Friedman v. Shalala

• Court: Court of Appeals for the First Circuit
• Decided: January 27, 1995
• Docket: 94-1611
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

____________________

No.  94-1611

                              LEONARD R. FRIEDMAN, M.D.,

                                Plaintiff, Appellant,

                                          v.

          DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, ET. AL.,

                                Defendants, Appellees.

____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Edward F. Harrington, U.S. District Judge]
                                               ___________________

                                 ____________________

                                        Before

                                  Cyr, Circuit Judge,
                                       _____________
                          Bownes, Senior Circuit Judge, and
                                  ____________________
                                Stahl, Circuit Judge.
                                       _____________

____________________

            Leonard R. Friedman, M.D., on brief pro se.
            _________________________
            Donald K.  Stern, United States  Attorney, and Suzanne E. Durrell,
            ________________                               __________________
        Assistant United States Attorney, on brief for appellee.

____________________
                                   January 27, 1995
                                 ____________________

Per  Curiam.   Leonard  Friedman  is  appealing the
                      ___________

            district  court's decision dismissing  his case for mootness.

            We affirm.

                      I.  Background
                          __________

                      We  recite only  briefly the  pertinent facts.   In

            1991,  Friedman sued  various defendants,  claiming that  the

            revocation of  his medical  license in Massachusetts  in 1987

            and  his exclusion from  Medicare provider rolls  in 1990 had

            been   unlawfully  effected.     The  district  court  stayed

            proceedings pending  the results  of other state  and federal

            court actions involving  the same parties.  In  October 1993,

            the  court  approved  the  parties'  stipulation  of  partial

            dismissal.  Pursuant to  that stipulation, Friedman dismissed

            with prejudice  his claims against all  defendants except his

            claim  against the  Department of  Health and  Human Services

            (HHS)  for a  declaratory  judgment that  HHS had  wrongfully

            excluded him from Medicare provider rolls in 1990.1  

____________________

            1.  HHS excluded Friedman under 42 U.S.C.   1320a-7(b)(4)(A),
            which permits  exclusion of  an individual "whose  license to
            provide  health care  has been  revoked  or suspended  by any
            State  licensing authority . .  . for reasons  bearing on the
            individual's  .  .  . professional  competence,  professional
            performance,  or   financial  integrity."    HHS   based  its
            exclusion  on  New York's  revocation  of Friedman's  medical
            license.  New York had based its revocation on Massachusetts'
            determination that Friedman had engaged in "gross misconduct"
            sufficient   to  warrant  revocation  of  Friedman's  medical
            license in that state.  Friedman's period of exclusion was to
            end  when either  Massachusetts  or New  York reinstated  his
            license.

                                         -2-



At Friedman's request, HHS reinstated Friedman as a

            Medicare  provider in November 1993.  When HHS later answered

            Friedman's   complaint,   it    asserted   that    Friedman's

            reinstatement had mooted  his claim for  relief and that  the

            action should be  dismissed.  The court  agreed and dismissed

            the action sua sponte.2
                       ___ ______

                      II.  Discussion
                           __________

                      We address two of Friedman's  arguments on appeal.3

            First, Friedman says that HHS is reasonably likely to exclude

            him  again since  California revoked  his medical  license in

            1990  and that any future exclusion by HHS would likely evade

            judicial review because it would lapse before the court could

            render  a  decision.     Second,  Friedman  argues  that  his

            exclusion  has continuing  collateral consequences  that will

                                
            ____________________

            2.  Friedman  did not immediately appeal the order dismissing
            his case, but filed  a motion for relief from  judgment under
            Fed.  R.  Civ. P.  60(b), the  denial  of which  he appealed.
            Because his motion was filed within the time limit for filing
            motions under Fed. R. Civ. P. 59(e),  however, and challenged
            the legal correctness of the court's decision that his action
            was moot,  we  treat it  as a  timely Rule  59(e) motion  and
            assume, without  deciding, that  the dismissal of  his action
            for  mootness  is properly  before  us.   See  Perez-Perez v.
                                                      ___  ___________
            Popular Leasing Rental, Inc., 993 F.2d 281, 284-85  (1st Cir.
            ____________________________
            1993); Mariani-Giron v. Acevedo-Ruiz, 945 F.2d 1, 3 (1st Cir.
                   _____________    ____________
            1991).

