Opposition Brief — Perales v. Krieger

Supreme Court, U.S.

FILED

NOV 20 987

JOSEPH F. SPANIOL’ UP

CLERK

No. 87-545

In The

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1987

CESAR A. PERALES, as Commissioner of

the New York State Department of

Social Services,

Petitioner,

- against -

MILDRED KRIEGER,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE NEW YORK STATE COURT OF APPEALS

BRIEF IN OPPOSITION

KALMAN FINKEL

Attorney-in-Charge

Civil Division

The Legal Aid Society

JOHN E. KIRKLIN JOAN MANGONES

Director of Litigation Attorney-in-Charge

Civil Appeals & Law Reform Unit Staten Island Neighborhood

JANET SABEL, of Counsel Office

11 Park Place - Room 1805 LESTER HELFMAN, of Counsel

New York, NY 10007 25 Hyatt Street

(212) 406-0745 Staten Island, NY 10301

(718) 273-6677

Attorneys for Respondent

QUESTIONS PRESENTED

1. Whether this Court lacks jurisdiction under Article III

of the Constitution to review a judgment that no longer presents

a case or controversy, the respondent Mildred Krieger having

received all the disputed Medicaid benefits from the

Commissioner of the New York City Department of Social Serv_-ces,

a party to the proceedings in the trial court below who did not

appeal that court’s adverse decision to the New York Court of

Appeals or seek review in this Court?

2. Whether this Court is without jurisdiction to review a

New York Court of Appeals judgment premised on an independent and

adequate state law ground, to wit that a Medicaid eligible

Claimant who has promptly paid her bills is entitled under the

New York Social Services Law and New York State case law to

Medicaid reimbursement for medical expenses incurred three months

prior to her application for Medicaid benefits?

3. Whether this Court should decline to review a _ state

court judgment to the extent that it concerns the weight to be

given a federal agency letter pursuant to the Administrative

Procedure Act where that decision is supported by an independent

federal law ground not challenged on certiorari, to wit that the

Freedom of Information Act’s publication requirement deprives the

unpublished agency letter on which petitioner relies of any force

and effect in determining the claimant’s rights?

4. Whether, absent a conflict among the federal circuit

courts or other state courts regarding an issue of limited

significance and consequence, this Court should deny certiorari

to review the New York Court of Appeals’ unexceptionable rulings

that (i) a Medicaid eligible claimant who promptly paid her

bills is entitled to Medicaid coverage of the same amount,

ii

duration and scope for the three months prior to the -month of

their application as a claimant who fail to pay her bills, and

that (ii) an unpublished agency letter on which petitioner relies

is of no binding force and effect in determining claimant’s

rights where that letter was not promulgated in accordance with

the notice and comment rulemaking requirements of the

Administrative Procedure Act?

TABLE OF CONTENTS

QUESTIONS PRESENTED. . . «© «© © © © © ee © @ «@

TABLE OF AUTHORITIES .. «© «© s ee ee © © 6

CONSTITUTION, STATUTES AND REGULATIONS ....

Gn eee. nc te ee eS Oe

COUNTERSTATEMENT OF THE CASE ......+ e+e -

Me EBCECGUCCIOS 4c cio se we eee

B. Statutory Seheme . . 2. st ese eae ss

Os" Oe eb a ee ae) 8 eae ea eee

REASONS FOR DENYING THE WRIT . . « «© « © « © «

Be BECAUSE ONE PARTY TO THIS LITIGATION

LACKS A PERSONAL STAKE IN THE OUTCOME OF THE

PROCEEDING, THE PETITION PRESENTS NO CASE OR

CONTROVERSY SUFFICIENT TO ESTABLISH

JURISDICTION UNDER ARTICLE ESS OF THE

CONSE LU EON 16) oe Ss ew Re ee el te wee a ee

pe THIS COURT IS WITHOUT JURISDICTION TO

REVIEW A NEW YORK COURT OF APPEALS JUDGMENT

PREMISED ON AN ENTIRELY INDEPENDENT AND

ADEQUATE STATE GROUND, TO WIT THAT UNDER THE

NEW YORK SOCIAL SERVICES LAW AND NEW YORK

STATE CASE LAW, MEDICAID ELIGIBLE CLAIMANTS

WHO HAVE PROMPTLY PAID THEIR BILLS ARE

ENTITLED TO MEDICAID REIMBURSEMENT FOR MEDICAL

EXPENSES INCURRED THREE MONTHS PRIOR TO THEIR

APPLICATION FOR MEDICAID BENEFITS. ......

III. CERTIORARI TO REVIEW THE EFFECT OF THE

ADMINISTRATIVE PROCEDURE ACT ON THE WEIGHT

ATTRIBUTED TO AN UNPUBLISHED AGENCY LETTER IS

INAPPROPRIATE IN THIS CASE BECAUSE THE STATE

COURT DECISION ON THAT ISSUE IS SUPPORTED BY

AN INDEPENDENT AND ADEQUATE FEDERAL LAW

GROUND, NOT CONTESTED BY PETITIONER HERE, TO

WIT THAT THE PUBLICATION REQUIREMENTS IN THE

FREEDOM OF INFORMATION ACT DEPRIVE THE

UNPUBLISHED LETTER ON WHICH PETITIONER RELIES

OF ANY FORCE OR EFFECT IN DETERMINING THE

BENBPITS DUE RESPONDENT <« . 2 s+ « + « s © « «

iv

Si

vi

viii

is

|

14

IV. THIS COURT SHOULD DECLINE TO EXERCISE

ITS JURISDICTION TO REVIEW THE NEW YORK COURT

OF APPEALS DECISION BECAUSE THAT COURT’S

JUDGMENT CREATES NO CONFLICT AMONG THE

FEDERAL CIRCUIT COURTS OR OTHER STATE

COURTS, RAISES NO IMPORTANT OR SIGNIFICANT

FEDERAL LAW QUESTIONS, AND WAS CORRECTLY

Gaetan & 6 A Ss e868 we 8 eee Oe ee

A. MEDICAID ELIGIBLE CLAIMANTS WHO

PROMPTLY PAID THEIR BILLS ARE ENTITLED TO

MEDICAID COVERAGE OF THE SAME AMOUNT,

DURATION AND SCOPE FOR THE THREE

MONTHS PRIOR TO THEIR APPLICATION AS

THOSE CLAIMANTS WHO FAIL TO PAY THEIR

Dates 6. 26 eS ete. Oe es eee ew

B. AN UNPUBLISHED AGENCY LETTER NOT

PROMULGATED IN ACCORDANCE WITH THE

NOTICE AND COMMENT RULEMAKING

REQUIREMENTS OF THE ADMINISTRATIVE

PROCEDURE ACT IS OF NO BINDING FORCE

AND EFFECT IN DETERMINING CLAIMANTS ’

Mares 60 8% oe es ee ee Oe ee Ae

GONGHUGEON 2.6 6 8 o-6 te ee ell le

id i 2 ® Gt Va a a a a a ee a a

16

17

LS

23

Al

TABLE OF AUTHORITIES

Tiburon,

Zoo Aveo). « 2 « 6 6 «6

Agins v.

