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S.P.S. CONSULTANTS, INC. v. LEFKOWITZ

July 8, 1971

S.P.S. CONSULTANTS, INC., and all others similarly situated, Plaintiffs,
v.
Louis J. LEFKOWITZ, Attorney General of the State of New York, Frank S. Hogan, District Attorney of New York County, Defendants. Martin S. MITCHELL et al., Plaintiffs, v. Louis J. LEFKOWITZ, Attorney General of New York, et al., Defendants


Bonsal, District Judge.


The opinion of the court was delivered by: BONSAL

MEMORANDUM

BONSAL, District Judge.

 In these companion actions plaintiffs seek the convening of a Three-Judge Court pursuant to 28 U.S.C. §§ 2281, 2284, and for a temporary restraining order pending decision by the Three-Judge Court. Plaintiffs S.P.S. Consultants, Inc. ("SPS") and Mitchell Referral Service, Inc. ("Mitchell") are corporations organized for profit, having as their purpose the dissemination of information as to the availability of abortions in the State of New York. Their services include dissemination of information as to the availability of facilities, the making of travel arrangements for patients referred to them by out of state doctors, and arrangements to have the abortions performed by licensed physicians in medical facilities within this State. Plaintiff Mitchell is the president of Mitchell, and plaintiff Sandra King is a patient who recently availed herself of the services of Mitchell. Both SPS and Mitchell were organized after the enactment of the 1970 New York Abortion Law.

 SPS charges a fee of $75 for its service of arranging travel and hotel accommodations and an appointment at an abortion facility for an out-of-state resident seeking an abortion. In addition, SPS provides its clients with information concerning probable expenses and the availability of facilities. Mitchell offers essentially the same services as SPS; however, its clients are assured a set price of $300 for the abortion. Mitchell's fee, which varies according to the type of abortion involved, is included in the set price of $300. Both SPS and Mitchell advertise their services -- SPS by direct mail and Mitchell through newspapers and television.

 Plaintiffs attack the constitutionality of the new Article 44 of the New York Public Health Law, McKinney's Consol. Laws, c. 45 which was recently enacted by the New York Legislature and approved by the Governor on June 25, 1971. Article 44 became effective on July 1, 1971 in accordance with paragraph 2 of Section 4403, which provides:

 
"§ 2. This act shall take effect on the first day of July next succeeding the date on which it shall have become a law."

 Section 4400, entitled "Legislative findings and statement of policy" reads as follows:

 
"The security of the health and welfare of the residents of this state requires, that the utmost attention be given to assure that persons seeking medical care and treatment in this state receive adequate care rendered within the standards of ethics and public policy applicable to all practices of medicine. Medical referral services, organized as profit making enterprises within this state, have been found to be engaged in the practice of medicine, have been sharing fees received for referrals with doctors and hospitals to whom patients are referred, have been otherwise compensating doctors and hospitals for accepting patients referred to them, have been giving medical advice by telephone to persons seeking referrals and have been advertising their services, all in violation of the standards of ethics and public policy applicable to the practice of medicine and which would be violations of standards of professional conduct if the acts were performed by physicians. Such profit making referral services have consistently engaged in practices inimical to the public interest which would be prohibited to physicians and have engaged in relationships with physicians which are in violation of the laws and public policy of this state and which have permitted physicians to benefit indirectly from acts and practices which would be prohibited to them directly. It is hereby declared to be the public policy of this state that the public health, safety and welfare of the citizens of this state require that such profit making medical referral service organizations be declared to be invalid and unlawful in this state."

 Section 4401, the constitutionality of which is attacked by the plaintiffs, provides as follows:

 
"§ 4401. Medical referral service businesses prohibited. 1. No person, firm, partnership, association or corporation, or agent or employee thereof, shall engage in for profit any business or service which in whole or in part includes the referral or recommendation of persons to a physician, hospital, health related facility, or dispensary for any form of medical care or treatment of any ailment or physical condition. The imposition of a fee or charge for any such referral or recommendation shall create a presumption that the business or service is engaged in for profit.
 
"2. No physician, hospital, health related facility or dispensary shall enter into a contract or other form of agreement to accept for medical care or treatment any person referred or recommended for such care or treatment by a medical referral service business located in or doing business in another state if the medical referral service business would be prohibited under this section if the business were located in or doing business in this state."

 Section 4402 provides that a violation of the statute shall constitute a misdemeanor punishable by imprisonment of not more than one year or a fine of not more than $5,000, or both, and authorizes the Attorney General to institute proceedings to enjoin any violation of the statute.

 In contending that the statute is unconstitutional, plaintiffs pose the following questions:

 
"I. Whether N.Y. Public Health Law, art. 44, violates the First Amendment right to disseminate information concerning the availability of health care facilities, and in particular, hospitals and clinics which provide low-cost ...

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