author: SELYA, Circuit Judge.

text:
    MAINE MEDICAL CENTER et al., Plaintiffs, Appellees, v. Sylvia M. BURWELL, Secretary, United States Department of Health and Human Services, Defendant, Appellant. Maine Medical Center et al., Plaintiffs, Appellants, v. Sylvia M. Burwell, Secretary, United States Department of Health and Human Services, Defendant, Appellee.
    No. 15-2408, No. 15-2483
    United States Court of Appeals, First Circuit.
    October 27, 2016

      Stephanie R. Marcus, Attorney, Appellate Staff, Civil Division, United States Department of Justice, with whom Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, Thomas E. Delahanty, II, United States Attorney, Andrew K. Lizotte, - Assistant ' United States Attorney, and Mark B. Stern, Attorney, Appellate Staff, Civil Division, were on brief, for defendant.
    William H. Stiles, Portland, ME, with whom Nora Lawrence Schmitt, Boston, MA, and Verrill Dana, LLP were on brief, for plaintiffs.
    Before HOWARD, Chief Judge, SELYA and KAYATTA, Circuit Judges.
   SELYA, Circuit Judge.

The system through which the federal government reimburses hospitals for charity care is among the most arcane known to man, A central feature of this system is a provision through which hospitals receive so-called disproportionate share payments (DSH payments). See 42 U.S.C. § 1395ww(d)(5)(F)(i)(I). These appeals involve a dispute between the Secretary of Health and Human Services (the Secretary) and a group of eight Maine hospitals about DSH payments for fiscal years dating as far back as 1993.

After first clearing a jurisdictional hurdle, we hold that the Secretary properly reopened the disputed years and adequately demonstrated that the Hospitals had received substantial overpayments of DSH funds. We further hold that the myriad defenses to repayment asserted by the Hospitals lack force. Accordingly, we reverse in part and affirm in part.

I. BACKGROUND

Putting these appeals in perspective requires a journey into the “often surreal” Medicare reimbursement regime. See S. Shore Hosp., Inc. v. Thompson, 308 F.3d 91, 94 (1st Cir. 2002). Medicare has a noble purpose: it assists elderly and disabled individuals in accessing health care. See 42 U.S.C. §§ 1395—1395Í¾. This regime is administered by the Secretary through the Centers for Medicare and Medicaid Services (CMS), which contracts with fiscal intermediaries—often private health insurance companies—to act as go-betweens for Medicare providers and CMS. See 42 C.F.R. § 421.100.

Initially, the federal government reimbursed hospitals for the “reasonable cost” of treating Medicáis patients. See, e.g., R.I. Hosp. v. Leavitt, 548 F.3d 29, 39 (1st Cir. 2008). In 1983, however, Congress amended the program to incorporate a prospective payment system through which hospitals are reimbursed predetermined amounts for certain services. See 42 U.S.C. § 1395ww(d); R.I. Hosp., 548 F.3d at 39-40. Congress was concerned, though, that the new payment system might disadvantage hospitals that served disproportionate numbers of low-income patients, so it created the DSH payment system to address this concern. See 42 U.S.C. § 1395ww(d)(5)(F)(i)(I); H.R. Rep. No. 98-861, at 1356 (1984) (Conf. Rep.), as reprinted in 1984 U.S.C.C.A.N. 1445, 2044; S. Rep. No. 98-23, at 54 (1983), as reprinted in. 1983 U.S.C.C.A.N. 143,194.

The DSH payment protocol works this way. Hospitals that serve a “significantly disproportionate number of low-income patients” are known as disproportionate share hospitals (DSH hospitals). 42 U.S.C. § 1395ww(d)(5)(F)(i)(I); see Catholic Health Initiatives Iowa Corp. v. Sebelius, 718 F.3d 914, 916 (D.C. Cir. 2013). Those hospitals receive additional payments—known as DSH payments or DSH adjustments—from the government. See Catholic Health Initiatives, 718 F.3d at 916. Both a hospital’s eligibility for DSH payments and the amount of any such payment depend in large part on the hospital’s disproportionate patient percentage (DPP). See 42 U.S.C. § 1395ww(d)(5)(F)(vi). Generally speaking, the more low-income patients a hospital serves, the higher its DPP and, thus, the higher its annual DSH payment. See Catholic Health Initiatives, 718 F.3d at 916; Metro. Hosp. v. HHS, 712 F.3d 248, 251 (6th Cir. 2013). Nevertheless, this figure does not correlate directly with “the actual percentage of low-income patients served; rather, it is an indirect, proxy measure for low income.” Catholic Health Initiatives, 718 F.3d at 916.

To receive Medicare payments (including DSH adjustments), a Medicare provider submits cost reports to an intermediary at the end of each fiscal year. The intermediary thereafter issues a notice of program reimbursement (NPR) specifying the amount the provider is owed in reimbursements and adjustments. See 42 C.F.R. §§ 405.1801(b)(1), 413.24(f), 421.100; see also MaineGen. Med. Ctr. v. Shalala, 205 F.3d 493, 494, 496 (1st Cir. 2000). The intermediary may reopen a cost report within three years after issuing the NPR and, if necessary, issue a revised NPR. See 42 C.F.R. § 405.1885(a)-(b). A provider may appeal an intermediary’s decision to the Provider Reimbursement Review Board (the Board). See 42 U.S.C. § 1395oo(a)(l)(A)(i). The Secretary has the option of reviewing Board decisions, and the agency’s final decision is subject to judicial review. See id. § 1395oo(f)(l).

In the case at hand, the Secretary maintains that the Hospitals were overinclusive in their DSH payment calculations because they included patient days for patients entitled to both Medicare Part A and Medicaid but not supplemental security income (SSI), known as- non-SSI type 6 days. The inclusion of these days dates back to at least 1997, when one of the plaintiffs (Central Maine Medical Center) settled an administrative cost report appeal. The settlement required the intermediary to include non-SSI type 6 days in its DSH payment calculations. Following this settlement and similar agreements between the intermediary and other hospitals in the late 1990s, the intermediary began telling all Maine hospitals to include such days in their cost reports.

In 2003, the intermediary changed its tune and reopened numerous cost reports to reassess DSH payments. After several meetings between the Hospitals, the intermediary, and CMS, CMS remained unconvinced that non-SSI type 6 days should be included in the DSH payment calculation. Accordingly, the intermediary recouped from the Hospitals approximately $22 million in alleged overpayments.

The Hospitals did not go quietly into this bleak night: they challenged the intermediary’s action before the Board. Their challenge bore fruit. The Board, finding many of the notices of reopening to be ineffectual, ordered the intermediary to restore approximately $17 million to the Hospitals.

The Hospitals’ victory was short-lived. The Secretary elected to review the Board’s decision and reversed. Displeased, the Hospitals sought judicial review. See 42 U.S.C. § 1395oo(f)(l). Following cross-motions for judgment on the administrative record, the district court held that some notices of reopening were fatally flawed and that settlement agreements barred the intermediary from reopening certain cost reports. Neither side was completely satisfied with the district court’s ruling, and these cross-appeals ensued.

