Yanez v. Jones, NC 38-72.

• Decision Date: 04 April 1973
• Docket Number: No. NC 38-72.,NC 38-72.
• Citation: 361 F. Supp. 701
• Parties: Jose H. YANEZ et al., Plaintiffs, v. Evans E. JONES, Jr., Director, Utah State Department of Social Services, Division of Family Services, et al., Defendants.
• Court: U.S. District Court — District of Utah

361 F. Supp. 701

Jose H. YANEZ et al., Plaintiffs, v. Evans E. JONES, Jr., Director, Utah State Department of Social Services, Division of Family Services, et al., Defendants.

No. NC 38-72.

United States District Court, D. Utah, N. D.

April 4, 1973.

COPYRIGHT MATERIAL OMITTED

Jerry L. Bean, L. G. Bingham, Paul D. Vernieu, David J. Knowlton, and William F. Daines, of Weber County Legal Aid Services, Ogden, Utah, for plaintiffs.

Vernon B. Romney, Atty. Gen., and Kent S. Lewis, Asst. Atty. Gen., Salt Lake City, Utah, for defendants Evans E. Jones, Jr., Gerald Kotter and Sterlin Hollingshead.

K. Roger Bean, Layton, Utah, for defendants Tanner Memorial Clinic, Noall Z. Tanner, V. Robert Kelly, Wayne D. Bosworth, D. J. Cutler, A. Lloyd Poulsen, Harold L. Hansen, and Robert F. Bitner.

MEMORANDUM AND ORDER

ALDON J. ANDERSON, District Judge.

Plaintiffs, recipients of federal Medicaid benefits,¹ have brought this bilateral class action against certain state employees charged with administering the Medicaid program in the Utah counties in which plaintiffs reside and against physicians who provide Medicaid services in those counties. Plaintiffs seek to enjoin the charging of amounts for Medicaid assistance which are above the fee level prescribed in the state Medicaid plan. As a basis for their cause of action plaintiffs rely upon the terms of 45 C.F.R. § 250.30(a)(6), which states:

Participation in the Medicaid program will be limited to providers of service who accept, as payment in full, the amounts paid in accordance with the fee structures.

Plaintiffs allege that for a considerable length of time defendant providers have assessed and collected from plaintiffs $1.00 to $8.00 per office visit, which are non-authorized amounts in excess of the established fee structure and further allege that defendant state employees have continued to make payments to such non-complying health providers under the Medicaid fee structure with knowledge that said providers have charged plaintiffs separate, additional fees not authorized by the Medicaid regulations.

Plaintiffs assert as alternative bases for jurisdiction 28 U.S.C. § 1331, which confers jurisdiction in cases which arise under the Constitution and laws of the United States and in which the matter in controversy exceeds $10,000, and 28 U.S.C. § 1343(3) & (4), which confer jurisdiction in actions authorized by 42 U.S.C. § 1983.

Defendant state employees moved to dismiss for lack of jurisdiction under either jurisdictional statute. Defendant health providers also moved to dismiss for lack of jurisdiction or to strike certain paragraphs of the complaint. The motion to strike contests the propriety of maintaining this action as a class action so far as the defendant class of doctors is concerned.

At a hearing on plaintiffs' motion for preliminary injunction held on September 26, 1972, it was represented to the court that a stipulation had been entered into between plaintiffs and defendant health providers whereby said defendants agreed to cease charging the excessive fees described in the complaint during the pendency of the suit. The court then denied plaintiffs' motion for preliminary injunction against both groups of defendants and granted a motion to strike the name of R. N. Hirst, M.D., as a defendant. On November 28, 1972, a hearing was held on the jurisdictional issues raised by the motions to dismiss and to determine whether the action was a proper class action. This was followed on December 19, 1972, by a further hearing on the jurisdictional issues.

JURISDICTION

Defendant providers and defendant state employees each object to jurisdiction under 28 U.S.C. § 1331 on two grounds. Defendants urge, first, that the case is not one which arises under the Constitution or laws of the United States. There is, they say, no constitutional or statutory provision in issue, rather only an administrative regulation which makes no mention of a right to sue for its enforcement. Second, defendants urge that the case is not one wherein the matter in controversy exceeds $10,000, exclusive of interest and costs.

