69 Cal.App.5th 1093
Cal. Ct. App.2021Background
- Petitioner Sanjoy Banerjee, a pain‑management physician, was charged after a preliminary hearing with two counts of insurance fraud (Pen. Code §550(a)(6)) and three counts of perjury (Pen. Code §118) based on 2014–2016 billings to a workers’ compensation insurer through three entities he operated: his professional corporation (PPCC), Kensington Diagnostics, LLC, and Rochester Imperial Surgical Center, LLC.
- The fraud theory: Banerjee referred patients to Kensington and Rochester (entities in which he had a financial interest) in violation of Labor Code §139.3(a) and submitted inflated claims through those entities; one instance involved apparent double billing for the same epidural injections.
- The perjury counts rested on three doctor’s reports in which Banerjee certified under penalty of perjury that he had not violated “section 139.3.”
- Banerjee argued (1) compliance with the written disclosure requirement (§139.3(e)) excuses any §139.3(a) violation; (2) the physician’s office exception (§139.31(e)) covers services he provided through separate legal entities at the same office; and (3) the statutes are unconstitutionally vague.
- The Court held that disclosure under §139.3(e) does not excuse a §139.3(a) prohibition, construed §139.31(e) to permit in‑office services rendered through separate legal entities by the same physician/group practice (so the perjury counts—premised solely on alleged §139.3(a) violations—were dismissed), but found probable cause for the insurance‑fraud counts based on inflated billings, sham‑entity indicia, and specific intent to defraud.
Issues
| Issue | Plaintiff's Argument (People) | Defendant's Argument (Banerjee) | Held |
|---|---|---|---|
| Whether compliance with §139.3(e) (written patient disclosure) excuses a §139.3(a) referral prohibition | §139.3(e) is not an exception; §139.31 lists exceptions and §139.3(e) is not one | §139.3(e) should operate as an exception—disclosure permits the referral | No. Disclosure does not excuse a §139.3(a) violation; the provisions are harmonized and independent |
| Whether §139.31(e) (physician’s office exception) applies when services are provided through separate legal entities at the same physical office | Exception should not cover referrals routed through separate legal entities that present as distinct centers | Exception applies because services were performed at the same physician office by the same physician/practice, even if billed through separate entities | §139.31(e) reasonably construed to cover services rendered through separate legal entities when performed within the same physician’s office or group practice; applied to Banerjee so §139.3(a) did not prohibit his referrals |
| Whether §§139.3(a), 139.3(e), and 139.31(e) are unconstitutionally vague | Statutes give adequate notice and are administrable | Statutes are vague as to required disclosure language and what counts as a “physician’s office” | Not unconstitutionally vague; court adopts a saving construction for §139.31(e) to clarify “physician’s office” |
| Whether probable cause supports insurance‑fraud and perjury charges | Evidence supports both fraud (inflated, double billing; sham entities) and perjury (false certifications of §139.3 compliance) | No §139.3(a) violation, so no perjury; fraud allegations explained by lawful in‑office practice | Probable cause supports insurance‑fraud counts (kept); perjury counts dismissed because §139.31(e) applied and the §139.3 basis for perjury failed |
Key Cases Cited
- People ex rel. Government Employees Ins. Co. v. Cruz, 244 Cal.App.4th 1184 (2016) (elements of health‑care insurance fraud under Pen. Code §550(a)(6)).
- People v. Scofield, 17 Cal.App.3d 1018 (1971) (insurance fraud is a specific‑intent crime).
- People v. Ramirez, 244 Cal.App.4th 800 (2016) (standard of review for denial of Penal Code §995 motion / probable cause at preliminary hearing).
- Cabe v. Superior Court, 63 Cal.App.4th 732 (1998) (perjury requires willful false statement of material matter under oath).
- People v. Williams, 44 Cal.3d 883 (1988) (scope of appellate review of preliminary hearing findings).
- People v. Pieters, 52 Cal.3d 894 (1991) (statutes must be harmonized; interpretive principles).
- Wildlife Alive v. Chickering, 18 Cal.3d 190 (1976) (express statutory exceptions preclude implying others).
- Skilling v. United States, 561 U.S. 358 (2010) (vagueness standard for criminal statutes).
- Hooper v. California, 155 U.S. 648 (1895) (courts should adopt reasonable constructions to save statutes from unconstitutionality).
- Ivory Education Institute v. Dep’t of Fish & Wildlife, 28 Cal.App.5th 975 (2018) (only a reasonable degree of certainty required to avoid vagueness).