647 U.S.

Anderson v.

550 F.2d 459

Butz,

(StH Cir.

1977) .

Francis,

Paerels ss « S *

Batterton v.

432 U.S. 416

Marshall,

(D.G.. Ci®.

Batterton v.

486 F.2d 694

1980).

Beal v.

432 U.S.

Doe,

438

et Paes

Schweiker,

(Sth Cir.

Buschmann v.

676 F.2d 352

1982) .

Calkins v. Blun,

511 F.Supp. 1073 (N.D.N.Y. 1981)

remanded, 657 F.2d 44 (2d Cir.

Canaday v. Koch,

608 F.Supp. 1460 (S.D.N.Y.),

768 F.2@ SOL (2a Cir.

1985)...

Carter v.

493 F.Supp.

Blun,

368 (S.D.N.Y.

1980).

Marshall

1980).

Cerro Metal Products v.

620 F.2d 964 (3d Cir.

Chrysler Corp. v. Brown,

SAS Ure< 208. (CASO) « 6 ss Be 8

Columbus Community Hospital, Inc

LS;

20,

» BLE’d ang

BOGGS 6x: s 6

aff’d,

,

20

v. Califano,

614 F.2G i181 (8th Cir.

1980)

Donovan v. Wollaston Alloys, Inc

27

695 F.2@ i (ist Cir. i962) .

Espinoza v. Farah Mfg. Co.,

B14 U.S. 66. (ES73) ss

Federated Department Stores,

Inc. v. Moitie,

a SR ee ee ee

General Electric v. Gilbert,

429 U.S. i25 (i976). . = « ©

Harris v. McRae,

e486 0.8. 207 (1960). . ss se

Hodecker v. Blum,

$25 F. Supp. 867 (N.D.N.Y.

685 F.2@ 424 (2a Cir.

1981)

1982).

, aff’d,

vi

13

20

21

21

ao

14

10

12

14

20

20

20

i5

ee

ai

a3

19

Holley v. Lavine,

605 F.2d 638 (2d Cir. 1979), cert. denied

sub nom. Blum v. Holley,

S06 Us BAe CEPR): 6 6 6 ee ee ew ee 9

Indianapolis School Commissioners

v. Jacobs,

420 Uibs Bae CAPO) 2 sak 8 ee Be ees 10

King v. Smith,

392 U.S. JOD (2968). 2. s « we ew we ee Ye he he i?

iegl v. Webb,

802 P.2@ G23 (20 Civ. i966). 2. 6 & & ws ees ai

Linoz v. Heckler,

800 F.2d 871 (9th Cait. ISS6) cs 6-6 we We 6 20

Matter of Adirondack League Club

v. Board of Black River

Regulating Dist.,

302 Nils 249, SS Nis.

4G GA? C2SS0)s se es ee ee eee EO we 9

- Matter of Cheng San Chen v. Toia,

; 67 A.D. 24 1065, 415 H.Y¥.S. i69

(2d Dept. 1979), aff’d 50 N.Y. 2d 826,

407 N.S. 2@ 1346, 430 N.¥.S. 2d 50 (2980). . .« 2

Matter of Cole v. Wyman,

40 A.D. 2€@ 1033, 338 N.Y.S. 20 $64

(24 DOP G. ZS72 ic. eo eS el Oe oe om ees 12

Matter of Jones v. Berman,

37 N.Y. 26. 42, S32 Bub. 24 S03; S71

B.F.8. Oe Side 3 6 ee She we me OES, et ew, oe Se 10

Matter of Krieger v. Krauskopf, -4

126 Hise. 2a 70, 461 N.iY¥.8. 24 219

(Sup. Ct. 1984), aff'd, 121 A.D. 2d 448,

503 N.Y.S. 2d 418 (2d Dep’t 1986),

aft’d, 70 N.Y. 24° 637, Si2 N.E. 2a 540,

Sis Ni¥.S. 26 S67 (i967)... «© ss es te 6 a By Gy Fe hey. 25

Matter of Lustig v. Blum,

$0 A.D. 24 558, 435 N.iiS. 24. 350

(20 DOp’S OPS). «es se ee eee ee Uhl ee ai

Matter of Lyon Co. v. Morris,

226i NuiY. 497, 255 Bibs FEE C2985). « cs ek we He 9

Matter cf Schwartz v. Toia,

68 A.D. 2d 890, 414 N.Y¥.S. 2d 23

(26 BOR" = 2979} «we & st ee se Se eS eH me

Michigan v. Long,

463 UcS. i032 €9GS) « «6 0 te wR we RO ee pe ae os

Morton v. Ruiz,

S35 Gis Bee Ceres 6 ks sk SE ee BP ee 15, 20, 21

National Nutritional Food Ass’n

v. Weinberger,

512 F.2d 688 (2d Cir.), cert. denied,

433 U8. ORT C3978) wk es 8s he Be Se es 20

vii

|

|

North Carolina v. Rice,

O04 Ucbs 258 (CA073)5 4 6 se oS 8 lt me

Oberlander v. Perales,

van Tiae tae (ea: Cat.. 2984). «so ows

O’Brien v. Skinner,

eae Vews Cen Tarrels « 6 ss se & + 6 ee 8

Powderly v. Schweiker,

VOS Eevew- agse (9tn Cir. 2963). «2. & & «© «ss

Preiser v. Newkirk,

ee is ee CPEs 6 «6 & Soe eee

Schweiker v. Hansen,

450 U.S. 785 (1981)... .. »@

SEC v. Medical Committee

for Human Rights,

404 U.S. 403 (i972). « « «

Sockin v. Overcash,

45 A.D. 2d 717, 356 N.Y.S. 2d 329

(2d Dep’t 1974). ......6.6.

