SETAREHSHENAS v. NATIONAL COMMISSION ON CERTIFICATION OF PHYSICIAN ASSISTANTS (2018)

MEMORANDUM & ORDER

On December 11, 2015, plaintiff Ramin Setarehshenas commenced this action in Supreme Court, Kings County, against defendant National Commission on Certification of Physician Assistants (“NCCPA”), a non-profit organized under Georgia law. Dkt. No. 1-3. On January 20, 2016, NCCPA timely removed the action to this Court based on diversity of citizenship. Dkt. No. 1. NCCPA now moves, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(c), to dismiss the complaint for lack of subject matter jurisdiction, or, in the alternative, for judgment on the pleadings. Dkt. No. 19. For the reasons that follow, the Rule 12(b)(1) motion is denied, but the Rule 12(c) motion for judgment on the pleadings is granted.

Background

In the fall of 1992, Setarehshenas enrolled in dental school at New York University, only to leave the program two years later without having received a degree. Dkt. No. 12 at ¶ 6. Nevertheless, although he did not have the requisite degree or license, he engaged in the practice of dentistry starting in late 1999 and continuing through early 2000. Id. at ¶ 7. In March 2000, he pled guilty to the felony of practicing dentistry without a license and was sentenced to five years of probation and ordered to pay $18,000 in restitution. Id. at ¶ 8. Later, Setarehshenas received a certificate of relief from disabilities, id., which relieves a convicted felon of certain automatic forfeitures of licenses and other public benefits. See N.Y. Corr. Law § 701(1). The certificate of relief, however, does not expunge a conviction or “in any way prevent any judicial, administrative, licensing or other body, board or authority from relying upon the conviction specified therein as the basis for the exercise of its discretionary power to suspend, revoke, refuse to issue or refuse to renew any license, permit or other authority or privilege.” N.Y. Corr. Law § 701(3).

Setarehshenas would again pursue degree-bearing education and, in 2006, graduated from the physician assistant program at Touro College. Dkt. No. 12 at ¶ 10. Having earned his degree, Setarehshenas applied to the New York State Education Department (“NYSED”) for a limited permit and license to practice as a physician assistant. Id. at ¶ 11. Because the application requested information concerning his criminal history, Setarehshenas duly disclosed his conviction from 2000. Id. His application was then forwarded to NYSED's Office of Professional Discipline (“OPD”), which assigned an investigator to his case. Id. at ¶ 13. In March 2009, a hearing panel concluded that Setarehshenas was eligible to receive a limited permit and license. Id. at ¶ 15. It was not to be the last word. A year later, that decision was reversed by an appellate panel. Id. at ¶ 17.

Undeterred by this setback, Setarehshenas reapplied in fall 2011. Id. at ¶ 18. The application was denied at an initial review by OPD. Id. at ¶ 26. This second denial pointed to his felony conviction and noted that “there is a direct connection between the crime committed and the professional license sought,” which would “thus create an unacceptable risk of harm to the public.” Id. at ¶ 29. Setarehshenas appealed again.¹ Dkt. No. 12 at ¶ 23.

Separate and apart from NYSED licensure, there was another prerequisite to lawful practice as a physician assistant in New York: The Physician Assistant National Certifying Exam (“PANCE”), which is developed and administered by defendant NCCPA, a non-governmental organization. Dkt. No. 12 at ¶¶ 3, 12; Dkt. No. 13 at ¶ 3. All 50 states require that prospective physician assistants pass the PANCE before receiving a license to practice. Dkt. No. 12 at ¶ 5; Dkt. No. 13 at ¶ 5. The individual states, however, and not NCCPA, remain the licensing authorities. Dkt. No. 13 at ¶ 5.

In furtherance of his objective, Setarehshenas, shortly after graduating from Touro, logged on to NCCPA's website in July 2006 to register for the exam. Dkt. No. 12 at ¶ 12; Dkt. No. 13 at ¶ 12. He then discovered that the PANCE registration application, like the NYSED licensure application, required him to disclose his criminal history. Dkt. No. 12 at ¶ 12. Setarehshenas further alleges that an investigator at NYSED – not NCCPA – told him that, because both the NYSED licensure application and the PANCE registration application contained questions about criminal history, Setarehshenas could not take the PANCE until he was “cleared by New York State.” Dkt. No. 12 at ¶ 12-13. Apparently relying on this representation, Setarehshenas chose not to register for the PANCE at that time; nor did he ever register, according to the record. See Dkt. No. 12 at ¶ 20-21; Dkt. No. 13 at ¶ 12.

