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WINGATE v. HARRIS

September 9, 1980

John B. WINGATE, as Commissioner of Social Services of the County of Orange, County of Orange, The State of New York, and Barbara Blum, as Commissioner of Social Services of the State of New York, Plaintiffs,
v.
Patricia R. HARRIS, as Secretary of the Department of Health, Education and Welfare of the United States of America, Defendants



The opinion of the court was delivered by: CARTER

The State of New York, the County of Orange, New York, and their respective Commissioners of Social Services ("New York" and "Orange") brought this action against the Secretary of the Department of Health, Education and Welfare ("HEW") seeking an order that the Secretary reimburse plaintiffs for certain costs incurred under the Medicaid program. No material facts are in dispute, and plaintiffs and defendant have each moved for summary judgment. Rule 56, F.R.Civ.P. For the reasons stated below, defendant's motion is granted, and the complaint is dismissed.

Background

The Medicaid program, established by Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (the "Act"), is a jointly financed undertaking by the federal and state governments to provide expanded medical care to needy, handicapped and disabled persons. Under the Act, the federal government reimburses state governments for a percentage of the cost of medical assistance to eligible individuals if the state has submitted and the Secretary has approved a plan for medical assistance, and the expenses for which reimbursement is sought are incurred in accordance with the plan. Ibid. In the instant case, the federal government reimburses New York for one half of its cost of administering the program, and New York in turn provides a percentage of Orange's costs, so that, in effect, the United States is paying for half of the benefits rendered under the program, while New York and the local jurisdiction, Orange, are dividing the remaining fifty percent.

 Individual recipients of medical services provided under the Act receive no bill therefor; rather, the provider of services is directly reimbursed by the appropriate governmental agency. 42 U.S.C. § 1395f. Therefore, one of the requirements imposed on state plans is that they provide for specific agreements with all individuals and institutions rendering services to Medicaid recipients. 42 U.S.C. § 1396a(a)(27); 42 C.F.R. § 442.10. In addition, state plans must require, with respect to skilled nursing care facilities-the type of providers involved in this suit-that each facility satisfy all the eligibility requirements for skilled nursing homes under the Medicare program (Title XVIII of the Act, 42 U.S.C. § 1395 et seq.). 42 U.S.C. § 1396a(a)(28); 42 C.F.R. § 442.202.

 This case involves the proper apportionment of costs incurred by three nursing home providers: Doane's Nursing Home, Earle Nursing Home, and Jones and Martin Nursing Home. Prior to 1975, 1976 and 1977, respectively, each was a certified provider of skilled nursing facility services under the Medicaid program, and each had the requisite provider agreement with New York. Subsequently, however, HEW found each not to meet the requirements of skilled nursing facilities under the Act, and they were decertified. *fn1" No federal payments for expenses incurred at these facilities were made thereafter. However, the resident recipients of Medicaid benefits at each nursing home instituted state court actions, to which the federal government was not a party, to prevent New York and Orange from transferring them to other locations or from terminating payments to their facilities pending hearings allegedly required under state law. See 18 N.Y.C.R.R. § 358.4(a)(4). In each case, these proceedings allowed Medicaid recipients to remain in the nursing homes, pursuant to state court orders, past the dates of termination of federal payments. *fn2" As a result, at least in the cases of Doane's and Earle, New York and Orange made payments to the provider facilities for which the Secretary refused to make the normal reimbursements, on the ground that the facilities lacked valid provider agreements as required by regulations promulgated under the Act. 42 C.F.R. § 449.10(b)(4)(i)(c). In excess of $ 70,000 in claims by New York went unpaid by HEW. *fn3" As to each claim, New York requested an administrative reconsideration of the disallowance, pursuant to 42 U.S.C. § 1316(d); these reconsiderations are still pending.

 Thereafter, plaintiffs brought this action contending that defendant is required under the Act and relevant regulations to continue federal financial participation in a state's Medicaid program even after decertification of the providers in question, pending completion of the administrative appeal process and final judicial review thereof. Plaintiffs therefore seek an order that federal payments be continued until final resolution of their dispute with HEW. The Secretary argues that the court lacks jurisdiction to grant such an order, and that, in any event, plaintiffs have not exhausted the available administrative remedies, and seeks dismissal.

 Determination

 Plaintiffs allege jurisdictional bases for this action in 28 U.S.C. §§ 1331 and 1361 and the Administrative Procedure Act, 5 U.S.C. §§ 701-04. The latter basis must be rejected, because the Supreme Court has ruled conclusively that the Administrative Procedure Act does not extend the jurisdiction of the federal courts, but merely defines the scope of judicial review where jurisdiction exists. Califano v. Sanders, 430 U.S. 99, 107, 97 S. Ct. 980, 985, 51 L. Ed. 2d 192 (1977); see Bussey v. Harris, 611 F.2d 1001, 1005 n.7 (5th Cir. 1980); Tongol v. Usery, 601 F.2d 1091, 1098 n.7 (9th Cir. 1979); White v. Mathews, 559 F.2d 852, 856 n.4 (2d Cir. 1977), cert. denied, 435 U.S. 908, 98 S. Ct. 1458, 55 L. Ed. 2d 500 (1978).

