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United States v. Daugherty

United States District Court, E.D. Kentucky, Central Division, Lexington

February 28, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
DAVID BLACK DAUGHERTY and ALFRED BRADLEY ADKINS, Defendants.

          MEMORANDUM OPINION AND ORDER

          Robert E. Wier, United States Magistrate Judge

         Defendant David B. Daugherty, a former Social Security Administration (SSA) Administrative Law Judge (ALJ), faces an Indictment generally charging him with one count of conspiracy to commit mail fraud and wire fraud, two counts of mail fraud, two counts of wire fraud, and one count of conspiracy to money launder. See DE #1 (Indictment). The count recitation, though, hardly captures the depth and scope of the case, which targets an alleged 8 year Social Security fraud scheme involving thousands of claims, $5.7 million in proceeds, and $600 million in potential losses.

         In the instant motion, Daugherty (joined by Defendant Adkins, see DE #133) moves to strike certain language from the Indictment. DE #130 (Motion). The United States responded in opposition. DE #150 (Response). The matter is ripe for consideration. For the following reasons, the Court DENIES DE #130.

         Legal Standard

         “Upon the defendant's motion, the court may strike surplusage from the indictment[.]” Fed. R. Crim. P. 7(d); see also United States v. Kemper, 503 F.2d 327, 329(6th Cir. 1974) (noting that “the striking of surplusage [is] permissive but not mandatory”). “The Rule is properly invoked when an indictment contains nonessential allegations that could prejudicially impress the jurors.” Kemper, 503 F.2d at 329. “The decision whether to strike language from an indictment rests within the sound discretion of the district court.” United States v. Emuegbunam, 268 F.3d 377, 394 (6th Cir. 2001); see also United States v. Moss, 9 F.3d 543, 550 (6th Cir. 1993) (noting the Circuit reviews surplusage striking “only for an abuse of discretion”); Kemper, 503 F.2d at 330 (even an erroneous decision not to strike “is not ground for reversal” if it “did not affect the substantial rights of the defendant”). “A motion to strike surplusage should be granted only where it is clear that the language is irrelevant and prejudicial.” United States v. Neller, 229 F.3d 1154, Nos. 97-3630, 97-3631, 97-4051, 97-4053, 99-3252, 2000 WL 1234330, at *2 (6th Cir. Aug. 25, 2000) (table) (per curiam) (emphases added). “[I]f the language in the indictment is information which the government hopes to properly prove at trial, it cannot be considered surplusage no matter how prejudicial it may be (provided, of course, it is legally relevant).” United States v. Thomas, 875 F.2d 559, 562 n.2 (6th Cir. 1989). Motions to strike surplusage are generally disfavored-the Rule 7(d) standard “has been strictly construed against striking surplusage[.]” Kemper, 503 F.2d at 329.

         Category 1-Language Concerning “On the Record” Decisions

         First, Daugherty moves to strike certain language from Indictment ¶¶ 13 and 14, generally concerning the regularity of SSA “on the record” (i.e., hearing-less) decision-making. See DE #130, at 1-3. The United States opposes striking. DE #150, at 3-7.

         Paragraph 13, which falls amid the Indictment's lengthy background section concerning the SSA disability determination process, states:

The vast majority of ALJs typically held hearings to determine whether Claimants were disabled. In certain limited instances, ALJs could determine there was sufficient evidence in the records submitted by Claimants to support findings of disability without holding hearings. In such instances, the SSA permitted ALJs to issue ‘on the record decisions' (‘OTR decisions') awarding disability benefits.

DE #1, at ¶ 13 (emphases added to indicate the precise language Daugherty seeks to cut).

Upon reviewing Claimants' applications and supporting documentation and holding hearings, ALJs then decided to either award or deny disability benefits. ALJs' decisions were communicated in writing to the Claimants. If ALJs awarded disability benefits, SSA offices then initiated the processes of disbursing disability benefits to Claimants.

Id. at ¶ 14 (emphasis added to indicate the phrase Daugherty wants stricken). The Indictment later charges that “DAUGHERTY solicited CONN to submit falsified medical evidence so that DAUGHERTY could issue fully favorable decisions, via OTR decisions[.]” DE #1, at ¶ 37(d); see also Id. at ¶ 37(m).

         Daugherty argues that both paragraphs “are inaccurate and misleading” because “[t]he ability to grant OTR decisions is not ‘limited' nor is it ignored by the ‘vast majority' of ALJs.” DE #130, at 3. Daugherty asserts that the paragraphs “are prejudicial to” him because they imply that “OTR decisions are unusual and/or limited” and “cast the idea of OTR decision-making, and [his] use of the OTR process, in a negative light.” Id. The Government responds that it “intends to introduce evidence at trial precisely to the effect that the relevant On-The-Record (‘OTR') decisions were atypical and were used by [Daugherty] to help execute the fraudulent scheme.” DE #150, at 3.

         The Court, in the circumstances and in an exercise of its discretion, denies Daugherty's request to strike the above-italicized phrases. No party doubts that the phrases pass over the low relevancy threshold, given the case charges and context. Under Thomas (and as repeated throughout Sixth Circuit case law), if the Government “hopes to properly prove” a relevant piece of information “at trial, it cannot be considered surplusage[.]” 875 F.2d at 562 n.2. That is the case here-the United States asserts that it “intends to introduce evidence at trial precisely to the effect that the relevant” OTR decisions “were atypical[.]” DE #150, at 3. Proving atypicality may indeed require the Government to establish the typical ALJ practice, the ...


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