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Chiropractic America v. Lavecchia

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY


February 8, 1999

CHIROPRACTIC AMERICA, ET AL., PLAINTIFFS,
v.
JAYNEE LAVECCHIA, COMMISSIONER, DEPARTMENT OF BANKING AND INSURANCE, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Simandle, District Judge

HONORABLE JEROME B. SIMANDLE

OPINION

This case involves a federal constitutional challenge to recently promulgated regulations governing the medical insurance benefits available to automobile accident victims under New Jersey's newly reformed no-fault automobile insurance law. Presently before the court are defendants' motions to dismiss plaintiffs' First Amended Complaint for lack of subject matter jurisdiction and/or for failure to state a claim upon which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(1) and/or (6), and/or to dismiss the First Amended Complaint under a variety of abstention doctrines.

Because the court finds that plaintiffs have adequately invoked the jurisdiction of this court by asserting claims for alleged violations of the due process and equal protection clauses of the Fourteenth Amendment and that plaintiffs have standing, the court denies defendants' motions to dismiss for lack of subject matter jurisdiction and lack of standing. However, because the court finds that timely and adequate state court review of the challenged regulations is available to plaintiffs, and that federal judicial review of the challenged regulations of the state regulatory agency may disrupt New Jersey's attempt to ensure a coherent policy in its treatment of the substantial local problem of automobile insurance reform, the court dismisses plaintiffs' First Amended Complaint under the Burford abstention doctrine. For the reasons that follow, it is apparent that the Appellate Division of the Superior Court of New Jersey is the appropriate forum for adjudicating these issues.

BACKGROUND

Plaintiffs in this matter are professional organizations that represent chiropractors and/or individual chiropractors who practice in New Jersey. *fn1 They challenge the constitutionality of certain regulations *fn2 recently promulgated by defendant Jaynee LaVecchia, Commissioner of the Department of Banking and Insurance ("DOBI"),("the Commissioner"), pursuant to authority granted to her by the Automobile Insurance Cost Reduction Act ("AICRA"), P.L. 1998, Chapters 21 and 22, codified at N.J.S.A. 39:6A-1.1 (1998 N.J. Sess. Laws Vol. 2). *fn3

The Legislature of the State of New Jersey enacted AICRA on May 19, 1998 in an effort to create a comprehensive scheme to reform private passenger automobile insurance in New Jersey. The Legislature's primary goal in enacting AICRA was to reduce the high cost of automobile insurance in New Jersey. See generally N.J.S.A. 39:6A-1.1. The Legislature attempted to achieve this goal by, among other things, revising the state's method of providing first-party no-fault insurance personal injury protection ("PIP") benefits to victims of automobile accidents. To that end, AICRA provides, in pertinent part, that:

Benefits provided under basic coverage shall be in accordance with a benefit plan provided in the policy and approved by the commissioner. The policy form, which shall be subject to the approval of the commissioner, shall set forth the benefits provided under the policy, including eligible medical treatments diagnostic tests and services as well as such other benefits as the policy may provide. The commissioner shall set forth by regulation a statement of the basic benefits which shall be included in the policy. Medical treatments, diagnostic tests, and services provided by the policy shall be rendered in accordance with commonly accepted protocols and professional standards and practices which are commonly accepted as being beneficial for the treatment of the covered injury. Protocols and professional standards and practices which are deemed to be commonly accepted pursuant to this section shall be those recognized by national standard setting organizations, national or state professional organizations of the same discipline as the treating provider, or those designated or approved by the commissioner in consultation with the professional licensing boards in the Division of Consumer Affairs in the Department of Law and Public Safety. The commissioner, in consultation with the Commissioner of the Department of Health and Senior Services and the applicable licensing boards, may reject the use of protocols, standards and practices or lists of diagnostic tests set by any organization deemed not to have standing or general recognition by the provider community or the applicable licensing boards. Protocols shall be deemed to establish guidelines as to standard appropriate treatment and diagnostic tests for injuries sustained in automobile accidents, but the establishment of standard treatment protocols or protocols for the administration of diagnostic tests shall not be interpreted in a such a manner as to preclude variance from the standard when warranted by reason of medical necessity.

