Opinion
B229682
01-12-2012
JAGVINDER SINGH et al., Plaintiffs and Appellants, v. STATE OF CALIFORNIA et al., Defendants and Respondents.
Law Offices of G. Marshall Hann and G. Marshall Hann for Plaintiffs and Appellants. Kamala D. Harris, Attorney General, Jennifer M. Kim, Assistant Attorney General, Richard T. Waldow and Jonathan E. Rich, Deputy Attorneys General, for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. PC049232)
APPEAL from an order of the Superior Court of Los Angeles County, Randy Rhodes, Judge. Affirmed.
Law Offices of G. Marshall Hann and G. Marshall Hann for Plaintiffs and Appellants.
Kamala D. Harris, Attorney General, Jennifer M. Kim, Assistant Attorney General, Richard T. Waldow and Jonathan E. Rich, Deputy Attorneys General, for Defendants and Respondents.
INTRODUCTION
Plaintiffs Jagvinder Singh, M. D. and Sabella Medical Group (Sabella) appeal from an order denying their application for a preliminary injunction against defendants, the Disability Determination Service Division of the State of California Department of Social Services and other State of California entities. We find that plaintiffs did not show they were likely to prevail on the merits, and that the trial court's determination of relative interim harm to the parties from issuance or nonissuance of the injunction was not an abuse of discretion. We reject plaintiffs' claims of error arising from defendants' alleged violations of the California Rules of Court in the trial court and from the trial court's failure to rule on plaintiffs' objection to a sur-reply filed by the defendants. We find that denial of plaintiffs' application for a preliminary injunction was not an abuse of discretion, and affirm that order.
FACTUAL AND PROCEDURAL HISTORY
Plaintiff Singh is a licensed and practicing physician in California. Dr. Singh owns and operates plaintiff Sabella. The Disability Determination Service Division (DDSD) of the State of California Department of Social Services refers cases to plaintiffs in accordance with its responsibility, pursuant to 42 United States Code section 421, to determine whether an individual is under a disability that qualifies the individual for Social Security disability benefits. The DDSD is authorized to refer disability claimants to physicians for consultative examinations. (20 C.F.R. §§ 404.1517, 404.1519.) As a cooperating state agency, the DDSD has responsibility for the consultative examination process and for "comprehensive oversight management of its consultative examination program, with special emphasis on key providers." (20 C.F.R. § 404.1519s(a) and (d).) A "key provider" includes a "consultative examination provider with an estimated annual billing to the disability programs . . . of at least $150,000[.]' (Id. at (e)(1).)
"State agencies have flexibility in managing their consultative examination programs, but at a minimum will provide[,]" inter alia, "[p]rocedures for control of scheduling consultative examinations;" "[p]rocedures for the ongoing review of consultative examination results to ensure compliance with written guidelines;" and "[a] program of systematic, onsite reviews of key providers that will include annual onsite review of such providers when claimants are present for examinations." (20 C.F.R. § 404.1519s(f)(3), (7), and (11).)
The Social Security Administration may impose specific administrative requirements on the State's provision of the organizational structure, qualified personnel, and a quality assurance function to ensure that disability determinations are made accurately and promptly. (20 C.F.R. § 404.1620(a).) The Social Security Administration "will notify the State, in writing, of the administrative requirements being imposed and of any administrative deficiencies it is required to correct. . . . If the State does not meet the requirements or correct all of the deficiencies, or, if some of the deficiencies recur, [the Social Security Administration] may initiate procedures to determine if the State is substantially failing to follow [the] regulations or other written guidelines." (Ibid?)If the State agency is found to have failed to make disability determinations consistent with the Act, regulations or other written guidelines, the Social Security Administration "will assume partial or complete responsibility for performing the disability determination function[.]" (20 C.F.R. § 404.1670.)
On July 21, 2009, DDSD representatives met with Dr. Singh to identify program deficiencies observed in his clinics. In an August 4, 2009, letter, the DDSD summarized that meeting and provided guidelines and goals to be assessed over the following four months. The DDSD raised several areas of concern:
a. Overscheduling of appointments, in that plaintiffs' records showed patients scheduled at the established consultative examination interval set by federal guidelines, while the DDSD found that plaintiffs actually scheduled claimants at shorter intervals.
b. Numerous instances of Sabella physicians arriving extremely late for appointments.
c. Oversight violations, such as the absence of a sign at the Rancho Cucamonga clinic and lack of X-ray equipment in the Glendale clinic.