Whatever his thinking, Setarehshenas did not perfect his registration. But, he claims, that at least as of August 29, 2011, he had been “advised that he was eligible to take the PANCE” and that he had one year of eligibility remaining. Dkt. No. 12 at ¶ 20. Typically, a prospective physician assistant must take the PANCE within six years of graduating from an accredited program. Id. at ¶¶ 21, 25. Nonetheless, Setarehshenas made no attempt to register for the exam during his sixth and final year of eligibility because, he says, one or more employees at NCCPA told him that requests for extension of the eligibility period were “liberally granted.” Dkt. No. 12 at ¶¶ 21, 24. Instead of registering, on July 6, 2012, less than two months before his eligibility was set to expire, Setarehshenas asked NCCPA for an extension. Id. at ¶ 25; Dkt. No. 19-1 at 4. NCCPA promptly denied his extension request on July 11, 2012. Dkt. No. 12 at ¶ 26; Dkt. No. 19-1 at 6-7. Setarehshenas then appealed, explaining his circumstances (including his felony conviction). Dkt. No. 19-1 at 9-10. On December 13, 2012, the NCCPA Review Panel affirmed its decision to deny his request for an extension, stating in a letter from its counsel:

After careful consideration and discussion of the Review Record, and the information provided by you and Mr. Setarehshenas during his telephonic appearance before the Review Panel, the Review Panel reaffirmed that the PANCE Eligibility Policy is a necessary and appropriate mechanism to help ensure that unqualified candidates are not certified, and thereby, to protect the public health. It further affirmed that PAs who do not pass the certification examination after six attempts or by the sixth year after their graduation require retraining. Finally, the Review Panel determined that the circumstances described by Mr. Setarehshenas do not merit an exception to this important policy. Accordingly, the NCCPA Review Panel determined to deny Mr. Setarehshenas' request for an exception to the NCCPA PANCE eligibility policy.

Dkt. No. 19-1 at 12. It further noted that Setarehshenas could reapply when he “completed an unabridged ARC-PA accredited physician assistant educational program.” Dkt. No. 19-1 at 12.

Two years after receiving NCCPA's December 13, 2012 letter, the first shots of litigation were fired in state court. Following removal, with leave of the Court by order dated March 3, 2015, Setarehshenas amended his complaint on April 1, 2016. Dkt. No. 12. The amended complaint now alleges solely that NCCPA discriminated against him on the basis of his criminal history and in violation of the New York State Human Rights Law (“NYSHRL”) and the New York City Human Rights Law (“NYCHRL”). Dkt. No. 12 at ¶ 38-43. He seeks damages and equitable relief.

Standard of Review

The burden of establishing federal subject matter jurisdiction when it is challenged by a Rule 12(b)(1) motion rests on the shoulders of the party invoking jurisdiction, not the party challenging it; proof of jurisdiction must be by a preponderance of the evidence. See, e.g., Augienello v. F.D.I.C., 310 F. Supp. 2d 582, 587-88 (S.D.N.Y. 2004).

In deciding a motion for judgment on the pleadings under Rule 12(c), district courts use the same standards as are applicable to motions brought under Rule 12(b)(6). Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). In other words, the test remains whether the complaint has complied with Rule 8(a)(2)'s requirement of providing a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This rule does not compel a litigant to supply “detailed factual allegations” in support of her claims, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1964, 167 L.Ed.2d 929 (2007), “but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009). “A pleading that offers ‘labels and conclusions’ ․ will not do.” Id. (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955); see also In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir. 2007). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

Thus, to survive a defendant's Rule 12(c) motion, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Iqbal, 556 U.S. at 663, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). This “plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citation and internal quotations omitted).

