22-3054 Haller v. U.S. Dep’t of Health & Hum. Servs.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals for the Second Circuit, 2 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of 3 New York, on the 23rd day of January, two thousand twenty-four. 4 5 PRESENT: 6 MICHAEL H. PARK, 7 EUNICE C. LEE, 8 SARAH A. L. MERRIAM, 9 Circuit Judges. 10 ___________________________________________ 11 12 Daniel Haller and Long Island Surgical PLLC, 13 14 Plaintiffs-Appellants, 15 16 v. 22-3054 17 18 U.S. Department of Health and Human Services, 19 Xavier Becerra, in his official capacity as 20 Secretary of Health and Human Services, U.S. 21 Office of Personnel Management, Kiran Ahuja, in 22 her official capacity as Director of the U.S. Office 23 of Personnel Management, U.S. Department of 24 Labor, Julie Su, in her official capacity as Acting 25 Secretary of Labor, U.S. Department of the 26 Treasury, Janet Yellen, in her official capacity as 27 Secretary of the Treasury, 28 29 Defendants-Appellees. * 30 _____________________________________

* The Clerk of Court is respectfully directed to amend the caption accordingly. 1 2 FOR PLAINTIFFS-APPELLANTS: NICK WILDER, The Wilder Law Firm, 3 New York, NY. 4 5 FOR DEFENDANTS-APPELLEES: SARAH J. CLARK (Joshua M. Salzman, on 6 the brief), U.S. Dep’t of Justice, 7 Washington, DC. 8 9 10 Appeal from a judgment of the United States District Court for the Eastern District of New

11 York (Donnelly, J.).

12 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

13 DECREED that the judgment of the district court is AFFIRMED IN PART, VACATED IN

14 PART, and REMANDED for further proceedings consistent with this order.

15 Daniel Haller and his associates at Long Island Surgical PLLC are surgeons who challenge

16 the constitutionality of the No Surprises Act.

(2020) (codified at 42 U.S.C.

17 § 300gg-111 et seq.) (the “Act”). Appellants argue that the Act exceeds Congress’s authority to

18 assign adjudicatory functions to non-Article III tribunals, violates their right to a jury trial under

19 the Seventh Amendment, and effects an unconstitutional taking of payments they would otherwise

20 receive from patients. We assume the parties’ familiarity with the underlying facts, the procedural

21 history of the case, and the issues on appeal.

22 We review a district court’s grant of a motion to dismiss de novo, accepting all factual

23 allegations as true and drawing all inferences in favor of the plaintiff. Apotex Inc. v. Acorda

24 Therapeutics, Inc.,

(2d Cir. 2016).

25 A. Article III and Seventh Amendment Claims

26 Appellants argued in the district court that Congress created no new public right when it

27 enacted the No Surprises Act because the Act supplanted doctors’ longstanding common-law 2 1 cause of action to sue patients for the reasonable value of emergency medical services. See Joint

2 App’x at 128-29 (“Plaintiffs’ common law claims are against the recipient of the medical

3 treatment, not the insurer.”). 1 Appellants did not argue that they had any particular right of action

4 against insurers, and they expressly conceded before the district court that they had no such claims.

5 On appeal, Appellants assert for the first time that they may have held a cause of action

6 against insurers before the No Surprises Act. We decline to consider that argument for the first

7 time on appeal. But neither should Appellants be prejudiced if they wish to replead and to

8 advance such claims before the district court at a later date. See United States v. Gomez,

76, 94-96 (2d Cir. 2017) (noting our discretion in handling forfeited arguments). We thus affirm

10 the judgment of the district court only insofar as it concludes that Appellants failed to state a claim

11 under Article III or the Seventh Amendment based on their right to bring common-law actions

12 against patients – a claim Appellants have abandoned on appeal. To the extent the district court

13 concluded that Appellants lacked a common-law cause of action against insurers, we vacate and

14 remand with instructions to dismiss Appellants’ Article III and Seventh Amendment claims

15 without prejudice to allow Appellants to plead such a claim if they so choose. 2

16 B. Takings Clause Claims

17 We affirm the district court’s judgment as to Appellants’ takings claims. The Takings

18 Clause provides that “private property [shall not] be taken for public use, without just

1 The district court correctly concluded that the existence of a common-law cause of action against patients did not render providers’ right to recover against insurers a “private” right that might (or might not) have been supplanted by the No Surprises Act. 2 We express no opinion as to whether providers had a common-law cause of action against insurers before the No Surprises Act or, if so, whether the Act replaced such a cause of action.

3 1 compensation.” U.S. Const. amend. V. Our precedents recognize two types of takings: physical

2 and regulatory. See Buffalo Tchrs. Fed’n v. Tobe,

, 374 (2d. Cir. 2006). Only the

3 regulatory variety is at issue here.

4 To determine whether “justice and fairness require that economic injuries caused by public

5 action must be deemed a compensable taking,” we employ an “ad hoc, factual” approach that

6 considers “the character of the governmental action, its economic impact, and its interference with

7 reasonable investment-backed expectations.” Ruckelshaus v. Monsanto Co.,

, 1005-

8 06 (1984) (citation and quotation marks omitted); Buffalo Tchrs. Fed’n, 464 F.3d at 374,

9 PruneYard Shopping Ctr. v. Robins,

(1980). Of course, not every alleged

10 reduction in the value of property is sufficient to support a takings claim. Andrus v. Allard, 444

(1979). We have observed that “loss of future profits—unaccompanied by any

12 physical property restriction—provides a slender reed upon which to rest a takings

13 claim. Prediction of profitability is essentially a matter of reasoned speculation that courts are not

14 especially competent to perform.”

We thus ask, for example, whether a regulation will

15 “unreasonably impair the value or use of [plaintiff’s] property.” See PruneYard Shopping Ctr.,

16

(emphasis added).

17 Appellants here fail to allege a regulatory taking. They argue that what was “taken” from

18 them was “the reasonable calculation of future income stream.” Appellant’s Br. at 56. Such

19 vague and speculative allegations of an unspecified diminution in future income are insufficient to

20 state a claim under the Takings Clause. We thus affirm the judgment of the district court as to

21 Appellants’ takings claim.

22 * * *

4 1 We have considered Appellants’ remaining arguments and found them to be without merit.

2 For the foregoing reasons, the judgment of the district court is AFFIRMED IN PART,

3 VACATED IN PART, and REMANDED for further proceedings consistent with this order.

4 5 FOR THE COURT: 6 Catherine O’Hagan Wolfe, Clerk of Court

5