At the July 21, 2009, meeting and in the August 4, 2009, letter, the DDSD advised Dr. Singh that approved vendors were maintained solely for the convenience of the DDSD, that he was admitted to the panel of consultative examining physicians with the understanding that his continued presence on the panel was at the sole discretion of the DDSD, and that use of his service was dependent on the continued satisfaction of the DDSD with those services.
On August 14, 2009, Dr. Singh's attorney sent a letter to the DDS responding to the August 4, 2009, letter. That letter is not in the record on appeal.
On September 4, 2009, the DDSD responded to the August 14, 2009, letter from Dr. Singh's attorney, and indicated that overscheduling had occurred and was documented by DDSD employees on multiple occasions; that extreme tardiness for appointments was not limited to a single physician, but had occurred by multiple Sabella doctors, including Dr. Singh himself; and that signage defects had been corrected and that the availability of -ray equipment would be reviewed during oversight visits. The letter advised that Dr. Singh had four months to correct problems identified in the July 21, 2009, meeting, but if by November 21, 2009, Dr. Singh had not addressed the problems, the DDSD could undertake "adverse action." Adverse action could include placing a hold on a specific physician, function, or on a facility; limiting referrals, refusing to pay for reports delivered too late to be used for the intended purpose; and removing a vendor or health care provider from the panel.
On September 3, 2010, the DDSD notified Dr. Singh by letter that it had recently completed a series of oversight visits of Sabella facilities to assess compliance with Sabella's corrective action plan. The letter stated the during the initial oversight visits during the four-month period following the July 21, 2009, meeting, the DDSD was concerned that Dr. Singh had not sufficiently implemented solutions in the corrective plan, but chose to provide additional time to make the necessary corrections. In June 2010, the DDS conducted oversight visits of Sabella facilities in San Fernando, Glendale, Pasadena, Rancho Cucamonga, Palmdale, Duarte, Hesperia, Lake Elsinore, Moorpark, Ridgecrest, and the Sabella Broadway facility.
Regarding physician tardiness, the oversight visits found that instances of physician tardiness persisted, including four instances of Dr. Singh's late arrivals for appointments. On two occasions, DDSD personnel arrived at Sabella facilities to find the offices closed without notice to claimants, with scheduled claimants waiting, and no Sabella personnel present or sign posted noting the closure. There were continued discrepancies between the DDSD schedule of claimants and the schedule of claimants' examinations at Sabella facilities. There was a pattern of claimants being called by Sabella the day before an exam and being asked to arrive at a time other than the scheduled time. This rescheduling of claimants was not done with prior DDSD approval, as directed in the corrective action plan, and resulted in substantial confusion and inconvenience for claimants. Multiple claimants were observed to arrive for the same examination time and then had to wait for an examination; other claimants stated that they were unsure whether to arrive at the scheduled time they received in the mail or the time rescheduled by Sabella. The oversight visits did not show progress in correcting overscheduling problems, and Sabella facilities routinely ignored federal guidelines requiring 60 minutes for psychological exams, 40 minutes for psychiatric exams, and 30 minutes for internist exams. Because of overscheduling, exam times for many claimants were observed to be substantially shorter than the federal guidelines.
The DDSD concluded that Dr. Singh had failed to correct problems with overscheduling, doctor tardiness, and rescheduling appointments. The letter stated: "Since you have not met the requirements of the corrective action plan despite being given multiple opportunities, we believe it unlikely that adverse action will result in a different outcome. Consequently, Sabella will be removed as a consultative examination vendor on our panel effective October 1, 2010."
On September 22, 2010, plaintiffs filed a complaint against defendants for declaratory relief and for a temporary restraining order, preliminary injunction, and permanent injunction.
The complaint named as defendants State of California; State of California Health and Human Resource Agency; California Department of Social Services; and State of California Disability Determination Service Division.
On September 24, 2010, plaintiffs filed an ex parte application for an order to show cause re preliminary injunction and an ex parte application for a temporary restraining order. On September 24, 2010, the trial court denied the application for a temporary restraining order and calendared a hearing on the application for a preliminary injunction for October 27, 2010.
