V.N.A. OF GREATER TIFT COUNTY, INC., a Georgia non-profit corporation, Plaintiff-Appellant, v. Margaret M. HECKLER * and Blue Cross and Blue Shield of Georgia/Columbus, Inc., Defendants-Appellees.
No. 82-8407.
United States Court of Appeals, Eleventh Circuit.
Aug. 12, 1983.
Rehearing and Rehearing En Banc Denied Oct. 7, 1983.
EDWARD S. SMITH, Circuit Judge
* Pursuant to Rule 43, Fed.R.App.P., Richard S. Schweiker has been replaced as a defendant-appellee by Margaret M. Heckler who assumed office as Secretary of Health and Human Services on March 9, 1983. ** Honorable Edward S. Smith, U.S. Circuit Judge for the Federal Circuit, sitting by designation.
Gregory J. Leonard, Asst. U.S. Atty., Macon, Ga., F. Richard Waitsman, Asst. Regional Atty., Dept. of Health & Human Services, Atlanta, Ga., for defendants-appellees.
Before GODBOLD, Chief Judge, FAY and SMITH **, Circuit Judges.
This appeal presents the efforts of a provider of medical services under the Medicare Act to obtain an injunction to restrain collection action on an alleged overpayment pending final administrative review. This appeal originally included a second case, Alabama Home Health Care v. Heckler, 711 F.2d 988 (11th Cir.1983), which presented the same legal issue on appeal but which has been dismissed as moot.1 The district court in the Alabama Home Health Care case granted the requested injunction,2 but the district court in this case dismissed the complaint for lack of jurisdiction.3 On appeal, we must decide whether the All Writs Act emрowers a district court, notwithstanding the preclusion of jurisdiction provision in the Medicare Act,
I.
A.
Under the Medicare program the Secretary of Health and Human Services (Secretary) reimburses providers of health services for certain medical items and services supplied to persons enrolled in the program.4 Medicare coverage includes items and services supplied on a visiting basis to an eligible person‘s home.
Reimbursement of a provider by the Secretary is accomplished through a “fiscal intermediary,” either a public or a private organization, which makes the initial determination of amount of reimbursement and handles the payments.
To facilitate participation in the Medicare program by cash-poor providers like V.N.A., Congress has authorized a system of monthly interim payments by the intermediary.
Upon receipt of the cost report, the intermediary analyzes the report, audits it if necessary, and issues its determination of the proper amount that the provider should
The intermediary‘s determination that an overpayment has occurred provides the basis for immediate suspension of all or part of further payments to the provider.
B.
Among the rules that the intermediary must apply in making its determination of amount of reimbursement is the related party principle.
A provider may obtain an exception to this rule if it “demonstrates by convincing evidence to the satisfaction of the fiscal intermediary” that the supplier is “a bona fide separate organization,” that the supplier has a significant amount of business with unrelated organizations and operates in a competitive market, that the supplies are of a type normally obtained by a provider from a separate supplier, and that the supplier‘s prices are “in line with” the prices on the open market.
In this case, the intermediary, Blue Cross, determined that a Medicare overpayment had occurred, $19,026 of which constituted overcharging by V.N.A.‘s management firm, Health Care International, Inc. (HCI). Blue Cross found that HCI and V.N.A. were related because HCI had “effective control” over V.N.A.; accordingly, Blue Cross discounted the payments by V.N.A. to HCI. In its statement of reasons for its findings, Blue Cross noted that HCI had started up and capitalized V.N.A. and had recruited V.N.A.‘s board of directors. The board had little involvement in the running of V.N.A.; HCI had almost entire administrative and financial control. The head administrator of V.N.A. was an HCI employee. HCI set all policies and provided professional training and guidance; it had sole control over all personnel—policies and individual actions—and custody of V.N.A.‘s financial and statistical records. HCI had the authority to enter into contracts for V.N.A. and could enter transactions for up to $2,500 without board approval. This authority was exercised on some occasions to enter supply contracts with companies owned or partly owned by HCI.
V.N.A. does not contest these points but rather stresses that V.N.A. and HCI were formally separate organizations. V.N.A. has no stock, so there is no common ownership; there are no common directors, officers, or employees; and no one from HCI is on the V.N.A. Board of Advisors. V.N.A. demonstrates the independence of its board of directors by pointing out that it terminated its management contract with HCI. V.N.A.‘s ultimate claim—that HCI‘s charges were not unacceptably high—is somewhat undercut, however, by its statement in terminating HCI that HCI‘s charges were “far out of line.”
