantless seizure of

records by the Attorney General if the medicaid provider

refuses to turn the records over voluntarily. Mich. Comp.

Laws § 400.111d and e.

Furthermore, even if the medicaid statute was appli-

cable, Petitioner’s subjective expectation of privacy in

his records was not relinquished. The Fourth Amend-

meni protects commercial premises as well as private

homes. Camara v. Municipal Court, 387 U.S. 523,

528-529 (1967); See v. City of Seattle, 387 U.S. 541, 543,

546 (1967). In See, this Court stated:

The businessman, like the occupant of a resi-

dence, has a constitutional right to go about his

business free from unreasonable official entries

upon his private commercial property. The busi-

nessman, too, has that right placed in jeopardy if

the decision to enter and inspect for violation of

regulatory laws can be made and enforced by the

inspector in the field without official authority

evidenced by warrant. [387 USS. at 543]

This Court recently reaffirmed that an owner or oper-

ator of a business has an expectation of privacy In com-

mercial property which society 1s prepared to recognize

as reasonable. New York v. Burger, 482 US. 691, 699

(1987). To be valid, administrative searches generally re-

quire a warrant. Michigan v. Clifford, 464 U.S. 287, 291

(1984). While only a reduced expectation of privacy is

recognized in “closely regulated industries,” Marshall v.

Barlow’s, Inc., 436 U.S. 307, 313 (1978),° warrantless

5 Marshall held that warrantless searches by the Occupational

Safety and Health Review Commission pursuant to statute were

unconstitutional. Administrative regulations requiring certain re-

cords to be maintained and open to inspection do not infringe on 1n-

dividual rights to the extent that warrantless searches would tt

allowed.

9

searches are considered reasonable only where a “ ‘sub-

stantial’ government interest” informs the regulatory

scheme, the search is “ ‘necessary to further [the] regula-

tory scheme’”, and the regulatory statute “advise[s] the

owner of the commercial premises that the search is

being made pursuant to the law and has a properly de-

fined scope, and it must limit the discretion of the in-

specting officers.” New York v. Burger, 482 USS. at 699.

In this case, the Assistant Attorney General did not

perform an administrative search pursuant to Michigan’s

medicaid statute,° but conducted a seizure of criminal

evidence. This Court holds that any use of an adminis-

trative search as a means of criminal investigation, ab-

sent a warrant, is forbidden. Michigan v. Clifford, 464

U.S. at 294. Further, Petitioner’s compliance with the

grand jury subpoena was an “acquiescence to a claim of

lawful authority,” Bumper v. North Carolina, 391 USS.

543,549 (1968), and not a voluntary relinquishmen: of

his privacy right.

Accordingly, under the commercial property doctrine,

Petitioner retained a reasonable expectation of privacy in

his medical records.

C. The Assistant Attorney General’s Use Of The

Grand Jury Subpoena Duces Tecum Was An Un-

reasonable Search And Seizure.

The question remains whether the Assistant Attorney

General's use of the grand jury subpoena duces tecum to

seize Petitioner’s medical records, without the interven-

tion of a neutral and detached magistrate, was “unrea-

sonable” within the meaning of the Fourth Amendment.

® Petitioner does not challenge the adequacy of the inspection

procedures provided in the Michigan Social Welfare Act.

LO

In United States v. Ross, 456 U.S. 798, 824-825 (1982),

this Court stated:

We reaffirm the basic rule of Fourth Amendment

jurisprudence stated by Justice Stewart for a

unanimous Court in Mincey v. Arizona, 437 US.

385, 390, 98 S.Ct. 2408, 2412, 57 L.Ed.2d 290

[1978]:

“The Fourth Amendment proscribes all unrea-

sonable searches and seizures, and it is a cardinal

principle that ‘searches conducted outside the

judicial process, without prior approval by judge

Or magistrate, are per se unreasonable under the

Fourth Amendment — subject only to a few spe-

cifically established and well-delineated excep-

tions.’ Katz v. United States, 389 U.S. 347, 357

[88 S.Ct. 507, .14, 19 L.Ed.2d 576 (1967)] (foot

notes omitted).”

What is reasonable, this Court holds, “ ‘depends on all

the circumstances surrounding the search or seizure and

the nature of the search or seizure itself.” Skinner v

Railway Labor Executives Ass'n, U.S. , 109 S.Ct

1402, 1414 (1989) (quoting United States v. Montoya d

Hernandez, 473 US. 531, 537 (1985}). The permissibility

of a particular search or seizure is judged by balancing

the intrusion on an individual’s privacy against the

competing governmental interest. Jd. In criminal cases

however, this Court “strike|s] this balance in favor of the

procedures described by the Warrant Clause of the

Fourth Amendment.” Jd. (citing United States v. Place,

462 US. 696, 701 (1983}). In criminal cases, only “ ‘spe-

cial needs, beyond the normal need for law enforcement,

make the warrant and probable-cause requirement im-

practicable.” Griffin v. Wisconsin, 483 U.S. 868, 873

(1987) (quoting New Jersey v. T.L.O., 469 U.S. 325, 351

(1985)}.