On October 27, 2010, the trial court denied plaintiffs' ex parte application for a preliminary injunction. The trial court considered plaintiffs' probability of success on the merits at trial, and compared the interim harm that plaintiffs would suffer if the injunction did not issue with the interim harm defendants would suffer if the relief was granted. With regard to plaintiffs' probability of success on the merits at trial, the trial court determined that a medical provider such as plaintiffs had no property interest in continued participation in federally funded state health programs, and no liberty interest in participating in a government assistance program providing benefits to a third party. Dr. Singh's removal from the panel did not prevent him from practicing medicine, and only precluded him from being paid to provide consultative exams to DDSD. The trial court also found that Dr. Singh's due process rights were not violated, as plaintiffs were given warnings of problems and opportunities to cure those problems before Dr. Singh was removed from the panel. Thus the trial court found plaintiffs had not shown they had any reasonable probability of prevailing on the merits at trial.
With regard to interim harm plaintiffs would suffer if the injunction did not issue, removal of Dr. Singh from the panel would result in only pecuniary loss, and Dr. Singh could still practice medicine. If it were later determined that defendants did not have the right to remove Dr. Singh from the panel, plaintiffs' damages could be ascertained and a money judgment would provide adequate relief. If the preliminary injunction issued, defendants would be forced to reinstate Dr. Singh to panels from which he had been removed, which would disturb the status quo pending outcome of the trial.
Plaintiffs filed a timely notice of appeal from the order denying the application for a preliminary injunction on December 22, 2010.
An order denying an application for a preliminary injunction is an appealable order. (Code Civ. Proc., § 904.1, subd. (a)(6); Department of Fish & Game v. Anderson-Cottonwood Irrigation Dist. (1992) 8 Cal.App.4th 1554, 1560.)
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ISSUES
Plaintiffs claim on appeal that:
1. The standards for issuing a preliminary injunction were met and the trial court erred in not issuing the requested relief;
2. Defendants' failure to attach federal cases to its original opposition barred their consideration by the trial court;
3. Defendants attempted to inject new issues through a sur-reply that was not ruled on by the trial court; and
4. Federal cases cited by defendants do not relate to a purely state-administered disability program that is unrelated to Medi-Cal benefits.
DISCUSSION
1. Standard of Review of an Order Denying an Application for a Preliminary Injunction
"In deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction. [Citation.] 'Generally, the ruling on an application for a preliminary injunction rests in the sound discretion of the trial court. The exercise of that discretion will not be disturbed on appeal absent a showing that it has been abused. [Citations.]' [Citation.] 'A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. [Citation.]' " (Hunt v. Superior Court (1999) 21 Cal.4th 984, 999.)
The applicant must make a prima facie showing of entitlement to injunctive relief before a trial court can exercise its discretion, and must show that the inadequacy of legal remedies creates a real threat of immediate and irreparable injury. On appeal we examine the evidence in the light most favorable to the prevailing party and draw all reasonable inferences in favor of the trial court's order. The existence of other effective judicial remedies or overriding public interests may compel denial of injunctive relief. (Triple A Machine Shop, Inc. v. State of California (1989) 213 Cal.App.3d 131, 138 (Triple A Machine Shop, Inc.).)
2. Denial of the Preliminary Injunction Was Not an Abuse of Discretion
Plaintiffs claim that the trial court erroneously denied a preliminary injunction because plaintiff met the standards for issuing a preliminary injunction.
A. Plaintiffs Did Not Show They Were Likely to Prevail on the Merits
Code of Civil Procedure section 526, subdivision (a)(1) states: "An injunction may be granted . . . [w]hen it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually."
Plaintiffs argue only that declarations of Dr. Singh and his attorney state that defendants planned to remove him as a consultative examining physician on October 1, 2010, and had begun this process by not referring patients to him and Sabella. Plaintiffs make no argument that it appeared by the complaint that plaintiffs were entitled to the relief demanded.
1. Allegations and Relief Demanded by the Complaint
The complaint alleged that defendants had taken actions that would harm plaintiffs' business by failing to honor the four-month corrective action period and the November 21, 2009, deadline; failing to advise plaintiffs of problems during this corrective action period; failing to find that plaintiffs were in compliance with issues and allegations within the corrective action period; advising plaintiffs on September 3, 2010, that plaintiffs would be removed from defendants' patient referral and examination list without providing plaintiffs the ability to respond to new allegations; failing to consider a lesser sanction than complete removal from defendant's patient referral and examination list; failing to fairly evaluate plaintiffs; and failing to uniformly and fairly enforce rules, polices, and regulations against plaintiffs and similarly situated individuals and companies.
