Judge Hanson's ruling

7/23/2019 Judge Hanson's ruling

http://slidepdf.com/reader/full/judge-hansons-ruling 1/38

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IN THE IOWA DISTRICT COURT FOR POLK COUNTY

IOWA HOSPITAL ASSOCIATION; KIRK

NORRIS, IOWA HOSPITAL

ASSOCIATION IN HIS CAPACITY AS AMEMBER OF THE HOSPITAL HEALTH

CARE ACCESS TRUST FUND BOARD;

CHI HEALTH-MERCY COUNCIL

BLUFFS; COVENANT MEDICAL

CENTER, INC.; FORT MADISON

COMMUNITY HOSPITAL; GREAT

RIVER MEDICAL CENTER; MARY

GREELEY MEDICAL CENTER; MERCY

MEDICAL CENTER-CEDAR RAPIDS;

MERCY MEDICAL CENTER-CLINTON;

METHODIST JENNIE EDUNDSON;SARTORI MEMORIAL HOSPITAL, INC.,

SPENCER HOSPITAL; AND ST.

ANTHONY REGIONAL HOSPITAL,

Plai!i""#,

$#.

CHARLES PALMER, DIRECTOR, IOWA

DEPARTMENT OF HUMAN SERVICES;

IOWA DEPARTMENT OF HUMANSERVICES, A STATE AGENCY,

D%"%&a!#.

CASE NO. CVCV'(')*'

RULING ON MOTION FOR

TEMPORARY INJUNCTION

Plaintiffs Iowa Hospital Association (“IHA”), the above-named eleven member hospitals,

and Kir !orris, "#$ of the IHA, in his capacit% as a member of the Hospital Health "are

Access &r'st 'nd oard (“the oard”) (collectivel% “Plaintiffs”), filed a Petition for

*eclarator% +'dment, In'nctive .elief, and .e/'est for #0pedited Hearin aainst *efendants

"harles Palmer, *irector of the Iowa *epartment of H'man ervices (“the *irector”), and the

*epartment of H'man ervices (“the *epartment”) on !ovember 2, 34156 &he parties

E-FILED 2015 DEC 31 1:24 PM POLK - CLERK OF DISTRICT COURT



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s'bmitted e0tensive briefin on Plaintiffs7 re/'est for a temporar% in'nction6 &his matter came

before the "o'rt for a hearin on *ecember 11, 34156 Attorne%s Kir lecha, 8indsa%

8'ndholm, and r%an $7!eill appeared for Plaintiffs6 Iowa olicitor 9eneral +effre% &hompson

and pecial Assistant Attorne% 9eneral *iane tahle appeared for the *irector and the

*epartment6 Havin reviewed the co'rt file, considered the ar'ments of co'nsel for the parties,

and bein otherwise f'll% informed in the premises, the "o'rt now DENIES Plaintiffs7 re/'est

for a temporar% in'nction beca'se: (1) the controvers% is not ripe and;or is moot< and (3)

notwithstandin ripeness or mootness, Plaintiffs have not demonstrated to the "o'rt7s

satisfaction that the% are abo't to s'ffer irreparable harm for which there is no ade/'ate leal

remed%6

I. FACTUAL BACKGROUND

A. T+% Pa!i%#

Plaintiffs are: (1) the IHA, a nonprofit orani=ation representin the interests of all 11>

Iowa hospitals< (3) Kir !orris, "#$ of the IHA, in his capacit% as a member of the oard< and

(?) eleven Iowa hospitals participatin in the hospital assessment proram 'nder Iowa "ode

chapter 3@B and providin health care services to Iowa Bedicaid beneficiaries6 *efendants are

"harles Palmer, *irector of the Iowa *epartment of H'man ervices, and the Iowa *epartment

of H'man ervices6 &he *epartment is the sinle state aenc% that operates Iowa7s Bedicaid

proram6

B. D%#i!i/ /" M%&iai& a& G/$%/ T%0 Ba#!a&1# 2M%&iai&

M/&%i3a!i/4 Pla

Bedicaid is a “Ccooperative federal-state proram thro'h which the federal overnment

provides financial assistance to states so that the% ma% f'rnish medical care to need%




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individ'als67” TLC Home Health Care, L.L.C. v. Iowa Dep’t of Human Servs., 2?> !6D63d E4>,

E11 (3443) (/'otin Madrid Home for the Aging v. Iowa Dep’t of Human Servs., 54E, 511 (Iowa

12) (citin @3 F66"6 G 1?2 (1@)< ilder v. !irginia Hosp. Ass’n, @2 F66 @>, 543

(14))6 &he federal overnment7s share of the Iowa Bedicaid b'det is called the federal

medical assistance percentae (“BAP”)6 Pl67s r6 1?6 &he *epartment is the “sinle state

aenc%” administerin Iowa7s Bedicaid proram6 See Iowa "ode G 3@A6@ (3415)< see also @3

"66.6 G @?1614 (3415)6 As re/'ired b% federal re'lations, the *epartment, as the sinle state

aenc%, has sole a'thorit% to “administer or s'pervise the administration of the plan” and

“mae r'les and re'lations that it follows in administerin the plan or that are bindin 'pon

local aencies that administer the plan6” See @3 "66.6 G @?16146 Appro0imatel% 5>4,444

Iowans receive health care services thro'h Bedicaid, Health% and Dell Kids in Iowa (“haw-

i”), and the Iowa Health and Dellness Plan (“IHADP”) (collectivel% “Bedicaid beneficiaries”)6

*ef67s r6 56

$ver the past decade, the tate of Iowa7s Bedicaid b'det has rown E?J6 *ef67s r6 5

(citin la%ba'h Aff6)6 or state fiscal %ear (“”) 3415, Iowa7s Bedicaid proram cost L@6

billion< state ta0 dollars f'nded L162 billion, and the federal overnment f'nded the remainder6

Id. &he *epartment characteri=es the rowth of the Bedicaid b'det as “'ns'stainable6” Id. In

+an'ar% 3415, Iowa 9overnor &err% ranstad anno'nced he wo'ld p'rs'e maor chanes to the

tate7s Bedicaid proram6 Id.< see also Pl67s r6 @6 His main proposal was to convert the

proram from a “fee for services model” to a “manaed care model6” *ef67s r6 5< Pl67s r6 @6

&he ranstad administration calls this proect “Bedicaid moderni=ation6” *ef67s r6 56

rom the beinnin, the ranstad administration and the *epartment have intended the

transition to tae place on +an'ar% 1, 34126 Pl67s r6 @6 However, beca'se Bedicaid is a oint




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federal and state proram, the federal "enter for Bedicare and Bedicaid ervices (“"B”) m'st

approve the transition to a manaed care model6 Id. at 26 $n *ecember 1E, 3415, "B notified

the *epartment that it m'st dela% implementation of the manaed care model 'ntil Barch 1,

34126 Pl67s #06 ?46 Dhile "B e0pects to event'all% approve the *epartment7s new proram,

the aenc%7s review indicated that a +an'ar% 1st transition date wo'ld res'lt in inade/'ate care

for Iowa Bedicaid beneficiaries6 Id.

&his transition to a manaed care model is intended to “interate care and improve

/'alit% o'tcomes and efficiencies across the health care deliver% s%stem, in t'rn decreasin costs

thro'h the red'ction of 'nnecessar%, inappropriate, and d'plicative services6” *ef67s r6 5

(citin la%ba'h Aff6)6 In a manaed care model, the *epartment sets a “capitation rate” b%

which it pa%s manaed care orani=ations (“B"$s”) a “per-member, per-month” fee for each

enrolled Iowa Bedicaid beneficiar%6 *ef67s r6 5 (notin that B"$s are for-profit corporations)6

#ach B"$ is then responsible for providin all medicall% necessar% health care services to its

members (i6e6, Iowa Bedicaid beneficiaries), reardless of the costs6 Id. "B re/'ires that the

capitation rates be “act'ariall% so'nd,” meanin that calc'lations 'sed to develop capitation rates

do not violate state or federal law6 Id. &he *epartment7s contracts with the for-profit B"$s

allow each corporation to eep 'p to 13J of the capitation rate for overhead and administrative

costs6 Pl67s r6 5M2 (notin the *epartment c'rrentl% 'ses 2J of its Bedicaid b'det for

medical treatment, while the B"$s will be allowed to 'se as little as >>J for medical

treatment)6 &he B"$s contract with Iowa health care providers for the provision of the act'al

services to Bedicaid beneficiaries6 *ef67s r6 56 Dhen it p'shed bac the implementation date,

"B noted a concern abo't the low n'mber of Iowa health care providers that have sined

contracts with the B"$s as of the "B review6 See Pl67s #06 ?46




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$n ebr'ar% 12, 3415, the *epartment iss'ed a re/'est for proposal (“.P”) seein 3M@

B"$s to provide health care services to Iowa Bedicaid recipients6 Id.< see also Pl67s r6 @M56

&he proram thro'h which the B"$s will operate is nown as IA Health 8in6 Pl67s r6 @6 $n

A''st 1E, 3415, after eval'atin the proposals received thro'h the .P, the *epartment

anno'nced its intention to neotiate contracts with fo'r o't-of-state corporations6 Pl67s r6 56 $n

$ctober , 3415, the *epartment anno'nced the e0ec'tion of contracts with the chosen B"$s:

Ameriro'p Iowa, Inc6, AmeriHealth "aritas Iowa, Inc6, and FnitedHealthcare Plan of the .iver

Nalle%, Inc6 Id. ($riinall%, there were fo'r corporations chosen as B"$s, b't one contract was

eliminated as a res'lt of a leal challene6)< see also *ef67s r6 5M26 All the B"$s have been

worin toward a +an'ar% 1, 3412 implementation date, incl'din leasin office space, hirin

and trainin staff, neotiatin and enterin into contracts with health care providers, and

enrollin members6 Id. at 2ME6

or 3412, the Iowa 8eislat're appropriated appro0imatel% L16? billion for the

Bedicaid proram6 *ef67s r6 2ME6 &his fi're incl'ded the *epartment7s oriinal proection of

