McKirdy v. Superior Court

Opinion

The Attorney General’s Medi-Cal Fraud Unit obtained from the San Francisco Municipal Court a search warrant for the office and home of Archibald A. McKirdy, M.D., a psychiatrist. Upon execution of the warrant at McKirdy’s office Fraud Unit investigators seized 49 files labelled with the names of patients together with other materials. McKirdy promptly filed in the municipal court a “notice of petition to quash search warrant and for return of property.” The municipal court granted McKirdy’s petition. The Attorney General petitioned respondent superior court for a writ of mandate or prohibition. The superior court issued a peremptory writ of prohibition vacating the municipal court’s order and thus, in practical effect, validating the search. McKirdy then petitioned this court for a writ of mandate or prohibition to vacate the superior court’s order. We initially denied the petition. The Supreme Court granted a hearing and retransferred the cause to us with directions to issue the alternative writ. We have done so. Upon consideration of the written and oral arguments of the parties we conclude that the superior court’s ruling was correct and that the municipal court should not have granted McKirdy’s petition to quash the warrant. Accordingly, we deny the peremptory writ and discharge the alternative writ.

At relevant times, McKirdy was a licensed physician and an enrolled provider of publicly funded health services under California’s Medi-Cal statute (Welf. & Inst. Code, § 14000 et seq.). To obtain payment for services rendered to patients entitled to Medi-Cal benefits McKirdy was required to submit claims on specified forms accompanied by specified documentation, and itemizing services rendered. Itemization was to be accomplished by means of codes assigned to enumerated categories of psychotherapeutic treatment: 45-50 minute individual sessions, 25 minute individual sessions, 15 minute individual sessions, 90 minute group sessions, and an initial comprehensive history and examination. Per patient the highest payable Medi-Cal rate was for initial examination and the next highest was for 45-50 minute individual sessions. The rate payable for each individual patient in a group session was less than half the rate for a 45-50 minute individual session.

n the municipal court McKirdy challenged the search on several grounds. The municipal court concluded that although the search warrant procedure had been proper in all other challenged respects, the warrant should be quashed for failure to comply with the special master procedure. The superior court vacated the municipal court’s order on the sole stated ground that the special master procedure was inapplicable, Since McKirdy was a psychotherapist and the documents to be seized were in his possession, the narrow question initially presented to us is whether the exception for a document custodian reasonably suspected of relevant criminal activity could properly have been invoked in the circumstances of record. If (as McKirdy strenuously contends) the exception could not be invoked, then patently the special master procedure applied and should have been followed and we should issue the writ. We conclude, contrary to McKirdy’s contentions, that the exception is valid and that McKirdy came within it.

McKirdy’s more thoroughly developed contention is that we must invalidate, or at least disregard, the statutory exception because it is unconstitutional. It is his position that the exception is in fatal conflict with his patients’ inalienable constitutional right of privacy. (Cal. Const., art. I, § 1; cf. Griswold v. Connecticut (1965) 381 U.S. 479 , 484 [ 14 L.Ed.2d 510 , 514-515, 85 S.Ct. 1678 ], and cognate cases under the federal Constitution.)

We have recognized a nexus between the confidentiality of information derived from psychotherapist-patient communications and the constitutional right of privacy. (Smith v. Superior Court (1981) 118 Cal.App.3d 136 , 140 [ 173 Cal.Rptr. 145 ]; cf. also In re Lifschutz (1970) 2 Cal.3d 415 , 431-432 [ 85 Cal.Rptr. 829 , 467 P.2d 557 , 44 A.L.R.3d 1 ]; Board of Medical Quality Assurance v. Gherardini (1979) 93 Cal.App.3d 669 , 676-679 [ 156 Cal.Rptr. 55 ] [physician-patient privilege].) While the right of privacy is not absolute, it is well established that the propriety of any governmental intrusion upon the right will depend upon a showing that the intrusion was justified by a state need which was compelling not only in the abstract but also when weighed against the privacy rights of the individual and that the scope of the intrusion was no greater than could be justified by the state’s need in all the circumstances. (Cf. White v. Davis (1975) 13 Cal.3d 757 , 775 [ 120 Cal.Rptr. 94 , 533 P.2d 222 ]; Board of Trustees v. Superior Court (1981) 119 Cal.App.3d 516 , 524-526 [ 174 Cal.Rptr. 160 ]; Board of Medical Quality Assurance v. Gherardini, supra, 93 Cal.App.3d at p. 680. McKirdy argues that the special master provisions of Penal Code section 1524 are a legislative response to this constitutional mandate, providing in circumstances to which section 1524 applies a procedure by which documents which may contain confidential communications will not be disclosed (to anyone other than the special master) until after a hearing at which interests can be weighed and alternatives explored. (Cf. Deukmejian v. Superior Court (1980) 103 Cal.App.3d 253 , 258 [ 162 Cal.Rptr. 857 ].) It seems clear that the patient’s constitutional right of privacy is wholly independent of any criminality which might be attributed to the psychotherapist; from this premise McKirdy argues that the purported

