Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-04097/USCOURTS-ca10-94-04097-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

F.E.R., personally and on behalf of a class ) 

of patients similarly situated; S.A., S.L.B.,) 

L.A.M., B.E.S., A.L.V., as the guardian ad ) 

litem for A.L.C.; A.L.C., a minor, personally) 

and on behalf of a class of patients ) 

similarly situated, ) 

) 

Plaintiffs-Appellants, ) 

) 

"· ) ) 

SALLY VALDEZ, Agent, Bureau of Medicaid ) 

Fraud, Di"ision of In"estigation, Department ) 

of Public Safety, State of Utah; DENNIS ) 

KROLL, Attorney for Bureau of Medicaid Fraud,) 

Di"ision of In"estigation, Department of ) 

Public Safety, State of Utah, ) 

) 

Defendants-Appellees. ) 

No. 94-4097 

OH APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF UTAH 

(D.C. Ho. 89-CV-1136) 

Joro·walker (Brian M. Barnard and John P~ce with her on the 

briefs), Utah Legal Clinic, Salt Lake City, Utah, for PlaintiffsAppellants. 

Brent A. Burnett, Assistant Attorney General (Jan Graham, Utah 

Attorney General, with him on the brief), Salt Lake City, Utah, 

for Defendants-Appellees. 

Before BRORBY, KELLY and HENRY, Circuit Judges. 

BRORBY, Circuit Judge. 

Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 1 
The plaintiffs are a group of patients (collectively the 

"Patients") of a psychiatrist who was the subject of a Medicaid 

fraud investigation. During the investigation, all of the 

psychiatrist's records were seized pursuant to a state search 

warrant. The Patients instituted a civil rights class action 

pursuant to 42 U.S.C. § 1983 against three state agents (the 

"defendants")1 alleging violations to their privacy rights. The 

Patients sought declaratory relief, injunctive relief and damages. 

On cross-motions for summary judgment, the district court denied 

the Patients' motion and granted the defendants' motion. The 

district court held the Patients' equitable claims were moot and 

the claim for damages must be dismissed because the defendants are 

protected by qualified immunity. We exercise jurisdiction 

pursuant to 28 U.S.C. § 1291, and we affirm. 

The Utah Bureau of Medicaid Fraud was investigating a 

psychiatrist when it executed a search warrant and seized the 

psychiatrist's treatment and billing records. This seizure 

encompassed the Patients' records although none of the Patients 

were Medicaid recipients. Approximately three months later, a 

state circuit court sealed the material obtained during the 

seizure. During the investigation, the records containing 

information on the Patients' psychiatric treatment were made 

available to a variety of Bureau employees. The criminal 

investigation of the psychiatrist ended with an out-of-court civil 

1 One of the defendants, Lieutenant Susan Jones, settled out of 

court and is not a party to this appeal. 

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Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 2 
settlement. In the settlement agreement, the psychiatrist 

consented to pay restitution and abstain from future participation 

in the Medicaid program. At the conclusion of the Bureau's 

investigation, the records were returned to the psychiatrist. 

The Patients sued three state agents 

capacities alleging the Bureau's seizure 

records violated the Patients' constitutional 

in their 

of the 

right 

individual 

psychiatric 

to privacy. 

The Patients sought damages, a declaration that the seizure was 

unconstitutional and an injunction to have the records returned to 

the psychiatrist. The district court determined the Patients' 

claims for equitable relief were moot and granted the defendants' 

motion for summary judgment on the basis of qualified immunity. 

The Patients appeal. 

MOOTNESS 

The initial issue in this case is whether the Patients' 

claims for equitable relief are moot. We review the question of 

mootness de novo as a matter of federal jurisdiction. Building & 

Constr. Dep't v. Rockwell Int'l, 7 F.3d 1487, 1491 (lOth Cir. 

1993). To maintain a claim the Patients must present an actual, 

ongoing dispute. Honig v. Doe, 484 U.S. 305, 317 (1988); Nebraska 

Press Ass'n v. Stuart, 427 U.S. 539, 546 (1976). 

