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Legal Docket: Identity theft and Medicare

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WORLD Radio - Legal Docket: Identity theft and Medicare

Plus: New Jersey tries to break up with New York on protecting the waterfront


The Supreme Court iStock.com/Photo by Perry Spring

MARY REICHARD, HOST: It’s Monday, March 13th. Glad to have you along for today’s edition of The World and Everything in It. Good morning. I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. It’s time for Legal Docket.

Today we have two recent oral arguments heard by the US Supreme Court. So let’s jump right in.

The first dispute has to do with additional prison time tacked on to a conviction and sentence for a related crime. Specifically here, additional time added for identity theft.

Stolen identities became more common with computer hacking and stolen credit cards. So Congress wrote a bill that President George W. Bush signed into law: the Identity Theft Penalty Enhancement Act.

Here’s President Bush on that day in July, 2004, edited for time:

BUSH: The crime of identity theft undermines the basic trust upon which our economy depends...The law signed today will dramatically strengthen the fight against identity theft and fraud...And someone convicted of that crime can expect to go to jail for stealing a person’s good name. These punishments will come on top of any punishment for crimes that proceed from identity theft. For example, when someone is convicted of mail fraud in a case involving stolen personal information, judges will now impose two sentences: one for mail fraud and one for aggravated identity theft. Those convicted of aggravated identity theft must serve an additional mandatory two year prison term...What I’m telling you is this is a good law. And I appreciate you working hard to see to it that it made it to my desk.

REICHARD: The best of intentions, certainly, but whether it’s “a good law” depends upon how well it’s carried out those intentions in the years since. And with two years’ additional prison time attached, the stakes are high.

Here are the facts of the case.

A man in Texas named David Dubin was a managing partner in his father’s psychology practice. Dubin filed a $540 claim with Medicaid for services provided to a patient. The patient’s name and Medicaid ID was on the form, along with a false date so that the bill would qualify for payment.

EICHER: A jury found Dubin guilty of healthcare fraud in overbilling Medicaid … and that part he doesn’t dispute. What he does dispute is the additional conviction and prison time added for aggravated identity theft—the 2004 law we just talked about.

Dubin says the overbilling has nothing to do with the patient’s identity and that the patient suffered no harm from it. So the facts don’t fit the law.

Or so says Dubin’s lawyer, Jeffrey Fisher:

JEFFERY FISCHER: The Fifth Circuit's decision here stretches the aggravated identity theft statute beyond its breaking point. Overbilling Medicaid by $101 may provide fodder for a simple healthcare fraud prosecution, but, as even the concurring judges below recognized, it does not meet any ordinary understanding of the term "identity theft."

REICHARD: Fisher went on to argue there has to be some meaningful connection between the Medicaid fraud and the use of someone’s name. Otherwise, commonplace errors could ensnare people. Fisher gave an example:

FISCHER: A lawyer who bills 4.9 hours when he worked 4.8 bills for a second year associate when it was really a first year, etc. Understanding what Congress meant by words, we would not assume Congress would sweep in vast arrays of conduct without doing so clearly.

REICHARD: Arguing the other side on behalf of the federal government: assistant to the Solicitor General Vivek Suri. He started with reference to a hypothetical … that Justice Ketanji Brown Jackson had made earlier:

VIVEK SURI: I'd like to start with a hypothetical that Justice Jackson was discussing with Mr. Fisher about the waiter who uses a customer's credit card to bill for something that the customer didn't order. Let's say the customer ordered steak, and the waiter uses the credit card to ring up a bottle of wine as well. And I think the discussion earlier today established that the waiter was acting without lawful authority. He had the authority to use the credit card number to bill only for the food that was ordered. He didn't have the authority to use it for other things, whether it be wine or Amazon.com products or paying down his mortgage.

EICHER: Likewise, Suri argued, Dubin had no authority to make a false claim with a patient’s personal information. Suri pointed to the language of the statute: if someone “uses” a patient’s name “in relation to” health care fraud, then he “plainly” acts “without lawful authority” in carrying out that fraud.

Suri sought to reassure the court that despite what the hypotheticals seemed to show, everyone and his brother would not get swept up in that language:

SURI: The statute at issue here only comes into play only if a predicate federal offense has already been committed.

