F.E.R. v. Valdez, 94-4097

• Decision Date: 10 July 1995
• Docket Number: No. 94-4097,94-4097
• Citation: 58 F.3d 1530
• Parties: Medicare & Medicaid Guide P 43,451 F.E.R., personally and on behalf of a class of patients similarly situated; S.A., S.L.B., L.A.M., B.E.S., A.L.V., as the guardian ad litem for A.L.C.; A.L.C., a minor, personally and on behalf of a class of patients similarly situated, Plaintiffs-Appellants, v. Sally VALDEZ, Agent, Bureau of Medicaid Fraud, Division of Investigation, Department of Public Safety, State of Utah; Dennis Kroll, Attorney for Bureau of Medicaid Fraud, Division of Investigation, Department of Public Safety, State of Utah, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1530

58 F.3d 1530

Medicare & Medicaid Guide P 43,451

F.E.R., personally and on behalf of a class of patients similarly situated; S.A., S.L.B., L.A.M., B.E.S., A.L.V as the guardian ad litem for A.L.C.; A.L.C., a minor personally and on behalf of a class of patients similarly situated, Plaintiffs-Appellants, v. Sally VALDEZ, Agent, Bureau of Medicaid Fraud, Division of Investigation, Department of Public Safety, State of Utah Dennis Kroll, Attorney for Bureau of Medicaid Fraud Division of Investigation, Department of Public Safety, State of Utah, Defendants-Appellees.

No. 94-4097.

United States Court of Appeals, Tenth Circuit.

July 10, 1995.

Joro Walker (Brian M. Barnard and John Pace with her on the briefs), Utah Legal Clinic, Salt Lake City, UT, for plaintiffs-appellants.

Brent A. Burnett, Asst. Atty. Gen. (Jan Graham, Utah Atty. Gen., with him on the brief), Salt Lake City, UT, for defendants-appellees.

Before BRORBY, KELLY and HENRY, Circuit Judges.

BRORBY, Circuit Judge.

The plaintiffs are a group of patients (collectively the "Patients") of a psychiatrist who was the subject of a Medicaid fraud investigation. During the investigation, all of the psychiatrist's records were seized pursuant to a state search warrant. The Patients instituted a civil rights class action pursuant to 42 U.S.C. Sec. 1983 against three state agents (the "defendants") ¹ alleging violations to their privacy rights. The Patients sought declaratory relief, injunctive relief and damages. On cross-motions for summary judgment, the district court denied the Patients' motion and granted the defendants' motion. The district court held the Patients' equitable claims were moot and the claim for damages must be dismissed because the defendants are protected by qualified immunity. We exercise jurisdiction pursuant to 28 U.S.C. Sec. 1291, and we affirm.

The Utah Bureau of Medicaid Fraud was investigating a psychiatrist when it executed a search warrant and seized the psychiatrist's treatment and billing records. This seizure encompassed the Patients' records although none of the Patients were Medicaid recipients. Approximately three months later, a state circuit court sealed the material obtained during the seizure. During the investigation, the records containing information on the Patients' psychiatric treatment were made available to a variety of Bureau employees. The criminal investigation of the psychiatrist ended with an out-of-court civil settlement. In the settlement agreement, the psychiatrist consented to pay restitution and abstain from future participation in the Medicaid program. At the conclusion of the Bureau's investigation, the records were returned to the psychiatrist.

The Patients sued three state agents in their individual capacities alleging the Bureau's seizure of the psychiatric records violated the Patients' constitutional right to privacy. The Patients sought damages, a declaration that the seizure was unconstitutional and an injunction to have the records returned to the psychiatrist. The district court determined the Patients' claims for equitable relief were moot and granted the defendants' motion for summary judgment on the basis of qualified immunity. The Patients appeal.

MOOTNESS

The initial issue in this case is whether the Patients' claims for equitable relief are moot. We review the question of mootness The Patients seek a declaratory judgment that the defendants invaded the privacy of the Patients. The Patients' claim for a declaratory judgment is similar to their claim for damages. In each, the Patients ask the court to determine whether a past constitutional violation occurred. In this dispute the alleged liability-producing act has already occurred. Because the question still exists as to whether the defendants violated the Patients' right to privacy, a controversy on the Patients' right to privacy still exists. But see Facio v. Jones, 929 F.2d 541, 544 (10th Cir.1991) (in discussing standing in a Sec. 1983 suit, the panel broadly stated a "plaintiff cannot maintain a declaratory or injunctive action unless he or she can demonstrate a good chance of being likewise injured in the future."). Therefore, the claim for a declaration that the defendants improperly invaded the privacy of the Patients when they seized the psychiatrist's files is not moot, and this claim will be discussed later with the claim for damages. See Yniguez v. Arizona, 975 F.2d 646, 647 (9th Cir.1992) ("A plaintiff's pursuit of nominal damages provides a sufficiently concrete interest in the outcome of the litigation to confer standing to pursue declaratory relief and thereby prevents mootness.").

de novo as a matter of federal jurisdiction. Building & Constr. Dep't v. Rockwell Int'l, 7 F.3d 1487, 1491 (10th Cir.1993). To maintain a claim the Patients must present an actual, ongoing dispute. Honig v. Doe, 484 U.S. 305, 317, 108 S.Ct. 592, 600-01, 98 L.Ed.2d 686 (1988); Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 546, 96 S.Ct. 2791, 2796-97, 49 L.Ed.2d 683 (1976).