The Patients seek a declaratory judgment that the defendants 

invaded the privacy of the Patients. The Patients' claim for a 

declaratory judgment is similar to their claim for damages. In 

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Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 3 
each, the Patients ask the court to determine whether a past 

constitutional violation occurred. In this dispute the alleged 

liability-producing act has already occurred. Because the 

question still exists as to whether the defendants violated the 

Patients' right to privacy, a controversy on the Patients' right 

to privacy still exists. But see Facio v. Jones, 929 F.2d 541, 

544 (lOth Cir. 1991) (in discussing standing in a § 1983 suit, the 

panel broadly stated a "plaintiff cannot maintain a declaratory or 

injunctive action unless he or she can demonstrate a good chance 

of being likewise injured in the future."). Therefore, the claim 

for a declaration that the defendants improperly invaded the 

privacy of the Patients when they seized the psychiatrist's files 

is not moot, and this claim will be discussed later with the claim 

for damages. See Yniguez v. Arizona, 975 F.2d 646, 647 (9th Cir. 

1992) ("A plaintiff's pursuit of nominal damages provides a 

sufficiently concrete interest in the outcome of the litigation to 

confer standing to pursue declaratory relief and thereby prevents 

mootness."). 

However, the claim for injunctive relief is moot. The 

Patients are seeking an injunction to have their medical records 

returned to the psychiatrist, yet the records were returned at the 

end of the Bureau's investigation. There is no longer a dispute 

about the current possession of the medical files. There is no 

present controversy on the claim for injunctive relief because the 

explicit objective of the proposed injunction has been met: the 

records were returned. 

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Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 4 
The Patients argue the exceptions to mootness apply in this 

case. One exception to mootness is when the dispute is "capable 

of repetition yet evades review." Los Angeles v. Lyons, 461 U.S. 

107, 109 (1983). To qualify for the exception, the Patients must 

show a reasonable likelihood that they will again suffer the 

alleged deprivation. See Honig, 484 U.S. at 318; Lyons, 461 U.S. 

at 109. The Patients acknowledge their current psychiatrist is 

unlikely to be investigated again because he no longer treats 

Medicaid patients, yet they allege their psychiatric records may 

be confiscated by the Bureau again if they consult a new 

psychiatrist who subsequently becomes the target of a Medicaid 

investigation. This allegation is too speculative to support the 

mootness exception, which is only to be used in "exceptional 

situations." See Lyons, 461 U.S. at 109. 

The Patients correctly note the general rule of law that 

"voluntary cessation of allegedly illegal conduct does not deprive 

the tribunal of power to hear and determine the case, i.e., does 

not make the case moot." United States v. W.T. Grant Co., 345 

U.S. 629, 632 (1953). They argue their claim for injunctive 

relief is not moot because the defendants voluntarily returned the 

records to the psychiatrist. Yet, the records were returned at 

the end of the investigation and not in an effort to evade review. 

In arguing voluntary cessation, the Patients rely on 

Longstreth v. Maynard, 961 F.2d 895 (lOth Cir. 1992), and Grant, 

345 U.S. at 633-34. In Longstreth, a prison vacated a policy that 

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Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 5 
was being challenged by some of the prisoners, but the court found 

that the allegedly wrongful behavior by the prison could 

reasonably recur. 961 F.2d at 900. In holding a "'voluntary 

cessation of a challenged practice does not deprive a federal 

court of its power to determine the legality of the practice,'" 

961 F.2d at 901 (quoting Mesquite v. Aladdin's Castle, Inc., 455 

U.S. 283, 289 (1982)), the court found the prison had the ability 

to change the policy again and affect the prisoners in the same 

way they were affected before. In Grant, a business executive 

voluntarily 

government 

directorates 

resigned from the companies' boards after the 

sued to enjoin him from holding interlocking 

in competing corporations. The Supreme Court found 

the executive was still free to return to his old ways even after 

resigning, therefore, the claim was not moot. 345 U.S. at 634. 

In the instant case, the Bureau returned the files and cannot 

simply decide to confiscate them again without a warrant issued by 

a detached and neutral magistrate. The allegedly wrongful action 

by the Bureau -- taking the files from this psychiatrist has 

ended. The investigation is closed and the psychiatrist's conduct 

has been rectified. The exception of voluntary cessation is not 

applicable to the Patients' request to have the files returned to 

the psychiatrist because that dispute has been completely 

eradicated. 

