Court Opinion

ID: 9460449
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:50:42.449348+00
Date Added: 2024-06-11T17:36:37.377759
License: Public Domain

BOREMAN, Senior Circuit Judge
(dissenting):
With due regard for the majority and its opinion I feel compelled to note my disagreement. Preliminarily, I am concerned with the breadth or scope of review of the district court’s award of the temporary injunction 1 as envisioned and assumed in the majority opinion.2 In reviewing such interlocutory decisions restraint is to be exercised:
“[Ljimited review is necessitated because the grant or denial of a preliminary injunction is almost always based on an abbreviated set of facts, requiring a delicate balancing of the probabilities of ultimate success at final hearing with the consequences of immediate irreparable injury which could possibly flow from the denial of preliminary relief.”
United States Steel Corp. v. Fraternal Association of Steelhaulers, 431 F.2d 1046, 1048 (3 Cir. 1970). The record before us is not complete; as noted in the majority opinion, “[t]he cause was heard on Blue Cross’ motion to dismiss.” As discussed below, on the basis of the material now before us, I think Clinic has established a prima facie case and is entitled to the benefits and protection of a temporary injunction pending an opportunity for both parties to fully develop the ease on its merits.
The majority has chosen to approach and treat this ease as though it had been tried on the merits. I am not persuaded that this is a proper exercise of judicial restraint. “It must be borne in mind that the parties did not submit the case to the trial court on its merits. It can not be gainsaid that the questions of law and fact to be ultimately determined in the action are grave and difficult.” Benson Hotel Corp. v. Woods, 168 F.2d 694, 697 (8 Cir. 1948). The instant case clearly presents a situation calling for application of the rule that an appellate court reviewing an interlocutory injunction should not “go any further into the merits of the case than is necessary to decide the matter upon appeal.” 9 J. Moore, Federal Practice fí 110.25 [1], at 269-70 (2 ed. 1973 revision) (footnote omitted).
The majority has undertaken to resolve the question of whether Blue Cross could reopen the settlement agreement which it had previously entered into with the Clinic. While I recognize, as does the majority, “that the point may later . have to be decided,” I do not believe that question is properly before us at this *56time. The fact that a speedy determination of a question “is of the utmost importance to all of the parties” does not justify deciding it on an interlocutory appeal. Ex parte National Enameling and Stamping Co., 201 U.S. 156, 162, 26 S.Ct. 404, 406, 50 L.Ed. 707 (1906). An interlocutory appeal “cannot be equated with an appeal from a final disposition on the merits.” Industrial Bank of Washington v. Tobriner, 132 U.S.App.D.C. 51, 405 F.2d 1321, 1323-1324 (1968). “The only questions which arise under the special or limited appeal from an interlocutory decree granting a preliminary injunction are those which are necessarily involved by the allowance of the injunction pendente lite.” City of Owensboro v. Cumberland Telephone and Telegraph Co., 174 F. 739, 747 (6 Cir. 1909); see also 7 J. Moore, Federal Practice jj 65.21 (2 ed. 1973 revision).
Another consideration makes a decision on that issue at this time particularly inappropriate. Although the district judge stated that he did “not doubt the authority of the defendants to recover amounts erroneously paid to the providers under the Act . . . ,” that point was not appealed by Clinic. Blue Cross, in whose favor such a decision would operate, originally argued that question on appeal, but subsequently conceded that, in the absence of a cross-appeal by Clinic, the “sole issue before this Court is ‘whether the Provider [Blue Cross] can withhold current medicare payments due the Hospital before an evi-dentiarly hearing is held on the matters in dispute.’ ” If Clinic chooses to wait until the record is fully developed to appeal from such a final decision it should be allowed to do so. Since Clinic has not briefed or argued this question on appeal I shall refrain from expressing any opinion with respect to the conclusion reached by the majority on what is presently nothing more than an abstract proposition of law.3
Because of the majority’s ultimate disposition of this appeal, I feel compelled to discuss the merits of Clinic’s due process claim. The procedures adopted by the Secretary do provide for a hearing by an impartial decision maker at some point in time. Whether this hearing is to be a pre-termination of benefits hearing or a post-termination of benefits, hearing is not established. Applying the regulations to the facts recited by the majority, Clinic was informed on August 7, 1972, of the administrative appeal procedure. Clinic had sixty days to appeal Blue Cross’ decision to an impartial decision maker. Commencing on August 24, 1972, Clinic began receiving notices of final reimbursements claimed to be due; each notice stated that if remittance of claimed overpayments was not received in thirty days Blue Cross would automatically suspend payments of amounts currently due Clinic. Obviously the date of suspension was in no way tied to a final decision by an impartial decision maker. There is nothing in the regulations to guarantee that the hearing would be of a pre-termination of benefits nature. The question then becomes whether, under the circumstances of this case, due process mandates a pre-termination hearing.
