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  5. 930 F.2d 163 (1991)
 

701 PHARMACY CORP. v. PERALES

Nos. 775, 776, 777, 778, 779, 780, 781, 782, Dockets 90-7648, 90-7650, 90-7656, 90-7658, 90-7808, 90-7830, 90-7842, 90-7844.

930 F.2d 163 (1991)

701 PHARMACY CORP., Willen Pharmacy, Inc., Magnam Pharmacy, Inc., Family Pharmacy, Inc., 1491 DeKalb Pharmacy, Inc., 96 Cent Goods and Drugs, Inc., Lasid Sales, Inc., Isham Broadway Pharmacy, Inc., MRB Pharmacy, Inc., Sultan Pharmacy, Inc., Lawrence Drugs, Inc., 67 East Burnside Pharmacy, Riteway Drugs, Inc., Asim Drugs, Inc., Plaintiffs-Appellees, v. Cesar A. PERALES, Commissioner of the New York State Department of Social Services, Defendant-Appellant.

United States Court of Appeals, Second Circuit.

Decided April 5, 1991.

Attorney(s) appearing for the Case

Lawrence S. Kahn, Deputy Sol. Gen. (Robert J. Schack, Andrea M.A. Osborne, Asst. Attys. Gen., Robert Abrams, Atty. Gen. of the State of New York), for defendant-appellant.

Jerome I. Sager, New York City (Laurie Lombardo, Lee-Lee Chang, Wise Lerman & Katz, P.C., New York City, of counsel), for plaintiffs-appellees Isham Broadway Pharmacy, Inc., 67 East Burnside Pharmacy, Riteway Drugs, Inc., and Asim Drugs, Inc.

Robert Purzak, Garden City, N.Y. (Jacobson & Goldberg, Garden City, N.Y., of counsel), for plaintiffs-appellees 701 Pharmacy Corp., Willen Pharmacy, Inc., Magnam Pharmacy, Inc., Family Pharmacy, Inc., 1491 DeKalb Pharmacy, Inc., 96 Cent Goods and Drugs, Inc., Lasid Sales, Inc., MRB Pharmacy, Inc., Sultan Pharmacy, Inc., and Lawrence Drugs, Inc.

Before KEARSE, PRATT and McLAUGHLIN, Circuit Judges.

McLAUGHLIN, Circuit Judge:

Effective January 5, 1987, the New York State Department of Social Services (the "Department") promulgated new regulations permitting it to terminate, without cause, the participation of a provider of benefits under the State Medicaid program. See 18 N.Y.C.R.R. § 504.7(a). Until 1987, the Department terminated providers only for cause. See 18 N.Y.C.R.R. Part 515. Because termination for cause involves allegations of fraud...

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