Smith v. Miller,

665 F.2d 172 (7th Cir. 1981)

St. Mary’s Hospital of Troy

v. Blue Cross & Blue Shield Ass’n,

788 F.2d 888 (2d Cir. 1986).

Townsend v. Swank,

404 U.S. 282 (1971).

United Housing Foundation, Inc.

v. Forman,

421 U.S. 837 (1975).

CONSTITUTION, STATUTES AND REGULATIONS

U. S. CONSTITUTION

Article III

5 U.S.C.

552

552(a) (1) ‘

552(a)(1)(D). . . 2... ew we

ns © Ce

Mmmm

42 U.S.C.

1396. °

1396a(a) (5)

1396a(a) (8)

1396a(a) (10)

1396a(a) (10) (B)

MOM Mm mM

viii

20,

10

12

a3

21

10

rp |

10

12

20

20

12

21

10

MwWWN NY

ee Yea Se 18

N,N ade ee eee ae 18

DEE i ate’ oe aoe ak 3

Re a ae re er ce i. &

42 C.F.R.

RRC. 2 eee ee 2

SNR, bs ee ee we be 3, 18

N.Y. CIV. PRAC. LAW

Wi as ber ar re Or a eg a ee 5

a eae ag ae ee er 5

N.Y. SOC. SERV. LAW

“. +s 2

§ 365. ae a ter mies ta Ret nae oe 3

BO | ee ree 3

CME ERREDD es 6 3 ss 6 oe wo 4

ee ara ann fe ae oe

eres kok ae Kk ee 8 ee ee :, §. 33

N.Y. ADMIN. CODE TIT. 18

ae ee ee oe ee es 2

G 2OUreGe. wc se sa wseenves vee a, @

PS: ae ee ee ee ee ee ee ee 3

ee & ee ee a a ee ee ee 4

OTHER AUTHORITIES

Cohen and Karger, Powers of the New York Court of

Appeais (1951) «© «© «© se» exes «sees oe 6 6 © @ G

H.R. Rep No. 92-231, 92d Cong., 2d Sess.

reprinted in (1972) U.S. Code Cong. &

Admin. News 4489, 5099 18

ix

No. 87-545

In The

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1987

CESAR A. PERALES, as Commissioner of

the New York State Department of

Social Services,

Petitioner,

- against -

MILDRED KRIEGER,

Respondent.

ON PETITION FOR A WRIT OF CERTIOFARI

TO THE NEW YORK STATE COURT OF APPEALS

BRIEF IN OPPOSITION

Respondent respectfully submits this brief in opposition to

the petition of the Commissioner of the New York State Department

of Social Services for a writ of certiorari to review

judgment of the New York State Court of Appeals.

COUNTERSTATEMENT OF THE CASE

A. Introduction

Petitioner’s selective statement of the case

misleading. First, petitioner fails to disclose that

the

is

the

Commissioner of the New York City Department of Social Services,

who alone was ordered by the trial court to reimburse respondent

for her paid medical expenses, chose not to appeal from the

original judgment and instead fully complied with the payment

order. Accordingly, in its present posture, this case presents

no case or controversy between the parties to this proceeding.

Second, the decision of the New York State Court of Appeals was

based independently and adequately on New York Social Services

Law § 367-a(1) (McKinney 1983) and an uninterrupted line of state

court cases interpreting that statute. This Court, therefore, is

without jurisdiction to grant the petition. Finally, with

respect to the challenge to the analysis of the Administrative

Procedure Act, petitioner failed to disclose that the state court

found the federal agency letter of no binding force or effect

under the Freedom of Information Law, an alternate federal law

ground uncontested by the State in its petition to this Court.

B. Statutory Scheme

The Medical Assistance Program ("Medicaid") is designed to

meet the medical expenses of needy individuals who satisfy the

program eligibility requirements. The United States Department

of Health and Human Services ("HHS") is authorized to make pay-

ments under the Medicaid program to states whose plans conform to

the specific requirements of Title XIX of the Social Security

Act, 42 U.S.C. §§ 1396 et seg. (1983). New York State partici-

pates in the Medicaid program and receives federal funding under

its state plan.1 New York Social Services Law §§ 363 et seg.

4 Federal law also requires that a state Medicaid plan be

administered or supervised by a "Single state agency." 42 U.S.C.

§ 1396a(a) (5); 42 C.F.R. § 431.10 (1986). In New York, the

petitioner, New York State Department of Social Services

("NYSDSS"), is the designated single state agency. The

NYSDSS has delegated its authority to make initial eligibility

determinations to local social services districts. In New York

State each county comprises a social services district except

the five counties of New York City which make up a single social

services district. Each local social services district is headed

by a county social services commissioner, or in the case of New

York City, a city social services commissioner. Determinations

made by the local Social Services Commissioners are reviewable by

the State Commissioner through an administrative hearing. N.Y.

All participating Stat#s must provide Medicaid to all persons

who fall within certain groups. These groups are referred to as

the “categorically needy." In addition, States may choose to

provide assistance to "medically needy" groups. If a group is

covered as categorically or medically needy, the State must

follow, at a minimum, all federal requirements.

Under New York’s Medicaid program, elderly persons who would

be eligible for benefits under the federal Social Security Income

("SSI") program but for their ineonn and resources are a

medically needy group. N.Y. Soc. Serv. Law § 366(1) (a) (5)

(McKinney 1983). Accordingly this group must receive benefits in

conformity with all federal and state requirements. The federal

law requirements include provisions that Medicaid be furnished

for care and services provided in or after the third month before

the month in which the Medicaid application was made if the

applicant was eligible for medical assistance at the time such

care and services were provided. 42 U.S.C. § 1396a(a) (34); N.Y.

Admin. Code tit. 18, § 360.16 (1986). In addition, payment must

be made to an eligible individual cr the person or institution

which provides the medical service or care. 42 U.8:C.. 4

1396a(a) (32); N.Y. Soc. Serv. Law § 367-a. Such medical

assistance to any individual shall not be less in amount,

duration or scope than that made available to any other eligible

individual. 42 U.S.C. § 1396a(a) (10); 42 C.F.R. § 440-240(b).

Finally, Medicaid must be provided to alli eligible individuals

with reasonable promptness. 42 U.S.C. § 1396a(a) (8); N.Y. Soc.

Serv. Law §365; N.Y. Admin. Code tit. 18, § 360.14 (1986).

Nothing in state or federal law prohibits the State from

providing medical assistance greater than that required under

federal law, although the State may forgo reimbursement for such

benefits. For example, the New York State Medicaid plan provides

for an income deduction for which there is no parallel federal

Admin. Code tit. 18, §358 (1983).

-3-

law provision, N.Y. Soc. Serv. Law § 366(2)(a)(7), and for

certain reimbursable family planning services for which there is

no federal reimbursement, N.Y. Admin. Code tit. 18, § 565.23

(1986).

Cc. Facts

Respondent Mildred Krieger is an 81-year-old widow who

suffers from angina pectoris, hypertension, glaucoma, a duodenal

ulcer, and severe arthritis. Mrs. Krieger is under the

continuous care of physicians and takes prescription medications

for her various ailments. Mrs. Krieger’s sole source of income

at the time of her Medicaid application was a Social Security

widow’s benefit in the amount of $420 per month. From this

limited income, respondent was required to meet all her living

expenses, including those for food, rent, utilities and clothing.

