Eleventh Circuit Court of Appeals - Published Opinions

Monday, December 12, 2005

Arias FRE 408 Applies in Criminal Cases

In U.S. v. Arias, No. 03-12185 (Dec. 12, 2005), the Court (Tjoflat, Barkett & Mills b.d.) upheld most convictions and sentences for defendants convicted of defrauding the Medicare program, but found one error, though harmless, in the failure to exclude evidence under Fed. R. Evid. 408, and reversed one conviction because the defendant was denied a jury instruction concerning his statute of limitations defense.
Rule 408 provides that evidence of compromise of a claim is not admissible. Over defense objection based on Rule 408, the trial court allowed the prosecution to introduce evidence that the defendant, in an administrative proceeding brought by the Florida Department of Health, had admitted certain allegations in order to avoid more formal proceedings and additional penalties. The government argued that Rule 408 does not apply in criminal proceedings, only in civil proceedings. Recognizing a circuit split on this issue, the Court ruled that Rule 408 does apply in criminal cases. The Court found support for its interpretation in the language of the rule, the advisory committee notes, and in the policy favoring settlements.
However, in light of the overwhelming evidence against this defendant, the Court found the Rule 408 error to be harmless.
The Court agreed with another defendant, who claimed that the district court improperly refused to instruct the jury on his withdrawal from the conspiracy defense, an error which affected his statute of limitations defense because the withdrawal occurred more than five years before the government charged him.
The Court noted that mere cessation of participation is not sufficient to establish withdrawal; the accused must also establish that he communicated his withdrawal either to his co-conspirators or to law enforcement.
Here, the defendant, a doctor, relied on a letter notifying Blue Cross/Blue Shield that he was no longer working at seeing patients on behalf of his co-conspirators fraudulent enterprise. Other evidence supported this termination, including subsequent cancellation letters. Viewing this evidence in the light most favorable to the defendant, and in light of the "extremely low" burden the defendant had to meet to be entitled to a jury instruction on his defense, it was error not to give it, and this error warranted a remand for a new trial.