            3.  Other arguments  he makes  are without merit,  e.g., that
            the stipulation of partial  dismissal and the court's failure
            to revoke  its stay  order prior to  Friedman's reinstatement
            waived  mootness,  that  evidence discovered  in  1991 before
            Friedman filed his suit  qualified as new evidence justifying
            relief  from  the court's  judgment,  and  that the  mootness
            doctrine  does  not  apply   to  judicial  review  of  agency
            decisions.

                                         -3-



affect his reputation and his medical and legal careers.  For

            those   reasons,  Friedman  claims   that  his   request  for

            declaratory relief is not moot. 

                      A.  Capable of Repetition Yet Evading Review
                          ________________________________________

                      We  conclude  that  the capable  of  repetition yet

            evading review exception to mootness does not apply.  While a

            one-year exclusion  may well  evade judicial review,  it does

            not seem at all  likely that HHS will exclude Friedman on the

            basis of California's revocation of his medical license.

                      At the time Friedman applied for reinstatement, the

            California  revocation clearly  would have  been a  basis for

            excluding Friedman from the Medicare  program.  See 42 U.S.C.
                                                            ___

               1320a-7(b)(4)(A),  supra  note  1.    Yet  HHS  reinstated
                                  _____

            Friedman in 1993,  and so it must not have  believed that the

            1990  California  license  revocation  would be  grounds  for

            excluding  Friedman.   See 42  C.F.R.    1001.3002(a)(3) (HHS
                                   ___

            "will"  reinstate  an  excluded  individual  if,  among other

            things,  it determines  that there  is "no  additional basis"

            under the statute for continuing the  exclusion).4  Thus, the

            fact that  Friedman was  reinstated shows that  HHS would  be

                                
            ____________________

            4.  Friedman alleges that this regulation and others cited by
            HHS  in  its brief  were not  in effect  at  the time  he was
            excluded,  but  does  not  allege  that  this  and  the other
            regulations embody practices  or policies that are  different
            from  ones prevailing  at  the time  of  his exclusion.    In
            addition,  we  note  that  the regulations  relating  to  the
            reinstatement  of excluded  individuals  became effective  on
            January  29, 1992,  and so  presumably applied  to Friedman's
            reinstatement in November 1993.

                                         -4-



unlikely to use the California revocation to exclude Friedman

            in the future.   Moreover, excluding Friedman because  of the

            California  revocation   would  arguably  be   an  abuse   of

            discretion.  California revoked Friedman's license because of

            Massachusetts' revocation of his license; that is, California

            based its  license revocation on  the same misconduct  as had

            New  York.   Because HHS  based Friedman's  exclusion  on New

            York's  revocation  of  Friedman's  license,   excluding  him

            because  of  the   California  revocation  would  essentially

            penalize Friedman twice for the same  misconduct, a course of

            action that we doubt HHS would undertake.  

                      B. Collateral Consequences
                         _______________________

                      The  adverse  collateral   consequences  to   which

            Friedman  points do  not suffice  to avoid  mootness in  this

            case.  According to Friedman, overturning his exclusion would

            relieve him of the  stigma of having been excluded,  ease his

            admission to  practice law in Massachusetts,  and relieve him

            of the  obligation to  explain the  exclusion  when he  seeks

            hospital  staff privileges,  affiliation with  certain health

            care entities, or licensure in other states.  