L51 million in savins d'e to the transition to manaed care, and the b'det ass'mes a manaed

care start date of +an'ar% 1, 34126 Id. at 2 (citin la%ba'h Aff6)6 (&he *epartment has since

revised this fi're down to L@E million in savins, and the dela% in implementation is e0pected

to f'rther red'ce that fi're b% appro0imatel% L1@6? million6 See Dilliam Petrosi, Bedicaid

*ela% Dill .ed'ce Iowa avins b% L1@6? million, *es Boines .eister (*ecember 1>, 3415),

http:;;www6desmoinesreister6com;stor%;news;politics;3415;13;1>;medicaid-dela%-red'ce-iowa-

savins-1@?-million;EE5E@>@2;6)

C. I/5a C/&% C+a!% 678M9 H/#i!al H%al!+ Ca% A%## A##%##:%!

P/a:




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At the center of this proceedin is the Hospital Health "are Access Assessment Proram

(“hospital assessment”)6 &he hospital assessment is codified at Iowa "ode chapter 3@B and

addresses specific ta0es and financin for Iowa hospitals6 See Iowa "ode ch6 3@B (3415)6

*esinated hospitals contrib'te to a tr'st f'nd 1632J of net patient reven'e as meas'red b% the

individ'al hospitals7 fiscal %ear 344> Bedicare cost report6 *ef67s r6 E (notin that meas'rin

the assessment amo'nt aainst a fi0ed point in time eeps the assessment amo'nt even %ear-to-

%ear)6 &he hospital assessment was created in 3414 beca'se the tate was facin a sinificant

b'det shortfall and wanted to avoid concomitant red'ctions in Bedicaid benefits6 Pl67s r6 1?6

&he Iowa 8eislat're wored in con'nction with Plaintiffs and other IHA member hospitals to

desin a proram to draw additional federal f'ndin for Iowa7s Bedicaid proram6 Id. At the

time chapter 3@B was enacted, Iowa Bedicaid pa%ment rates to hospitals were amon the

lowest in the co'ntr%, and chapter 3@B was intended to increase s'ch pa%ments to participatin

hospitals6 Id. &he stat'te e0cl'des state-owned hospitals, o't-of-state hospitals, and desinated

critical care access hospitals from participation in the tr'st f'nd6 *ef67s r6 E< see also Iowa

"ode GG 3@B63(2), 6?(3)6 &he hospital assessment collects over L?@ million ann'all% from

participatin hospitals6 Pl67s r6 1?6 &he federal overnment matches the assessment f'nds at a

ratio determined b% the ann'al BAP form'la6 Id.

ection 3@B6@(?) of chapter 3@B provides that f'nds collected in the hospital

assessment are stored in a tr'st f'nd that:

shall be separate from the eneral f'nd of the state and shall not be considered part of the eneral f'nd6 &he mone%s in the tr'st f'nd shall not be consideredreven'e of the state, b't rather shall be f'nds of the hospital health care accessassessment proram6 &he mone%s deposited in the tr'st f'nd 6 6 6 shall not betransferred, 'sed, obliated, appropriated, or otherwise enc'mbered




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e0cept as specificall% provided for 'nder chapter 3@B6 Pl67s r6 1@< Iowa "ode G 3@B6@(?)6

ection 3@B6@(?) f'rther mandates that “interest or earnins on mone%s deposited in the tr'st

f'nd shall be credited to the tr'st f'nd6” Iowa "ode G 3@B6@(?)6

&he state treas'rer holds the tr'st f'nd, the 8eislat're controls appropriation of the

f'nds, and the *epartment is responsible for administration of the f'nd incl'din

reimb'rsements and e0pendit'res6 See Iowa "ode GG 3@B6@(1), (3), (@)6 *'rin the first %ear

of the assessment, the *epartment 'sed the appropriated f'nds to increase the base rate paid to

hospitals for certain services in an amo'nt e/'al to the “Bedicare 'pper limit pa%ment for the

fiscal %ear beinnin +'l% 1, 3414, calc'lated as of +'l% ?1, 34146” Iowa "ode G 3@B6@(5)(a)

(definin “Bedicare 'pper limit pa%ment” as the federall% imposed ceilin on Bedicaid

pa%ments for inpatient and o'tpatient hospital services, which is the ma0im'm reimb'rsement

for lie services 'nder Bedicare)< see also @3 "66.6 GG @@E63E3(b), @@E6?31(b)6 &he

8eislat're also appropriated mone% for the rebasin of reimb'rsement rates for inpatient and

o'tpatient services for the participatin hospitals in 3413 and 341?6 Iowa "ode G 3@B6@(E)6

ection 3@B6@() also created the Hospital Health "are Access &r'st 'nd oard,

which is comprised of: (1) the co-chairpersons and the ranin members of the oint

appropriations s'bcommittee on health and h'man services< (3) the Iowa medical assistance

director< (?) two hospital e0ec'tives representin the two larest private health care s%stems in

the state< (@) the president of the Iowa Hospital Association< and (5) a representative of a national

and state cons'mer advocac% ro'p6 Iowa "ode G 3@B6@()6 &he oard is responsible for

overseein the tr'st f'nd, main recommendations reardin the hospital assessment, its

calc'lations and pa%ments, and 'ses of the tr'st f'nd mone%s, and s'bmittin an ann'al report to

the overnor and eneral assembl%6 Id. at G 3@B6@()(b)6 ince its creation, the oard has




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never been convened6 &he stat'te instr'cts, “the department shall provide administrative

assistance to the board” b't is silent with reard to an% mechanism for convenin the board6 See

id.

D. Plai!i""#1 R%<=%#! "/ D%laa!/0 a& I>=!i$% R%li%"

Plaintiffs7 Nerified Petition re/'ests a declarator% order and temporar% and permanent

in'nctive relief6 Pet6 16 Plaintiffs as the "o'rt to find: (1) the *epartment7s Bedicaid

moderni=ation plan “is contrar% to Iowa and federal law<” (3) the *epartment is witho't leal

a'thorit% to pa% hospital assessment f'nds to an%one other than participatin hospitals, incl'din

the manaed care orani=ations< (?) *efendants7 “actions violate the separation of powers, are

'ltra vires, 'nreasonable, capricio's, and contrar% to law<” and (@) the contracts awarded to the

B"$s thro'h the .P process are n'll and void beca'se the *epartment is witho't a'thorit% to

contract in this capacit%6 Id. at 31M3?6 Plaintiffs as the "o'rt to: (1) enoin *efendants from

implementin the Bedicaid moderni=ation plan< (3) re/'ire “that an% implementation of the

manaed care model occ'r thro'h an .P process that does not violate Iowa or federal law,”

incl'din 'se of hospital assessment f'nds< (?) re/'ire *efendants to cease and desist

implementation of the manaed care model 'ntil all leal iss'es are resolved< (@) enoin

*efendants from disb'rsin an% hospital assessment f'nds other than to participatin hospitals as

defined 'nder Iowa "ode section 3@B6@(3)< and (5) re/'ire *efendants “to convene the

Hospital Health "are Access &r'st 'nd oard for a meetin to oversee the tr'st f'nd as

re/'ired b% law6” Id. Plaintiffs assert the% are entitled to a temporar% in'nction to maintain the

stat's /'o d'rin this litiation6 Pl67s r6 E6

II. LEGAL STANDARDS FOR STANDING, RIPENESS ? MOOTNESS, JUDICIAL

REVIEW OF AGENCY ACTION, AND INJUNCTIVE RELIEF




A. S!a&i

tandin to s'e means “a part% m'st have s'fficient stae in an otherwise 'sticiable

controvers% to obtain 'dicial resol'tion on that controvers%6” Alons v. Iowa Dist. Court for

ood"ur# Ct#., 2> !6D63d >5>, >2?M2@ (Iowa 3445) (internal /'otation mars omitted)

(/'otin Citi$ens for %esponsi"le Choi&es v. Cit# of Shenandoah, 2>2 !6D63d @E4, @E5 (Iowa

344@) (citations omitted))6 In standin, the foc's is on the part%, not the claim6 Id. Iowa law

re/'ires “that a complainin part% m'st (1) have a specific personal or leal interest in the

litiation and (3) be in'rio'sl% affected6” Id. &hese two criteria are separate re/'irements for

standin6 Id. ederal law sets o't three criteria for standin:

(1) “the plaintiff m'st have s'ffered an in'r% in factOan invasion of a leall% protected interest which is (a) concrete and partic'lari=ed, and (b) act'al orimminent, not conect'ral or h%pothetical<” (3) “there m'st be a ca'salconnection between the in'r% and the cond'ct complained of<” and (?) it m'st be liel%, as opposed to merel% spec'lative, that the in'r% will be redressed b% afavorable decision6”

Lu'an v. Defenders of ildlife, 54@ F66 555, 524M21 (13) (internal /'otation mars and

citations omitted)6 &he Iowa 'preme "o'rt has reconi=ed, “the federal test for standin is not

dissimilar from o'r own test 6 6 6 we therefore consider the federal a'thorit% pers'asive on the

standin iss'e6” Alons, 2> !6D63d at >26

&he doctrine of standin

ens'res that co'rts are decidin act'al, specific controversies and not abstract/'estions or moot iss'es6 tandin is a r'le of 'dicial self-restraint based on the principle that co'rts sho'ld not resolve abstract /'estions or iss'e advisor%

opinions< the f'ndamental /'estion raised b% an obection to standin is whetherthe litiant is a proper part% to see ad'dication of a partic'lar iss'e6

