ML20057B535

Order Denying Defendant,Lp Zerr 930816 Motion Requesting Dismissal of Proceeding

ML20057B535
Person / Time
Issue date:	09/20/1993
From:	Margulies M Atomic Safety and Licensing Board Panel
To:	AFFILIATION NOT ASSIGNED
References
93-01-PF, 93-0673-01-PF, 93-1-PF, 93-673-1-PF, ALJ-93-1, NUDOCS 9309220187
Download: ML20057B535 (16)

Text

{{#Wiki_filter:. i l ALJ-93-1 i UNITED STATES OF AMERICA l NUCLEAR REGULATORY COMMISSION END ATOMIC SAFETY AND LICENSING BOARD PANEL Before Administrative Law Judge 'SEP 20 IM3 Morton B. Margulies D0cNumber N _i Docket No. 93-01-PF i In the Matter of I L ASLBP No. 93-673-01-PF Lloyd P. Zerr -{ September 20, 1993 i RULING ON DEFENDANT'S MOTION TO DISMISS 1 There is before me for decision a motion filed by the Defendant, Lloyd P. Zerr, on August 16, 1993, entitled " Motion To Dismiss", seeking dismissal of this proceeding on the grounds that it constitutes double jeopardy in violation of the Fifth Amendment of the United States constitution and 1 l because the institution of the proceeding violates agreements reached with the United States government. The United States Nuclear Regulatory Commission, in a response j dated September 2, 1993, contends that the motion is j entirely without merit and that it should be denied. A -reply was served by Defendant on September 10, 1993. I find against the Defendant on the motion. i i 2100:'S h h fg7 930920 h ppp j l l 9309220397 i.

4 I ' Backaround Defendant was indicted by a Grand Jury in the United States District Court for the Southern District of Georgia on December 9, 1991, on two counts of violating 18 U.S.C. 5 287 (Making False, Fictitious or Fraudulent Claims) and three counts of violating 18 U.S.C. S 1001 (Making False Statements). The activities charged occurred in almost all of the time frame alleged in the subject Complaint, served December 10, 1992, alleging violations of the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801-3812) (Making False Claims). The same activities alleged in the indictment underlie much of that alleged in the Complaint. In May 1992 Defendant entered into an " Agreement For Pretrial Diversion," with the United States Attorney for the i Southern District of Georgia which provided, among other things, that prosecution would be deferred for a period of 18 months and if Defendant complied with the conditions of the agreement no prosecution for the offense charged in the indictment would be instituted in the District and that the indictment would be discharged. A condition of the j i agreement provided that Defendant's attorney, the Assistant United States Attorney and a Special Agent of the Inspector General of the Nuclear Regulatory Commission would determine I "what restitution, if any, is owed by [ Defendant] to the i

~ . United States." The sum arrived at was for the amount of the alleged false claims, totaling $7,454.57. The United States Attorney found the amount to be adequate' restitution J l for resolution of the matter before him. l The indictment was dismissed without prejudice on. l May 20, 1992 because Defendant was placed on pretrial diversion. By letter dated June 30, 1993, the United States Attorney advised the Nuclear Regulatory Commission that Defendant had fulfilled the terms of the diversion agreement and that no further prosecution would be forthcoming for the crimes covered by the agreement. I On February 7, 1992, Defendant resigned his Federal employment. The Notification Of Personnel Action under Remarks stated that it was a " Resignation In Lieu Of Adverse Action." Defendant's Motion Defendant, by counsel, argues that the subject complaint is punitive in nature in seeking restitution and monetary penalties. He contends that Defendant has already been subject to criminal sanction having been indicted and l having reached a settlement with the United States government on restitution. He states that the subject i I

~ e e . action places Defendant in jeopardy twice for the same matter, which constitutes a violation of the double jeopardy clause of the Fifth Amendment of the Constitution. i Defendant further argues that the United States having already received restitution under a settlement previously reached, now seeks to breach the settlement by the subject action. Additionally, he alleges that the Defendant resigned from Federal employment in lieu of adverse action but now is made the subject of adverse action. Defendant requests that the Complaint be dismissed because the United States has been fully satisfied in this matter and all that remains is an attempt to obtain additional penal sanctions, which are barred by the Constitution. No case law was cited in support of Defendant's position. Complainant's Response i Complainant argues that the Constitutional provision against double jeopardy, which protects an accused against a i second prosecution for the same offense after acquittal, j against a second prosecution for the same offense after conviction, and against multiple punishments for the same offense, requires that jeopardy first attach sometime prior m-e m

