

                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT

                                         

No.  94-1611

                  LEONARD R. FRIEDMAN, M.D.,

                    Plaintiff, Appellant,

                              v.

DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, ET. AL.,

                    Defendants, Appellees.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

       [Hon. Edward F. Harrington, U.S. District Judge]                                                                  

                                         

                            Before

                      Cyr, Circuit Judge,                                                    
              Bownes, Senior Circuit Judge, and                                                      
                    Stahl, Circuit Judge.                                                    

                                         

Leonard R. Friedman, M.D., on brief pro se.                                     
Donald K.  Stern, United States  Attorney, and Suzanne E. Durrell,                                                                             
Assistant United States Attorney, on brief for appellee.

                                         
                       January 27, 1995
                                         

          Per  Curiam.   Leonard  Friedman  is  appealing the                                 

district  court's decision dismissing  his case for mootness.

We affirm.

          I.  Background                                    

          We  recite only  briefly the  pertinent facts.   In

1991,  Friedman sued  various defendants,  claiming that  the

revocation of  his medical  license in Massachusetts  in 1987

and  his exclusion from  Medicare provider rolls  in 1990 had

been   unlawfully  effected.     The  district  court  stayed

proceedings pending  the results  of other state  and federal

court actions involving  the same parties.  In  October 1993,

the  court  approved  the  parties'  stipulation  of  partial

dismissal.  Pursuant to  that stipulation, Friedman dismissed

with prejudice  his claims against all  defendants except his

claim  against the  Department of  Health and  Human Services

(HHS)  for a  declaratory  judgment that  HHS had  wrongfully

excluded him from Medicare provider rolls in 1990.1  

                                                    

1.  HHS excluded Friedman under 42 U.S.C.   1320a-7(b)(4)(A),
which permits  exclusion of  an individual "whose  license to
provide  health care  has been  revoked  or suspended  by any
State  licensing authority . .  . for reasons  bearing on the
individual's  .  .  . professional  competence,  professional
performance,  or   financial  integrity."    HHS   based  its
exclusion  on  New York's  revocation  of Friedman's  medical
license.  New York had based its revocation on Massachusetts'
determination that Friedman had engaged in "gross misconduct"
sufficient   to  warrant  revocation  of  Friedman's  medical
license in that state.  Friedman's period of exclusion was to
end  when either  Massachusetts  or New  York reinstated  his
license.

                             -2-

          At Friedman's request, HHS reinstated Friedman as a

Medicare  provider in November 1993.  When HHS later answered

Friedman's   complaint,   it    asserted   that    Friedman's

reinstatement had mooted  his claim for  relief and that  the

action should be  dismissed.  The court  agreed and dismissed

the action sua sponte.2                                 

          II.  Discussion                                     

          We address two of Friedman's  arguments on appeal.3

First, Friedman says that HHS is reasonably likely to exclude

him  again since  California revoked  his medical  license in

1990  and that any future exclusion by HHS would likely evade

judicial review because it would lapse before the court could

render  a  decision.     Second,  Friedman  argues  that  his

exclusion  has continuing  collateral consequences  that will

                                                    

2.  Friedman  did not immediately appeal the order dismissing
his case, but filed  a motion for relief from  judgment under
Fed.  R.  Civ. P.  60(b), the  denial  of which  he appealed.
Because his motion was filed within the time limit for filing
motions under Fed. R. Civ. P. 59(e),  however, and challenged
the legal correctness of the court's decision that his action
was moot,  we  treat it  as a  timely Rule  59(e) motion  and
assume, without  deciding, that  the dismissal of  his action
for  mootness  is properly  before  us.   See  Perez-Perez v.                                                                      
Popular Leasing Rental, Inc., 993 F.2d 281, 284-85  (1st Cir.                                        
1993); Mariani-Giron v. Acevedo-Ruiz, 945 F.2d 1, 3 (1st Cir.                                                
1991).

3.  Other arguments  he makes  are without merit,  e.g., that
the stipulation of partial  dismissal and the court's failure
to revoke  its stay  order prior to  Friedman's reinstatement
waived  mootness,  that  evidence discovered  in  1991 before
Friedman filed his suit  qualified as new evidence justifying
relief  from  the court's  judgment,  and  that the  mootness
doctrine  does  not  apply   to  judicial  review  of  agency
decisions.

                             -3-

affect his reputation and his medical and legal careers.  For

those   reasons,  Friedman  claims   that  his   request  for

declaratory relief is not moot. 