EICHER: But Justice Jackson wasn’t convinced:

JACKSON: Mr. Fisher says look at the list of predicate offenses. It's like every fraud in the world. And you’ve just admitted in response to Justice Thomas that it could be a teeny, teeny fraud. So it's not more serious just because of the predicate offense. It would seem to me it would have to be more serious because of the way in which you're using the name.

REICHARD: I think the court will narrow the scope of this law so as not to catch unawares nearly everyone (and his brother) in the language of this law.

This last dispute at the court is one of so-called original jurisdiction. That means it’s one of those rare times in which the Supreme Court is not only judge of the law and the constitution, but finders of fact, as well. Another way of saying it: Original jurisdiction is litigation that begins at the high court, not the usual years of winding through the lower courts first.

EICHER: It’s also a dispute with a set of facts reminiscent of the 1954 movie starring Marlon Brando: On the Waterfront. A movie about an ex-prize fighter who worked as a New Jersey longshoreman trying to stand up against his corrupt bosses in the union.

You might recognize the most famous lines from the film:

BRANDO: You don’t understand! I coulda had class. I coulda been a contender. I coulda been somebody. Instead of a bum. Which is what I am. Let’s face it.

EICHER: Contenders in this lawsuit are the states of New York and New Jersey. Back in the 1950s, mob violence and corruption were rampant along the waterfront in a 25 mile radius around the Statue of Liberty. Cargo theft. Loan sharks preying on the longshoremen. Foremen taking kickbacks. And much worse.

So the two states agreed to something called the Waterfront Commission Compact. Congress gave its consent, which led to the Waterfront Commission of New York Harbor.

REICHARD: Seventy years later, New Jersey wants out of the compact. It’s wanted to do that for a while now, given that things have changed: technology has replaced most dockside jobs, for example. Others cite a climate of abuse that still prevails even at the Commission.

Lawyer for New Jersey, state solicitor general Jeremy Feigenbaum:

JEREMY FEIGENBAUM: The question this case presents is whether the Waterfront Commission Compact prevents New Jersey from reclaiming its police powers. As New York admits, there is nothing in the plain text of the compact that expressly limits New Jersey's withdrawal.

EICHER: Maybe nothing that expressly limits New Jersey’s withdrawal, but New York argues if New Jersey exits the compact, the stability of the area will collapse. And more than that, there’s no way for New Jersey to pull out of the agreement unilaterally.

New York Solicitor General Judith Vale:

JUDITH VALE: And it's not just 70 years. I don't think that's just what we're judging it from. The two states have come together and amended this compact over the decades. As recently as 2006, they amended this compact to add powers to the Commission. And so they were re-upping their understanding over time that they are still in this together and that they still believe that the joint endeavor is needed.

REICHARD: Again, this is an original jurisdiction case—so it sounds much more like a trial court. And as I heard it, it sure sounds like a victory for New Jersey, the state that wants out of the deal. For example, this exchange between Justice Clarence Thomas and lawyer Vale for New York. It’s a discussion on what the compact specifically does and does not say:

CLARENCE THOMAS: They said nothing about ending it. They had other modifications and other terms that had to be jointly decided but nothing about terminating it. So what I'm hearing you say is that if they say nothing about terminating it, they basically sacrifice their sovereignty permanently, unless the other party agrees.

VALE: Well, two -- two responses to that. I don't think it's a sacrifice of sovereignty….

THOMAS: And there are indications in both this compact and the history of compacts generally that that is what the states would understand, that they would understand that when you do a compact and you don't say anything express about termination, that you are sticking together until you jointly decide to end it.

REICHARD: Advocates and justices lobbed legal theories back and forth like a tennis match. Principles of contract law; the sovereignty of states; how treaties are made and broken; unintended consequences on other interstate compacts in the country; and which state is bringing the biggest book of business to the port. It used to be New York.

JOHN ROBERTS: What was the allocation of business between the New York side and the New Jersey side in 1953?

VALE: It was predominantly on the New York side. It was about 70 percent on the New York side.

ROBERTS: And today?

VALE: It's predominantly on the New Jersey side.

ROBERTS: Eighty/twenty is the numbers that -- okay.

VALE: Yes.

ROBERTS: That's a fairly substantial change in the mix, and that may have something to do with an effort to reallocate or withdraw from a compact that was entered into in 1953.

REICHARD: The justices as a whole were skeptical that New York can hold New Jersey to this compact. We’ll know for sure by end of June.

And that’s this week’s Legal Docket.


WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.

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