I]

In Coolidge v. New Hampshire, 403 U.S. 443 (1971),

then-existing state law authorized the New Hampshire

Attorney General to issue search warrants without the

intervention of a neutral and detached magistrate. This

Court ruled the procedure invalid:

[T|here could hardly be a more appropriate setting

than this for a per se rule of disqualification

rather than a case-by-case evaluation of all the

circumstances. Without disrespect to the state

law enforcement agent here involved, the whole

point of the basic rule .. . [of the warrant require-

ment] is that prosecutors and policemen simply

cannot be asked to maintain the requisite neu-

trality with regard to their own investigations —

the ‘competitive enterprise’ that must rightly

engage their single-minded attention. |/d. at 450,

footnote omitted. |

Under the circumstances presented here, the Assistant

Attorney General similarly seized Petitioner's records

without the intervention of a neutral and detached mag-

istrate. Two primary functions of a grand jury are to de-

termine probable cause and to protect citizens against

unfounded criminal prosecutions. Branzburg v. Haves,

408 U.S. 665 (1972). Here, no detached grand jury consid-

ered the evidence, for there was no intention to present

the seized records to the grand jury. As this Court recog-

nized when it condemned Michigan's “one-man” grand

Jury system in /n re Murchison, 349 US. 133, 136 (1954),

“no man can be a judge in his own case.”

Where, as here, the prosecutor manipulates the grand

jury system to secure criminal evidence, even the min-

imal Fourth Amendment limitations on the subpoena

power discussed in Boyd, Hale, and Oklahoma Press are

no longer present. If the prosecution can seize medical

records from a physician's office, sift through these

12

records, and make an independent decision to charge

minus the disinterested intervention Of a judge or of citi-

zens of the grand jury at any point in the process, the

prosecution becomes “the judge of its own case” and the

privacy rights of the accused are violated. Petitioner sub-

mits that the procedure used by the Assistant Attorne)

General, if allowed to stand, would reduce the Fourth

Amendment to a nullity

CONCLUSION

For the foregoing reasons, this Petition tor a Writ ot

Certiorari should be granted

Respectfully submitted

By: /s/ NEIL H. FINK (P13430

Counsel of R

2500 Buhl Building

535 Griswold

Detroit, Michigan 48226

313) 963-9625

Att rns tor Dptit

Ail rilic y f & Citi

Dated: July 18, 1990

A-1

APPENDIX TO PETITION FOR CERTIORARI

APPENDIX A

[1986] OPINION

\State of Michigan — Court of Appeals}

(Dated April 29, 1986)

(PEOPLE OF THE STATE OF MICHIGAN, Plaintiff-Appellant,

V JOEL EDWARD FREEDLAND and GRIGGS CLINIC, P.-C,

a protessional corporation, Detendants-Appellees —

No. 79865)

BEFORE: Mackenzie, PJ..

and Cynar and H. E. Deming’, J]

PER CURIAM

Detendants were charged with multiple counts of

violating the Medicaid False Claims Act, MCL 400.601

et sey.; MSA 16. 614(1) et seg. The trial court granted

detendants’ motion to suppress evidence and dismissed

all charges. The people appeal as of mnght. The narrow

issue betore us may be tramed as tollows: when a grand

jurv is discharged betore issuing an indictment or no-

dill and, upon its discharge, releases to the Attorney

General records it obtained trom detendants pursuant

to a subpoena duces tecum tor use in a criminal prose-

cution by complaint and warrant, are defendants

Fourth Amendment rights against unreasonable

searches and seizures violated? We answer this question

in the negative and reverse

Circuit Judge, sitting on the Court ot Appeals by assignment

A-3

1984, the trial court granted the motion in a written

opinion which stated in pertinent part

“The aspect of this case which triggers the

most concern derives from the fact that the

prosecution through its use of the grand jury

was able to obtain from the defendants evidence

against them which it could not have obtained

by means of a search warrant which would have

required a showing of probable cause before a

magistrate who was duly authorized, upon such

showing, to issue a search warrant. In the

opinion of this Court, this constituted a viola-

tion of not only the Fourth Amendment to the

Federal Constitution but a violation of the Mich-

igan Constitution as well. (See Const 1963, Art |

Sec 11), both of which undertake to protect our

citizens trom unreasonable search and seizure

*** This Court is constrained to hold,

and does hold as a matter of law, therefore, that

the use of the Grand Jury Subpoena to seize the

records in question, absent the express approval

of the supervising judge of the grand jury, was

unlawtul. Accordingly, it will order the same

suppressed as evidence in this case

On appeal, the people contend that the trial court

erroneously ruled that the Attorney General's use of the

records pursuant to the grand jaury subpoena amounted

to a Fourth Amendment violation. We agree. We con-

clude that there was no governmental intrusion into an

area in which detendants had a protected Fourth

Amendment interest, so that the trial court errone-

ously granted defendants’ motion to suppress. In

reaching this conclusion, we examine detendants’ inter

A-4

ests at the two critical junctures in this case: first,

when the grand jury subpoena duces tecum was served

en defendants, and second, when the grand jury author-

ized the release of the subpoenaed records to the

Attorney General.

A grand jury subpoena is not a “seizure” within the

meaning of the Fourth Amendment. United States \

Mara, 410 US 19, 21; 93 § Ct 774, 775-776; 35 L Ed 2d

99 (1973), citing United States v Dionisio, 410 US 1; 93

S Ct 764. 35 L Ed 2d 67 (1973). This is in large part

because a subpoena lacks the abruptness, demeaning

circumstances, and social stigma attached to a search

and seizure. A subpoena is served in the same manner

as other legal process and may be challenged betore the

subpoenaed documents must be produced. No officer or

other person enters the subpoenaed party's premises

against his will The subpoenaing grand jury remains

under the control and supervision of a court. See gener

ally, Dionisio, supra, 410 US 9-10; Oklahoma Press Pub

Co v Walling, 327 US 186; 66 S Ct 494; 90 L Ed 614

(1946). “This is not to say that a grand jury subpoena 1s

some talisman that dissolves all constitutional protec

tions”. Dionisio, supra, 410 US 11. A grand jury sub-

poena cannot require the production by a person of

private books that would incriminate him. Bovd v

United States, 116 US 616; 6S Ct 524; 29 L Ed 746

(1886). The Fourth Amendment provides protection

against a grand jury subpoena duces tecum too sweep:

