Tsirelman v. Daines

14‐2154‐cv
Tsirelman v. Daines
In the
United States Court of Appeals
For the Second Circuit
________
A UGUST TERM , 2014
A RGUED: A PRIL 16, 2015
D ECIDED: JULY 24, 2015
No. 14‐2154‐cv
G ARY TSIRELMAN, M.D.,
Plaintiff‐Appellant,
v.
R ICHARD F. D AINES , M.D., Commissioner of Health, S TATE OF NEW
Y ORK D EPARTMENT OF H EALTH , K ENDRICK A. S EARS , M.D., Chairman
of the State Board for Professional Medical Conduct, S TATE OF NEW
Y ORK D EPARTMENT OF H EALTH , and S TATE B OARD FOR PROFESSIONAL
MEDICAL C ONDUCT and THEIR E MPLOYEES and AGENTS,
Defendants‐Appellees.
________
Appeal from the United States District Court for the Eastern District
of New York.
No. 1:10‐cv‐903 – Jack B. Weinstein, Judge.
________
 The clerk of the court is directed to amend the caption as set forth
above.

-- 1 of 16 --

2 No. 14‐2154‐cv
Before: W INTER, WALKER , and D RONEY , Circuit Judges.
________
Plaintiff Gary Tsirelman’s medical license was revoked in a
New York disciplinary proceeding. On appeal, he challenges New
York’s use of the preponderance‐of‐the‐evidence standard in such
proceedings as a violation of the Due Process Clause. Because we
hold that the Constitution does not require a higher standard of
proof in fraud‐based medical disciplinary proceedings, we AFFIRM
the district court’s order dismissing Tsirelman’s complaint.
________
A DAM F RANCOIS WATKINS , Watkins Bradley LLP,
New York, NY, for Plaintiff‐Appellant.
K AREN W. L IN (Claude S. Platton, Barbara D.
Underwood, Solicitor General of New York, on
the brief), for Eric T. Schneiderman, Attorney
General of the State of New York, New York, NY,
for Defendants‐Appellees.
________
JOHN M. WALKER , JR ., Circuit Judge:
Plaintiff Gary Tsirelman’s medical license was revoked in a
New York disciplinary proceeding. On appeal, he challenges New
York’s use of the preponderance‐of‐the‐evidence standard in such
proceedings as a violation of the Due Process Clause. Because we
hold that the Constitution does not require a higher standard of

-- 2 of 16 --

3 No. 14‐2154‐cv
proof in fraud‐based medical disciplinary proceedings, we AFFIRM
the district court’s order dismissing Tsirelman’s complaint.
BACKGROUND
Gary Tsirelman became licensed to practice medicine in 1996.
In 2000, he acquired an ownership interest in LaMed medical clinic
(“LaMed”). While practicing at LaMed, Tsirelman performed
synaptic therapy, a non‐invasive, drug‐free treatment consisting of
electrical impulses administered to areas causing the patient pain.
Flatlands Management, the contractor who assembled LaMed’s bills,
however, billed insurance companies for a nerve destruction
procedure when Tsirelman performed synaptic therapy, for which
no billing codes existed. Synaptic therapy is not a form of nerve
destruction procedure.
In 2007, the State of New York Office of Professional Medical
Conduct (“OPMC“) charged Tsirelman with practicing medicine
fraudulently, willfully making or filing a false report, ordering
excessive tests or treatments not warranted by the patient’s
condition, and therefore engaging in conduct that evidenced moral
unfitness to practice medicine. OPMC based the charges on
Tsirelman’s bills for nerve destruction procedures that he never
performed. After a six‐day hearing, a Hearing Committee for the
State Board of Professional Medical Conduct (the “Hearing
Committee”), which consisted of two licensed physicians, one lay