II.
At the same time that it filed for review by the PRRB, V.N.A. filed suit in district court to enjoin the suspension of payments pending a PRRB decision. V.N.A. claimed that, as virtually all of its patients are in the Medicare program, the incorrect suspension of full payments will cause it irreparable harm. The Secretary objected that the district court was without jurisdiction to review the intermediary‘s decision before a PRRB decision had been rendered.
Judicial review of reimbursement determinations is limited by the Medicare Act. Not only does the act require that a provider exhaust its administrative remedies before suing, but it removes jurisdiction from the courts to review a reimbursement decision before а PRRB decision has been rendered. The Medicare Act,
No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under sections 1331 [general federal question] or 1346 [United States as defendant] of title 28 to recover on any claim arising under this subchapter.
A decision of the Board shall be final unless the Secretary, on his own motion, and within 60 days after the provider of services is notified of the Board‘s decision, reverses, affirms, or modifies the Board‘s decision. Providers shall have the right to obtain judicial review of any final decision of the Board, or of any reversal, affirmance, or modification by the Secretary, by a civil action commenced within 60 days of the date on which notice of аny final decision by the Board or of any reversal, affirmance, or modification by the Secretary is received. * * * Such action shall be brought in the district court of the United States for the judicial district in which the provider is located or in the District Court for the District of Columbia and shall be tried pursuant to the applicable provisions under chapter 7 of title 5 [the Administrative Procedure Act] * * *.
In Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975), and Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), the Supreme Court held that the limitation of jurisdiction is to be strictly applied.6 The preclusion provision is not merely “a codification of the doctrine of exhaustion of administrative remedies,” which a court could waive if exhaustion appeared futile, but “prevent[s] review of decisions of the Secretary save as provided in the Act, which provision is
Since Salfi and Eldridge, the scope of the preclusion provision has engendered much litigation and little consensus. It is agreed by all of the circuits that the central target of the section 405(h) preclusion is “any action envisioning recovery on any claim emanating from” the Medicare Act. Association of American Medical Colleges v. Califano, 569 F.2d 101, 107 (D.C.Cir.1977). Regardless of its setting, any suit “seeking eventual realization of provider-cost reimbursement under the Medicare Act” is “intercept[ed]” by section 405(h). Id. From this point on, however, consensus ceases. To summarize: some circuits have held that section 405(h) does not preclude challenges brought under the Administrative Procedure Act—not because the APA provides an independent source of jurisdiction,9 but because a claim “brought simply to vindicate an interest in procedural regularity” is not an action “to recover on any claim.” Humana of South Carolina, Inc. v. Califano, 590 F.2d 1070, 1080 (D.C.Cir.1978) (emphasis supplied).10 Three circuits have held that a claim that is not cognizable by the PRRB under section 1395oo is not precluded, because there is a strong presumption, not rebutted by the statute, that Congress would not cut off all relief.11 Other circuits have held that total preclusion of review except after a PRRB decision is “precisely what was intended.”12 These
Even though the District Court may perceive equities in favor of hearing claims immediately, perhaps even the appearance of futility in forcing a party to pursue the statutory procedure, the District Court is utterly without power to entertain those claims. [Emphasis supplied.]