N.J.S.A. 39:6A-3.1(4)(a). AICRA defines "medically necessary" as follows: "Medically necessary" means that the treatment is consistent with

the symptoms or diagnosis, and treatment of the injury (1) is not primarily for the convenience of the injured person or provider, (2) is the most appropriate standard or level or service which is in accordance with standards of good practice and standard professional treatment protocols, as such protocols may be recognized and designated by the Commissioner of Banking and Insurance, in consultation with the Commissioner of Health and Senior Services or with a professional licensing or certifying board in the Division of Consumer Affairs in the Department of Law and Public Safety, or by a nationally recognized professional organization, and (3) does not involve unnecessary diagnostic testing.

N.J.S.A. 39:6A-2m.

AICRA authorized the Commissioner to "enlist the services of a benefit consultant in establishing the basic benefits level" of coverage. N.J.S.A. 39:6A-3.1(4)(a).

Accordingly, the Commissioner retained the firm of PriceWaterhouseCoopers ("PWC") to assist DOBI in carrying out the Legislature's directive to determine and establish protocols and standard treatments and practices for specified diagnosed injuries.

On September 8, 1998, the Commissioner published the proposed regulations DOBI developed in conjunction with PWC pursuant to the authority granted by AICRA. See 30 N.J.R. 3211. The Commissioner also extended the public comment period from October 8, 1998 through November 4, 1998, and held a public hearing on November 4, 1998. See 30 N.J.R. 3748(a). After making certain minor changes to the original proposed regulations, the Commissioner signed the regulations for adoption on November 30, 1998. See 30 N.J.R. 4401(a). The regulations became effective on December 21, 1998 and will become operative on March 22, 1999. See id.

The primary feature of the regulations is the creation of six so-called "care paths" that designate the appropriate treatment for certain particularized back injuries. See N.J.A.C. 11:3-4. The regulations also provide a system for resolving disputes about the medical necessity of care that deviates or exceeds the type or degree of care designated in the six care paths, culminating in arbitration. See N.J.A.C. 11:3-5.

On November 4, 1998, plaintiff Chiropractic America commenced this action by filing a Complaint challenging the constitutionality of the regulations. On January 12, 1999, Chiropractic America and the other plaintiffs filed a First Amended Complaint. Plaintiffs allege that three of the six care paths (care path 2: cervical spine herniated disc/radiculopathy; care path 4: thoracic spine herniated disc/radiculopathy; and care path 6: lumbar spine herniated disc/radiculopathy) completely eliminate the availability of reimbursable chiropractic care for automobile accident victims, while the remaining three care paths (care path 1: cervical spine strain/sprain/ contusion whiplash of the neck; care path 3: thoracic spine strain/sprain/contusion of the upper back; and care path 5: lumbar sacral spine strain/sprain/contusion) restrict the number of chiropractic care visits available without pre-approval from the insurer to twelve in the first month. See First Amended Complaint at ¶¶ 26-26, 30-31. Plaintiffs claim that the care paths "are inconsistent with the standard of chiropractic care in the State of New Jersey" and "are arbitrary and capricious and violate federal substantive due process principles." Id. at ¶ 37. Furthermore, plaintiffs claim that the arbitration provisions of the regulations are designed in such a way as to make it all but impossible for an insured or a medical provider to successfully challenge an insurer's refusal to approve care that deviates from or exceeds the care paths. Id. at ¶¶ 52-59. Thus, plaintiffs claim that they "will surely be placed in the intolerable position of choosing between providing necessary care without compensation, or substandard care mandated by the care paths." Id. at ¶ 60.

In the First Count of the First Amended Complaint, plaintiffs seek a declaratory judgment "that the regulations violate the substantive due process rights of chiropractors and their patients" because "the care paths and the arbitration provisions are unreasonable and capricious and do not bear a rational relationship to the legitimate aim of the enabling legislation" and because they "appear to be targeted at restricting chiropractic care to accident victims" and "manifest a bias and bad faith towards chiropractors and accident victims who opt to undergo chiropractic care." Id. at ¶ 64. Plaintiffs also allege that "[t]he elimination of chiropractic care for auto accident victims with herniated discs or radiculopathy [care paths 2, 4 and 6] is an irrational and arbitrary restriction on the ability of chiropractors to perform chiropractic services within the scope of chiropractic practice in the State of New Jersey" in violation of their substantive due process and equal protection rights. Id. at ¶ 65.

