motion to dismiss it - NPR : National Public Radio : News ... to dismiss it - NPR : National Public Radio : News

K AMALA D. HARRIS Attorney General of Cali fornia

2 SUSAN M. CARSON (SBN 135875) Supervising Deputy Attorney Genera l

3 HADARA R. STANTON (SBN 227040) Deputy Attorney General

4 DANE C. BARCA Deputy Attorney General

5 State Bar No. 294278 455 Golden Gate A venue, Suite 11000

6 San Francisco, CA 94102-7004 Telephone: ( 41 5) 703-5605

7 Fax: (4 15) 703-5480

8 Emai l: [email protected]

Attorneys/or Defendant Diana Dooley, in her 9 official capacity as Secretary of the California

Department of Health and Human Services 10

11

12

13

lN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

BRUCE ANDERSON, JOHN WILSON, and CALIFORNIA ADVOCATES FOR NURSING HOME REFORM, a California non-profit corporation,

Plaintiffs,

v.

DIANA DOOLEY, in her official capacity as Secretary of the CALIFORNIA DEPARTMENT OF HEALTH AND HUMAN SERVICES,

Defendant.

3: I 5-cv-05120

DEFENDANT'S NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT (Fed. R. Civ. P. 12(B)(l) & (6)) AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

Date: Time: Dept. : Judge:

Action Filed:

Thursday, February 11 , 2016 2:00 p.m. 15 The Honorable Haywood S. Gilliam, Jr. 11/9/2015

Defendant' s Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: l 5-cv-05 120)

Case 3:15-cv-05120-HSG Document 11 Filed 12/30/15 Page 1 of 31

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF CONTENTS

Page Notice of Motion and Motion to Dismiss ... ........ .. ..................................... ........................ .. .... ....... 1 Statement of Issues to be Dec ided ................................................ ................................... ............... 1 Memorandum of Points and Authorities ..................................................................... .................... 2 Introduction ................................................................................. ..... .. : ............................................ 2 Background ....................................................................... ........................... .............. ..................... 2

A. HHS Administers the Medicaid Act ........................................................... 2 B. c.

D.

The Federal Nursing Home Reform Act.. ...................... : ............................ 4 Options in Cal iforn ia to Enforce Faci li ties' Compliance ............................ 6 I. Federal and State Mechanisms to Bring Facilities Into

Co1npliance ........................... .. ........................................................ 6 2. DHCS has Additional Enforcement Mechanisms ........................... 7 1 .), The Office of the Attorney General Has Statutorily Defined

Authority to Secure Re-Admission ................................................. 8 4. Nursing Home Residents Themselves Can Bring Individual

or Class Actions Against Nursing Homes for Re-Admission Vio lations .............. ....... ............................. ............ ... ..... .. ................ 8

Plaintiffs and Their Claims ............................... ..... ............ .. ....................... 9 Legal Standard for Motion to Dismiss .......................................................................................... 10 Argu,nent ............ ....... ............ ... ... ... .............................................................................................. 11

I. Plaintiffs Lack Article III Standing ............................... ........................................ 11

II . I I I.

A. Plaintiffs Have Not and Will Not Suffer Any Injury As the Result of Any State Action or Inaction ................................................................ 11

B. California Has An Effective Process and Secretary Dooley Has Not Caused Plaintiffs Any Injury ..................................................... ............ .... 13

c. Any Alleged Injury Caused By The Facilities Cannot Be Redressed By A Favorable Decision Here ................................................................. 14

D. Article III and Prudential Standing Principles Bar CANHR' s Claim .. ..... 15 Plaintiffs Lack A Federal Private Right Of Action To Bring This Lawsuit ......... 16 Plaintiffs Cannot State A Claim For Relief ..................................... ................. .... 19 A. Plainti,ffs Cannot State A Claim For An Alleged Violation Of A

Federal Regulation .. .. .... ......... .............................................. ........ ... .......... 20 B. Plaintiffs Cannot State A Claim For Equitable Rel ief Because They

Have Adequate Remedies At Law ............. .. .......... ............. ...................... 21 IV. The Complaint Should Also Be Dismissed Under Primary Jurisdiction .............. 24

Conclusion .... ............... ........... .. ................. .......................................... .... ... ............................. ..... 25

Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: I 5-cv-05 120)