-- 3 of 16 --

4 No. 14‐2154‐cv
member, and a non‐voting administrative law judge as presider,
sustained 51 of 69 charges of professional misconduct. The Hearing
Committee found, by a preponderance of the evidence, that
Tsirelman knew that bills were being sent under his signature for
procedures that he did not perform and that he allowed such bills to
be sent for his own benefit. In re Tsirelman, No. 07‐269, at 43 (N.Y.
Bd. Prof. Med. Conduct Dec. 5, 2007), J.A. 234. The Hearing
Committee revoked Tsirelman’s medical license and fined him
$100,000. Id. at 52, J.A. 243.
Tsirelman filed an Article 78 proceeding in New York state
court seeking review of the Hearing Committee’s determination. 1 In
April 2009, the Appellate Division affirmed the Hearing
Committee’s principal findings and held that “the Committee could
infer [Tsirelman’s] knowledge that the bills were false, rather than
merely inaccurate, and that he had willfully intended to mislead and
deceive the insurer.” Tsirelman v. Daines, 876 N.Y.S.2d 237, 239 (App.
1 An Article 78 proceeding “provide[s] an expeditious and essentially
uniform procedure for judicial review of . . . action (or inaction) by
agencies and officers of state and local government.” Finley v. Giacobbe, 79
F.3d 1285, 1291 (2d Cir. 1996) (omission in original) (internal quotation
marks omitted).

-- 4 of 16 --

5 No. 14‐2154‐cv
Div. 3d Dep’t 2009). The Appellate Division affirmed both penalties.
Id. at 240.2
On March 1, 2010, Tsirelman filed this action in federal district
court (Jack B. Weinstein, Judge), alleging that defendants, the New
York commissioner of health, the chairman of the state board for
professional medical conduct, and their agencies, violated his due
process rights in the conduct of his disciplinary hearing. Defendants
moved to dismiss or, in the alternative, for abstention. On October
14, 2010, the district court granted defendants’ motion for abstention
to permit Tsirelman to petition the director of OPMC to reopen his
case in light of an intervening amendment to New York’s Public
Health Law. The district court stayed the action pending Tsirelman’s
petition.
Tsirelman filed a motion for reconsideration with the director
of OPMC. The director denied Tsirelman’s motion. Thereafter,
Tsirelman moved to reopen his federal action, and defendants
renewed their motion to dismiss for lack of subject matter
jurisdiction and failure to state a claim. On May 14, 2014, the district
court granted the motion to dismiss as to the New York Department
of Health and the State Board for Professional Medical Conduct
2 The Appellate Division annulled the Hearing Committee’s finding
that Tsirelman had ordered treatment not warranted by his patients’
conditions.

-- 5 of 16 --

6 No. 14‐2154‐cv
under the Eleventh Amendment. In doing so, the district court
implicitly denied that portion of the motion concerning defendants
Daines and Sears, who were sued in their official capacities.
However, the district court also concluded that Tsirelman’s
complaint failed to state a claim under the Due Process Clause.
Accordingly, the district court granted defendants’ motion to
dismiss, and Tsirelman timely appealed.
DISCUSSION
Tsirelman argues that defendants denied him due process in
their conduct of his disciplinary hearing by employing a
preponderance‐of‐the‐evidence standard. Before turning to
Tsirelman’s merits arguments, however, we address defendants’
argument that Tsirelman’s complaint must be dismissed as against
the individual defendants because they are protected from suit by
the Eleventh Amendment.
We review de novo the district court’s dismissal for lack of
subject matter jurisdiction under Rule 12(b)(1) or failure to state a
claim under Rule 12(b)(6). Jaghory v. N.Y. State Depʹt of Educ., 131
F.3d 326, 329 (2d Cir. 1997). Like the district court, we “accept all
factual allegations in the complaint as true and draw inferences from
those allegations in the light most favorable to the plaintiff.” Id.
I. Eleventh Amendment Immunity
The Eleventh Amendment provides:

-- 6 of 16 --

7 No. 14‐2154‐cv
The Judicial power of the United States shall not be construed
to extend to any suit in law or equity, commenced or
prosecuted against one of the United States by Citizens of
another State, or by Citizens or Subjects of any Foreign State.
The Supreme Court has consistently interpreted the Eleventh
Amendment to bar suits brought against an unconsenting state in
federal courts “by her own citizens as well as by citizens of another
State.” Edelman v. Jordan, 415 U.S. 651, 662‐63 (1974). Because
Tsirelman is a citizen of New York who brought suit against New
York officials in their official capacities, defendants argue that his
suit is nonjusticiable under the Eleventh Amendment. We reject this
contention because Tsirelman’s suit seeks prospective relief against
state officials in their official capacities, which is permitted
notwithstanding the general proscription of suits against states by
the Eleventh Amendment.
In Ex parte Young, the Supreme Court held that the Eleventh
Amendment did not bar an action in federal court to enjoin a state
official from taking official action claimed to violate federal law. 209
U.S. 123, 155‐56 (1908); see also Edelman, 415 U.S. at 664. Under this
doctrine, federal courts may hear claims for prospective injunctive
relief, see Edelman, 415 U.S. at 677, but retroactive claims seeking
monetary damages from the state treasury are barred by the
Eleventh Amendment because, even if state officials are the nominal
defendants, the state is the real party in interest, id. at 663.

-- 7 of 16 --

8 No. 14‐2154‐cv
Tsirelman’s complaint seeks an injunction restoring the status
quo unless and until the State conducts a new hearing and
establishes the charges based on a clear and convincing standard.
Defendants characterize this claim as seeking purely retrospective
relief because Tsirelman is trying to remedy a past violation of his
due process rights that occurred during his disciplinary hearing.
Contrary to defendants’ contentions,3 Tsirelman’s complaint
seeks prospective relief because he requests a remedy to an alleged
ongoing violation of federal law. Tsirelman claims that New York’s
rule permitting proof of fraud‐based medical misconduct using a
preponderance‐of‐the‐evidence standard violates due process and
that, as a result, he is unconstitutionally being denied his medical
license. As a remedy, Tsirelman seeks an injunction requiring either
reinstatement of his license or a hearing that, in his view, comports
with due process. Either outcome would remedy Tsirelman’s alleged
injury and would be “prospective relief that is not barred by the
Eleventh Amendment.” Dwyer v. Regan, 777 F.2d 825, 836 (2d Cir.
1985) (public employee’s request for reinstatement or a hearing
sought prospective injunctive relief). Therefore, we affirm the
3 Defendants also argue that Tsirelman lacks standing to seek the
requested injunction because, as he is no longer a doctor, there is no
reasonable prospect Tsirelman will again find himself subject to medical
disciplinary proceedings. This argument assumes an outcome in
defendants’ favor and is therefore without merit.

-- 8 of 16 --

9 No. 14‐2154‐cv
district court’s denial of Daines’s and Sears’s motion to dismiss
pursuant to the Eleventh Amendment.
II. Tsirelman’s Due Process Challenges
We turn now to the merits of Tsirelman’s appeal. Tsirelman
makes two separate but related challenges to New York’s use of the
preponderance‐of‐the‐evidence standard: (a) a facial challenge to the
standard as used in all fraud‐based medical disciplinary
proceedings, and (b) an as‐applied challenge to use of the standard
in his own proceeding.
a. Facial Challenge
New York’s medical misconduct committees base their
conclusions on a statutorily‐prescribed preponderance‐of‐the‐
evidence standard. N.Y. Pub. Health L. § 230(10)(f). Tsirelman
argues that New York’s use of the preponderance standard fails to
comport with the minimum requirements of due process in fraud‐
based disciplinary proceedings because of the compelling private
and public interests in avoiding erroneous license revocations.
Tsirelman contends that only the higher clear and convincing
standard comports with due process.
The preponderance standard is constitutionally adequate.
“The function of a standard of proof . . . is to instruct the factfinder
concerning the degree of confidence our society thinks he should
have in the correctness of factual conclusions for a particular type of

-- 9 of 16 --

10 No. 14‐2154‐cv
adjudication.” Addington v. Texas, 441 U.S. 418, 423 (1979) (internal
quotation marks omitted). “The standard serves to allocate the risk
of error between the litigants and to indicate the relative importance
attached to the ultimate decision.” Id. To determine the standard of
proof required by the Constitution, we balance: (1) “the private
interests affected by the proceeding”; (2) “the risk of error created by
the State’s chosen procedure”; and (3) “the countervailing
governmental interest supporting use of the challenged procedure.”
Santosky v. Kramer, 455 U.S. 745, 754 (1982) (citing Mathews v.
Eldridge, 424 U.S. 319, 335 (1976)). The preponderance standard
strikes the proper balance between these competing interests.
First, physicians have an important, but not compelling,
property interest in their medical licenses and a liberty interest in
pursuing their chosen profession. See Donk v. Miller, 365 F.3d 159,
163 (2d Cir. 2004); RRI Realty Corp. v. Inc. Vill. of Southhampton, 870
F.2d 911, 917 n.4 (2d Cir. 1989). However, if a physician loses his
license, he remains free to pursue other employment and otherwise
participate in life’s activities. For this reason, we find a physician’s
interest in his license to be less compelling than those interests that
the Supreme Court has determined require clear and convincing
proof before the state can effect a deprivation. Compare Addington,
441 U.S. at 433 (civil commitment proceedings must be conducted
under at least a clear and convincing standard), with Vance v.