          A.  Capable of Repetition Yet Evading Review                                                                  

          We  conclude  that  the capable  of  repetition yet

evading review exception to mootness does not apply.  While a

one-year exclusion  may well  evade judicial review,  it does

not seem at all  likely that HHS will exclude Friedman on the

basis of California's revocation of his medical license.

          At the time Friedman applied for reinstatement, the

California  revocation clearly  would have  been a  basis for

excluding Friedman from the Medicare  program.  See 42 U.S.C.                                                               

   1320a-7(b)(4)(A),  supra  note  1.    Yet  HHS  reinstated                                       

Friedman in 1993,  and so it must not have  believed that the

1990  California  license  revocation  would be  grounds  for

excluding  Friedman.   See 42  C.F.R.    1001.3002(a)(3) (HHS                                      

"will"  reinstate  an  excluded  individual  if,  among other

things,  it determines  that there  is "no  additional basis"

under the statute for continuing the  exclusion).4  Thus, the

fact that  Friedman was  reinstated shows that  HHS would  be

                                                    

4.  Friedman alleges that this regulation and others cited by
HHS  in  its brief  were not  in effect  at  the time  he was
excluded,  but  does  not  allege  that  this  and  the other
regulations embody practices  or policies that are  different
from  ones prevailing  at  the time  of  his exclusion.    In
addition,  we  note  that  the regulations  relating  to  the
reinstatement  of excluded  individuals  became effective  on
January  29, 1992,  and so  presumably applied  to Friedman's
reinstatement in November 1993.

                             -4-

unlikely to use the California revocation to exclude Friedman

in the future.   Moreover, excluding Friedman because  of the

California  revocation   would  arguably  be   an  abuse   of

discretion.  California revoked Friedman's license because of

Massachusetts' revocation of his license; that is, California

based its  license revocation on  the same misconduct  as had

New  York.   Because HHS  based Friedman's  exclusion  on New

York's  revocation  of  Friedman's  license,   excluding  him

because  of  the   California  revocation  would  essentially

penalize Friedman twice for the same  misconduct, a course of

action that we doubt HHS would undertake.  

          B. Collateral Consequences                                                

          The  adverse  collateral   consequences  to   which

Friedman  points do  not suffice  to avoid  mootness in  this

case.  According to Friedman, overturning his exclusion would

relieve him of the  stigma of having been excluded,  ease his

admission to  practice law in Massachusetts,  and relieve him

of the  obligation to  explain the  exclusion  when he  seeks

hospital  staff privileges,  affiliation with  certain health

care entities, or licensure in other states.  

          Certainly, in some  situations, adverse  collateral

consequences such  as those advanced here have  been found to

avoid  mootness.   See, e.g.,  Kirkland v.  National Mortgage                                                                         

Network,  Inc., 884  F.2d  1367, 1370  (11th Cir.  1989) (the                          

dismissal  of an action did  not moot an attorney's challenge

                             -5-

to a court's  revocation of  his admission pro  hac vice  for                                                                    

failure   to  abide  by   promises  made   during  settlement

negotiations; the  "brand of disqualification  on grounds  of

dishonesty and  bad faith could well  hang over [plaintiff's]

name  and  career  for  years to  come");  Kleiner  v.  First                                                                         

National Bank of Atlanta, 751 F.2d 1193, 1200 n.14 (11th Cir.                                    

1985)  (the  settlement  of  a  class  action  did  not  moot

attorneys' challenge to  their disqualification by the  court

in part because counsel could be exposed to further sanctions

by  the bar  and  their disqualification  could have  adverse

effects on  their  careers  and  public  image)  (alternative

holding);  Miller v.  Washington  State Bar  Ass'n, 679  F.2d                                                              

1313, 1316, 1318  (9th Cir.  1982) (an attorney  could sue  a

state bar association to expunge  a letter of admonition from

his file since he would be required to explain the admonition

if  he applied  to the  bar in  other states or  for judicial

appointments).  

          Here, however,  it is  not the HHS  exclusion which

has tarnished Friedman's reputation, but the apparently valid

New York and Massachusetts  licensing board decisions,5 which

                                                    

5.  Friedman  apparently  did  not  challenge  the  New  York
decision in court.   The Massachusetts Supreme Judicial Court
has upheld the Massachusetts decision.  See Friedman v. Board                                                                         
of  Registration in  Medicine,  561 N.E.2d  859 (Mass.  1990)                                         
(substantial  evidence  supported  the  decision   to  revoke
Friedman's  license for gross  misconduct), cert. denied, 498                                                                    
U.S.  1107  (1991);  Friedman  v. Board  of  Registration  in                                                                         
Medicine, 609  N.E.2d 1223 (Mass. 1993)  (petition for relief                    
from license revocation was denied).  