In the Second Count of the First Amended Complaint, plaintiffs "seek a declaration that the arbitration provisions contained in the proposed regulations violate the procedural due process rights of chiropractors and their patients in that they deny health care practitioners any practical right to contest the medical treatment judgments of the PIP carriers." Id. at ¶ 71.

In the Third Count of the First Amended Complaint, plaintiffs seek a permanent injunction banning the implementation of the regulations as they pertain to chiropractors. Id. at ¶ 73.

In addition to this federal action, plaintiffs have filed a notice of appeal challenging the regulations in the Superior Court of New Jersey, Appellate Division, pursuant to Rule 2:2-3(a)(2). The state court appeal filed by plaintiffs is one of four appeals challenging the regulations that are currently pending in the Appellate Division, the others having been filed by the Association of Lawyers of America - New Jersey, which filed two appeals, and a consortium of health care providers including the New Jersey Coalition of Health Care Professionals, Inc., Physicians for Quality Care, Inc., and Physicians Union of New Jersey, Local Lodge 8. See Certification of John C. Grady, dated January 25, 1999.

DISCUSSION

A. Subject Matter Jurisdiction and Standing

As a threshold matter, the court must address defendants' contention that it should dismiss the First Amended Complaint for lack of subject matter jurisdiction and/or for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(1) and/or (6), because plaintiffs have failed to adequately plead a cause of action under the due process and equal protection clauses of the Fourteenth Amendment and/or because plaintiffs lack standing.

The court finds no merit in defendants' argument that plaintiffs have not adequately invoked the jurisdiction of this court. Plaintiffs invoke federal question jurisdiction under 28 U.S.C. § 1331, and civil rights jurisdiction under 28 U.S.C. § 1343(3) & (4), pleading claims under 42 U.S.C. § 1983 and the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202. See First Amended Complaint at ¶ 5. Plaintiffs have alleged violations of their constitutional rights to substantive and procedural due process and equal protection of the law. See First Amended Complaint at ¶¶ 64-65, 71. Defendants were clearly put on notice of and obviously had no difficulty in understanding the nature of plaintiffs' claims against them and the grounds upon which those claims rest. That is all that is required at this stage of the proceeding. See Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). Without determining at this time whether the First Amended Complaint is subject to dismissal for failure to state a claim upon which relief can be granted under Rule 12(b)(6), this court concludes that it has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1343(3) & (4).

At this early stage, the court also finds no merit in defendants' argument that plaintiffs lack standing. In order to have standing, a plaintiff must: (1) have suffered an "injury in fact," i.e., an invasion of a legally protected interest that is both (a) concrete and particularized and (b) actual or imminent, as opposed to conjectural or hypothetical; that was (2) caused by or fairly attributable to the challenged action of the defendant; and that is (3) likely redressable by a favorable decision. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). Additionally, an organization may have standing to represent its members when: (1) the organization's members would have standing to sue on their own; (2) the interest that the organization seeks to protect is germane to its purpose; and (3) neither the claims asserted nor the relief requested require individual participation by the organization's members. Chiropractic Alliance of New Jersey v. Parisi, 854 F. Supp. 299, 307 (D.N.J. 1994)(citing Public Interest Research of New Jersey v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 70 (3d Cir. 1990), cert. denied, 498 U.S. 1109 (1991)).

"At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice." Lujan, 504 U.S. at 561. In this case, plaintiffs allege that they "will surely be placed in the intolerable position of choosing between providing necessary care without compensation, or substandard care mandated by the care paths" if the regulations are implemented. See First Amended Complaint at ¶ 60. At this stage of the proceeding, the court finds this allegation sufficient to confer standing on plaintiffs. The Legislature recognized that chiropractors and other healthcare professionals have an interest in the subject matter of the challenged regulations when, in enacting AICRA, it required DOBI to consult with the professional licensing boards in the Division of Consumer Affairs in the Department of Law and Public Safety, including the State Board of Chiropractic Examiners, in developing the protocols, standard treatments and approved diagnostic procedures. See N.J.S.A. 39:6A-3.14(a). The court construes the First Amended Complaint as an attempt to protect this interest.

In sum, the court finds that it has subject matter jurisdiction, and that plaintiffs have standing. Accordingly, the court denies defendants' motion to dismiss the First Amended Complaint under Rule 12(b)(1) for lack of subject matter jurisdiction or standing. Because this court, for the reasons set forth below, has determined that it shall abstain from reaching the merits of plaintiffs' claims, the court does not address defendants' motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6).

