Levin v. Childers, 95-6542

• Decision Date: 20 November 1996
• Docket Number: No. 95-6542,95-6542
• Citation: 101 F.3d 44
• Parties: , Medicare & Medicaid Guide P 44,900 Richard LEVIN, Plaintiff-Appellant, v. Masten CHILDERS, II, Medicaid Commissioner and Secretary of the Cabinet for Human Resources, Commonwealth of Kentucky, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 44

101 F.3d 44

52 Soc.Sec.Rep.Ser. 169, Medicare & Medicaid Guide

P 44,900

Richard LEVIN, Plaintiff-Appellant, v. Masten CHILDERS, II, Medicaid Commissioner and Secretary of the Cabinet for Human Resources, Commonwealth of Kentucky, Defendant-Appellee.

No. 95-6542.

United States Court of Appeals Sixth Circuit.

Argued Oct. 16, 1996.

Decided Nov. 20, 1996.

Thomas E. Clay (argued and briefed), Louisville, KY, for Plaintiff-Appellant.

Byron E. Leet (argued and briefed), Jean Winfield Bird, Wyatt, Tarrant & Combs, Louisville, KY, for Defendant-Appellee.

Before: LIVELY and NELSON, Circuit Judges; HACKETT, District Judge. ^*

PER CURIAM.

This is an appeal from an order in which a civil rights action was dismissed under Rule 12(b)(6), Fed.R.Civ.P. The plaintiff, Richard Levin, M.D., claimed that the defendant, Masten Childers, II--Medicaid Commissioner for the Commonwealth of Kentucky and Secretary of the Commonwealth's Human Resources Cabinet--violated Dr. Levin's due process rights in suspending the Doctor's Medicaid payments during an investigation of possibly fraudulent billing practices. We agree with the district court's conclusion that Dr. Levin's complaint failed to state a claim on which relief could be granted, and we shall affirm the dismissal.

I

The complaint alleged that defendant Childers issued a press release on June 7, 1994, in which he stated that payments due Dr. Levin and two other health care providers under the state Medicaid program were being suspended pending an investigation of billing practices that might be fraudulent or abusive. ¹ The complaint further alleged that Mr. Childers was required by Kentucky law to provide a hearing within 30 days after receipt of a written request therefor; that such a request was made by letter dated June 15 and redelivered on June 30, 1994; that by letter of August 2, 1994, Dr. Levin requested that the suspension be lifted for failure to conduct the required hearing; and that Mr. Childers notified Dr. Levin on August 24, 1994, that the suspension had been lifted. (It is uncontested that all payments withheld pending the investigation were released at that time.) The complaint's recitation of the facts was followed by a claim that "[t]he actions of the defendant have denied the plaintiff due process of law as guaranteed by the United States Constitution, Amendment Five and Amendment Fourteen (Due Process)."

Mr. Childers moved to dismiss the complaint pursuant to Rules 12(b)(1) and (6), Fed.R.Civ.P., contending (1) that the claims made against him in his official capacity were barred by the Eleventh Amendment, and (2) that no claim had been stated against him in his individual capacity. In connection with the latter proposition Mr. Childers submitted that he was protected by qualified immunity.

Dr. Levin filed a response asserting that he had a cause of action to enforce the regulation (42 C.F.R. § 455.23(a)) separate and apart from any due process claim. The complaint was not formally amended to add the non-constitutional claim, but defendant Childers was clearly put on notice that such a claim was being asserted.

The district court granted the motion to dismiss. Dr. Levin does not challenge the court's ruling on the official capacity claims, but he appeals from the dismissal of the claims asserted against Mr. Childers in his individual capacity.

II

Section 1 of the Fourteenth Amendment prohibits a state from depriving any person of life, liberty, or property without due process of law. To state a due process claim, accordingly, a plaintiff must assert (1) a deprivation, (2) of life, liberty, or property, (3) under color of state law, (4) without due process of law. See Brotherton v. Cleveland, 923 F.2d 477, 479 (6th Cir.1991).

Dr. Levin alleged that defendant Childers violated the Due Process Clause by failing to provide a post-suspension hearing as required by 42 C.F.R. § 455.23(a). That section, as noted above, calls for such a hearing when state law requires one. ² But "[s]tate-created procedural rights that do not guarantee a particular substantive outcome are not protected by the Fourteenth Amendment, even where such procedural rights are mandatory." Tony L. v. Childers, 71 F.3d 1182, 1185 (6th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1834, 134 L.Ed.2d 938 (1996).

