Catar Clinic of Hot Springs LLC v. Robinson

          ORDER

          D.P. Marshall Jr., United States District Judge

         Background.

Some three months ago this Court held a third hearing on preliminary matters in the case. Chase Steppig appeared to show cause why, on Catar's^[*] motion, he should not be held in contempt of this Court's orders about keeping patient information confidential. Michael Casillas also appeared. The Court ordered him and Catar to show cause why, in the circumstances, they shouldn't be estopped to complain about Steppig's actions. The Court's Order convening the hearing and giving notice is No. 79. Some unexpectedly tangled evidentiary issues -about prior criminal charges against Steppig - arose at the hearing. The Court took those issues, plus the merits on contempt and estoppel, under advisement. The press of other matters has prevented the Court from digging back into this case until now. Other disputes have arisen in the meantime. There are proposed new pleadings; there are lawyer issues; and there are some scheduling challenges. This Order aims to address all pending matters.

         Evidentiary Issues.

         Catar's counsel relied on several exhibits while questioning Steppig at the December 2017 hearing. Appendix A lists the Steppig-related exhibits and the Court's final ruling on the admissibility of each. The contested exhibits center on three recent episodes when Steppig was charged with crimes.

         First, the Court disregards everything about Steppig's November 2017 arrest. Exhibits 14 and 15 are excluded. There's been no conviction; the underlying conduct is irrelevant to Steppig's credibility; and, most importantly, this event is (with a minor exception about an undisputed fact) irrelevant to the contempt issues. Fed.R.Evid. 401, 608(b), & 609.

         Second, Steppig pleaded guilty in 2016 to felony insurance fraud in Texas state court. Catar argues that his plea, Exhibit 16, comes in under Rule 609(a)(2) as a conviction involving dishonesty. This is a strong argument but the circumstances are peculiar. The Texas court noted the guilty plea, finding that it was knowing, voluntary, and made with the advice of competent counsel. The state court, though, never found Steppig guilty of insurance fraud. Instead, there was a deferred adjudication, a period of supervision, and then a July 2017 discharge - which specifically said that the court had not adjudicated Steppig guilty. See the next-to-last page of Exhibit 16.

         The lack of a judicial finding of guilt casts doubt on whether a Rule-609-qualifying conviction occurred. See generally 28 CHARLES Alan Wright & Victor J. Gold, Federal Practice and Procedure § 6133 at 224-27 (2d ed. 2012). The surer path is to treat Steppig's guilty plea as a prior act that illuminates his truthfulness. FED. R. EVID. 608(b). Catar's counsel was allowed to (and did) question Steppig about the plea; but counsel must take Steppig's answers as they came, and cannot supplement those answers with the proposed extrinsic evidence. Ibid; United States v. Martz, 964 F.2d 787, 789 (8th Cir. 1992).

         Third, Steppig was arrested in 2015 and indicted in 2016 for falsely holding himself out as a lawyer. Exhibit 18. These incidents fall squarely within Rule 608(b). They're prior acts - not convictions - that go to Steppig's truthfulness. And because they aren't convictions, they're beyond Rule 609's reach regardless of whether the charges were expunged. The Court therefore denies Steppig's motion to file the expungement records under seal, and excludes Catar's proffered expungement petition, Exhibit 20. Those documents are unnecessary. Fed.R.Evid. 403.

         Contempt and Estoppel.

         Based on all the exhibits and all the testimony at the December 2017 hearing, including an evaluation of each witness's credibility, the Court finds these facts.

• Casillas had mixed motives in reporting Terry to the Social Work Licensing Board.

         The NASW Code of Ethics says that "[w]hen necessary, social workers who believe that a colleague has acted unethically should take action through appropriate formal channels (such as contacting a state licensing board ...)." Exhibit 22 at § 2.10(d). Casillas believed Terry had taken confidential patient information from Catar and was using that information to drum up business for her new employer. Fulfilling his ethical obligations, however, was not the only thing that prompted Casillas to act. Catar's business was threatened. And Casillas made the Board complaint right after Catar filed this case, while it was seeking a preliminary injunction, and while all counsel were working toward an order to keep patient information confidential. The Board complaint was also intended to be a second front against the new competitor clinic. Catar made a concerted effort to gather the witness statements. Then, through Casillas, it deployed them. Casillas's testimony that he acted only because of his ethical obligations was not credible.

• Casillas believed that the Social Work Licensing Board would keep patients' identities confidential.

         Casillas so testified. The Court believes him. Plus he relied on the advice of his lawyers.

• The Social Work Licensing Board has kept the patient information confidential.

         The Board provided copies of Casillas's complaint (including the patient statements) to Steppig because he said he was acting for and with Terry in responding to the report. There is no evidence that the Board routinely discloses, or makes public, patient identifying information.

• Steppig has filed a complaint against Casillas with the Social Work Licensing Board.

         This was undisputed.

• Steppig learned about patient Doe's identity, occupation, and treatment during the sealed portion of the preliminary injunction hearing held on 31 August 2017 and 1 September 2017. That was his only source for those facts.

         At the hearing, Doe appeared and identified himself, his occupation, his employer, and the fact that he was a patient of Catar. Steppig did not know any of these facts before the hearing. Steppig and Terry received a copy of Casillas's complaint to the Board about Terry after the hearing.

• Steppig realized at the hearing that Doe could not be licensed in his occupation while receiving the medication prescribed through Catar.

         Steppig so testified. The Court believes him.

• After the injunction hearing, and after getting a copy of Casillas's Board complaint against Terry, Steppig investigated the patients (including Doe) who made statements ...