Discussion

I. Rule 12(b)(1) Motion 2

A federal district court has no power to address the merits of a case over which it lacks subject matter jurisdiction. Defendant's challenge to jurisdiction, therefore, must be resolved before reaching any other challenge. See Polera v. Bd. of Educ. of Newburgh Enlarged City Sch. Dist., 288 F.3d 478, 481 (2d Cir. 2002).

NCCPA's Rule 12(b)(1) motion presents a procedural oddity. NCCPA invoked the Court's jurisdiction by removing this case from New York state court, and it now seeks dismissal of the action for lack of jurisdiction. Ordinarily, however, the burden of establishing subject matter jurisdiction rests on the party that invoked it in the first place – here, NCCPA. Setting aside the seeming chutzpah of NCCPA's removal double-talk, the fact remains that this Court cannot preside over a case lacking jurisdiction and, as a result, must consider the merits of NCCPA's arguments, given that diversity jurisdiction entitles it to have its arguments heard and resolved in federal district court.

Luckily, there is no serious question that subject matter jurisdiction exists here, so resolving who should bear the burden of proving it is of no moment. Indeed, NCCPA's failing argument is limited to its contention that Setarehshenas lacks Article III standing to bring his claims. To satisfy the “case or controversy” requirement, see U.S. Const. Art. III, § 2, a plaintiff must have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L. Ed. 2d 635 (2016).

To establish the first of these elements, a plaintiff must show that it “suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.” Id. at 1548 (internal quotations omitted). The Supreme Court in Spokeo cautioned that the risk of real harm may satisfy “concreteness.” Id. at 1549. NCCPA argues that Setarehshenas has not alleged an “injury-in-fact” and, therefore, lacks standing to bring this lawsuit.³ Dkt. No. 19-2 at 8-9. Specifically, NCCPA argues that, “because [Setarehshenas] never submitted an application to take PANCE, he has not alleged an injury in fact and his claim is not ripe for review.” Id. NCCPA also contends that, beyond conclusory statements, plaintiff has not demonstrated that NCCPA discriminated against him in any way. Id. at 9-10. Plaintiff alleges that the only reason NCCPA offered for denying his extension request was his felony conviction, but NCCPA points to the full text of the denial letter as cutting against any potential discrimination. Id. at 10.

Setarehshenas has killed three birds with one stone. He satisfies the injury-in-fact element of standing, as well as the other elements, by (1) pointing out that he was denied an extension by NCCPA despite making a timely request and being eligible to take the PANCE, Dkt. No. 19-3 at 7; (2) connecting the denial of his extension request to his inability to take the PANCE and thereby become a PA, id.; and (3) noting that his injury is redressable, insofar as he could become a PA if he were allowed to take the exam (and passed). Id. at 7-8.

The injury here – denial of an extension and, ultimately, his ability to take the exam – is a particularized injury that affects him in a “personal and individual way.” Spokeo, ––– U.S. at ––––, 136 S. Ct. at 1548. Setarehshenas has therefore demonstrated that he has Article III standing. Dismissal for want of subject matter jurisdiction must be denied.

II.  Rule 12(c) Motion

As noted earlier, NCCPA also moves, in the alternative, under Rule 12(c), for judgment on the pleadings with respect to both claims in Setarehshenas' amended complaint. Succinctly stated, Setarehshenas' two claims are that, in denying his request for an extension of time to take the PANCE, NCCPA discriminated against him on the basis of his criminal history, in violation of NYSHRL and NYCHRL.

The parties agree that, as relevant to this case, NYSHRL and NYCHRL prohibit the denial of a license because of the applicant's past criminal conviction, subject to certain exceptions. Dkt. No. 19-2 at 12; Dkt. No. 19-3 at 12-14. Setarehshenas pegs his NYSHRL claim to § 296(15) of the statute, which provides:

It shall be an unlawful discriminatory practice for any person, agency, bureau, corporation or association, including the state and any political subdivision thereof, to deny any license or employment to any individual by reason of his or her having been convicted of one or more criminal offenses, or by reason of a finding of a lack of “good moral character” which is based upon his or her having been convicted of one or more criminal offenses, when such denial is in violation of the provisions of article twenty-three-A of the correction law.