The creation of procedural rights does not ipso facto create any property interest. See United of Omaha Life Ins. Co. v. Solomon, 960 F.2d 31, 34 (6th Cir.1992) (" '[N]o property interest exists in a procedure itself, without more' ") (quoting Curtis Ambulance of Florida, Inc. v. Board of County Comm'rs, 811 F.2d 1371, 1377 (10th Cir.1987)). As the Supreme Court stated in Olim v. Wakinekona, 461 U.S. 238, 250, 103 S.Ct. 1741, 1748, 75 L.Ed.2d 813 (1983), "[p]rocess is not an end in itself. Its constitutional purpose is to protect a substantive interest to which the individual has a legitimate claim of entitlement." And "an expectation of receiving process is not, without more, a liberty interest protected by the Due Process Clause." Id. at 250 n. 12, 103 S.Ct. at 1748 n. 12.

In Procopio v. Johnson, 994 F.2d 325 (7th Cir.1993), the plaintiff asserted a claim under 42 U.S.C. § 1983 for an alleged violation of the Adoption Assistance and Child Welfare Act of 1980, 42 U.S.C. § 675(5)(C), a statute that "assures each foster child under state supervision 'a dispositional hearing to be held ... no later than eighteen months after the original placement.' " Procopio, 994 F.2d at 330 (quoting 42 U.S.C. § 675(5)(C)). The court rejected the notion that this statute could be "itself the source of a liberty interest the deprivation of which requires due process," noting that there is a "fundamental logical flaw in viewing the process as a substantive end in itself." Id. at 332. The court explained the flaw thus:

" 'If a right to a hearing is a liberty interest, and if due process accords the right to a hearing, then one has interpreted the Fourteenth Amendment to mean that the state may not deprive a person of a hearing without providing him with a hearing. Reductio ad absurdum.' " Id. (quoting Shango v. Jurich, 681 F.2d 1091, 1101 (7th Cir.1982)).

We are satisfied that the procedural rights claimed by Dr. Levin under 42 C.F.R. § 455.23 and the Kentucky Medicaid regulation did not create a liberty or property interest protected by the Due Process Clause of the Constitution.

III

Dr. Levin advances two theories as to why the district court should have denied the motion to dismiss even if the regulations, standing alone, did not give rise to a constitutionally protected interest. First, he contends, the facts alleged in his complaint would support a claim of "[i]nfliction of a stigma to reputation accompanied by an official sanction regarding a person's employment or profession." We shall refer to this as the "stigma-plus" theory. Second, he contends, § 1983 may be used to enforce not only constitutional rights, but rights defined by federal statute or regulation as well.

The "stigma-plus" argument is being raised for the first time on appeal. Neither the complaint nor the response to the motion to dismiss asserted that the press release was defamatory. "[I]t is not proper to assume the plaintiff could prove facts he had not alleged or that the defendants had violated applicable laws in ways that had not been alleged." Cline v. Rogers, 87 F.3d 176, 184 (6th Cir.1996) (internal quotation marks and alterations omitted), cert. denied, --- U.S. ----, 117 S.Ct. 510, 136 L.Ed.2d 400 (1996). A plaintiff will be found to have waived a particular legal theory if he "fail[s] to mention it to the district court when the time ... come[s] in the proceedings below to present legal arguments linking the claims described in the complaint to the relevant statutory (or other) sources for relief." Teumer v. General Motors Corp., 34 F.3d 542, 545-46 (7th Cir.1994). Dr. Levin waived his "stigma-plus" claim by failing to mention it when he should have done.

Dr. Levin's second theory rests on Loschiavo v. City of Dearborn, 33 F.3d 548 (6th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1099, 130 L.Ed.2d 1067 (1995), which holds that "plaintiffs may use Section 1983 to enforce not only constitutional rights, but also those rights defined by federal statutes [and federal regulations]." Id. at 551. The potential availability of § 1983 for such a use depends not only on whether a violation of federal law has occurred, but on whether the statute or regulation in question "created enforceable rights, privileges, or immunities within the meaning of § 1983." Suter v. Artist M., 503 U.S. 347, 357, 112 S.Ct. 1360, 1367, 118 L.Ed.2d 1 (1992) (internal quotation marks omitted).

This court applies a three part test to determine whether a federal statute or regulation creates rights enforceable under § 1983:

"(1) Was the provision in question intended to benefit the plaintiff?

(2) Does the statutory provision in question create binding obligations on the defendant governmental unit, rather than merely expressing a congressional preference? and

(3) Is the interest the plaintiff asserts specific enough to be enforced judicially, rather than being 'vague and amorphous'?" Wood v. Tompkins, 33 F.3d 600, 604-05 (6th Cir.1994).

We need not decide whether this test is satisfied by whatever hearing requirement 42 C.F.R. § 455.23(a) may have imposed here, because we believe that Mr. Childers is entitled to qualified immunity in any event.

Qualified immunity protects government officials against suit for the performance of discretionary functions so long as the conduct in question " 'does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.' " Veney v. Hogan, 70 F.3d 917, 920 (6th Cir.1995) ...