United States v. Hayes

633 F.Supp. 1183 (1986)

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Nature of the Case

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Facts

D is a medical doctor. In June 1978, D applied pursuant to 42 U.S.C. § 254l for an award under the National Health Service Corps (NHSC) Scholarship Program to fund her study of medicine at Tufts. D stated in her application that she intended to specialize in family medicine and work in a rural area. D became obligated under the terms of the scholarship contract to perform one year of service in the NHSC for each year of scholarship awarded or two years, whichever was greater. D was awarded a scholarship in the amount of $13,115 for the 1978-1979 school year. In June 1979, D received an extension to include the 1979-1980 school year in the amount of $16,430. D was granted a deferment by the Secretary of Health and Human Services to complete a three-year residency in internal medicine at North Carolina Memorial Hospital. D notified P that she had abandoned her internal medicine residency and had initiated a three-year residency in dermatology. D requested permission to serve in the NHSC as a dermatologist. This request was denied. D failed to participate in placement procedures and failed to perform her service under the scholarship contract. P sued D. P moved for summary judgment. D admits that she is in breach but disputes the amount of the debt and argues that 42 U.S.C. § 254o, the treble damages provision, is penal in nature and thus is unenforceable, and invalid liquidated damages provision.