Tsirelman v. Daines

• Citation: 794 F.3d 310
• Decision Date: 24 July 2015
• Docket Number: No. 14–2154–CV.,14–2154–CV.
• Parties: Gary TSIRELMAN, M.D., Plaintiff–Appellant, v. Richard F. DAINES, M.D., Commissioner of Health, State of New York Department of Health, Kendrick A. Sears, M.D., Chairman of the State Board for Professional Medical Conduct, State of New York Department of Health, and State Board for Professional Medical Conduct and their Employees and Agents, Defendants–Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

794 F.3d 310

Gary TSIRELMAN, M.D., Plaintiff–Appellant

v.Richard F. DAINES, M.D., Commissioner of Health, State of New York Department of Health, Kendrick A. Sears, M.D., Chairman of the State Board for Professional Medical Conduct, State of New York Department of Health, and State Board for Professional Medical Conduct and their Employees and Agents, Defendants–Appellees.^*

No. 14–2154–CV.

United States Court of Appeals, Second Circuit.

Argued: April 16, 2015.

Decided: July 24, 2015.

Adam Francois Watkins, Watkins Bradley LLP, New York, N.Y., for Plaintiff–Appellant.

Karen W. Lin (Claude S. Platton, Barbara D. Underwood, Solicitor General of New York, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, New York, N.Y., for Defendants–Appellees.

Before: WINTER, WALKER, and DRONEY, Circuit Judges.

Opinion

JOHN M. WALKER, JR., Circuit Judge:

Plaintiff Gary Tsirelman's medical license was revoked in a New York disciplinary proceeding. On appeal, he challenges New York's use of the preponderance-of-the-evidence standard in such proceedings as a violation of the Due Process Clause. Because we hold that the Constitution does not require a higher standard of proof in fraud-based medical disciplinary proceedings, we AFFIRM the district court's order dismissing Tsirelman's complaint.

BACKGROUND

Gary Tsirelman became licensed to practice medicine in 1996. In 2000, he acquired an ownership interest in LaMed medical clinic (“LaMed”). While practicing at LaMed, Tsirelman performed synaptic therapy, a non-invasive, drug-free treatment consisting of electrical impulses administered to areas causing the patient pain. Flatlands Management, the contractor who assembled LaMed's bills, however, billed insurance companies for a nerve destruction procedure when Tsirelman performed synaptic therapy, for which no billing codes existed. Synaptic therapy is not a form of nerve destruction procedure.

In 2007, the State of New York Office of Professional Medical Conduct (“OPMC”) charged Tsirelman with practicing medicine fraudulently, willfully making or filing a false report, ordering excessive tests or treatments not warranted by the patient's condition, and therefore engaging in conduct that evidenced moral unfitness to practice medicine. OPMC based the charges on Tsirelman's bills for nerve destruction procedures that he never performed. After a six-day hearing, a Hearing Committee for the State Board of Professional Medical Conduct (the “Hearing Committee”), which consisted of two licensed physicians, one lay member, and a non-voting administrative law judge as presider, sustained 51 of 69 charges of professional misconduct. The Hearing Committee found, by a preponderance of the evidence, that Tsirelman knew that bills were being sent under his signature for procedures that he did not perform and that he allowed such bills to be sent for his own benefit. In re Tsirelman, No. 07–269, at 43 (N.Y. Bd. Prof. Med. Conduct Dec. 5, 2007), J.A. 234. The Hearing Committee revoked Tsirelman's medical license and fined him $100,000. Id. at 52, J.A. 243.

Tsirelman filed an Article 78 proceeding in New York state court seeking review of the Hearing Committee's determination.¹ In April 2009, the Appellate Division affirmed the Hearing Committee's principal findings and held that “the Committee could infer [Tsirelman's] knowledge that the bills were false, rather than merely inaccurate, and that he had willfully intended to mislead and deceive the insurer.” Tsirelman v. Daines, 61 A.D.3d 1128, 876 N.Y.S.2d 237, 239 (App.Div.3d Dep't 2009). The Appellate Division affirmed both penalties. Id. at 240.²

On March 1, 2010, Tsirelman filed this action in federal district court (Jack B. Weinstein, Judge ), alleging that defendants, the New York commissioner of health, the chairman of the state board for professional medical conduct, and their agencies, violated his due process rights in the conduct of his disciplinary hearing. Defendants moved to dismiss or, in the alternative, for abstention. On October 14, 2010, the district court granted defendants' motion for abstention to permit Tsirelman to petition the director of OPMC to reopen his case in light of an intervening amendment to New York's Public Health Law. The district court stayed the action pending Tsirelman's petition.

