Appeal from the United States District Court for the Southern District of New York.
Present: HONORABLE WILFRED FEINBERG, HONORABLE JAMES L. OAKES, Circuit Judges, HONORABLE CHARLES L. BRIEANT, JR., District Judge
This cause came on to be heard on the transcript of record from the United States District Court for the Southern District of New York, and was argued by a representative of plaintiffs-appellants and by counsel for defendants-appellees.
This is an appeal from an order of the United States District Court for the Southern District of New York, Robert L. Carter, J., denying plaintiffs-appellants' application to renew their motion for a preliminary injunction, and dismissing the complaint. The denial of the application to renew the motion for a preliminary injunction is affirmed for substantially the reasons stated in Judge Robert W. Sweet's decision denying the injunction, dated August 21, 1978, and in the first paragraph of Judge Robert L. Carter's opinion, dated October 5, 1978, denying the application to renew the motion.
The decision of the district court to abstain is also affirmed. Plaintiffs' first claim, that they were entitled to hearing prior to termination of the funding for treatments at a particular clainic is moot because they were given an administrative fair hearing by the state in August 1978. Although this occurred after termination of the payments to PSCI, it occurred prior to any termination of PSCI's services to plaintiff's class. Under the circumstances, this hearing satisifies the requirement, if any, that the patients be given a pretermination hearing.
Although the patient-plaintiffs were not parties, PSCI apparently prevailed in the state Supreme Court on an argument similar to plaintiffs' other claim, that PSCI is entitled to medicaid vendor payments even though it has not obtained a contract from the Westchester County Mental Health Board. See Psychiatric Services Center, Inc. v. Bates, Index No. 10414/77, L. 339, p. 325 (Supreme Court of the State of New York, County of Westchester July 27, 1978), motion to reconsider denied, December 12, 1978. We are informed that this decision is now being appealed to the New York State Supreme Court, Appellate Division. Since the issue raised by plaintiffs is apparently being pursued in the state court system, we agree that abstention is proper. However, the proper procedure in an abstention situation is to retain jurisdiction. The complaint should be dismissed only under special circumstances and only then if the dismissal is without prejudice. See Harris County Commissioners Court v. Moore, 420 U.S. 77, 88 n.14 (1975); American Trial Lawyers Assn., New Jersey Branch v. New Jersey Supreme Court, 409 U.S. 467, 468-69 (1973).
The judgment dismissing the complaint is vacated and the case is remanded for reinstatement of the complaint and entry of an order of abstention.