In addition, unaware of the procedures in the Medicaid program or

of her right to receive medical assistance benefits, Mrs. Krieger

was paying her medical bills out of her monthly Social Security

check and her small savings account in the months prior to

applying for medical assistance. Medicaid reimbursement to Mrs.

Krieger for her payment of those covered services was to become

the issue presented in this litigation.

Respondent Mildred Krieger applied for Medicaid through a

local office of the New York City Department of Social Services

("local agency"). When the local agency failed to make an

eligibility determination within 30 days as required by state

regulation,2 respondent commenced a state mandamus proceeding

pursuant to Article 78 of the New York Civil Practice Law and

Rules against the Commissioners of the New York City and New York

State Departments of Social Services to compel them to provide

her with Medical Assistance, and to reimburse her for

2 N.Y. Admin. Code tit. 18, § 360.14 (1986).

'

4.

'

out-of-pocket medical expenses. 3

Through a_ state administrative hearing and a_e subsequent

Stipulation of Partial Settlement in the mandamus proceeding, all

of the issues raised in respondent’s original and amended

petitions were resolved,4 except the issue of respondent’s

entitlement to reimbursement for medical expenses incurred and

paid for during the three months prior to the month of her

application.

The state trial court, relying exclusively on state law,

determined that New York Social Services Law § 367-a(1) did not

prevent direct reimbursement to the respondent and that the

State Commissioner’s failure to order reimbursement for elaimed

medical expenses was "arbitrary and capricious."5 The court,

accordingly, ordered the local agency to reimburse respondent for

medical bills incurred and paid for in the three months prior to

applying for Medicaid. Matter of Krieger v. Krauskopf, 126

Misc. 2d 70, 481 N.Y¥.S.2d 219 (Sup. Ct. 1984).

The local agency chose not to appeal from the lower state

3 Article 78 of the New York Civil Practice Law and Rules is

the state proceeding available to individuals to challenge a

determination of an administrative officer or body to obtain

the relief previously available through the common law writs of

certiorari, mandamus and prohibition. N.Y. Civ. Prac. Law § 7801

et seq. (McKinney 1981).

4 As a combined consequence of the Decision After Fair Hearing

and the Stipulation of Partial Settlement, respondent was found

to be eligible for Medicaid from February 1, 1983, the third

month prior to the month of her application, through June

30, 1983, after incurring medical expenses of $19.80 for each

of those months. She was also determined to be eligible for

Medicaid beginning July 1, 1983 without the need to incur any

medical expenses. Furthermore, the local agency agreed to,

and in fact did, reimburse respondent directly for all medical

expenses which she incurred and paid for out of exempt income and

resources except those incurred during the three months prior to

the month of her application.

| The "arbitrary and capricious" finding by the state court is

a direct reference to the state law Article 78 proceeding. See

supra note 3. Among those questions reviewable in an Article

78 proceeding are "whether a determination was made in violation

of lawful procedure, was affected by an error of law or was

arbitrary and capricious or an abuse of discretion... ." N.Y.

Civ. Prac. Law § 7803 (emphasis supplied).

court’s judgment, thereby binding itself to the mandate of the

court. Accordingly, the local agency issued a check to

respondent for $139.15 (a copy of which is annexed hereto as

Appendix "A") in full compliance with that judgment.

The State Commissioner, however, did appeal. On appeal, the

Appellate Division of the Supreme Court of the State of New York

affirmed, finding no valid basis for denying respondent direct

reimbursement for paid medical expenses. "To hold otherwise,"

the court stated, "would lead to the creation of two classes of

Medicaid recipients, one of which would receive fewer benefits

solely because members of the class paid their medical bills

promptly, and the other which would receive greater benefits by

way of reimbursement to the providers of medical services because

the members of the class did not pay their medical bills

promptly." Matter of Krieger v. Krauskopf, 121 A.D.2d 448, 450,

503 N.Y.S.2d 418, 420 (2d Dep’t 1986). The court rested its -

decision to reimburse Mrs. Krieger for her paid medical expenses

on Section 367-a of the New York Social Services Law, and the

state decisional law construing that statute, which provides that

payment for medical services be made to the provider of services,

except as here, where reimbursement directly to the recipient of

the medical services is required under state law. The court

subsequently noted that federal law offers "further support" for

its conclusion; federal law may also require the direct

reimbursement to Mrs. Krieger for medical expenses incurred and

paid for in the three months prior to the month of her

application for Medicaid. In this regard, the court also stated

that it was not bound to follow the federal agency’s unpublished

letter directive, ruling that the letter announced a_ substantive

rule and was not entitled to full force and effect because it was

not promulgated pursuant to the notice and comment provisions of

the Administrative Procedure Act or alternatively, if the letter

- 6-<-

announced an interpretive rule, HHS’ failure to publish the rule

in the Federal Register, as required by the Freedom of

Information Act of all interpretive rules which adversely affect

citizens’ rights, precludes the enforcement of the interpretive

rule against Mrs. Krieger. Matter of Krieger v. Krauskopf, 121

A.D.2d at 450-451, 503 N.Y.S.2d at 421. The New York Court of

Appeals affirmed and adopted the decision of the Appellate

Division. Matter of Krieger v. Krauskopf, 70 N.Y.2d 637, 512

N.E.2d 540, 518 N.¥.S.2d 957 (1987).

REASONS FOR DENYING THE WRIT

In his petition the Commissioner of the New York State

Department of Social Services asks the Court to render an

advisory opinion on the propriety of dicta in a decision based on

an independent, adequate, and uncontested state law ground,

concerning matters as to which there is no live controversy

between the parties. Prudential considerations and

jurisdictional requirements compel the denial of the petition for

certiorari in this case.

I. BECAUSE ONE PARTY TO THIS’ LITIGATION LACKS A

PERSONAL STAKE IN THE OUTCOME OF THE PROCEEDING,

THE PETITION PRESENTS NO CASE OR CONTROVERSY

SUFFICIENT TO ESTABLISH JURISDICTION UNDER’ ARTICLE

III OF THE CONSTITUTION.

Respondent Mildred Krieger commenced this action against

the New York City and New York State Departments of Social

services ?n July, 1984, to obtain reimbursement for $139.15 which

she spent on health care in the three months prior to the month

of her application for Medicaid. The state trial court entered

judgment for Mrs. Krieger, granting her petition and ordering the

New York City Department of Social Services ("local agency") to

reimburse her for paid medical expenses incurred during the

contested period.& The New York City Department of Social

Services chose not to appeal the trial court’s decision, and

instead, complied with the judgment by paying Mrs. Krieger the

full amount of benefits for which she had sued in the trial

court. The check is attached as Appendix "A".

