Silver v. Baggiano

• Decision Date: 24 November 1986
• Docket Number: No. 85-7402,85-7402
• Citation: 804 F.2d 1211
• Parties: , Medicare&Medicaid Gu 36,032 Dr. Morgan SILVER, on his own behalf and on behalf of all other similarly situated podiatrists in the State of Alabama, Plaintiff-Appellee, v. Faye BAGGIANO, Commissioner of the Department of Medicaid, State of Alabama, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1211

804 F.2d 1211

15 Soc.Sec.Rep.Ser. 346, Medicare&Medicaid Gu 36,032

Dr. Morgan SILVER, on his own behalf and on behalf of all other similarly situated podiatrists in the State of Alabama, Plaintiff-Appellee, v. Faye BAGGIANO, Commissioner of the Department of Medicaid State of Alabama, Defendant-Appellant.

No. 85-7402.

United States Court of Appeals Eleventh Circuit.

Nov. 24, 1986.

Henry C. Barnett, Jr., Capell, Howard, Knabe & Cobbs, Montgomery, Ala., for defendant-appellant.

Copeland, Franco, Screws & Gill, E. Terry Brown, Montgomery, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Alabama.

Before TJOFLAT and ANDERSON, Circuit Judges, and MORGAN, Senior Circuit Judge.

CORRECTED OPINION

ANDERSON, Circuit Judge:

In this action, the plaintiff seeks to have the federal courts determine whether the Commissioner of the Alabama Medicaid Agency has violated state or federal law by denying Medicaid reimbursement to podiatrists for podiatric services while at the same time reimbursing medical doctors for the identical podiatric services. Because the plaintiff cannot bring his claims in federal court, we must vacate the judgment of the district court. However, we remand to the district court to consider a Medicaid recipient's motion to intervene in the action.

I. FACTS AND PROCEEDINGS

The plaintiff, Dr. Morgan Silver, is a podiatrist licensed to practice in the state of Alabama. In Alabama, podiatrists are permitted to treat the human foot to the same extent as medical doctors can. Suing both individually and on the behalf of all other similarly situated podiatrists, Silver alleged that defendant Baggiano, Commissioner of the Alabama Medicaid Agency, and Attorney General Charles Graddick had established, in violation of federal and state law, a policy of denying Medicaid reimbursements to licensed podiatrists while at the same time reimbursing medical doctors for podiatric services. Silver's complaint sought a declaratory ruling that podiatrists are entitled to participate in Alabama's Medicaid program and injunctive relief directing the Alabama Medicaid Agency to reimburse podiatrists for podiatric services in the same manner as physicians are reimbursed under the state Medicaid plan.

Dr. Silver originally filed this action in the Circuit Court for Montgomery County, Alabama. The defendants removed the case from Alabama state court to the United States District Court for the Middle District of Alabama. The Attorney General was dismissed from the case, leaving Commissioner Baggiano as the only remaining defendant. On cross-motions for summary judgment, ¹ the district court found that Baggiano had not violated a state statute, but was in violation of the federal statute. Therefore, the district judge granted the relief which Silver sought. This appeal followed. We first discuss the state law claims, then the federal claims, and finally a motion to intervene which the district court did not rule upon.

II. STATE LAW CLAIMS

Silver contends that the policy of the Alabama Medicaid Agency not to reimburse podiatrists violates the laws and constitution of the state of Alabama. The district court ruled that the policy was not violative of Ala.Code Sec. 27-1-15. It did not consider Silver's claims based on the Alabama Constitution.

On appeal, Baggiano argues that Silver cannot bring his claims based on the Alabama Constitution or statutes in federal court. Baggiano did not present the Eleventh Amendment issue to the district court nor did the district court consider this issue. However, since this is a jurisdictional issue, we must rule on it.

The Eleventh Amendment bars suits in federal court against a state by its own citizens as well as by citizens of other states. Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). "A federal court must examine each claim in a case to see if the court's jurisdiction over that claim is barred by the Eleventh Amendment." Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 121, 104 S.Ct. 900, 919, 79 L.Ed.2d 67 (1984) ("Pennhurst II "). "[A] claim that state officials violated state law in carrying out their official responsibilities is a claim against the State that is protected by the Eleventh Amendment." Id. "[T]his principle applies as well to state-law claims brought into federal court under pendent jurisdiction." Id.

In the instant case, Silver has charged the Commissioner of the Alabama Medicaid Agency with violating the state constitution and at least one state statute, and he has asserted that the federal courts have pendent jurisdiction over these claims. On its face, each of these claims appears to be precisely the type of claim barred by Pennhurst II. However, Silver advances three arguments that his state claims are not barred by the Eleventh Amendment.