Tsirelman filed a motion for reconsideration with the director of OPMC. The director denied Tsirelman's motion. Thereafter, Tsirelman moved to reopen his federal action, and defendants renewed their motion to dismiss for lack of subject matter jurisdiction and failure to state a claim. On May 14, 2014, the district court granted the motion to dismiss as to the New York Department of Health and the State Board for Professional Medical Conduct under the Eleventh Amendment. In doing so, the district court implicitly denied that portion of the motion concerning defendants Daines and Sears, who were sued in their official capacities. However, the district court also concluded that Tsirelman's complaint failed to state a claim under the Due Process Clause. Accordingly, the district court granted defendants' motion to dismiss, and Tsirelman timely appealed.

DISCUSSION

Tsirelman argues that defendants denied him due process in their conduct of his disciplinary hearing by employing a preponderance-of-the-evidence standard. Before turning to Tsirelman's merits arguments, however, we address defendants' argument that Tsirelman's complaint must be dismissed as against the individual defendants because they are protected from suit by the Eleventh Amendment.

We review de novo the district court's dismissal for lack of subject matter jurisdiction under Rule 12(b)(1) or failure to state a claim under Rule 12(b)(6). Jaghory v. N.Y. State Dep't of Educ., 131 F.3d 326, 329 (2d Cir.1997). Like the district court, we “accept all factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff.” Id.

I. Eleventh Amendment Immunity

The Eleventh Amendment provides:

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

The Supreme Court has consistently interpreted the Eleventh Amendment to bar suits brought against an unconsenting state in federal courts “by her own citizens as well as by citizens of another State.” Edelman v. Jordan, 415 U.S. 651, 662–63, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). Because Tsirelman is a citizen of New York who brought suit against New York officials in their official capacities, defendants argue that his suit is nonjusticiable under the Eleventh Amendment. We reject this contention because Tsirelman's suit seeks prospective relief against state officials in their official capacities, which is permitted notwithstanding the general proscription of suits against states by the Eleventh Amendment.

In Ex parte Young, the Supreme Court held that the Eleventh Amendment did not bar an action in federal court to enjoin a state official from taking official action claimed to violate federal law. 209 U.S. 123, 155–56, 28 S.Ct. 441, 52 L.Ed. 714 (1908) ; see also Edelman, 415 U.S. at 664, 94 S.Ct. 1347. Under this doctrine, federal courts may hear claims for prospective injunctive relief, see Edelman, 415 U.S. at 677, 94 S.Ct. 1347, but retroactive claims seeking monetary damages from the state treasury are barred by the Eleventh Amendment because, even if state officials are the nominal defendants, the state is the real party in interest, id. at 663, 94 S.Ct. 1347.

Tsirelman's complaint seeks an injunction restoring the status quo unless and until the State conducts a new hearing and establishes the charges based on a clear and convincing standard. Defendants characterize this claim as seeking purely retrospective relief because Tsirelman is trying to remedy a past violation of his due process rights that occurred during his disciplinary hearing.

Contrary to defendants' contentions,³ Tsirelman's complaint seeks prospective relief because he requests a remedy to an alleged ongoing violation of federal law. Tsirelman claims that New York's rule permitting proof of fraud-based medical misconduct using a preponderance-of-the-evidence standard violates due process and that, as a result, he is unconstitutionally being denied his medical license. As a remedy, Tsirelman seeks an injunction requiring either reinstatement of his license or a hearing that, in his view, comports with due process. Either outcome would remedy Tsirelman's alleged injury and would be “prospective relief that is not barred by the Eleventh Amendment.” Dwyer v. Regan, 777 F.2d 825, 836 (2d Cir.1985) (public employee's request for reinstatement or a hearing sought prospective injunctive relief). Therefore, we affirm the district court's denial of Daines's and Sears's motion to dismiss pursuant to the Eleventh Amendment.

II. Tsirelman's Due Process Challenges

We turn now to the merits of Tsirelman's appeal. Tsirelman makes two separate but related challenges to New York's use of the preponderance-of-the-evidence standard: (a) a facial challenge to the standard as used in all fraud-based medical disciplinary proceedings, and (b) an as-applied challenge to use of the standard in his own proceeding.

a. Facial Challenge

New York's medical misconduct committees base their conclusions on a statutorily-prescribed preponderance-of-the-evidence standard. N.Y. Pub. Health L. § 230(10)(f). Tsirelman argues that New York's use of the preponderance standard fails to comport with the minimum requirements of due process in fraud-based disciplinary proceedings because of the compelling private and public interests in avoiding erroneous license revocations. Tsirelman contends that only the higher clear and convincing standard comports with due process.

The preponderance standard is...