However, the claim for injunctive relief is moot. The Patients are seeking an injunction to have their medical records returned to the psychiatrist, yet the records were returned at the end of the Bureau's investigation. There is no longer a dispute about the current possession of the medical files. There is no present controversy on the claim for injunctive relief because the explicit objective of the proposed injunction has been met: the records were returned.

The Patients argue the exceptions to mootness apply in this case. One exception to mootness is when the dispute is "capable of repetition yet evades review." Los Angeles v. Lyons, 461 U.S. 95, 109, 103 S.Ct. 1660, 1669, 75 L.Ed.2d 675 (1983). To qualify for the exception, the Patients must show a reasonable likelihood that they will again suffer the alleged deprivation. See Honig, 484 U.S. at 318, 108 S.Ct. at 601; Lyons, 461 U.S. at 109, 103 S.Ct. at 1669. The Patients acknowledge their current psychiatrist is unlikely to be investigated again because he no longer treats Medicaid patients, yet they allege their psychiatric records may be confiscated by the Bureau again if they consult a new psychiatrist who subsequently becomes the target of a Medicaid investigation. This allegation is too speculative to support the mootness exception, which is only to be used in "exceptional situations." See Lyons, 461 U.S. at 109, 103 S.Ct. at 1669.

The Patients correctly note the general rule of law that "voluntary cessation of allegedly illegal conduct does not deprive the tribunal of power to hear and determine the case, i.e., does not make the case moot." United States v. W.T. Grant Co., 345 U.S. 629, 632, 73 S.Ct. 894, 897, 97 L.Ed. 1303 (1953). They argue their claim for injunctive relief is not moot because the defendants voluntarily returned the records to the psychiatrist. Yet, the records were returned at the end of the investigation and not in an effort to evade review.

In arguing voluntary cessation, the Patients rely on Longstreth v. Maynard, 961 F.2d 895 (10th Cir.1992), and Grant, 345 U.S. at 633-34, 73 S.Ct. at 897-98. In Longstreth, a prison vacated a policy that was being challenged by some of the prisoners, but the court found that the allegedly wrongful behavior by the prison could reasonably recur. 961 F.2d at 900. In holding a " 'voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice,' " 961 F.2d at 901 (quoting Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289, 102 S.Ct. 1070, 1074-75, 71 L.Ed.2d 152 (1982)), the court found the prison had the ability to change the policy again and affect the prisoners in the In the instant case, the Bureau returned the files and cannot simply decide to confiscate them again without a warrant issued by a detached and neutral magistrate. The allegedly wrongful action by the Bureau--taking the files from this psychiatrist--has ended. The investigation is closed and the psychiatrist's conduct has been rectified. The exception of voluntary cessation is not applicable to the Patients' request to have the files returned to the psychiatrist because that dispute has been completely eradicated.

same way they were affected before. In Grant, a business executive voluntarily resigned from the companies' boards after the government sued to enjoin him from holding interlocking directorates in competing corporations. The Supreme Court found the executive was still free to return to his old ways even after resigning, therefore, the claim was not moot. 345 U.S. at 634, 73 S.Ct. at 898.

However, if we read the Patients' claim for injunctive relief as an effort to enjoin future seizures, it may fit within the voluntary cessation exception. Assuming there is no problem with mootness, the Patients must still show they have standing to bring this claim. Thus, as in Lyons, the issue becomes "not whether that claim has become moot but whether [the Patients] meet[ ] the preconditions for asserting an injunctive claim in a federal forum." 461 U.S. at 109, 103 S.Ct. at 1669. The Patients must demonstrate a personal stake in the outcome, yet "[p]ast exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief ... if unaccompanied by any continuing, present adverse effects." O'Shea v. Littleton, 414 U.S. 488, 495-96, 94 S.Ct. 669, 676, 38 L.Ed.2d 674 (1974). Also, abstract injury is not enough. Lyons, 461 U.S. at 109, 103 S.Ct. at 1669. To establish standing the Patients must demonstrate a sufficient likelihood that they will again be harmed in a similar manner. See Lyons, 461 U.S. at 111, 103 S.Ct. at 1670 ("Absent a sufficient likelihood that he will again be wronged in a similar way, Lyons is no more entitled to an injunction than any other citizen of Los Angeles; and a federal court may not entertain a claim.").

The Patients argue ...