6 In so ruling, the trial court annulled so much of the

September 13, 1984 decision of the Commissioner of the New York

State Department of Social Services as refuséd to direct the

local agency to reimburse Mrs. Krieger for the monies sought in

the petition.

In its present posture, this case presents no matter in

controversy between the two parties to this litigation because

Mrs. Krieger has no dispute with the petitioner State

Commissioner. 7 Mrs. Krieger was reimbursed by the local agency

-- not a party at this stage of the proceedings -- for the monies

she spent. Any wrongs against her have been fully redressed and

there is no likelihood that she will be confronted with this

situation again. She has nothing further to litigate and no

stake in the ultimate outcome of this proceeding. Even if the

state court judgment were reversed, Mrs. Krieger could mot be

required to refund the monies issued by the local agency; the

City Department of Social Services lost any claim it may have had

to the reimbursed money when it declined to exercise its

appellate rights. See Federated Department Stores, Inc. v.

Moitie, 452 U.S. 394, 398 (1981). Where one of two remaining

parties to litigation utterly lacks a personal stake in the

cutcome of the proceeding, Article III of the United States

Constitution, as well as prudential considerations, compel this

Court to decline jurisdiction and to deny the petition for a writ

of certiorari.&® Preiser v. Newkirk, 422 U.S. 395, 401 (1975);

7 There is no counterpart to the Article III case or

controversy requirement in the New York State Constitution.

The New York State appellate courts, therefore, were free to

determine the State Department of Social Services’ appeal even

in the absence of a case or controversy between the parties.

Appellate determinations are frequently rendered in such cases

where a question of public importance is presented. Matter

of Adirondack League Club v. Board of Black River Regulating

District, 301 N.Y. 219, 222, 93 N.E.2d 647, 649 (1950), Matter of

Lyon Co. v. Morris, 261 N.Y. 497, 499, 185 N.E. 711 (1933). See

also Cohen and Karger, Powers of the New York Court of Appeals

§ 99, pp.420-421 (1951).

8 Furthermore, although not crucial to the outcome here, the

petitioner has demonstrated no concrete financial interest im the

outcome of his current dispute with Mrs. Krieger and has alleged

none. In this case, the local agency chose to reimburse Mrs.

Krieger pursuant to the state court order. The local agency has

the authority to forgo federal reimbursement and pay out Medicaid

benefits that are not approved by the State. Holley v. Lavine,

Indianapolis Schoo] Commissioners v. Jacobs, 420 U.S. 128, 129

(1975); SEC v. Medical Committee for Human Rights, 404 U.S. 403

(1972).

The exercise of judicial power under Article III of the

Constitution depends on the existence of a case or controversy at

all stages of review. Mrs. Krieger no longer has an advers

wv

a |

«

interest in the outcome of this proceeding. Furthermore, the

petitioner’s interest in this proceeding is speculative. The

petition for a writ of certiorari should be denied. reiser

Newkirk, 422 U.S. at 401-402.

3

|

ty

i

605 F.2d 638, 643-645 (2d Cir. 1979) cert. denied sub

v. Holley, 446 U.S. 913 (1980); Calkins v. Blum, 511 F

1073, 1099 (N.D.N.Y. 1981), aff’d and remanded, 675

Cir. 1982). See Matter of Jones v. Berman, 37 N.Y.

332 N.E.2d 303, 310, 371 N.¥.S.2d 422, 431 (1975).

local agency fully paid Mrs. Krieger’s disputed medica

the State’s adversarial interest is speculative, at be

essence, therefore, the Commissioner of the New York S

Department of Social Services has petitioned this Cour

of an advisory opinion to review the merits of the New Y

of Appeals decision. The Court is without jurisdiction

Article III to render advisory opinions or to decide que

that cannot affect the rights of litigants in the case b

it. Preiser v. Newkirk, 422 U.S. 395, 401 (1975), quoting North

Carolina v. Rice, 404 U.S. 244, 246 (1971).

<

nN

ova”

“cowed.

1oO Nn

Qrergansae

~~

- 10 -

II. THIS COURT IS WITHOUT JURISDICTION TO REVIEW A

NEW YORK COURT OF APPEALS JUDGMENT PREMISED ON

AN ENTIRELY INDEPENDENT AND ADEQUATE STATE

GROUND, TO WIT THAT UNDER THE NEW YORK SOCIAL

SERVICES LAW AND NEW YORK STATE CASE LAW,

MEDICAID ELIGIBLE CLAIMANTS WHO HAVE PROMPTLY

PAID THEIR BILLS ARE ENTITLED TO MEDICAID

REIMBURSEMENT FOR MEDICAL EXPENSES INCURRED

THREE MONTHS PRIOR TO THEIR APPLICATION FOR

MEDICAID BENEFITS.

This Court is without jurisdiction to issue a writ of

certiorari in this case because the decision of the New York

Court of Appeals is based on an independent and adequate _ state

law ground. Specifically, the New York court’s judgment

requiring direct reimbursement of the medical expenses incurred

-and paid by Mrs. Krieger in the three months prior to the month

of her application for medical assistance is clearly based on

settled state decisional authority interpreting New York Social

,

Services Law § 367-a(1) (McKinney 1983). See Michigan v. Long,

463 U.S. 1032, 1042 (1983).

Section 367-a(1) of the Social Services Law provides that

payment for medical services under the state Medicaid program be

made to the provider of such services "except as otherwise

permitted or required by applicable federal and state provisions,

including the regulations of the [New York State] [D]Jepartment

(of Social Services]. In this case, as in other similar

circumstances, the New York State courts have read this

"exceptions" Clause of Section 367-a(1) to require direct

reimbursement of medical payments made by Mrs. Krieger under the

state Medicaid plan. The court cited other state court decisions

which required direct payment of benefits to Medicaid applicants

in other contexts, and ruled that state case law should be

extended "by parity of reasoning" to situations where a Medicaid

applicant incurs and pays for medical expenses in the three

i) For example, in Matter of Lustig v. Blum, 80 A.D.2d 558, 435

months prior to the month of her application.? tte £ leger

v. Krauskopf, 121 A.D.2d 448, 450, 503 N.¥.S.2d 418, 420, af££’d,

70 N.¥.2d 637, 518 N.¥.S.2d 957, 512 N.E.2d 540 (1987).

The Commissioner may not by sleight-of-hand transform thi

yw

state law ground for requiring reimbursement of Mrs. Krieger

wv

medical expenses into a federal law question. C£. Oberlander

Perales, 740 F.2d 116, 119 (2d Cir. 1984); Canaday v. Koch, 602

F.Supp. 1460, 1472 (S.D.N.¥.), aff'd, 768 F.2d 501 42a (Cir.

1985). Any conclusion to the contrary "would provide a

jurisdictional basis for federal judicial review of every

disputed state administrative ruling relating to Medicaid."