Plaintiffs claim this suit arises under the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution and under 45 C. F.R. § 250.30(a)(6). So far as the equal protection claim is concerned, plaintiffs have failed to adequately allege conduct on the part of any defendants toward non-welfare recipients which, when compared to the alleged conduct of the defendants toward the plaintiffs, gives rise to a claim of discrimination. Furthermore, plaintiffs have also failed to allege conduct on the part of any defendants toward other welfare recipients which, when compared to the alleged conduct of the defendants toward the plaintiffs, gives rise to a claim of discrimination. More particularly, there is no claim that defendant providers have charged (and defendant state officers have allowed to be charged) any nonplaintiffs who are also recipients of medical benefits under federally-assisted programs administered by the State of Utah fees for services comparable to those received by the plaintiffs which are less than the sum of the fee structure amount plus the alleged office visit charge. Therefore, this is not a suit which arises under the Constitution of the United States.

The court does conclude, however, that the claim against the defendant state employees is a claim which arises under the laws of the United States. On more than one occasion federal courts have stated that a civil remedy may be implied from statutes or regulations which make no mention of a right to sue. See, e. g., Euresti v. Stenner, 458 F.2d 1115 (10th Cir. 1972); Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969); Cook v. Ochsner Foundation Hospital, 319 F.Supp. 603 (E.D.La.1970). The reasoning of those cases amply supports jurisdiction over defendant state employees in the instant action. There is no need to decide, as defendants urge, whether 45 C.F.R. § 250.30(a)(6) alone implies a remedy. This suit arises under provisions of Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., as well. The regulation in question implements the clear object of Title XIX which is to provide medical services to those who cannot afford them. The regulation must be enforceable against the State or this purpose of Title XIX will not be achieved. Where the State's eligibility for funds may be drawn into question for failure to comply with federal regulations, it is imperative that plaintiff Medicaid recipients, who are the real beneficiaries under the Medicaid program, be afforded a civil remedy under Title XIX and the regulation. In Gomez, cited above, the court dealt with regulations promulgated by the Secretary of Labor pursuant to the Wagner-Peyser Act. The regulations provided for minimum wages and housing for migratory farm workers. The plaintiffs sued to obtain relief from injuries suffered as a result of the alleged violation of these regulations by their employer. In the course of its opinion the court stated the following:

We start with the proposition that there can be no doubt that the regulations of the Secretary of Labor were intended to protect the interest of the workers.

* * * * * *

Thus from the "legislative" history and from the regulations themselves it is plain that they were intended to confer an interest upon migrant farm workers such as Plaintiffs here. There being no explicit indication in the regulations or the Act that the workers were to have the opportunity to protect such conferred interest is not decisive since the existence of such an explicit grant of a remedy is not necessary. A civil remedy may be given to those protected by statutes or regulations by implication.

* * * * * *

This Act, its setting and the regulations call imperatively for implied remedies here if the purpose of the regulations—the protection of migratory farm workers—is to be achieved.

* * * * * *

It is unthinking that Congress, obviously concerned with people, would have left the Secretary with only the sanction of cutting off funds to the state. Moreover, the private civil remedy is a method of policy enforcement long honored explicitly in statutes and by implication with the help of courts. Congress more and more commits to individuals, acting as a private Attorney General, the effectuation of public rights through relief to individuals.

417 F.2d at 575-576.

The court is of the opinion that the above language is controlling in the case at bar. Although the statutes and regulations involved in that case are different from those involved in the instant case, both statutes are administered in similar fashion. In both instances the statute provides for the allocation of federal resources to state agencies on the condition that the state agencies undertake certain obligations. The language quoted above from the Gomez decision makes it clear that the welfare recipients are the real beneficiaries of legislation such as the Wagner-Peyser Act and Title XIX of the Social Security Act. For this reason plaintiffs are entitled to sue state authorities in order to preserve their rights under the Medicaid program. In addition, it should be made clear that although the Department of Health, Education and Welfare has authority to review state Medicaid programs with a view toward cutting off funds to states which do not comply with 45 C.F.R. § 250.30(a)(6), the Medicaid program provides no procedure whereby recipients of services under the program may trigger and participate in review by HEW. For this reason, neither the principle of exhaustion of administrative remedies, nor the doctrine of primary jurisdiction, has any application in this case. Rosado v. Wyman, 397 U.S. 397, 406, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970).

The federal right which is jeopardized when the State fails to fully comply with federal regulations is the right to good health and full physical and...