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Supreme Court To Weigh Case Of False Testimony

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The U.S. Supreme Court hears arguments Tuesday in a case that sounds more like a John Grisham novel than a Supreme Court case.

The issue is whether police investigators have total immunity from being sued for giving false testimony before a grand jury. The case has all the elements of a spooky saga, involving power, influence and money — all used to silence the critics of Phoebe Putney Memorial Hospital, the largest hospital in Albany, Ga.

The drama begins in 2003, when a general surgery practice of six doctors in Albany wanted to open an outpatient surgery center and found its plans strongly opposed by Phoebe Putney and its political allies.

Charles Rehberg, the business manager for the practice, decided to do a little investigating. Using his skills as a certified public accountant and certified forensic accountant, he got hold of the nonprofit hospital's public IRS form. And he learned some startling things. In 2002, the CEO was earning close to three-quarters of a million dollars a year; the hospital had a bank account in the Cayman Islands; and hospital officers spent $33,000 that year visiting the Cayman Islands. Though a nonprofit, the hospital was charging uninsured patients more than those covered by private insurance, Medicaid and Medicare, and it was aggressively taking poor patients to court when they couldn't pay the full amount.

Rehberg and one of the practice's surgeons, Dr. John Bagnato, were so astonished that they started sending out anonymous faxes to business and community leaders with what they called "Phoebe Factoids."

They sent the faxes anonymously, says Rehberg, because "Phoebe is such a powerful local institution. They're the largest employer. They're the wealthiest institution. They're incredibly connected, politically and otherwise."

The Phoebe Factoids caused quite a stir, and the hospital complained to District Attorney Ken Hodges, asking him to find out who was sending out the factoid faxes.

With the district attorney's subpoena power, it didn't take long to find out that Rehberg and Bagnato were the culprits. At the same time, the hospital also hired its own private investigators, men with whom Rehberg would soon come face to face.

"They pulled into the parking lot, kind of police-raid fashion, real fast," Rehberg recalls, adding they blocked his car, shouted his name and surrounded him. "They proceeded to tell me that they had been investigating me and I was about to be the target of a large lawsuit."

The hospital did indeed file a $66 million lawsuit against the faxers, and when Rehberg and Bagnato didn't back off, they were indicted on charges of telephone harassment, aggravated assault and burglary.

"I was just stunned," says Rehberg. "I hadn't done anything wrong, yet I'd been indicted and I was actually facing up to 47 years in prison."

The Investigator's Evidence

The evidence leading to the indictment was presented to the grand jury by the district attorney's chief investigator, James Paulk.

As it turns out, though, neither Rehberg nor Bagnato had ever been to the house where the alleged burglary and assault took place.

Indeed, as even the prosecutors now concede, there was no burglary, there was no assault and Paulk did not conduct an investigation. His testimony was instead based on what he was told by the DA.

That, however, did not stop the train from proceeding down the tracks. When the indictment ran into trouble, prosecutors brought a second indictment, and then a third. All were thrown out.

Ultimately, the hospital would also drop its $66 million lawsuit against the faxers. At the same time, it settled a countersuit out of court, paying Rehberg an undisclosed and reportedly substantial sum.

That left one lawsuit still standing — a suit brought by Rehberg against the district attorney and his chief investigator, Paulk, seeking damages for abuse of power. That suit, however, was tossed out by a federal appeals court in Atlanta. Tuesday's Supreme Court argument is an appeal of that decision, insofar as it applies to investigator Paulk.

Weighing Immunity

The Supreme Court has ruled that prosecutors are totally immune from damage suits for their trial-related actions, no matter how illegal those actions might have been. The theory is that if prosecutors could be sued, they would be too timid in bringing charges. But investigative actions are not similarly protected, whether it is police or prosecutors doing the investigating. Thus, for instance, the court ruled 25 years ago that if police or prosecutors file false affidavits to obtain an arrest warrant, they can be sued for damages because such affidavits are part of the investigative process, not part of any trial.

So, one of the questions in this case is whether a grand jury proceeding is a trial or investigative proceeding.

Investigator Paulk's lawyer, John Jones, contends that testimony in the grand jury is like testimony at a trial.

"It's the same testimony," argues Jones. "It's the same type of judicial proceeding, and the court has said you get absolute immunity."

But Andrew Pincus, representing Rehberg, counters that the purpose of a grand jury is to investigate.

"If you're the complaining witness, if you're the person who sets the prosecution in motion and allows it to proceed, which clearly Mr. Paulk was, then you shouldn't be absolutely immune. You should be able to be held responsible if what you say is false."

Outlook Unclear

Pincus notes that this lawsuit was brought under a post–Civil War statute enacted by Congress to provide citizens with a remedy for abuses of power by the state, and he says that what happened to Rehberg and Bagnato easily falls within the scope of the statute.

"This incident fits just squarely in what Congress had in mind," contends Pincus. "This is an abuse of government power that caused someone to suffer not only financial injury but a lot of personal hardship and personal angst for him and his family." Pincus argues that Paulk "shouldn't get special absolute immunity that protects him totally no matter how false and how knowingly false his statements were."

Paulk's lawyer concedes that this case does have the aura of a private prosecution. There is, he readily admits, "no question" about that. But Jones thinks adequate remedies exist. "If someone has committed perjury, you prosecute them," he says. Or, if the person is an employee, you "fire them."

But he also contends that investigator Paulk didn't knowingly give false testimony; he just did what he was told to do by the district attorney, only to be left "holding the bag," Jones says.

Perhaps. But Paulk was neither prosecuted nor fired. He remains the district attorney's chief investigator today, and if he were ultimately held liable after trial, it would be the county, through its insurer, that would pay damages, not Paulk.

Those, however, are a lot of ifs, and it is uncertain at best whether the Supreme Court will let there be a damages trial in this case. The conservative majority of the current court has been increasingly reluctant to hold public officials, or municipalities, liable for even gross prosecutorial misconduct.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

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