The complaint sought a judicial declaration of the parties' rights, duties, interest, and obligations to each other.
2. Plaintiffs Did Not Show They Had a Due Process Right to Remain on the Panel of Consultative Medical Examiners
Plaintiffs were appointed to the DDSD consultative examiners panel pursuant to the responsibility to distribute Social Security disability benefits only to qualifying claimants. (42 U.S.C. § 421; Welf. & Inst. Code, § 10613; 20 C.F.R. §§ 404.1517, 404.1519.) The DDSD has responsibility for the consultative examination process and for "comprehensive oversight management of its consultative examination program." (20 C.F.R. § 404.1519s(d).) The DDSD's responsibility includes recruitment of consultative examination providers. (Id. at (f)(1).) Federal regulations require the DDSD to provide "procedures for control of scheduling consultative examination[s]," to provide "ongoing review of consultative examinations," and to conduct "onsite reviews of key providers." (Id. at (f)(3), (7), and (11).) If the DDSD does not correct deficiencies or deficiencies recur, it may lose its authority to administer disability benefits. (20 C.F.R. §§ 404.1620(a), 404.1670.)
The complaint sought a judicial decree that plaintiffs were entitled to remain on the DDSD independent examination panel and to receive patient referrals and appointments. To show a right to due process, plaintiffs must prove that they have a property or liberty interest in a continued participation in a federally funded program (here, a Social Security disability program). (Erickson v. U.S. ex rel Dept. Health and Hum. Ser. (9th Cir. 1995) 67 F.3d 858, 861 (Erickson))
Erickson held that a physician had no property interest in continued participation in federally funded state health care programs. (Erickson, supra, 67 F.3d at p. 862.) Lin v. State of California (2000) 78 Cal.App.4th 931 similarly held that providers of Medicare services or related programs have no protected interest in continued participation in those programs. (Id. at p. 935.)
Private parties, such as plaintiffs, have no liberty interest in participation in a government assistance program designed to provide benefits for a third party. (Guzman v. Shewry (9th Cir. 2009) 552 F.3d 941, 954 (Guzman).)Suspension of the ability to receive reimbursement for examination of Social Security disability claimants does not deprive plaintiffs of any liberty interest in the right to contract with the state or to pursue their occupation. (Id. at pp. 954-955.)
A person's liberty interest may be implicated if the government brings a charge against him that impairs his reputation for honesty or morality. (Guzman, supra, 552 F.3d at p. 955.) In this context, however, to show that a protected liberty interest is at stake plaintiffs must show that they contest the accuracy of the charge, there is public disclosure of the charge, and the charge is made in connection with the termination of employment or alteration of some right or status recognized by law. (Ibid.) Dr. Singh and Sabella were not accused of fraud, dishonesty, or immorality, but rather with program deficiencies observed in plaintiffs' clinics and with failing to comply with federal guidelines regarding examinations of disability claimants. Moreover, defendants made no public disclosure of the basis for removal of plaintiffs from the panel of consultative medical examiners; a physician's own disclosure of charges against him does not satisfy the requirement of public disclosure. (Id. at p. 957.) Thus plaintiffs have not shown a liberty interest in their continued participation on the panel of consultative medical examiners.
Plaintiffs have not shown they have a due process right to remain on the DDSD panel of consultative medical examiners, to receive patient referrals and appointments, or to continued participation in a federally funded program. Thus they have not shown a likelihood of prevailing on the merits.
B. The Trial Court's Determination of Relative Interim Harm to the Parties From Issuance or Nonissuance of the Injunction Was Not an Abuse of Discretion
1. Injunctive Relief Sought by Plaintiffs
Plaintiffs sought an injunction restraining defendants from taking any action that threatened financial harm or injury to plaintiffs, including preventing defendants from removing plaintiffs from the DDSD panel of consultative medical examiners, interfering with plaintiffs' examination of disability patients, and terminating plaintiffs' right to receive referrals from defendants for disability evaluations. Plaintiffs sought an injunction ordering defendants to continue referring patients to plaintiffs for independent medical disability examinations and evaluations.
2. There Was No Abuse of Discretion in the Trial Court's Determination of Interim Harm to Plaintiffs from Denial of the Preliminary Injunction Compared to Harm to Defendants if the Preliminary Injunction Were Issued
The second factor evaluated by the trial court is " 'the interim harm that the plaintiff is likely to sustain if the injunction were denied as compared to the harm that the defendant is likely to suffer if the preliminary injunction were issued.' " (Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286.)