II. JURISDICTION

At the outset, a jurisdictional question looms. The parties jointly assure us that we have jurisdiction under 28 U.S.C. § 1291, which permits us to review “appeals from all final decisions of the district courts.” Notwithstanding their shared assurance, we have an independent obligation to confirm our jurisdiction to hear this dispute. See Anversa v. Partners Healthcare Sys., Inc., 835 F.3d 167, 174 n.5, 2016 WL 4527492 (1st Cir. 2016) [No. 15-1897, op. at 174 n.5].

The district court’s initial decision inspires some cause for concern: it directed the parties to inform the court which settlement agreements purported to be “full and final settlements of the issues raised concerning the cost reports for the years at issue.” It went on to provide that if the parties disagreed about which settlement agreements satisfied this standard, the court would establish a dispute-resolution procedure. The parties could not agree on an answer to the question the court had posed. Instead, they jointly petitioned the court to amend its decision and leave the matter unresolved. The court acquiesced to the parties’ suggestion that it did not need to answer the question “at this point” and simply removed the requirement from its decision.

A related matter also may bear on the jurisdictional issue. After the district court handed down its initial decision, the Hospitals requested the payment of interest on the amounts due under the court’s decision. The court denied the Hospitals’ request without prejudice because the precise amounts owed to the Hospitals had not yet been determined.

We begin the probe into our subject-matter jurisdiction with first principles. As a general matter, a final decision is one “that disposes of all claims against all parties.” Bos. Prop. Exch. Transfer Co. v. Iantosca, 720 F.3d 1, 6 (1st Cir. 2013). The decision in this case does not satisfy that general rule; it leaves open the identification of the fiscal years to which the decision applies, as well as the question of interest.

Here, however, the general rule does not apply because this is not an appeal from a garden-variety civil judgment. Rather, it is an appeal taken from the district court’s review of agency action.

This is a critically important distinction because “when a court reviewing agency action determines that an agency made an error of law, the court’s inquiry is at an end: the case must be remanded to the agency for further action consistent with the corrected legal standards.” County of Los Angeles v. Shalala, 192 F.3d 1005, 1011 (D.C. Cir. 1999) (quoting PPG Indus., Inc. v. United States, 52 F.3d 363, 365 (D.C. Cir. 1995)); see Hosp. Ass’n of R.I. v. Sec’y of HHS, 820 F.2d 533, 538 (1st Cir. 1987) (stating that “it is the Secretary who must first apply” the applicable law to the facts). Thus, the court below had gone as far as it could go: even if it had intended to resolve other issues at a later, date, it lacked any authority to do so.. Consistent with the limits of the district court’s authority, we construe its decision as a remand to the agency. See County of Los Angeles, 192 F.3d at 1012.

Even so, a remand order is not usually considered a final decision. See Glob. NAPs, Inc. v. Mass. Dep’t of Telecomms. & Energy, 427 F.3d 34, 41 (1st Cir. 2005). There is an exception, though, for cases “where the agency to which the case is remanded seeks to appeal and it would have no opportunity to appeal after the proceedings on remand.” County of Los Angeles, 192 F.3d at 1012 (quoting Occidental Petrol. Corp. v. S.E.C., 873 F.2d 325, 330 (D.C. Cir. 1989)). This is such a case: the Secretary will have to conduct further proceedings pursuant to the remand order and, unless the Hospitals appeal the outcome of those further proceedings, the district court’s ruling will escape review. See id.

To be sure, a district court’s failure to award or withhold interest may in some circumstances prevent its decision on the merits from being a final judgment. See Comm’l Union Ins. Co. v. Seven Provinces Ins. Co., 217 F.3d 33, 37 & n.3 (1st Cir. 2000). But in this case, the district court’s refusal to pass upon the Hospitals’ request for interest does not alter our analysis. Since the district court had to remand to the agency to determine the precise amounts due to the Hospitals, an award of interest would have been premature. See Palisades Gen. Hosp. Inc. v. Leavitt, 426 F.3d 400, 403 (D.C. Cir. 2005) (holding that district court lacked authority to order specific relief because it had jurisdiction only to vacate agency’s decision, and then had to remand).

We conclude that we have jurisdiction to hear and determine these appeals. Consequently, we proceed to the merits.

III. STANDARDS OF REVIEW

We review the judgment of the district court de novo. See Doe v. Leavitt, 552 F.3d 75, 78 (1st Cir. 2009). Given the nature of the case, we—like the court below—are obliged to apply familiar principles of administrative law. See Assoc’d Fisheries of Me., Inc. v. Daley, 127 F.3d 104, 109 (1st Cir. 1997).

The most basic of these tenets is that a court will disturb an agency’s decision only if that decision is “arbitrary, capricious, an abuse of discretion,” “otherwise not in accordance with law,” or “unsupported by substantial evidence in the administrative record.” S. Shore Hosp., 308 F.3d at 97 (citations omitted). Atop this tenet lies a “further gloss.” Id. When Congress has spoken directly on a particular issue and the traditional tools of statutory interpretation reveal that congressional intent is clear, an inquiring court must give effect to Congress’s intent. See Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43 & n.9, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). If Congress did not directly address the issue, the question reduces to whether the agency’s view is based on a permissible construction of the statute. See id. at 843, 104 S.Ct. 2778. Particular deference is owed to the agency’s interpretation of its own regulations when Congress has entrusted the agency with rulemaking authority. See S. Shore Hosp., 308 F.3d at 97. That deference is most pronounced when the issue involves “a complex and highly technical regulatory program,” such as Medicare, “in which the identification and classification of relevant criteria necessarily require significant expertise and entail the exercise of judgment grounded in policy concerns.” Id (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994)).

IV. THE SECRETARY’S APPEAL

The Secretary claims that the district court erred both by holding certain notices of reopening invalid and by holding that settlement agreements barred the reopening of certain cost reports. We put these claims in context and then explain why we accept them.

A. Validity of Notices of Reopening.

We start with the validity of the notices of reopening. To initiate a cost report reopening, the intermediary must give a hospital written notice. See 42 C.F.R. § 405.1887(a). At that point, the hospital “shall be allowed a reasonable period of time in which to present any additional evidence or argument in support of [its] position.” Id § 405.1887(b). In this instance, the district court ruled that certain notices of reopening were invalid because they failed to comply with the Medicare Provider Reimbursement Manual, CMS Pub. 15-1, Section 2932 (PRM). This ruling illuminates a lack of congruence between the regulations and the PRM. On the one hand, the regulations simply require “written notice” to all parties and allowance of “a reasonable period of time in which to present any additional evidence or argument in support of [the party’s] position.” 42 C.F.R. § 405.1887(a)-(b). On the other hand, the PRM goes further: it requires that the notice advise the provider “as to the circumstances surrounding the reopening, i.e., why it was necessary to take such action, and [notify the provider of its] opportunity to comment, object, or submit evidence in rebuttal.” PRM § 2932(A).

Here, the written notices sent by the intermediary were terse. They stated:

The above referenced Medicare cost report is reopened to address the following issue:
To review and correct the disproportionate share hospital (DSH) payment calculation in accordance with section 1886(d)(5)(F) [of] the Social Security Act and 42 CFR 412.106.
Please contact me at ... if you have any questions regarding this reopening.

The Hospitals do not seriously argue that the notices failed to satisfy the plain language of the regulation. They do argue, however—and the district court found— that the notices did not satisfy the more elaborate criteria limned in the PRM: although the notices advised the Hospitals of the circumstances surrounding the reopening by identifying DSH payments as the relevant issue, they failed to furnish any additional detail and did not offer the Hospitals the opportunity to comment, object, or submit evidence in rebuttal. ■

Essentially, the Secretary makes two arguments. First, she says, that the notices substantially complied with the demands of the PRM. Second, she says that even if they did not, they complied with the regulation—and no more was exigible.

