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BECKER v. TOIA

June 23, 1977

Itha David BECKER, Hannah M. Kneafsey, on behalf of themselves and all other persons similarly situated, Plaintiffs,
v.
Phillip L. TOIA, as Commissioner of the New York State Department of Social Services, and Robert B. Travis, as Commissioner of the Sullivan County Department of Social Services, Defendants



The opinion of the court was delivered by: BRODERICK

VINCENT L. BRODERICK, District Judge.

 Plaintiffs Itha David Becker and Hannah M. Kneafsey, Medicaid beneficiaries, on behalf of themselves and all other persons similarly situated, allege in the complaint herein that New York State, in enacting and implementing Section 16 of Chapter 77 of the Laws of 1977 of the State of New York (hereinafter "Section 16"), *fn1" has violated the Equal Protection and the Due Process Clauses of the Constitution, and the federal Social Security Act and the regulations promulgated thereunder, as well as the Social Services Law of the State of New York. Section 16 by its terms mandates the Department of Social Services of the State of New York to impose, upon plaintiffs and other Medicaid beneficiaries, an obligation to make "co-payments" in an amount to be fixed by regulation with respect to purchases of prescription drugs and other medical services and supplies.

 Named as defendants in the complaint are the Commissioner of New York State's Department of Social Services, and the Commissioner of the Department of Social Services of Sullivan County. The plaintiffs have moved for a preliminary injunction, pursuant to Rule 65(a) of the Federal Rules of Civil Procedure, enjoining the defendants from implementing and enforcing Section 16 and the regulations implementing it. *fn2" I find that there is a decided balance of hardships in favor of the plaintiffs, and that there are at a minimum sufficiently serious issues raised by the complaint as to make them "a fair ground for litigation". Sonesta Int'l Hotels Corp. v. Wellington Associates, 483 F.2d 247, 250 (2d Cir. 1973). I therefore grant plaintiffs' prayer for a preliminary injunction. *fn3"

 The pertinent portion of Section 16 provides as follows:

 
6. Any inconsistent provision of law notwithstanding, rates of payment for claims for medical and prosthetic appliances, supplies and equipment, dental care and eyeglasses and each separate claim for drugs, furnished to persons twenty-one years of age or over but under sixty-two years of age, shall be reduced in accordance with department regulations by an amount not to exceed the maximum amount authorized by federal law and regulations, except that in the case of each separate claim for drugs such maximum amount shall not exceed fifty cents, as a co-payment amount, which co-payment amount the person providing such care, services, supplies and equipment, or drugs may charge the recipient, provided, however, that no such reduction may be made for any such care, services, supplies and equipment, or drugs provided to any recipient receiving care on an in-patient basis in a hospital as defined in article twenty-eight of the public health law; provided further that the exclusion of individuals age sixty-two or over from the co-payment provision of this subdivision shall apply to the extent consistent with federal law and regulations.

 Section 16 pertains to the federal medical assistance program ("Medicaid") which has functioned in the State of New York pursuant to 42 U.S.C. § 1396, et seq. (Title XIX of the federal Social Security Act) and Sec. 363, et seq., of the New York Social Services Law. Under Medicaid the federal and state and local governments participate in funding medical aid, but various requirements with respect to such aid are spelled out in the federal law -- conformance with those requirements is a condition of federal participation. 42 U.S.C. §§ 1396a, 1396c. See generally Feld v. Berger, 424 F. Supp. 1356, 1360 (S.D.N.Y.1976).

 Plaintiffs do not allege that federal law prohibits the requirement of co-payments from Medicaid recipients: indeed, co-payment is specifically authorized by 42 U.S.C. § 1396a(a)(14) of the federal statute and 45 C.F.R. § 249.40(a)(3) of the federal regulations.

 Plaintiffs do urge, however, that the imposition and implementation of co-payment requirements must conform to federal law in all respects. The thrust of the complaint is that co-payment requirements under Section 16 do not conform in that a) they have been imposed without satisfying notice requirements imposed by federal law; b) Section 16 was proposed, enacted and implemented in the absence of any consultation with a medical advisory committee which, under federal and state law, New York State was required to establish; and c) Section 16 as implemented requires co-payment from some but not all of categories and recipients who pursuant to federal law must be treated equally.