“The state Constitution is controlling and statutes which are inconsistent with and contrary to constitutional provisions cannot stand. [Citations.] Every intendment, however, is in favor of the validity of a statute, and it should not be held to be void unless it is clearly repugnant to the Constitution. [Citation.] If reasonably possible, a harmonious adjustment of the constitutional provision and the statutory provision will be found. [Citation.]” (Wright v. Compton Unified Sch. Dist. (1975) 46 Cal.App.3d 177 , 183-184 [ 120 Cal.Rptr. 115 ]; cf., e.g., Department of Corrections v. Workers’ Comp. Appeals Bd. (1979) 23 Cal.3d 197 , 207 [ 152 Cal.Rptr. 345 , 589 P.2d 853 ]; English v. Marin Mun. Water Dist. (1977) 66 Cal.App.3d 725 , 730 [ 136 Cal.Rptr. 224 ].) McKirdy’s contention fails for want of a demonstrable conflict between the statutory exception to the special master procedure and the privacy clause of the California Constitution. The privacy clause is manifestly self-executing (cf. White v. Davis, supra, 13 Cal.3d 757 , 775) and requires no statutory implementation. Under the privacy clause one who seeks, in behalf of the state or by invocation of state authority by judicial process or otherwise, to obtain information subject to individual privacy rights must be prepared to make a showing of predominant state need and sufficiently circumscribed means. It is absurd to suggest, as McKirdy necessarily does, that the special master procedure is the only sufficient vehicle for such a showing in this action and therefore that the statutory exception would—or could—“preclude” such a showing. If the privacy clause applies at all to the situation described in the record it applies notwithstanding the statutory exception.,

It. The constitutional right of privacy

Our analysis leads directly to the question whether in this action, without reference to the special master procedure and without reaching search and seizure issues, the procedure the Fraud Unit followed violated the constitutional privacy rights of McKirdy’s patients as expressly stated in article I, section 1 of the California Constitution and as found implicit in the federal Bill of Rights. We conclude that there was no violation.

In general, the state, or a private proponent who invokes the state’s authority by judicial process or otherwise, should (whenever individual privacy rights can reasonably be perceived to be involved) make a showing of predominate state need and sufficiently circumscribed means, in a form susceptible to judicial review, before disclosure is compelled whenever reasonably possible and as soon as reasonably possible in any event. The proponent should also obtain an advance judicial determination of the propriety of the inquiry whenever it is reasonable and practical to do so. The proponent should notify the individual of the proposed or accomplished incursion upon his privacy rights whenever and as soon as reasonably and practically possible. The determination of what is reasonable and practical should be gauged by the circumstances of each case as it arises and should take into account not only the interests of the parties but also the availability and sufficiency of existing procedures.

Thus, in civil litigation the Discovery Act already provides means by which notice must be given, and privacy issues may be fully litigated, before court process to compel discovery will issue. (Code Civ. Proc., § 2016 et seq.; cf. In re Lifschutz, supra, 2 Cal.3d 415 ; Smith v. Superior Court, supra, 118 Cal.App.3d 136 .) In proceedings in which a state administrative agency is empowered to issue its own subpoenas it is enough that the state incorporate into the subpoena declaration a showing on the privacy issues sufficient to sustain the state’s position upon subsequent judicial review. (Board of Medical Quality Assurance v. Gherardini, supra, 93 Cal.App.3d 669 , 680-681.)

In areas of criminal and disciplinary investigation, it has not been the rule that a noticed hearing must be had before disclosure is compelled. The reason seems plain: the state’s legitimate interest in obtaining full and accurate information would be unduly compromised, in such situations, by affording direct or in

Here, the magistrate’s decision to issue the warrant sufficiently implies a determination that the privacy rights of McKirdy’s patients should give way to the limited extent necessary to permit execution of the search warrant. Beall’s affidavit provides an adequate basis for that determination.