The second of these arguments is dispositive. The regulation itself does not require that a notice of reopening include advice about the opportunity to present evidence and arguments. The regulation controls: as we said in an earlier case discussing the PRM, the PRM is nothing more than an interpretive guide and, as such, “interpretive guides generally do not have the force of law.” S. Shore Hosp., 308 F.3d at 103; accord Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 99, 115 S.Ct. 1232, 131 L.Ed.2d 106 (1995) (concluding that the PRM does not have the force and effect of law).

B. Effect of Settlement Agreements.

This brings us to the Secretary’s contention that the settlement agreements present no barrier to the cost report re-openings in this case. This contention rests on solid ground: the regulations make pellucid that an intermediary lacks the authority to make payments that are not authorized by Medicare. See 42 C.F.R. § 421.100(a)(l)(ii) (directing intermediary to ensure “that it makes payments only for services that are ... [c]overed under Medicare”). We see no reason why an intermediary would have any greater authority when entering into a settlement agreement or administrative resolution. The fact that the Secretary - was not a party to the settlement agreements - reinforces this conclusion. See Howard Young Med. Ctr., Inc. v. Shalala, 207 F.3d 437, 443 (7th Cir. 2000) (holding Secretary not bound by stipulation entered into by intermediary); Appalachian Reg’l Healthcare, Inc. v. Shalala, 131 F.3d 1050, 1053 n.4 (D.C. Cir. 1997) (holding Secretary not bound by intermediary’s statements before the Board). "

We acknowledge that the intermediary represented to at least one hospital (Central Maine Medical Center) that it had the authority to enter into a settlement that included non-SSI type 6 days. Such a representation, however, cannot cloak the intermediary with authority that it does not have. Cf. Sheinkopf v. Stone, 927 F.2d 1259, 1269 (1st Cir. 1991) (recognizing that, under doctrine of apparent authority, agent’s own words are insufficient to bind principal). The Supreme Court has made it nose-on-the-face plain that “anyone entering into an arrangement with the 'Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority.” Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 92 L.Ed. 10 (1947); see United States v. Flemmi, 225 F.3d 78, 85 (1st Cir. 2000) (noting' that “doctrines such as estoppel and apparent authority are not available to bind the federal sovereign”). Here, the Hospitals accepted public funds knowing (or, at • least, being fully charged with knowledge of) the limitations of intermediaries; and any attempt by the Hospitals to claim -that they reasonably relied on the intermediary’s extralegal representations would be empty. See Heckler v. Cmty. Health Servs., 467 U.S. 51, 64-65, 104 S.Ct. 2218, 81 L.Ed.2d 42 (1984); Faith Hosp. Ass’n v. Blue Cross Hosp. Serv., 537 F.2d 294, 295 (8th Cir. 1976) (per curiam); see also Madison Gen. Hosp., Inc. v. United States, No. 141-85 C, 1986 WL 66215, at *2-3 (Cl. Ct. Sept. 19, 1986) (holding that a settlement agreement between a hospital and an intermediary did not bind the government when the intermediary lacked authority to settle the claim).

This ends our analysis of the Secretary’s appeal. The short of it is that we find her arguments largely persuasive. We therefore proceed to the Hospitals’ appeal. As we undertake that task, we are cognizant that unless the Hospitals prevail, the Secretary will be entitled to the relief that she seeks.

V. THE HOSPITALS’APPEAL

In their appeal, the Hospitals advance three main lines of argument. They begin with the proposition that the reopening notices were invalid because they failed to comply with mandatory reopening provisions contained in the regulations. As a fallback, the Hospitals say that even if the notices of reopening were valid, non-SSI ■type 6 days were properly included in DSH calculations. Finally, the Hospitals suggest that - they should either be held harmless or absolved as without fault for including non-SSI type 6 days in their DSH calculations. We examine each line of argument in turn.

A. Effect of Mandatory Reopening Provisions.

The Hospitals assert that the notices of reopening were invalid for a reason different from those identified by the district court. Their view has morphed over time, see supra note 7; but as expressed here, their assertion seems to be that the mandatory reopening provisions of 42 C.F.R. § 405.1885(b) must always be complied with, and those provisions were flouted because there was no documentation of CMS’s instruction to the intermediary to reopen the cost reports. The Secretary demurs, asserting that compliance with the mandatory reopening provisions does not constitute the exclusive method for reopening and that, under the circumstances of this case, the intermediary was at liberty to reopen the cost reports without a written directive from CMS. The district court agreed with the Secretary’s conclusion, and so do we.

It is clear that the regulations allow an intermediary to reopen its own determination. See 42 C.F.R. § 405.1885(a) (explaining that “[a] determination of an intermediary ... may be reopened ... by such intermediary ... either on motion of such intermediary ... or on the motion of the provider”). The regulations also make clear that CMS (acting for the Secretary) has the authority to direct an intermediary to reopen a determination. See id § 405.1885(b)(1) (“An intermediary determination ... must be reopened and revised by the intermediary if ... CMS—(i) Provides notice to the intermediary that the intermediary determination ... is inconsistent with the applicable law ...; and (ii) Explicitly directs the intermediary to reopen and revise_”).

Here, the record indicates that CMS instructed the intermediary to reopen the cost reports, but did not issue a written directive to that effect. Rather, the instruction appears to have taken place orally and informally. The Hospitals’ argument is that, under 42 C.F.R. § 405.1885(b)(1), a written directive from CMS was a condition precedent to reopening. We find this wooden reading of the regulation insupportable: it would nullify an intermediary’s power to reopen if CMS advises it to reopen only in a casual conversation, and that dilution of the intermediary’s power would serve no useful purpose. Indeed, it would pay obeisance to formalism for formalism’s sake.

The more logical reading of the regulation is that it simply makes clear the power structure in play: CMS trumps the intermediary. Should an intermediary and CMS disagree about the need for reopening, CMS may force the intermediary’s hand. Such a situation did not occur here because the intermediary reopened the cost reports as CMS desired. Accordingly, any failure to comply with the mandatory reopening provisions did not abrogate the notices of reopening.

B. Treatment of Non-SSI Type 6 Days.

We turn next to the Hospitals’ contention that the statutory scheme permits providers to include in DSH calculations all patients eligible for either Medicare or Medicaid, whether or not those patients are entitled to SSI. Like the agency and the district court, we reject this contention.

The DPP is the sum of two fractions: the Medicare fraction and the Medicaid fraction. See 42 U.S.C. § 1395ww(d)(5)(F)(vi); Catholic Health Initiatives, 718 F.3d at 916. For the Medicare fraction, the numerator is the number of patient days for patients who were entitled to both Medicare Part A and SSI benefits. See 42 U.S.C. § 1395ww(d)(5)(F)(vi)(I); see also Metro. Hosp., 712 F.3d at 251; 42 C.F.R. § 412.106(b)(2). The denominator is the number of patient days for patients entitled to Part A benefits. See 42 U.S.C. § 1395ww(d)(5)(F)(vi)(I). For the Medicaid fraction, the numerator is the number of patient days for patients who were eligible for coverage under a federally approved state Medicaid plan but who were ineligible for Medicare Part A coverage. See id. § 1395ww(d)(5)(F)(vi)(II); see also Metro. Hosp., 712 F.3d at 251; 42 C.F.R. § 412.106(b)(4). The denominator is the total number of patient days. See 42 U.S.C. § 1395ww(d)(5)(F)(vi)(II).