-- 10 of 16 --

11 No. 14‐2154‐cv
Terrazas, 444 U.S. 252, 266 (1980) (abandonment of citizenship
proceedings may be conducted under a preponderance standard).
Tsirelman also argues that a physician’s interest in a fraud‐
based medical disciplinary hearing is more substantial than in other
disciplinary proceedings because the resulting reputational harm
can extend beyond the medical field. This distinction is
unpersuasive. A license revocation based on medical incompetence,
sexual impropriety, or another serious charge would also tend to
taint a physician’s other future endeavors. In any event, even if we
accepted Tsirelman’s argument that physicians have a greater
interest in fraud‐based revocation proceedings, that interest still
does not rise to the fundamental level that requires the application
of a heightened standard of proof as a matter of federal due process.
See Herman & MacLean v. Huddleston, 459 U.S. 375, 390 (1983)
(preponderance‐of‐the‐evidence standard applied in securities‐fraud
case despite “the risk of opprobrium that may result from a finding
of fraudulent conduct”).
Second, the preponderance standard “fairly distributes the
risk of error” between the state and the physician. Santosky, 455 U.S.
at 765. The corresponding consequences of error to the physician
and the state in a fraud‐based license revocation are roughly
equivalent. If a doctor’s license is erroneously revoked, he should be,
but is not, allowed to practice medicine. If a doctor’s license is

-- 11 of 16 --

12 No. 14‐2154‐cv
erroneously maintained, he should not be, but is, allowed to
continue to practice. Thus, the “social disutility” of each potential
outcome is about the same, and it is not in general more serious for a
license to be erroneously revoked than to be erroneously
maintained. See In re Winship, 397 U.S. 358, 371 (1970) (Harlan, J.,
concurring).
Third, the countervailing governmental interest is strong. The
State, on behalf of the public, has a substantial interest in revoking
the licenses of doctors who engage in fraud or are otherwise found
to be unfit to practice medicine. See Doe v. Connecticut, 75 F.3d 81, 85
(2d Cir. 1996) (per curiam). Although he recognizes this interest,
Tsirelman argues that fraud‐based revocations do not further it
because they do not target physicians providing substandard care.
But Tsirelman’s conception focuses on only one of the State’s many
healthcare interests. New York has an interest in ensuring that its
citizens receive adequate care and that they have access to that care.
Fraudulent insurance claims drive up the costs of health insurance
for everyone, making it difficult for some New Yorkers to afford
quality healthcare, and thus limiting their access to care. Moreover,
as a major consumer of healthcare through the insurance programs
operated by the State, New York has a direct interest in affordable
medical care.