Oberlander v. Perales, 740 F.2d at 119.

~

Although a state may not adopt a more restr

program than that required by th Social Securi

regulations promulgated thereunder, and then expect federal

reimbursement, see Townsend v. Swank, 404 U.S. 282,

tw

aw

’

4

'

it may adopt, as it has done here, a program that is more

generous than those required by the federal guidelines and assume

the costs of such programs forgoing federal reimbursement. See

ante, p. 3. Matter of Cheng San Chen v. Toia, 67 A.D.2da 1085

1086, 415 N.Y.S.2d 169, 170 (4th Dep’t 1979), aft’d, 50 N.Y.2a

N.Y.S.2d 350 (2d Dep’t 1981), the state court determined that a

Medicaid applicant was entitled to retroactive reimbursement for

funds expended for her medical care due to the local agency’s

delay in approving the applicant’s Medicaid application

court rested its decision exclusively on state law; and )

rejected the Commissicner’s contention that the Social

Law § 367-a categorically prohibits direct reimbursem

Medicaid recipient in all situations. Similar in reaso

Matter of Cole v. Wyman, 40 A.D.2d 1033, 338 N.Y.S.2da 9

Dep’t 1972), in which the state court referred only to

Medicaid regulations in support of its decision to requ

reimbursement to a Medicaid recipient for medical servi

provided and paid for during a period of Medicaid eligi

before the eligibility determination was actually made

New YOrk State court decisions on this issue, see e.g.

Schwartz v. Toia, 68 A.D.2d 890, 414 N.Y.S. 23 (2a D

(reimbursement required pursuant to state law for cost

home care where application for Medicaid was erroneous

Sockin v. Overcash, 45 A.D.2d 717, 356 N.Y.S.2d 329 (2

1974) (reimbursement required under state law and "

interests of justice" where two-and-a-half years elaps

a prior Medicaid application which was lost by the lo

and a subsequent eligibility determination).

826, 430 N.Y.S.2d 50, 407 N.E.2d “1346 (1980). Cf. Harris _y.

McRae, 448 U.S. 297, 311 n. 16 (1980); Beal v. Doe, 432 U.S. 438,

447 n.15 (1977). Therefore, even if the Court of Appeals’

interpretation of Section 367-a of the Social Services Law should

have the effect of conferring greater benefits to Mrs. Krieger

than federal law may require, it does not implicate federal

rights or duties, but rather only dictates that such payments are

not federally reimbursable.

Thus, the Commissioner cannot succeed in invoking this

Court’s jurisdiction Simply by claiming that federal law

prohibits direct reimbursement to a Medicaid recipient where it

1s clear that state law, independent and exclusive of federal

law, mandates direct reimbursement to the Medicaid recipient

under the facts of this case. Michigan v. Long, 463 U.S. at

1041-1042; see O’Brien v. Skinner, 414 U.S. 524, 531 (1974); see

also Agins Vv. Tiburon, 447 U.S. 255, 259 n.6 (1980).

Accordingly, the presence of an independent and adequate state

law ground supporting the judgment of the New York court compels

the denial of the petition for certiorari.

III. CERTIORARI TO REVIEW THE EFFECT OF THE

ADMINISTRATIVE PROCEDURE ACT ON THE WEIGHT

ATTRIBUTED TO AN UNPUBLISHED AGENCY LETTER IS

INAPPROPRIATE IN THIS CASE BECAUSE THE STATE

COURT DECISION ON THAT ISSUE IS SUPPORTED BY AN

INDEPENDENT AND ADEQUATE FEDERAL LAW GROUND,

NOT CONTESTED BY PETITIONER HERE, TO WIT THAT

THE PUBLICATION REQUIREMENTS IN THE FREEDOM OF

INFORMATION ACT DEPRIVE THE UNPUBLISHED LETTER

ON WHICH PETITIONER RELIES OF ANY FORCE OR

EFFECT IN DETERMINING THE BENEFITS DUE

RESPONDENT.

Petitioner relied in the state courts on an unpublished

letter from the Regional Medicaid Director of the Department of

Health and Human Services ("HHS") which interprets the Medicaid

statute to withhold reimbursement from persons’ such as Mrs.

Krieger who paid their bills promptly.19°

The court below properly refused to give full farce and

effect to the agency interpretation on two independent grounds,

only one of which -- the Administrative Procedure ct -- is

challenged by the petitioner in this Court. First, the state

court concluded that the HHS letter announced a substantive rule

prohibiting reimbursement in the circumstances of this case, and

therefore could only be binding if it were promulgated in

accordance with the notice and comment rulemaking requirements of

the Administrative Procedure Act ("APA"), 5 U.S.C. § 553 19

Because the letter rule was never promulgated pursuant to the

APA, the New York Court of Appeals found that the HHS letter is

of no force and effect. Matter of Krieger v. Krauskopf, O N.Y.2d

637, 518 N.Y¥.S.2d 957, 512 N.E.2d 540 (1987), affirming, Matter

of Krieger v. Krauskopf, 121 A.D.2d 448, 503 N.Y.S.2d 418 (2d

Dep’t 1986). See Buschmann v. Schweiker, 676 F.2d 352, 355-356

p

(9th Cir. 1982); Carter v. Blum, 493 F. Supp. 368, 372 (S.D.N.Y.

1980).

10 It is undisputed that the HHS letter was never published in

the Federal Register.

In the alternative, and assuming arguendo as petitioner

argues here that the HHS letter announced an interpretive rule,

the New York Court of Appeals found that HHS’ failure to publish

the rule in the Federal Register, as required by the Freedom of

Information Act~("FOIA") of all interpretive rules adversely

affecting citizens’ rights, precludes the enforcement of the

interpretive rule against Mrs. Krieger inasmuch as the rule

clearly would have adversely affected her.1i

Petitioner seeks review of the state court’s treatment of

the unpublished agency letter only with respect to the New York

Court of Appeals’ interpretation of the Administrative Procedure

Act, to withhold binding effect from the Regional Director’s

unpublished letter. Petitioner does not contest the New York

court’s identical "no binding effect" conclusion based on the

Freedom of Information Act. This Court does not sit to review

dicta in state court decisions that reach correct results on

unchallenged, alternative and wholly adequate and independent

grounds. Accordingly, because the New York Court of Appeals

correctly found the letter of no lecal force and effect under

the unimpéached and unappealed FOIA ground, that court’s obiter

dicta with regard to the APA issue is'‘irrelevant to the outcome

of the case and provides no basis for review by the Court.

11 gee 5 U.S.C. § 552(a)(1)(D) (1977): Morton v. Ruiz, 415 U.S.

