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EINAUGLER v. DOWLING

August 20, 1994

GERALD EINAUGLER, M.D., Plaintiff,
v.
MICHAEL J. DOWLING, Commissioner, New York State Department of Social Services, JAMES P. WHITE, Director, Bureau of Program Integrity, Office of Quality Assurance and Audit, New York State Department of Social Services, DONNA SHALALA, Secretary of the United States Department of Health and Human Services, LINDA LITTLE, Regional Inspector General, United States Department of Health and Human Services, and BRUNO VARANO, Assistant Regional Inspector General, United States Department of Health and Human Services, Defendants. GERALD EINAUGLER, M.D., Petitioner, v. EDWARD J. KURIANSKY, Special Prosecutor for Medicaid Control of the State of New York, OLIVER KOPPELL, Attorney General of the State of New York, MICHAEL J. DOWLING, Commissioner, New York State Department of Social Services, and JAMES P. WHITE, Director, Bureau of Program Integrity, New York State Department of Social Services, Respondents.



The opinion of the court was delivered by: EDWARD R. KORMAN

 Korman, J.

 On June 4, 1993, after a jury trial in the New York State Supreme Court, Kings County, Dr. Gerald Einaugler was found guilty of reckless endangerment in the second degree, N.Y. Penal Law § 120.20 (McKinney 1987), and wilful violation of the public health laws, N.Y. Pub. Health Law § 12-b(2) (McKinney 1990), in a prosecution alleging patient neglect. On July 22, 1993, Einaugler was sentenced on each count to 52 consecutive weekends of incarceration, the sentences to run concurrently. Justice Vincent R. Balletta of the Appellate Division, Second Department, stayed execution of the sentences, pending appeal. Despite Einaugler's thrice-repeated pleas for an expedited hearing, see Ex.'s A, B and C to Petition for a Writ of Habeas Corpus (Case No. 94-CV-2737) ("Petition") , the Appellate Division has yet to set a date for oral argument on the appeal.

 On June 16, 1993, based solely upon his conviction, the New York State Department of Social Services ("DSS"), as required by federal law, excluded Einaugler from participating in the state's Medicaid program, a consequence which impacted roughly one half of Einaugler's medical practice. See Petition, P 14. On June 2, 1994, almost one year after his conviction, the United States Department of Health and Human Services ("HHS") notified Einaugler that, based solely upon his conviction, it was required, pursuant to 42 U.S.C. § 1320a-7(a) (1988), to exclude him from participation in both the Medicare and Medicaid programs for a period of at least five years, the exclusion to take effect on June 22, 1994. See Ex. F to Affirmation of James D. Harmon, Jr., May 19, 1994 (Case No. 94-CV-2484). The practical effect of this exclusion, according to Einaugler, whose medical practice focuses almost exclusively on elderly patients, is the termination of his practice of medicine. Petition, PP 14 and 23.

 Einaugler then sought, inter alia, to enjoin HHS and DSS from excluding his participation in the Medicare and Medicaid programs, pending resolution of the direct appeal of his conviction. See Complaint (Case No. 94-CV-2484). At an expedited hearing on Einaugler's motion for a temporary restraining order, however, it became clear that the statute, pursuant to which Einaugler would be excluded from Medicare and Medicaid, did not provide for a stay of the mandated suspension while petitioner challenged his conviction on appeal. *fn1" The problem of the delay in the hearing and determination of Einaugler's direct appeal, however, could be addressed in a habeas corpus proceeding.

 While the writ of habeas corpus may be extended only to a prisoner who "is in custody in violation of the Constitution or laws or treaties of the United States," 28 U.S.C. § 2241(c)(3) (1988) (emphasis added), "a petitioner enlarged on his own recognizance pending execution of sentence [is] in custody within the meaning" of the federal habeas corpus statute. See Justices of Boston Municipal Court v. Lydon, 466 U.S. 294, 300, 80 L. Ed. 2d 311, 104 S. Ct. 1805 (1984) (citing Hensley v. Municipal Court, 411 U.S. 345, 36 L. Ed. 2d 294, 93 S. Ct. 1571 (1973)). Accordingly, petitioner's present status satisfies the "in custody" requirement of § 2241(c)(3), even though the execution of his sentence has been stayed pending appeal.

 Moreover, the delay in the hearing and determination of the appeal appeared to provide ample cause for some form of equitable relief pursuant to 28 U.S.C. § 2254 (1988). Indeed, respondents in the habeas proceeding offer no explanation for the delay. Instead, they reject the notion that the state appellate process is ineffective, and argue that the "Appellate Division's computer entries demonstrate that [Einaugler's] appeal has been closely monitored" from its inception to the present. Respondent's Memorandum of Law ("Resp't Mem.") at 4-5. Because this is of little solace to Einaugler, who is facing collateral consequences that threaten to terminate his means of livelihood, Einaugler seeks to set aside the judgment of conviction. In the alternative, he seeks a stay of its collateral consequences until the New York appellate courts have had a chance to hear and decide his appeal on the merits.

 Einaugler alleges both that his conviction was obtained in violation of the laws of the United States, and that the continuing delay in the hearing of his appeal, an injury exacerbated by the collateral consequences of his conviction imposed by HHS and DSS, violates the Due Process and Equal Protection Clauses of the Constitution.