N.Y. Exec. Law § 296(15). And plaintiff's NYCHRL claim relies on a substantially similar provision of the New York City administrative code, which provides:

It shall be an unlawful discriminatory practice ․ [f]or any person to deny any license, registration or permit to any applicant, or act adversely upon any holder of a license, registration or permit by reason of his or her having been convicted of one or more criminal offenses, or by reason of a finding of a lack of “good moral character” which is based on his or her having been convicted of one or more criminal offenses, when such denial or adverse action is in violation of the provisions of article twenty-three-a of the correction law.

N.Y.C. Admin. Code § 8-107(9).⁴ The parties agree that the term “license,” for purposes of these statutes, is defined as “any certificate, license, permit or grant of permission required by the laws of this state ․ as a condition for the lawful practice of any occupation, employment, trade, vocation, business, or profession.” Dkt. No. 19-2 at 12 (quoting N.Y. Corr. Law § 750(4)); Dkt. No. 19-3 at 12 (same).

Where they part company, of course, is whether NCCPA is liable to Setarehshenas under NYSHRL or NYCHRL. NCCPA contends that it does not issue licenses “or otherwise grant legal permission to PAs to practice” and thus has not violated either NYSHRL or NYCHRL. Dkt. No. 19-2 at 12-13. Plaintiff responds that the “PANCE examination is a grant of permission for the lawful practice” of being employed as a PA because it is a “condition precedent to a license in all fifty states.” Dkt. No. 19-3 at 13. But a condition precedent to licensure is not the same as licensure, itself. NCCPA “merely provides a mechanism by which a candidate may meet the state requirements” for licensure. Metzger v. Nat'l Comm'n On Certification of Physician Assistants, No. CIV.A. 00-4823, 2001 WL 76331, at *2 (E.D. Pa. Jan. 26, 2001). Critically, NCCPA does not, and cannot, issue licenses, permits or consents for the lawful practice as a physician's assistant or any other occupation in New York. Cf. Sammons v. Nat'l Comm'n on Certification of Physician Assistants, Inc., 104 F. Supp. 2d 1379, 1382–83 (N.D. Ga. 2000) (“[NCCPA] is a private organization which does not qualify as a state actor and does not act under color of state law ․”). Therefore, even assuming that the state statute and administrative code provisions that the parties agree are the exclusive bases for plaintiff's claims have extraterritorial reach to regulate NCCPA's conduct in Georgia and that such extraterritorial application of New York law is constitutional, since NCCPA is not a licensing authority within the meaning of these provisions of law, the cause of action fails. Defendant is entitled to judgment on the pleadings.⁵

Conclusion

For the foregoing reasons, NCCPA's Rule 12(b)(1) motion is denied, but its Rule 12(c) motion for judgment on the pleadings is granted.

The Clerk of Court is directed enter judgment and to close this case.

So Ordered.

FOOTNOTES

1.   The record reflects that plaintiff filed an appeal of this denial but it is silent as to the disposition of the appeal.

3.   In its reply brief, NCCPA also alleges that Setarehshenas also fails to establish causation and redressability. See NCCPA's Reply Memorandum, Dkt. No. 19-4, at 6. A court “has wide discretion to consider arguments raised for the first time on reply.” See Brown Publ'g Co. v. Brown, No. 15-MC-0531(JS), 2017 WL 455418, at *3 (E.D.N.Y. Feb. 1, 2017). Regardless, NCCPA's untimely arguments do not upset the conclusion that plaintiff has standing to sue here.

4.   Plaintiff actually cites to § 8-107(10). Subsection 10 is plainly inapposite here, and plaintiff made no attempt in his opposition to discuss that portion of the code.

5.   NCCPA also argues that (1) plaintiff has failed to plausibly allege that NCCPA actually discriminated against him because of his criminal conviction; and (2) even if NCCPA did consider his criminal conviction in rendering its decision, both NYSHRL and NYCHRL allow for the “consideration of a prior criminal conviction if ‘there is a direct relationship between one or more of the previous criminal offenses and the specific license or employment sought or held by the individual.’ ” Dkt. No. 19-2 at 13 (quoting N.Y. Corr. Law § 752(1)). The Court need not, and does not, reach the merits of those arguments.

VITALIANO, D.J.