This taxonomy, as the Secretary interprets it, excludes patients who are entitled to both Medicare Part A and Medicaid, but not entitled to SSI. The Secretary reasons that a patient must be eligible for SSI to be included in the Medicare fraction numerator and must be ineligible for Medicare Part A to be included in the Medicaid fraction numerator. The Hospitals take issue with this reasoning, insisting that all Medicaid- and Medicare-eligible patient days, including non-SSI type 6 days, should be included in the DSH calculation.

Our resolution of these dueling interpretations is guided by the Supreme Court’s landmark decision in Chevron. Where applicable, Chevron requires a two-step approach. See 467 U.S. at 842-43, 104 S.Ct. 2778. At step one, an inquiring court must determine whether Congress has spoken clearly and, if so, must give effect to Congress’s intent. See id. Step two is necessary only if Congress’s intent is unclear: in that event, the question reduces to whether the agency’s view is based on a permissible interpretation of the. statute. See id. at 843,104 S.Ct. 2778.

Here, we need not go beyond step one. The language of the controlling statute is unambiguous, and the Secretary’s interpretation of the statute faithfully tracks its plain language.

The Hospitals nonetheless point out that in a Chevron step one analysis, courts must apply the traditional rules of statutory interpretation. See id. at 843 & n.9, 104 S.Ct. 2778. These rules include the canon that statutes should be construed to avoid absurd results. See Stornawaye Fin. Corp. v. Hill (In re Hill), 562 F.3d 29, 32 (1st Cir. 2009). Seizing on this canon, the Hospitals argue that excluding certain low-income patients from the DSH calculation is absurd because the purpose of the figure is to- compensate hospitals for providing services to disproportionately large populations of low-income patients.

Although the kind of line-drawing that is often necessary in our administrative state may occasionally be unsatisfying at the edges, that discomfiture does not make a rule absurd. See, e,g., Sprandel v. Sec’y of HHS, 838 F.2d 23, 27 (1st Cir. 1988) (per curiam). Absurdity, like beauty, sometimes lies in the eye of the beholder. So it is here: given that the DSH calculation is merely a proxy for low-income patients rather than a reimbursement scheme designed to compensate hospitals for care administered to specific patients, see Catholic Health Initiatives, 718 F.3d at 916, we do not consider the exclusion of certain low-income patients to be absurd. While the rules for Medicare reimbursement may seem inscrutable at times, Congress’s intent with regard to this provision is transparently clear. Thus, the Secretary’s reading of the provision is unimpugnable and our analysis can stop at Chevron step one. See 467 U.S. at 842,104 S.Ct. 2778 (stating that “[i]f the intent of Congress is clear, that is the end of the matter”).

Even if a Chevron step two analysis were required, the result would be the same: it is crystal clear that the Secretary’s interpretation would certainly be permissible under Chevron step two. The Hospitals’ argument rests upon the supposition that Congress must have intended to include in the DSH calculation all patients eligible for either Medicare or Medicaid. But the authorities on which they rely for that supposition, see Jewish Hosp., Inc. v. Sec’y of HHS, 19 F.3d 270 (6th Cir. 1994); Edgewater Med. Ctr. v. Blue Cross & Blue Shield Ass’n/Blue Cross & Blue Shield of Ill., 2000 WL 1146601 (HCFA Admin. June 19,2000), lend no support.

To be sure, the Jewish Hospital court stated that “Congress intended to include all days attributable to Medicaid beneficiaries in the proxy.” 19 F.3d at 276. The context of the case reveals, however, that the Sixth Circuit’s analysis was focused on the meaning of the words “eligible for” medical assistance and “entitled to” benefits, 42 U.S.C. § 1395ww(d)(5)(F), without reference to SSI status. See Jewish Hosp., 19 F.3d at 274-76; see also Metro. Hosp., 712 F.3d at 259 (limiting decision in Jewish Hosp,).

So, too, the Secretary’s decision in Edgewater explains that one apparent purpose of the two fractions that compose the DPP is to prevent double counting of patient days. See 2000 WL 1146601, at *5 n.17. Again, the Secretary was considering the “eligible for” versus “entitled to” dichotomy addressed in Jewish Hospital. See id. at *4-5. The decision simply did not consider the possibility that a patient could be eligible for Medicare and Medicaid but ineligible for SSI. See hi at *4. And to the extent the decision is applicable at all, it is more helpful to the Secretary than to the Hospitals: it recognizes that the plain language of the statute excludes from the Medicaid fraction individuals who are eligible for Medicare - Part A. See id. (noting that “the statutory phrase in the Medicaid proxy ‘but who were not entitled to benefits under Medicare Part A of-this title’ forecloses the inclusion of the days at issue in this case in the numerator of the Medicaid proxy” (quoting 42 U.S.C. § 1395ww(d)(5)(F)(vi)(II))).

The Hospitals argue that these two decisions require us to hold that an interpretation of the statutory provision that does not count a particular low-income patient at all must be an unreasonable synthesis of congressional intent. But—as we have shown—the authorities upon which the Hospitals rely do not support, let alone require, such a view, and we refuse to take such a gargantuan leap. We believe that the Secretary, at the very least, acted permissibly in adhering to the plain language of the statute, which is typically the best evidence of Congress’s intent. See Metro. Hosp., 712 F.3d at 269 (stating that the “exclusion of at least some dual-eligible patient days ... appears to be inevitable based on” the statute’s structure).

C. Confession and Avoidance.

In a last-ditch effort to stem the tide, the Hospitals attempt to confess and avoid. This attempt takes two forms.

First, the Hospitals claim that, even if their DSH calculations were incorrect, they should be held harmless from any obligation to refund overpayments. This claim rests on a program memorandum issued by the Secretary, see Program Memorandum HCFA-Pub. 60A, No. A-99-62 (Dec. 1, 1999) (PM A-99-62), which instructed intermediaries to refrain from recouping “the portion of Medicare DSH adjustment payments previously made to hospitals attributable to the erroneous inclusion of general assistance or other State-only health program, charity care, Medicaid DSH, and/or ineligible waiver or demonstration population days in the Medicaid days factor used in the Medicare DSH formula.” The Secretary argued below—and the district court found—that this hold-harmless provision does not extend to the obligation to refund DSH over-payments based on non-SSI type 6 days. We agree.

Read in context, PM A-99-62 plainly concerns a different DSH calculation issue. Historically, “hospitals and Intermediaries [had] relied, for the most part, on Medicaid days data obtained from State Medicaid agencies to compute Medicare DSH payments and ..; some of those agencies commingled the types of otherwise ineligible days ... with Medicaid Title XIX days.” PM A-99-62. Seen in this light, the hold-harmless provision in PM A-99-62 must refer to the calculation of Medicaid-eligible patient days, not to whether Medicaid- and Medicare-eligible patients who were not entitled to SSI could be included in the DSH calculation.