199, 233 (1974). The Freedom of Information Act ("FOIA") requires

the publication in the Federal Register of "substantive rules

of general applicability adopted as authorized by law, and

statements of general policy or interpretations of general

applicability formulated and adopted by the agency..." 5

U.S.C. § 552(a)(1)(D). The Act further states that a person may

not be adversely affected in any manner by matter required to be

published in the Federal Register and not so published. 5 U.S.C.

§ 552(a)(1). Anderson v. Butz, 550 F.2d 459, 463 (9th Cir.

1977); see Donovan v. Wollaston Alloys, Inc., 695 F.2d l, 9

(lst Cir. 1982). The state court in this case concluded that

Mrs. Krieger would be adversely affected by the provision

contained in the HHS letter, that she had no actual or timely

notice of that provision, and therefore, absent publication, the

alleged rule could have no force or effect with respect to her.

- 15 -

IV. THIS COURT SHOULD DECLINE TO EXERCISE ITS

JURISDICTION TO REVIEW THE NEW YORK COURT OF

APPEALS DECISION BECAUSE THAT COURT’S JUDGMENT

CREATES NO CONFLICT AMONG THE FEDERAL CIRCUIT

COURTS OR OTHER STATE COURTS, RAISES NO

IMPORTANT OR SIGNIFICANT FEDERAL LAW QUESTIONS,

AND WAS CORRECTLY DECIDED.

The federal law dicta in the New York Court of Appeals’

decision supporting the direct reimbursement to Mrs. Krieger for

medical bills paid in the three months prior to the month in

which she applied for Medicaid does not raise a novel or

substantial federal question worthy of the exercise of this

Court’s jurisdiction. Significantly, petitioner does not allege

that there are state or federal court decisions which concern

this issue, or which conflict with the New York court’s decision,

because there are none reported. Nor does petitioner allege a

substantial adverse financial or other impact on the

administration of the State’s Medicaid plan as a result of this

litigation. Nor can petitioner substantiate his assertion that

all states will be required to~ follow the New York Court of

Appeal’s decision with respect to the New York State Medicaid

plan if the decision below is upheld, because the state court

decision has no impact on the interpretation of any other state

Medicaid plan. Petitioner’s utter failure to identify or

substantiate any far-reaching consequences of the New York

Court’s decision belies its bald assertion that the questions

presented merit review by this Court. Furthermore, as explained

below, the New York Court of Appeals’ decision is correct.

Accordingly, certiorari should be denied.

A. MEDICAID ELIGIBLE CLAIMANTS WHO PROMPTLY

PAID THEIR BILLS ARE ENTITLED TO MEDICAID

COVERAGE OF THE SAME AMOUNT, DURATION AND

SCOPE FOR THE THREE MONTHS PRIOR TO THEIR

APPLICATION AS THOSE CLAIMANTS WHO FAIL TO

PAY THEIR BILLS.

Petitioner’s refusal to direct the local agency to

reimburse Mrs. Krieger for medical expenses incurred during the

three months prior to the month of her Medicaid application

violates the mandatory requirements of the federal Medicaid

program. Under 42 U.S.C. § 1396a(a)(34) a State plan for

Medicaid must provide:

that in the case of any individual who has_ been

determined tc be eligible for medical assistance

under the plan, such assistance will be made

available to him for care and services included

under the plan and furnished in or after the

third month before the month in which he made

application . ._.+ oy

42 U.S.C § 1396a(a) (34). By its terms, 42 U.S.C. § 1396a(a) (34)

requires assistance to persons, such as Mrs. Krieger, who have

been determined to be eligible for medical assistance and to whom

care and services were furnished. The statute provides no basis

for excepting care and services solely on the ground that the

eligible claimant chose to pay bills promptly rather than face

the potential loss of necessary care. By adding the condition

that bills be unpaid, petitioner has interposed an illegal and

unauthorized condition of eligibility. See generally King v.

Snith, 392 U.S. 309, 333 n.34 (1968).

Indeed the legislative history of 42 U.S.C. § 1396a(a) (34)

demonstrates that Congress was particularly concerned with the

practical problems Medicaid eligible persons have in filing

applications before they receive treatment. Prior to 1972,

coverage for the three months prior to application was optional

and only thirty-one states provided such coverage. In making 42

- 17 «=

U.S.C. § 1396a(a) (34) a mandatory part of any State Medicaid

plan, Congress recognized that many Medicaid eligible claimants

"do not apply for assistance until after they have received care,

either because they did not know about Medicaid eligibility

requirements, or because the sudden nature of their illness

prevented their applying." H.R. Rep. No. 92-231, 92d Cong., 2d

Sess. reprinted in [1972] U.S. Code Cong. & Ad. News 4489, 5099.

Because Congress found coverage for these earlier months to be

both “reasonable and desirable," id., it required all states to

provide such coverage. Congress’ express intent that eligibility

not be denied due to a delay in applying for Medicaid is clearly

frustrated by petitioner’s arbitrary rule that penalizes eligible

claimants who paid their bills promptly out of fear of losing

essential medical care.

The singling out of claimants who have paid their bills

likewise violates the Social Security Act’s mandatory

requirement that State plans set forth a single standard for

determining the amount, duration and scope of assistance

within any group of persons eligible for medical assistance.

See 42 U.S.C. §§ 1396a(a)(10)(B), 1396a(a)(10)(C). Similarly,

42 U.S.C. § 1396a(a)(17) requires that state plans’ include

reasonable standards that are comparable for all groups

determining the extent of medical assistance and that are

consistent with the objectives of the Medicaid statute. As set

forth in federal regulations, a State plan:

must provide that the services available to any

individual in the following groups are equal in

amount, duration, and scope for all recipients

within the group:

= Rm ®

(2) A covered medically needy group.

42 C.F.R. § 440.240(b) (1986). This comparability requirement

mendates that Mrs. Krieger receive care in the same amount,

- 18 -

duration and scope as a similarly situated person who has not

paid her bills. See Hodecker v. Blum, 525 F. Supp. 867, 873

(N.D.N.Y. 1981), aff’d, 685 F.2d 424 (2d Cir. 1982). It does not

permit Mrs. Krieger to be penalized for simply paying her bills

on time.

In this case, Mrs. Krieger has been found to be "medically

needy" for the three months prior to her application date. Under

the facts of this case stipulated to below, she is eligible to

receive Medicaid for any month in which she has incurred $19.80

in medical expenses. In fact, Mrs. Krieger’s expenses were in

excess of $19.80 for each of those three months. Had she not

paid her bills, the provider of medical services admittedly would

have been reimbursed. By not reimbursing Mrs. Krieger for the

very same bills petitioner would Save ethenvine paid, petitioner

is denying Mrs. Krieger the same ameunt, duration and scope of

medical assistance provided to persons who are _ identically

situated but who have not paid their bills.