-- 12 of 16 --

13 No. 14‐2154‐cv
In sum, while we acknowledge a physician’s interest in
maintaining his license, the State has at least as substantial an
interest in protecting the public, and the cost of error is about the
same. Thus, we find no constitutional basis for exempting fraud‐
based medical disciplinary proceedings from the traditional powers
of state legislatures to prescribe standards of proof in state
proceedings.4 See Vance, 444 U.S. at 265; see also In re Friedman, 51
F.3d 20, 22 (2d Cir. 1995) (holding that a federal court may
constitutionally impose reciprocal attorney discipline based on an
underlying state disciplinary proceeding conducted under the
preponderance‐of‐the‐evidence standard). Accordingly, we affirm
the district court’s dismissal of Tsirelman’s facial challenge to the
State’s use of the preponderance standard in fraud‐based medical
disciplinary proceedings.5
4 We recognize that this conclusion conflicts with the conclusions of the
supreme courts of Oklahoma, Washington, and Wyoming. See Johnson v.
Bd. of Governors of Registered Dentists, 913 P.2d 1339, 1347 (Okla. 1996);
Nguyen v. State, 29 P.3d 689, 697 (Wash. 2001); Painter v. Abels, 998 P.2d
931, 940‐41 (Wyo. 2000). In so holding, the Oklahoma and Wyoming
Supreme Courts explicitly recognized that their state constitutions can
afford greater due process safeguards than the Federal Constitution.
Johnson, 913 P.2d at 1346; Painter, 998 P.2d at 941.
5 We have also considered Tsirelman’s facial and as‐applied challenges
to the absence of formal rules of evidence and find them to be without
merit. “[P]rocedural due process does not require rigid adherence to
technical evidentiary rules in administrative hearings, as long as the
evidence introduced is reliable.” United States v. Intʹl Bhd. of Teamsters, 941
F.2d 1292, 1298 (2d Cir. 1991). There is no support for the inference,

-- 13 of 16 --

14 No. 14‐2154‐cv
b. As‐Applied Challenge
Finally, we turn to Tsirelman’s claim that, even if use of the
preponderance‐of‐the‐evidence standard is not on its face
unconstitutional, its use in this case violated due process as applied
to him because of the limited evidence from which the Hearing
Committee could infer fraudulent intent.
Tsirelman’s as‐applied challenge requires us to consider the
particular facts of his case to determine whether the application of
the preponderance standard, although constitutional on its face,
deprived him of a protected right. See, e.g., Field Day, LLC v. Cty. of
Suffolk, 463 F.3d 167, 174 (2d Cir. 2006).
Tsirelman’s hearing did not deviate from normal hearing
procedures in any material respect. In any event, the details of the
necessary to Tsirelman’s position, that evidence of fraud in medical
disciplinary hearings will necessarily be unreliable unless governed by
formal rules of evidence. See United States v. Salerno, 481 U.S. 739, 745
(1987) (to sustain a facial challenge, “the challenger must establish that no
set of circumstances exists under which the Act would be valid.”).
Likewise, Tsirelman has failed to allege any facts suggesting the lack of
formal rules of evidence resulted in an as‐applied due process violation.
The Hearing Committee expressly acknowledged certain gaps in the
evidentiary record and afforded Tsirelman the benefit of the doubt on any
claims as to which “there was even a slight possibility” that additional
information might have bolstered his position. In re Tsirelman, No. 07‐269,
at 41, J.A. 232. And, as noted above, the Appellate Division annulled an
entire subset of charges for which it concluded that additional evidence
might have proven exculpatory.

-- 14 of 16 --

15 No. 14‐2154‐cv
hearing show that application of the preponderance standard did
not deprive Tsirelman of due process because it did not
unacceptably increase the risk of error. As the Appellate Division
has already concluded, there was ample evidence from which the
Hearing Committee could infer Tsirelman’s fraudulent intent,
including discrepancies between patient medical records and the
bills LaMed submitted to insurers, as well as Tsirelman’s “complete
lack” of credible testimony. Tsirelman v. Daines, 876 N.Y.S.2d at 239.
Tsirelman also availed himself of the robust procedures permitted in
New York’s disciplinary hearings, including representation by
counsel, presentation of evidence, witness testimony, and cross‐
examination of the State’s witnesses. Finally, Tsirelman obtained
review of the Hearing Committee’s determination in an Article 78
proceeding.
In sum, there is nothing exceptional about Tsirelman’s hearing
that rendered the Hearing Committee’s use of the preponderance
standard unconstitutional as applied to Tsirelman. In essence,
Tsirelman asks us to reevaluate the Hearing Committee’s findings,
but due process guarantees only a fair hearing, which Tsirelman
received in full. See Conopco, Inc. v. Roll Int’l, 231 F.3d 82, 88 (2d Cir.
2000). Accordingly, the district court’s dismissal of Tsirelman’s as‐
applied challenge is affirmed.

-- 15 of 16 --

16 No. 14‐2154‐cv
CONCLUSION
For the foregoing reasons, the judgment is AFFIRMED.

-- 16 of 16 --