In Re Dr. John Doe, M.D., a Witness Before the January 1982 Additional Grand Jury. Dr. John Doe, M.D. v. United States

711 F.2d 1187, 13 Fed. R. Serv. 1202, 1983 U.S. App. LEXIS 26264

• Court: Court of Appeals for the Second Circuit
• Decided: June 29, 1983
• Docket: 19-2886
• Status: Published

Opinions

CARDAMONE,

Circuit Judge:

We are called upon to decide whether a grand jury has the power to subpoena a physician’s W-2 forms, prescription forms and patient files despite his claims that the Fifth Amendment and doctor-patient privilege shield these records from production. A grand jury sitting in the Southern District of New York is investigating what it believes to be a sham medical clinic that served as a front for the illegal sale of tens of thousands of “quaaludes” in New York City. The records subpoenaed are those of a psychiatrist allegedly associated with the clinic. The Court is unanimous in its view that the doctor’s W-2 and prescription forms are subject to the subpoenas duces tecum issued against him and that for his failure to produce them he was properly held in civil contempt. We are divided only on the issue of patient files in the doctor’s possession.

BACKGROUND

In 1981 the Drug Enforcement Administration (DEA) commenced an investigation of Jorum Associates, Inc. and a number of individuals associated with Jorum, including Dr. Doe. Concluding that it had unearthed sufficient evidence of narcotics violations to establish probable cause, the DEA applied for and obtained a warrant in May 1982 to search Jorum’s East 34th Street premises. As the record reveals, the government furnished evidence that Jorum and those associated with it were engaged in large-scale illegal distribution of quaaludes to both consumers and street dealers. The government’s proof describes the following operation. Jorum hired doctors who were paid on the basis of days worked. Dr. Doe, for example, worked one day per week from late 1981 until early 1982. For each of the eight days Dr. Doe worked he was paid $3,000 by Jorum. The medical specialties represented at the clinic were extraordinarily diverse, including acupuncture, surgery, osteopathy, gynecology and, in Dr. Doe’s case, psychiatry. Those who came to Jo-rum, and they came daily by the score, were given a perfunctory physical by a medical assistant and a brief interview with one of the doctors. Over 90% of the individuals who visited Jorum obtained quaalude prescriptions for 30 to 60 tablets each. All that was required of a patient to obtain such a prescription was a claimed sleeping difficulty, denial of drug abuse, and cash payment of a $150 to $200 fee. Dr. Doe saw over 590 patients — an average of more than 70 per day — while associated with Jo-rum.

That this assembly-line technique for prescribing drugs had little or nothing to do with the practice of medicine is tellingly revealed in the affidavit of an undercover DEA agent who came to Jorum and saw Dr. Doe on December 3,1981 and again two weeks later. On each visit the agent adopted a different identity and name without changing his appearance, drawing no comment from anyone. On both occasions the agent received a prescription from Dr. Doe for 45 quaaludes after paying a $200 fee.

With this sort of evidence before it, the grand jury issued subpoenas duces tecum directing appellant to produce his patient files, financial records and Schedule II prescription forms.¹ The issuance of these subpoenas prompted a battle of ex parte filings by Doe and the government seeking in camera review by United States District Judge Stewart. On December 13, 1982, after reviewing the open and in camera submissions of the parties, the district court concluded that the “required records” exception to the Fifth Amendment overcame appellant’s objection to compelled production of his Schedule II prescription and W-2 forms and patient files. The trial court later held that no psychotherapist-patient privilege should apply in this case and ordered production of the subpoenaed patient files in their original, unredacted condition. When Dr. Doe declined to comply, he was held in civil contempt and this appeal followed.

DISCUSSION

I

In assessing whether appellant may rely on a Fifth Amendment privilege not to comply with the subpoenas duces tecum, it is first necessary to determine whether the act of producing the documents described in the subpoenas would involve compelled, testimonial self-incrimination on Doe’s part. See Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976); In re Katz, 623 F.2d 122, 125-26 (2d Cir.1980). In relevant portion the subpoenas seek

(1) All patient files relating to persons purportedly treated by [Doe] on the premises of Jorum Associates ... [and its successor entities] ... in the period August 1981 — June 1982;

(2) ... IRS Form[s] W-2, relating to [Doe’s] compensation by Jorum Associates, Inc. [and its successor entities];

(3) All Schedule II prescription forms reflecting drugs prescribed by [Doe] at [Jorum’s and its successors’ premises].