Pacific Coast Medical Enterprises v. Harris, 633 F.2d 123, 138 (9th Cir.1980).14
This circuit is squarely in the latter camp. In Dr. John T. MacDonald Foundation, Inc. v. Califano, 571 F.2d 328, 331-32 (5th Cir.) (en banc), cert. denied, 439 U.S. 893, 99 S.Ct. 250, 58 L.Ed.2d 238 (1978)—a challenge to a regulation, and the Secretary‘s interpretation of it, governing method for determining cost—the court held that the rationale of Salfi “precludes all review of the Secretary‘s decisions by federal district courts brought under § 1331.”15 In American Association of Councils of Medical Staffs of Private Hоspitals, Inc. v. Califano, 575 F.2d 1367 (5th Cir.1978), cert. denied, 439 U.S. 1114, 99 S.Ct. 1018, 59 L.Ed.2d 72 (1979), the court further held that, with respect to a purely procedural claim (regulations governing evaluation of medical staffs) which would have no effect upon any reimbursement, the absence of an effect on reimbursement was “unimportant.” “[Section] 405(h) extended to any action to recover on any claim.” Id., 575 F.2d at 1372 (emphasis in original).16 This strict position was maintained in Bussey v. Harris, 611 F.2d 1001 (5th Cir.1980), in the face of a constitutional and statutory challenge to regulations denying reimbursement for services of a licensed physician‘s assistant. In short, the Fifth Circuit has consistently adhered to the position that no claims may be heard by the district court in any posture because section 405(h) has removed all jurisdiction from the district courts.17
The Eleventh Circuit, of course, is bound by MacDonald, et al. Bonner v. City of Prichard, Alabama, 661 F.2d 1206, 1207 (11th Cir.1981) (en banc). In United States v. Sanet, 666 F.2d 1370 (11th Cir.1982), an overpayment was determined but the provider refused to appeal to the PRRB and then withdrew from the program, so the Government was forced to sue the provider for return of overpayments. The provider argued that, since the suit was brought
The claims of V.N.A. are at the heart of the section 405(h) preclusion, as it readily concedes. V.N.A. seeks redress on the basis of interpretation of regulations (it does not challenge the validity of the regulations) and it directly seeks “realization of provider-cost reimbursement under the Medicare Act.” American Medical Colleges, 569 F.2d at 107. Furthermore, the claims are within the PRRB‘s jurisdiction—V.N.A. has appealed to the PRRB—and the PRRB has not yet rendered a final decision. Nor is there any reason to believe that the Secretary has waived any administrative procedures. Considered alone, therefore, section 405(h) would entirely preclude the district court from exercising jurisdiction over this case.
III.
V.N.A. argues, however, that it is not requesting review of a decision within the meaning of section 405(h). Rather, it simply wants to preserve the status quo (i.e., its solvency and ability to operate) pending the PRRB decision, at which time the district court would unquestionably have jurisdiction of the case.19 The provider аsserts that the district court has jurisdiction to issue an injunction under the All Writs Act, notwithstanding section 405(h).
The All Writs Act, a feature of the judiciary since 1789,20 provides:
The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.
Against this background, the Court in 1966 decided Federal Trade Commission v. Dean Foods Co., 384 U.S. 597, 86 S.Ct. 1738, 16 L.Ed.2d 802 (1966). The FTC in that case was seeking to maintain the status quo by enjoining a merger which it believed, but had not yet administratively determined, was anticompetitive. The Court, relying on Scripps-Howard, Roche, and Arrow, held that the power to enter a status quo injunction “extends to the poten
The FTC had argued that, if the proposed merger took place, the resultant sharing and division of assets between the companies would render impossible the fashioning of an administrative order separating the two companies.
[T]he Court of Appeals “will, in effect, be deprived of its appellate jurisdiction [over final Commission orders] and of the оpportunity to enter a meaningful final order of its own in respect to this acquisition, since the res in custodia legis—Bowman [the acquired company]—will have vanished.”
Dean Foods, 384 U.S. at 600, 86 S.Ct. at 1740. The Court accepted this contention as true, 384 U.S. at 601, 86 S.Ct. at 1741, and relied heavily on these compelling facts. Accordingly, the Fifth Circuit has said:
A federal court has the power under the All Writs Act to issue injunctive orders [to preserve the status quo] in a case even before the court‘s jurisdiction has been established. When potential jurisdiction exists, a federal court may issue status quo orders to ensure that once its jurisdiction is shown to exist, the court will be in a position to exercise it. See, e.g., FTC v. Dean Foods Co. * * *
ITT Community Development Corp. v. Barton, 569 F.2d 1351, 1359 n. 19 (5th Cir.1978).22
The direct application of Dean Foods to the present case might well be expressed by use, verbatim, of an earlier statement by Justice Douglas:
The power to issue a stay is inherent in judicial power and as indicated by the Court rests on the exercise of an informed discretion on a showing of irreparable injury to the applicant or to the public interest, Scripps-Howard Radio v. FCC, 316 U.S. 4, 14 [62 S.Ct. 875, 882, 86 L.Ed. 1229]. That doctrine is not limited, as the Department of Justice suggests, to issuance of stays by a court only after an appeal has been taken. We held in FTC v. Dean Foods Co., 384 U.S. 597, 603-604 [86 S.Ct. 1738, 1742-43, 16 L.Ed.2d 802], that the All Writs Act, 28 U.S.C. § 1651, which empowers federal courts to “issue all writs necessary or appropriаte in aid of their respective jurisdictions and agreeable to the usages and principles of law,” extends to “potential jurisdiction of the appellate court where an appeal is not then pending but may be later perfected.” The District Court has at least a limited review of the [Secretary] * * *. Hence the All Writs Act justified its power to grant a stay.
