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UNITED STATES v. WAKSBERG

March 30, 1995

UNITED STATES OF AMERICA, Plaintiff,
v.
MORRY WAKSBERG, M.D., et al., Defendants.



The opinion of the court was delivered by: JUNE L. GREEN

 I. Introduction

 II. Statement of Facts

 This case began in 1987 with an investigation of Dr. Waksberg by the United States Department of Health and Human Services (HHS) and its Office of the Inspector General (OIG). On June 20, 1991, the Government filed a complaint against Dr. Waksberg in which it sought judicial enforcement of a settlement agreement between Dr. Waksberg and HHS. The Government argued that the settlement agreement resolved charges made by HHS that Dr. Waksberg submitted false claims to the federal Medicare program.

 Dr. Waksberg filed a motion for a preliminary injunction pending resolution of the trial on the merits. On September 24, 1991, then presiding Judge Revercomb issued an order which stated in relevant part:

 
[The Government] is enjoined from disseminating or causing to be disseminated publicly any information that in any manner suggests that [Dr. Waksberg has] been excluded from participation in Medicare and Medicaid programs and [has] furnished services substantially in excess of the needs of individuals and of a quality not meeting professional standards.
 
Furthermore, [the Government] is enjoined from taking any steps to preclude [Dr. Waksberg] from participating in Medicare and Medicaid programs or in the reimbursement of Medicare [or] Medicaid claims in the absence of full compliance with all appropriate regulatory requirements.

 United States v. Waksberg, C.A. No. 91-1531 (GHR), Order dated September 24, 1991, at 2. The injunction applied to OIG, as the office within HHS responsible for investigating Medicare fraud and for implementing, through its regional offices, physician exclusions and suspensions from Medicare and Medicaid programs. United States v. Waksberg, CA. No. 91-1531 (GHR), Order dated July 28, 1992, at 3. The injunction was to remain in place until the Court ruled after hearing arguments on proposed findings of fact and conclusions of law on December 3, 1991. Id.

 On October 23, 1991, Transamerica-Occidental Life Insurance Company ("Transamerica"), HHS's Medicare carrier in southern California, issued a newsletter to approximately 52,000 hospital administrators, physicians and other interested persons in that area publicizing Dr. Waksberg's name at the head of a list of health care providers who had been excluded from participating in the Medicare program. Id. at 3-4. The newsletter falsely stated that Dr. Waksberg had been excluded as of September 26, 1989. Id. at 4. At a hearing on October 29, 1991, the Court found that the publication of Dr. Waksberg's name in the newsletter violated the Order of September 24, 1991. Id. at 1 n.1.

 On July 18, 1992, the Court heard oral argument on Dr. Waksberg's Supplemental Motion for Order of Contempt and Sanctions. Id. The Court concluded that there was clear and convincing evidence that the Government failed to comply with the preliminary injunction order on September 24, 1991; the Court then cited the Government for civil contempt. Id. at 5, 7. Since the preliminary injunction bound Transamerica as the agent of HHS in Medicare administration matters, the Court held HHS responsible for Transamerica's violation of the injunction. Id. at 5.

 The Court then sought a sanction that would coerce future compliance and remedy past non-compliance. Id. at 7. With the latter in mind the Court stated, "The Court believes that Dr. Waksberg is entitled to compensation to the extent he can prove damages caused by [the Government's] violation of the preliminary injunction . . . Such a compensatory fine is analogous to a tort judgment for damages caused by wrongful conduct and where a complainant can demonstrate actual losses, courts have held that compensatory damages must be awarded." Id. at 7-8 (citations omitted).

 A hearing on compensatory damages was postponed until after the trial on the merits. After trial, the Court set a date for a hearing on damages and the Government filed its Motion to Dismiss [Dr. Waksberg's] Claims for Damages Based Upon Contempt.

 III. Discussion

 A. Timeliness

 As a preliminary matter, Dr. Waksberg argues that the Government's Motion to Dismiss is untimely. (Defs. Mem. in Resp. to Pl.'s Mot. to Dismiss at 4-5.) The issue of sovereign immunity, however, is jurisdictional and may be raised at any time. Fed. R. Civ. P. 12(h)(3). Dr. Waksberg also claims that Judge Revercomb decided the "issue of monetary damages" in Dr. Waksberg's favor, and that his ruling is the "law of the case." (Id. at 4-5.) But Judge Revercomb's Order of July 28, 1992 does not directly address the issue of sovereign immunity and the Court, therefore doubts whether it represents the "law of the case." See Bouchet v. National Urban League, 235 U.S. App. D.C. 37, 730 F.2d 799, 806 (D.C. Cir. 1984.) ("Questions that merely could have been decided do not become law of the case."). To the extent that the Order necessarily implies that sovereign immunity does not bar recovery of compensatory damages, this Court vacates that decision as clear error. See Alliance for Cannabis Therapeutics v. DEA, 304 U.S. App. D.C. 400, 15 F.3d 1131, 1134 (D.C. Cir. 1994) (explaining that courts will reconsider rulings that result in clear error). In any event, the Court is free to rule on this issue since the doctrine of "law of the case" is a prudential rather than a jurisdictional restriction on a Court's authority to reconsider an issue once it has been decided. Women's Equity Action League v. Cavazos, 285 U.S. App. D.C. 48, 906 F.2d 742, 751-52 n.14 (D.C. Cir. 1990). The Court, therefore, holds that the Motion is not untimely and consideration of the Motion is not precluded by the "law of the case" doctrine.

 B. Sovereign Immunity

 In the matter presently before the Court, Dr. Waksberg seeks money damages as compensation for all injuries he may have suffered as a result of the Government's violation of the preliminary injunction. In order to determine whether the doctrine of sovereign immunity applies to a case, a court must first decide whether the action is "against the sovereign." "The general rule is that a suit is against the sovereign if the judgment sought would expend itself on the public treasury or domain or interfere with the public administration . . . or if the effect of the judgment would be to restrain the government from acting or compel it to act." Dugan v. Rank, 372 U.S. 609, 620, 10 L. Ed. 2d 15, 83 S. Ct. 999 (1963) (citations omitted). In this case, the money damages which Dr. Waksberg seeks would plainly come from the public treasury. This action, therefore, is "against the sovereign."

 The doctrine of sovereign immunity "stands as an obstacle to virtually all direct assaults against the public fisc, save only those incursions from time to time authorized by Congress." United States v. Horn, 29 F.3d 754, 761 (1st Cir. 1994). The doctrine which has emerged from countless Supreme Court cases is that the United States government can only be sued when it has expressly given its consent to be sued, United States v. Mitchell, 463 U.S. 206, 212, 77 L. Ed. 2d 580, 103 S. Ct. 2961 (1983) and the consent must be clear and unequivocal and it will not be implied. United States v. King, 395 U.S. 1, 4, 23 L. Ed. 2d 52, 89 S. Ct. 1501 (1969). The government's consent to be sued "must be construed strictly in favor of the sovereign . . . and not enlarged beyond what the language requires . . . ." United States v. Nordic Village Inc. 503 U.S. 30, 112 S. Ct. 1011, 1014-15, 117 L. Ed. 2d 181 (1992) (citation omitted). A Court will find a waiver only when a legislative intent is "so clear and explicit as to brook no reasonable doubt." ...


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