ing “to be regarded as reasonable”. Hale v Henkel, 201

US 43, 76, 26 S Ct 370, 379; 50 L Ed 652 (1905). In the

context of the First Amendment, “|{o}fticial harrassment

of the press [by a grand jury| not for purposes of law

enforcement but to disrupt a reporter's relationship

with his news sources” is prohibited. Branzburg v

Haves, 408 US 665; 92 § Ct 2646; 33 L Ed 2d 626

(1972). Additional grand jury subpoena sateguards are

A-5

also recognized. Use of a “forthwith” subpoena duces

tecum is generally disapproved since it forecloses the

opportunity to challenge it in court. See, e.g., In Re

Nwamu, 421 F Supp 1361 (SDNY, 1976). Cf. United

States v DiGilio, 538 F2d 972 (CA 3, 1976), cert den

sub nom Lupo v United States 429 US 1038 (1977). A

grand jury subpoena may not be used to gather evi-

dence for civil enforcement rather than for purposes of

criminal investigation. See In Re Grand Jury Sub-

poenas, April, 1978, 581 F2d 1103 (CA 4, 1978), cert den

sub nom Fairchild Industries, Inc v Harvey 440 US 971

(1979). Nor may the grand jury process be used by the

prosecutor as a discovery device once a trial is pending.

See, e.g., United States v Doe (Elisberg), 455 F2d 1270

(CA 1, 1972).

In the instant case, no such infirmities in the grand

jury subpoena duces tecum existed. Defendants have

raised no Fifth Amendment challenge. We are not faced

with a sweeping, “fishing expedition” subpoena as in

Hale, supra. As in Dionisio, “even if Branzburg be

extended beyond its First Amendment moorings and

tied to a more generalized due process concept, there is

still no indication in this case of the kind of harrass-

ment that was of concern there”. 410 US 12. No “forth-

with” subpoena was used in this case. The subpoena

was not used as part of a civil investigation, or to

gather evidence after defendants’ bind-over. Accordingly,

we conclude that the grand jury properly obtained the

challenged records from defendants. Defendants’ Fourth

Amendment interests were not violated at this stage of

the proceedings

It the challenged documents were not obtained by the

grand jury in violation of defendants’ Fourth Amend-

ment interests, did the grand jury’s release of the

documents to the Attorney General without judicial

A- 6

intervention elevate the production of the records to an

unlawful governmental seizure contrary to the Fourth

Amendment: Defendants contend, and the trial court

ruled. that the combination of the issuance of the sub-

poena to obtain the challenged documents, the dis-

charge of the grand jury before it made the indictment

no-bill decision, and the Attorney General’s decision to

proceed by complaint permitted the state to effect a

seizure without a neutral magistrate’s probable cause

determination. We are not so persuaded.

Not all governmental intrusions constitute a “search

and seizure” within the meaning of the Fourth Amend-

ment. See People v Nash, 418 Mich 196; 341 NW2d 439

1983). Hence, the initial inquiry in any Fourth Amend-

ment challenge 1s whether, in fact, there was a search

and seizure. The controlling test 1s whether the govern:

ment’s actions violated defendants’ reasonable expecta-

tion of privacy. Katz v United States, 389 US 347; 8&S

Ct 507. 19 L Ed 2d 576 (1967). If the answer 1s aftirma

tive. then defendants’ Fourth Amendment rights are

implicated and the attendant safeguards which the trial

court found lacking in this case are triggered.

An expectation of privacy for purposes of the Fourth

Amendment is legitimate if the individual has an

actual, subjective expectation of privacy and that actual

expectation is one which society recognizes as reason-

able. Nash, supra, p 205, citing United States v Knotts,

460 US 276; 103 S Ct 1081; 75 L Ed 2d 55 (1983). We

must examine the nature of the particular documents

sought to be suppressed in order to determine whether

there is a legitimate expectation of privacy concerning

their contents. United States v Miller, 425 US 435, 442;

96 S Ct 1619, 1623; 48 L Ed 2d 71 (1976).

We cannot perceive a legitimate expectation of pri-

vacy in the contents of the records released by the

A-7

grand jury to the Attorney General in this case.

Defendants were required to produce pursuant to the

subpoena duces tecum “records, notes, papers, writings,

files or memoranda which pertain to the diagnosis and/

or treatment” of 53 named patients. In our opinion, a

Medicaid provider's lack of any legitimate expectation

of privacy in this information is manifest in the Legis-

lature’s enactment of § 116 of the Social Welfare Act,

MCL 400.111b; MSA 16.490(21b). That section requires

Medicaid providers to maintain records necessary to

fully document the extent of services provided and to

substantiate the medical necessity for claimed treat-

ment, and to make available such records for examina-

tion and photocopying by the Attorney General. In light

of this statutory requirement, we conclude that

defendants could not harbor an actual expectation of

privacy in the disputed records, nor that society would

recognize such an expectation as reasonable. Accord-

ingly, we do not believe that any governmental intru-

sion regarding the records constituted a search and

seizure within the meaning of the Fourth Amendment.

Because, in our opinion, this case does not nresent a

governmental intrusion into an area in which defendants

had a protected Fourtt Amendment interest, we con-

clude that the trial court erred in finding a Fourth

Amendment or Art 1, § 11 violation on these facts.

Although we view the Attorney General’s procedure in

the case with disfavor, we are unable to find support for

the trial court’s wholesale condemnation of that proce-

dure on the record before us.

