Hawaii Psychiatric Soc., Dist. Branch v. Ariyoshi

Decision Date22 October 1979
Docket NumberNo. CV 79-0113.,CV 79-0113.
Citation481 F. Supp. 1028
PartiesHAWAII PSYCHIATRIC SOCIETY, DISTRICT BRANCH OF the AMERICAN PSYCHIATRIC ASSOCIATION, a Hawaii Nonprofit Corporation, et al., Plaintiffs, v. George R. ARIYOSHI, in his official capacity as Governor of the State of Hawaii, et al., Defendants.
CourtU.S. District Court — District of Hawaii




Mark S. Davis, Stanley E. Levin, Honolulu, Hawaii, for plaintiffs.

Wayne Minami, Atty. Gen., Michael A. Lilly, Deputy Atty. Gen., Honolulu, Hawaii, for defendants.


WM. MATTHEW BYRNE, Jr., District Judge.

Section 8 of Act 105 of the 1978 Session Laws of the State of Hawaii "Section 8" authorizes the issuance of administrative inspection warrants, upon a sworn affidavit showing "probable cause," to search the offices and records of Medicaid "providers." A "provider" is a person or institution authorized to provide health care, suppliers or services to beneficiaries of medical assistance.1 "Probable cause" is defined for purposes of Section 8 as showing of a valid public interest in the effective enforcement of Act 105, sufficient to justify administrative inspection in the circumstances specified in the application for the warrant.2 The complaint alleges that Section 8 and defendants' application of it violate plaintiffs' right to be free from unreasonable searches and seizures guaranteed by the Fourth Amendment, and their and their patients' right to privacy guaranteed by the Ninth Amendment. The matter is before the Court on defendants' motion for summary judgment and plaintiffs' application for a preliminary injunction.


Act 105 of the 1978 Session Laws was enacted in conjunction with Act 106, which establishes a Medicaid Fraud Unit under the Department of the Attorney General for the investigation and prosecution of Medicaid fraud. Section 6 of Act 105 requires that each provider maintain for a period of three years "such records as are necessary to disclose fully the type and extent of health care, service or supplies provided to medicaid recipients." Section 6 further requires that providers make such records available upon request to authorized representatives of the Attorney General's office or the Department of Social Services and Housing, and makes wilful refusal to make records available a misdemeanor. Section 8 authorizes the issuance of warrants to inspect, copy and maintain records required to be kept under Section 6.3 Act 105 also requires confidentiality of providers' records obtained or maintained by the State and provides penalties for violation of the Act's requirements.

On December 18, 1978, an administrative inspection warrant was issued authorizing the search and seizure of plaintiff Virgil Willis, Jr.'s records relating to Medicaid beneficiaries, including therapeutic notes, patient history forms, medical records and reports, and diagnoses. The affidavit in support of the warrant stated that Willis was a licensed clinical psychologist and a Medicaid provider, that his offices had never been inspected pursuant to Section 8, and that such inspection was in the public interest.4 No showing was made as to any particularized need to inspect Willis's records. Further, Willis was never requested, pursuant to Section 6, to produce voluntarily the information described in the warrant. On December 28, 1978, the warrant was executed at Willis's office, records were seized, and copies made of those records, which copies are still in the possession of the Attorney General.

On March 7, 1979, Willis and plaintiff Hawaii Psychiatric Society filed this action challenging the constitutionality of Section 8, both on its face and as applied to Willis. The Hawaii Psychiatric Society, a district branch of the American Psychiatric Association, is a nonprofit corporation composed of 115 psychiatrists, a majority of whom are Medicaid providers. Defendants are all officials of the State of Hawaii authorized to implement Section 8, and are sued in their official capacity.

This case raises issues concerning the right of privacy inherent in the psychotherapist-patient relationship and the reasonableness of administrative searches of psychiatrists' offices. Neither area has been addressed directly by the Supreme Court, and only a few lower courts have discussed the issues. For the reasons set forth below, defendants' motion for summary judgment is denied, and plaintiffs' application for a preliminary injunction is granted.