5 Am6 +'r6 3d (arties G 3 (3415) (citations omitted)< see also Haw)e#e *an&orporation v.

Iowa Coll. Aid Comm’n, ?24 !6D63d E>, >43 (Iowa 1>5) (“standin is a self-imposed r'le of

restraint”)6 &he doctrine 'ards aainst advisor% opinions beca'se it “re/'ires the co'rt to




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dispose of onl% those iss'es that affect the rihts of the parties present6” 5 Am6 +'r6 3d (arties

G36

An association ma% have standin to represent its members7 views6 Iowa+Illinois as

and -le&. Co. v. Iowa State Commer&e Comm’n, ?@E !6D63d @3?, @32M3E (Iowa 1>@) (citin

Iowa *an)ers Ass’n v. Iowa Credit nion Dep’t , ??5 !6D63d @?, @@5 (Iowa 1>?))6

Associational standin in Iowa re/'ires: “(1) affirmative demonstration of a specific, personal,

and leal interest in the s'bect matter as distin'ished from the eneral interest shared b% and

common to all members of the comm'nit%, and (3) affirmative establishment of specific in'r% to

this interest b% the decision6” /orth"roo) %esidents Ass’n v. Iowa State Dep’t of Health 0ffi&e

for Health (lanning and Dev., 3> !6D63d ??4, ??3 (Iowa 1>4)6 ederal law reconi=es an

association7s standin to brin s'it on behalf of its members when, “(a) its members wo'ld

otherwise have standin to s'e in their own riht< (b) the interests it sees to protect are ermane

to the orani=ation7s p'rpose< and (c) neither the claim asserted nor the relief re/'ested re/'ires

the participation of individ'al members in the laws'it6” nited 1ood and Commer&ial or)ers

nion Lo&al 234 v. *rown roup, In&., @?3 F66 5@@, 553M5? (12) (/'otin Hunt v.

ashington State Apple Advert. Comm’n, @?3 F66 ???, ?@1M@3 (1EE))6

B. Ri%%## ? M//!%##

.ipeness and mootness are closel% related b't distinct doctrines that f'nction to ens're

co'rts consider cases and controversies at the proper moment in time6 .ipeness overns

'sticiabilit% for cases that ma% become appropriate for a co'rt to hear, while mootness applies to

cases that are no loner appropriate for a co'rt to ad'dicate6 oth are at iss'e in the present

case6




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.ipeness, lie standin and mootness, is a 'risdictional re/'irement, and if a claim is not

ripe, the co'rt m'st dismiss it6 See Iowa Coal Min. Co., In&., v. Monroe Ct#., 555 !6D63d @1>,

@?3 (Iowa 12) (citin Triple . Landfills, In&., v. *oard of Comm’rs, EE 63d 3>E, 3>>M>

(Eth "ir6 13)< Iowa Coal I , @@ !6D63d 22@, 2E1M2E3 (Iowa 12)< *a))en v. Cit# of Coun&il

*luffs, E@4 !6D63d ?@, ?E (Iowa 11))6 &he Triple co'rt described the ripeness doctrine

th's:

&he ripeness doctrine deals with the time, if an%, at which a part% ma% see pre-enforcement review of a stat'te or re'lation6 It sees to avoid the premat'read'dication of cases when the iss'es posed are not f'll% formed, or when thenat're and e0tent of the stat'te7s applications are not certain6

Triple . Landfills, EE 63d at 3>>M>6 &he rationale for the doctrine is two-fold6 irst, it

prevents co'rts from “entanlin themselves in abstract disareements,” and in the case of

re'lator% action, it “protects the parties from 'dicial interference 'ntil the aenc% decision7s

effects are felt in a concrete wa% b% the challened parties6” Iowa Coal , 555 !6D63d at @?3

(citin A""ott La"s v. ardner , ?>E F66 1?2, 1@>M@ (12E))6 .ipeness /'estions re/'ire

co'rts to as two /'estions: (1) “are the relevant iss'es s'fficientl% foc'sed so as to permit

'dicial resol'tion witho't f'rther fact'al development” and (3) “wo'ld the parties s'ffer an%

hardship b% the postponement of 'dicial action” Id. (citin Triple . Landfills, EE 63d at

3>>)6

&he doctrine of mootness prevents co'rts from ad'dicatin claims in which the formerl%

live controvers% has become resolved in some wa%6 “A moot case is one that no loner presents

a 'sticiable controvers% beca'se the iss'es involved have become academic or none0istent6”

Martin+Trigona v. *a5ter , @?5 !6D63d E@@, E@5 (Iowa 1>) (citin 6un)ins v. *ranstad , @31

!6D63d 1?4, 1?? (Iowa 1>>))6 “&he test is whether a 'dment, if rendered, wo'ld have an%

practical effect 'pon the e0istin controvers%6” Id. Bootness, lie standin, is a /'estion of




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'dicial restraint6 %ush v. %a#, ??3 !6D63d ?35, ?32 (Iowa 1>?) (citin Cit# of Des Moines v.

(u"li& -mp’t %elations *d., 3E5 !6D63d E5?, E5 (Iowa 1E))6

&here is, however, a “p'blic interest” e0ception to the mootness doctrine that allows

consideration of moot /'estions “when (1) the% are of reat p'blic importance and (3) are liel%

to rec'r6” Id. (citin Cit# of Des Moines, 3E5 !6D63d at E5>)6 &he first pron has sometimes

been divided in two parts, res'ltin in a “not different” b't “more ill'strative” test that “sho'ld

be preferred to the two-pron test6” Id. at ?32M3E6 &he complete test, then, considers, “(1) the

p'blic or private nat're of the /'estion presented, (3) desirabilit% of an a'thoritative ad'dication

for f't're 'idance of p'blic officials, and (?) lielihood of f't're rec'rrence of the same or

similar problem6” Id. (citin *d. of Dirs. of Indep. S&h. Dist. of aterloo v. reen, 1@E !6D63d

>5@, >52 (Iowa 12E)< Cit# of Des Moines, 3E5 !6D63d at E5>)6

C. J=&iial R%$i%5 /" A%0 A!i/#

Iowa "ode section 1EA61(1) a'thori=es 'dicial review of administrative aenc%

decisions6 Iowa "ode G 1EA61(1) (3415)6 #ssentiall%, the district co'rt acts in appellate

capacit% and “ma% onl% interfere with the aenc%7s decision if it is erroneo's 'nder one of the

ro'nds en'merated in the stat'te, and a part%7s s'bstantial rihts have been pre'diced6” Me#er

v. I*(, In&., E14 !6D63d 31?, 31> (Iowa 3442)< see also Iowa "ode G 1EA61(14)6 If the co'rt

“determines that the s'bstantial rihts of the person seein 'dicial relief have been pre'diced”

b% the aenc% action, “it shall reverse, modif%, or rant other appropriate relief from aenc%

action, e/'itable or leal and incl'din declarator% relief6” Iowa "ode G 1EA61(14)6 &he

fo'rteen wa%s in which aenc% action can be pre'dicial and the accompan%in standards of

review are detailed in section 1EA61(14) of the Iowa "ode6 Id. at (a)M(n)6 &he “standard of




1?

review depends on the aspect of the aenc%7s decision that forms the basis of the petition for

'dicial review6” *urton v. Hilltop Care Ctr., >1? !6D63d 354, 352 (Iowa 3413)6 B'ch depends

on the a'thorit% with which the aenc% is vested b% its enablin stat'te and whether the iss'es on

appeal are fact'al, leal, or mi0ed /'estions of fact and law (i6e6, a challene to the aenc%7s

'ltimate concl'sion)6 See Me#er , E14 !6D63d at 316 eca'se there are diverent methods of

anal%sis, it is “essential 6 6 6 to search for and pinpoint the precise claim of error on appeal” rather

than “l'mpin the fact, law, and application /'estions toether within the 'mbrella of a

s'bstantial-evidence iss'e6” Id.

D.

I>=!i$% R%li%"

Iowa .'le of "ivil Proced're 161543 (formerl% .'le ?31) provides:

A temporar% in'nction ma% be allowed 'nder an% of the followincirc'mstances:(1) Dhen the petition, s'pported b% affidavit, shows the plaintiff isentitled to relief which incl'des restrainin the commission or contin'anceof some act which wo'ld reatl% or irreparabl% in're the plaintiff6(3) Dhere, d'rin the litiation, it appears that a part% is doin, proc'rin

or s'fferin to be done, or threatens or is abo't to do, an act violatin theother part%7s riht respectin the s'bect of the action and tendin to maethe 'dment ineffect'al6(?) In an% case speciall% a'thori=ed b% stat'te6

Iowa .6 "iv6 P6 1615436 &he Iowa 'preme "o'rt has provided comprehensive 'idance

on the interpretation of .'le 1615436

9enerall%, the iss'ance of an in'nction invoes the e/'itable powers ofthe co'rt and co'rts appl% e/'itable principles6 &he standards considered

in rantin temporar% in'nctions are similar to those for permanentin'nctions, e0cept temporar% in'nctions re/'ire a showin of thelielihood of s'ccess on the merits instead of act'al s'ccess6 &hesetraditional e/'itable principles are reflected in s'bsections (1) and (3) ofr'le 1615436 In appl%in these principles to temporar% in'nctions, co'rtsconsider the circ'mstances confrontin the parties and balance the harmthat a temporar% in'nction ma% prevent aainst the harm that ma% res'ltfrom its iss'ance6




1@

Ma5 477 L.C. v. Iowa %ealt# Co., In&., 231 !6D63d 1E>, 1>1 (Iowa 3441) (internal citations,

/'otations, and bracets omitted)6

“$ne re/'irement for the iss'ance of a temporar% in'nction is a showin of the

lielihood or probabilit% of s'ccess on the merits of the 'nderl%in claim6” Lewis Invs., In&. v.

