Friedman v. Shalala ( 1995 )

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 94-1611
LEONARD R. FRIEDMAN, M.D.,
Plaintiff, Appellant,
v.
DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, ET. AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
Before
Cyr, Circuit Judge,
Bownes, Senior Circuit Judge, and
Stahl, Circuit Judge.
Leonard R. Friedman, M.D., on brief pro se.
Donald K. Stern, United States Attorney, and Suzanne E. Durrell,
Assistant United States Attorney, on brief for appellee.
January 27, 1995
Per Curiam. Leonard Friedman is appealing the
district court's decision dismissing his case for mootness.
We affirm.
I. Background
We recite only briefly the pertinent facts. In
1991, Friedman sued various defendants, claiming that the
revocation of his medical license in Massachusetts in 1987
and his exclusion from Medicare provider rolls in 1990 had
been unlawfully effected. The district court stayed
proceedings pending the results of other state and federal
court actions involving the same parties. In October 1993,
the court approved the parties' stipulation of partial
dismissal. Pursuant to that stipulation, Friedman dismissed
with prejudice his claims against all defendants except his
claim against the Department of Health and Human Services
(HHS) for a declaratory judgment that HHS had wrongfully
excluded him from Medicare provider rolls in 1990.1
1. HHS excluded Friedman under 42 U.S.C. 1320a-7(b)(4)(A),
which permits exclusion of an individual "whose license to
provide health care has been revoked or suspended by any
State licensing authority . . . for reasons bearing on the
individual's . . . professional competence, professional
performance, or financial integrity." HHS based its
exclusion on New York's revocation of Friedman's medical
license. New York had based its revocation on Massachusetts'
determination that Friedman had engaged in "gross misconduct"
sufficient to warrant revocation of Friedman's medical
license in that state. Friedman's period of exclusion was to
end when either Massachusetts or New York reinstated his
license.
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At Friedman's request, HHS reinstated Friedman as a
Medicare provider in November 1993. When HHS later answered
Friedman's complaint, it asserted that Friedman's
reinstatement had mooted his claim for relief and that the
action should be dismissed. The court agreed and dismissed
the action sua sponte.2
II. Discussion
We address two of Friedman's arguments on appeal.3
First, Friedman says that HHS is reasonably likely to exclude
him again since California revoked his medical license in
1990 and that any future exclusion by HHS would likely evade
judicial review because it would lapse before the court could
render a decision. Second, Friedman argues that his
exclusion has continuing collateral consequences that will
2. Friedman did not immediately appeal the order dismissing
his case, but filed a motion for relief from judgment under
Fed. R. Civ. P. 60(b), the denial of which he appealed.
Because his motion was filed within the time limit for filing
motions under Fed. R. Civ. P. 59(e), however, and challenged
the legal correctness of the court's decision that his action
was moot, we treat it as a timely Rule 59(e) motion and
assume, without deciding, that the dismissal of his action
for mootness is properly before us. See Perez-Perez v.
Popular Leasing Rental, Inc., 993 F.2d 281, 284-85 (1st Cir.
1993); Mariani-Giron v. Acevedo-Ruiz, 945 F.2d 1, 3 (1st Cir.
1991).
3. Other arguments he makes are without merit, e.g., that
the stipulation of partial dismissal and the court's failure
to revoke its stay order prior to Friedman's reinstatement
waived mootness, that evidence discovered in 1991 before
Friedman filed his suit qualified as new evidence justifying
relief from the court's judgment, and that the mootness
doctrine does not apply to judicial review of agency
decisions.
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affect his reputation and his medical and legal careers. For
those reasons, Friedman claims that his request for
declaratory relief is not moot.
A. Capable of Repetition Yet Evading Review
We conclude that the capable of repetition yet
evading review exception to mootness does not apply. While a
one-year exclusion may well evade judicial review, it does
not seem at all likely that HHS will exclude Friedman on the
basis of California's revocation of his medical license.
At the time Friedman applied for reinstatement, the
California revocation clearly would have been a basis for
excluding Friedman from the Medicare program. See 42 U.S.C.
1320a-7(b)(4)(A), supra note 1. Yet HHS reinstated
Friedman in 1993, and so it must not have believed that the
1990 California license revocation would be grounds for
excluding Friedman. See 42 C.F.R. 1001.3002(a)(3) (HHS
"will" reinstate an excluded individual if, among other
things, it determines that there is "no additional basis"
under the statute for continuing the exclusion).4 Thus, the
fact that Friedman was reinstated shows that HHS would be
4. Friedman alleges that this regulation and others cited by
HHS in its brief were not in effect at the time he was
excluded, but does not allege that this and the other
regulations embody practices or policies that are different
from ones prevailing at the time of his exclusion. In
addition, we note that the regulations relating to the
reinstatement of excluded individuals became effective on
January 29, 1992, and so presumably applied to Friedman's
reinstatement in November 1993.
