NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS MAY 12 2020

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, No. 18-50253

Plaintiff-Appellant, D.C. No. 2:17-cr-00661-DMG-2 v.

INDEPENDENT MEDICAL SERVICES, MEMORANDUM*

INC.; SURGERY CENTER

MANAGEMENT LLC,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California Dolly M. Gee, District Judge, Presiding

Submitted May 8, 2020** Pasadena, California

Before: M. SMITH and OWENS, Circuit Judges, and HUMETEWA,*** District Judge.

The Government appeals the district court’s June 15, 2018 and July 6, 2018

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Diane J. Humetewa, United States District Judge for the District of Arizona, sitting by designation. orders requiring it to pay the fees of two attorneys (Conflict Counsel) appointed to

assist each of Defendants Independent Medical Services, Inc. and Surgery Center

Management LLC as part of a Wheat inquiry into potential conflicts of interest

with their attorneys. See Wheat v. United States, 486 U.S. 153, 160 (1988) (“[A]

court confronted with and alerted to possible conflicts of interest must take

adequate steps to ascertain whether the conflicts warrant separate counsel.”).

While the challenged orders are not final judgments, we have jurisdiction to

hear this appeal pursuant to the collateral order doctrine. See Copeland v. Ryan,

852 F.3d 900, 904 (9th Cir. 2017) (“[T]his court has collateral order jurisdiction to

review interlocutory orders requiring a government litigant to pay for litigation

expenses incurred by the opposing party.”); United States v. Baker, 603 F.2d 759,

761–62 (9th Cir. 1979) (per curiam).

The district court cited its “inherent authority” as the basis for requiring the

Government to pay the Conflict Counsel’s fees. “[W]hile a district court's decision

to exercise its inherent power is reviewed for an abuse of discretion, whether a

district court possessed that power is a question of law reviewed de novo.” Ready

Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402, 404 (9th Cir. 2010).

We have held that “neither the Sixth Amendment nor the CJA entitle a

corporation to appointed counsel.” United States v. Unimex, Inc., 991 F.2d 546,

550 (9th Cir. 1993). And we have rejected a similar argument that a district court

2 has the inherent authority to order the government to pay the attorneys’ fees of

defense counsel. See Baker, 603 F.2d at 762.

The district court relies on an order in an out-of-circuit district court case,

United States v. Burk, No. 3:14-cr-00240-DCG, 2014 WL 2800759, at *12–14

(W.D. Tex. June 18, 2014), to support this exercise of its inherent authority. But in

Burk, the district court’s order appointing corporate counsel was contingent upon

funds being located by the government in either the entity’s corporate treasury or

the United States treasury, Burk, 2014 WL 2800759, at *14, and the court ordered

the defendant entity to produce records relating to its ability to pay, Order

Granting, In Part, Motion for Miscellaneous Relief, Burk, No. 3:14-cr-00240-DCG

(W.D. Tex. Jul. 16, 2014), ECF No. 62. Moreover, when it became clear that

neither the government nor the entity had the funds available to pay for appointed

counsel, the judge refused to appoint counsel. Advisory to the Parties at *2–5,

Burk, No. 3:14-cr-00240-DCG (W.D. Tex. Aug. 12, 2014), ECF No. 77; Excerpt

of Docket Call at *5–9, Burk, No. 3:14-cr-00240-DCG (W.D. Tex. Sept. 25, 2014),

ECF No. 86. Without counsel, the entity could not appear, and eventually, the case

against the entity was dismissed. Order Dismissing Indictment, Burk, No. 3:14-cr-

00240-DCG (W.D. Tex. Mar. 6, 2015), ECF No. 105.

Other cases reflect the options that district courts have in this situation. The

funds of the corporate defendants (or related entities) are often used to pay

3 appointed corporate counsel. See United States v. Chan, No. 3:14-cr-03662-AJB-

2, 2015 WL 545544, at *2–3 (S.D. Cal. Feb. 9, 2015); United States v. Rivera, 912

F. Supp. 634, 644–45 (D.P.R. 1996). In United States v. Human Services

Associates, LLC, 216 F. Supp. 3d 841, 851–52 (W.D. Mich. 2016), the district

court relied upon the government’s willingness to use seized assets for the payment

of appointed corporate counsel. And in other instances, pro bono counsel has been

appointed to represent indigent corporations. See United States v. JB Tax Prof’l

Servs., Inc., No. 2:13-cr-00127-SM-JCW, 2013 WL 6004047, at *5 (E.D. La. Nov.

13, 2013); United States v. Crosby, 24 F.R.D. 15, 16 (S.D.N.Y. 1959).

We recognize, as do the parties, that the district court’s orders were part of a

good faith effort to move this proceeding forward. And we also recognize that

Conflict Counsel have already provided their services to the court. But the district

court’s order was not within the scope of its inherent authority. On remand, the

district court is in the best position to determine, with the cooperation of the

parties, how to best compensate Conflict Counsel for their work.

Accordingly, we VACATE the district court’s June 15, 2018 and July 6,

2018 orders requiring the government to pay the fees of the Conflict Counsel and

REMAND for further proceedings.

VACATED AND REMANDED.

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