Cit# of Iowa Cit#, E4? !6D63d 1>4, 1>@ (Iowa 3445)6 A part% seein a temporar% in'nction

m'st also establish an invasion or threatened invasion of a riht< that s'bstantial in'r% or

damaes will res'lt 'nless an in'nction is ranted< and that no ade/'ate leal remed% is

available6 See In re -state of Hurt, 2>1 !6D63d 51, 55 (Iowa 344@)< Ma5 477 L.C., 231

!6D63d at 1>4< Iowa (u". Serv. Co. v. (arsons, 3E3 !6D6 21?, 21E (Iowa 1?E)6

A temporar% in'nction “is not mandated where ade/'ate redress can be afforded b% a

monetar% award, even tho'h the harm is clearl% shown to e0ist6” 8riener v. Tur)e# !alle#

Comm. S&h. Dist., 313 !6D63d 532, 5?2 (Iowa 1E?)6 &herefore, even if plaintiffs establish a

technical riht to in'nctive relief, the co'rt sho'ld den% a temporar% in'nction where it wo'ld

ca'se serio's loss to the defendant, while the in'r% to the plaintiffs can readil% be compensated

thro'h damaes6 &his is nown as the “balance of convenience” or “relative hardship” standard

'nder which the "o'rt e0ercises its power with a view to the relative amo'nt of in'r% to be

s'ffered b% the parties6 Id. In addition, some co'rts have held that the determination as to

whether a temporar% in'nction sho'ld iss'e involves consideration of the p'blic interest6 See

Dataphase S#stems, In&., v. CL S#stems, In&., 2@4 63d6 14, 11? (>th "ir6 1>1) (listin the so-

called “ Dataphase factors” for eval'atin a temporar% in'nction motion)6

In s'm, to iss'e a temporar% in'nction, a co'rt m'st consider “(1) the threat of

irreparable harm to the movant< (3) the state of balance between this harm and the in'r% that

rantin the in'nction will inflict on other parties litiant< (?) the probabilit% that movant will




15

s'cceed on the merits< and (@) the p'blic interest6” Id. at 11?M1@ ("o'rts often address the third

Dataphase factor first as it is 's'all% the most lenth% and comple0 factor6)6 An in'nction is

“an e0traordinar% remed% that is ranted with ca'tion and onl% when re/'ired to avoid

irreparable damae6” S)ow v. oforth, 21> !6D63d 3E5, 3EEME> (Iowa 3444)< see Lewis Invs.,

In&., E4? !6D63d at 1>56 “&he decision to iss'e or ref'se a temporar% in'nction rests larel%

within the so'nd discretion of the trial co'rt6” Ma5 477 L.C., 231 !6D63d at 1>4 (internal

/'otations and bracets omitted)6 “A temporar% in'nction is a delicate matter, and the

e0ercise of 'dicial power to iss'e or ref'se a temporar% in'nction re/'ires reat ca'tion,

deliberation, and so'nd discretion6” Id. (internal /'otations omitted)6

III. ARGUMENTS OF THE PARTIES

A. Plai!i""#1 A=:%!#

Plaintiffs ar'e that the% are entitled to an in'nction 'nder each of the three potential

ro'nds in Iowa .'le of "ivil Proced're 1615436 Pl67s r6 >6 Plaintiffs f'rther state that for all

three ro'nds, the "o'rt sho'ld follow the same basic anal%sis, with the e0ception that

s'bsection (3) does not re/'ire a showin of irreparable harm6 Id. at >M6 Plaintiffs also mae

e0tensive reference to Iowa "ode section 1EA61, which overns district co'rt appellate review

of aenc% decisions6 See Iowa "ode G1EA61(14)< Pl67s r6 M116 Plaintiffs 'se section 1EA61

to present their ar'ment reardin the factors the "o'rt sho'ld 'se to anal%=e their in'nction

re/'est6 Id. at 14M116 eca'se the present action is not appellate review of an aenc% decision,

disc'ssion of section 1EA61 is s'perfl'o's and inapposite, and the "o'rt will 'se the traditional

Dataphase factors to anal%=e Plaintiffs7 motion for a temporar% in'nction6

@. Li%li+//& /" S=%## / !+% M%i!#




12

Plaintiffs ar'e the% will s'cceed on the merits of their claim beca'se: (1) *efendants7

proposed 'se of hospital assessment f'nds violates the plain, 'nambi'o's lan'ae of Iowa

"ode chapter 3@B< (3) the *epartment has no leal a'thorit% to chane the plain lan'ae of

Iowa "ode chapter 3@B< (?) implementation of the manaed care model is an 'ltra vires

encroachment 'pon the leislative power< and (@) IHA and its member hospitals reasonabl% and

detrimentall% relied on the *epartment7s misrepresentation6 Pl7s r6 13M?16 Plaintiffs also ar'e

that the *epartment has had notice from the Iowa "o'rt of Appeals that “it is re/'ired to tae

affirmative steps to enforce a leislative directive or its actions will be witho't leal a'thorit%6”

Id. at 336 &h's, the *epartment sho'ld be on notice that it “is re/'ired to adopt administrative

r'les to implement” to hospital assessment in accordance with Iowa "ode chapter 3@B6 Id.

Plaintiffs7 first ar'ment is that IA Health 8in wronf'll% diverts hospital assessment

f'nds to the B"$s rather than to the “participatin providers,” violatin the “plain,

'nambi'o's lan'ae of Iowa "ode chapter 3@B6” Pl67s r6 1@6 In Plaintiffs7 view, the Iowa

"ode provision e0plicitl% instr'cts the *epartment to 'se hospital assessment f'nds onl% to

reimb'rse participatin hospitals6 Id.< see also Iowa "ode G 3@B6@(3)6 Plaintiffs ar'e the

hospital assessment is to be 'sed onl% to ens're that participatin hospitals are reimb'rsed for

Bedicaid services at the 'pper pa%ment limit for inpatient and o'tpatient health care services6

Id. &h's, an% diversion of hospital assessment f'nds or ro'tin of s'ch f'nds thro'h entities

other than the participatin hospitals violates the stat'tor% lan'ae6 Id.

'rther, Plaintiffs ar'e that the *epartment7s contracts with the B"$s 'se hospital

assessment f'nds to pa% capitation rates in direct conflict with the stat'tor% limitation6 Pl67s r6

156 pecificall%, Plaintiffs ar'e: (1) the contracts are silent as to the mechanism b% which the

B"$s or the *epartment will reimb'rse the hospitals as re/'ired b% Iowa "ode chapter 3@B<




1E

(3) the contracts ive the B"$s complete discretion as to how to 'se the hospital assessment

f'nds< and (?) their reimb'rsement will chane from the 'pper limit 'nder chapter 3@B to the

floor 'nder the B"$ scheme6 Id. Plaintiffs rel% on lan'ae present in the *epartment7s .P

and the s'bse/'ent B"$ contracts:

&he Aenc% has established assessment fees for Hospitals, !'rsin acilities, andIntermediate "are acilities for the Intellect'all% *isabled6 "apitation rates willincl'de allowance for these assessment fees6 Awarded "ontractors are re/'ired tocooperate with the Aenc% and facilities impacted b% assessment fees to ens're pa%ments b% the "ontractor to the facilities appropriatel% acco'nt for assessmentfees to be paid b% the facilities6

Id.

Plaintiffs7 second and third ar'ments are related6 &he second ar'ment is that stat'tor%

and re'lator% chanes are re/'ired to facilitate the leal implementation of the manaed care

model, and the *epartment is witho't power to implement the proram prior to enactment of

those chanes b% the 8eislat're6 Pl67s r6 3@6 &he third ar'ment is that beca'se of the

necessit% of leislative action, implementation of the manaed care model b% *efendants is an

encroachment on leislative responsibilities in violation of the separation of powers6 Id. As

s'ch, contractin to pa% the B"$s a capitation rate 'sin hospital assessment f'nds amo'nts to

an illeal “raidin” of the tr'st f'nd, and the associated contracts are n'll and void6 Id. at 3@M356

Plaintiffs ar'e d'rin the 3415 appropriations process, the 8eislat're passed lan'ae

overnin the *epartment7s obliations with reard to the transition to manaed care6 Id. &he

8eislat're directed that the *epartment:

16 &he department of h'man services shall incl'de in an% Bedicaid manaed carecontract entered into on or after +'l% 1, 3415, a mechanism b% which the capitated pa%ment received b% the manaed care contractor reflects the amo'nt necessar% tocontin'e reimb'rsement of participatin hospitals b% manaed care contractors inaccordance with the provisions of chapter 3@B6 'ch reimb'rsement shall preferabl% be provided thro'h l'mp s'm pa%ments to participatin hospitals6




1>

!otwithstandin an% provisions of chapter 3@B to the contrar%, the departmentma% mae administrative modifications to the hospital health care accessassessment proram to compl% with this section6 &he department of h'manservices shall wor with participatin providers, incl'din health s%stems and theIowa hospital association, to effect'ate this section6

36 &he department of h'man services shall s'bmit recommendations for an%chanes in stat'te or r'les reardin the hospital health care access assessment proram necessitated b% the transition to manaed care to the individ'alsidentified in this Act for s'bmission of reports b% *ecember 15, 34156

3415 Iowa Acts ch6 1?E G 1156 Plaintiffs ar'e that the *epartment has not followed these

directives6 Pl67s r6 34M3@6 eca'se the *epartment is 'nable to modif% chapter 3@B b% itself,

it m'st wait for the 8eislat're to do so before implementin the manaed care proram6 Id. at

3@6

Plaintiffs7 final ar'ment reardin their lielihood of s'ccess on the merits is a

promissor% estoppel claim6 Pl67s r6 3E6 Plaintiffs o'tline an e0tensive period of cooperation

between the IHA, the *epartment, the 8eislat're, and the ranstad administration d'rin the