Blue Cross cites Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), (which, on its facts, called for a hearing prior to termination of benefits) for the proposition that “some governmental benefits may be administratively terminated without affording the recipient a pre-termination evidentiary hearing.” 397 U.S. at 263, 90 S.Ct. at 1018. Apparently the majority has relied on this statement in holding that the procedure involved here did meet the *57requirements of due process, albeit a post-termination of benefits hearing was probable. I am of the opinion that a close reading of Goldberg indicates that a pre-termination hearing is required to satisfy due process under the facts as developed in this record.
In Goldberg the Court stated:
“The extent to which procedural due process must be afforded the recipient . . . depends upon whether the recipient’s interest in avoiding that loss outweighs the governmental interest in summary adjudication. [Consideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as the private interest that has been affected by governmental action.” 397 U.S. at 262-263, 90 S.Ct. at 1017 (citations omitted).
The Court established what has been called a “balancing” or “weighing” test. Morrissey v. Brewer, 443 F.2d 942 (8 Cir. 1971); Caulder v. Durham Housing Authority, 433 F.2d 998 (4 Cir. 1970). In Goldberg the recipients’ need for welfare benefits and the Government’s interest in providing for the dignity and well being of all its citizens were balanced or weighed against the countervailing governmental interest in protecting public revenues. The Court observed that the recipients involved were probably judgment proof, thus creating a compelling interest of the Government to make sure that public revenues were not lost on ineligible recipients. Nevertheless, the Court held that, in balancing the interests, the recipients’ “brutal needs” and the Government’s interest in a continuing viable program outweighed the countervailing governmental interest in protecting public funds.
Goldberg does not leave us with the cold statement that some benefits can be terminated only with a pre-termination hearing while others require only a post-termination hearing. A balancing test is provided whereby the circumstances of each case can be analyzed and weighed to determine whether due process is served by the hearing procedure to be employed. The majority here merely recites the facts and procedures involved in concluding that due process was satisfied but without the analysis or weighing as called for in Goldberg.
Although incomplete, the record does indicate that Clinic received approximately one-third of its income for current operations from the Medicare program. Any reduction or suspension of estimated monthly payments for current services being rendered under the program would naturally lead to substantial cutbacks in supplies and services. Although the effect of such suspension might not be as severe as was the effect of withdrawal of payments on recipients in Goldberg the withholding of funds from Clinic would substantially affect the very means by which it operates. Naturally the ones to suffer would be those elderly persons in need of medical treatment. The Government’s interest in providing continuing complete and competent medical service and care for the elderly would be frustrated. The interest that counseled the creation of Medicare counsels as well its uninterrupted continuation for those who should receive it. Thus, as in Goldberg, there appear to be valid and compelling reasons to continue providing payments to Clinic unless a pre-termination of benefits hearing determines otherwise. Con-cededly the interests here involved might not reach the “brutal needs” of the welfare recipients in Goldberg yet the balance should tip in Clinic’s favor since there has been no showing here, as there was in Goldberg, that the countervailing governmental interest in protecting public funds is present. In Goldberg the recipients were judgment proof and once money was disbursed to ineligibles by the Government there was little or no chance of ever regaining amounts which had been paid. The trial judge succinctly described the situation present here in his order denying a motion to stay the injunction:
“There has been no showing in this case that irreparable damage will be *58done .... As pointed out in the previous Order of the Court, it appears inconceivable that even if plaintiff [Clinic] should withdraw from the Medicare Program that its assets would be squandered or depleted to the extent that the defendant [Blue Cross] could not properly be reimbursed.”
Thus, on the merits, the balancing test of Goldberg leads me to conclude that a pre-termination of benefits hearing was essential here in order to satisfy due process requirements.
As before stated, it is my view that the case is not properly before us for a decision on the merits. Faced with an incomplete record and concerned with an order denying a motion to dismiss a complaint seeking temporary injunctive relief, I conclude that the reasoning of this court in Caulder v. Durham Housing Authority, 433 F.2d 998 (4 Cir. 1970) (Winter, J.), should control:
“Both Goldberg and Escalera [Esca-lera v. New York City Housing Authority, 425 F.2d 853 (2 Cir. 1970)] also recognize the possibility that in some instances the right to procedural due process must bend to a compelling governmental interest in summary adjudication. ‘The very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation.’ . . . We do not foreclose this possibility here. But this case was decided on motion to dismiss, and governmental interests, if any, competing with plaintiff’s apparent rights have not been developed in this record. If there are compelling competing governmental interests, they may be developed on remand and weighed by the district court, which may then decide the effect to be given them.” 433 F.2d at 1004 n. 3 (emphasis added, citation omitted).