B. Abstention

Having determined that it has jurisdiction, the court now considers whether it should abstain from exercising that jurisdiction, as urged by defendants.

In Burford v. Sun Oil Co., 319 U.S. 315 (1943), the U.S. Supreme Court articulated for the first time a doctrine of abstention based on the principle that a federal court should avoid exercising its jurisdiction in a manner that would likely interfere with a state's attempt to regulate in a substantive area of predominate state interest where timely and adequate state court review of the challenged regulatory action is available. In its present formulation, the so-called Burford doctrine of abstention provides:

Where timely and adequate state court review is available, a federal court sitting in equity must decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are "difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case at bar"; or (2) where the "exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern."

New Orleans Public Service, Inc. v. Council of City of New Orleans, 491 U.S. 350, 361 (1989)("NOPSI")(quoting Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 814 (1976)).

In the present case, defendants argue that Burford abstention is appropriate because federal review of the challenged regulations would disrupt New Jersey's effort to reform its no-fault automobile insurance law, an area of predominate state interest. Plaintiffs respond by arguing that timely and adequate state court review is not available under the circumstances of this case, and that this court's adjudication of the their federal constitutional claims will not unnecessarily involve the court in parallel review of state regulations.

For the following reasons, the court finds that abstention is appropriate under the second prong of the NOPSI test because (1) timely and adequate state court review is available to plaintiffs, and (2) this court's review of plaintiffs' claims would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.

1. Availability of Timely and Adequate State Court Review

The first step in the Burford abstention analysis is whether "timely and adequate state-court review" is available. Riley v. Simmons, 45 F.3d 764, 771 (3d Cir. 1995). "Only if a district court determines that such review is available, should it turn to the other issues." Id.

In New Jersey, appeals may be taken in the Appellate Division as of right under Rule 2:2-3(a)(2) "to review final decisions or actions of any state administrative agency or officer, and to review the validity of any rule promulgated by such agency or officer." The Appellate Division's scope of review on appeal under Rule 2:2-3(a)(2)

is generally restricted to three inquiries: (1) whether the agency's action violates the express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency bases its action; and (3) whether, in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

Matter of Musick, 143 N.J. 206, 216 (1996)(citing Campbell v. Dept. of Civil Serv., 39 N.J. 556, 562 (1963)).

Plaintiffs have filed an appeal of the regulations at issue in this case in the Appellate Division under Rule 2:2-3(a)(2), as have three other appellants. However, plaintiffs argue that timely and adequate state court review is not available in this case because (1) the Appellate Division will not be able to rule before the regulations become effective on March 22, 1999 and (2) the Appellate Division is unable to hold an evidentiary hearing. Neither argument is valid.

The Appellate Division has the power to accelerate an appeal and/or to stay agency action pending appeal. Under Rule 2:9-2, the usual briefing and oral argument schedule "may be accelerated on the court's own motion or on the motion of any party." Under Rule 2:9-7, "[o]n or after the filing with the Appellate Division of a notice of appeal . . . from a state administrative agency or officer, a motion for ad interim relief or for a stay of the decision, action or rule under review shall be made in the first instance to the agency whose order is appealed from and, if denied, to the Appellate Division."

The Appellate Division also has the power to permit supplementation of the record on appeal, including the presentation of live witnesses before a designated judge of the Superior Court. Rule 2:5-5(b) provides:

At any time during the pendency of an appeal from a state administrative agency, if it appears that evidence unadduced in the proceedings below may be material to the issues on appeal, the appellate court, on its own motion or on the motion of any party, may order, on such terms as it deems appropriate, that the record on appeal be supplemented by the taking of additional evidence and the making of findings of fact thereon by the agency below or, in exceptional instances, by a judge of the Superior Court especially designated for that purpose.

Rule 2:5-5(b).

Although plaintiffs acknowledge the existence of these procedural devices, they have declined to utilize them to seek an expeditious review of their claims in the Appellate Division based on their unsubstantiated belief that their effort would be futile when, in fact, the Appellate Division has on appropriate occasion moved swiftly to invalidate agency action that was inconsistent with its purported enabling legislation.

