A federal judge followed through Tuesday on his threat to dismiss criminal charges against personal injury attorney Noel Gage if the government refused to offer immunity to a doctor defense lawyers described as a key witness.
Prosecutors claim Gage, 70, who was charged with mail and wire fraud, belonged to a network of Las Vegas doctors and lawyers who schemed to cheat clients out of honest services.
The government claims the doctors inflated medical costs, protected doctors from medical malpractice lawsuits and shared kickbacks from legal settlements.
After a four-week trial that ended March 11, a jury deliberated for one week before announcing it could not reach a decision.
In his order Tuesday, Senior U.S. District Judge Justin Quackenbush wrote that it was unfair for the government to offer immunity to two doctors accused of being involved in the conspiracy, but not to Dr. Mark Kabins, whose testimony was expected to contradict government witnesses.
Dr. Benjamin Venger and Dr. John Thalgott testified during the trial, supporting the government's argument that they worked with Gage and committed perjury to avoid malpractice lawsuits.
"The integrity of our justice system would be totally compromised if the prosecutor could grant immunity to witnesses whose testimony supports the Government's charges, but reject the same 'use' immunity to other witnesses whose testimony would contradict the Government's position or witnesses," Quackenbush wrote.
First Assistant U.S. Attorney Steve Myhre told Quackenbush the government could not offer immunity to Kabins, because he is a target of its investigation and could be indicted.
Quackenbush noted it is unusual for a judge to force the government to offer a witness protection. "While the decision to grant the limited 'use' immunity is ordinarily left to the discretion of the prosecutor, a basic and constitutional exception is recognized when the potential witness has relevant testimony favorable to the Defendant," he wrote.
Tom Pitaro, Gage's attorney, agreed it is uncommon for a judge to order the government to grant immunity, but he said the circumstances in the Gage trial called for that action.
"Given the way the case was prosecuted, focusing on the actions of Dr. Kabins, we felt it was incumbent on us to request immunity so the jury could hear him," Pitaro said. "His testimony was crucial to a fair trial and crucial to the defense."
Because Quackenbush dismissed the charges with prejudice, the government cannot refile charges. The prosecution is only permitted to appeal the case with the 9th U.S. Circuit Court of Appeals.
A spokeswoman said the U.S. attorney's office is reviewing the order and considering its options.
It's unclear how Quackenbush's actions will affect the government's case, which initially was reported to be a widespread investigation that would bring down dozens of high-profile doctors and lawyers based in Las Vegas.
Howard Awand, a self-proclaimed medical consultant who prosecutors claim was the network's ringleader, is scheduled to go to trial in October.
The charges against Gage stemmed from his treatment of Melodie Simon, who sought legal advice from him after a routine medical procedure left her paralyzed. Thalgott and Kabins performed spinal surgery on Simon in 2000.
Thalgott left for vacation the day after the surgery, when Simon began feeling numbness in her legs and complained to hospital staff. Prosecutors said Kabins waited 11 hours before performing emergency surgery to fix a punctured sac that was causing internal bleeding.
The government claimed Gage had a solid lawsuit against the surgeons that could have resulted in a settlement between $8 million and $10 million. Prosecutors told jurors that Gage abruptly switched courses and instead sued the hospital and the anesthesiologist.
Simon received a $2.3 million settlement. After attorneys fees and associated costs, she received $1.3 million, an amount that she said will never cover the cost of her ongoing medical needs.
The government contends that Gage was persuaded to change his strategy after Awand referred a multimillion-dollar case to him. Gage was promised more lucrative cases if he backed off suing the two surgeons who were part of Awand's network, according to prosecutors.
During the trial, Thalgott testified that he and Kabins met secretively with Gage and the trio agreed to blame the anesthesiologist. Thalgott said the surgeons' testimony at trial was tailored to fit Gage's argument that anesthesiologist Dan Burkhead was at fault.
Quackenbush said Kabins' testimony was crucial in making the trial fair.
Kabins' attorney, David Chesnoff, informed the court that "Dr. Kabins testimony would have sharply contradicted the inculpatory testimony of Dr. Thalgott and other non-examining medical doctors against Mr. Gage," Quackenbush wrote.
Gage's defense team subpoenaed Kabins to testify, but the surgeon invoked his constitutional right not to after he learned he was a "target" of the government's ongoing investigation.
According to Quackenbush, Kabins was interviewed by the government for eight hours just days before the Gage trial. During that interview, Kabins strongly denied any wrongdoing.
"Dr. Kabins denied the commission of any malpractice in the treatment of Ms. Simon and stated that if he had been sued thereon, he would have fully and successfully defended that action," Quackenbush wrote.
Quackenbush said allowing Kabins immunity would not preclude the government from filing charges against him. His testimony, like his earlier interview with prosecutors, can only be used to further the government's investigation; it cannot be used as evidence against him.
During an April 28 hearing, Quackenbush gave the government only days to offer Kabins immunity before he dismissed the charges against Gage. After a flurry of motions submitted by both sides, Quackenbush rendered his decision more than a month later.
Contact reporter Adrienne Packer at email@example.com or 702-384-8710.