In light of the well-documentated high incidence of fraud upon publicly funded health care programs at the expense of the public (cf., e.g., 1977 U.S. Code Cong. & Admin. News, No. 3, at pp. 3040-3050), a legitimate state need to obtain evidence of such fraud is manifest. The specific state need to obtain access to patient records in this action is similarly manifest from Beall’s affidavit. Such records could rationally be supposed to contain contemporaneous records of the services McKirdy actually performed for each of his Medi-Cal patients to supplement, verify, and in some instances render coherent, the statements Beall had obtained from some of the patients. The records also offered an efficient source of leads for further interviews with other patients and a basis upon which to construct questions to be put to such patients.

To evaluate the balance between this need and the countervailing interest of McKirdy’s patients in the privacy of their records it is necessary to analyze the privacy clause itself. The privacy clause was added to the California Constitution by initiative. From a statement in the election brochure the Supreme Court has deduced its purpose and limits: “First, the statement identifies the principal ‘mischiefs’ at which the amendment is directed: (1) ‘government snooping’ and the secret gathering of personal information; (2) the overbroad collection and retention of unnecessary personal information by government and business interests; (3) the improper use of information properly obtained for a specific purpose, for example, the use of it for another purpose or the disclosure of it to some third party; and (4) the lack of a reasonable check on the accuracy of existing records. Second, the statement makes clear that the amendment does not purport to prohibit all incursion into individual privacy but rather that any such intervention must be justified by a compelling interest. Third, the statement indicates that the amendment is intended to be self-executing, i.e., that the constitutional provision, in itself, ‘creates a legal and enforceable right of privacy for every Californian.’” (White v. Davis, supra, 13 Cal.3d 757 , 775.) The

Finally, we believe that the terms of the search warrant as issued, in light of the availability of the very protective procedures of which McKirdy has availed himself, represent within practical bounds sufficient limitations upon the state’s inquiry. To us the key is practicality. McKirdy argues for stricter limits and more elaborate procedures, while undoubtedly the Fraud Unit would have preferred carte blanche to seize and, at leisure, to screen all of McKirdy’s records. At the time the warrant issued neither the Fraud Unit nor the magistrate had means of knowing what McKirdy’s patient records would contain. The warrant might properly have incorporated provision, in light of the apparent privacy interests of the patients, for early screening and for prompt return of matter not clearly relevant to the criminal investigation, perhaps subject to review at a hearing to be noticed once the search was complete. However, we conclude that omission of such unprecedented safeguards from this warrant is not fatal to its validity under the privacy clause. We anticipate that the state’s representatives will take all appropriate steps to assure that no more disclosure will be made of confidential patient information than is clearly necessary to meet the legitimate state need described above.

In both lower courts McKirdy tendered several additional grounds on which, he contended, the warrant should have been quashed. He renews these contentions in this court. It might have been argued that these contentions were never reached in the superior court proceedings which are before us for review but the Attorney General does not make the argument. Instead the Attorney General responds to each of McKirdy’s contentions on the merits. Both because it could rationally be inferred that the superior court did consider and reject each such contention and because we deem it conducive to judicial efficiency, we briefly discuss each of McKirdy’s additional contentions.

1) The affidavit: probable cause

McKirdy argues that “[t]he State’s affidavit, based on stale and uncorroborated information from five clearly unreliable informants, failed to support the Magistrate’s finding of probable cause to seize all Medi-Cal patient files.”

The basic rules of review are clear: “¡T]t is well settled that1 “[t]he warrant can be upset only if the affidavit fails as a matter of law to set forth sufficient competent evidence supportive of the magistrate’s finding of probable cause since it is the function of the trier of fact, not the reviewing court, to appraise and weigh evidence when presented by affidavit. . . .’” (Italics in original.) [Citations.] In examining the affidavit for sufficiency of the facts therein to support the magistrate’s finding of probable cause, it is axiomatic that the courts are to interpret the affidavit in a common sense, nontechnical manner. [Citations.] The reviewing court will pay substantial deference to the magistrate’s determination of probable cause [citation] and may sustain a search where one without a warrant would fail [citation]. ” (People v. Emanuel (1978) 87 Cal.App.3d 205 , 212-213 [ 151 Cal.Rptr. 44 ].)

We conclude that the affidavit was sufficient.

(a) Reliability and corroboration

Beall’s affidavit describes interviews with eight of McKirdy’s Medi-Cal patients. Each of the patients interviewed described consultations with Mc-Kirdy which were substantially shorter than or different in nature from the 45-50 minute individual sessions for which McKirdy (according to other facts recited in the affidavit) subsequently billed.