                      Certainly, in some  situations, adverse  collateral

            consequences such  as those advanced here have  been found to

            avoid  mootness.   See, e.g.,  Kirkland v.  National Mortgage
                               _________   ________     _________________

            Network,  Inc., 884  F.2d  1367, 1370  (11th Cir.  1989) (the
            ______________

            dismissal  of an action did  not moot an attorney's challenge

-5-



to a court's  revocation of  his admission pro  hac vice  for
                                                       ___  ___ ____

            failure   to  abide  by   promises  made   during  settlement

            negotiations; the  "brand of disqualification  on grounds  of

            dishonesty and  bad faith could well  hang over [plaintiff's]

            name  and  career  for  years to  come");  Kleiner  v.  First
                                                       _______      _____

            National Bank of Atlanta, 751 F.2d 1193, 1200 n.14 (11th Cir.
            ________________________

            1985)  (the  settlement  of  a  class  action  did  not  moot

            attorneys' challenge to  their disqualification by the  court

            in part because counsel could be exposed to further sanctions

            by  the bar  and  their disqualification  could have  adverse

            effects on  their  careers  and  public  image)  (alternative

            holding);  Miller v.  Washington  State Bar  Ass'n, 679  F.2d
                       ______     ____________________________

            1313, 1316, 1318  (9th Cir.  1982) (an attorney  could sue  a

            state bar association to expunge  a letter of admonition from

            his file since he would be required to explain the admonition

            if  he applied  to the  bar in  other states or  for judicial

            appointments).  

                      Here, however,  it is  not the HHS  exclusion which

            has tarnished Friedman's reputation, but the apparently valid

            New York and Massachusetts  licensing board decisions,5 which

                                
            ____________________

            5.  Friedman  apparently  did  not  challenge  the  New  York
            decision in court.   The Massachusetts Supreme Judicial Court
            has upheld the Massachusetts decision.  See Friedman v. Board
                                                    ___ ________    _____
            of  Registration in  Medicine,  561 N.E.2d  859 (Mass.  1990)
            _____________________________
            (substantial  evidence  supported  the  decision   to  revoke
            Friedman's  license for gross  misconduct), cert. denied, 498
                                                        ____________
            U.S.  1107  (1991);  Friedman  v. Board  of  Registration  in
                                 ________     ___________________________
            Medicine, 609  N.E.2d 1223 (Mass. 1993)  (petition for relief
            ________
            from license revocation was denied).  

                                         -6-



concluded  that  Friedman had  engaged in  gross professional

            misconduct   sufficient   to   warrant  license   revocation.

            Consistent with the applicable statutory basis for exclusion,

            HHS's  letter notifying  Friedman of his  exclusion explained

            that his exclusion  was based on "the fact" that New York had

            revoked  his license  and  indicated that  the  issue in  any

            administrative  hearing would  be "whether  your license  was

            revoked for reasons relating to your professional competence,

            professional  performance, or  financial  integrity."   Since

            Friedman's Medicare  exclusion was  based solely on  the fact

            that his license had  been revoked, the exclusion effectively

            signified only  that New York had  revoked Friedman's license

            for  reasons  bearing  on   his  professional  competence  or

            performance.  Compare 42 C.F.R.   1001.2007(a)(i) & (ii) (the
                          _______

            only issues before an ALJ in an exclusion hearing are whether

            the  basis  for the  imposition  of the  sanction  exists and

            whether  the   length  of  the   exclusion  is  reasonable).6

                                
            ____________________

6.  This regulation became effective January  29, 1992, after
            Friedman was  excluded.  Nonetheless,  it was published  as a
            proposed   regulation   before   Friedman's   exclusion   and
            represents  HHS's  interpretation   of  its  obligations   in
            exclusions such  as Friedman's  as of  the time  Friedman was
            excluded.  See 55 Fed. Reg. 12,206  (4/2/90) (explaining that
                       ___
            HHS's  authority  to exclude  certain  individuals, including
            those  whose state  medical  licenses have  been revoked,  is
            "derivative" because "our ability to exclude derives from the
            fact  that  another  entity has  imposed  a  sanction on  the
            individual  or  health  care  entity.    [HHS]  would not  be
            required to reestablish  the factual or legal basis  for such
            underlying sanction.").  