Nor can there be any legitimate doubt about the sweep of the hold-harmless provision. PM A-99-62 itself states that it “is not intended to hold hospitals harmless for any other aspect of the calculation of Medicare DSH payments or any other Medicare payments.”

In yet another effort to confess and avoid, the Hospitals attempt to skirt liability by insisting that they should be excused as being “without fault” for collecting DSH overpayments because they reasonably relied on the incorrect advice of their intermediary. See 42 U.S.C. § 1395gg. The Secretary rejoins that the statute on which the Hospitals rely, 42 U.S.C, § 1395gg, does not apply to. DSH overpayments because they are aggregate payments as opposed to reimbursement for services provided on behalf of a specific patient, We. agree with the district court that the Secretary’s argument carries the day.

Section 1395gg sets forth a framework for recovering overpayments made to or on behalf of individuals. As part of this scheme, Section 1395gg(b) authorizes the Secretary to recoup overpayments from individuals and providers when the over-payments were made “for items or services furnished an individual,” Section 1395gg(c) carves out an exception: it provides that overpayments made “with respect to an individual who is without fault” should not be recouped if doing so “would defeat the purposes of [Social Security] or [Medicare] or would be against equity and good conscience.” Congress’s repeated references to “individuals” in the text of the statute convince us that the “without fault” language in. Section 1395gg(c) does not apply to DSH payments, the calculation of which- does involve individual patient days but only as a means of evaluating a provider’s patient population income level. See Visiting Nurses Ass’n of Sw. Ind., Inc. v. Shalala, 213 F.3d 352, 357 (7th Cir. 2000) (“Because the only adjustment contemplated by § 1395gg(b) is an adjustment of payments to individuals, no waiver under § 1395gg(c) is possible for these providers.”); see also Medicare Program; “Without Fault” and Waiver of Recovery from an Individual as it Applies to Medicare Overpayment Liability, 63 Fed. Reg. 14,-506, 14,510 (Mar. 25, 1998) (“[T]he without fault provisions under [42 U.S.C. § 1395gg] do not extend to aggregate overpayment issues, such as Medicare cost report errors, because liability for an individual claim cannot be shifted to a specific individual”).

The Hospitals make one final argument. They protest that during meetings at which the Hospitals, CMS, and the intermediary were all represented, the attendees discussed whether the Hospitals satisfied the “without fault” requirements and agreed that the provision applied. But even if this is an accurate depiction of the parties’ negotiations, it does not preclude the Secretary from asserting a different view now. In the absence of detrimental reliance—and we see none here—the Secretary is not foreclosed from changing a position that she has come to conclude is rooted in a mistaken interpretation of the statutory scheme. See Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 417, 113 act. 2151, 124 L.Ed.2d 368 (1993).

VI. CONCLUSION

We need go no further. For the reasons elucidated above, we reverse the judgment of the district court as to the cost reports for which the Board and the district court found that the notices provided to specific plaintiffs were inadequate and as to the cost reports for providers and years covered by written settlement agreements entered into by individual providers and the intermediary. As to all other plaintiffs and cost years, we affirm the district court’s entry of judgment for the Secretary. All parties shall bear their own costs.

Reversed in part, affirmed in part, and remanded with instructions to enter judgment in favor of the Secretary.

      . The eight hospitals (collectively, the Hospitals) are Maine Medical Center, Central Maine Medical Center, Mid Coast Hospital, Eastern Maine Medical Center, Mercy Hospital, Northern Maine Medical Center, Southern Maine Medical Center, and Maine General Medical Center.

      . Unless otherwise indicated, we refer throughout to the version of the regulations in effect in 2003 (when the notices of reopening that undergird these appeals were issued).

      . For ease in exposition, we do not distinguish between the district judge and the magistrate judge but, rather, take an institutional view and refer throughout to the district court.

      . In all events, the administrative record does not contain all of the documentation needed to permit a determination as to which settlement agreements were full and final settlements of the issues raised concerning the cost reports for the years at issue. Ideally, the agency—not the district court'—should be the body to augment the record. See Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973) (per curiam) (explaining that “the focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court”).

      . We limit our discussion under this heading to the district court's rationale for invalidity. The Hospitals’ other arguments for invalidity, rejected by the district court, are discussed infra in connection with our discussion of the Hospitals’ appeal.

      . Because we agree with the Secretary that the PRM did not bind her, we need not decide whether she substantially complied with its notice requirements. We note, though, that the Hospitals do not appear to have suffered ány prejudice because the notices failed to comport fully with the PRM's guidance. The Hospitals’ representatives attended numerous meetings to discuss the DSH adjustments and took full advantage of ample opportunities to present their side of the story. This alone suggests that the Secretary may well have substantially complied with the notice provisions of the PRM. See, e.g„ Boateng v. Inter-Am. Univ., Inc., 210 F.3d 56, 61 (1st Cir. 2000) (finding substantial compliance where error was harmless); In re Hollingsworth & Whitney Co., 242 F. 753, 760-61 (1st Cir. 1917) (finding substantial compliance where parties were not denied the opportunity to present the merits of their case in any material respect).

      . Before the agency, the Hospitals advanced a more nuanced argument: that the settlement agreements barred the intermediary from reopening the cost reports under its permissive reopening authority, meaning that CMS had to follow the mandatory reopening protocols if it did not want to comply with the agreements. See 42 C.F.R. § 405.1885(a)-(b). This nuanced argument was mentioned only briefly in the district court and evaporated entirely on appeal. Consequently, we treat it as waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990). For the sake of completeness, though, we note that the settlement agreements do not seem to bar the intermediary from reopening under its permissive authority; they appear only to require the intermediary to issue revised NPRs, without discussion of whether the revised NPRs could be reopened.

      . Knowing the circumscribed authority of intermediaries, the utter lack of any documentation concerning the intermediary's purported authority to include previously excluded days in DSH computations should have constituted a flashing red light, easily visible to the Hospitals.

      . The statute provides in pertinent part:
      the term “disproportionate patient percentage” means, with respect to a cost reporting period of a hospital, the sum of—

        (I) the fraction (expressed as a percentage), the numerator of which is the number of such hospital’s patient days for such period which were made up of patients who (for such days) were entitled to benefits under part A of this subchapter and were entitled to supplementary security income benefits (excluding any State supplementation) under subchapter XVI of this chapter, and the denominator of which is the number of such'hospital’s patient days for such fiscal year which were made up of patients who (for such days) were entitled to benefits under part A of this subchapter, and
      (II) the fraction (expressed as a percentage), the numerator of which is the number of the hospital’s patient days for such period which consist of patients who (for such days) were eligible for medical assistance under a State plan approved under sub-chapter XIX of this chapter, but who were not entitled to benefits under part A of this subchapter, and the denominator of which is the total number of the hospital’s patient days for such period.
      42 U.S.C. § 1395ww(d)(5)(F)(vi) (emphasis added).


source: Caselaw Access Project

author: BARRON, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Kormahyah KARMUE, Defendant, Appellant.
    No. 15-1990
    United States Court of Appeals, First Circuit.
    October 28, 2016

      Michael C. Bourbeau, with whom Bour-beau & Bonilla, LLP, Boston, MA, was on brief, for appellant.
    Donald C. Lockhart, Assistant United States Attorney, with whom Peter F. Ne-ronha, United States Attorney, was on brief, for appellee.
    Before TORRUELLA, KAYATTA, and BARRON, Circuit Judges.
   BARRON, Circuit Judge.