We have, therefore, a case where a stay supplements and does not curtail administrative power, the [Secretary] having no authority to grant that relief. The District Court power preserves the status quo, does not pass on the merits of the controversy, and limits its stay to the date when the merits of the discharge are adjudicated by the [Secretary]. * * *
IV.
A.
The two lines of analysis described above—one (Part II) based on section 405(h), the other (Part III) on the All Writs Act and Dean Foods—parallel the arguments in this case of the district court and the Government and of V.N.A., respectively. Considering them, one has less a sense оf conflicting theories than of ships passing in the night. The Medicare Act preclusion line of argument and the Dean Foods line of argument do not really respond to each other, and neither refers to a common higher authority which could explain how they are related.
In Sampson v. Murray, 415 U.S. 61, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974), the Supreme Court was faced with a similar conflict between the expansive Dean Foods doctrine and the “established principles [which refuse] equitable intervention in disputes over tenure of governmental employees” (415 U.S. at 71, 94 S.Ct. at 944).23 Murray did not adopt the direct Dean Foods approach—the sharp-eyed reader will have noted that Justice Douglas’ comments above were in dissent—and attempted to find the common ground between the preclusion and Dean Foods lines of analysis.
The Court in Murray agreed with Dean Foods to the extent that Murray held that the district courts are “not totally without authority to grant interim injunctive relief” in a status quo action, 415 U.S. at 63, 94 S.Ct. at 940, but then said:
While it would doubtless be intellectually neater to completely separate the question whether a District Court has authority to issue any temporary injunctive relief * * * from the question whether the relief granted in this case was proper, we do not believe the questions may be thus bifurcated into two watertight compartments. * * *
415 U.S. at 68, 94 S.Ct. at 942. Accordingly, a district court is
quitе wrong in routinely applying to this case the traditional standards governing more orthodox “stays.” [Citation and footnote omitted.] Although we do not hold that Congress has wholly foreclosed the granting of preliminary injunctive relief in such cases, we do believe that respondent at the very least must make a showing of irreparable injury sufficient in kind and degree to override these factors cutting against the general availability of preliminary injunctions in [such] cases. [Emphasis supplied.]
Murray, 415 U.S. at 83-84, 94 S.Ct. at 950. In other words, the proper analysis adjusts the standard requirements for the requested preliminary injunction in light of (1) whether refusal to grant the injunction will defeat the court‘s review jurisdiction and (2) whether Congress intended to permit or to preclude a status quo injunction.
In considering the harm to the court‘s jurisdiction, Murray was at some pains to emphasize the extreme facts in Dean Foods. In Dean Foods, the disappearance of the acquired company would have “effectively defeated” the court‘s ability to exercise its jurisdiction. Murray, 415 U.S. at 77-78 & nn. 34, 36, 94 S.Ct. at 946-47 & nn. 34, 36. In Murray by contrast—where a probationary Government employee was seeking an injunction against dismissal pending final administrative review—the court‘s review was not endangered because Mrs. Murray would not cease to exist. The Court therefore found that the dismissal of a Government employee (except in rare cases, see 415 U.S. at 92 n. 68, 94 S.Ct. at 953 n. 68) does not give rise to the same injury to jurisdiction as threatened in Dean Foods.
To determine congressional intent, the Court looked at both the statutes governing the Civil Service and the cases interpreting them. It concluded that the statutory
Concluding that considerations of harm to jurisdiction and congressional intent “cut against” the availability of a status quo injunction, the Court held that Murray would have to make an unusually strong showing on the factors determining issuance of a preliminary injunction.24 415 U.S. at 80, 83-84, 94 S.Ct. at 948, 949-50. The Court found Murray‘s claim of irreparable injury unconvincing. It held that the simple loss of a job is loss of income and that mere loss of income does not establish irreparable injury even under the normal standards for granting a preliminary injunction.