Finally, we briefly address plaintiff’s argument that

even excluding the subpoenaed records, the remaining

evidence adduced at defendants’ preliminary examina-

tion was sufficient to support the 64-count informa-

tion. While we cannot agree with plaintiff that absent

A- S

the challenged documents there existed sufficient evi-

dence to bind over defendants on all 64 counts, we have

carefully reviewed the preliminary examination trans-

cripts in this case and conclude that the trial court

erred in dismissing outright the information against

defendants. In our opinion, there was sufficient evi-

dence on each element of the crime charged under

counts 1-12, 14-21, 24-33, 39-50, and 55-59 to support

defendants’ bindover. Thus, even if we were to agree

with the trial court’s ruling on detendants’ motion to

suppress, we would still be constrained to reverse

the court’s further decision to strike the 47 above-

enumerated counts.

Reversed and remanded. We do not retain jurisdiction.

s/ Barbara B. MacKenzie

s/ Walter P. Cynar

s/ Hudson E. Deming

B-1

APPENDIX B

[1989 MAJORITY] OPINION

(State of Michigan — Court of Appeals)

(Dated August 7, 1989}

(PEOPLE OF THE STATE OF MICHIGAN, Plaintitf-Appellee,

v JOEL FREEDLAND, Detendant-Appellant and GRIGGS

CLINIC, P.C., Detendant — No. 99983)

Betore: Doctorott, P.J.,

and Shepherd and R. R. Lamb,” JJ.

SHEPHERD), J.

Detendants Dr. Joel Freedland and the Griggs Clinic,

P.C., were tried jointly on charges of conspiracy to

commit Medicaid fraud, MCL 400.606; MSA 16.614(6),

and Medicaid traud, MCL 400.607; MSA 16.614(7}. The

other alleged co-conspirators, Drs. Tocco and Kelly,

entered guiltv pleas to lesser charges in exchange tor

their testimony against defendants. A jury found

defendants guilty of one count of conspiracy and

twenty-two counts of Medicaid fraud. By the time of

sentencing, the clinic was dissolved. Detendant Freed-

land was fined $50,000 and sentenced to five to ten

years’ imprisonment for the conspiracy conviction and

concurrent terms of two to four years’ imprisonment

for the Medicaid fraud convictions. Defendant appeals

by right, challenging the jury instructions and raising

one evidentiary issue. We affirm.

During 1981 Drs. Tocco and Kelly submitted false

Medicaid claims to the state for x-ray and osteopathic

Circuit Judge, sitting on the Court ot Appeals by assignment.

B-2

manipulative therapy (OMT) services provided at the

Griggs Clinic. The clinic’s services included a large low

back pain practice. It was operated by Dr. Freedland,

who hired Drs. Tocco and Kelly and instructed them on

the protocol to follow for all new patients. From a

technical standpoint, both doctors understood that they

could deviate from the protocol. However, Dr. Tocco

testified that it was clear that he was expected to order

all procedures in the protocol and Dr. Kelly testified

that she did not think she could stay employed by

defendant if she consistently deviated frem the protocol.

The new patient protocol required prescribing Talwin

and Valium for outpatients, on whom a full set of x-rays,

numerous diagnostic laboratory tests and procedures

ithe comprehensive profile), and an OMT would be

done and billed to Medicaid. An OMT is a technique

used to correct abnormal bodily motions or restrictions

by manipulating muscles, joints, etc. When Dr. Kelly

applied for the job in 1981, she was near bankruptcy.

Dr. Kelly twice informed defendant that she did not

teel qualified to do OMTs and was told she would not

have to do so. She was also advised that she need not

apply if she had a problem prescribing a lot ot Talwin

and Valium. Once hired, Dr. Kelly ordered the protocol

for new patients even when not medically necessary.

Two week prescriptions of Talwin and Valium were

given to every patient. Dr. Kelly only performed OMTs

once or twice, but she charted OMTs for every patient

because it was clear that defendant expected her to do

so. At one point, Dr. Kelly discussed the lack of OMTs

with defendant, who responded “What is an OMT any-

way? ... A patient walks into a room. You follow them.

You watch their head follow you and you watch the

range of motion in their neck.”

B-3

Dr. Tocco, who was hired in 1980, similarly testified

that he was instructed to and did order the protocol for

all new patients, even if unnecessary. Defendant told

him to write up a diagnosis to justity ordering the tests.

Dr. Tocco performed very few OMTs because he had

very little use of his left arm and wore a wrist brace,

but charted that he performed the OMT anyway. Dr.

Tocco claimed that he ordered unnecessary services and

billed for procedures not done because defendant

wanted him to and he liked the money he was paid to

do it.

Both Drs. Tocco and Kelly were hired at a salary of

$78,000, which was paid by the clinic. For purposes of

billing Medicaid, however, Drs. Tocco and Kelly

enrolled in the Medicaid program individually pursuant

to defendant's instructions. They were issued individual

provider identification numbers by the state and both

authorized a third-party billing service to submit

Medicaid claims to the state on their behalf. Under this

arrangement, Drs. Tocco and Kelly completed patient

charts and indicated the services performed for the

Medicaid patients. The patient charts were reviewed by

billing clerks and the billing information transferred to

forms provided by the third-party service. The forms

were given to the third-party service which then put

the information on a computer tape. The tape was sent

to Medicaid, which processed the information and

issued state treasury warrants made payable to Dr.

Tocco or Dr. Kelly, in care of defendant, for services

rendered. Defendant’s office manager received the war-

rants, used signature stamps of Drs. Tocco and Kelly to

endorse their respective warrants, and deposited the

warrants into the clinic’s bank account.