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unlikely to use the California revocation to exclude Friedman
in the future. Moreover, excluding Friedman because of the
California revocation would arguably be an abuse of
discretion. California revoked Friedman's license because of
Massachusetts' revocation of his license; that is, California
based its license revocation on the same misconduct as had
New York. Because HHS based Friedman's exclusion on New
York's revocation of Friedman's license, excluding him
because of the California revocation would essentially
penalize Friedman twice for the same misconduct, a course of
action that we doubt HHS would undertake.
B. Collateral Consequences
The adverse collateral consequences to which
Friedman points do not suffice to avoid mootness in this
case. According to Friedman, overturning his exclusion would
relieve him of the stigma of having been excluded, ease his
admission to practice law in Massachusetts, and relieve him
of the obligation to explain the exclusion when he seeks
hospital staff privileges, affiliation with certain health
care entities, or licensure in other states.
Certainly, in some situations, adverse collateral
consequences such as those advanced here have been found to
avoid mootness. See, e.g., Kirkland v. National Mortgage
Network, Inc., 884 F.2d 1367, 1370 (11th Cir. 1989) (the
dismissal of an action did not moot an attorney's challenge
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to a court's revocation of his admission pro hac vice for
failure to abide by promises made during settlement
negotiations; the "brand of disqualification on grounds of
dishonesty and bad faith could well hang over [plaintiff's]
name and career for years to come"); Kleiner v. First
National Bank of Atlanta, 751 F.2d 1193, 1200 n.14 (11th Cir.
1985) (the settlement of a class action did not moot
attorneys' challenge to their disqualification by the court
in part because counsel could be exposed to further sanctions
by the bar and their disqualification could have adverse
effects on their careers and public image) (alternative
holding); Miller v. Washington State Bar Ass'n, 679 F.2d
1313, 1316, 1318 (9th Cir. 1982) (an attorney could sue a
state bar association to expunge a letter of admonition from
his file since he would be required to explain the admonition
if he applied to the bar in other states or for judicial
appointments).
Here, however, it is not the HHS exclusion which
has tarnished Friedman's reputation, but the apparently valid
New York and Massachusetts licensing board decisions,5 which
5. Friedman apparently did not challenge the New York
decision in court. The Massachusetts Supreme Judicial Court
has upheld the Massachusetts decision. See Friedman v. Board
of Registration in Medicine, 561 N.E.2d 859 (Mass. 1990)
(substantial evidence supported the decision to revoke
Friedman's license for gross misconduct), cert. denied, 498
U.S. 1107 (1991); Friedman v. Board of Registration in
Medicine, 609 N.E.2d 1223 (Mass. 1993) (petition for relief
from license revocation was denied).
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concluded that Friedman had engaged in gross professional
misconduct sufficient to warrant license revocation.
Consistent with the applicable statutory basis for exclusion,
HHS's letter notifying Friedman of his exclusion explained
that his exclusion was based on "the fact" that New York had
revoked his license and indicated that the issue in any
administrative hearing would be "whether your license was
revoked for reasons relating to your professional competence,
professional performance, or financial integrity." Since
Friedman's Medicare exclusion was based solely on the fact
that his license had been revoked, the exclusion effectively
signified only that New York had revoked Friedman's license
for reasons bearing on his professional competence or
performance. Compare 42 C.F.R. 1001.2007(a)(i) & (ii) (the
only issues before an ALJ in an exclusion hearing are whether
the basis for the imposition of the sanction exists and
whether the length of the exclusion is reasonable).6
6. This regulation became effective January 29, 1992, after
Friedman was excluded. Nonetheless, it was published as a
proposed regulation before Friedman's exclusion and
represents HHS's interpretation of its obligations in
exclusions such as Friedman's as of the time Friedman was
excluded. See 55 Fed. Reg. 12,206 (4/2/90) (explaining that
HHS's authority to exclude certain individuals, including
those whose state medical licenses have been revoked, is
"derivative" because "our ability to exclude derives from the
fact that another entity has imposed a sanction on the
individual or health care entity. [HHS] would not be
required to reestablish the factual or legal basis for such
underlying sanction.").
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Although the exclusion resulted from the license revocation,
it conferred no additional stigma on Friedman.7
Moreover, the actual effect of the exclusion was
exclusively a financial one, as the letter notifying Friedman
of his exclusion made clear. Because of his exclusion,
neither Medicare nor certain federally-assisted state health
care programs (from which Friedman was also excluded) would
pay for services or items furnished to Friedman's patients.8
7. HHS's letter to Friedman notifying him of his exclusion
informed him that HHS would notify certain state agencies and
the public of his exclusion and of the reasons therefor. A
copy of the public notice of Friedman's exclusion is not
included in the record, but it apparently would have stated
that Friedman's exclusion would end when his license was
reinstated. See 42 U.S.C. 1320a-7(c)(3)(A) (the notice of
exclusion given to the excluded individual and to the public
shall specify the minimum period of exclusion). At the time
Friedman was reinstated, HHS was required to notify "those
agencies, groups, individuals, and others that were
originally notified of the exclusion" of Friedman's
reinstatement. See 42 C.F.R. 1001.3003(a)(4). Presumably,
therefore, public notice of Friedman's reinstatement was
given, although it is not clear whether the notice would have
given the reason for his reinstatement. Compare id.