                             -6-

concluded  that  Friedman had  engaged in  gross professional

misconduct   sufficient   to   warrant  license   revocation.

Consistent with the applicable statutory basis for exclusion,

HHS's  letter notifying  Friedman of his  exclusion explained

that his exclusion  was based on "the fact" that New York had

revoked  his license  and  indicated that  the  issue in  any

administrative  hearing would  be "whether  your license  was

revoked for reasons relating to your professional competence,

professional  performance, or  financial  integrity."   Since

Friedman's Medicare  exclusion was  based solely on  the fact

that his license had  been revoked, the exclusion effectively

signified only  that New York had  revoked Friedman's license

for  reasons  bearing  on   his  professional  competence  or

performance.  Compare 42 C.F.R.   1001.2007(a)(i) &amp; (ii) (the                                 

only issues before an ALJ in an exclusion hearing are whether

the  basis  for the  imposition  of the  sanction  exists and

whether  the   length  of  the   exclusion  is  reasonable).6

                                                    

6.  This regulation became effective January  29, 1992, after
Friedman was  excluded.  Nonetheless,  it was published  as a
proposed   regulation   before   Friedman's   exclusion   and
represents  HHS's  interpretation   of  its  obligations   in
exclusions such  as Friedman's  as of  the time  Friedman was
excluded.  See 55 Fed. Reg. 12,206  (4/2/90) (explaining that                          
HHS's  authority  to exclude  certain  individuals, including
those  whose state  medical  licenses have  been revoked,  is
"derivative" because "our ability to exclude derives from the
fact  that  another  entity has  imposed  a  sanction on  the
individual  or  health  care  entity.    [HHS]  would not  be
required to reestablish  the factual or legal basis  for such
underlying sanction.").  

                             -7-

Although the exclusion resulted from  the license revocation,

it conferred no additional stigma on Friedman.7  

          Moreover, the  actual effect of  the exclusion  was

exclusively a financial one, as the letter notifying Friedman

of  his exclusion  made  clear.   Because  of his  exclusion,

neither Medicare nor  certain federally-assisted state health

care programs  (from which Friedman was  also excluded) would

pay for services or  items furnished to Friedman's patients.8

                                                    

7.  HHS's letter  to Friedman notifying him  of his exclusion
informed him that HHS would notify certain state agencies and
the  public of his exclusion and  of the reasons therefor.  A
copy  of the  public  notice of  Friedman's exclusion  is not
included in the  record, but it apparently would  have stated
that  Friedman's exclusion  would  end when  his license  was
reinstated.  See 42 U.S.C.    1320a-7(c)(3)(A) (the notice of                            
exclusion given to the excluded individual and  to the public
shall  specify the minimum period of exclusion).  At the time
Friedman was  reinstated, HHS  was required to  notify "those
agencies,  groups,   individuals,   and  others   that   were
originally   notified   of  the   exclusion"   of  Friedman's
reinstatement.  See 42 C.F.R.   1001.3003(a)(4).  Presumably,                               
therefore,  public  notice  of  Friedman's  reinstatement was
given, although it is not clear whether the notice would have
given  the  reason for  his  reinstatement.   Compare  id.                                                                         
1001.134(a)(2)  (a predecessor regulation  to   1001.3003(a),
which  provided for  notice  to  the  public of  an  excluded
individual's  reinstatement).    Assuming that  the  original
public   notice  of  Friedman's   exclusion  had  stigmatized
Friedman as a  person who  had lost his  medical license  for
reasons   bearing   on   his  professional   performance   or
competence,  that stigma likely would have been erased to the
extent possible by the  reinstatement notice implying, if not
stating outright, that he had regained his license.  

8.  The letter stated:

     The effect  of your exclusion from  participation in the
     Medicare  and  State health  care  programs  is that  no
     payment will  be made for  any items or  services (other
     than an emergency item or service) furnished, ordered or
     prescribed by you under the above-mentioned programs.

                             -8-

Regulations  in effect  at the  time Friedman  was reinstated

indicate  that such payments  would have resumed  once he was

reinstated.   See  42 C.F.R.    1001.1901(b)  (payments under                             

Medicare and applicable state health care programs may not be

made unless  and until  an excluded individual  is reinstated

into the Medicare program);  id.   1001.3003(b) (with certain                                            

exceptions apparently not applicable  here, state health care

programs must  reinstate an individual to  such programs upon

notification by  HHS that the individual  has been reinstated

to  the Medicare program).   There is nothing  in the present

record to suggest that reinstatement did not have this result

in Friedman's case.