Kormahyah Karmue appeals his convictions on three federal counts: conspiracy to commit arson, wire fraud, and mail fraud. He also challenges his sentence. The convictions and sentence relate to Karmue’s alleged participation in a scheme to burn down a tenement house that Karmue owned so that he could collect the insurance proceeds. We affirm.

On May 27, 2014, following the fire at the tenement house, Karmue was indicted for conspiracy to commit arson, 18 U.S.C. § 844(n); arson, 18 U.S.C. § 844(1) and 18 U.S.C. § 2; wire fraud, 18 U.S.C. § 1343; mail fraud, 18 U.S.C. § 1341; and theft of government funds, 18 U.S.C. § 641. On April 7, 2015, Karmue pled guilty to theft of government funds. He then proceeded to trial on the other counts. After a jury trial, he was convicted on all counts except arson, 18 U.S.C. § 844(i) and 18 U.S.C. § 2. Karmue now challenges his conviction on three different grounds. We consider each in turn.

I.

Karmue first seeks the reversal of his convictions on the ground that the District Court erred by conducting a portion of what is known as a Daubert hearing in his absence. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). The hearing was held to determine whether to permit an arson investigator, Sean Reddy, to testify at trial not only as a fact witness as the officer who investigated the fire, but also as an expert for the government regarding the cause of the fire.

Karmue’s attorney at the time, George West, was present for the first day of the Daubert hearing, and so, too, was Karmue. But Karmue did not attend the second day of the Daubert hearing, and West objected that, given Karmue’s absence, the holding of the hearing would violate Karmue’s Sixth Amendment rights. Nonetheless, the District Court proceeded with the second day of the hearing. On appeal, Karmue reasserts his Sixth Amendment challenge, and also contends that the decision to proceed with the Daubert hearing in his absence violated both his Due Process rights and Federal Rule of Criminal Procedure 43(a)(2).

Karmue raised the Sixth Amendment challenge below, and so our review, is de novo. United States v. Liriano, 761 F.3d 131, 136 (1st Cir. 2014). We have previously stated that the Confrontation Clause “has historically applied to testimony elicited at, and evidence produced for, trial,” and we have noted that the “confrontation right has never been extended beyond the context of a trial.” United States v. Mitchell-Hunter, 663 F.3d 45, 51 (1st Cir. 2011). But, we have not completely foreclosed the possibility that the Confrontation Clause might apply to a pretrial hearing, of some sort, see id. at 53, and we also have not previously considered the' specific issue of whether a pretrial. Daubert hearing might qualify as a hearing to which ■ the right guaranteed by the Confrontation Clause could attach.

In. this case, however, Karmue’s challenge fails even if we were to assume that the Confrontation Clause does apply, as any error was harmless beyond a reasonable doubt. See United States v. Sepúlveda-Contreras, 466 F.3d 166, 171 (1st Cir. 2006). The record fully supports the Daubert ruling that the District Court made. Karmue neither argues that the District Court’s ruling was erroneous nor explains how his" presence at the second day of the hearing could conceivably have revealed any error. In addition, at trial, Karmúe’s counsel objected to Reddy providing expert testimony only as to the portion of Reddy’s' testimony that concerned his opinion that the fire was deliberately set. Yet there was overwhelming independent evidence that the fire was deliberately set. See United States v. Godfrey, 787 F.3d 72, 77-78 (1st Cir. 2015) (holding that overwhelming evidence of the fact for which the challenged testimony was entered suffices to show that an error was harmless beyond a reasonable doubt).

Karmue separately contends that he had a Due Process right to be present at the Daubert hearing and that this right was infringed. Specifically, he contends that there wás a Due Process violation because his presence at the Daubert hearing would have “ha[d] a relation, reasonably substantial, to the fulness of his opportunity to defend against the charge.” Kentucky v. Stincer, 482 U.S. 730, 745, 107 S.Ct. 2658, 96 L.Ed.2d 631 (1987).

Karmue did -not raise this issue ■ below, however, and so our review is ohly for plain error. .Karmue thus must show, among other things, both that any error was clear or obvious and that it affected his substantial rights. United States v. Savarese, 686 F.3d 1, 12 (1st Cir. 2012). He has done neither.

.Even assuming that, this pretrial héaring is the type to which the Due Process right to be present described in Stincer applies, the right is infringed only if the defendant’s presence would have “contribute[d] to the fairness of the procedure.” Stincer, 482 U.S. at 745, 107 S.Ct. 2658. It is not clear or obvious, however, what the benefit of Karmue’s presence at the hearing would have been. While Karmue does contend in his briefing to us that he would have been able to assist counsel at the Daubert hearing, he does not explain what assistance he could have rendered in a hearing about Reddy’s credentials as an expert. Nor does Karmue make any concrete argument about- how his absence on .that second day of' the Daubert hearing impeded his ability to, effectively assist his lawyer in preparing for Reddy’s cross-examination at trial.

Moreover, Karmue’s Due Process challenge fails on plain error review because— even assuming a clear or obvious error— Karmue cannot demonstrate that the District Court’s decision to proceed with the hearing in Karmue’s absence “affected [his] substantial rights, which in the ordinary case means it affected the outcome of the district court proceedings.” United States v. Fernández-Hernández, 652 F.3d 56, 64 (1st Cir. 2011). As we have already explained, there was overwhelming independent evidence that the fire was deliberately set, and Karmue’s “conclusory allegations do not establish the required showing of prejudice to prevail under the plain error standard.” United States v. Hayes, 40 F.3d 362, 366 (11th Cir. 1994).

Finally, Karmue contends that the decision to proceed with the hearing in his absence violated Rule 43(a) of the Federal Rules of Criminal Procedure. Because Karmue raises this challenge, too, for the first time on appeal, our review is, again, only for «plain error. And again, Karmue fails to show either that any error was clear or obvious or that it affected his substantial rights.

The text of Rule 43(a) provides that the defendant must be present at “every trial stage.” Fed. R. Crim. P. 43(a) (emphasis added). The Advisory Committee notes then explain that this rule, which “set[s] forth the necessity of the defendant’s presence at arraignment and trial[,] is a restatement of existing law. This principle does not apply to hearings on motions made prior to or after trial.” Fed. R. Crim. P. 43 advisory committee’s notes to 1944 adoption (emphasis added) (citations omitted).

Karmue identifies no precedent holding that the Rule—despite its text and the Advisory Committee notes—somehow does apply to the pretrial hearing at issue here, and two circuits have held that it does not apply to other kinds of pretrial hearings. See United States v. Burke, 345 F.3d 416, 423-24 (6th Cir. 2003) (no right to be present at a pretrial suppression hearing); Taylor v. United States, 385 F.2d 835, 836 (8th Cir. 1967) (per curiam) (no right to be present for a hearing on motions in li-mine). Karmue thus cannot show that, in this case, there was a “clear or obvious” violation of Rule 43(a). See Savarese, 686 F.3d at 12.

Nor can Karmue meet the prong of the plain error standard that requires him to show that any clear or obvious violation of Rule 43(a) prejudiced his substantial rights. See Fernández-Hernández, 652 F.3d at 64. As we have explained, there was, wholly apart from Reddy’s expert testimony, overwhelming independent evidence that the fire was deliberately set.