 Section 16 by its terms would reduce the rates of payment for medical appliances and drugs, "in accordance with department regulations", by an amount not more than the maximum authorized by federal law and regulations. Under Section 16 the amount of reduction is not to exceed $.50 for each separate claim for drugs. No reduction is to be made for medical services or drugs provided to an in-patient in a hospital. By its terms the co-payment provisions do not apply to persons under 21 or over 61, but the exemption for persons over 61 has been administratively deleted, and persons over 61 are now subject to the co-payment. *fn4" Also specifically exempted from the co-payment provisions of Section 16 are individuals receiving service on an in-patient basis in a hospital.

 A. Jurisdiction

 The threshold question is that of jurisdiction. Plaintiffs bring this action pursuant to 42 U.S.C. § 1983 and its jurisdictional counterpart, 28 U.S.C. § 1343(3) and (4), as well as 28 U.S.C. § 1331. Since I find that there is jurisdiction pursuant to 28 U.S.C. § 1343(3), the question of jurisdiction pursuant to 28 U.S.C. §§ 1343(4) *fn5" and 1331 need not be reached.

 Jurisdiction under § 1343(3) properly lies where a constitutional claim has been raised and is not insubstantial or wholly without merit. See Lynch v. Philbrook, 550 F.2d 793 (2d Cir. 1977); Andrews v. Maher, 525 F.2d 113 (2d Cir. 1975). Regardless of the ultimate resolution of the issues on the merits, plaintiffs' claims are not "'so insubstantial, implausible, foreclosed by prior decisions of this Court or otherwise completely devoid of merit as not to involve a federal controversy within the jurisdiction of the District Court . . .' Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666-667 [94 S. Ct. 772, 39 L. Ed. 2d 73] (1974)." Hagans v. Lavine, 415 U.S. 528, 543, 94 S. Ct. 1372, 1382, 39 L. Ed. 2d 577 (1974). Thus I find that there is a colorable constitutional claim justifying the exercise of jurisdiction pursuant to § 1343(3). Having found that jurisdiction is established under this section on the constitutional claim, I find that it is appropriate to exercise pendent jurisdiction over the statutory claims. Hagans v. Lavine, supra at 536, 94 S. Ct. 1372; Lynch v. Philbrook, supra at 795.

 B. Class Certification

 An additional preliminary question is raised by plaintiffs' motion for class certification. Plaintiffs seek to have certified pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure a class composed of all persons twenty-one years of age or older *fn6" who are now or may in the future be eligible for medical assistance benefits in the State of New York and who are not receiving the care, services, supplies, equipment or drugs enumerated in Section 16 on an in-patient basis in a hospital, or on an out-patient basis from a facility or institution having such services, drugs or supplies included in their approved rate. *fn7"

 In order for the class action to be certified, the class must satisfy the prerequisites of Fed.R.Civ.P. 23(a) and (b)(2).

 The first requirement of Rule 23(a), that joinder of all members of the class would be impracticable, has clearly been met. There are several hundred thousand persons who will be affected by the State's action and joinder of these would clearly be impracticable.

 The second prerequisite of Rule 23(a) is that there be questions of law or fact common to the class. In this respect, there are Equal Protection and Due Process claims, as well as State claims under New York State Social Services Law § 365-c, which are common to all members of the proposed class.

 There are also claims under the Social Security Act and the federal regulations which are applicable to the majority of the class members but are not applicable to a relatively small group of people who are "home relief" recipients for whom medical assistance is provided solely under state law.

 The existence of this latter group does not necessarily render class action certification undesirable. It is possible that "home relief" recipients constitute a group which can be appropriately certified as a sub-class pursuant to Rule 23(c)(4). See, e.g., Federman v. Empire Fire & Marine Ins. Co., 19 F.R.Serv.2d 480 (S.D.N.Y.1974). Thus plaintiffs are not barred by Rule 23(a)(2) from obtaining class action certification.

 Plaintiffs are next required to meet the requirement that the claims of the representatives are typical of the claims of the class. Since the named plaintiffs assert claims which are common to both the proposed class and the possible sub-class, the third requirement is met.

 There can be no question that the plaintiffs are adequately represented here. Accordingly, the elements of Rule 23(c) have been satisfied.

 Rule 23(b)(2) provides for class actions where the defendants have "acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the ...


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