%ears immediatel% prior to 34156 Id. at 3EM3>6 *'rin this period, all parties wored to create

m't'all% beneficial Bedicaid deliver% prorams p'rs'ant to the Patient Protection and

Affordable "are Act6 Id. at 3E (citin Patient Protection and Affordable "are Act, @3 F66"6 G

1>441 (3414))6 Plaintiffs assert that the% sinificantl% invested in “necessar% infrastr'ct're

incl'din increased staffin, health information technolo%, doc'mentation and reportin,

additional e0tended provider ho'rs, and member o'treach efforts” to implement the proram

desined b% the ro'p6 Id. at 3>6 &he% allee that *efendants were aware as earl% as +an'ar%

341@ that s'ch investments wo'ld be rendered meaninless b% the transition to a manaed care

model d'rin 3415, and that the *epartment d'plicito'sl% too steps to conceal that realit% from

Plaintiffs6 Id. at 36 Plaintiffs ar'e that beca'se the% reasonabl% relied on *efendants7




1

misrepresentations to their detriment, *efendants sho'ld be estopped from implementin the

manaed care proram6 Id. at 3E6

Plaintiffs acnowlede that assertin promissor% estoppel aainst a overnment actor is

rare beca'se of the concern that s'ch a claim ma% neativel% impact the overnment7s abilit% to

enforce the law, which wo'ld in t'rn have a neative impact on the entire citi=enr%6 Pl67s r6 ?46

However, the% ar'e that there is no “o'triht r'le” aainst assertin promissor% estoppel aainst

a state actor< instead, s'ch claims are held to a hiher leal standard6 Id. Plaintiffs ar'e

promissor% estoppel ma% be asserted aainst a state actor “when the interest of a part% 'nder

standards of decenc%, honor, and reliabilit% in their dealins with a overnment bod%” o'tweihs

the overnment7s riht to enforce the law6 Id. In this case, Plaintiffs assert: (1) that *efendants7

behavior was so ereio's as to fall below standards of decenc%, honor and reliabilit%,

facilitatin the promissor% estoppel claim< and (3) beca'se implementation of the manaed care

proram is contrar% to the law, the standard concern reardin preventin overnment

enforcement of the law is not present in this sit'ation6 Id. at ?16 &herefore, *efendants sho'ld

be estopped from implementin the manaed care proram6 Id.

6. I%aal% Ha:

Plaintiffs allee that a conflict between federal and state law will lead to irreparable

financial in'r% to them6 Pl67s r6 ?1M?26 irst, Plaintiffs ar'e that pa%ment of hospital

assessment f'nds to B"$s violates state law beca'se chapter 3@B limits pa%ment of hospital

assessment f'nds to participatin hospitals onl%6 Id. Accordin to Plaintiffs, the “illeal”

disb'rsement of f'nds to which the% are entitled 'nder Iowa law represents an irreparable harm

in and of itself6 See id. at ??M?@6 However, Plaintiffs7 second ar'ment compo'nds the alleed




34

irreparable harm6 Id. At ?1M?26 Plaintiffs ar'e that once hospital assessment f'nds are

disb'rsed to the B"$s thro'h the capitation rates, federal law (specificall% @3 "66.6 G @?>624)

will prevent an% recover% of “illeall%” disb'rsed hospital f'nds6 Id. Plaintiffs ar'e the federal

re'lation prohibits the *epartment from main pa%ments to an% entit% o'tside the corporations

with which it has contracted for services available 'nder the contract6 Id. In Plaintiffs7

estimation, the interpla% between these two laws p'ts them between the proverbial roc and a

hard placeOstate law re/'ires hospital assessment f'nds be disb'rsed in a specific manner b't

federal law prevents the recover% of those f'nds (via a laws'it) even if the *epartment violates

the state law b% disb'rsin the f'nds to the B"$s6 Id. As s'ch, Plaintiffs ar'e that if

*efendants are allowed to 'se hospital assessment f'nds to pa% capitation rates to the B"$s,

Plaintiffs will have no leal remed% available to reco'p the f'nds lost6 Id. &hird, the% ar'e that

B"$s are not 'nder an% obliation to repa% hospital assessment f'nds to Plaintiffs beca'se their

contracts with the *epartment are silent on the iss'e6 Id. inall%, the% ar'e that beca'se the

lac of readiness for the transition to manaed care will res'lt in an inade/'ate networ of health

care providers, Bedicaid patients will be driven to see treatment in Plaintiffs7 emerenc%

rooms, which ma% res'lt in ins'fficient pa%ments to Plaintiffs if the visits do not /'alif% as

emerencies 'nder the relevant leal standard6 Id.

Plaintiffs acnowlede that financial harm is not normall% a s'fficientl% irreparable

in'r% to 'stif% the iss'ance of a temporar% in'nction6 Pl67s r6 ?36 However, the% ar'e that

“e0treme circ'mstances of financial loss, even if recoverable, co'ld amo'nt to irreparable

in'r%” 'nder certain circ'mstances6 Id. (citin rinnell College v. 0s"orn, E51 !6D63d ?2,

@43 (Iowa 344>) (citin is&onsin as Co. v. 1ed. -nerg# %egulator# Comm’n, E5> 63d 22,




31

2E@ (*6"6"ir6 1>5))6 inall%, Plaintiffs ar'e that 'nder .'le 161543(3), the% do not need to

show irreparable harm6

*. Bala% /" Ha:#

Plaintiffs ar'e the *epartment will not s'ffer an% harm if the in'nction is ranted

beca'se the *epartment “is not prepared or able to implement” the manaed care proram on

+an'ar% 1, 34126 Pl67s r6 ?E6 Plaintiffs ar'e that beca'se the *epartment7s proected L@E

million in savins is “witho't basis or fact,” there can be no financial harm to the tate if the

manaed care proram is dela%ed6 Id. Plaintiffs ar'e that even if there were financial harm d'e

to the loss in proected savins, the tate7s L?5 million "ash .eserve and #conomic #merenc%

'nds co'ld cover the potential loss handil%6 Id. at @46

7. T+% P=li I!%%#!

Plaintiffs ar'e that it is in the p'blic7s best interest for the "o'rt to enoin the

implementation of the Bedicaid moderni=ation plan6 Pl67s r6 @3M@56 Plaintiffs state that iven

the *epartments7 poor state of readiness, the in'nction will protect the most v'lnerable Iowans

from potential aps in coverae of critical medical services6 Id. 'rthermore, Plaintiffs ar'e

that even if the *epartment were read% to move forward with implementation, the proram is

detrimental to the p'blic7s interest beca'se it decreases the efficienc% of Iowa7s Bedicaid

proram, as evidenced b% the increase from @J administrative costs to 13J administrative costs,

witho't a proven, correspondin increase in efficienc% or better o'tcomes6 Id.

B. D%"%&a!#1 A=:%!#




33

*efendants ar'e that Plaintiffs are not entitled to in'nctive relief or the re/'ested leal

findins6 *ef67s r6 36 .eardin the appropriate leal standard to appl% to Plaintiffs7 Botion

for a &emporar% In'nction, *efendants correctl% state that an% disc'ssion of Iowa "ode section

1EA61 is inapplicable to this case beca'se this is not 'dicial review of aenc% action6 Id. at 3

n616 'rther, *efendants ar'e that beca'se Plaintiffs allee an irreparable harm, onl%

s'bsection (1) of .'le 161543 is relevant6 Id.

@. Li%li+//& /" S=%## / !+% M%i!#

*efendants characteri=e Plaintiffs7 ar'ments on the merits as two-fold: (1) Plaintiffs

ar'e the *epartment promised that the Bedicaid proram wo'ld be administered in a certain

wa% and that there can be no chane< and (3) Plaintiffs ar'e that the move to manaed care will

res'lt in an illeal disb'rsement of the provider assessment f'nds and th's the contracts with the

B"$s are void6 *ef67s r6 6 In t'rn, *efendants ar'e Plaintiffs cannot s'cceed on the merits

of either ar'ment beca'se: (1) the promissor% estoppel claim fails as a matter of law< (3) the

promissor% estoppel claim fails fact'all%< and (3) the 8eislat're has leall% directed the

*epartment to transfer the provider assessment f'nds to the B"$s for pa%ment to the

participatin hospitals6 Id. at M116

irst, *efendants ar'e soverein imm'nit% prevents assertion of promissor% estoppel

aainst the tate6 *ef67s r6 116 See also Haw)e#e *#+(rodu&ts, In&., v. State, @1 !6D63d @14,

@13 (Iowa 1>) (den%in recover% aainst the tate based on a theor% of promissor% estoppel)<

In re M&Allister’s -state, 31@ !6D63d 1@3, 1@2 (Iowa 1E@) (holdin that the closel%-related

doctrine of e/'itable estoppel “is not enerall% invoed aainst the state” even when an

in'stice will res'lt witho't its application)6




3?

econd, *efendants ar'e that the promissor% estoppel ar'ment lacs fact'al merit

beca'se the e% components of Iowa7s c'rrent Bedicaid deliver% s%stem will contin'e to e0ist

'nder the new manaed care model6 *ef67s r6 11 (mentionin health homes, Acco'ntable "are

$rani=ations (“A"$s”), and the eneral principles behind relevant rants)6 *efendants state

that the B"$s are contract'all% re/'ired to provide all services that are c'rrentl% available to

Bedicaid beneficiaries, specificall% incl'din health homes and interated health homes6 *ef67s

r6 11M136 'rther, the A"$s that were created followin the enactment of the Patient

Protection and Affordable "are Act will be interated into the manaed care proramOthe B"$

contracts re/'ire that at least @4J of B"$ members are served b% a val'e-based p'rchasin

orani=ation b% 341>6 *ef67s r6 1? (e0plainin the A"$ concept and its interation into the

manaed care model)6 inall%, *efendants ar'e that Plaintiffs7 “real complaint is not with the

contin'ation of the services the% are providin, b't with the pa%ment the% will receive in the

f't're for providin those services6” *ef67s r6 1@6

&hird, *efendants ar'e that the 8eislat're has leall% directed them to transfer the

hospital assessment f'nds to the B"$s for pa%ment to the participatin hospitals6 *ef67s r6 6