II.

Karmue’s next challenge concerns a correction that the government was allowed to make, post-trial, to a statutory citation that was contained in Count I of the superseding indictment. Karmue contends that this change was impermissible, and that, had he been aware of the correct statutory citation prior to trial, his decision not to plead guilty and to proceed to trial would have been affected (though he does not say precisely how).

A.

The relevant facts as to this aspect of Karmue’s challenge are as follows. Prior to the correction of the citation, the caption to Count I of the superseding indictment, for conspiracy to commit arson, cited to 18 U.S.C. § 844(m). On June 9, 2014, the government moved to correct the citation pursuant to Federal Rule of Criminal Procedure 7(c)(2). The government contended that the caption to the count should have cited to 18 U.S.C. § 844(n), rather than to § 844(m).

Karmue’s attorney at the time, Edward Pepe, did not oppose the government’s motion. On June 17, 2014, the Magistrate Judge assigned to the case granted the motion in a text order. The order was entered on Karmue’s docket sheet. But that order—for some reason—made the correction only as to the indictment for Karmue’s co-defendant.

Following the jury’s verdict,-West, who had replaced Pepe as Karmue’s counsel, filed Karmue’s objection to the presen-tence report with the District Court. The objection contended that the presentence report erred in calculating the recommended sentence based on 18 U.S.C. § 844(n), which carries a minimum sentence of five years, rather than on 18 U.S.C. § 844(m), which imposes no such mandatory minimum sentence. The objection explained that the basis for the calculation in the presentence report was wrong because Karmue’s indictment at' that point still referred to 18 U.S.C.'§ 844(m).

The next day, the District Court granted the government’s June 2014 motion to correct Karmue’s indictment to fix the citation. The sentencing hearing then followed approximately one month later. During that hearing, the District Court addressed Karmue’s pending objection to the presen-tence report.

West acknowledged at the hearing that Karmue’s prior counsel, Pepe, had not objected to the government’s motion to correct the indictment and that the Magistrate Judge' had in fact granted that motion (although the order granting that motion had made the correction only as to the co-defendant’s indictment). West then stated that, based on those two facts, “the air has gone out of my argument that I thought I was going to be able to make here to fight the five-year mandatory minimum in this case.” West went on to say, however, that he was “not waiving Mr. Karmue’s heartfelt conviction that that motion under Rule 7(c)” should- not have been granted.

B.

Karmue now contends on appeal that the-District Court erred in permitting Count I of the superseding indictment -to be altered post-trial and -that he was prejudiced in consequence. But, even assuming that this challenge was not waived below, the challenge has no merit.

Under Rule 7(c)(2) of the Federal Rules of Criminal Procedure, “[ujnless the defendant was misled and thereby prejudiced, neither an error in the citation nor a citation’s omission is a ground to ... reverse a conviction.” Karmue cannot show the required prejudice here.

In United States v. Isabel, 945 F.2d 1193 (1st Cir. 1991), we found no prejudice from a mistaken statutory citation in an indictment because the mistake was “patent,” and “the original indictment placed appellant] on reasonable notice that [he] was being charged with the ... conspiracy expressly alleged in the text of the indictment.” Id. at 1197 (emphasis in original). The same is true here.

The caption for Count I of the indictment reads: “Conspiracy to Commit Arson, 18 U.S.C. § 844(m).” The text of that count of the indictment then describes the offense. In doing so, the count states that “defendants Kormahyah Karmue and Gba-bia Kollie ... did unlawfully, willfully, and knowingly combine, conspire, confederate, and agree with each other to maliciously damage and destroy by means of fire and explosive materials, the building ... in violation of 18 U.S.C. § 844(i).”

Consistent with this language from the indictment, § 844(i) sets forth an offense that is committed by “[w]hoever maliciously damages or destroys ... by means of fire or an explosive, any building.” And, a count that details a conspiracy to violate § 844(i) is clearly one detailing a violation of § 844(n), not § 844(m). That is because § 844(n) applies to persons who conspire to commit any crimes under any part of § 844 other than § 844(h), while § 844(m) applies only to persons who conspire to violate § 844(h). 18 U.S.C. §§ 844(m)-(n).

Thus, the only possible confusion engendered by the text of Count I of the indictment arises not from its “operative language” but rather from its caption’s reference to § 844(m), rather than to § 844(n). But, as that reference in the caption is a “patently] mistake[n]” one, and the “operative language” of the unamended indictment “placed appellant[] on reasonable notice that [he] w[as] being charged with the ... conspiracy expressly alleged in the text of the indictment,” Isabel, 945 F.2d at 1197 (emphasis in original), there was no prejudice here.

Moreover, the government’s motion to correct the citation was on Karmue’s docket two weeks after the superseding indictment containing the mistake was filed, and the government’s proposed jury instructions, filed five months before trial, referenced the appropriate statutory provision. Thus, Karmue’s counsel had notice of the correct citation well before trial. Indeed, further undermining the contention that the mistaken citation misled and thereby prejudiced Karmue is the fact that Kar-mue’s then-counsel referred to the correct provision in a motion in limine filed two months before trial.

For these reasons, we conclude that Karmue has failed to show the prejudice that he must to bring a successful challenge under Rule 7(c)(2). Accordingly, we reject this challenge.

III.

Karmue’s final challenge concerns the District Court’s refusal to appoint new counsel at sentencing and instead to give Karmue the choice only either of proceeding pro se or of keeping the appointed counsel that he had at the time and with whom he was then allegedly in serious conflict. Finding no error, we reject Kar-mue’s contention that his sentence must be vacated and. new counsel appointed for re-sentencing.

A.

The facts relevant to this challenge are as- follows. Just prior to sentencing, Kar-mue filed a letter with the District Court that alleged, among other things, that his then-court-appointed counsel, West, had pressured him to plead guilty, failed to communicate with him, failed to diligently represent him at trial, and wrongly failed to contest the correction of the-indictment. Karmue thus requested that new court-appointed counsel be substituted for West.

That same day, West filed his own motion, in which he sought leave to withdraw as appointed counsel. In his one-page motion, West stated that there existed an “inherent conflict of interest” between West and Karmue “such that the attorney client relationship cannot continue, as [West] has been effectively discharged.” West gave no. specific grounds and simply referred to Karmue’s letter, which was appended to the motion.’

At the beginning of the sentencing hearing, which was held on August 26,. the District Court addressed both Karmue’s letter and West’s motion to withdraw. The District Court explained that Karmue’s letter constituted a pro se filing by a represented defendant and thus that he would not treat the letter as a motion -to substitute counsel. The District Court then proceeded to address West’s motion to withdraw as counsel.

In the course of doing so, the District Court reviewed the allegations about counsel’s performance at trial that Karmue had set forth in his letter and that West had referenced in his motion to withdraw. The District Court also engaged in an extended colloquy with West about the nature of the counsel’s conflict with Karmue and its impact on West’s ability to represent Karmue at sentencing. During that colloquy, West, when asked whether he could still fulfill his professional responsibilities in representing Karmue at sentencing, stated that he felt “perfectly, professionally ready” to do so.

B.

Our review of ■ the District Court’s ruling refusing to substitute counsel is for abuse of discretion. United States v. Myers, 294 F.3d 203, 207 (1st Cir. 2002). Karmue argues that the District Court did abuse its discretion because the District Court failed to question Karmue regarding West’s motion before denying it. But we do not agree.