 Superficially, the other alleged jurisdictional bases appear proper. Section 1331 authorizes suits in the district courts that arise under federal law and are brought against a federal agency or officer, both of which criteria are met here; and section 1361 provides the district courts with jurisdiction over mandamus actions to compel federal officials to perform duties owed to plaintiff, which is one way to express the relief sought here. These provisions notwithstanding, however, in the Tucker Act Congress created exclusive jurisdiction in the Court of Claims over actions "against the United States founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contact with the United States, or for liquidated or unliquidated damages in cases not sounding in tort." 28 U.S.C. § 1491; see 28 U.S.C. § 1346(a)(2). "It has long been settled that the United States, as sovereign, cannot be sued without its consent, and that such a waiver of immunity can only be made by the Congress.... Therefore, the nature and terms of any Congressional consent to be sued define the court's jurisdiction over claims against the United States." Grasso v. United States Postal Service, 438 F. Supp. 1231, 1233 (D.Conn.1977) (citations omitted). Thus, if this case falls within the exclusive jurisdiction granted to the Court of Claims, the court is without authority to hear it. E. g., Estate of Watson v. Blumenthal, 586 F.2d 925, 929 (2d Cir. 1978); Sherar v. Harless, 561 F.2d 791, 794 (9th Cir. 1977); South Windsor Convalescent Home, Inc. v. Mathews, 541 F.2d 910, 914 (2d Cir. 1976); Putnam Mills Corp. v. United States, 432 F.2d 553, 554 (2d Cir. 1970); Ove Gustavsson Contracting Co. v. Floete, 278 F.2d 912, 914 (2d Cir.), cert. denied, 364 U.S. 894, 81 S. Ct. 225, 5 L. Ed. 2d 188 (1960); Grasso v. United States Postal Service, supra, 438 F. Supp. at 1233-34; see generally 17 Wright & Miller, Federal Practice and Procedure § 4101 at 210-13 (1978).

 The determination of whether a case falls within the exclusive jurisdiction of the Court of Claims or the more general jurisdiction of the district court depends upon a proper construction of plaintiffs' claims. See Estate of Watson v. Blumenthal, supra, 586 F.2d at 928-29; American Science & Engineering, Inc. v. Califano, 571 F.2d 58, 61 (1st Cir. 1978); Warner v. Cox, 487 F.2d 1301, 1303-04 (5th Cir. 1974). If, as plaintiffs argue here, this case is truly one for injunctive and declaratory relief to compel the Secretary to perform her duty under the law as plaintiffs construe it, then jurisdiction is proper in this court under 28 U.S.C. §§ 1331 and 1361. On the other hand, if the principal relief sought is an award of damages in excess of $ 10,000, then under the Tucker Act, jurisdiction exists only in the Court of Claims. 28 U.S.C. §§ 1346(a)(2), 1491.

 The relief sought by plaintiffs *fn4" reveals that this action is principally one for damages in excess of $ 10,000. While it is true that plaintiffs seek several "declarations" regarding the invalidity of various HEW regulations and the illegality of the Secretary's actions thereunder, this relief is merely incidental to the primary remedy requested: an order directing payment of the monies withheld by the Secretary. The declaratory relief sought simply establishes plaintiffs' legal entitlement to this principal remedy, and does not expand it in any meaningful way. *fn5" See Cape Fox Corp. v. United States, 456 F. Supp. 784, 794 (D.Alaska 1978).

 Plaintiffs also seek an injunction against the continued application of the regulation authorizing the Secretary's disallowance of continued federal payments with respect to a decertified provider of services. Nowhere in the amended complaint, however, is it alleged that this regulation is in current use to deprive plaintiffs of any benefit. Rather, the gist of their claim is that its application in the past with respect to the three nursing homes discussed above operated to deprive them of federal funds to which the Act entitled them. This claimed injury can be redressed fully by an award of damages, if plaintiffs' allegations are proven correct. In such a situation, injunctive relief would be inappropriate, O'Shea v. Littleton, 414 U.S. 488, 499, 94 S. Ct. 669, 677, 38 L. Ed. 2d 674 (1974); United States v. Maidman, 340 F. Supp. 395, 399 (S.D.N.Y.1971) (Motley, J.); 11 Wright & Miller, supra, § 2942 at 368-69, 371, and a claim for such relief is therefore insufficient to bypass the exclusive jurisdiction of the Court of Claims. This requested remedy, like the declaratory judgment discussed above, is at most ancillary to the claim for damages.

 Finally, plaintiffs' attempt to ground jurisdiction in the mandamus statute, 28 U.S.C. § 1361, is unavailing. Although that provision is an independent basis for jurisdiction in the district courts, the extraordinary relief it provides is unavailable when adequate alternative remedies exist. Ex parte Republic of Peru, 318 U.S. 578, 584, 63 S. Ct. 793, 797, 87 L. Ed. 1014 (1943); Kennecott Copper Corp., Nevada Mines Division v. Costle, 572 F.2d 1349, 1356 (9th Cir. 1978); Cartier v. Secretary of State, 165 U.S. App. D.C. 130, 506 F.2d 191, 199 (D.C.Cir.1974), cert. denied, 421 U.S. 947, 95 S. Ct. 1677, 44 L. Ed. 2d 101 (1975); Grant v. Hogan, 505 F.2d 1220, 1225 (3d Cir. 1974). In this case, the alternate remedy of damages is available in the Court of Claims, 28 U.S.C. § 1491, and would clearly be adequate, since the only relief in the nature of mandamus sought by plaintiffs is an order that the Secretary pay them the disputed sums. See Cape Fox Corp. v. United States, supra, 456 F. Supp. at 793.

 Thus, it is apparent, despite plaintiffs' efforts to recast this action in a form subject to this court's authority, see Warner v. Cox, supra, 487 F.2d at 1304; Ove Gustavsson Contracting Co. v. Floete, supra, 278 F.2d at 914, that plaintiffs' claim is, in the final analysis, simply one for a specific sum of money, more than $ 10,000, allegedly ...


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