          Thus,   if   Friedman  should   seek   some  future

affiliation with a hospital or  other health care entity, the

decision to  grant  or  deny  him affiliation  would  not  be

affected  by the  entity's inability  to receive  Medicare or

applicable  state   program  payments  for   care  given   to

Friedman's patients.  On the other hand, if hospitals, health

care entities, state medical  licensing boards, or any boards

of bar examiners are  concerned about Friedman's character or

professional competence or performance, their response to any

future application of his would be affected predominantly, if

                                                    

     Furthermore, payment will  not be made to  any entity in
     which you  are  serving as  an employee,  administrator,
     operator, or in any other capacity for any services that
     you  furnish,  order  or   prescribe  on  or  after  the
     effective date of this exclusion.

                             -9-

not  exclusively,  by the  apparently  valid  state decisions

revoking his medical license.  While   Friedman    may   have

expected  the  district  court  to  review  the Massachusetts

license revocation  proceedings in this suit,  its review was

of necessity  limited to the exclusion  decision itself which

did not encompass the state proceedings.  As noted above, the

parties stipulated to dismissal  of Friedman's claims against

all  defendants with the  exception of his  claim against HHS

relating   to  his  Medicare   exclusion.    Presumably,  the

jurisdictional  basis  for that  claim would  be 42  U.S.C.  

1320a-7(f)(1),  which provides  for judicial review  of final

HHS  exclusion  decisions.   Under  HHS  Departmental Appeals

Board  precedent   in  effect  at  the   time  of  Friedman's

exclusion, excluded  individuals  could not  challenge  their

exclusion  by  collaterally  attacking the  underlying  state

license revocation proceedings.  Citing that  precedent, both

the  administrative law  judge  and the  Departmental Appeals

Board  rejected Friedman's attempt to collaterally attack the

Massachusetts  and New  York license  revocation proceedings.

Thus, the  validity of  the underlying state  proceedings was

never  an issue  in  Friedman's exclusion  proceedings.   The

scope of the  proceedings below having  been confined to  the

determination  whether  the  statute  applied  to  Friedman,9

                                                    

9.  Friedman had  alleged that the statute  was being applied
retroactively  to him  since  Massachusetts had  rendered its
licensing decision before the statute became effective.

                             -10-

whether  Friedman's  license  had  been revoked  by  a  state

licensing  authority for the  statutorily prescribed reasons,

and  whether  the period  of  exclusion  was reasonable,  the

district  court's review  of the decision  excluding Friedman

would be likewise constrained.   Cf. Travers v. Sullivan, 801                                                                    

F.  Supp. 395, 403 (E.D.  Wash. 1992) (where  HHS excluded an

individual on the  basis of  a prior state  conviction for  a

program-related offense, it was  "not necessary or proper for

the   court  to   delve  into   the  facts   surrounding  the

conviction"; the court's role  under   1320a-7(f) was  not to

review  the  validity of  the  underlying  conviction but  to

review the  validity of the  exclusion), aff'd, 20  F.3d 993,                                                          

998 (1994).10

          Under  these circumstances,  we conclude  that this

action is  moot.  See  Florida Farmworkers  Council, Inc.  v.                                                                     

Marshall,  710  F.2d 721,  731  (11th Cir.  1983)  (the court                    

determined  that  expiration  of  plaintiff's  debarment  had

                                                    

10.  HHS's  policy barring collateral attack on state license
revocation proceedings and limiting  the nature of the issues
addressed  in   exclusion  proceedings  is  now  codified  in
regulations that have been  expressly made binding on federal
courts.  See 42 C.F.R.   1001.2007(d) (prohibiting collateral                        
attacks on  the underlying state determinations  which form a
basis for exclusion); id.   1001.2007(a)(i) &amp;  (ii) (the only                                     
issues  before an  administrative law  judge in  an exclusion
hearing  are whether  the basis  for excluding  an individual
exists   and  whether   the  length   of  the   exclusion  is
reasonable);   id.      1001.1(b)   (these   regulations  are                              
applicable  to and  binding  on federal  courts in  reviewing
exclusions  imposed by  HHS)  (this latter  regulation became
effective January 22, 1993).    

                             -11-

mooted   its   action  challenging   the   debarment  despite

plaintiff's  claim of stigma because the court had upheld the

costs  disallowances  that  had  caused  the  debarment;   it

explained  that it  could not  discern any  additional stigma

created  by the  debarment  and that  the  debarment had  not

prevented plaintiff from receiving substantial federal funds,

apparently after the debarment had ended).

          Affirmed.                                   

                             -12-