*'rin the 3415 leislative session, the 8eislat're passed 66 545, and 9overnor ranstad

sined the bill into law on +'l% 3, 34156 Id. It contains the followin lan'ae:

ec6 1156 H$PI&A8 H#A8&H "A.# A""# A#B#!& P.$9.AB M&.A!I&I$! &$ BA!A9#* "A.#6

16 The department of human servi&es shall in&lude in an# Medi&aid managed &are&ontra&t entered into on or after 6ul# 4, 9743, a me&hanism "# whi&h the

&apitated pa#ment re&eived "# the managed &are &ontra&tor refle&ts the amount

ne&essar# to &ontinue reim"ursement of parti&ipating hospitals "# managed &are&ontra&tors in a&&ordan&e with the provisions of Chapter 9:;M. 'chreimb'rsement shall preferabl% be provided thro'h l'mp s'm pa%ments to participatin hospitals6 /otwithstanding an# provisions of 9:;M to the &ontrar#,the department ma# ma)e administrative modifi&ations to the hospital health &are




3@

a&&ess assessment program to &ompl# with this se&tion. &he department ofh'man services shall wor with participatin providers, incl'din health s%stemsand the Iowa hospital association, to effect'ate this section6

36 &he department of h'man services shall s'bmit recommendations for an%chanes in stat'te or r'les reardin the hospital health care access assessment proram necessitated b% the transition to manaed care to the individ'alsidentified in this Act for s'bmission of reports b% *ecember 15, 34156

3415 Iowa Acts, ch6 1?E, G 115 (emphasis added)6 *efendants also point o't that d'rin the

3415 session, the 8eislat're appropriated the mone% in the hospital assessment f'nd to the

*epartment6 3415 Iowa Acts, ch6 1?E, G 26

*efendants ar'e that the *epartment, thro'h its act'ar%, has incl'ded the amo'nt of

the hospital assessment in the capitation rates that will be paid to the B"$s6 *ef67s r6 14

(citin la%ba'h Aff6)6 'rther, *efendants ar'e that the B"$s are contract'all% bo'nd to

reimb'rse the hospitals in the same amo'nt the% were bein paid on $ctober 1, 34156 Id. (citin

*ef67s #06 1, p6 14E of 35E)6 Accordin to *efendants, once manaed care is implemented,

hospitals will s'bmit their claims to the B"$s rather than to the *epartment and will be

reimb'rsed in the same amo'nt the% wo'ld have had the% s'bmitted identical claims to the

*epartment6 Id. "riticall%, chapter 3@B is set to e0pire on +'ne ?4, 34126 Id.< see Iowa "ode

G 3@B656 *efendants ar'e that no non-participatin hospitals will receive hospital assessment

f'nds6 *ef67s r6 14 M116 inall%, *efendants ar'e that Plaintiffs7 re/'est of the "o'rt amo'nts

to “asin the "o'rt to overt'rn a leislative directive and clear leislative intent6” Id. at 116

6. T+%a! /" I%aal% Ha:

*efendants also ar'e Plaintiffs will not s'ffer an irreparable harm if manaed care is

implemented as sched'led6 *ef67s r6 1@6 It has lon been enerall% reconi=ed that loss of

reven'e does not constit'te an irreparable in'r%, at least in part beca'se leal remedies are




35

available for recoverin damaes6 *ef67s r6 1@ (citin Tele&onne&t Co. v. Iowa State Commer&e

Comm’n, ?22 !6D63d 511, 51@ (Iowa 1>5)< I-S tils., In&., v. Iowa Dep’t of %evenue < 1in.,

5@5 !6D63d 5?2, 5@1 (Iowa 12) (citin Sals"ur# La" v. Iowa Dep’t of -nvtl. =ualit#, 3E2

!6D63d >?4, >?E (Iowa 1E))< !irginia (etroleum 6o""ers Ass’n v. 1ed. (ower Comm’n, 35

63d 31, 35 (F66 *6"6 15>) (“mere in'ries, however s'bstantial, in terms of mone%, time

and ener% necessaril% e0pended in the absence of a sta%, are not eno'h6”))6 *efendants ar'e

that Plaintiffs have not alleed an% non-financial in'r%6 *ef67s r6 1@ (citin Pet6 Q >)6

*. Bala% /" Ha:# B%!5%% !+% Pa!i%#

*efendants ar'e that the *epartment, the tate, the B"$s, and h'ndreds of tho'sands

of Bedicaid beneficiaries will s'ffer irreparable in'r% if the in'nction is ranted6 *ef67s r6 156

&he tate, the *epartment, and the B"$s will s'ffer in'r% beca'se each has p't s'bstantial

effort into preparin for a +an'ar% 1, 3412 start date, and “to p't a stop to this e0tensive effort

at this late date wo'ld create an 'ntenable sit'ation6” Id. at 15M126 'rther, the dela% in

implementation wo'ld create a m'lti-million dollar b'det deficient for the *epartment d'e to

the loss in proected savins6 Id. at 126 &he Bedicaid beneficiaries will s'ffer in'r% beca'se the

period of transition, and its accompan%in 'ncertaint%, will be e0tended6 See id. at 156

*efendants ar'e that when the harms are weihed aainst each other, the potential in'r% to the

*epartment, the tate, the B"$s, and Bedicaid beneficiaries o'tweihs the financial in'r%

claimed b% Plaintiffs6 Id. at 1EM1>6

7. P=li I!%%#!

inall%, *efendants ar'e that an in'nction is not in the p'blic7s best interest6 *ef67s r6

1>6 *efendants ar'e: (1) additional dela% wo'ld ca'se p'blic conf'sion and dela% for Bedicaid




32

beneficiaries and providers< (3) the sinificant b'detar% impact on the *epartment wo'ld ca'se

financial ripples thro'h the entire tate overnment< and (?) an in'nction wo'ld ca'se a maor

portion of Iowa7s health care s%stem to be indefinitel% st'c in “limbo6” Id. at 1>M16

*efendants ar'e that it is inappropriate to rant an in'nction beca'se the p'blic sho'ld not

have to s'ffer these detrimental impacts so that Plaintiffs ma% maintain their financial interest in

Iowa7s Bedicaid deliver% s%stem6 Id. at 16

IV. ANALYSIS

&his case presents proced'ral /'estions reardin standin, ripeness, and mootness6 &he

"o'rt will consider the proced'ral matters before disc'ssin the merits of Plaintiffs7 application

for a temporar% in'nction6 &he "o'rt notes that the bases of its r'lin relatin to standin,

ripeness, and mootness are limited to the motion for a temporar% in'nction and do not e0tend to

the entire laws'it6

A. S!a&i

In their brief, *efendants ar'e that both the IHA and Kir !orris, named in his capacit%

as a member of the oard, do not have standin to s'e for the relief specified6 *ef67s r6 34 (“In

this case, neither the Iowa Hospital Association nor Kir !orris have a leall% coni=able in'r%6

&he% are not amon those who will be impacted b% the manner in which the hospital assessment

is paid and can th's s'ffer no possible harm6”)6 *efendants do not challene the individ'al

hospital Plaintiffs7 standin6 See id. &he "o'rt concl'des that the IHA does have associational

standin to s'e, b't !orris does not6

&he IHA has associational standin to s'e 'nder Iowa re/'irements6 irst, the IHA has

the re/'isite specific, personal, and leal interest in the Bedicaid moderni=ation plan as




3E

distin'ished from that of the eneral comm'nit%6 &he shift to a manaed care model will

radicall% chane the wa% Bedicaid services are administered and delivered in Iowa6 #ven if the

IHA and its member hospitals are not in'red financiall% b% the transition, the% m'st still adapt to

a new b'siness model that will impact information technolo% s%stems, infrastr'ct're, ph%sical

facilities, and personnel levels, trainin, and retention6 'ch a switch will re/'ire the investment

of both mone% and time6 Iowans7 eneral interest in the Bedicaid transition is limited to the wa%

in which an efficient, well-r'n Bedicaid s%stem ens'res the most v'lnerable citi=ens receive

ade/'ate medical care and promotes the responsible 'se of ta0 dollars for the p'blic ood6

econd, Plaintiffs are in'rio'sl% affected b% the transition to a manaed care model6 Dhile

Plaintiffs ma% not have shown the t%pe of irreparable in'r% that warrants an in'nction, the%

have certainl% demonstrated that the transition will disr'pt m'ltiple aspects of their b'siness and

chane the amo'nt and manner of their reimb'rsement6 #speciall% after the enactment of the

Affordable "are Act, Bedicaid is a central pillar of the health care ind'str% in ever% state6 &he

shift from a fee for services model to a manaed care model will necessaril% entail chanes of

man% if not all actors in the maretplace6 At the ver% least, the IHA and its members m'st

chane their orani=ations to f'nction within the new model< at worst, member hospitals stand to

lose sinificant reimb'rsement dollars6

&he IHA also has standin to s'e for a temporar% in'nction 'nder federal associational

standin re/'irements6 irst, IHA members have standin to s'e in their own riht6 As disc'ssed

immediatel% above, the member hospitals meet Iowa standin re/'irements beca'se the% have a

specific personal and leal interest in the litiation, and the% are in'rio'sl% affected6 &he

member hospitals also meet federal standin re/'irements6 As o'tlined in Plaintiffs7 brief, their

in'r% is concrete, partic'lari=ed, and act'al (the in'r% is far from conect'ral or h%pothetical)6