 I heard oral argument on the injunction and habeas corpus application on July 15, 1994. At that time, I proposed to enter an order setting aside the judgment of conviction unless the Appellate Division decided the appeal within five months. In the interim, I proposed to enjoin the Secretary of Health and Human Services (the "secretary") from implementing the suspension of petitioner's participation in the Medicare and Medicaid programs. The Secretary vigorously opposed this relief on the grounds that Congress mandated petitioner's exclusion upon the event of his conviction. The position of the secretary, while supported by the language of the statute, see 42 U.S.C. § 1320a-7(a), seemed particularly inconsistent with her conduct in this case.

 Specifically, despite the secretary's insistence that she did not have the discretion to consent to an order that would suspend the enforcement of the mandate of § 1320a-7(a) -- which she maintained required Einaugler's suspension from the Medicare and Medicaid programs from the moment the jury returned a verdict of guilty on June 4, 1993 -- the Secretary conceded that she had delayed implementing the suspension for over one year for reasons that can only be offered by an incompetent and insensitive bureaucracy. According to the Assistant United States Attorney, who spoke for the Secretary, the secretary had been certain from the outset that Einaugler would be suspended for a period of at least five years. Instead of suspending him immediately, however, she waited twelve months to effect the suspension, so that she could decide whether Einaugler should be suspended for just five years, or a period in excess of five years. See Tr. of June 21, 1994 at 7. The supposed reason for the delay was that there was just "one person, one analyst, for all of New York and New Jersey" that has the authority to review cases of this nature. Id. at 8.

 The net effect of the Secretary's position here is as follows: She may fail to comply, for over one year, with what she alleges is the unqualified command of Congress that petitioner be suspended from the Medicare and Medicaid programs. On the other hand, she is legally obligated to oppose a delay in implementing the suspension so that petitioner may obtain the appellate review to which he is entitled, and thereby give effect to the congressional policy favoring exhaustion of state remedies before resort may be had to habeas corpus review. The secretary's position is all the more troubling because not only has New York State suspended all of the direct consequences of Einaugler's conviction pending appeal, but the very sentence of 52 weekends enabled Einaugler to continue practicing medicine.

 Unfortunately, I conclude that I have no more power than the Secretary had to stay the congressionally mandated suspension. Section 1320a-7 does not by its terms proscribe a stay of the mandatory suspension in the event of a habeas corpus proceeding. See 42 U.S.C. § 1320a-7(i). Nevertheless, a petition for a writ of habeas corpus "is akin to an appeal by petitioner from the affirmance of the judgment of conviction. . . ." Pinkney v. Keane, 737 F. Supp. 187, 196 (E.D.N.Y.), aff'd, 920 F.2d 1090, 1098-99 (2d Cir. 1990), cert. denied, 501 U.S. 1217, 115 L. Ed. 2d 995, 111 S. Ct. 2824 (1991). It is therefore unlikely that Congress intended that a habeas corpus proceeding could provide an occasion for staying the mandatory suspension, when Congress explicitly indicated that the pendency of an appeal would not have such an effect. Nevertheless, there are a number of alternative remedies pursuant to 28 U.S.C. § 2254 that are available to limit the extreme prejudice suffered by Einaugler if, as he alleges, he has been deprived inexcusably of his right to appeal within a reasonable time from the judgment of conviction.

 The first alternative, assuming the delay is of sufficient magnitude, is to forgo the requirement that petitioner exhaust his New York appellate remedies, and consider his claim that his conviction was obtained in violation of the Constitution and laws of the United States. It has long been recognized that under special circumstances a federal court may consider the merits of a habeas corpus petition "notwithstanding the lack of complete exhaustion." Granberry v. Greer, 481 U.S. 129, 131, 95 L. Ed. 2d 119, 107 S. Ct. 1671 (1987); see also Frisbie v. Collins, 342 U.S. 519, 521-22, 96 L. Ed. 541, 72 S. Ct. 509 (1952). The federal statute itself provides that a habeas petitioner need not exhaust state remedial procedures in "circumstances rendering such process ineffective to protect the rights of the [petitioner]." 28 U.S.C. § 2254(b). Pursuant to this authority, federal courts have waived the exhaustion requirement for habeas petitioners whose criminal appeals have languished in state courts for inexcusable periods of time. See, e.g., Simmons v. Reynolds, 898 F.2d 865, 867 (2d Cir. 1990) (six years); Brooks v. Jones, 875 F.2d 30, 31 (2d Cir. 1989) (eight years).

 While the Second Circuit has declined "to define precisely, a specific interval of time after which a habeas petition based on delay of a state prisoner's appeal would excuse compliance with the federal exhaustion requirement," it has counseled that a petitioner should not have to wait "even three or four years before enlisting federal aid to expedite an appeal." Simmons 898 F.2d at 870. The Tenth Circuit addressed this issue in Harris v. Champion, 15 F.3d 1538 (10th Cir. 1994), after a thorough review of the case law in all of the circuits. See id. at 1555-56 (collecting cases in which at least five different circuit courts of appeal had remanded for consideration of whether exhaustion requirement should be waived in light of state court delays ranging from fifteen, seventeen, and eighteen months to over one to two years). The Tenth Circuit held in Harris that "delay in adjudicating a direct criminal appeal beyond two years from the filing of the notice of ...


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