We read Murray to require that all of the standards for a preliminary injunction—probability of success on the merits, harm to other parties, the public interest, and irreparable injury—are subject to the heightened standards. The author of the Murray opinion said as much in a later decision, in which he cited Murray for the proposition that several factors—he mentioned particularly irreparable injury and likelihood of success on the merits—are to be considered. Coleman v. Paccar, Inc., 424 U.S. 1301, 1305, 96 S.Ct. 845, 847-48, 47 L.Ed.2d 67 (1976) (Rehnquist, Circuit Justice). Murray dwelt on irreparable injury, we believe, because that was the essential weakness in Murray‘s case.
Murray, therefore, does not so much mandate new considerations as a new way of analyzing them.25 Dean Foods and its predecessors had divided their analyses between the traditional power to issue the status quo injunction and the congressional prеclusion, and the appropriateness of the exercise of the power in the particular case. See, e.g., Dean Foods, 384 U.S. at 612, 86 S.Ct. at 1746; Roche, 319 U.S. at 25-26, 63 S.Ct. at 941; Scripps-Howard, 316 U.S. at 9-10, 62 S.Ct. at 879-80. The earlier cases, however, more sharply separated the jurisdictional question (the “traditional power“) from the congressional intent, and both from the preliminary injunction standards. The sharp division is easier to manage (“intellectually neater,” in Murray‘s words), perhaps because it accords better with one‘s general notion that jurisdiction is a yes or no proposition in a given kind of case, but it is of little help where the traditional power collides with an apparent statutory preclusion.
B.
We must now determine whether the heightened standards used in Murray must be applied in this case. This involves two inquiries: whether the reviewing court‘s eventual jurisdiction will be defeated, and whether a status quo injunction would be contrary to the statutory scheme.
Be that as it may—we recognize that the distinction between “impair” and “defeat” is a fine one—we must concurrently examine whether the granting of a status quo injunction pending an administrative determination of relatedness would be contrary to the intent of Congress in the Medicare Act.
It cannot be gainsaid that the present dispute is at the core of the act‘s preclusion. The provider directly seeks higher reimbursement, which MacDonald held is most emphatically precluded—the area is where the district court is “utterly without power.” Pacific Coast, 633 F.2d at 138. In addition, the dispute hinges on the application of regulations (conceded to be valid) to particular, complicated facts. This is precisely the situation in which PRRB review will not only be most helpful and appropriate, but also where it holds the greatest potential for eliminating the need for eventual resort to the courts.27
This is also the area for which Congress clearly provided a remedy which places PRRB review first. The relief in the courts at a later time was intended by Congress to be a full and complete remedy. In the words of Murray, the provider is “in effect asking [the] court to grant * * *, on an interim basis, relief which the administrative agency charged with review * * * could grant * * * only after it had made a determination on the merits.” 415 U.S. at 74, 94 S.Ct. at 945. It is significant that Congress has specifically provided for a remedy in the district court where the PRRB cannot decide the question because it has no jurisdiction.
Against these considerations is V.N.A.‘s basic contention that it is not asking for review on the merits but merely a stay to maintain the status quo. It is true that the cases speak of preclusion of review of PRRB decisions, and the main purpose of
V.N.A. also points out that the regulatory prohibition on PRRB stays is not mandated by the Medicare Act. The act gives the PRRB “full power and authority to make rules and establish procedures, not inconsistent with the provisions of this subchapter or regulations of the Secretary.”
Whilе the regulatory arrangement certainly sows the seeds of potential injury to a provider, that potential is not contrary to the statutory structure. Eldridge suggests strongly that there is room for a wholly collateral procedural attack, for example, to compel agency action wrongfully withheld. Eldridge, 424 U.S. at 330-31, 96 S.Ct. at 900-01. In other words, to the extent that a provider could show that a delay during PRRB review is contrary to the statute, it might well have a cause of action.30 Furthermore, our holding that there is fundamental jurisdiction in the case of truly wrongful agency action also mitigates any extremely ill effects of preclusion.