For example, in Matter of Commissioner of Insurance, 256 N.J. Super. 158 (App. Div. 1992), aff'd, 132 N.J. 209 (1993), approximately 20 insurance companies appealed a March 24, 1992 Order issued by the Commissioner of Insurance declining to implement an April 1, 1992 rate increase requested by the Market Transition Facility ("MTF") to meet a shortfall in automobile insurance premiums and instead creating a program of "transitional assessments" against insurers who failed to write their share of MTF depopulation business to raise MTF revenues and defray the MTF deficit. The Commissioner planned to call for the new assessment payments in May or early June 1992. Id. at 160.

The appellants moved to accelerate their appeals and to stay the March 24, 1992 Order. Id. Noting that "[t]he need for a prompt disposition was apparent to all parties," the Appellate Division on April 10, 1992 ordered that briefs be exchanged on April 20, 1992 and that oral argument be heard on April 24, 1992. Id. at 160-61. Because "[a]cceleration of the appeals made less urgent the insurers' motions for stays," the court denied those motions. Id. at 161. The court did, however, issue its Opinion invalidating the March 24, 1992 Order on May 1, 1992 -- just one week after it heard oral argument on April 24, 1992 and less than five weeks after the filing of the notices of appeal. Id. at 158, 160-61.

In another instance, although it ultimately affirmed the challenged agency action, the Appellate Division also moved quickly in Monmouth Medical Ctr. v. State Dept. of Health, 272 N.J. Super. 297 (App. Div.), certif. denied, 137 N.J. 310 (1994), where a number of hospitals challenged regulations adopted by the Department of Health that imposed a moratorium upon the consideration of certificate of need applications for cardiac services pending the completion of certain studies relating to the need for such services. The Department of Health proposed the regulations on August 16, 1993. Id. at 303. In October 1993, two hospitals filed actions in lieu of prerogative writs in the Superior Court, Law Division, seeking to enjoin the Department of Health from formally adopting the proposed regulations and to compel the Department of Health to process their certificate of need applications, which had been pending when the regulations were proposed. Id. at 304. Finding that it lacked subject matter jurisdiction, the Law Division transferred the actions to the Appellate Division, where they should have been filed originally. Id.

After the transfer, the hospitals moved to stay the adoption of the proposed regulations and for other injunctive relief relating to the processing of certificate of need applications. Id. The Appellate Division denied the motions, but accelerated the appeals. Id. The proposed regulations were adopted and became effective on December 20, 1993. Id. The court heard oral argument on January 19, 1994 and issued its written Opinion affirming the adoption of the regulations less than ten weeks later, on March 31, 1994. Id. at 297.

In light of these demonstrations of the Appellate Division's willingness and ability to move rapidly in appropriate cases, plaintiffs' skepticism about their ability to receive prompt review of their claims in the Appellate Division is unfounded, and their contention that "timely and adequate state-court review" of the challenged regulations is unavailable is without merit.

2. Coherent State Policy and the Public Interest

The Supreme Court has acknowledged that federal adjudication of "a claim that a state agency has misapplied its lawful authority or has failed to take into consideration or properly weigh relevant state-law factors" may "disrupt the State's attempt to ensure uniformity in the treatment of an essentially local problem." NOPSI, 491 U.S. at 362. That is exactly the type of claim at issue in the present case, where plaintiffs allege that DOBI acted arbitrarily and capriciously in adopting the challenged regulations.

Furthermore, in Marks v. Snedecker, 612 F. Supp. 1158 (D.N.J. 1985), this court abstained under Burford in a case involving a federal constitutional challenge to a previous attempt by the Legislature to reform New Jersey's comprehensive automobile insurance law. The plaintiffs in Marks challenged the retroactive surcharge system created by the New Jersey Insurance Reform Act of 1982 and the New Jersey Automobile Full Insurance Availability Act under the due process and ex post facto clauses of the federal constitution. Id. at 1160. Judge Cohen found that because the court would have to interpret the statutes in order to address the constitutional questions, the resolution of the constitutional questions "could have a significant disruptive effect on New Jersey's newly reformed automobile insurance program which is unquestionably a matter of substantial public concern." Id. at 1161. Judge Cohen also found that the constitutional analysis would "involve an in-depth analysis of the legislative purposes which underlie a major reform effort in an area of law -- insurance -- which has typically been left to the states to regulate." Id. Thus, the court held that the "`exercise of federal review of the question in [this] case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.'" Id. (quoting Colorado River, 424 U.S. at 814). The "timely and adequate state-court review" test was satisfied because persons aggrieved by the challenged surcharge provision had the ability to file an expedited appeal directly in the Appellate Division, and eight such appeals were already pending in the Appellate Division. Id. at 1162.

