Yapalater v. Bates

• Decision Date: 30 July 1980
• Docket Number: No. 80 Civ. 1794-CSH.,80 Civ. 1794-CSH.
• Citation: 494 F. Supp. 1349
• Parties: Alvin R. YAPALATER, M.D., F.A.P.A., Plaintiff, v. Charles W. BATES, Individually and as Westchester County Commissioner of Social Services; Barbara Blum, Individually and as New York State Commissioner of the Department of Social Services; William Steibel, Individually and as Deputy Commissioner of the New York State Department of Social Services (Division of Medical Assistance); Robert P. Whalen, Individually and as Commissioner of the New York State Department of Health; Albert DeMartino, Individually and as Director of the White Plains Regional Office of the New York State Department of Health; Lois Eil, Individually and as Medical Director, Westchester County Division of Medical Assistance of the New York State Department of Health; Henry J. Lefkowits, M.D., Individually and as Westchester County, Department of Social Services, Psychiatric Consultant, Defendants.
• Court: U.S. District Court — Southern District of New York

494 F. Supp. 1349

Alvin R. YAPALATER, M.D., F.A.P.A., Plaintiff, v. Charles W. BATES, Individually and as Westchester County Commissioner of Social Services; Barbara Blum, Individually and as New York State Commissioner of the Department of Social Services; William Steibel, Individually and as Deputy Commissioner of the New York State Department of Social Services (Division of Medical Assistance); Robert P. Whalen, Individually and as Commissioner of the New York State Department of Health; Albert DeMartino, Individually and as Director of the White Plains Regional Office of the New York State Department of Health; Lois Eil, Individually and as Medical Director, Westchester County Division of Medical Assistance of the New York State Department of Health; Henry J. Lefkowits, M.D., Individually and as Westchester County, Department of Social Services, Psychiatric Consultant, Defendants.

No. 80 Civ. 1794-CSH.

United States District Court, S. D. New York.

July 30, 1980.

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Marc E. Grossman, White Plains, N. Y., for plaintiff; Evelyn K. Isaac, Fahey & Isaac, White Plains, N. Y., of counsel.

Samuel S. Yasgur, Westchester County Atty., White Plains, N. Y., for Westchester County defendants; Eric D. Koster, Sr. Asst. County Atty., White Plains, N. Y. of counsel.

Robert Abrams, Atty. Gen. of the State of New York, New York City, for State defendants; Ellen J. Bronzo, Asst. Atty. Gen., New Hyde Park, N. Y., of counsel.

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

Plaintiff Alvin R. Yapalater, M.D., is a psychiatrist practicing in White Plains, Westchester County, New York. He is a provider of services under New York State's Medicaid Plan, which is funded in part by the federal government pursuant to Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq.

Defendants Charles W. Bates, Albert DeMartino, Lois Eil, and Henry J. Lefkowits, M.D. (the "County defendants") are concerned with the administration of the Medicaid program on the Westchester County level. Defendants Barbara Blum, William Steibel, and Robert P. Whalen (the "State defendants") are charged with administration of the Medicaid program on the State level. Plaintiff's claims for Medicaid reimbursement are submitted in the first instance to the County defendants, who make an initial evaluation, and determine whether or not to pay them, thereafter making claims for partial reimbursement from the State, which in turn makes a claim for partial reimbursement from the federal government. In their evaluation of Medicaid-reimbursement claims, the County defendants are guided by regulations and policy decisions emanating from the State defendants.

Plaintiff has been practicing psychiatry in White Plains for a number of years. Medicaid patients have formed a significant part of his practice. At present, about 75% of his 300 patients are Medicaid recipients.¹ In his practice Dr. Yapalater employs psychologists, psychiatric social workers, psychiatric nurses, and behavioral therapists. These individuals work with patients, under plaintiff's supervision. The State defendants have refused to approve reimbursement of Dr. Yapalater for the services of these individuals. The County defendants have consequently declined to process plaintiff's reimbursement claims.

Plaintiff claims that this refusal violates Title XIX and federal regulations promulgated thereunder. He also asserts constitutional deprivations of due process and equal protection. Dr. Yapalater sues for declaratory and injunctive relief, punitive damages, and costs including attorney's fees. Jurisdiction was originally asserted under 28 U.S.C. § 1331(a),² it being alleged that the matter in controversy exceeds the sum of $10,000. Following filing of the first amended complaint, the Supreme Court decided Maine v. Thiboutot, ___ U.S. ___, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). The plaintiff thereupon moved to amend his complaint further, so as to state a cause of action under 42 U.S.C. § 1983,³ and to claim attorney's fees under § 1988. That application was granted, and the complaint deemed amended accordingly.