[(4)] All patient files relating to persons purportedly treated for sleep and stress problems in the period March-June 1982;

[and (5)] All Schedule II prescription forms reflecting drugs prescribed in the period March-June 1982.

Because Jorum and its successor entities are alleged by the government not to be sleep disorder clinics but actually fronts for the illegal distribution of controlled substances, any admission on appellant’s part that he is associated or connected with these organizations could be self-incriminating. Thus, even appellant’s mere production of items 1, 2 and 3, apart from their content, might involve his incriminating admission that these documents exist and that he was in some way connected with Jorum.

Moreover, since items 1 and 4 consist of an inordinate number of files considering the time periods involved (as the government suggests), simply turning over these files could constitute incriminating testimony by Doe that he “treated” this unrealistic number of patients during the specified periods. Similarly, since the subpoenas call upon Doe to surrender what may be an inappropriately large number of forms reflecting his prescriptions of controlled substances during limited time periods (see items 3 and 5), the mere act of compelling Doe to produce these documents could be compelling him to be a witness against himself. Thus, the act of complying with these subpoenas could require appellant’s compelled, testimonial self-incrimination and may therefore give rise to a Fifth Amendment privilege not to comply.

II

Having decided that the mere act of surrendering these documents to the government may be testimonial in nature, we turn to the issue of whether their production is mandated by the so-called “required records” exception to the Fifth Amendment. See Shapiro v. United States, 335 U.S. 1, 68 S.Ct. 1375, 92 L.Ed. 1787 (1948). Under this exception, a person whose records are required to be kept by law has no Fifth Amendment protection against self-incrimination when these records are directed to be produced. This rule applies regardless of whether the records are kept pursuant to federal or state law. See id. at 17-18 & n. 25, 68 S.Ct. at 1384 & n. 25. To constitute “required records” the documents must satisfy a three-part test: (1) the requirement that they be kept must be essentially regulatory, (2) the records must be of a kind which the regulated party has customarily kept, and (3) the records themselves must have assumed “public aspects” which render them analogous to public documents. See Grosso v. United States, 390 U.S. 62, 67-68, 88 S.Ct. 709, 713, 19 L.Ed.2d 906 (1968).

We have little difficulty applying the required records exception to the W-2 and Schedule II prescription forms. With respect to the W-2s, a wage earner filing a federal income tax return must attach a W-2 in order for the return to be complete. This requirement, found on the face of the tax form, has the force of law, see I.R.C. § 6011(a) (1976), and is part of the regulatory scheme established by the Internal Revenue Service. That the W-2s are records of a kind customarily kept by taxpayers is not open to dispute, and the public aspect requirement appears satisfied simply from the fact that the taxpayer is required to attach copies of his W-2 when filing, see Shapiro v. United States, supra.

As for the Schedule II prescriptions, New York law requires practitioners² to prepare “official New York State prescriptions” for all Schedule II drugs and retain copies for five years. See N.Y.Pub.Health Law §§ 3332 & 3338(2) (McKinney 1977). These statutes are part of a comprehensive scheme established by the New York State Legislature to prevent harmful drugs from “being diverted into unlawful channels,” Whalen v. Roe, 429 U.S. 589, 591, 97 S.Ct. 869, 872, 51 L.Ed.2d 64 (1977). Thus, these records are maintained pursuant to a regulatory scheme, cf. United States v. Warren, 453 F.2d 738, 742 (2d Cir.) (record keeping required under 21 U.S.C. § 360a(d) for certain controlled substances held to be part of a regulatory scheme), cert. denied, 406 U.S. 944, 92 S.Ct. 2040, 32 L.Ed.2d 331 (1972), and are of the kind customarily kept by the regulated party. The public aspect of the prescription is demonstrated by the requirement that a copy of it must be forwarded to the New York State Department of Health. See N.Y.Pub.Health Law §§ 3331(6) & 3333(4) (McKinney 1977); cf. United States v. Warren, 453 F.2d at 742 (similar scheme has public aspect).

The more troublesome issue concerns the patient files in Dr. Doe’s possession. The New York Board of Regents (Regents) is charged with regulating the medical profession. See N.Y.Educ.Law §§ 6504, 6506 & 6520 (McKinney 1972 & Supp.1982-1983). Sections 6509(9) and 6511 of the Education Law (McKinney Supp.1982-1983) permit the Regents to define unprofessional conduct and to impose sanctions for such conduct. In the health professions, unprofessional conduct includes the failure “to maintain a record for each patient which accurately reflects the evaluation and treatment of the patient.” 8 N.Y.C.R.R. 29.2(a)(3) (1981). It is evident that Dr. Doe’s patient files were kept pursuant to this regulatory scheme and are of a kind customarily maintained by the regulated party. His argument focuses on the third element. He contends that the patient files possess no public aspect and are not, therefore, required records.