According to Corrine McCall, one of the clinic’s bil-

ling clerks, detendant instructed her directly regarding

B-4

how to bill for certain procedures and patients. On one

occasion, McCall was instructed to bill complete spinal

X-rays as four separate x-rays instead of one complete

procedure because of its more favorable Medicaid reim-

bursement. On another occasion, when Medicaid low-

ered the amount that it would pay for some testing,

defendant took the time to find out which tests would

be paid at a higher rate and changed the comprehensive

profile to include them. Another billing clerk, Lola

Holton, testified that defendant instructed her con-

cerning OMT billings “to note that everyone that

comes through the door would have their neck cracked

and make sure I bill it.”

The conspiracy and fraud statutes’ underlying

defendant's convictions provided that:

(1) A person shall not enter into an agreement,

combination, or conspiracy to defraud the

state by obtaining or aiding another to

obtain the payment or allowance of a false,

fictitious, or fraudulent claim under Act

No. 280 of the Public Acts of 1939, as

amended. [MCL 400.606; MSA 16.614(6).|

(1) A person shall not make or present or cause

to be made or presented to an employee or

officer of the state a claim under Act

No. 280 of the Public Acts of 1939, as

amended, upon or against the state,

knowing the claim to be false, fictitious, or

fraudulent. [MCL 400.607; MSA 16.614{7).|

The prosecutor’s theory was that defendant conspired

with employees of the clinic to defraud Medicaid by

means of the protocol he devised, that defendant knew

' The statutes were subsequently amended by 1984 PS 333 to

delete the “fictitious or fraudulent” language.

B-5

that various procedures and testing in the protocol were

either medically unnecessary or were not performed,

that Drs. Tocco and Kelly implicitly agrecd to further

the conspiracy by falsifying records, and that defendant

caused Medicaid claims to be submitted by Drs. Tocco

and Kelly with knowledge that the claims were false.

The defense was that defendant instituted safeguards at

the clinic to insure that services being billed were

actually performed, that the work done at the clinic

was medically necessary, and that defendant had no

knowledge that the claims submitted by Drs. Tocco and

Kelly were false

i

On appeal, defendant claims that the instructions

given to the jury on two statutory rebuttable presump-

tions allowed in Medicaid fraud cases requires reversal.

Since defendant did not object to the instructions, relief

will be given only if necessary to avoid manifest injustice

to the detendant. People v Kelly, 423 Mich 261, 272; 378

NW2d 365 (1985). In deciding whether manifest injustice

occurred, we review the instructions as a whole. Our

responsibility as a reviewing court is to balance the gen-

eral correct, clear tenor of the instructions in their

entirety against the potential misleading effect of a

single sentence isolated by a defendant. Id, p 275.

The instructions on the rebuttable presumptions

given in this case were taken from MCL 400.608; MSA

16.614(8) and preceded by general instructions on per-

missive presumptions and the standard of proof im-

posed on the prosecutor. Specifically, the court

instructed that

A rebuttable presumption is an inference of

tact based upon the existence of other basic

established facts or circumstances.

B-6

A rebuttable presumption has the effect of

evidence and may be used as evidence. You as

jurors may but need not infer the existence of

the presumed fact from the basic facts.

The prosecutor still has the burden of proot

beyond a reasonable doubt of all of the elements

of the oftense.

» + * |(Examples|

In these examples, the presumed facts may be

used as evidence unless rebutted by competent

evidence to the contrary.

I’m now going to instruct you on the rebut

table presumption you may utilize as evidence

ot the defendant's knowledge in this case

it shall be a rebuttable presumption that a

person knowingly made a claim tor Medicaid

‘enefit if the person's actual, facsimile, stamped,

typewritten or similar signature is used on the

form required for the making of a claim tor Med

caid benefit

If a claim for Medicaid benefit is made by

means of computer billing, tapes or other elec-

tronic means, it shall be a rebuttable presump-

tion that the person knowingly made the claim

if that person has notified the Department of

Social Services in writing that claims tor

Medicaid benefits will be submitted by use ot

computer billing, tapes or other electronic

means.

It is important to note that defendant does not chal

lenge the above instructions or the validity of the statu-

tory presumptions, other than the use of the word

B-7

“shall,” which defendant claims may have left the jury

with the impression that the presumptions were man-

datory. We tind no merit in this argument. The use of

the word “shall” merely informed the jury that the

court's definition of the rebuttable presumption must

be followed. Read in their entirety, the instructions

clearly did not require the jury to utilize the presump-

tions as evidence, but merely suggested to the jury a

possible conclusion to be drawn if the prosecutor

proved certain predicate facts. Hence, the presumptions

were permissive. See Kelly, supra, 273-274 n4; Francis v

Franklin, 471 US 307, 314; 105 S Ct 1965; 850 L Ed 2d

344, 353 (1985).

It is also important to note that defendant does not

challenge the specific instructions given by the court

on the intent and knowledge elements of the charged

ottenses. Detendant’s principal attack on the jury

instructions is based on the tollowing statement made

by the court immediately following the court’s instruc-

tions on the knowledge element of the Medicaid fraud

ottense and immediately preceding the above-quoted

instruction on the rebuttable presumptions. Specifically,

the court stated:

Now, because this is a prosecution for false

claims under the Medicaid False Claims Act,

there are two rebuttable presumptions which

you may consider on the issue of the intent of

the defendants, knowledge required for estab-

lishing the knowledge, elements of the offenses

charged. |Emphasis added. |

Detendant claims that this prefatory statement mis-

interpreted the purpose of the presumption and may

have persuaded a reasonable jury that the use of a com-

puterized billing constituted proof beyond a reasonable

doubt of defendant’s intent and knowledge unless the

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APPENDIX ¢

1990) ORDER DENYING LEAVE TO APPEAI

D-]