The action first came before the Court on plaintiff's motion for preliminary injunction pursuant to Rule 65, F.R.Civ.P., and defendants' cross-motion under Rule 12(b) to dismiss the complaint for legal insufficiency. The Court directed that the trial of the action be advanced and consolidated with the hearing of the application for preliminary injunction. Rule 65(a)(2). The parties having offered the testimony of witnesses and documentary exhibits, briefs having been submitted and oral argument heard, the case is now ready for final adjudication. The following constitute the Court's Findings of Fact and Conclusions of Law. Rule 52(a), F.R.Civ.P.

I.

At the threshold defendants challenge the Court's subject matter jurisdiction.

In Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 99 S.Ct. 1905, 60 L.Ed.2d 508 (1979), the Supreme Court held that 28 U.S.C. § 1343(3) and (4)⁴ did not encompass, within its jurisdictional grant, claims by welfare recipients that a state welfare regulation was invalid because it conflicted with the Social Security Act. Section 1343 did not confer federal jurisdiction over claims based on the Social Security Act, the Court held, because the Act did not secure "equal rights," the predicate to jurisdiction under § 1343(3), or "civil rights," the jurisdictional predicate under § 1343(4). Since the recipients' claims did not exceed $10,000, general federal-question jurisdiction was not available under § 1331(a). Even assuming there was a viable claim under the Civil Rights Act, 42 U.S.C. § 1983, the Court concluded that statute did not secure "equal rights" or "civil rights" within the meaning of § 1343, and afforded no independent basis for jurisdiction, since in the words of the Third Circuit's opinion, affirmed in Chapman, § 1983 "is not a jurisdictional statute; it only fashions a remedy." 441 U.S. at 606, 99 S.Ct. at 1910.

Maine v. Thiboutot, supra, answering the question assumed in Chapman, held that 42 U.S.C. § 1983 encompassed welfare recipients' claims based upon a state's purely statutory violations of the Social Security Act, thereby making available the right to claim attorney's fees under § 1988. The case commenced in the state court, and so no federal jurisdictional question arose; but the Court, in dictum, reconciled its decision with Chapman by recognizing that § 1983 was broader than its so-called jurisdictional counterpart in § 1343. ___ U.S. at ___ n.6, 100 S.Ct. at 2506 n.6. The gap in jurisdictional coverage could, as in Thiboutot, be filled by a state court's general subject matter jurisdiction, or, as recognized in Chapman, by general federal-question jurisdiction under § 1331, and presumably by the grant of diversity jurisdiction under 28 U.S.C. § 1332.

Defendants argue, within the context of what is said to be a jurisdictional defense, that Thiboutot, which involved welfare recipients, did not overrule sub silentio Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975); and that under the Cort analysis,⁵ plaintiff as a welfare provider has no federal right of action for an alleged violation of the Social Security Act under color of state law.

Defendants' Cort v. Ash argument, even if sound, does not defeat the Court's jurisdiction. Rather, the argument goes to the merits, and is addressed infra. Jurisdiction of the plaintiff's § 1983 claim for violations of the Social Security Act is properly founded upon 28 U.S.C. § 1331(a), as "arising under the Constitution, laws, or treaties of the United States." The district court in Cort held that it had jurisdiction under § 1331, Ash v. Cort, 350 F.Supp. 227, 232 (E.D.Pa.1972), a conclusion which the Supreme Court did not question, although holding that the underlying federal statute did not create a private cause of action.

To be sure, § 1331(a) requires a $10,000 jurisdictional amount. The present defendants contend that the $10,000 jurisdictional amount is not satisfied.

Where the question is raised at the pleading stage, a complaint alleging the jurisdictional amount will stand unless "upon the face of the complaint, it is obvious that the suit cannot involve the necessary amount," Saint Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 292, 58 S.Ct. 586, 591-92, 82 L.Ed. 845 (1937). The affidavits accompanying the complaint and motion for preliminary injunction alleged that plaintiff was owed $20,375 as the result of defendants' allegedly wrongful interpretation of the Medicaid regulations. While defendants argue that a number of these claims have been held up because of facial or other irregularities not related to the regulations at issue in the case, it is not necessary to inquire further into the details of these invoices, in order to determine the existence vel non of the jurisdictional amount. First, even if we were concerned solely with plaintiff's claim for invoices previously rendered, one cannot say from the face of his complaint that the jurisdictional amount could not be met; and it is well settled that a federal court does not lose jurisdiction over a case originally well-founded, simply because the amount ultimately recovered falls short of $10,000. Rosado v. Wyman, 397 U.S. 397, 405 n.6, 90 S.Ct. 1207, 1214, 25 L.Ed.2d 442 (1970). A leading commentator has stated: ". . . the jurisdictional amount test is not dependent upon the amount actually recovered by plaintiff. Otherwise, the court's jurisdiction would be uncertain and some adjudications of the merits would be subject to a condition subsequent." 14 Wright-Miller-Cooper, Federal Practice and Procedure (1976) at § 3702, p. 381.

Secondly, the present complaint also contains a prayer for injunctive relief, "ordering defendants to conform their policy and procedure for outpatient services to federal law. . ....