Defendants urge this court to abstain from deciding the constitutional questions presented by this case. They contend that the court may not enjoin "ongoing state criminal proceedings." At the time the complaint was filed and at the time of the hearing on these motions, no ongoing criminal or civil proceeding was pending involving the parties to this action or Section 8. The Supreme Court has stated:

"`When no state criminal proceeding is pending at the time the federal complaint is filed, federal intervention does not result in duplicative legal proceedings or disruption of the state criminal justice system; nor can federal intervention, in that circumstance, be interpreted as reflecting negatively upon the state courts' ability to enforce constitutional principles.'"

Steffel v. Thompson, 415 U.S. 452, 94 S.Ct. 1209, 1217, 39 L.Ed.2d 505 (1974), quoted in Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 1207-08, 43 L.Ed.2d 482 (1975). Accord, Ellis v. Dyson, 421 U.S. 426, 95 S.Ct. 1691, 1695, 44 L.Ed.2d 274 (1975). There is accordingly no basis for this court to abstain from enjoining any state proceeding.

Defendants also urge abstention in order to give the state courts an opportunity to construe Section 8 before this court rules on its constitutionality. Abstention is appropriate in cases presenting a constitutional issue "which might be mooted or presented in a different posture by a state court determination of pertinent state law." Colorado River Water Conser. Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976); Lake Carrier's Assoc. v. MacMullan, 406 U.S. 498, 92 S.Ct. 1749, 1757, 32 L.Ed.2d 257 (1972). But even where a state statute has never been interpreted by a state court, if the statute is not susceptible to an interpretation that would avoid or modify the federal constitutional question, the federal court must decide the question. Zwickler v. Koota, 389 U.S. 241, 88 S.Ct. 391, 397, 19 L.Ed.2d 444 (1967). This is especially true where a state statute has been challenged on its face and forcing the plaintiff to suffer the delay of state court proceedings might itself effect a chilling of the very constitutional rights he seeks to protect. Id., 389 U.S. 241, 88 S.Ct. at 397-98.

These principles preclude this court from abstaining from decision of the constitutional questions presented here. Section 8 is not susceptible of any interpretation that would significantly modify the substance or effect of the constitutional analysis set forth below.5 Further, the Attorney General of the State of Hawaii has urged no narrowing interpretation and contends, and stated at oral argument that he would contend in the state courts, that the statute is constitutional on its face and as applied to Willis. Compare Carey v. Sugar, 425 U.S. 73, 96 S.Ct. 1208, 1210-11, 47 L.Ed.2d 587 (1976) (state officials urged narrowing construction of challenged statute).

Defendants contended in their moving papers that this action is barred by the Eleventh Amendment. The Supreme Court made clear in Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), that actions for injunctive and declaratory relief against state officials acting in their official capacity are not barred by the Eleventh Amendment. Defendants conceded as much at the hearing on these motions.

The only remaining issue raised by defendants' motion for summary judgment is the constitutionality of Section 8. For reasons set forth with regard to plaintiffs' application for a preliminary injunction, defendants are not entitled to summary judgment on the ground that Section 8 is constitutional.


A preliminary injunction should issue upon a clear showing by the plaintiff of either (1) probable success on the merits and possible irreparable harm, or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief. Benda v. Grand Lodge of Intern. Ass'n, 584 F.2d 308, 315 (9th Cir. 1978); Aguirre v. Chula Vista Sanitary Service, 542 F.2d 779, 781 (9th Cir. 1976); Kupau v. Yamamoto, 455 F.Supp. 1084, 1087-88 (D.Haw.1978). Where the balance of harm tips decidedly toward the plaintiff, he need not show as substantial a likelihood of success on the merits. Conversely, where the probability of success on the merits is high, plaintiff need only show a possibility of irreparable harm. See Benda v. Grand Lodge of Intern. Ass'n, supra, 584 F.2d at 315. Plaintiffs here have established a very high probability of success on the merits and a substantial possibility of irreparable harm.

1. The Merits — The Right to Privacy

Before the court turns to the merits of plaintiffs' right to privacy claim, the question of plaintiffs' standing demands attention. Plaintiffs challenge Section 8 on the ground that it violates their right to privacy guaranteed by the Ninth Amendment. The court reads the complaint and plaintiffs' application for a preliminary injunction as raising also the privacy rights of their present and future patients who are Medicaid beneficiaries. The court concludes that plaintiffs have standing to raise both their own privacy rights and those of their patients. See Carey v. Population Services Intern., 431 U.S. 678, 97 S.Ct. 2010, 2015-16, 52 L.Ed.2d 675 (1977).

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