3>

See Pl67s r6 12, 1M34 (Altho'h Plaintiffs face both ripeness and mootness iss'es, federal law

re/'ires that the in'r% be act'al or imminent, not both6 Dhile not imminent, the in'r% is

act'al6)6 &here is a clear ca'sal connection between the manaed care implementation and the

in'r%6 'rther, now and at the time of filin, an in'nction wo'ld redress member hospitals7

in'r% b% preventin the transition from tain place6 econd, the IHA e0ists to represent the

interests of all 11> Iowa hospitals, and in this s'it, it sees to protect those interests as the% relate

to the administration and deliver% of Bedicaid benefits in Iowa6 &he interests the IHA is seein

to protect are ermane to the orani=ation7s p'rpose6 &hird, while eleven member hospitals are

participatin in this s'it, neither the claims asserted nor the relief re/'ested re/'ire the

participation of the individ'al members of the IHA6

Kir !orris is named as a plaintiff in his capacit% as a member of the oard6 oth Iowa

and federal law re/'ire some t%pe of in'r% for standin, and !orris does not allee a s'fficient

in'r%6 !orris7 ar'ment is essentiall% that b% ref'sin to call a meetin of the oard, the

*epartment is deprivin him of his stat'tor% riht to participate in the administration and

overnance of the hospital assessment tr'st f'nd 'nder chapter 3@B6 Dhile !orris7 stat's as a

member of the oard provides him with the necessar% specific personal or leal interest in the

litiation, it is do'btf'l that he is in'rio'sl% affected 'nder Iowa or federal law6

irst, !orris and the oard have pla%ed no role in the administration and overnance of

the hospital assessment tr'st f'nd even tho'h the% co'ld have done so at an% time since the

inception of the oard6 &he oard was created in 3414, and 'ntil the c'rrent conflict, neither

!orris nor an% other actor has attempted to convene the oard6 It is diffic'lt to ar'e that a

concrete, partic'lari=ed, act'al and;or imminent in'r% has arisen from behavior that has not

chaned and was 'nobectionable for %ears prior to this conflict6 econd, the stat'te does not




3

confer responsibilit% for convenin the oard on an% specific person or entit%, nor does it

prevent !orris or an% other actor from convenin the oard6 &he *epartment7s onl% stat'tor%

responsibilit% with reard to the oard is to “provide administrative assistance6” See Iowa "ode

G 3@B6@()(c)6 &hird, the *epartment is correct in its assertion that !orris cannot claim a

financial in'r% from the shift to manaed care beca'se in his capacit% as a member of the oard,

he is not in'red b% a chane in the manner the hospital assessment is distrib'ted6 inall%, while

a co'rt order to convene the oard wo'ld redress !orris7 alleed in'r%, it is worth notin that so

wo'ld an independent decision from the oard members to meet and f'lfill their stat'tor%

responsibilities6 !orris has not alleed an in'r% s'fficient to have standin to s'e for a

temporar% in'nction6

B. Ri%%## ? M//!%##

“ CA temporar% in'nction is a preventative remed% to maintain the stat's /'o of the

parties prior to final 'dment and to protect the s'bect of the litiation67 ” Lewis Investments,

In&. vs. Cit# of Iowa Cit#, E4? !6D6 3nd 1>4, 1>@ (Iowa 3445)6 “&he iss'ance of a temporar%

in'nction pres'mes that there is an emerenc% or other special reason for s'ch an order before

the case can be re'larl% heard6” @3 Am6 +'r6 3d In'un&tions, ec6 > (3444)6 Dhile the

application for a temporar% in'nction ma% have been ripe when Plaintiffs filed s'it, it is no

loner ripe6 &here is no loner an% present need for some e0traordinar% remed% to maintain the

stat's /'o of the parties prior to final 'dment or to protect the s'bect of this litiation6 &here

is no loner an% present emerenc%6 "B ordered Iowa to dela% implementation of the manaed

care model 'ntil Barch 1, 34126 Pl67s #06 ?46 &he 3412 Iowa leislative session beins on

+an'ar% 11, 34126 See >2th Iowa 9eneral Assembl%, 3412 Iowa 8eislat're ession &imetable,

8eislative ervices Aenc%, available at https:;;www6leis6iowa6ov;6 At the core of Plaintiffs7




?4

ar'ment is the assertion that vario's Iowa stat'tes and administrative re'lations prohibit the

leal implementation of the manaed care model6 eca'se the *epartment cannot implement the

new proram 'ntil Barch 1st, the 8eislat're has appro0imatel% si0 wees to brin Iowa stat'tes

and re'lations in compliance with the manaed care model6 &his case is not ripe beca'se

f'rther fact'al development co'ld sinificantl% impact 'dicial resol'tion of the controvers%6

Additionall%, neither part% will s'ffer an% hardship b% the postponement of 'dicial action

beca'se "B has alread% dela%ed the implementation for si0t% da%s6

In con'nction with the ripeness disc'ssion, the "o'rt notes Plaintiffs7 ar'ment

reardin -5&eptional (ersons v. Iowa Dep’t of Human Servs., 3415 D8 5E4??3 (Iowa App6

$ct6 1@, 3415)6 Dhile -5&eptional (ersons is c'rrentl% pendin f'rther review b% the Iowa

'preme "o'rt, Plaintiffs correctl% characteri=e the Iowa "o'rt of Appeals7 holdin: “the case

demonstrates that the *epartment has had notice d'rin this period that it was re/'ired to tae

affirmative steps to enforce a leislative directive or its action wo'ld be witho't leal a'thorit%6”

Pl67s r6 336 However, beca'se "B dela%ed implementation of the manaed care model 'ntil

Barch 1, 3412, both the 8eislat're and the *epartment now have additional time to brin Iowa

stat'tes and administrative re'lations into compliance with 9overnor ranstad7s vision for

Bedicaid moderni=ation6 &here is too m'ch potential for the fact'al sit'ation to chane for the

controvers% to be ripe at this time6

&he case is also, at this point in time, moot6 .eardless of whether the "o'rt denies or

rants the temporar% in'nction, the *epartment cannot implement the manaed care model 'ntil

Barch 1, 3412, at the earliest6 &his "o'rt7s 'dment on the merits wo'ld have no immediate

practical effect 'pon the e0istin controvers%6 eca'se this iss'e will liel% rec'r, the "o'rt will

disc'ss whether the case falls into the p'blic interest e0ception to the mootness doctrine6 &he




?1

case presents a p'blic /'estion of reat importance that is liel% to rec'r in the same or a ver%

similar format6 However, for the same reasons s'pportin the "o'rt7s concl'sion that the matter

isn7t ripe, the "o'rt is presentl% 'nable to sa% that its ad'dication wo'ld be desirable or that the

same or similar problems are liel% to rec'r6 &he fact'al sit'ation is liel% to chane between

now and Barch 1, 3412Othe 8eislat're ma% chane the laws, the *epartment will become

more prepared for the transition, and co'rts will contin'e to ad'dicate the n'mero's leal

challenes to the 9overnor7s Bedicaid moderni=ation plan6 or these reasons, this case does not

fall into the p'blic interest e0ception to the mootness doctrine6

C.

J=&iial R%$i%5 /" A%0 A!i/

$nce the *epartment f'll% denied Plaintiffs7 re/'est for declarator% relief, Plaintiffs had

two options for f'rther leal action6 See *ef67s r6 3 n616 &he% co'ld either file for 'dicial

review of the aenc% action or the% co'ld file a new, oriinal laws'it6 See Camp"ell v. Iowa

*eer and Li>uor Control , ?22 !6D63d 5E@, 5E2 (Iowa 1>5)6 &he two t%pes of action are

m't'all% e0cl'sive b% definitionOa 'dicial review action re/'ires the co'rt to act in an

appellate capacit%, which it cannot do while e0ercisin oriinal 'risdiction over a new laws'it6

See id. (notin an oriinal action ma% not be “pi% baced” onto a 'dicial review proceedin)

(citin *la&) v. niv. of Iowa, ?23 !6D63d @5, @2@ (Iowa 1>5))6 As *efendants correctl%

note, Plaintiffs have not complied with the re/'irements of Iowa "ode section 1EA61 to brin

this as a 'dicial review action6 See *ef67s r6 3 n616 &his case is not before the "o'rt on appeal

from action b% an administrative aenc%, so the "o'rt is not actin in an appellate capacit% for

'dicial review6




?3

eca'se this is not a 'dicial review action, the "o'rt will not anal%=e an% claims b% leal

standards related to administrative appeals6 &his incl'des both an% ar'ment 'nder Iowa "ode

section 1EA61 and Plaintiffs7 ar'ment that rinnell Coll. v. 0s"orn 'stifies the 'se of

financial harm as an irreparable in'r%6 See Iowa "ode G 1EA61(14)< E51 !6D63d ?2 (Iowa

344>)6 irst, the Iowa 'preme "o'rt7s holdins in rinnell College were within the conte0t of

'dicial review of worers7 compensation action 'nder Iowa "ode section 1EA61 , so the

holdins are inapplicable to this case6 Id. at @43M4?6 econd, even if rinnell College were

applicable, the sit'ation is not analoo's eno'h to transform Plaintiffs7 financial harms into an

irreparable in'r%6 In rinnell College, the absence of an in'nction d'rin the pendenc% of the

litiation was liel% to deprive one part% of its abilit% to recover the mone% in iss'e sho'ld that

part% prevail at the end of the litiation6 Id. Here, no s'ch concern e0ists6 As Plaintiffs stated,

the tate of Iowa is financiall% health% and has cash reserves and emerenc% f'nds from which to

draw an% damaes Plaintiffs ma% recover in the f't're6

D. M%i!# /" Plai!i""#1 Alia!i/ "/ I>=!i$% R%li%"

eca'se Plaintiffs7 claims are both 'nripe and;or moot, it is not necessar% for the "o'rt to

reach the merits of their motion for a temporar% in'nction6 However, even if the claims were

ripe and;or not moot, the "o'rt wo'ld den% the motion for a temporar% in'nction beca'se

Plaintiffs have not demonstrated irreparable harm6

@.