As presented to the magistrate by Beall’s affidavit, the statements of these patients were the equivalent of hearsay and, accordingly, subject to the rule that the affidavit must (among other things) “contain some underlying factual infor

We agree with the Attorney General. Both in specific detail and in general tenor the statements attributed to each patient were adequately corroborated not only by other facts developed by Beall’s investigation—for example: the initial revelation that McKirdy had often billed for 10 to 15 45-50 minute sessions in a single day; a reported Medi-Cal income level for 1980 which, at the highest rate reportedly applicable to 45-50 minute Medi-Cal therapy sessions, would have required McKirdy to have conducted between seven and eight such sessions every weekday of the year without allowance for holidays or vacations; claim records which correlated with the dates, if not the details, of the sessions described by the patients—but also by the consistency in description of McKirdy’s pattern of behavior among all of the patients’ statements (cf. People v. McFadin (1982) 127 Cal.App.3d 751 , 767 [ 180 Cal.Rptr. 4 ]; People v. Amos (1977) 70 Cal.App.3d 562 , 567 [ 139 Cal.Rptr. 30 ]; People v. Balassy (1973) 30 Cal.App.3d 614 , 621 [ 106 Cal.Rptr. 461 ]).

(b) Staleness

Some of the patient statements summarized in Beall’s affidavit related to events three to four years old at the time the statements were given. McKirdy argues that this and other information in the affidavit are fatally stale.

The argument evokes the established principles that “[a]s a general rule, information is stale, and hence unworthy of weight in the magistrate’s consideration of an affidavit, unless the information consists of ‘facts so closely related to the time of the issue of the warrant as to justify a finding of probable cause at that time.’ [Citations.] No clear cut rule, of course, tells us when the time span must be deemed too attenuated. ‘The length of the time lapse alone is not controlling since even a brief delay may preclude an inference of probable cause in some circumstances while in others a relatively long delay may not do so. Nonetheless, there are obviously some limits.’ [Citation.]” {Alexander v. Superior Court (1973) 9 Cal.3d 387 , 393 [ 107 Cal.Rptr. 483 , 508 P.2d 1131 ].) Under these general principles it would appear that the age of the information

Apparently these general principles are not exactly that to which McKirdy is referring. McKirdy expresses the specific concern that the patients’ statements would be rendered unreliable by a passage of time. So phrased his argument simply recasts a contention we have already discussed. We conclude that the time intervals reflected in the affidavit do not vitiate it.

(c) General sufficiency

Finally McKirdy argues that the affidavit does not establish probable cause to seize all of the patient records ultimately taken. Relying on language in Burrows v. Superior Court (1974) 13 Cal.3d 238 , 250-251 [ 118 Cal.Rptr. 166 , 529 P.2d 590 ], he argues that “the warrant at issue authorized a search of all of Dr. McKirdy’s Medi-Cal patient files. Such a warrant, not limited to the particular patient files for which probable cause was shown, cannot stand . . . .” (Italics in original.)

This argument requires a return to general principles: “[T]he more appropriate standard of probable cause is whether the affidavit states facts that make it substantially probable that there is specific property lawfully subject to seizure presently located in the particular place for which the warrant is sought. [Citations.]” (People v. Cook (1978) 22 Cal.3d 67 , 84, fh. 6 [ 148 Cal.Rptr. 605 , 583 P.2d 130 ].) In our view the affidavit sufficiently establishes a probability that information directly relevant to the criminal investigation would be found in business and professional records then located in McKirdy’s office or home. The zone of direct relevance is sufficiently circumscribed by the affidavit’s references to records concerning Medi-Cal claims in a specified period. Whether all records within the circumscription were “lawfully subject to seizure” is a matter to be resolved not by search and seizure principles but rather by consideration of the patients’ privacy interests. We have already concluded that the affidavit was sufficient to support the magistrate’s implicit finding that the state’s need outweighed the patients’ individual interests in these circumstances. Burrows v. Superior Court, supra, 13 Cal.3d 238 , is factually distinguishable. In Burrows the warrant was issued on the basis of testimony which described only the suspect’s alleged peculations from a single victim and for that reason, among others, was held insufficient to authorize searches of the suspect’s records relevant to other individuals. Here, the affidavit sufficiently demonstrates the probability of fraudulent conduct involving many, if not all, of McKirdy’s Medi-Cal patients.

McKirdy also attacks the search warrant itself, contending that it was “irremediably overbroad” both because it lacked sufficient particularity and because it authorized seizure of records of patients other than those as to whom specific facts had been developed in the affidavit. The second point, for which McKirdy again relies on Burrows v. Superior Court, supra, 13 Cal.3d 238 , is essentially a reiteration of his contention, discussed above, that the affidavit did not establish probable cause as to all of the records seized. McKirdy’s remaining contention is that the warrant lacked particularity sufficient to “place a meaningful restriction” on the objects to be seized. (People v. Superior Court (Williams) (1978) 77 Cal.App.3d 69 , 76 [ 143 Cal.Rptr. 382 ], disapproved as to distinct issue in People v. Superior Court (Meyers) (1979) 25 Cal.3d 67 , 77, fn. 9 [ 157 Cal.Rptr. 716 , 598 P.2d 877 ].)