. to the second punishment, citing Fransav v. Lynaugh, 810 F.2d 518 (5th Cir. 1987), cert. denied, 483 U.S. 1008 (1987). Complainant contends that the mere bringing of an indictment, followed by its withdrawal after the conditions of a pretrial diversion agreement were met, never placed Defendant in jeopardy so that he can claim protection ,ainst double jeopardy. Complainant asserts that jeopardy never attached as a i result of the Georgia indictment and pretrial diversion agreement. It argues that for jeopardy to attach, in a jury trial it is when the jury is impounded and sworn and in a bench trial when evidence is heard, citing Buffington v. Baltimore County, 913 F.2d 113 (4th Cir. 1990), cert. denied, __ U.S. 113 S Ct 1106 (1991), or when a court unconditionally accepts a guilty plea, citing U.S. v. Baggett, 901 F.2d 1546 (11th Cir. 1990), cert. denied, __ U.S. 111 S Ct 168 (1990). Complainant argues that procedural matters preliminary to a trial such as a pretrial diversion agreement do not constitute jeopardy. It cites U.S.

v. Soto-Alvarez, 958 F.2d 473 (1st Cir. 1992), cert. denied, __ U.S.

113 S Ct 221, where the court considered, only for jeopardy purposes, those counts to which defendant pled guilty and not those which were dismissed and on which no finding of

s ~ ,, guilty was made. It also relies on U.S. v. Schaffner, 771 1 F.2d 149 (6th Cir. 1985) where there was a pretrial diversion agreement concerning defendant's violation of obstruction of process. Defendant's subsequent trial for obstruction of justice was held not to violate the rules of double jeopardy because defendant was never tried on the obstruction of process charge and therefore was never put in jeopardy. As to the matter of Defendant's claim that the United States seeks to breach the conditions of the diversion agreement by the subject action, complainant contends it is without merit. It states that the only commitments made by the United States Attorney in the diversion agreement, to defer prosecution for 18 months and to not prosecute and to discharge the indict wnt upon Defendant meeting the terms of the agreement, were carried out. Complainant further asserts that Defendant's I resignation in lieu of discharge did not foreclose the NRC from bringle this Complaint under the Program Fraud Civil Remedies Ace. It contends that the adverse action, which the resf ~ation was in lieu of, was being fired and not the filing hh1 subject complaint. Complainant argues that i Defendant'< laim is unsupported by any evidence to the contrary.

~ J i ~ Defendant's Reply l In the Reply served September 10, 1993, Defendant I asserts that the Complainant, in its response to the motion, incorrectly cited cases Complainant relied upon and did not i cite other cases that would assist Defendant. Complainant had cited U.S.

v. Baggett, 901 F.2d 1546

[ i (11th Cir. 1990) for the proposition that jeopardy attaches l when the court unconditionally accepts a guilty plea. Defendant claims that the case provides that the concept of i due process and double jeopardy means that the government with all of its resources and power should not be allowed to l l make repeated efforts against an individual, se'ajecting that individual to embarrassment expense and ordeal and compelling that individual to live in a continuing state of anxiety and insecurity. The government is permitted "one i 1 l complete opportunity" against the individual. It also l l states that the case provides that any effort to discourage resolution of cases by prearrangement with prosecutors is contrary to the interest of justice and that where l violations of the agreement take-place both parties are to be returned to the position which they occupied before 1 relinquishing those positions. Defendant argues that the l case is supportive of Defendant who entered into an l

l 'I

• agreement with the government which the latter now seeks to

.i avoid. i i i Complainant had cited U.S. v. Schaffner, 771 F.2d 149 (6th Cir. 1985) for the proposition that a pretrial diversion agreement does not placi a defendant in jeopardy. It is Defendant's position that the Court in Schaffner l recognized that diversion prohibited further prosecution on j the same offense and that diversion is enforceable. In support of Defendant's case it cited Santobello v. J New York, 404 U.S. 257, 92 S Ct 495, 30 L.Ed2d 427 (1971) j where the Court upheld the enforceability of plea agreements 'l stating that they involved promises which must be fulfilled. Defendant also cited U.S.

v. Halper, 490 U.S.