I%aal% Ha: I# R%<=i%& U&% B/!+ S=#%!i/# @ a& 6/" I/5a R=l% /" Ci$il P/%&=% @.@('6

In their Petition, Plaintiffs as the "o'rt to permanentl% enoin the *epartment from

implementin 9overnor ranstad7s Bedicaid moderni=ation plan6 Pl67s Pet6 31, 33()6 In the

interim, Plaintiffs as the "o'rt to iss'e a temporar% in'nction to preserve the stat's /'o d'rin




??

the pendin litiation6 Id. at 316 In Ma5 477 L.C. v. Iowa %ealt# Co., In&., the Iowa 'preme

"o'rt comprehensivel% disc'ssed the iss'ance of temporar% in'nctions 'nder Iowa .'le of "ivil

Proced're ?31 (now Iowa .'le of "ivil Proced're 161543)6 See 231 !6D63d 1E>, 1>1 (Iowa

3441)6 However, it is well-settled that the iss'ance of temporar% in'nctions is larel% within the

so'nd discretion of the trial co'rt, and the r'le is onl% the startin point of the anal%sis6 Id. at

1>46 &he .'le identifies three potential circ'mstances 'nder which a temporar% in'nction ma%

be appropriate: (1) “an act ca'sin reat or irreparable harm<” (3) the violation of a riht

“tendin to mae the 'dment ineffect'al<” and (?) “in an% case speciall% a'thori=ed b%

stat'te6” Iowa .6 "iv6 P6 1615436

After presentin the r'le, the Iowa 'preme "o'rt stated, “the iss'ance of an in'nction

invoes the e/'itable powers of the co'rt and co'rts appl% e/'itable principles6” Ma5 477, 231

!6D63d at 1>16 !otabl%, the Iowa 'preme "o'rt said, “these traditional e/'itable principles

are reflected in s'bsections (a) and (b) of r'le ?316” Id. (correspondin to s'bsections (1) and (3)

of the r'le toda%)6 &he "o'rt onl% deviated from “traditional e/'itable principles” when

anal%=in claims 'nder s'bsection (c), beca'se when the 8eislat're imposes a d't% to rant an

in'nction via stat'te, “the conditions specified in the stat'te s'persede the traditional e/'itable

principles6” Id. (Aain, beca'se this is not a 'dicial review action, Iowa "ode section 1EA61

cannot 'stif% the rantin of a temporar% or permanent in'nction in this case6) Fnder

traditional e/'itable principles, temporar% in'nctions re/'ire a showin of a lielihood of

s'ccess on the merits of the 'nderl%in claim6 Id. at 1>16 Here, the 'nderl%in claim is a re/'est

for a permanent in'nction6 Pl67s Pet6 31M3?6 eca'se their 'ltimate re/'est is for a permanent

in'nction, the e/'itable factors Plaintiffs m'st satisf% incl'de demonstratin irreparable harm6

See Ma5 477, 231 !6D63d at 1E>6




?@

Irreparable harm is the most important re/'irement for iss'ance of a permanent

in'nction, and it m'st be liel% (not merel% possible) and s'bstantial6 inter v. /atural %es.

Def. Coun&il, In&., 555 F66 E, 34M31 (344>)< see also @3 Am6 +'r6 3d In'un&tions G ?5 (3415)6

Dhether or not the part% has another opport'nit% for leal relief is an important consideration in

whether or not harm is irreparable6 See 6ohnson v. (attison, 1>5 !6D63d E4, EEM> (Iowa

1E1)6 eca'se permanent in'nctive relief is e0traordinar%, it is onl% ranted when there is no

other wa% to avoid irreparable in'r% to the plaintiff6 Lewis Investments, In&. v. Cit# of Iowa

Cit#, E4? !6D63d 1>4, 1>5 (Iowa 3445) (citin (lanned (arenthood of Mid+Iowa v. Ma)i, @E>

!6D63d 2?E, 2? (Iowa 11)< M#ers v. Caple, 35> !6D63d ?41, ?4@M45 (Iowa 1EE))6

&herefore, if Plaintiffs have an ade/'ate remed% at law, in'nctive relief is not available6 Id.

(citin 0pat v. Lude)ing, 222 !6D63d 5E, 24? (Iowa 344?)< Sergeant *luff?Luton S&h. Dist. v.

Cit# of Siou5 Cit#, 523 !6D63d 15@, 152 (Iowa 1E))6

In their rief, Plaintiffs ar'e that the% are entitled to an in'nction 'nder all three

s'bsections of Iowa .'le of "ivil Proced're 1615436 In partic'lar, the% ar'e that 'nder

s'bsection (3) of the .'le, the% do not need to show irreparable in'r%6 Plaintiffs cite no leal

a'thorit% for this proposition6 #ven if their intention was to somehow bolster this h%pothesis

with reference to Iowa "ode section 1EA61, an% a'thorit% related to section 1EA61 is

'nconnected to this case beca'se this is not a 'dicial review action6

eca'se Plaintiffs7 'nderl%in claim is for a permanent in'nction, and a permanent

in'nction re/'ires a showin of irreparable harm for s'ccess on the merits, Plaintiffs m'st show

an irreparable in'r% to s'cceed even 'nder s'bsection (3) of the .'le6 See Ma5 477, 231

!6D63d at 1E>6 #ven if 161543(3) removes the e0plicit irreparable in'r% re/'irement at the

first stae of anal%sis (i6e6 in relation to the .'le itself), beca'se Iowa co'rts s'bse/'entl% appl%




?5

traditional e/'itable principles when eval'atin whether there is a lielihood of s'ccess on the

merits of the application for a permanent in'nction, the irreparable in'r% re/'irement is revived

for the second stae of anal%sis6 See id.

6. Plai!i""# Ha$% N/! D%:/#!a!%& I%aal% Ha:

Plaintiffs are 'nliel% to s'cceed on the merits of their application for a permanent

in'nction beca'se the% have failed to demonstrate an% irreparable harm6 All of Plaintiffs7

alleed individ'al and collective harms are financial in nat're6 It is a0iomatic that financial harm

can be rectified thro'h s'its at law for damaes6 See eneral Motors Corp. v. Harr# *rown’s,

L.L.C., 52? 6?d ?13, ?1>M1 (>th "ir6 344) (“Irreparable harm occ'rs when a part% has no

ade/'ate remed% at law, t%picall% beca'se its in'ries cannot be f'll% compensated thro'h an

award of damaes6”)6 If the *epartment transitions from the c'rrent model of Bedicaid

administration to a manaed care model, m'ch abo't the flow of mone% thro'h Iowa7s health

care maretplace will chane6 *'e to the nat're of the manaed care model, Plaintiffs will no

loner be worin with Iowa7s overnment to provide health care to v'lnerable IowansOthe%

will be worin with private, for-profit corporations that the *epartment has endowed with

sinificant powers of neotiation and contractin6 &he manner and rate of reimb'rsement will

liel% chane, as will the needed infrastr'ct're and b'siness orani=ation6 &he "B-mandated

dela% of the implementation means that Plaintiffs will not e0perience an% in'r% d'e to the

transition and alterations in the maretplace 'ntil at least Barch 1, 34126 However, even if

financial in'r% does occ'r after implementation, the harm is simpl% not irreparable beca'se

Plaintiffs co'ld be made f'll% whole thro'h an action for damaes6

Plaintiffs themselves note that the tate of Iowa has ample cash reserves and an economic

hardship f'nd6 If Plaintiffs are in'red financiall%, the% have a readil% available remed% at law




?2

thro'h a s'it for damaes6 #ven if Plaintiffs7 ar'ment that there is no leal wa% to recover the

hospital assessment f'nds once the f'nds are disb'rsed to the B"$s is tr'e, damaes for s'ch a

transression co'ld be paid from the tate7s cash reserve or economic hardship f'nds6

.eardless of how the remainin factors ma% balance between the parties, Plaintiffs cannot

prevail on their applications for a temporar% or permanent in'nction beca'se the% have not

shown an% irreparable harm6

V. JUDGMENT

A. CONCLUSION

"onsiderin the ar'ments of the parties and evidence s'bmitted at hearin, Plaintiffs7

claims are not ripe and;or are moot6 'rther, even if Plaintiffs7 claims are ripe and;or not moot,

Plaintiffs have not established the elements necessar% for the "o'rt to rant a temporar%

in'nction< in partic'lar, Plaintiffs have not demonstrated an% irreparable harm6

B. JUDGMENT

IT IS THEREFORE THE ORDER OF THIS COURT that Plaintiffs7 Application for

&emporar% In'nction is DENIED6

*A&#*: *ecember ?1, 3415

RRRRRRRRRRRRRRRRRRRRRRRRRRRRRR

ROBERT B. HANSON, Di#!i! J=&%

ifth +'dicial *istrict of Iowa




?E

"opies to:

+effre% 6 &hompson, olicitor 9en6 of Iowa

*iane B6 tahle, pecial Asst6 Attorne% 9en6Hoover 'ildin, econd loor1?45 #ast Daln't treet*es Boines, Iowa 54?1

Kir 6 lecha8insda% K6 8'ndholmaird Holm 88P1E44 arnam treet, 'ite 1544$maha, !ebrasa 2>143-342>

6 .ichard 8%ford.ichard A6 Balm*icinson 8aw2 Daln't treet, 'ite 1244*es Boines, Iowa 54?4




State of Iowa Courts

Type: OTHER ORDER

Case Number Case Title

CVCV050830 IOWA HOSPITAL ASSOCIATION ET AL V CHARLES PALMER

So Ordered

Electronically signed on 2015-12-31 13:24:55 page 38 of 38


Documents

Judge Hanson's ruling