Finally, in its brief, Clinic objects to Blue Cross’ failure to comply with 20 C.F.R. § 405.370(b). That section provides in part:
“A suspension shall be put into effect only after . . . the intermediary or carrier [Blue Cross] has determined that the suspension of payments, in whole or in part, is needed to protect the program against financial loss.”
Absent the determination that suspension is necessary to protect public funds, Clinic contends that Blue Cross should be prevented from suspending future payments until a pre-termination hearing could be held. The majority refuses to consider this contention, noting that the matter was raised for the first time on appeal. It is apparent, however, from its denial of Blue Cross’ motion to stay that the district court did consider the point:
“There has been no showing in this case that irreparable damage will be done . . . . [I] t appears inconceivable that even if plaintiff [Clinic] should withdraw from the Medicare Program that its assets would be squandered or depleted to the extent that the defendant could not properly be reimbursed.”
Even if Clinic did not raise the point below, clearly the judge took cognizance of it. If the case is to be treated on appeal as ripe for consideration on the merits there would appear to be no valid policy reason to support the majority’s refusal to consider the point. The language in the Secretary’s own regulation is clear. Suspension shall be put into effect only after a determination that it is needed to protect the program. Clearly this requirement has not been met and Blue Cross should, therefore, be enjoined from suspending payments.
“An agency of the government must scrupulously observe rules, regulations, or procedures which it has established. When it fails to do so, its action cannot stand and courts will strike it down. This doctrine was announced in United States ex rel. Ac-cardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681 (1954). There, the Supreme Court vacated a *59deportation order of the Board of Immigration because the procedure leading to the order did not conform to the relevant regulations. The failure of the Board and of the Department of Justice to follow their own established procedures was held a violation of due process.” United States v. Heffner, 420 F.2d 809, 811-812 (4 Cir. 1969) (Winter, J.) (Bryan, J., dissenting).
Having concluded that, under the circumstances Clinic had a right to a hearing prior to the suspension of future payments, I note Blue Cross’ contention that this action should be dismissed because of the alleged failure of Clinic to exhaust the administrative remedies. On August 24,1972, Blue Cross informed Clinic that unless the disputed overpay-ments were repaid within thirty days the amounts would be automatically deducted from future payments due. On September 20, 1972, prior to formally requesting an administrative hearing, Clinic filed this suit seeking injunctive relief. Blue Cross insists that in the absence of a previous request for a hearing this suit was premature and should be dismissed. I do not agree. The notice of intent to suspend future payments until the disputed amount was recovered by Blue Cross and regulations respecting such suspensions do not provide for an extension of time beyond the thirty days when a hearing is requested. It was the announced intention of Blue Cross to initiate the suspension of payments process after thirty days without regard to or mention of a request for a hearing. I find no administrative procedure whereby Clinic could protect its right to a pre-termination hearing. Only by enjoining such suspension of payments by Blue Cross, pending a hearing, could Clinic protect its rights. The very fact that Clinic subsequently formally requested a hearing within the allowable time period demonstrates that this action was not instituted for the purpose of by-passing the administrative process. I would affirm.

. Blue Cross was enjoined and restrained from withholding funds currently due the Clinic “pending the evidentiary hearing on the merits of this case.”

. The vice of attempting to make a final disposition of a case upon a motion for a temporary injunction was considered in Mayo v. Lakeland Highlands Canning Co., 309 U.S. 310, 60 S.Ct. 517, 84 L.Ed. 774 (1940).
We think the court committed serious error in thus dealing with the case upon motion for temporary injunction. The question before it was not whether the act was constitutional or unconstitutional; was not whether the Commission had complied with the requirements of the act, if valid, but was whether the showing made raised serious questions, under the federal Constitution and the state law, and disclosed that enforcement of the act, pending final hearing, would inflict irreparable damages upon the complainants.
Id. at 316, 60 S.Ct. at 520.

. Blue Cross initially asserted that reopening was authorized by 20 C.F.B.. § 405.499g. It is clear that if that regulation is found to be controlling the three year statute of limitation set forth therein may bar recovery of at least a part of the amount in dispute. The record in this interlocutory appeal is not sufficiently complete to resolve this issue. This demonstrates the danger of making a final determination at this stage of the proceedings.