Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-95-05165/USCOURTS-caDC-95-05165-0/pdf.json

Nature of Suit Code: 150
Nature of Suit: Overpayments &amp; Enforcement of Judgments
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 17, 1997 Decided May 16, 1997

No. 95-5165

UNITED STATES OF AMERICA,

APPELLEE 

v.

MORRY WAKSBERG, M.D., AND MORRY WAKSBERG, M.D., INC.,

APPELLANTS 

Appeal from the United States District Court 

for the District of Columbia 

(91cv01531)

Erwin Chemerinsky argued the cause for appellants. With 

him on the briefs was Paul J. Weiner.

W. Mark Nebeker, Assistant U.S. Attorney, argued the 

cause for appellee. With him on the brief were Eric H. 

Holder, Jr., U.S. Attorney, and R. Craig Lawrence, Assistant 

U.S. Attorney.

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Daniel J. Popeo, Richard A. Samp, Arthur B. Spitzer, and 

Daniel I. Prywes were on the brief for amici curiae the 

Washington Legal Foundation and the American Civil Liberties Union of the National Capital Area in support of appellants.

Before: RANDOLPH, ROGERS, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge: This appeal raises a question 

which, for prudential reasons, we will not decide at this 

timewhether, upon finding the United States in contempt 

for violating an injunction, a federal court may order the 

government to pay a compensatory fine despite its claim of 

sovereign immunity. The question is new to this court and to 

decide it we would have to resolve a dispute about the 

meaning of the Constitution. But there has not yet been a 

finding that the government's violation of the decree caused 

any monetary losses. Only if that is established on remand 

will it be necessary to resolve this dispute about the extent of 

the judiciary's power.

I

The Department of Health and Human Services investigated Morry Waksberg, M.D., and Morry Waksberg, M.D., Inc., 

for submitting false or fraudulent claims for reimbursement 

under the Medicare program between 1984 and 1986. Waksberg and a Department representative signed a "Settlement 

Agreement" in September 1989 to resolve the government's 

civil claims against Waksberg. The Settlement Agreement 

provided, among other things, that Waksberg was to be 

excluded from the Medicare program for two years.

In June 1991, the United States brought an action against 

Waksberg to enforce the agreement. Shortly thereafter, 

Transamerica Occidental Life Insurance Co., the government's Medicare carrier in southern California, where Waksberg practiced, began sending letters to Waksberg's patients. 

The letters announced that Transamerica would not pay for 

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ed from the Medicare program. His exclusion, the letters 

stated, resulted from a determination that he had "furnished 

services substantially in excess of the needs of individuals and 

[of a] quality not meeting professional standards."

With the government's case pending in the district court, 

Waksberg reacted to Transamerica's letters by moving for a 

temporary restraining order against the United States. The 

district court (Revercomb, J.) issued a TRO in July 1991, 

ordering the United States to have Transamerica send letters 

to Waksberg's patients retracting the statements made in the 

earlier letters. The TRO, and a preliminary injunction issued 

in September 1991, further enjoined the United States "from 

disseminating or causing to be disseminated publicly any 

information that in any manner suggests that defendants 

have been excluded from participation in Medicare and Medicaid programs and have furnished services substantially in 

excess of the needs of individuals and of a quality not meeting 

professional standards." Despite 5 U.S.C. § 702, neither the 

TRO nor the preliminary injunction designated the government officers "personally responsible for compliance."

In October 1991, Transamerica distributed a newsletter to 

approximately 50,000 hospital administrators, physicians, and 

other interested persons. The newsletter listed Waksberg 

among a group of health care providers who had been excluded from the Medicare program. In an order dated July 28, 

1992, the court held the United States in civil contempt for 

violating the preliminary injunction, finding that Transamerica was an agent of the government, that "there was 

little if any formal procedure by which [the government] 

communicated court orders to its regional offices and carriers, and ensured that these orders were complied with," and 

that, while the government had notified Transamerica of the 

TRO, it had not informed the company of the preliminary 

injunction. Hence the government "is held to account for 

Transamerica's publication of Dr Waksberg's name in violation of the injunction."