However, if we read the Patients' claim for injunctive relief 

as an effort to enjoin future seizures, it may fit within the 

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Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 6 
voluntary cessation exception. Assuming there is no problem with 

mootness, the Patients must still show they have standing to bring 

this claim. Thus, as in Lyons, the issue becomes "not whether 

that claim has become moot but whether [the Patients] meet[] the 

preconditions for 

forum." 461 U.S. 

personal stake in 

asserting an injunctive claim in a federal 

at 109. The Patients must demonstrate a 

the outcome, yet "[p]ast exposure to illegal 

conduct does not in itself show a present case or controversy 

regarding injunctive relief if unaccompanied by any 

continuing, present adverse effects." O'Shea v. Littleton, 414 

U.S. 488, 495-96 (1974}. Also, abstract injury is not enough. 

Lyons, 461 U.S. at 109. To establish standing the Patients must 

demonstrate a sufficient likelihood that they will again be harmed 

in a similar manner. See Lyons, 461 U.S. at 111 ("Absent a 

sufficient likelihood that he will again be wronged in a similar 

way, Lyons is no more entitled to an injunction than any other 

citizen of Los Angeles; and a federal court may not entertain a 

claim."} . 

The Patients argue "Non-Medicaid psychiatric patients 

throughout the state face the possibility that documents detailing 

their most intimate thoughts and feelings, records which they 

believe are secret and confidential, may be seized, examined and 

disclosed to and by state officials in the course of an 

investigation." The threat to the Patients personally, in this 

scenario, is not sufficiently real to establish standing. See 

Lyons, 461 U.S. at 103; Harris v. Ch~ion, 51 F.3d 901, 908 (lOth 

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Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 7 
Cir. 1995). The doctrine of voluntary cessation does not save the 

Patients' claim for injunctive relief because the Patients' "lack 

of standing does not rest on the termination of the [Bureau] 

practice but on the speculative nature of [their] claim that 

[they] will again experience injury as the result of that practice 

even if continued." Lyons, 461 U.S. at 109. The Patients fail to 

allege a realistic threat of seizure of their psychiatric 

treatment records, therefore the district court did not err in 

dismissing the Patients' claims for injunctive relief. 

PRIVACY 

The remaining issue is whether the district court erred in 

finding the defendants were entitled to qualified immunity. We 

review the district court's grant of summary judgment on this 

issue de novo. Cummins v. Campbell, 44 F.3d 847, 850 (lOth Cir. 

1994). 

The first inquiry in assessing the state agents' defense of 

qualified immunity is whether the Patients met their burden of 

establishing a constitutional violation occurred at all and then 

whether the law was clearly established at the time the action 

occurred. Siegert v. Gilley, 500 U.S. 226, 231-32 (1991); 

Hilliard v. Denver, 930 F.2d 1516, 1518 (lOth Cir.), cert. denied, 

502 u.s. 1013 (1991). 

The right to be free from unreasonable searches and seizures 

originates in the Fourth Amendment and is applied to the states 

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Appellate Case: 94-4097 Document: 01019277360 Date Filed: 07/10/1995 Page: 8 
through the Fourteenth Amendment due process clause. Mapp v. 

Ohio, 367 U.S. 643 (1961). The Constitution generally requires 

government officials to obtain a search warrant from an impartial 

judicial official based upon probable cause before seizing 

material. Katz v. United States, 389 U.S. 347, 357 (1967). The 

Patients allege the seizure of the psychiatrist's files was a 

clear violation of their constitutional right to privacy. 

However, the material was seized from the psychiatrist's office 

pursuant to a state search warrant. The Patients do not challenge 

the validity of the search warrant; thus we assume the warrant was 

valid. Instead, the Patients generally claim the seizure was 

unconstitutional. 

