Sila Luis was living the American dream, running what seemed to be not one but two thriving Florida companies that provided home health care and physical therapy to Medicare patients.  The fruits of her labors allowed Luis to take dozens of trips overseas, buy luxury cars, and give millions of dollars to her husband, children, and other family members.  But that all changed in 2012, when Luis was indicted on charges that she had conspired to commit Medicare fraud by paying kickbacks for patient referrals and by billing for services that were either not necessary or not actually performed, ultimately receiving $45 million dollars in fraudulent reimbursements over a six-year period.     

Relying on a federal law that authorizes courts to freeze assets with the same value as the assets obtained by violating federal health care laws when the government can show that the defendant has disposed of the proceeds of her crime, the federal government asked the trial court to freeze all of Luis’s assets, including those that were not obtained through fraud.  Luis then requested permission to use her “untainted” assets to pay her attorneys in her criminal case.  But the district court denied that request.  It explained that, because the government could locate “only a fraction of the assets” that Medicare had paid Luis’s companies, her “untainted” assets could also be frozen.  The district court compared Luis’s scenario to that of a bank robber who is indicted for stealing $100,000:  if the robber can’t use the $100,000 that he stole to hire his preferred lawyer, he also shouldn’t be able to spend the $100,000 that he stole and then spend a different $100,000 that he “just so happens” to have lying around to hire the lawyer that he wants.  The court of appeals upheld that ruling, and tomorrow the Supreme Court will hear oral arguments in Luis’s case.

The Sixth Amendment to the Constitution guarantees that, in all criminal cases, the defendant has a right “to the assistance of counsel for his defense.”  The main point of contention in Luis’s case before the Court tomorrow is whether freezing her “untainted” assets violates the Sixth Amendment by depriving her of the right to the lawyer of her choice in her criminal case.

The government argues that it does not.  The government concedes that the right to hire the attorney of one’s choice is at the heart of the Sixth Amendment.  But, it adds, that right is not absolute: you can’t, for example, insist on hiring a lawyer who is not a member of the bar or has a conflict of interest, nor are you entitled to a lawyer you can’t afford.  Limits like these, the government emphasizes, are the “incidental consequence of restrictions that serve legitimate and important public purposes.”  And the Supreme Court has recognized as much in its earlier cases, upholding an order that froze assets resulting from the crime until the trial and explaining that such an order does not “arbitrarily” impinge on the defendant’s right to hire a lawyer.

It doesn’t matter, the government continues, that in Luis’s case the government is trying to freeze assets that are not related to her alleged crimes, because the same reasoning applies.  Under the federal health care fraud statute, if Luis is convicted but the proceeds of her crime either cannot be located or have been spent, the government can obtain “property of equivalent value” to her ill-gotten gains.  After all, criminal forfeiture is simply a way to directly punish a defendant by taking away the proceeds of the crime; because money is fungible, the government’s right to have Luis forfeit the proceeds of her crime therefore isn’t just a right to the specific money that she obtained from defrauding Medicare.  Otherwise, a defendant like Luis could spend everything that she obtained by committing a crime, but keep her other assets, because they could not be frozen.  Moreover, nothing is stopping Luis from hiring the lawyer of her choice; she just can’t pay him upfront.

Luis counters by emphasizing the importance of being able to choose your own lawyer.  It can be expensive, she acknowledges, but it gives the client more control over her case, which then bolsters the public’s confidence in our criminal justice system.  A statute like the one at issue in this case, she contends, has the opposite effect:  by freezing even the assets that aren’t linked to the crime and depriving a defendant of her right to her preferred lawyer, the statute “undermines the adversarial system of justice.”  And, she adds, the idea that a court could freeze the assets of a defendant and therefore prevent her from using money unrelated to the crime of which she is accused to hire a lawyer “would have been inconceivable to the Founding Fathers,” particularly when at that time there was no right to have a lawyer appointed for you at all – retaining an attorney (and, presumably, paying for him) would have been the only way to ensure legal representation.

Luis attempts to distinguish her case from the Supreme Court’s earlier cases allowing courts to issue a pretrial order freezing the proceeds of the crime, even if doing so prevented the defendant from retaining her preferred lawyer.  There is a difference, she stresses, between those kinds of “tainted” assets, which can be frozen before trial “because they never legitimately belonged to the criminal defendant in the first place,” and the “untainted” assets at issue in her case, which she owns and the government cannot claim until she is convicted.

When the nine Justices take the bench tomorrow, they will not be writing on a blank slate.  A little less than two years ago, the Court held that a Florida couple whose assets had been frozen, and who wanted to use them to pay their lawyer, did not have the right to challenge the grand jury’s determination that there was probable cause to believe that they had committed a crime that could lead to forfeiture.  Chief Justice John Roberts dissented from that ruling, in an opinion joined by Justices Stephen Breyer and Sonia Sotomayor.  He complained that the Court’s decision will allow the government “to initiate a prosecution and then, at its option, disarm its presumptively innocent opponent by depriving him of his counsel of choice—without even an opportunity to be heard.”  Such a result, he suggested, “is fundamentally at odds with our constitutional tradition and basic notions of fair play.”  Sila Luis could well go into the oral argument with three votes on her side, but she will need two more for the win.

Posted in Luis v. U.S., Analysis, Featured, Merits Cases

Recommended Citation: Amy Howe, Argument preview: Court to consider restraint of “untainted” assets needed to pay attorney, SCOTUSblog (Nov. 9, 2015, 7:07 PM), http://www.scotusblog.com/2015/11/argument-preview-court-to-consider-restraint-of-untainted-assets-needed-to-pay-attorney/