435, 109 S Ct 1892, 104 L.Ed2d 487 (1989) where the Court held that an analysis of double jeopardy and due process issues requires a particularized assessment of the nature of the penalty sought, not the simplified labelling of civil or criminal. Defendant argues that in violation of due process and double jeopardy protection, the government instituted the subject proceeding despite the fact that Defendant fulfilled

,-m4 ' the pretrial diversion agreement and voluntarily left government employment in lieu of any further action. 7 Discussion and Conclusions I cannot find, on the facts and law presented, that t this proceeding constitutes double jeopardy and that it should be dismissed under the double jeopardy clause of the Constitution. Defendant has neither established that the criminal action taken against him in the Southern District of Georgia is the initial jeopardy needed to invoke the claim of double jeopardy nor has he shown that this civil i proceeding for false claims against the government, brought under the Program Frauds Civil Penalties Act, would rise to I i l the level of punishment for the purpose of applying the double jeopardy clause. Defendant's indictment, his entering into a pretrial diversion agreement under which he arranged for restitution l in the amount alleged to be falsely claimed, the deferral from prosecution by the United States Attorney and the dismissal of the indictment do not constitute jeopardy as contemplated by the double jeopardy clause. None of these activities placed him in judicial. jeopardy, an essential i element in claiming the protection of the double jeopardy clause. Fransav v. Lynaugh, 810 F.2d 518, 523 (5th Cir. )

. 1987). Defendant under the pretrial diversion agreement, had obtained the benefit of not being prosecuted at the cost of not being placed in jeopardy. The failure to establish the initial jeopardy vitiates any claim to double jeopardy l protection. Id. That alone is sufficient to deny the motion. 3ren had Defendant established that the Georgia process had constituted jeopardy, the bringing of the subject action does not per se constitute double jeopardy. It is well I established that Congress may impose both a criminal and civil sanction in respect to the same act or omission. I Helvering v. Mountain Producers Corp., 303 U.S. 390, 399 (1937). If jeopardy has attached and the civil penalty for filing false claims with the government bears no rational relationship to the government's loss then there is double jeopardy.2 United States v. Halper, 490 U.S. 435 (1989). In Halper, the Supreme court upheld the District Court finding that a sanction in excess of $130,000 set under mandatory penalties of the False Claims Act, where the government's losses, costs or expenses were approximately $16,000, bore no rational relationship and constituted a 1 The Court stated that the government can seek the full civil penalty against a defendant who previously had not been punished for the same conduct even if the civil sanction imposed is punitive. Id. at'450.

. l t L second punishment in violation of the double jeopardy clause. l i a The Court held that the government is entitled to rough remedial justice, that it may demand compensation according to somewhat imprecise formulas, such as reasonable liquidated damages or a fixed sum plus double damages without being deemed to have imposed a second punishment. Id. at 446. It may include ancillary costs such as the I costs of detection and investigation. The Court went on to state that the protection of the double jeopardy clause "is intrinsically personal. Its violation can be identified only by assessing the character of the actual sanctions imposed on the individual by the machinery of the state.'" (footnote omitted). Id. at 447. 1 Assuming arguendo that Defendant had established the 1 initial jeopardy, it is premature for him to contend at this j ) l time that this proceeding constitutes double punishment and 1 therefore is double jeopardy. The actual sanctions imposed on the individual must be analyzed to determine whether the civil penalty is to l recompense the. government or is punitive.- There is no way q to do that at this pretrial stage when no determination has

l been made as to whether a penalty is warranted. It should be noted that this proceeding differs from that in Halper which involved mandatory penalties. In this proceeding the judge can mitigate penalties and assessments and obviate double punishment. 10 C.F.R. S 1331. Defendant's Reply does nothing to warrant a different result. Baggett, supra, does not preclude the filing of a Complaint under the Program Fraud Civil Remedies Act where Defendant had entered into a pretrial diversion agreement in the criminal matter. Subsequent action can be taken against a defendant even after jeopardy has attached. In'Halper, supra, the Court held that a proceeding for a civil sanction could follow jeopardy in a criminal proceeding so long as a second punishment is not imposed. Halper at 446. l i In Baggett a second action was permitted to be taken against the defendant after jeopardy attached. Defendant ] had entered into a plea agreement after the jury was sworn and the Court accepted the guilty plea. As a result a number of counts were dismissed. The trial judge rejected 1 the sentencing agreement at the sentencing hearing, and i permitted the defendant to withdraw the guilty plea. .i Defendant was brought to trial on the dismissed counts and 1 objected on the grounds of double jeopardy. 'I