                                         -7-



Although the exclusion resulted from  the license revocation,

            it conferred no additional stigma on Friedman.7  

                      Moreover, the  actual effect of  the exclusion  was

            exclusively a financial one, as the letter notifying Friedman

            of  his exclusion  made  clear.   Because  of his  exclusion,

            neither Medicare nor  certain federally-assisted state health

            care programs  (from which Friedman was  also excluded) would

            pay for services or  items furnished to Friedman's patients.8

                                
            ____________________

            7.  HHS's letter  to Friedman notifying him  of his exclusion
            informed him that HHS would notify certain state agencies and
            the  public of his exclusion and  of the reasons therefor.  A
            copy  of the  public  notice of  Friedman's exclusion  is not
            included in the  record, but it apparently would  have stated
            that  Friedman's exclusion  would  end when  his license  was
            reinstated.  See 42 U.S.C.    1320a-7(c)(3)(A) (the notice of
                         ___
            exclusion given to the excluded individual and  to the public
            shall  specify the minimum period of exclusion).  At the time
            Friedman was  reinstated, HHS  was required to  notify "those
            agencies,  groups,   individuals,   and  others   that   were
            originally   notified   of  the   exclusion"   of  Friedman's
            reinstatement.  See 42 C.F.R.   1001.3003(a)(4).  Presumably,
                            ___
            therefore,  public  notice  of  Friedman's  reinstatement was
            given, although it is not clear whether the notice would have
            given  the  reason for  his  reinstatement.   Compare  id.   
                                                          _______  ___
            1001.134(a)(2)  (a predecessor regulation  to   1001.3003(a),
            which  provided for  notice  to  the  public of  an  excluded
            individual's  reinstatement).    Assuming that  the  original
            public   notice  of  Friedman's   exclusion  had  stigmatized
            Friedman as a  person who  had lost his  medical license  for
            reasons   bearing   on   his  professional   performance   or
            competence,  that stigma likely would have been erased to the
            extent possible by the  reinstatement notice implying, if not
            stating outright, that he had regained his license.  

            8.  The letter stated:

                 The effect  of your exclusion from  participation in the
                 Medicare  and  State health  care  programs  is that  no
                 payment will  be made for  any items or  services (other
                 than an emergency item or service) furnished, ordered or
                 prescribed by you under the above-mentioned programs.

                                         -8-



Regulations  in effect  at the  time Friedman  was reinstated

            indicate  that such payments  would have resumed  once he was

            reinstated.   See  42 C.F.R.    1001.1901(b)  (payments under
                          ___

            Medicare and applicable state health care programs may not be

            made unless  and until  an excluded individual  is reinstated

            into the Medicare program);  id.   1001.3003(b) (with certain
                                         ___

            exceptions apparently not applicable  here, state health care

            programs must  reinstate an individual to  such programs upon

            notification by  HHS that the individual  has been reinstated

            to  the Medicare program).   There is nothing  in the present

            record to suggest that reinstatement did not have this result

            in Friedman's case.

                      Thus,   if   Friedman  should   seek   some  future

            affiliation with a hospital or  other health care entity, the

            decision to  grant  or  deny  him affiliation  would  not  be

            affected  by the  entity's inability  to receive  Medicare or

            applicable  state   program  payments  for   care  given   to

            Friedman's patients.  On the other hand, if hospitals, health

            care entities, state medical  licensing boards, or any boards

            of bar examiners are  concerned about Friedman's character or

            professional competence or performance, their response to any

            future application of his would be affected predominantly, if

                                
            ____________________

                 Furthermore, payment will  not be made to  any entity in
                 which you  are  serving as  an employee,  administrator,
                 operator, or in any other capacity for any services that
                 you  furnish,  order  or   prescribe  on  or  after  the
                 effective date of this exclusion.