Although what is needed to show public aspect is somewhat clouded, see The Supreme Court, 1967 Term, 82 Harv.L.Rev. 63, 201 (1968), we harbor no doubt that it is satisfied here. As defined by the Regents, unprofessional conduct includes the failure of a health practitioner, upon written request by the patient, to make available a patient file to the patient or another licensed health practitioner. 8 N.Y.C.R.R. 29.2(a)(6) (1981). Standing alone, this reference gives us little confidence that the patient files exhibit some public aspect, inasmuch as it is the patient alone who may trigger the release of the information. To this reference must be added the provisions of N.Y.Pub.Health Law § 230(10)(a) (McKinney Supp.1982-1983), which permit the New York State Board for Professional Medical Conduct (Board) to “investigate on its own any suspected professional misconduct.” Subdivision (10)(l) of this statute expressly authorizes the Board to obtain and examine patient records “in any investigation or proceeding by the board acting within the scope of its authorization.” Every time Dr. Doe assembled a patient file at Jorum, he knew or should have known that the file was subject to review by the State. Records made under those circumstances have a public aspect. With this element satisfied, we hold that the patient files are required records.

We agree with our respected colleague Judge Friendly’s view that even Shapiro recognizes constitutional limits on the government’s power to compel record keeping which might circumvent the privilege contained in the Fifth Amendment. In this case we think, however, that there is a strong correlation between the purpose of the New York law which requires that patient files be kept and that for which their production is sought here. The purpose of New York’s regulation is to investigate licensed physicians suspected of medical misconduct, Schachter v. Whalen, 581 F.2d 35, 37 (2d Cir.1978) (per curiam), which certainly encompasses improperly prescribing controlled substances, see 8 N.Y.C.R.R. § 29.-2(a)(8) (1981) (“ordering of excessive ... treatment ... not warranted by the condition of the patient” constitutes unprofessional conduct). The conduct for which Dr. Doe is being investigated by federal authorities is precisely that conduct proscribed by the New York State law here applicable.

Doe argues that even if the subpoenaed documents are required records, Fisher nevertheless shields them from production. We note that the required records doctrine is an exception to the Fifth Amendment privilege. As such, it necessarily overrides the privilege in instances in which the privilege would otherwise apply. See In re Grand Jury Empanelled March 19, 1980, 680 F.2d 327, 336 n. 15 (3d Cir.1982), cert. granted on other issues, — U.S. —, 103 S.Ct. 1890, 77 L.Ed.2d 281 (1983); In re Grand Jury Proceedings, 601 F.2d 162, 171 (5th Cir.1979). Fisher was not concerned with required records and nothing in its analysis could be construed as weakening the required records exception.

III

Appellant next contends that he need not surrender his patient files because to do so would violate his patients’ psychotherapist-patient privilege. Proposed Federal Rule of Evidence 504(b) would have created a psychotherapist-patient privilege in the federal courts, but Congress declined to adopt it.³ Instead, Fed.R.Evid. 501, which controls the privileges of witnesses, provides that such privileges “shall be governed by the principles of common law as they may be interpreted by the courts of the United States in the light of reason and experience” on a case-by-case basis, Trammel v. United States, 445 U.S. 40, 47, 100 S.Ct. 906, 910, 63 L.Ed.2d 186 (1980). Since no doctor-patient privilege existed at common law, Whalen v. Roe, 429 U.S. 589, 602 n. 28, 97 S.Ct. 869, 877 n. 28, 51 L.Ed.2d 64 (1977), most courts which have considered the matter have concluded that none exists in federal law, see e.g., United States v. Meagher, 531 F.2d 752, 753 (5th Cir.) (psychiatrist-patient privilege), cert. denied, 429 U.S. 853, 97 S.Ct. 146, 50 L.Ed.2d 128 (1976); United States v. Mullings, 364 F.2d 173, 176 n. 3 (2d Cir.1966) (dicta); In re Grand Jury Subpoena, 460 F.Supp. 150, 151 (W.D.Mo.1978); Hardy v. Riser, 309 F.Supp. 1234, 1236-37 (N.D.Miss. 1970); cf. Lord v. Board of Education of the City of New York, 74 F.R.D. 565 (E.D.N.Y. 1977) (recognizing a limited privilege outweighed by other considerations before the court).

