In re Wellcare Health Plans, Inc.
2014 U.S. App. LEXIS 11086
| 11th Cir. | 2014Background
- Wellcare entered a deferred prosecution agreement admitting that, through former officers and employees, it knowingly conspired to defraud Florida healthcare programs of about $40 million and agreed to pay $40 million in restitution and $40 million in forfeiture.
- A federal grand jury later indicted several former Wellcare executives; a jury convicted three executives of healthcare fraud and other counts (some counts deadlocked). The government designated Wellcare an unindicted co-conspirator.
- Wellcare moved in district court to be recognized as a “victim” under the Crime Victims’ Rights Act (CVRA) and to obtain restitution under the Mandatory Victims Restitution Act (MVRA); defendants opposed; the government took no position.
- The district court denied Wellcare’s motion, concluding Wellcare was harmed collaterally (not directly) and was effectively a co-conspirator, citing precedent that co-conspirators are not victims for restitution.
- Wellcare filed a mandamus petition under 18 U.S.C. § 3771(d)(3) asking this Court to declare it a victim and order restitution from three convicted executives; the Court reviewed whether traditional mandamus standards apply and then whether the district court clearly abused its discretion.
- The Court denied the petition, holding Wellcare’s admission of participation in the conspiracy and its status as an unindicted co-conspirator (plus its restitution/forfeiture payments) precluded victim status under the CVRA and MVRA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mandamus review applies to CVRA petitions | Wellcare invoked §3771(d)(3) to seek immediate mandamus relief | District court used denial; respondents argued standard should be highly deferential | Court held traditional mandamus review applies (statute contemplates mandamus and compressed timeline) |
| Whether Wellcare is a “victim” under the CVRA | Wellcare argued it suffered direct, proximate harm from executives’ crimes and thus qualifies for CVRA rights and restitution | Defendants argued Wellcare admitted participation and was an un-indicted co-conspirator, so cannot be a victim | Court held Wellcare is not a victim under CVRA because it admitted co-conspirator role and statute bars an accused from relief |
| Whether Wellcare is a “victim” under the MVRA entitled to restitution | Wellcare sought restitution from convicted executives for losses it sustained | Defendants argued MVRA distinguishes perpetrators and victims; a perpetrator cannot be the victim and Wellcare admitted wrongdoing | Court held MVRA precludes restitution to an entity that admitted participation in the offense; a perpetrator cannot be its own victim |
| Whether district court clearly abused discretion in denying victim status/restitution | Wellcare argued denial was erroneous and mandamus is appropriate | Respondents argued no clear abuse given Wellcare’s admissions, DPA, and payments | Court held no clear abuse of discretion and denied mandamus |
Key Cases Cited
- Morissette v. United States, 342 U.S. 246 (1952) (interpretive principle that Congress adopting familiar legal terms imports established meanings)
- Cheney v. United States Dist. Court for the Dist. of Columbia, 542 U.S. 367 (2004) (articulates traditional three-part mandamus standard and rarity of the remedy)
- United States v. Lazarenko, 624 F.3d 1247 (9th Cir. 2010) (co-conspirators generally cannot recover restitution)
- United States v. Reifler, 446 F.3d 65 (2d Cir. 2006) (orders treating co-conspirators as victims are fundamentally erroneous)
- United States v. Brown, 665 F.3d 1239 (11th Cir. 2011) (district courts lack inherent restitution power absent statutory authorization)
- In re Antrobus, 519 F.3d 1123 (10th Cir. 2008) (applies mandamus review to CVRA petitions)
- United States v. Monzel, 641 F.3d 528 (D.C. Cir. 2011) (treats mandamus as available under CVRA)