..The Court held "that a strict application of the rule that jeopardy attaches upon the swearing of a jury or the acceptance of a guilty plea would result in a discussion in i favor of Baggett." However, the Court would not so find because it would provide defendants with an opportunity to avoid prosecution by entering a plea bargain after trial commences and revoking the plea at sentencing. Also, it would discourage prosecutors from entering into plea j bargains after commencement of trial. Permitting the defendant to be tried on the dismissed counts placed the parties in the same position as they had been before they-1 i voluntarily relinquished it. Baggett at 1550. Baggett does not support Defendant's position on double jeopardy. j .1 The facts submitted do not support Defendant's claim that by filing this action the government is breaching the i pretrial diversion agreement. That agreement settled the criminal matter which was within the jurisdiction of the United States At torney. Nothing was cited in the agreement that would preclude the Nuclear Regulatory Commission from filing a civil action against the Defendant as is authorized I by the Program Fraud Civil Remedies'Act. Congress has authorized a criminal and civil sanction in respect to the i same act, which it is authorized to do. Helvering v.. Mountain Producers Corp., supra. l l w e

r Defendant's argument, that his resigning from government employment in lieu of adverse action precludes the filing of the subject action, is not convincing. He has not shown that the adverse action referred to involves more than being fired. The cases of Schaffner and Santobello, supra, cited by Defendant for the propositions that diversion and plea agreements are enforceable, that they must be kept and they i prohibit prosecution on the same offense, provide no basis for altering the findings above. i In Schaffner defendant had entered into a pretrial diversion agreement under which a charge of obstruction of I process was dismissed with prejudice. Defendant was i subsequently tried for obstruction of justice, a separate criminal offense, which was not contrary 3 o the terms of the t pretrial diversion agreement. The Court Fad ruled, in response to defendant's claim that the two charges constituted the same offense, that the elements of the offenses were different and there could be no double jeopardy on that basis. The Court never. ruled that the pretrial diversion agreement constituted a prior jeopardy. In fact, the Court.found that "because he was never found guilty of. violating S 1501 (obstruction of process),.the subsequent trial'of the S 1503 (obstruction of justice) \\ I

. charge was not barred by res judicata or collateral estoppel." Schaffner at 152. Jeopardy did not attach under the pretrial diversion agreement absent a guilty finding. Fransaw at 523. l Here Defendant has not made a legal or factual showing that the pretrial diversion agreement entered into by Defendant does not permit the filing of the subject Complaint by the Nuclear Regulatory Commission or that the resignation from Federal employment in lieu of adverse action prohibits the filing. Absent such showing no finding can be made in Defendant's favor. Defendant's motion is not meritorious on the issues that he has raised. ORDER Based on all of the foregoing, it is hereby Ordered that Defendant's motion filed August 16, 1993 requesting dismissal of the proceeding, is hereby denied. Morton B. Margulie(/ CHIEF ADMINISTRATIVE LAW JUDGE Dated September 20, 1993 Bethesda, Maryland a

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Docket No. 93-01-PF In the Matter of Lloyd P. Zerr ASLBP No. 93-673-01-PFC CERTIFICATE OF SERVICE 4 I hereby certify that copies of the foregoing " RULING ON DEFENDANT'S MOTION TO DISMISS" in the above-captioned-proceeding has been served upon the following persons by U.S. Mail first class, except as otherwise noted, this 20th day of September 1993: Office of Commission Appellate Adjudication U.S. Nuclear Regulatory Commission i Washington, D. C. 20555 Roger K. Davis, Esq. Daryl M. Shapiro, Esq. i Office of the General Counsel Mail Stop 15 B 18 U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Morton B. Margulies Chief Administrative Law Judge Mail Stop EW-439 U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Lloyd P. Zerr 718 13th Street, N.E. Washington, D. C. 20002 Timothy Clarke, Esq. 5 North Adams Street Rockville, Maryland 20850 A $$ i JMmes M. Cutchin V l i mn}}