Nixon, Hargrave, Devans & Doyle, LLP by G. Robert Witmer
Daniel J. Hurteau, for plaintiff; U.S. Department of Justice by Thomas E. Carallero for defendant.
Presently before the Court is plaintiff's motion for summary judgment seeking a declaration that 42 US Code §1320-7b(a)(6) is unconstitutional and a permanent injunction enjoining the defendant from enforcing the statutes.
Section 1320a-7b(a)(6) makes it a crime for anyone to knowingly and willfully counsel or assist an individual, for a fee, to dispose of assets in order for the individual to become eligible for Medicaid benefits if disposing of such assets would result in the imposition of a period of ineligibility.
Plaintiff asserts that the statute violates the First and Fifth Amendments to the U.S. Constitution. Plaintiff further asserts that defendant concedes the unconstitutionality of the statute and, therefore, summary judgment is appropriate.
Defendant, on the other hand, asserts that summary judgment is inappropriate because the present case is not justiciable under Article III of the U.S. Constitution.
The defendant claims that the present matter is justiciable because plaintiff cannot demonstrate a claim of specific present harm or imminent future harm. Defendant asserts that plaintiff would be unable to demonstrate the requisite degree of harm because plaintiff's members are not being prosecuted under the statute and do not face an imminent threat of prosecution. This, according to the defendant, is supported by letters from the Attorney General advising Assistant U.S. Attorneys not to initiate any prosecutions under this statute.
Plaintiff has submitted affidavits demonstrating that the statute has resulted in its members refraining from providing certain counsel and assistance to clients. Plaintiff claims that the statute places its members in a quandry. On the other hand, plaintiff's members are ethically bound to respect and uphold the law, which would include the statute at issue here. On the other hand, plaintiff's members also have an ethical obligation to provide full and competent representation to their clients. See, generally, 22 New York Codes Rules and Regulations, §1200.32. Lawyers shall not intentionally fall to seek the lawful objectives of the client through reasonable available means provided through the law. This includes advising clients on financial planning to qualify for Medicaid. Thus, under the statute, plaintiff's members would be precluded from advising clients to engage in an estate-planning strategy that itself is legal.
The issue if justiciability arises out of the limitations on the judicial power of the United States to the resolution of cases and controversies. Valley Forge Christian College versus Americans United for Separation of Church and State Inc., 102 Supreme Court 752, at 757. This court already determined the instant litigation to be ripe. Memorandum decision and order of April 7, 1998. That decision is the law of the case. Zdanok versus Glidden Company Durkee Famous Foods Division, 327 Fed 2d 944, at 953, cert denied; 884 Supreme Court 1338. Where litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted, to battle for it again. That's the Durkee case.
Furthermore, special rules apply in First Amendment cases where, as here, there is a challenge to the overbreadth of the statute. Bates versis State bar of Arizona, 97 Supreme Court 2691, at 2707. Quote, an overbroad statute might serve to chill protected speech. First Amendment interests are fragile interests, and a person who contemplates protected activity might be discouraged by the interrorem effect of the statute, close quote. That's from Bates. Thus, plaintiff's claim is ripe under the First Amendment jurisprudence if its First Amendment Rights have been restricted or chilled by the existence of the Act. See, generally, New York Public Interest Research Group Inc. versus Village of Roslyn Estates, 498 Fed Supp 922, at 928; Natco Theaters Inc. versus Ratner, 463 Fed Supp 1124, at 1126.
The case of St. Martin's Press Inc. versus Carey, 605 Fed 2d 41, relied upon by defendant is distinguishable. That case involved conduct that was unlikely to be covered by the challenged statute. In that case, the chilling effect was too remote. Here, however, the challenged conduct is directly covered by the challenged statute.
The defendant principally relies on Sanger versus Reno, 966 Fed Supp 151, which also is readily distinguishable. Much like St. Martin's Press, Sanger involved a situation where plaintiff's allegations of a chilling effect were not substantiated by evidence that the challenged statute would directly affect them. Again, the chilling effect was too remote.
The present case may be likened to Epperson v. Arkansas, 89 Supreme Court 266, wherein a teacher challenged a statute making it unlawful to teach any theory of evolution or adopt or use a textbook that teaches evolution. In Epperson, the teacher was provided with a book by the school administration that contained a chapter on evolution. As in the present case, the teacher was faced with a dilemma because, on the one hand, she was supposed to use and teach from the book, but, on the other hand, to do so would constitute a criminal offense. The Supreme Court speifically noted that, quote, there is no record of any prosecutions under the statute. It is possible that the statute is presently more of a curiosity than a vital fact of life, close quote. That's Epperson at 269. Nevertheless, the Supreme Court stated that, quote, it is our duty to decide the issues presented, close quote. Also Epperson. See also Doe versus Bolton, 93 Supreme Court 739.
Here, plaintiff commenced the instant litigation claiming that the statute violated the Constitution. Thereafter, the defendant voluntarily stated that she would not enforce the statute. The statute, however, remains on the books. Congress has not repealed the statute. Thus, there remains the fear that a future administration or even a wayward U.S. Attorney could attempt to enforce the statute.
As discussed, plaintiff has submitted evidence that the challenged statute is having the immediate and demonstrable effect of deterring plaintiff's members from advising clients of the legal transfer of assets to become eligible for Medicaid. Since the plaintiff's members are prospectively subject to proscriptions that plaintiff is challenging, there is a sufficient chilling effect such that the validity of the statute is proper before this Court. Laird versus Tatum, 92 Supreme
Plaintiff claims that the subject statute violates the First and Fifth Amendments of the U.S. Constitution. Defendant does not defend the constitutionality of the statute.Court 2318, at 2324.
Congress is precluded from making any law abridging the freedom of speech, U.S. Constitution Amendment I. The speech at issue here is advice given by an attorney to a client for a fee regarding the transfer of assets to qualify for Medicaid.
Assuming, without deciding, that the speech at issue is commercial speech, thereby implicating a mid-level scrutiny standard, the statute does not pass muster. The Government fails to demonstrate: One, a substantial governmental interest; and two, that the statute directly advances any asserted governmental interest; and three, that the statute is not more extensive than necessary to serve that interest. Central Hudson Gas and Electric Corporation versus Public Service Commission of New York, 100 Supreme Court 2343, at 2351. In fact, the defendant has stated that, quote, we are unable to identify a governmental interest that would justify the restriction on protected speech, close quote. March 11, 1998 letter from Janet Reno, Attorney General, to Albert Gore Jr., President of the Senate. Since the statute cannot withstand mid-level scrutiny, it certainly cannot withstand strict scrutiny. See Consolidated Edison Company versus Public Service Commission of New York, 100 Supreme Court 2326, at 2334.
Furthermore, under the overbreadth doctrine applicable to statutes restricting speech, quote, a statute is invalid in all of its applications; that is, facially invalid, if it is invalid in any of them. Ada versus Guam Society of Obstetricians and Gynecologists, 113 Supreme Court 633, at 634. The defendant does not even assert a circumstance under which the statute could be applied in a constitutional manner. Thus, the statute is overbroad and facially invalid.
For the foregoing reasons, the plaintiff's motion for summary judgment is granted. Section 1128B(a)(6) of the Social Security Act, 42 US Code §1320a-7b(a)(6) is hereby declared unconstitutional and the defendant is permanently enjoined from enforcing same.
Plaintiff is to submit an order.
Thank you both for an interesting argument.
Last revised september 28 1998
by
David Goldfarb