947 F.2d 1011 (2nd Cir. 1991), 1581, Easton v. Sundram

Docket Nº:1581, Docket 91-7165.
Citation:947 F.2d 1011
Party Name:Karl EASTON, M.D., Plaintiff-Appellant, v. Clarence J. SUNDRAM; Paul Stavis; Walter E. Saurack; John J. Rybaltowski; Bruce E. Feig; Francine Cournos; Paul Glickman; Louis J. Patack; Kathleen Sweeney and Ilene Margolin, Defendants-Appellees.
Case Date:October 18, 1991
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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947 F.2d 1011 (2nd Cir. 1991)

Karl EASTON, M.D., Plaintiff-Appellant,


Clarence J. SUNDRAM; Paul Stavis; Walter E. Saurack; John

J. Rybaltowski; Bruce E. Feig; Francine Cournos; Paul

Glickman; Louis J. Patack; Kathleen Sweeney and Ilene

Margolin, Defendants-Appellees.

No. 1581, Docket 91-7165.

United States Court of Appeals, Second Circuit

October 18, 1991

Argued May 30, 1991.

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Leon Friedman, New York City, for plaintiff-appellant.

Laurel W. Eisner, Asst. Atty. Gen., New York City (Robert Abrams, Atty. Gen. of State of N.Y., of counsel), for defendants-appellees.

Before OAKES, Chief Judge, KAUFMAN and WALKER, Circuit Judges.

WALKER, Circuit Judge:

Dr. Karl Easton appeals from a judgment entered on July 18, 1990 pursuant to an opinion and order of the United States District Court for the Southern District of New York (Robert W. Sweet, Judge ) granting defendants' motion to dismiss the complaint for failure of pleading under Fed.R.Civ.P. 12(b)(6). Easton, now represented by counsel, contends that the district court overlooked three well-pleaded constitutional claims under 42 U.S.C. § 1983 in his pro se complaint: claims for first amendment retaliation, malicious prosecution, and a violation of a protected liberty right. He further contends that the district court erred in holding that certain of the defendants were entitled to prosecutorial and witness immunity. We find that Easton's complaint failed to state a claim on the first amendment retaliation and malicious prosecution causes of action and that defendants were entitled to qualified immunity on the violation of liberty cause of action, regardless of whether or not Easton stated a claim. We therefore affirm without reaching the issues of prosecutorial or witness immunity.

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For the purposes of review of a Rule 12(b)(6) dismissal, we take the factual allegations of plaintiff's complaint as true. Easton, a psychiatrist, was the former executive director and ex-officio board member of the Brooklyn Psychosocial Rehabilitation Institute ("BPRI"), a not-for-profit mental health institution. His claims arise from a series of events that started with the suicide of a patient in July of 1984. The New York State Office of Mental Health ("OMH") subsequently initiated an inspection and ongoing investigation of Easton's facilities.

On August 24, 1984, OMH Regional Director Sarah Connell wrote a letter to BPRI's executive director, Irving Link, detailing a list of alleged shortcomings that had been uncovered in various inspections. These allegations included: lack of proper record-keeping and documentation of patient progress, failure to provide for regular medical and dental care, failure to properly report suicides, failure to document the implementation of a suicide prevention program, the presence of a serious roach infestation in patients' bedrooms, the possession by patients of outdated medications, improperly executed patient fee agreements, inadequate inventories of patients' possessions, and overcrowding.

On December 24, 1984, the New York City regional director of OMH suspended patient referrals to Boerum Hill, BPRI's residential and rehabilitative care facility in Brooklyn. In response, on February 5, 1985, BPRI filed a petition against OMH under Article 78 of the New York State Civil Practice Law and Rules (CPLR) in state court, alleging that its due process rights were being violated since no hearing had been held before OMH blocked referrals. The Article 78 suit was concluded on April 17, 1985, with OMH ordered to afford a hearing within 30 days. The hearing was never held, but on May 30, 1985, the regional office of OMH rescinded its memorandum to stop referrals to BPRI. The investigation by OMH continued, with health and fiscal standards targeted for scrutiny.

At about the same time that BPRI brought its Article 78 suit against OMH, another state agency, the Commission on Quality of Care ("CQC"), started an investigation of BPRI at the request of Kathleen Sweeney, a supervisor in the OMH regional office. In October of 1986, CQC issued a report recommending the continuation "under new auspices" of BPRI programs, recovery of cash and other assets "unlawfully received" by Easton's family or closely held corporations, and criminal prosecution of those who had "engaged in systematic fraud against the State and Federal governments."

The New York State Attorney General, the OMH and the State Department of Social Services ("DSS") brought suit against BPRI, Easton and others under the caption People of the State of New York, New York State Office of Mental Health, New York State Department of Social Services v. Brooklyn Psychosocial Rehabilitation Institute, 3 Lafayette Avenue Corporation, Cobble Hill Center Corporation, Dr. Karl Easton, Jacqualine Easton, Irving Link, Theodore Rosten, Sup.Ct. Kings County, Index No. 29163/86 ("People v. BPRI" ). In People v. BPRI, the state charged the defendants with Medicaid fraud, endangering the health and safety of mentally disabled clients, and siphoning public funds through BPRI to members of Easton's family by way of improper leases with real estate corporations owned by Easton's children. At the same time, in an ex parte proceeding brought by the Attorney General pursuant to Article 31, Section 28 of the New York State Mental Health Law ("MHL"), the Supreme Court of the State of New York appointed Federation Employment Guidance Service ("FEGS"), a not-for-profit social welfare agency, as temporary receiver of the BPRI facilities pending determination of the State's charges. The receiver removed Easton from his post at BPRI. The complaint alleges that this firing took place in conjunction with the dissemination of highly defamatory charges against Easton. The court continued the receivership after a hearing, and it remained in effect for eighteen months, until

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April of 1988. When the receivership terminated, OMH acquired the properties under the New York State Eminent Domain Procedure Law.

The State Supreme Court referred People v. BPRI to Judicial Hearing Officer ("JHO") Carmine A. Ventiera for determination of all issues. On November 7, 1990, the JHO denied the State relief on all causes of action...

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