Finally, Murray held that where interim relief would usurp or expand the agency‘s jurisdiction it impermissibly disrupts the agency. Murray, 415 U.S. at 71-72, 94 S.Ct. at 943-44. The relief requested here—purely staying affirmative agency action to collect—would appear to present no such obstacle. However, we must question, as the Secretary does, the practical reality of the idea that the district court does not consider the merits in a close case like this. In order to establish substantial likelihood of success on the merits it will become necessary, as it did in Alabama Home Health Care, for both parties to engage in extensive discovery and to present their whole cases on the merits.31 The district court will in effect decide the merits of the case before the board does32—and then conduct a limited review of the board‘s decision as mandated in the statute.
The preclusion provision in the Medicare Act works in both directions: it avoids unnecessary and/or uninformed court decisions, and it protects the integrity of the administrative process. The agency would be substantially undermined by issuance of a status quo injunction. Where both parties engage in extensive discovery and presentation of their whole cases on the merits, the district court does exactly what the PRRB is expected to do. It is simply not realistic to say that the district court in such a case does not address and decide the merits of the case. Such plenary consideration violates not only the procedural structure of the Medicare Act, but it is in effect a de novo decision on the merits in direct contravention of the limited review mandated by statute.
We therefore conclude that, even granting the strong possibility of harm to the reviewing court‘s eventual jurisdiction, the lengthy review of the merits required in a close case such as this is so at odds with the statutory framework that a conflict is created which requires, pursuant to Murray,
V.
A.
Our ultimate task is to apply the heightened standards to the case at bar. However, while Murray required a higher standard for granting preliminary injunctive relief, it did not articulate the new standard.
Some guidance can be obtained from cases decided under the Anti-Injunction Act, which provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.”
to permit the United States to assess and collect taxes alleged to be due without judicial intervention, аnd to require that the legal right to the disputed sums be determined in a suit for refund. * * *
Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d 292 (1962); see also Bob Jones University v. Simon, 416 U.S. 725, 736, 94 S.Ct. 2038, 2045, 40 L.Ed.2d 496 (1974). Despite the apparently absolute prohibition on such suits, the Supreme Court has held that there are exceptional cases in which jurisdiction can be exercised:
Only upon proof of the presence of two factors could the literal terms of § 7421(a) be avoided: first, irreparable injury, the essential prerequisite for injunctive relief in any case; and second, certainty of success on the merits. [William Packing], [370 U.S.] at 6-7 [82 S.Ct. at 1128-29]. An injunction could issue only “if it is clear that under no circumstances could the Government ultimately prevail. . . .” Id., at 7 [82 S.Ct. at 1129]. * * * [Emphasis supplied.]
Bob Jones University, 416 U.S. at 737, 94 S.Ct. at 2046; Commissioner v. “Americans United” Inc., 416 U.S. 752, 758, 94 S.Ct. 2053, 2057, 40 L.Ed.2d 518 (1974).33 In Williams Packing itself the Court had denied the injunction and its discussion of irreparable injury is particularly instructive.
Noting that collection of the tax “would destroy its business, ruin it financially and inflict loss for which it would have no remedy at law,” the Court held that an injunction could properly issue. [Citation omitted.] The courts below seem to have found that * * * § 7421(a) does not bar suit for an injunction against the collection of taxes not due if the legal remedy is inadequate. We cannot agree.
* * * [I]f Congress had desired to make the availability of thе injunctive remedy against the collection of federal taxes not lawfully due depend upon the adequacy of the legal remedy, it would have said so explicitly. Its failure to do so shows that such a suit may not be entertained merely because collection would cause an irreparable injury, such as the ruination of the taxpayer‘s enterprise. This is not to say, of course, that inadequacy of the legal remedy need not be established if § 7421(a) is inapplicable; * * * [Citations omitted.] However, since we conclude that § 7421(a) bars any suit for an injunction in this case [because the Government may well prevail], we need not determine whether the taxpayer would suffer irreparable injury if collection were effected.
Williams Packing, 370 U.S. at 6-7, 82 S.Ct. at 1128-29. These cases are not controlling here, but they do offer a concrete example of the Murray synthesis.
The preclusion of review in section 405(h), and its purpose to ensure that the
B.
Finally, we apply each requirement to the undisputed facts in this case.