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As to the question of sanctions, the court thought the 

newsletter might have affected Waksberg's reputation and 

thus "his ability to attract and maintain patients." One of the 

permissible purposes of civil contempt sanctions is "to compensate the complainant for losses sustained," through a fine 

payable to the complainant. United States v. United Mine 

Workers of Am., 330 U.S. 258, 303-04 (1947). Therefore, "Dr 

Waksberg is entitled to compensation to the extent he can 

prove damages caused by plaintiff's violation of the preliminary injunction." The court, in referring the case to a 

magistrate judge for the taking of evidence on the extent, if 

any, of Waksberg's "damages or loss" caused by the United 

States, emphasized that Waksberg would "be permitted to 

prove only those damages caused by plaintiff's failure to 

comply with the preliminary injunction" (emphasis in original).

A hearing on the compensatory fine was postponed until 

after the conclusion of the trial on the merits of the government's claims. After the trial, in which Waksberg prevailed, 

but before the hearing on the fine, the government filed a 

motion styled "Plaintiff's Motion to Dismiss Defendants' 

Claims for Damages Based Upon Contempt." Without attacking the underlying contempt citation, the government 

argued that sovereign immunity "bars the award of ... 

damages against the government" in this case.

In an opinion and order dated March 30, 1995, the district 

court (June L. Green, J.) granted the government's motion, 

finding no waiver of sovereign immunity that would render 

the United States liable to pay a compensatory fine to Waksberg for its violation of the injunction. United States v. 

Waksberg, 881 F. Supp. 36, 39-41 (D.D.C. 1995).

II

Federal courts have the power to punish those who disobey 

their orders. See 18 U.S.C. § 401; Shillitani v. United 

States, 384 U.S. 364, 370 (1966). The power is inherent, 

"shielded from direct democratic controls," and necessary to 

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maintain the authority of the Judicial Branch. Roadway 

Express, Inc. v. Piper, 447 U.S. 752, 764 (1980).

The judiciary may not impose monetary relief against the 

United States without its consent. The government's consent, its waiver of sovereign immunity, must appear as an 

"unequivocal expression" in "statutory text," at least when 

the cause of action arises under a federal statute. United 

States v. Nordic Village, Inc., 503 U.S. 30, 37 (1992).

Whether sovereign immunity stands in the way of a federal 

court ordering the United States to compensate a party for 

losses caused by the government's violation of an injunction is 

a question of first impression in this court, and in all but one 

other court of appeals. The Eighth Circuit is the exception. 

See Coleman v. Espy, 986 F.2d 1184, 1190-92 (8th Cir. 1993). 

Waksberg makes a constitutional argument not discussed in 

Coleman. Basically it is this: separation of powers principles 

require the government's immunity to give way because 

judicial power to enforce court orders against the United 

States through contempt is an essential feature of the judicial 

function under Article III of the Constitution.

Waksberg raises other points, but we will not recite them 

or the government's rejoinders. The constitutional question 

he poses colors his non-constitutional arguments and is itself 

serious enough to invoke the principle Justice Brandeis described in his concurring opinion in Ashwander v. Tennessee 

Valley Auth., 297 U.S. 288, 346-47 (1936). The principle is 

that a federal court should not decide a constitutional issue 

unless it is necessary to do so. The Supreme Court has 

called this "a fundamental rule of judicial restraint." Three 

Affiliated Tribes of the Fort Berthold Reservation v. Wold 

Engineering, P.C., 467 U.S. 138, 157 (1984). See also, e.g., 

Lyng v. Northwest Indian Cemetery Protective Ass'n, 485 

U.S. 439, 445 (1988); Bush v. Texas, 372 U.S. 586, 590 (1963) 

(per curiam); Parker v. Los Angeles County, 338 U.S. 327, 

333 (1949); Rescue Army v. Municipal Court, 331 U.S. 549, 

568-70 (1947); Spector Motor Serv., Inc. v. McLaughlin, 323 

U.S. 101, 105 (1944). Just as the Supreme Court has a 

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sues," Rescue Army, 331 U.S. at 568, we have "an obligation 

to avoid constitutional questions if at all possible," Deaver v. 