We are asked to recognize the privilege but decline to do so in this case for several reasons. To begin, Professor Wig-more has set forth four conditions necessary to the establishment of a privilege against the disclosure of communications. They are: (1) the communication must be one made in the belief that it will not be disclosed; (2) confidentiality must be essential to the maintenance of the relationship between the parties; (3) the relationship should be one that society considers worthy of being fostered; and (4) the injury to the relationship incurred by disclosure must be greater than the benefit gained in the correct disposal of litigation. 8 J. Wigmore, Evidence § 2285, at 527 (McNaughton rev. 1961). Arguably these conditions could obtain in a true psychotherapist-patient relationship. See Slovenko, Psychiatry and a Second Look at the Medical Privilege, 6 Wayne L.Rev. 175, 184-99 (1960). But the relationship in this case does not meet all four conditions. Presumably those visiting the Jorum clinic wanted the fact and purpose of their visit kept in confidence, but there was hardly any relationship of trust since it appears that Dr. Doe did not even recognize his “patient” of two weeks earlier. The 70 patient per day assembly-line technique involving only a brief interview is scarcely a psychiatrically nurturing event for a patient, much less one worth fostering.

Wigmore’s fourth condition recognizes the balancing which must be done when an asserted privilege contravenes a principle fundamental to the fair administration of justice — that the public has a right to everyone’s evidence. Testimonial privileges are permitted only to the very limited extent that excluding "relevant evidence “ ‘has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth.’ ” Trammel v. United States, 445 U.S. at 50,100 S.Ct. at 912 (quoting Elkins v. United States, 364 U.S. 206, 234, 80 S.Ct. 1437, 1454, 4 L.Ed.2d 1669 (1960) (Frankfurter, J., dissenting)). Here the exclusion of Doe’s patient files would not serve a public good that transcends the need for this evidence in the search for truth. As the court below noted following in camera examination of a sampling of patient files, there are no communications in these files of the intensely personal nature that the psychotherapist-patient privilege is designed to protect from public scrutiny.⁴ There is also no need to redact the names of the supposed patients before surrender of the files because there is substantial evidence indicating that no real psychotherapist-patient relationship existed between Doe and the persons whose identities appear in the files.

IV

Finally, Doe contends that it was error for the district court to read in camera ex parte submissions from the government. In an order dated May 13, 1983 the district court specifically noted that while it had considered these submissions for background information, it did not rely on them and the information they provided was not necessary for its decisions. Upon review of the record, we are satisfied that the district court could have reached the same result without resort to the in camera submissions. In any event, this Court has recently approved the use of in camera submissions by the government in situations where an “ongoing interest in grand jury secrecy” is at stake. In re John Doe Corp., 675 F.2d 482, 490 (2d Cir.1982); see In the Matter of a Grand Jury Subpoena directed to Marc Rich & Co., A.G., 707 F.2d 663 at 670 (2d Cir. 1983). We note further that, save only for the names of potential witnesses, the government made extensive and detailed disclosure to appellant of the underlying facts. The information provided was sufficiently ample to allow him a full and fair opportunity to be heard, see In re John Doe Corp., 675 F.2d at 489-90.

For the above reasons the order holding Dr. Doe in civil contempt is affirmed. The mandate of the court shall issue forthwith.

1 . Schedule II drugs possess a high potential for abuse but have recognized medical uses. Whalen v. Roe, 429 U.S. 589, 592, 97 S.Ct. 869, 872, 51 L.Ed.2d 64 (1977); see N.Y. Pub. Health Law § 3306 (McKinney 1977 & Supp. 1982-1983).

2 . A practitioner is defined as a “physician, dentist, podiatrist, veterinarian, scientific investigator, or other person licensed, or otherwise permitted to dispense, administer or conduct research with respect to a controlled substance in the course of a licensed professional practice or research licensed pursuant to this article.” N.Y. Pub. Health Law § 3302(28) (McKinney 1977).

3 . In states which have adopted the privilege it is often subject to many exceptions and grounds for waiver, Whalen v. Roe, 429 U.S. 589, 602 n. 28, 97 S.Ct. 869, 877 n. 28, 51 L.Ed.2d 64 (1977) and authorities cited therein, and criminal prosecutions in particular are frequently withdrawn by statute from the operation of the privilege, C. McCormick, Evidence § 104, at 223 & n. 76 (2d ed. 1972) and statutes cited therein.

4 . In fact, perusing these files is somewhat like attempting to read Egyptian hieroglyphics, so that even without a testimonial privilege these patient files’ undecipherable contents remain inscrutable.