The warrant describes the property to be seized in five numbered categories, covering appointment records, medical records, official publications, Medi-Cal procedural materials, and Medi-Cal billing records. McKirdy focuses on the medical records category which the warrant describes as follows:

“(2) All medical records that disclose the type and extent of services Arthur McKirdy, M.D., billed the Medi-Cal Program for providing between January 15, 1979 and April 27, 1981. Each of these services is listed in Exhibit 1 [records of McKirdy’s Medi-Cal claims for the period] by the patient’s name, the patient’s Medi-Cal identification number, the date the service was provided, the diagnostic code, the type of service provided, the numbered claim form the claim was presented to the Medi-Cal program on, the amount billed, and the numbered check used to pay for each service billed.”

“Whether the description in the warrant is sufficiently definite is a question of law on which an appellate court makes an independent judgment. [Citation.]” (People v. Superior Court (Williams), supra, 77 Cal.App.3d at pp. 76-77, listing many of the earlier appellate decisions.) Citing federal cases, McKirdy argues that the quoted description violates constitutional limitations because it permits indiscriminate seizure. Apparently to lend evidentiary support to his contention, he asserts that the executing officers did, in fact, engage in an indiscriminate exploratory search. We postpone consideration of the point because McKirdy’s challenge to the warrant itself must be determined on the face of the warrant rather than in light of subsequent events. On its face the quoted description is, in our view, sufficiently particular to satisfy constitutional requirements. While we would, of course, accord respectful attention to pertinent federal appellate decisions, we conclude that neither Application of Lafayette Academy, Inc. (1st Cir. 1979) 610 F.2d 1 , 6, nor United States v. Abrams (1st Cir. 1980) 615 F.2d 541 , 542-543, on which McKirdy relies,

3) Execution of the warrant: exploratory search

McKirdy next contends that by seizing entire files when the warrant authorized only seizure of particular records the Fraud Unit demonstrated that it in fact engaged in a general exploratory search of McKirdy’s office. Therefore, McKirdy argues, all evidence seized must be returned. Again McKirdy relies on Burrows. However, in relevant part Burrows turned not on the scope of the search but rather on the facial sufficiency of the warrant. (Burrows v. Superior Court, supra, 13 Cal.3d at pp. 248-251.) It is clear that law enforcement officers may not use a search warrant directed to specifically described premises and property simply as a predicate for a general and indiscriminate search of the premises, but we disagree with McKirdy’s contention that that is what occurred in this action. The record furnished to us with respect to execution of the warrant is sketchy. We conclude that the executing officers have not been shown to have acted unreasonably. Any materials which may be shown, in further proceedings, to have been beyond the scope of the warrant should of course be returned absent an independent, constitutionally sufficient basis for their retention. We find in the record before us no justification for an order to return all evidence seized.

4) “Misconduct”

Finally, McKirdy complains of what he characterizes as state “misconduct” and “impropriety” in the preparation of the search warrant affidavit. The Attorney General concedes that the previous Board of Medical Quality Assurance licensing action against McKirdy had been resolved by a stipulation in which McKirdy acknowledged misconduct and the parties agreed that all admissions of fact and conclusions of law were made exclusively for the administrative proceeding “and shall not be deemed to be admissions for any purpose in any other administrative, civil or criminal action . . . .” In his affidavit Beall recited that representatives of the board had informed him that there had been an investigation of allegations that McKirdy had unnecessarily prescribed drugs, that an administrative complaint had been filed, that an adjudication had been reached in which the allegations against McKirdy had been found to be true and that McKirdy had been suspended from practice for 30 days. McKirdy contends that this recitation breached the terms of the earlier stipulation and invalidates the warrant. The Attorney General responds that Beall did not breach the stipulation but “simply noted the historical facts of the existence, substance, and disposition of the licensing actions all of which were matters of public record.”

Because we conclude that the search warrant should not have been quashed, we find it unnecessary at this stage to consider whether or to what extent “the Victim’s Bill of Rights” (adopted by our electorate as Proposition 8 on the June 1982 ballot) would be applicable to the facts before us.

The peremptory writ is denied. The alternative writ is discharged.

Rouse, Acting P. J., and Miller, J., concurred.

Petitioner’s application for a hearing by the Supreme Court was denied February 16, 1983. Grodin, J., did not participate therein.