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January 15, 2004.


The opinion of the court was delivered by: ELLEN S. HUVELLE, District Judge


Plaintiffs seek review under the Administrative Procedure Act ("APA"), 5 U.S.C. § 701, et seq., of a Department of Health and Human Services ("HHS") determination that they are ineligible for medical malpractice liability coverage from the federal government under the Federally Supported Health Centers Assistant Act ("FSHCAA" or "the Act"), 42 U.S.C. § 233(g). For the reasons set forth below, plaintiffs' motion for summary judgment will be granted, and defendants' cross-motion will be denied.


  Plaintiffs are physicians who provide obstetric and gynecological services in Arizona for patients of El Rio Santa Cruz Neighborhood Health Center, Inc. ("El Rio") through contracts established between El Rio and each physician's individually-owned, eponymous corporation. As a non-profit clinic that receives federal funds for the provision of medical care to low-income patients, El Rio receives professional liability coverage from the federal government pursuant to Page 2 the FSHCAA. This Act makes federally-funded community health centers and their employees, officers, and individual contractors eligible for medical malpractice coverage under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 1346, 2671, to the same extent as federal employees of the Public Health Service.

  In July 2002 the family of an El Rio patient sued plaintiffs, among others, in a survival action in Arizona state court for medical malpractice allegedly committed in July 2000. See Puig v. Rios, No. 2002-3441 (Ariz. Sup. Ct). Shortly thereafter, El Rio notified HHS of the suit and submitted information to the agency for a determination of the physicians' FTCA coverage, which, if granted, would prompt the substitution of the United States as defendant for the individual physicians in the malpractice suit. See 42 U.S.C. § 233(g)(1)(A). HHS, however, denied the physicians FTCA coverage by letter dated January 23, 2003, to El Rio from Elizabeth Jordan Gianturco, the Chief of the Claims and Employment Law Branch of HHS's General Counsel's Office ("the Gianturco letter"). The letter stated that plaintiffs

cannot be deemed employees of the Public Health Service because their contracts were between the health center and a professional corporation. See BPHC Policy Information Notice 99-08, Section IV. Based upon the above, this agency has determined that this matter does not meet the criteria under the FSHCAA for coverage under the Federal Tort Claims Act (FTCA) and for representation by the United States government.
  Although HHS had made its determination, the physicians removed the malpractice action from state to federal court in Arizona in March 2003.*fn1 See Puig v. Rios, Civ. No. 03-161 (D. Ariz.). El Rio sought intervenor status for the sole purpose of adjudicating the FTCA Page 3 coverage issue, and before that motion was decided, the physicians and El Rio filed a joint petition for a determination of the physicians' coverage and a third-party complaint for declaratory and injunctive relief against HHS and Tommy Thompson as "necessary parties" to the coverage decision. Meanwhile, the malpractice plaintiff had moved to remand the case to state court. On June 5, 2003, the court granted the remand because it found that the notice of removal had not been timely filed as required by 42 U.S.C. § 233(1)(2) and 28 U.S.C. § 1446(b), and therefore, the remaining matters were moot. El Rio subsequently withdrew its motion to intervene, and the third-party complaint was also voluntarily withdrawn.*fn2 Thus, the malpractice claim is currently pending in Arizona state court.

  The physicians and El Rio filed the instant complaint against HHS and its Secretary in this Court on August 18, 2003, requesting that the Court invalidate HHS's refusal to grant FTCA coverage to the physicians and direct HHS to take appropriate action to notify the Department of Justice that plaintiffs are entitled to FTCA coverage. Their summary judgment motion and the government's cross-motion are now before the Court.


  The issues raised by the parties present narrow questions of law appropriate for summary judgment. As a threshold matter, the government challenges the Court's jurisdiction over plaintiffs' claim. It contends that it is "well-settled that the APA is not an implied grant of subject matter jurisdiction permitting review of agency action," and thus, plaintiffs must establish an independent source of federal question jurisdiction. (Cross-mot, at 10 (citing Califano v. Sanders, 430 U.S. 99 (1977)).) The government argues that no independent Page 4 jurisdiction exists, because "HHS's negative `deeming' determination [does] not create federal question jurisdiction." (Id. at 11 (citing Allen v. Christenberry, 327 F.3d 1290 (11th Cir. 2003)).)

  Addressing the merits of plaintiffs' claim that they should receive FTCA coverage under the Act, the government asks the Court to construe the relevant portions of the FSHCAA narrowly, limiting FTCA coverage only to individuals who contract directly with health clinics. It contends that HHS's denial of coverage to the physicians, who have contracted with El Rio "not in their individual capacities, but through a separate and distinct corporate entity," was not arbitrary and capricious, and should be upheld. (Id. at 14, 17.)


  The government's challenges to the Court's jurisdiction are misguided. There is a presumption in favor of reviewability under the APA, see, e.g., Abbott Labs. v. Gardner, 387 U.S. 136, 141 (1967), and thus, "[e]ven though the APA itself technically grants no jurisdiction, power to review any agency action exists under 28 U.S.C. § 1331." Robbins v. Reagan, 780 F.2d 37, 42-43 (D.C. Cir. 1985) (quoting Megapulse, Inc. v. Lewis, 672 F.2d 959, 966 n.30 (D.C. Cir. 1982)).

  This Circuit has discussed how the holding in Sanders, upon which defendants rely, "does not inexorably lead to the conclusion" that the Court has no basis for jurisdiction over APA claims, but instead has been limited to its facts. Robbins, 780 F.2d at 42. It is now well-established that Sanders bars a district court's jurisdiction over an APA challenge to federal agency action only when a federal statute specifically precludes review. Id. See also Ass'n of Nat'l Advertisers v. FTC, 617 F.2d 611, 619 (D.C. Cir. 1979) ("[g]eneral federal question jurisdiction . . . gives the district courts the power to review agency action absent a preclusion of review statute"). No statutory provision precludes APA review of the HHS determination at Page 5 issue here. See Fox Television Stations, Inc. v. F.C.C., 280 F.3d 1027, 1038 (D.C. Cir. 2002) (citing Abbott Labs., 387 U.S. at 141 ("clear and convincing evidence" of congressional intent is required to foreclose judicial review)). Thus, the Court has jurisdiction over plaintiffs' APA claim.

  Second, the government's reliance on the Alien case is inapposite. In Allen, the Eleventh Circuit concluded that HHS's determination that a physician was not covered under the FTCA did not create federal question jurisdiction over the underlying malpractice claim between the injured plaintiff and the physician defendant. 327 F.3d at 1295-96. There, because HHS had determined, prior to removal, that the doctors were not covered, the doctors had no basis to remove the case to federal court.*fn3 Id. Therefore, Alien's procedural posture rendered the HHS determination a "tangential federal issue" that could not transform the action "into a federal case where the rights involved [were] rooted in state law." Robbins, 780 ...

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