The Patients allege the seizure was too broad and served no 

legitimate state interest. However, as discussed below, the 

seizure served the compelling state interest of ending fraud in 

the Medicaid program and the record fails to show how the search 

could have been narrowed. A reasonable government official has 

not violated the Fourth Amendment when the official conducts a 

search pursuant to a facially valid warrant. 

854 F.2d 1206, 1208-09 (lOth Cir. 1988) (a 

See Jones v. Denver, 

reasonable officer 

concluding that a search warrant was supported by probable cause 

is protected by qualified immunity) . Because the seizure was 

conducted pursuant to and within a valid search warrant, the 

Patients have presented no grounds to claim a constitutional 

violation. 

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The Patients' brief also alleges a violation of privacy in 

the dissemination of information from the seized files. They 

allege improper handling of confidential material resulted in a 

violation of their privacy. There is a constitutional right to 

privacy in preventing disclosure by the government of personal 

matters. See Whalen v. Roe, 429 U.S. 589, 599 & n.24 (1977). To 

determine a constitutional violation of privacy, the Tenth Circuit 

adopted a balancing test. Flanagan v. Munger, 890 F.2d 1557, 1570 

(lOth Cir. 1989) (citing Denver Policemen's Protective Ass'n v. 

Lichtenstein, 660 F.2d 432, 435 (lOth Cir. 1981)). We must 

consider (1) whether the Patients have a legitimate expectation of 

privacy in their psychiatric records, (2) whether disclosure of 

this information served a compelling state interest, and (3) 

whether the state could have achieved its objectives in a less 

intrusive manner. 

The defendants concede the Patients have a legitimate 

expectation of privacy in the medical records. Thus we move to 

the second inquiry. The second prong of Lichtenstein requires the 

defendants' actions serve a compelling state interest. Here, the 

defendants were acting to prevent and punish Medicaid fraud. The 

state's need to investigate and prosecute abuses of the state 

Medicaid program is a compelling interest. 

The Patients had an expectation of privacy in their medical 

records and the state was serving a compelling interest in trying 

to protect its Medicaid program; therefore, we are left with the 

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final prong: whether the dissemination of the material was made 

in the least intrusive manner possible. Because the 

constitutional right to privacy in this case is being analyzed in 

the context of qualified immunity, the burden is on the Patients. 

See Hilliard, 930 F.2d at 1518. They bear the burden of 

demonstrating a constitutional violation occurred. 

The defendants claim they needed the records to determine if 

Medicaid patients were being billed at the same rate as nonMedicaid patients, if the Medicaid patients were being billed for 

individual therapy when in fact the treatment was group therapy, 

if billing was falsely made, if medications billed to Medicaid 

patients had been diverted for resale to non-Medicaid patients, 

and if the psychiatrist contra-indicated medication or overprescribed medication. The Patients argue the Bureau's treatment 

of the files was not the least intrusive method available because 

the Bureau took every record in the doctor's office, failed to 

immediately seal the material, and failed to edit and redact the 

materials to protect the Patients' privacy. However, the Patients 

do not support these arguments with sufficient facts for us to 

determine whether the Bureau could have behaved in a less 

intrusive manner in respect to the Patients' files. The record 

simply informs us the psychiatrist's files were partially in hard 

copy and the rest were computer files. The defendants claim the 

billing and treatment records were so intertwined that the 

handling of the material could not be less intrusive than it was. 

The Patients have failed to rebut the defendants' assertion that 

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' 

the files could not be separated effectively to protect the 

Patients' treatment records. The record supports the conclusion 

that the psychiatrist's files were handled in the least intrusive 

manner. 

The Patients have failed to meet their burden in 

demonstrating a constitutional violation occurred. Therefore, the 

defendants are entitled to qualified immunity from this § 1983 

action. 

CONCLUSION 

The Patients are unable to make a reasonable showing that 

their psychiatric records will again be subjected to a seizure by 

the Bureau. Therefore, their claim for injunctive relief is moot 

due to the return of the records to the psychiatrist, and they 

lack standing to enjoin future seizures. 

We affirm the district court's grant of summary judgment for 

the defendants on the remaining claims because the Patients failed 

to show a constitutional violation and the defendants were thus 

entitled to qualified immunity. Judgment AFFIRMED. 

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