Denial of the preliminary injunction—allowing defendants to remove Dr. Singh from the panel of consultative medical examiners—would produce only monetary loss to plaintiffs. As noted ante, defendants' actions have not resulted in the discipline or loss of Dr. Singh's medical license and do not prevent him from practicing medicine. As the trial court found, if the litigation ultimately determines that defendants did not have the right to remove Dr. Singh from the panel and to stop referring disability claimants to plaintiffs for examination, plaintiffs' damages are ascertainable and a money judgment would provide adequate relief. The existence of another effective judicial remedy is grounds for denying injunctive relief. (Triple A. Machine Shop, Inc., supra, 213 Cal.App.3d at p. 138.)
The grant of the preliminary injunction would have ordered defendants to reinstate plaintiffs to the panel of consultative examiners. It would thus involve ordering the defendants to perform an affirmative act which would have changed the status quo, as at the time of the October 27, 2010, order, plaintiffs had been removed from that panel. " 'Where . . . the preliminary injunction mandates an affirmative act that changes the status quo, we scrutinize it even more closely for abuse of discretion. "The judicial resistance to injunctive relief increases when the attempt is made to compel the doing of affirmative acts." ' " (Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 625.) Moreover, as defendants point out, the public interest in having medical examinations of disability claimants performed properly in compliance with federal guidelines outweighs plaintiffs' interest in being on the panel of consultative medical examiners.
This court's decision does not constitute a final adjudication of the parties' rights. "In reviewing the propriety of a ruling on an application for a preliminary injunction, we merely decide whether the trial court abused its discretion based on the record before it at the time of the ruling." (Shoemaker v. County of Los Angeles, supra, 37 Cal.App.4th at p. 626.)
3. No Error Occurred Because Defendants Violated California Rules of Court, Rules 3.1113(i) and 3.1110(f) by Failing to Timely File Tabbed, Indexed Federal Authorities with Their Opposition to the Application for Preliminary Injunction
Plaintiffs claim that defendants violated California Rules of Court, rules 3.1113(i) and 31110(f) by failing to lodge, and to tab and index as exhibits, federal cases, statutes, and rules cited in their opposition to the application for a preliminary injunction. Therefore, plaintiffs argue, the trial court should have ignored those federal cases, statutes, and rules.
Plaintiffs have provided no authority that the violation of those rules of court bars consideration of the federal cases, statutes, and rules. Defendants filed the federal authorities on October 7, 2010, twenty days before the October 27, 2010, hearing and ruling on the application for preliminary injunction.
4. Plaintiffs Have Not Shown That the Trial Court's Failure to Rule on Their Objection to Defendants' Sur-Reply Was Reversible Error
Plaintiffs claim that after they filed their reply to the opposition to the application for preliminary injunction, defendants filed a "Sur-reply" which raised new issues and introduced new cases and authorities. Plaintiffs cite their objection to defendants' sur-reply and the trial court's failure to rule on their objection. Plaintiffs have provided no authority that the trial court's failure to rule on their objection to defendants' sur-reply was reversible error.
5. The Guzman and Erickson Cases Are Not Distinguishable and Apply to this Appeal.
Plaintiffs claim that Guzman and Erickson concern Medi-Cal benefits administered through a state, while plaintiffs' claims relate to a Supplemental State Program. Both Guzman and Erickson, however, have application beyond Medi-Cal benefits. Erickson stated that the issue was "whether a medical provider has a protected interest in continued participation in Medicare, Medicaid or similar programs." (Erickson, supra, 67 F.3d at p. 861, italics added.) Erickson held that "plaintiffs do not possess a property interest in continued participation in Medicare, Medicaid, or the federally-funded state health care programs." (Id. at p. 862, italics added.) Guzman similarly applied the broadly stated rule that "there is no authority for the proposition that a private party, such as Guzman, has a 'liberty interest in . . . participation in a government assistance program designed to provide benefits for a third party.' " (Guzman, supra, 552 F.3d at p. 954.) We do not find Guzman and Erickson distinguishable or inapplicable.
DISPOSITION
The order denying the application for a preliminary injunction is affirmed. Costs on appeal are awarded to defendants State of California; State of California Health and Human Resource Agency; California Department of Social Services; and State of California Disability Determination Service Division.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KITCHING, J. We concur:
KLEIN, P. J.
ALDRICH, J.