Judge declines to dismiss case over attorney-client privilege violations

SANTA ANA -- Saying the attorney-client privilege violations warranted "a lesser remedy," a judge on Friday declined to dismiss a large workers' compensation criminal case or remove the Orange County district attorney as prosecutors, but she imposed sanctions that defense attorneys say would make it difficult for the case to proceed.

Orange County Superior Court Judge Sheila F. Hanson issued her order nearly five months after final arguments in a dismissal motion centered on attorney-client privilege violations in the prosecution of two executives at Landmark Medical Management, a doctors' billing service accused of a multimillion dollar fraud involving kickbacks to doctors who prescribed a pain medication cream linked to CEO Kareem Ahmed.

The judge said prosecutors Shaddi Kamiabipour and Scott M. Van Camp don't have a conflict of interest that warrants their removal from the case, but as a sanction, she barred them from working with the district attorney's office investigator who reviewed the confidential material.

She also said they must prove "beyond a reasonable doubt" that any evidence they use in future proceedings was obtained independent from the tainted attorney-client communications.

"The defense has spent great time alleging this is an intentional, deliberate, deceptive act by Ms. Kamiabipour," Hanson said. However, "I found Ms. Kamiabipour to be credible. I did not find that she was deceptive. I did not find that she was dishonest, or that she intended to deliberately impede or pierce any attorney-client privileged information."

"Make no mistake," the judge continued, "I would have preferred to have had much greater care in the manner in which this evidence was seized or reviewed or distributed. ... But I do not believe by any stretch of the imagination it was designed to be intentional or deliberate."

Hanson's sanction regarding evidence is "a whole new front on which to fight this case," said Benjamin N. Gluck of Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow P.C.

"We're pleased that the court agreed with us that the district attorney's office reviewed voluminous amounts of attorney-client privileged material," Gluck told the Daily Journal. "It remains to be seen whether they can proceed with this case in light of the sanctions that she placed on them."

Gluck is representing Ahmed, whose charges include conspiracy to commit medical insurance fraud and two counts of involuntary manslaughter for the death of an infant who was prescribed the pain cream. He and Bird Marella's Nicole R. Van Dyk joined attorneys at Isaacs Friedberg LLP, who represent Landmark marketing manager Yvette Charbonnet, in bringing the motion.

Attorneys representing approximately 12 co-defendants, including two others charged with involuntary manslaughter, joined the motion.

In total, 15 defense attorneys appeared in Hanson's courtroom Friday for her ruling.

Bird Marella and Isaacs Friedberg's litigation led to a 12-day evidentiary hearing last year that included testimony from attorneys at O'Melveny & Myers LLP, Hinshaw & Culbertson LLP, McGuireWoods LLP, Quarles & Brady LLP and other firms who worked as regulatory and criminal defense counsel for Landmark.

Their privileged work for Landmark was seized during a raid of the company's headquarters in Ontario in October 2013, then reviewed by the investigator who Hanson formally banned from the case on Friday.

Some attorneys testified that Kamiabipour falsely claimed she had procedures for handling privileged evidence and would use a special master, but she instead had the investigator review it. Meanwhile, Kamiabipour and Van Camp said the investigator had been walled off from the case, and Kamiabipour saw only six privileged documents but couldn't remember the content.

Defense attorneys wanted the case dismissed because of constitutional violations related to the 6th Amendment right to counsel or, in the alternative, for outrageous government misconduct.

"We have a prosecution team whose every member has been tainted by the review of privileged materials and confidential work product to such a degree that it cannot be undone, it cannot be untangled," said Isaacs Friedberg's Jeffrey B. Isaacs in closing arguments Sept. 14.

Removing the prosecutors was a second option, but Hanson determined that wasn't warranted, either. She said case law regarding the state Penal Code Section 1424, which governs prosecutorial recusals, establishes that recusal is warranted only if a conflict of interest threatens the fair treatment of the defendant. People v. Ahmed, 16CF1351 (Orange Super. Ct., filed May 20, 2016).