Silver states that Alabama is not the "real party in interest." He contends that Baggiano has not "shown ... any effect upon the State itself, and ... she cannot." Supp.Brief of Appellee at 8. Thus, Silver is arguing that the " 'general rule ... that relief sought nominally against an officer is in fact against the sovereign if the decree would operate against the latter,' " Pennhurst II, 465 U.S. at 101, 104 S.Ct. at 908 (citation omitted), is not applicable.

" 'The general rule is that a suit is against the sovereign if "the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration," or if the effect of the judgment would be "to restrain the Government from acting, or to compel it to act." ' " Id. at 101, 104 S.Ct. at 908-09 n. 11 (quoting Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963)) (citations omitted). A declaratory judgment or injunction against Baggiano would clearly compel the government of Alabama to act, i.e., to reimburse podiatrists, and "expend itself on the public treasury" since the money to reimburse podiatrists would in some part come from the Alabama treasury. Thus, although the claims are nominally brought against Baggiano, Alabama is the real, substantial party in interest.

Silver also contends that Baggiano was acting ultra vires her authority and that the suit should not be considered to be against Alabama for the purposes of the Eleventh Amendment. However, in Pennhurst II, the Supreme Court pointed out that recent cases have made "clear that a state officer may be said to act ultra vires only when he acts 'without any authority whatever.' " Id. (citations omitted). "[A]n ultra vires claim rests on 'the officer's lack of delegated power. A claim of error in the exercise of that power is therefore not sufficient.' " Id. (citation omitted). The Supreme Court specifically rejected any broader interpretation of the ultra vires doctrine. Id. at 105-18, 104 S.Ct. at 911-17. Under the Pennhurst II standard, Commissioner Baggiano was clearly acting within the scope of her authority in deciding not to reimburse podiatrists.

Finally, citing Barnes v. Cohen, 749 F.2d 1009 (3d Cir.1984), cert. denied, 471 U.S. 1061, 105 S.Ct. 2126, 85 L.Ed.2d 490 (1985), Silver argues that the Third Circuit has recognized an exception to Pennhurst II which is applicable in this case and which this court should adopt. In Barnes, the Third Circuit found that state officials were not adhering to their own regulations regarding their Aid to Families with Dependent Children ("AFDC") program. As a result, the court found that the state officials were violating the state AFDC plan. Moreover, since the federal AFDC statute requires that state AFDC plans "be in effect in all political subdivisions of the State, and if administered by them, be mandatory upon them," 42 U.S.C. Sec. 602(a)(1), the Third Circuit held that state officials, by not adhering to their own regulations, had violated the state plan and thus had violated the federal law which makes the state plan mandatory. Therefore, because state officials were alleged to have violated federal law by not complying with state law, the Third Circuit decided that Pennhurst II was inapplicable. Id. at 1019.

Assuming arguendo that Pennhurst II is not applicable to a case such as that described in Barnes v. Cohen, we hold that we are not faced with such a situation. Silver has not alleged that Baggiano has violated the state Medicaid plan or regulations promulgated pursuant to the state Medicaid plan. Instead he argues that Baggiano has not complied with the state constitution and with state statutes which are not part of the Medicaid plan. Thus, the principles announced in Barnes are not relevant here.

It might be argued that the Eleventh Amendment immunity was waived by the removal of this case from state court to federal court. However, a waiver of Eleventh Amendment immunity by state officials must be explicitly authorized by the state "in its Constitution, statutes and decisions." Ford Motor Co. v. Department of Transportation, 323 U.S. 459, 467, 65 S.Ct. 347, 352, 89 L.Ed. 389 (1945). Thus, removal by state officials of a suit containing state law claims to federal court does not amount to waiver of Eleventh Amendment immunity unless those state officials are authorized to waive such immunity. Gwinn Area Community Schools v. State of Michigan, 741 F.2d 840, 846-47 (6th Cir.1984); David Nursing Home v. Michigan Department of Social Services, 579 F.Supp. 285, 287-88 (E.D.Mich.1984). Silver has conceded that neither Baggiano nor Attorney General Graddick could waive Alabama's Eleventh Amendment immunity. Supp.Brief of Appellee at 12. See Alabama v. Pugh, 438 U.S. 781, 98 S.Ct. 3057 57 L.Ed.2d 1114 (1978). Thus, there has been no waiver of Alabama's Eleventh Amendment sovereign immunity.

In summary, the district court was barred by the Eleventh Amendment from entertaining the claims against Baggiano based on violations of the Alabama Constitution and the Alabama statute. The decision of the...