APPENDIX D

[1986] ORDER DENYING LEAVE TO APPEAI

State of Michigan — Supreme Court)

‘Entered September 23, 1986)

[PEOPLE OF THE STATE OF MICHIGAN, Plaintiff Appellee,

v JOEL FREEDLAND and GRIGGS CLINIC, P.C., a profes

sional corporation, Defendants-Appellants — SC 78673;

COA: 79865; LC: 83-024

\T A SESSION OF THE SUPREME COURT OF THE STATI

OF MICHIGAN, Held at the Supreme Court Room, 1n

the Citv of Lansing, on the 23rd day of September in

the vear of our Lord one thousand nine hundred and

e1ghtv-S1x

Present the Honorable

CG. MENNEN WILLIAMS, Chiet Justice; CHARLES |

LEVIN, JAMES H. BRICKLEY, MICHAEL F. CAV ANAGH,

PATRICIA J. BOYLE, DOROTHY COMSTOCK RII EY,

DENNIS W. ARCHER, Associate Justices.

On order of the Court, the application for leave to

appeal is considered, and it 1s DENIED, because we are

not persuaded that the question presented should now

be reviewed by this Court.

Levin, J., would grant leave to appeal

(Certification Omitted |

E-]

APPENDIX E

OPINION

(State of Michigan — Recorder’s Court — City of Detroit)

(Dated June 26, 1984)

(PEOPLE OF THE STATE OF MICHIGAN, Plaintiff, v JOEL

EDWARD FREEDLAND and GRIGGS CLINIC, P.C., a Mich-

igan Professional Corp., Defendant — No. 83-02469)

Detendants, JOEL EDWARD FREEDLAND, a physician

and GRIGGS CLINIC, P.C., a Michigan Professional Cor-

poration of which defendant FREEDLAND was a prin-

cipal, were charged in an Information with one (1)

count of conspiracy to obtain payment of false, fic-

titious and/or fraudulent claims under the Medicaid

Act, MCL 400.606, and with seventy-nine (79) counts of

presenting talse, fictitious and/or fraudulent claims for

payment under another provision of the Act.

A number of motions have been filed on behalf of

defendants. Included among these are: {1} a Motion for

Discovery and Inspection of “any and all physical

documentary or tangible evidence” pertaining to the

cause which is in the possession of the police or prose-

cuting officials in charge or which have been turned

over to any other “person, agency or institution,” all

statements, admissions of defendant, addresses of wit-

nesses named in the Information who did not testify at

the preliminary examination, the arrest and conviction

records of any such witnesses, including juvenile con-

tacts of such witnesses, a prosecution statement indi-

cating any considerations or promises made for their

testimony, and any statements of persons interviewed

in connection with the investigation; (2) a Motion to

E-2

Dismiss the “medical judgment” counts, that is to say,

all counts which arose out of the assertion that

defendants made or presented claims for services which

were not inedically necessary; and (3) a Motion to Sup-

press evidence and quash information based upon the

contention that the information was based upon evi-

dence gathered under a grand jury subpoena, and that

such use of the grand jury subpoena was improper, that

it constituted abuse of the grand jury’s power and vio-

lated defendant’s constitutional rights under the Fourth

Amendment.

The last of the above-mentioned motions is, in the

opinion of the Court, the most troublesome among

them. Discussion and treatment of that motion will be

deferred to the concluding portions of this opinion.

Therefore, the Court will first inquire into the merits

of the motion for discovery. It should be kept in mind

that should either of the dispositive motions made by

defendant be granted, any decision by this Court that

detendant is entitled to any given item or items of

discovery will not result in any order to that effect.

Defendant aptly cites case authority tor the propos!

tion that the “trend in Michigan and other states is

toward broader criminal discovery.” (See, People v

Brownings (On Rehearing), 108 Mich App 281, 307

1981), and other cases.) However, this does not mean

that the prosecution is completely at the beck and call

of the defense in this respect. The trial court must

exercise discretion and a sense of reasonableness.

Looking at defendant's motion with particularity, the

Court concludes that defendants are entitled to the

items requested in Paragraphs 3(b) and 3{c}. As to the

items requested in Paragraph 3(a), the Court holds that

defendants are entitled to the items requested provided

that they relate to defendants FREEDLAND or GRIGGS

E-3

CLINIC, P.C., but not to include the Medicare Proces-

sing Manuals or any information requested by Medi-

care, for the reason that the essentiality of these

last-mentioned items to the defense is not potent on

the fact of the motion.

The Court will hold that the conviction records of

those persons or witnesses referred to in Paragraph 3(d)

shall be furnished to the defendant in order that the

same may be examined for impeachment data, however,

disclosure shall be limited as provided in Rule 609,

Michigan Rules of Evidence, and no information on

arrests not resulting in conviction nor on juvenile “con-

tacts” which did not result in any adjudication against

a witness in this case shall be disclosed, nor shall] any

juvenile court adjudication be disclosed as to any wit-

ness On any offense not within the scope of MRE

609} d).

For the purpose of aiding the defense in testing the

credibility ot witnesses, the Court will grant the

request set torth in paragraph 3(e}, and for the purpose

of aiding the defendants in the preparation of their

defenses, the items requested in paragraph 3(f) will be

granted.

Now as to defendant JOEL EDWARD FREEDLANI)’s

Motion to Dismiss Counts 2, 4, 6, 7, 24, 27, 29 30, 32,

37, 39, 41, 46, 55, 56, 58, 61, and 65-80 as against him, it

is contended that these charges cannot be maintained

tor the reason that the statute under which these

counts are laid) MCL 400.67, when read in conjunction

with MCL 400.602 and MCL 400.608, allows a criminal

conviction without a finding of “actual criminal intent

on part of the defendant.” He contends further that the

evidence adduced at the preliminary examination failed

to show that this defendant knew that the x-rays and/or

physical examination, and/or medical histories were

E-4

not performed and therefore there was NO criminal

intent on his part.