                                         -9-



not  exclusively,  by the  apparently  valid  state decisions

            revoking his medical license.  While   Friedman    may   have

            expected  the  district  court  to  review  the Massachusetts

            license revocation  proceedings in this suit,  its review was

            of necessity  limited to the exclusion  decision itself which

            did not encompass the state proceedings.  As noted above, the

            parties stipulated to dismissal  of Friedman's claims against

            all  defendants with the  exception of his  claim against HHS

            relating   to  his  Medicare   exclusion.    Presumably,  the

            jurisdictional  basis  for that  claim would  be 42  U.S.C.  

            1320a-7(f)(1),  which provides  for judicial review  of final

            HHS  exclusion  decisions.   Under  HHS  Departmental Appeals

            Board  precedent   in  effect  at  the   time  of  Friedman's

            exclusion, excluded  individuals  could not  challenge  their

            exclusion  by  collaterally  attacking the  underlying  state

            license revocation proceedings.  Citing that  precedent, both

            the  administrative law  judge  and the  Departmental Appeals

            Board  rejected Friedman's attempt to collaterally attack the

            Massachusetts  and New  York license  revocation proceedings.

            Thus, the  validity of  the underlying state  proceedings was

            never  an issue  in  Friedman's exclusion  proceedings.   The

            scope of the  proceedings below having  been confined to  the

            determination  whether  the  statute  applied  to  Friedman,9

                                
            ____________________

            9.  Friedman had  alleged that the statute  was being applied
            retroactively  to him  since  Massachusetts had  rendered its
            licensing decision before the statute became effective.

                                         -10-



whether  Friedman's  license  had  been revoked  by  a  state

            licensing  authority for the  statutorily prescribed reasons,

            and  whether  the period  of  exclusion  was reasonable,  the

            district  court's review  of the decision  excluding Friedman

            would be likewise constrained.   Cf. Travers v. Sullivan, 801
                                             ___ _______    ________

            F.  Supp. 395, 403 (E.D.  Wash. 1992) (where  HHS excluded an

            individual on the  basis of  a prior state  conviction for  a

            program-related offense, it was  "not necessary or proper for

            the   court  to   delve  into   the  facts   surrounding  the

            conviction"; the court's role  under   1320a-7(f) was  not to

            review  the  validity of  the  underlying  conviction but  to

            review the  validity of the  exclusion), aff'd, 20  F.3d 993,
                                                     _____

            998 (1994).10

                      Under  these circumstances,  we conclude  that this

            action is  moot.  See  Florida Farmworkers  Council, Inc.  v.
                              ___  __________________________________

            Marshall,  710  F.2d 721,  731  (11th Cir.  1983)  (the court
            ________

            determined  that  expiration  of  plaintiff's  debarment  had

____________________

            10.  HHS's  policy barring collateral attack on state license
            revocation proceedings and limiting  the nature of the issues
            addressed  in   exclusion  proceedings  is  now  codified  in
            regulations that have been  expressly made binding on federal
            courts.  See 42 C.F.R.   1001.2007(d) (prohibiting collateral
                     ___
            attacks on  the underlying state determinations  which form a
            basis for exclusion); id.   1001.2007(a)(i) &  (ii) (the only
                                  ___
            issues  before an  administrative law  judge in  an exclusion
            hearing  are whether  the basis  for excluding  an individual
            exists   and  whether   the  length   of  the   exclusion  is
            reasonable);   id.      1001.1(b)   (these   regulations  are
                           ___
            applicable  to and  binding  on federal  courts in  reviewing
            exclusions  imposed by  HHS)  (this latter  regulation became
            effective January 22, 1993).    

                                         -11-



mooted   its   action  challenging   the   debarment  despite

            plaintiff's  claim of stigma because the court had upheld the

            costs  disallowances  that  had  caused  the  debarment;   it

            explained  that it  could not  discern any  additional stigma

            created  by the  debarment  and that  the  debarment had  not

            prevented plaintiff from receiving substantial federal funds,

            apparently after the debarment had ended).

                      Affirmed.    
                      _________

-12-