(1) V.N.A. makes a far stronger case for irreparable injury than was made in Murray. It specifically alleges an irreparable harm—being forced out of business34—which is not remediable in the interim by the PRRB.
The significance of this injury under the Medicare Act is lessened, however, by three considerations. First, the Secretary may enter into an agreement to make suspension of payments as painless as possible. Such an agreement will stay total suspension pending PRRB review.
In view of these considerations, we cannot conclude that the provider, in the words of Murray, made “a showing of irreparable injury sufficient in kind and degree to override these factors [i.e., the statutory preclusion] cutting against the general availability of preliminary injunctions” to providers (415 U.S. at 84, 94 S.Ct. at 950).
(2) We also find that V.N.A. cannot show a probability of success on the merits even approaching the certainty required in light of the statutory preclusion. It presented a plausible but by no means overwhelming case. The pervasive role of HCI in the creation and operation of V.N.A. offered an ample basis for the intermediary‘s initial determination of relatedness. Indeed, V.N.A. itself accused HCI of overcharging—precisely the problem which the related party principle was designed to cure. To show unrelatedness, V.N.A. cited other undisputed facts and argued their relative significance. The detailed inquiry and analysis that this will obviously entail does not constitute, in our view, certainty of success on the merits.37
From our review of the record, it is clear to us that if the intermediary was wrong in finding the organizations to be related, it was not obviously so. Certainly it did not overstep its authority in so finding.38 The situation of disputed application of a regulation to complex and lengthy facts is particularly suited to initial agency interpretation of its own regulations.
(3) The factor of harm to another party in this case consists mainly in disruption of the agency, a key factor in Murray. 415 U.S. at 77-78, 83, 94 S.Ct. at 946-47, 949. The court‘s need to hold a full hearing on the merits and to determine credibility in a close case seriously disrupts the congressionally mandated process and in effect tells the PRRB how to decide. As to the factual aspect of the case, determination of credibility is the hallmark of de novo review, which is expressly denied the district court.
There is in addition the possibility that the Government will not recover its overpayment. While the record does not directly suggest that the Government may not recover overpayments in this case, the manifest purpose of the immediate recovery provision is to protect against this possibility. We should respect that administrative assessment, and issuance of an injunction would in effect overrule it.
(4) We see no independent public interest consideration that clearly favors the assumption of jurisdiction.
VI.
We conclude that it would be inappropriate for a district court to exercise its All Writs Act jurisdiction to grant a status quo injunction in this case. The district court therefore correctly denied V.N.A.‘s request for an injunction, thоugh through a different analysis than we have found to be required. The judgment of the United States District Court for the Middle District of Georgia is
AFFIRMED.
GODBOLD, Chief Judge, dissenting:
To justify issuance of a status quo injunction under the All Writs Act pending administrative review, VNA must establish the traditional prerequisites of injunctive relief. I agree with the court that under Sampson v. Murray the required strength of VNA‘s showing depends on two factors: whether a refusal to grant the injunction will defeat the district court‘s merits jurisdiction and whether Congress intended to preclude or permit an interim injunction. I disagree with the court‘s evaluation of these two factors and its corresponding conclusion that VNA must make out a virtually certain case.
The court accepts VNA‘s allegations that it will be forced out of business and go bankrupt if interim relief is denied. Maj. op. at 1031 n. 26. It concludes that this may be a significant impairment of the district court‘s jurisdiction but does not necessarily defeat it. Id. at 1031. It seems to hold that if VNA proved or alleged that it would “disappear“, id. at 1029, the court could issue an injunction, but if it is merely going bankrupt the court cannot issue an injunction.
This is too fine a distinction. The term “defeat” [of jurisdiction] in Murray must be given a common sense meaning. Murray emphasized that injunctive relief was needed in Dean Foods to prevent “the practical disappearance” of one of the litigants through merger and to preserve the agency‘s and the court‘s ability to implement “their statutory duties by fashioning effective relief.” 415 U.S. at 77, 94 S.Ct. at 947 (emphasis added). Accordingly, the court‘s jurisdiction is “effectively defeated“, 415 U.S. at 78, 94 S.Ct. at 947 (emphasis added), when the ultimate exercise of it has little
In Murray interim relief was not necessary to preserve the possibility of efficacious relief because, as the Court noted, Congress had provided an adequate post-hoc remedy. 415 U.S. at 75, 94 S.Ct. at 945. The situation here is strikingly different. A court has no power to breathe life into the corpse of a provider that is out of business and bankrupt. The possibility that a court may order the government to pay the disputed amount to the provider‘s representative in bankruptcy proceedings is hardly an efficacious remedy. Absent an injunction the district court‘s jurisdiction will be effectively defeated within the meaning of Dean Foods and Murray.