Now, based upon this Court’s understanding of this

case from the lengthy transcript of the preliminary

examination record and the numerous exhibits filed as

indicated by the same record, this case involved the

operation of a medical clinic operating as a professional

corporation of which the defendant JOEL EDWARD

FREEDLAND was the principal if not the sole sharehol-

der. The fact that there were other persons performing

services in the clinic, including, it appears other physi-

cians, it was not unreasonable on the part of the exam-

ining magistrate to infer that the principal, defendant

FREEDLAND, had knowledge of the patients’ presence

in the office, general knowledge of the fact that charges

were made for services purportedly performed and of the

fact that billings were made for these purported services.

To conclude otherwise would be to conclude that hy

incorporating a professional could abdicate all responst-

bility tor professional services. The professional services

corporation statute, MCL 450.221 et seq, by no means

contemplates such a result. In fact Section 6 specifically

negates that idea and holds personally accountable

officers and shareholders of such a corporation.

The statute, MCL 400.601 (Sec. 3} specifically pro-

hibits anyone from “knowingly” making or causing TO

he made a false statement OF representation to obtain

rhe penefits of “medicaid.” Sec. 5 prohibits anyone

from “knowingly or willfully” making or inducing

others to make false statements in regard to these bene-

fits. Sec. 6 prohibits agreements and conspiracies of

like import; and Sec. 7 prohibits the making or pre-

senting of a false claim knowing it to be false.

The element of intent 1s implicit in all of these

actions. Thus it 1s not at all true, as defendant argues,

that the statute permits a conviction without criminal

intent.

E-5

Given a small amount of knowledge which must, of

necessity, be presumed under the circumstances, it was

reasonable for the magistrate to infer sufficient intent

on the part of the defendant to submit the billings in

question regardless of whether he was satisfied that the

services were performed. Such an inference of intent is

sufficient to support that element for purposes of pre-

liminary examination. See, e.g., People v Nelson, 123

Mich App 649 (1983). There is no necessity to prove

any element of the offense or defendant's guilt beyond a

reasonable doubt at the preliminary examination. The

facts adduced at preliminary examination are not sub-

stantially different from those evidenced at preliminary

examination in /n re Wavne County Prosecutor, 121

Mich App 798 (i982), and which were concluded by the

Court of Appeals to support the bind over order. This

Court does not, therefore, agree with the defendant

either that the statute permits a tinding of guilt

without criminal intent or that intent was not suffi-

ciently shown at the preliminary examination. For this

reason dismissal will not be ordered on this asserted

basis

Now we come to that defense motion which the

Court has, earlicr in this opinion, indicated as the most

troublesome, the Motion to Quash the Information or

in the alternative to Suppress Evidence and Dismiss.

The grounds asserted, which for emphasis, are restated

here, are in ettect that the information is based improp-

erly upon evidence seized by a grand jury subpoena and

thereafter used outside the scope of grand jury's pur-

poses. The detense makes the plain assertion that the

grand jury at the behest of the prosecution subpoenaed

the documents which ultimately constituted the basis

tor the complaint and warrant in this case without any

legitimate grand jury purpose in mind. Indeed the prose-

cution seems to admit this assertion claiming as the

E-6

only excuse for this conduct the fact that the grand jury

was about to expire. The question therefore is a clear

one albeit that it appears after considerable research

that it is one of first impression.

Before entering upon a discussion of this motion, it

may be worth noting that in this state a valid order

binding a defendant over for trial following preliminary

examination requires that the crime be established and

that probable cause be shown only on legally admis-

sible evidence. People v Gwinn, 47 Mich App 134

(1973) and People v Charles D. Walker, 385 Mich 565

(1971).

Thus, if defendant’s contention that the seizure of the

evidence by the grand jury without any valid purpose

and its surrender of that evidence to the prosecutor was

constitutionally invalid, is correct, and if the order

binding the defendant over for trial rested solely on

that evidence, an order granting the Motion to Quash

the Information would appear to be in order.

The aspect of this case which triggers the most con

cern derives from the tact that the prosecution through

its use of the grand jury was able to obtain trom the

defendants evidence against them which it could not

have obtained by means of a search warrant which

would have required a showing of probable cause betore

4 magistrate who was duly authorized, upon such show

ing, to issue a search warrant. In the opinion ot this

Court, this constituted a violation of not only the

Fourth Amendment to the Federal Constitution but a vio

lation of the Michigan Constitution as well. (See Const

1963, Art 1, Sec 11), both of which undertake to protect

our citizens from unreasonable search and seizure

Many years ago, the United States Supreme Court in

Johnson v United States, 333 US 10, 14; 92 L Ed 2d

E-7

4436, 440 (1947) emphasized the importance of the

magistrate in the evidence gathering process by saying:

“Any assumption that evidence sufficient to

support a magistrate’s disinterested determina-

tion to issue a search warrant will justify the

otticer in making a search without a warrant

would reduce the (4th) Amendment to a nullity.

When the right of privacy must reasonably

yield to the right of search is, as a rule, to be

decided by a judicial officer, not a policeman or

Government enforcement agent.”

The degree of apparent intrigue between the attorney

general and grand jury in this case was such as would

appear to disturb almost any one’s sense of justice and

tair play. Nowhere in the plan on the part of the prose-

cution to obtain the evidence did the judiciary play a

role. Despite the fact that the grand juries in this

County as elsewhere are under the supervision of the

circuit judge at no time, as far as this Court has been

intormed, did the attorney general make a request of

the judge to authorize the release of these records by

the grand jury Just as the United States Supreme Court

expressed in /o/inson, this Court teels that the judicial

ofi.cer in this case should have a role in the seizure of

the evidence in question.