B. AN _ UNPUBLISHED AGENCY LETTER NOT

PROMULGATED IN ACCORDANCE WITH THE NOTICE AND

COMMENT RULEMAKING REQUIREMENTS OF THE

ADMINISTRATIVE PROCEDURE ACT IS OF NO BINDING

FORCE AND EFFECT IN DETERMINING CLAIMANTS’

RIGHTS.

With respect to its Administrative Procedure Act .("APA")

claim, petitioner argued inconsistently that although the HHS

letter is merely an interpretation of the agency’s regulation and

therefore exempt from the notice and comment provisions of the

Administrative Procedure Act, 5 U.S.C. § 553 (1977), it is

nevertheless binding law upon the courts and the parties as an

authoritative interpretation of federal statutory law.12 13 The

12 This argument was raised by petitioner on appeal to the New

York Court of Appeals in a footnote. Petitioner did not raise a

specific objection to the lower state court’s interpretation of

the Freedom of Information Law, 5 U.S.C. § 552, on appeal to the

New York Court of Appeals.

13 A substantive rule is defined as a "legislative type rule .

- 19 -

petitioner misconstrues the decision of the New York court to

create an alleged conflict among the federal circuit courts.

Petitioner characterizes the New York Court of Appeals decision

as holding that interpretive rules must be promulgated as a

regulation pursuant tc the APA in order to be given force and

effect. In fact, the New York Court of Appeals never addressed

the bearing of the APA on interpretive rules because it concluded

in its APA analysis that the HHS letter was a substantive rule.14

Substantive rules clearly and unequivocally fall within the

ambit of the APA notice and comment provision, 5 U.S.C. § 553,

and will not "be afforded the ‘force and effect of law’ if not

promulgated pursuant to the statutory procedural minimum found in

th[e] [Administrative Procedure] Act." Chrysler Corp. v. Brown,

441 v8. aes, 223. (2979): On this point, there is no

disagreement among the petitioner, the respondent, the New York

Court of Appeals, and the federal courts. See e.g., St. Mary’s

Hospital of Troy v. Blue Cross & Blue Shield Ass’n, 788 F.2d 888,

891 (2d Cir. 1986); Linoz v. Heckler, 800 F.2d 871, 877 (9th

Cie 2966); Suita v. Bilier, 665 -F.20 172, 179 n.7 (7th Cir.

1981); Cerro Metal Products v. Marshall, 620 F.2d 964, 981-982

(3d Cir. 1980); Columbus Community Hospital, Inc. v. Califano,

614 F.2a@ 281, i187 (Sth Cir. 1980); Anderson v. Butz, 550 F.2d

459, 463 (9th Cir. 1977).

Nor is there a conflict between the New York Court of

- - aS one ‘affecting individual rights and obligations.’"

Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979), quoting Morton

v. Ruiz, 415 U.S. 199, 236 (1974), which purports to be binding

on the agency, Batterton v. Marshall, 648 F.2d 694, 702 (D.C.

Cir. 1980), and which has "the force and effect of law."

Batterton v. Francis, 432 U.S. 416, 425 n.9 (1977); National

Nutritional Foods Ass’n. v. Weinberger, 512 F.2d 688, 698 n.8 (2d

Cir.), cert. denied, 423 U.S. 827 (1975). Therefore, if the HHS

letter is read as binding agency policy, it meets the description

of a substantive rule set out by this Court and the lower courts.

14 The HHS letter purports to interpret a provision in the HHS

Medicaid Manual. A section of this Medicaid Manual is annexed

to the Petition for a Writ of Certiorari as Appendix "F" in an

attempt to make it part of the record. The HHS Medicaid Manual

was not introduced and is not part of the record below. It

therefore should not be considered at this time.

- 20 -

Appeals and the federal circuits with respect to the deference

accorded to administrative interpretations. If the HHS letter is -

only an interpretive rule -- one "which merely clarif[{ies] or

explain{s] existing law or regulations," Powderly v. Schweiker,

704 F.2d 1092, 1098 (9th Cir. 1983) -- it is by definition

"non-binding," Batterton v. Marshall, 648 F.2d 694, 702 (D.C.Cir.

1980), and is not entitled to the type of judicial deference

accorded regulations promulgated pursuant to the notice and

comment provisions of the APA. See Schweiker v. Hansen, 450 U.S.

785, 789-90 (1981); Liegl v. Webb, 802 F.2d 623 (2d Cir. 1986)

(The Medical Assistance Manual merely provides operational

assistance without intending to supplement regulations and is not

entitled to particular deference. )

Varying degrees cf deference are accorded to administrative

interpretations based on a number of factors, most notably the

consistency of the agency’s position. Batterton v. Francis, 432

U.S. 416, 425 n. 9 (1977)3 General Electric v. Gilbert, 429 U.S.

125, 141-143 (1976). As the record below establishes, petitioner

decidedly has not consistently enforced the administrative

interpretation it invokes in this court. For example,

reimbursement was made to the respondent in this very case for

prescription drugs which petitioner claimed in the Court of

Appeals, relying on the Regional Director’s letter, cannot be the

subject of reimbursement. See supra note 9. Administrative

guidelines are properly discounted where as here they conflict

with earlier pronouncements of the agency. General Electric v.

Gilbert, 429 U.S. at 143; United Housing Foundation, Inc. v.

Forman, 421 U.S. 837, 858 n. 25 (1975); Morton v. Ruiz, 415 U.S.

199, 237 (1974); Espinoza v. Farah Mfg. Co., 414 U.S. 86, 93-94

(1973).

The petitioner cannot have it both ways. If the HHS letter

states a substantive rule, it is void for failure to comply with

- 21 -

the notice and comment provisions of the Administrative Procedure

act, 5 U.is.E. $e S53. If, on the other hand, it is an

interpretive rule, it lacks binding authority, and is not

entitled to slavish deference by the reviewing court. The New

York Court of Appeals decision is consistent with the federal

circuits on these points. Certiorari is unwarranted.

- 22 -

CONCLUSION

For the reasons set forth above, the writ of certiorari

should be denied.

Respectfully submitted,

KALMAN FINKEL, ESQ.

Attorney-in-Charge

Civil Division

The Legal Aid Society

11 Park Place - Room 1800

New York, New York 10007

(212) 406-0750

JOHN E. KIRKLIN, ESQ.

Director of Litigation

Civil Appeals & Law Reform Unit

JANET SABEL, Of Counsel

The Legal Aid Society

11 Park Place - Room 1805

New York, New York 10007

(212) 406-0745

DA Mar wie

4

AN MANGONES,

ttorney-in-Charge

Staten Island Neighborhood Office

LESTER HELFMAN, Of Counsel

The Legal Aid Society

25 Hyatt Street

Staten Island, New York 10301

(718) 237-6677

Dated: New York, New York

November 20, 1987

- 23-