Source: https://law.justia.com/cases/federal/appellate-courts/F2/485/1073/399515/
Timestamp: 2020-01-23 17:31:59
Document Index: 333040779

Matched Legal Cases: ['§ 1332', '§ 1395', '§ 701', '§ 1395', '§ 1395', '§ 1395', '§ 701', '§ 701']

Pine View Gardens, Inc., Appellant, v. Mutual of Omaha Insurance Co, 485 F.2d 1073 (D.C. Cir. 1973) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › D.C. Circuit › 1973 › Pine View Gardens, Inc., Appellant, v. Mutual of Omaha Insurance Co
Pine View Gardens, Inc., Appellant, v. Mutual of Omaha Insurance Co, 485 F.2d 1073 (D.C. Cir. 1973)
US Court of Appeals for the District of Columbia Circuit - 485 F.2d 1073 (D.C. Cir. 1973) Argued Nov. 2, 1972. Decided June 29, 1973
We note that the complaint makes no reference to a written contract between the parties. It may be, as plaintiff's brief in this court appears to assume, that the complaint is founded either on an oral contract or on quantum valebat and quantum meruit claims in quasi contract; and that on such an approach, plaintiff relied on the District Court's diversity jurisdiction under 28 U.S.C. § 1332. Possibly, plaintiff, because its claims relate to services which it, as an extended-care facility, gave to beneficiaries protected by Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., and who were insured by defendant as a carrier and fiscal intermediary under that Act, also relies on the District Court's jurisdiction under the Administrative Procedure Act, 5 U.S.C. § 701 et seq.
We are spared a full, precise recital of the statutory and administrative background of this controversy because it has already been splendidly and accurately done by Circuit Judge Feinberg in a case, which though plainly distinguishable on its merits, is set, in legislative, in executive, and, above all, in relevant time span, in a context fully congruent to that here relevant. Acquavella v. Richardson, 437 F.2d 397 (2nd Cir., 1971). In that suit, brought, as the title emphasizes, against the Secretary of Health, Education, and Welfare, Judge Feinberg observed that, under what is generally denominated the Medicare Act, 42 U.S.C. §§ 1395-1395ll, the Secretary of HEW, pursuant to 42 U.S.C. § 1395cc (1969), may make an agreement with a so-called private "extended-care facility" to act as a "provider of services" under 42 U.S.C. § 1395x(u) (1969). The Secretary may also make contracts with insurance companies or like private organizations to act as the government's fiscal intermediary. Through such an intermediary, the Secretary, rather than the patients, reimburses the provider of services for the extended care it has given. There are complicated, safeguarding provisions in the statutes and regulations, which, since Judge Feinberg summarized them, we shall not set forth, and which govern the Secretary's payments, advances, audits, and other controls with respect to the relations between a fiscal intermediary and the Secretary, on the one hand, and the provider of services, on the other hand.
The question initially presented is whether, there being diversity of citizenship between the parties, plaintiff may sue in contract or in quasi contract the defendant insurer. Inasmuch as it is plain from the statutory set-up, and is at least implied in the complaint, that the defendant insurer was a disclosed agent and fiscal intermediary for the Government, and it being incontrovertible that the Government itself has not consented to be sued in this manner, the defendant insurer is immune from this action premised on alleged underpayments. What plaintiff is seeking, indirectly to be sure, is payment by the Government. Plaintiff sought to avoid the problems of sovereign immunity by casting his complaint against the insurer as though it were the real party in interest, and as if its real principal (the Government) is an undisclosed principal. The statute and regulations, of which we may take judicial notice, make it clear that Mutual is an agent for the Government as a disclosed principal, and preclude our having to deal with the case on the basis of plaintiff's synthetic construct. Were plaintiff to succeed, it would, in effect, be requiring a governmental fiscal agent to make a payment for which, in turn, the agent would reasonably seek, and justly claim, reimbursement from the Government. This is not a case in which the Government has given its fiscal agents funds to pay plaintiff, and in which the agent is not turning the money over to the appropriate ultimate payee. On the contrary, it is an attempt to compel the Government to act, and is, therefore, not within the District Court's diversity jurisdiction. Cf. Larson v. Domestic & Foreign Corp., 337 U.S. 682, 704, 69 S. Ct. 1457, 93 L. Ed. 1628 (1949); Land v. Dollar, 330 U.S. 731, 67 S. Ct. 1009, 91 L. Ed. 1209 (1947); Kuenstler v. Occidental Life Ins. Co., 292 F. Supp. 532 (C.D. Cal., 1968); Allen v. Allen, 291 F. Supp. 312 (S.D. Iowa, 1968).
A secondary question is whether, though not so pleaded, this complaint may be viewed as an action brought against defendant as a governmental "agency" suable under the Administrative Procedure Act, 5 U.S.C. § 701. It suffices to say that the case was not brought on this theory: that plaintiff has in effect asserted a breach of contract, and not, e. g., an official abuse of discretion or action unsupported by substantial evidence, and hence has not asserted the kind of wrong made cognizable by the Administrative Procedure Act; that there is at least a question whether Mutual is an "agency" within 5 U.S.C. § 701(b) (1); and that we do not think our judicial function requires us to pose and answer questions that would arise from a sweeping reconstitution of the nature of plaintiff's claim.