It is dittucult to forget that grand juries have

enormous powers. Such powers are not unlimited, how-

ever. A criminal law text widely used in Michigan

makes reference to that fact in the following manner:

“No matter how respectable or eminent the

citizens may be who comprise the grand jury,

they are not above the law, and the people have

not delegated to them arbitrary or plenary

powers to do that, under an ancient form, which

E-8

they have not a legal right to do.” 1 Mich Cr L

& Proc, Ch 8, Sec 135.

If a grand jury, without any purpose whatever to act

upon evidence subpoenaed by it, simply, as it appar-

ently did in this case, issued its subpoena to ettect the

same purposes as a search warrant, its power would,

indeed, be limitless. Our Supreme Court held un-

equivocally, in Oakland County v Bice, 386 Mich 143,

149 (1971) that a subpoena is not a substitute tor a

warrant by declaring:

“We hold that a subpoena duces tecum cannot

perform the office of a warrant to search and

seize and hence the seizure in this case was

unlawful.”

The use of the subpoena duces tecum in this

instance runs counter to the law of Bice. This Court 1s

constrained to hold, and does hold as a matter of law,

therefore, that the use of the Grand Jury Subpoena to

seize the records in question, absent the express

approval ot the supervising judge of the grand jury, was

unlawful. Accordingly, it will order the same suppressed

as evidence in this case.

Inasmuch as it does not appear that aside from the

records in question, there is sufficient evidence to sup-

port the charges against the defendants, the Motion to

Quash the Information will be granted, and the case

dismissed.

The Court is aware of the high public interest in

prosecutions of this nature as well as the importance ot

the constitutional questions provoked by the motions.

Consequently, it will be inclined to stay for a reason-

able period the execution of its order of quashal

Finally, in the foregoing discussion the Court has

expressed its opinions on other motions in this cause.

E-9

However, inasmuch as these motions will be rendered

moot by the entry of an order quashing the information

and dismissing the case, such additional motions will

be dismissed without prejudice, pending the finality of

the order of quashal and dismissal.

/s/ Samuel C. Gardner

DATED: June 26, 1984

APPENDIX I

ORDER

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APPENDIX G

GRAND JURY SUBPOENA

\State of Michigan — Circuit Court — County of Wayne!

(Dated February 16, 1982)

TO: JOEL EDWARD FREEDLAND DO, PC

a/k/a Griggs Medical Clinic

*. Joel Edward Freedland, D.O.

‘ 10300 W. 7 Mile Road, Detroit, Michigan

GREETINGS:

IN THE NAME OF THE PEOPLE

OF THE STATE OF MICHIGAN:

You are hereby commanded to appear before the

CITIZENS GRAND JURY FOR THE COUNTY OF WAYNE

Room 1125, Latayette Building, 149 Michigan Avenue,

Detroit, Michigan, on Tuesday, the 16th day of February,

1982, at 10-00 o'clock, A.M., then and there to testify

and give evidence, and to bring with you: Those mate-

rials described on the reverse side hereof.*

HEREOF FAIL NOT. Failure to attend will subject vou

to tine and imprisonment for contempt of Court.

This Subpoena is issued on behalf of the PEOPLE OF

THE STATE OF MICHIGAN.

By. /s’ Nelson W. Westrin

Assistant Attorney General, State of Michigan

DATE: February 8, 1982

NOTICE: You have the right to have a lawver present

in the hearing room during your examina-

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APPENDIX H

GRAND JURY AUTHORIZATION

FOR RELEASE OF RECORDS

State of Michigan — Circuit Court — County of Wayne!

\Filed April 29, 1982)

IN RE: WAYNE COUNTY CITIZENS GRAND JURY — File

No. 81-116363-PZ)

WHEREAS, we, the Wayne County Citizens Grand

lury issued a subpoena duces tecum to Joel Edward

Freedland, D.O., P-C., a/k/a Griggs Medical Clinic, and

Peter Tocco, Ill, D.O., for the production of certain

documents and medical records, and

WHEREAS, certain documents and medical records

were produced by Joel Edward Freedland, D.O., a/k/a

Gnggs Medical Clinic, pursuant to said subpoena duces

tecum, and

WHEREAS, the Department of Attorney General has

conducted an independent criminal investigation in-

volving Joel Edward Freedland, D.O., et al, and has

represented that its criminal investigation has been

concluded and that it is prepared to proceed criminally

against Joel Freedland, D.O., et al, by complaint and

warrant, and

WHEREAS, the Department of Attorney General has

requested that this grand jury release said documents

and records produced pursuant to said grand jury sub-

poena duces tecum to the Department of Attorney

General tor use in the criminal prosecution of Joel

Edward Freedland, D.O., et al, and

H-2

WHEREAS, we, the Wayne County Citizens Grand

Jury, are interested in promoting the efficient and effec-

tive investigation and prosecution of all criminal

activity occurring in Wayne County, and

WHEREAS, the Wayne County Citizens Grand Jury

has accordingly considered the Attorney General’s

request and has voted unanimously to comply with

said request.

NOW THEREFORE, all documents produced pursuant

to said subpoena duces tecum are hereby released by

the Wayne County Citizens Grand Jury to the Depart-

ment of Attorney General for use in the criminal prose-

cution of Joel Edward Freedland, D.O., et al, by

Complaint and Warrant.

/s/ Andrea E. Wojack,

Acting Foreman

Wayne County Citizens Grand Jury

Dated: April 28, 1982

(Certification Omitted)