1001.134(a)(2) (a predecessor regulation to 1001.3003(a),
which provided for notice to the public of an excluded
individual's reinstatement). Assuming that the original
public notice of Friedman's exclusion had stigmatized
Friedman as a person who had lost his medical license for
reasons bearing on his professional performance or
competence, that stigma likely would have been erased to the
extent possible by the reinstatement notice implying, if not
stating outright, that he had regained his license.
8. The letter stated:
The effect of your exclusion from participation in the
Medicare and State health care programs is that no
payment will be made for any items or services (other
than an emergency item or service) furnished, ordered or
prescribed by you under the above-mentioned programs.
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Regulations in effect at the time Friedman was reinstated
indicate that such payments would have resumed once he was
reinstated. See 42 C.F.R. 1001.1901(b) (payments under
Medicare and applicable state health care programs may not be
made unless and until an excluded individual is reinstated
into the Medicare program); id. 1001.3003(b) (with certain
exceptions apparently not applicable here, state health care
programs must reinstate an individual to such programs upon
notification by HHS that the individual has been reinstated
to the Medicare program). There is nothing in the present
record to suggest that reinstatement did not have this result
in Friedman's case.
Thus, if Friedman should seek some future
affiliation with a hospital or other health care entity, the
decision to grant or deny him affiliation would not be
affected by the entity's inability to receive Medicare or
applicable state program payments for care given to
Friedman's patients. On the other hand, if hospitals, health
care entities, state medical licensing boards, or any boards
of bar examiners are concerned about Friedman's character or
professional competence or performance, their response to any
future application of his would be affected predominantly, if
Furthermore, payment will not be made to any entity in
which you are serving as an employee, administrator,
operator, or in any other capacity for any services that
you furnish, order or prescribe on or after the
effective date of this exclusion.
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not exclusively, by the apparently valid state decisions
revoking his medical license. While Friedman may have
expected the district court to review the Massachusetts
license revocation proceedings in this suit, its review was
of necessity limited to the exclusion decision itself which
did not encompass the state proceedings. As noted above, the
parties stipulated to dismissal of Friedman's claims against
all defendants with the exception of his claim against HHS
relating to his Medicare exclusion. Presumably, the
jurisdictional basis for that claim would be 42 U.S.C.
1320a-7(f)(1), which provides for judicial review of final
HHS exclusion decisions. Under HHS Departmental Appeals
Board precedent in effect at the time of Friedman's
exclusion, excluded individuals could not challenge their
exclusion by collaterally attacking the underlying state
license revocation proceedings. Citing that precedent, both
the administrative law judge and the Departmental Appeals
Board rejected Friedman's attempt to collaterally attack the
Massachusetts and New York license revocation proceedings.
Thus, the validity of the underlying state proceedings was
never an issue in Friedman's exclusion proceedings. The
scope of the proceedings below having been confined to the
determination whether the statute applied to Friedman,9
9. Friedman had alleged that the statute was being applied
retroactively to him since Massachusetts had rendered its
licensing decision before the statute became effective.
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whether Friedman's license had been revoked by a state
licensing authority for the statutorily prescribed reasons,
and whether the period of exclusion was reasonable, the
district court's review of the decision excluding Friedman
would be likewise constrained. Cf. Travers v. Sullivan, 801
F. Supp. 395, 403 (E.D. Wash. 1992) (where HHS excluded an
individual on the basis of a prior state conviction for a
program-related offense, it was "not necessary or proper for
the court to delve into the facts surrounding the
conviction"; the court's role under 1320a-7(f) was not to
review the validity of the underlying conviction but to
review the validity of the exclusion), aff'd, 20 F.3d 993,
998 (1994).10
Under these circumstances, we conclude that this
action is moot. See Florida Farmworkers Council, Inc. v.
Marshall, 710 F.2d 721, 731 (11th Cir. 1983) (the court
determined that expiration of plaintiff's debarment had
10. HHS's policy barring collateral attack on state license
revocation proceedings and limiting the nature of the issues
addressed in exclusion proceedings is now codified in
regulations that have been expressly made binding on federal
courts. See 42 C.F.R. 1001.2007(d) (prohibiting collateral
attacks on the underlying state determinations which form a
basis for exclusion); id. 1001.2007(a)(i) & (ii) (the only
issues before an administrative law judge in an exclusion
hearing are whether the basis for excluding an individual
exists and whether the length of the exclusion is
reasonable); id. 1001.1(b) (these regulations are
applicable to and binding on federal courts in reviewing
exclusions imposed by HHS) (this latter regulation became
effective January 22, 1993).
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mooted its action challenging the debarment despite
plaintiff's claim of stigma because the court had upheld the
costs disallowances that had caused the debarment; it
explained that it could not discern any additional stigma
created by the debarment and that the debarment had not
prevented plaintiff from receiving substantial federal funds,
apparently after the debarment had ended).
Affirmed.
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