Omega Acupuncture, PC v. Lacewell

1

2024 NY Slip Op 31466(U)

OMEGA ACUPUNCTURE, PC, RAF SPORTS CHIROPRACTIC PC, ROSS A. FIALKOV, DC, PAWEL GIERUKI, LAC, SILVER NEEDLE ACUPUNCTURE PC, NEW HEALTH ACUPUNCTURE PC, JOSEPH GAMBINO, DC, JJ&R CHIROPRACTIC PC, JOSEPH GAMBINO DC PC, WOO YUP KANG DC, BALDWIN CHIROPRACTIC PC, BO-KWAN KANG, PT, YOO & KANG PHYSICAL THERAPY PC, Petitioners, v. LINDA LACEWELL, in her official capacity as the Superintendent of the New York Department of Financial Services; the New York Department of Financial Services; Clarissa M. Rodriguez, in her official capacity as the Chair of the New York Workers' Compensation Board; and the New York Workers' Compensation Board, Respondents.

Index No. 522601/2020, Mot. Seq. 4

Supreme Court, Kings County

April 16, 2024

Unpublished Opinion

PRESENT: HON. INGRID JOSEPH, JUSTICE

DECISION & ORDER

INGRID JOSEPH, JUDGE

At an IAS Term, Part 83 of the Supreme Court of the State of New York, held in and for the County of Kings, at the Courthouse at 360 Adams Street, Brooklyn, New. York, on the 16^th day of April, 2024.

The following e-filed papers read herein:

NYSCEF Doc Nos.

Notice of Motion/Order to Show Cause/ Petition/Cross Motion, Affidavits (Affirmations) and Memorandum of Law __

99-101

Opposing Affidavits (Affirmations) and Memorandum of law _______

102

Reply Affidavits (Affirmations) And Memorandum of Law____

104

Upon the foregoing papers in this Article 78 proceeding Petitioners Omega Acupuncture, PC, RAF Sports Chiropractic PC, Ross A. Fialkov, DC, Pawel Gieruki, LAC, Silver Needle Acupuncture PC, New Health Acupuncture PC, Joseph Gambino DC, JJ&R Chiropractic PC, Joseph Gambino DC PC, Woo Yup Kang DC, Baldwin Chiropractic PC, Bo-Kwan Kang, PT, and Yoo & Kang Physical Therapy PC (collectively, Petitioners) move (mot. seq. no. 4) for an order, pursuant to CPLR 2221(d), for leave to reargue, and upon reargument, vacating or modifying the court's September 19, 2023 order dismissing Petitioners' cause of action alleging that Respondents New York Department of Financial Services (DFS) Linda Lacewell, in her official capacity as the Superintendent of DFS (Superintendent), New York Workers' Compensation Board (WCB) and Clarissa M. Rodriguez, in her official capacity as the Chair of the WCB (Chair; collectively, Respondents) violated the State Administration Procedure Act (SAPA), and deeming that the Amended Petition was timely filed with respect to the causes of action therein (NYSCEF Doc No. 99).

Petitioners, who are health providers, commenced this Article 78 proceeding by order to show cause by filing a Verified Petition challenging regulations concerning the nature and amount of fees reimbursable by insurers to health providers for treatment (including medical care, physical therapy, chiropractic care, and acupuncture) provided to patients injured in a motor vehicle accident. Specifically, petitioners challenged what they refer to as the 12 Relative Value Units (RVU) Ground Rules and the Treatment Scope Ground Rules contained in the Fee Schedules.

By decision and order dated August 16, 2021, Justice Partnow granted Respondents' cross-motion to dismiss to the extent that the court permitted the retroactive filing of an amended petition and extended Respondents' time to file an answer. The branch of Respondents' cross-motion seeking dismissal of the Amended Petition based on statute of limitations grounds and Petitioners' order to show cause were held in abeyance pending the filing of Respondents' answer and Petitioners' reply, if any (NYSCEF Doc No. 58 at 23-24). By order dated September 19, 2023, the court granted the branch of Respondents' cross-motion (mot. seq. no. 2) seeking dismissal of the Amended Petition as time-barred and denied, as moot, Petitioners' order to show cause (mot. seq. no. 1) and Respondents' cross-motion to strike the arguments improperly raised for the first time in Petitioners' reply memorandum of law (mot. seq. no. 3). As is relevant here, the decision held

"that the relation-back doctrine does not apply and petitioners' SAPA claim must be dismissed as untimely since it challenges the procedures and administrative mechanics of rule promulgation rather than what was challenged in the original petition, that the enacted rules were arbitrary and capricious in that the government action was taken without sound basis in reason or regard of the facts (see generally Matter of Peckham v Calogero, 12 N.Y.3d 424 [2009]). Contrary to petitioners' contentions in opposition to the instant cross motion, the allegations in the original petition gave no notice of the facts, transactions, and occurrences giving rise to the newly asserted SAPA cause of action as the original petition contested the substance of the fee schedules and did not raise any issues regarding the procedures the agencies followed when promulgating the regulations at issue..." (NYSCEF Doc No. 90 at 17-18).