Seymour, 822 F.2d 66, 71 (D.C. Cir. 1987). See also, e.g., 

Harmon v. Thornburgh, 878 F.2d 484, 494 (D.C. Cir. 1989); 

Meredith Corp. v. FCC, 809 F.2d 863, 870 (D.C. Cir. 1987); 

American Postal Workers Union v. U.S. Postal Service, 764 

F.2d 858, 861-62 (D.C. Cir. 1985).

At this point, we do not know whether a ruling in Waksberg's favor would result in an order requiring the United 

States to compensate him. The district court's contempt 

order made the government's liability contingent. To recover 

anything, Waksberg had to establish that he sustained monetary losses from the government's violation of the preliminary 

injunction. Under the terms of the order, he must prove, 

first, that he suffered losses due to the publication of his 

name in the newsletter, and, second, that the United States 

caused those losses. Whether Waksberg can establish either 

proposition remains to be seen.

As to the extent of Waksberg's losses, the Transamerica 

newsletter did not say anything about why Waksberg had 

supposedly been excluded from the Medicare program. And 

it did not represent that Waksberg was currently excluded 

from the Medicare program. It said that he had been subject 

to a two year exclusion that had already ended by the time of 

publication. So it is conceivable that Waksberg's practice did 

not actually suffer due to the publication of his name in the 

newsletter. As to causation, the order specified that Waksberg was only to receive compensation to the extent that the 

"plaintiff"the United States, not Transamericacaused him 

harm. The government has an argument that its misconduct 

was not causally connected to the publication of Waksberg's 

name in the Transamerica newsletter: while no government 

officer notified Transamerica of the preliminary injunction, 

the HHS Office of Inspector General had notified Transamerica of the temporary restraining order and directed the 

responsible Transamerica officials not to implement "exclusions" of Waksberg until further notice.

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We note these points not to express any view about whether Waksberg will succeed in proving monetary losses caused 

by the government's violation of the decree, but simply to 

show that his recovery is not a foregone conclusion. If 

Waksberg cannot prove his case, he will not be entitled to 

compensation from the government and the issue of sovereign 

immunity will drop out of the case.

In the past, this court and others have declined to decide 

cases or aspects of cases that raised constitutional issues 

when other proceedings or further evidentiary findings might 

have made the resolution of those issues unnecessary. See, 

e.g., Deaver, 822 F.2d at 71; Vincent v. Brown, 590 F.2d 1137, 

1138-39 (D.C. Cir. 1978); United States v. Diamond, 820 

F.2d 10, 12-13 (1st Cir. 1987) (en banc); Dhangu v. INS, 812 

F.2d 455, 460-61 (9th Cir. 1987); Wagman v. Arnold, 257 

F.2d 272, 277 (2d Cir. 1958). Cf. Three Affiliated Tribes, 467 

U.S. at 157-58; Rescue Army, 331 U.S. at 584-85. We follow 

the same course here.

Accordingly, we vacate the district court's March 30, 1995, 

order granting the government's motion to dismiss, and remand the case with instructions that the district court withhold a ruling on the motion pending a determination of the 

extent of the government's liability to Waksberg under the 

terms of the district court's July 28, 1992, order. If the 

district court finds that Waksberg sustained monetary losses 

caused by the government's violation of the preliminary injunction, the court may on motion of the government reissue 

its decision barring relief on the ground of sovereign immunity.

So ordered.

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