As in Marks, analysis of the constitutional questions raised in this case would involve an in-depth analysis of the legislative purposes of AICRA, a major reform effort in an area of law -- automobile insurance -- that has typically been left to the states to regulate. See Lac D'Amiante du Quebec v. American Home Assurance Co., 864 F.2d 1033, 1038-39 (3d Cir. 1988)("the states have assumed the primary role in regulating insurance"). This case requires an analysis of whether the challenged regulations, as they apply to chiropractors and their patients, are consistent with the Legislature's attempt in enacting AICRA to reform New Jersey's comprehensive no-fault automobile insurance law so as to reduce the high cost of automobile insurance in New Jersey, or whether chiropractors and their patients have been unfairly singled out for unfavorable treatment. The outcome of this inquiry turns upon an assessment of the rationality of the basis for the regulations, which involves an examination of the administrative procedure and the substantive result of the state regulatory scheme. Unlike in cases where the state regulations under constitutional review were enacted to comply with a federal mandate in the particular regulatory field, see, e.g., New Jersey Hospital Assoc. v. Waldman, 73 F.3d 509 (3d Cir. 1995)(involving a due process challenge to a state agency's reduction in Medicaid reimbursement rates mandated by the Boren Amendments to the Medicaid Act, 42 U.S.C. § 1396(a)(13)(A)), there is no federal interest in the regulation of automobile insurance, an area in which Congress has deferred to the states. See Lac D'Amiante, 864 F.2d at 1038-39 (discussing the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-15, which provides for exclusive state regulation of the business of insurance).

Furthermore, as in Marks, the resolution of the constitutional questions could have a significant disruptive effect on the newly reformed automobile insurance program created by AICRA, which is unquestionably a matter of substantial public concern. This is especially so in light of the fact that plaintiffs have standing to challenge the regulations only insofar as they affect chiropractors and their patients, while there are presently three other appeals pending before the Appellate Division challenging the regulations as they pertain to other interested parties, including physicians and their patients, attorneys and their clients, and automobile accident victims in general. Under these circumstances, there is a very real possibility of ongoing, contemporaneous, inconsistent verdicts if this court were to adjudicate plaintiffs' claims while the other actions proceed in the Appellate Division.

Finally, as in Marks and as discussed in more detail above, timely and adequate state court review is available to plaintiffs, and several appeals of the challenged agency action are already pending in the Appellate Division.

For these reasons, the court concludes that Burford abstention is appropriate in this case. *fn4 When a district court decides to abstain on Burford grounds, the proper course is to dismiss the action. See 17A Charles Alan Wright, Arthur R. Miller and Edward H. Cooper, Federal Practice & Procedure § 4245 (2d ed. 1988). Accordingly, the court dismisses plaintiffs' First Amended Complaint, without prejudice to plaintiffs' proceedings before the Appellate Division.

CONCLUSION

For the foregoing reasons, the court denies plaintiffs' motion to dismiss for lack of subject matter jurisdiction and/or lack of standing, and grants defendants' motion to dismiss on Burford abstention grounds. The accompanying Order is entered.

JEROME B. SIMANDLE

U.S. District Judge

Dated: February 8, 1999

ORDER

THIS MATTER having come before the court on defendants' motion to dismiss the First Amended Complaint for lack of subject matter jurisdiction and/or for failure to state a claim upon which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(1) and/or (6), and to dismiss the First Amended Complaint under a variety of abstention doctrines, and the court having considered the moving papers and plaintiffs' opposition thereto and having heard the argument of counsel on Friday, February 5, 1999, and for the reasons set forth in the accompanying Opinion;

IT IS on this 8th day of February, 1999, hereby ORDERED that defendants' motion to dismiss the First Amended Complaint for lack of subject matter jurisdiction and for lack of standing is DENIED; and

IT IS FURTHER ORDERED that defendants' motion to dismiss the First Amended Complaint on Burford abstention grounds is GRANTED and that the First Amended Complaint be and hereby is DISMISSED without prejudice to plaintiffs' right to pursue these claims in the Appellate Division of the Superior Court of New Jersey.

JEROME B. SIMANDLE

U.S. District Judge


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