Petitioners filed the instant motion to reargue on November 20, 2023; thereafter, opposition and reply papers were filed and oral argument was held on February 14, 2024.

In support of its motion, Petitioners contend that the court erred by granting Respondents' cross-motion to dismiss the SAPA cause of action because the court had already denied the motion in a prior order, which violates the law of the case doctrine (NYSCEF Doc No. 101 at 5). Petitioners argue that the August 16, 2021 decision ruled on this exact issue when the court denied "the branch of respondents' cross-motion (mot. seq. no. two) seeking to dismiss the amended petition as improperly filed without leave of court," ruled that Petitioners' SAPA cause of action "related-back" to the claims in the original Petition, and accepted the Amended Petition as filed (NYSCEF Doc No. 58 at 23; NYSCEF Doc No. 101 at 6). Next, Petitioners assert that the SAPA cause of action was timely filed because Respondents admitted as much (NYSCEF Doc No. 101 at 7-8, citing NYSCEF Doc No. 43 at 14). Petitioners further contend that the Amended Petition was improperly dismissed as the court did not apply the statute of limitations to the 2019 Fee Schedules (id. at 10-17). Additionally, Petitioners argue that the Amended Petition should not have been dismissed because the Chiropractic Fee Schedule was amended, effective January 1, 2020, which revised the 2018 Chiropractic Fee Schedule on January 1, 2020, via the July 3, 2019 State Register (id. at 15).

In their memorandum of law in opposition, Respondents argue that the law of the case doctrine does not apply because the August 16, 2021 decision only ruled on the petition amendment and did not address the limitations arguments. Respondents contend that Petitioners mischaracterize the nature of the August 16, 2021 order since it only ruled on the propriety of Petitioners' amendment to the Petition and explicitly did not rule on the limitations issue, saving that analysis for the subsequent decision ultimately made by the court (NYSCEF Doc No. 102 at 4). Respondents assert that Petitioners' law of the case argument was never presented to the court during briefing on the prior motions and cannot be done now as a motion for leave to reargue is not designed to permit Petitioners to present arguments different from those originally presented (id. at 4).

Additionally, Respondents contend that to the extent the August 16, 2021 decision discussed notice or prejudice to the Respondents, it was in the context of explaining the court's rationale for granting discretionary leave to amend and that no plausible interpretation of the order exists as implicitly determining the statute of limitations issue, or the applicability of the relation-back doctrine (id. at 5). Respondents highlight that the August 16, 2021 decision did not decide the limitations question or relation-back doctrine particularly when it stated that "the court will address the[] merits, as well as respondents' cross motion to dismiss based on the statute of limitations, after issue has been joined" (id. at 4-5; NYSCEF Doc No. 58 at 23). Respondents ? I further cite to the portion of the August 16, 2021 decision that ordered that "the branch of respondents' cross motion ... seeking to dismiss the amended petition based on the statute of limitations is held in abeyance until after respondents' have filed an answer to the amended petition and petitioners have filed their reply, if any" to support their argument (NYSCEF Doc No. 58 at 23).

Next, Respondents argue that Petitioners' second argument is a rehash of their first argument and, in any event, Petitioners' SAPA claim is untimely as the relation-back doctrine is inapplicable since the newly added claim puts forth a fundamentally new theory (NYSCEF Doc No. 102 at 7). Respondents note that the Petitioners do not attempt to convince the court that the relation-back doctrine should apply, even though it was their burden to carry (id. at 8). Furthermore, Respondents contend that Petitioners did not challenge the 2019 WCB Fee Schedules despite their instant attempt to recontextualize this case as always having been about WCB's 2019 Fee Schedules. Respondents note that the Amended Petition makes no mention of any challenge to the 2019 WCB Fee Schedules, and thus gave no notice that it was Petitioners' intent to challenge them as opposed to the 2018 WCB Fee Schedules they specifically mentioned (id. at 9). Respondents claim that while they repeatedly pointed out that the Petitioners had not challenged the 2019 Fee Schedules, Petitioners never argued otherwise; nor did their Amended Petition add any language specifying a challenge to these particular fee schedules (id.; NYSCEF Doc No. 23 at 15, n. 5).

Respondents assert that if the Petitioners' case were a challenge to the 2019 Fee Schedules, they surely would...