Our cases caution district courts against denying such motions without hearing from the defendant. See United States v. Prochilo, 187 F.3d 221, 228-29 (1st Cir. 1999). We have also explained, however, that “there is no invariable model for a trial court’s inquiry into an allegedly embattled attorney-client relationship.” Myers, 294 F.3d at 207. We have instead emphasized the considerable discretion that district courts have to make such rulings, and explained that we will reverse such a decision for an abuse of discretion only after considering “the adequacy of the [trial] court’s inquiry[,] ... the timeliness of the motion for substitution^] and the nature of the conflict between the lawyer and client.” Id.

Based on those considerations, we cannot say that there was an abuse of discretion here. Faced with allegations of a conflict between counsel and defendant raised just prior to sentencing, the District Court did not ignore them or dismiss them summarily. Rather, at the sentencing hearing, the District Court examined the substance of that conflict and how it bore on counsel’s capacity to continue to represent the defendant. The District Court did so, moreover, by considering the defendant’s own recent filing describing that conflict and engaging in an extended colloquy with defendant’s counsel about its substance.

Then, on the basis of that inquiry, the District Court reasonably concluded that the alleged conflict was based on a dispute over trial strategy and thus was not of a kind that necessitated the appointment of new counsel for sentencing. Supporting the reasonableness of the District Court’s on-the-ground assessment was defense counsel’s own statement that he did not view the conflict as one that precluded him from carrying out his professional duties at sentencing. Supporting that conclusion, too, is the fact that the request to substitute counsel was made just two days before sentencing, even though it was based on disagreements over trial strategy that had allegedly broken out months before. Moreover, Karmiie did not offer any explanation in his letter for why he had not complained about the allegedly disabling conflict with counsel until two days before sentencing. As a result, as in Myers, “the chronology plainly militates against the granting” of the motion to withdraw. 294 F.3d at 207.

In light of these facts, we find that the District Court did not abuse its discretion in declining to substitute counsel at sentencing. Accordingly, we reject Karmue’s challenge to his sentence.

IV.

The decision of the District Court is affirmed.

      . A number of other witnesses testified that Karmue’s alleged co-conspirators bought gasoline, brought it to • Karmue’s- building, and poured it on the floor, causing the fire. In addition, surveillance footage shows the co-conspirators purchasing the gasoline and entering the building with the gasoline.


author: LYNCH, Circuit Judge.

text:
    Marisol QUEZADA-CARABALLO, Petitioner, v. Loretta E. LYNCH, Attorney General of the United States, Respondent.
    No. 15-2563
    United States Court of Appeals, First Circuit.
    October 31, 2016
    Randy Olen on brief for petitioner.
    Enitan 0. Otunla, Trial Attorney, Office of Immigration Litigation, Civil Division, U.S. Department of Justice, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and John W. Blakeley, Assistant Director, on brief for respondent.
    Before HOWARD, Chief Judge, LYNCH and KAYATTA, Circuit Judges.
   LYNCH, Circuit Judge.

Marisol Quezada-Caraballo, a native and citizen of the Dominican Republic, petitions for review of the Board of Immigration Appeals’ (“BIA”) decision affirming an Immigration Judge’s (“IJ”) denial of her application for a good-faith-marriage waiver of the joint-filing requirement for a Petition to Remove Conditions on Residence (“Form 1-751 waiver”). See 8 U.S.C. § 1186a(c)(4)(B). We deny the petition.

I.

As she admitted to the IJ, Quezada-Caraballo made a series of misrepresentations to advance her Form 1-751 waiver application. During two interviews with United States Citizenship and Immigration Services (“USCIS”), she claimed that her ex-husband, Jose Garay, lived with her in Rhode Island when, in fact, she and Garay had separated before she moved from Puerto Rico to the continental United States, and he had never lived with her in Rhode Island. Quezada-Caraballo also admitted that she had submitted fabricated documents, including a Verizon bill purportedly issued to her and Garay, and other mail apparently sent to Garay at their joint residence in Rhode Island. She had done so in order to make it appear as if Garay lived with her in Rhode Island. And she admitted to submitting several misleading affidavits, including one from Garay.

The IJ denied Quezada-Caraballo’s application for review of USCIS’s denial of her Form 1-751 waiver application and granted Quezada-Caraballo voluntary departure. After taking into account the record evidence, including testimony by Que-zada-Caraballo and two others who spoke on her behalf at the hearing, the IJ found that Quezada-Caraballo’s numerous misrepresentations to USCIS undermined the credibility of her testimony.

The BIA affirmed. It found that the IJ was warranted in drawing a “falsus in uno, falsus in omnibus” (false in one thing, false in everything) inference from Quezada-Caraballo’s misrepresentations. And it agreed with the IJ that, in light of Queza-da-Caraballo’s misrepresentations, the record evidence as a whole was insufficient to meet her burden to establish by a preponderance of the evidence that she had entered into a good-faith marriage.

II.

Under the substantial evidence standard, we must uphold the BIA’s decision unless Quezada-Caraballo can show that “the evidence not only supports [reversal], but compels it.” INS v. Elias-Zacarias, 502 U.S. 478, 481 n.1, 112 S.Ct. 812, 117 L.Ed.2d 38 (1992). Quezada-Cara-ballo contends that the record as a whole establishes that her marriage to Garay was in good faith; that the IJ and BIA erroneously focused solely on her admitted misrepresentations and failed to consider the countervailing evidence; and that the BIA’s approval of the IJ’s falsus in uno, falsus in omnibus inference was unreasonable under the circumstances of her case.

We disagree. This court has already held that “the REAL ID Act [gives an] IJ discretion to draw [a] ‘falsus in uno, falsus in omnibus’” inference. Wen Feng Liu v. Holder, 714 F.3d 56, 61 (1st Cir. 2013). The relationship between the falsehoods and the undermined claim here is stronger than it was in Wen Feng Liu. Quezada-Caraballo’s misrepresentations about the duration and scope of her cohabitation with Garay were directly material to her claim that she had married him in good faith. Further, Quezada-Caraballo was not dishonest about just one thing— she made and relied on repeated misrepresentations. Consequently, the IJ was permitted to discredit Quezada-Caraballo’s testimony.

The BIA, like the IJ, considered the entire record. It agreed with the IJ that, in light of Quezada-Caraballo’s misrepresentations, the record was insufficient to meet the burden of proof needed to establish a good-faith marriage. That conclusion is well supported by our precedent. This case is not like Cho v. Gonzales, 404 F.3d 96, 103 (1st Cir. 2005), in which we granted a petition for review and remanded to the BIA because the petitioner had submitted a jointly held health insurance policy, tax returns, bank accounts, automobile financing agreements, a credit card, and health and telephone records to corroborate her good-faith-marriage claim. Quezada-Cara-ballo’s evidentiary showing, including the testimony of Garay’s ex-wife and son, falls far short of that. See Valdez v. Lynch, 813 F.3d 407, 411-13 (1st Cir. 2016) (holding that petitioner’s general testimony as to validity of his marriage and his submission of tax returns that provided little evidence of commingled assets were insufficient to demonstrate good-faith marriage).

Nothing Quezada-Caraballo argues on appeal compels us to reverse the BIA’s reasonable decision.

III.

. The petition is denied.