Turning to congressional intent, arguably one can infer an intent favoring issuance of a status quo injunction. Absent an injunction, review by the administrative board as well as the court will becomе virtually meaningless; with VNA out of business and bankrupt, neither board nor court could grant an effective remedy. This case differs from Murray because Congress has not provided an adequate post-hoc remedy, making effective review and relief possible. I believe Congress intended that the review it conferred on board and courts be meaningful.
In assessing congressional intent one must bear in mind that VNA is not asking the district court to decide the merits of its claims; it seeks an interim injunction while the board decides its claims. Because the court overlooks the implications of this basic fact, it errs in inferring an intent to deny or strictly limit interim injunctive relief from
In pertinent part, § 405(h) provides:
No action against the United States, the Secretary, or any officer or employee thereof shall be brought under sections 1331 [federal question jurisdiction] or 1346 [United States as a defendant] of title 28 to recover on any claim arising under this subchapter.
VNA does not seek judicial review on the merits of its claims. Section 405(h) is simply inapplicable because this is not an action brought under § 1331 or § 1346, but rather an action brought under the All Writs Act,
Of course, the lesson of Murray is that the All Writs Act should be interpreted in light of policies militating against issuance of interim injunctive relief. But § 405(h) reflects no such countervailing policies. As the court notes, “the main purpose of [§ 405(h)] preclusion is to avoid anticipation by the court of an agency determination on the merits.” Maj. op. at pp. 1031-1032. VNA does not seek a determination on the merits of its claims.
The court‘s reliance on § 1395oo(f)(1) is similarly misplaced. Section 1395oo(f)(1) generally precludes district court review until the board issues a final decision. That
Finally, I do not agree with the conclusion that the district court, in deciding whether to grant a status quo injunction, interferes with the administrative board‘s review. The court reasons that the district court‘s determination regarding the plaintiff‘s probable success on the merits usurps the board‘s statutory prerogative to decide the merits in the first instance. Although the court‘s determination is not binding on the board, the court states: “It is simply not realistic to say that the district court . . . does not address and decide the merits of the case.” Maj. op. at 1032. This reasoning sweeps too broadly. The district court must consider the plaintiff‘s likelihood of success in every case where interim injunctive relief is sought. The court‘s opinion implies that in all such cases the court should be reluctant to еven entertain the possibility of injunctive relief because its advance assessment of plaintiff‘s probability of success will effectively predetermine the ultimate decision of the administrative body before whom review is pending. This reasoning suggests that this court, in considering a motion for an injunction pending appeal, should hesitate to assess the plaintiff‘s likelihood of success because its assessment might taint the decision of the panel to whom the appeal is ultimately assigned. This cannot be correct.
The concern about the effect of the district court‘s probable success determination on the administrative board‘s decision was also present in Murray, as it is in all cases where interim injunctive relief is sought. Yet the court did not mention this concern, despite discussing whether interim injunctive relief would interfere with the administrative process.
Ironically, the court‘s “virtual certainty” standard exacerbates the very evil the court seeks to exorcise. A determination that the plaintiff is virtually certain to prevail on the merits necessitates an even firmer conclusion on the merits аnd is even more likely to straitjacket the administrative board.
To summarize, Congress did not intend to preclude or limit interim injunctive relief. In fact, a status quo injunction aids rather than interferes with the board‘s review. Absent injunctive relief, the board‘s merits review will lack meaning because the board is entirely unable to provide an effective remedy. Congress intended that the board‘s review have meaning and efficacy.
Because without an injunction the district court‘s jurisdiction will be effectively defeated within the meaning of Murray, and the evidence of congressional intent does not militate against the issuance of injunctive relief, I would not require that VNA make out a virtually certain case. I would remand to the district court to determine whether VNA can make out a case under the usual test for injunctive relief.