2

3

4

5

6

7

8

9

10

l I

12

13

14

15

16

17

18

19

20

2 1

22

23

24

25

26

27

28

TABLE OF AUTHORITIES

CASES

Agua Caliente Band ofCahuilla Indians v. Hardin 223 F.3d 104 1 (9th Cir. 2000) ................ ........................................................ ...... ...... ............... 2 I

Armstrong v. Exceptional Child Cent., Inc. 135 S.Ct. 1378 (2015) ........................................................................................ .. .... ....... 4, 17, 22

Ashcroft v. Iqbal 556 U.S. 662 (2009) ................................... .. ................................................................. 10, 11 , 12

Bell Atlantic Corp. v. Twombly 550 U.S. 544 (2007) .......................................................... ... .............................. ....................... 10

Blessing v. Freestone 520 U.S. 329 ( 1997) ................................. .... ....................... ..... .. ........ ............. .. ...... ............ 17, 18

Buckley v. City of Redding, Cal. 66 F.3d 188 (9th C ir. 1995) ....................................................................................................... 19

Cetacean Community v. Bush 386 F.3d 1169 (9 Lh C ir.2004) .................... .... ..... ...... ................... ........ ...... .................. .. ...... 10, 11

Chabner v. United Omaha Life Ins. Co. 225 F.3d 1042 (9th C ir.2000) .................................................................... ...... ................. .. ....... 24

Chandler v. State Farm Mut. Auto. Ins. Co. 598 F.3d 11 15 (9th Cir. 20 l 0) .. ....... ........ .. ............ .... ................ .. ..................................... ..... .... 10

Chevron, U.S. A. , Inc. v. Natural Resources Defense Counsel 467 U.S. 837 (1984) ................................ .... ....... .. ......... .............. ... .................................... ... .... 23

Clark v. Time Warner Cable 523 F .3d 1110 (9th Cir.2008) ....... ..... .... ..... ........... ...... .. ......... ........ .................................. .... ..... 24

Camile de Jornaleros de Redondo Beach v. City of Redondo Beach 657 F.3d 936 (9th Cir. 2011) ....................................... .. ............ ........... .... ...................... .. .. . I 5, 16

Conservation Force v. Salazar 646 F.3d 1240 (9th Cir. 2011) ............................ .. ................... .......... ........... ............... ............... 10

Dev. Servs. Network v. Douglas 666 F.3d 540 (9th C ir. 2011) .. ................ .. ................. ....................... ........ .... ..................... 3, 4, 22

Douglas v. Indep. Living Cent. of Southern California, Inc. 132 S.Ct. 1204(20 12) ................................ ... ........................... .. .. ............. .................................. 3

Defendant 's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: l 5-cv-05 120)


2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF AUTHORITIES (continued)

Farmers Ins. Exch. v. Superior Court 2 Cal.4th 377 ( 1992) ............................... .............. .......... ... .............. .. .............. ... ...................... 24

Gonzaga University v. Doe 536 U.S. 273 (2002) ... .. ......... ...... .................................................................................. 17, 19, 23

Grammer v. John J Kane Reg '/ Ctrs.- Glen Hazel 570 F.3d 520 (3rd Cir. 2009) ................................................................................................ 4, 19

Levine v. Vi/sack 587 F.3d 986 (9th Cir. 2009) ............................................................................................... 11 , 15

Lujan v. Defenders of Wildlife 504 U.S. 555 (1992) ............................................................................................................ l 1, 14

Nat'/ Ass'nfor the Advancement of Multijurisdiction Practice v. Berch 773 F.3d 1037 (9th Cir.2014) .................................................................................................... 13

Pareto v. F.D.J.C. 139 F.3d 696 (9th Cir.1998) ...................................................................................................... IO

Pennhurst State Sch. & Hosp. v. Halderman 45 1 U.S. 1 (198 1) ...................................................................................................................... 17

Pharm. Research & Mfrs. of Am. v. Walsh 538 U.S. 644 (2003) ......................... .. ........... ............................................................. ................. 3

Rhoades v. Avon Products, Inc. 504 F.3d 11 51 (9th Cir.2007) ............................................................................... ..................... 22

Save Our Valley v. Sound Transit 335 F.3d 932 (9th Cir.2003) ............................ ............................ .............................................. 20

Shuts v. Covenant Holdco 208 Cal. App. 4th 609 (Cal. Ct. App. 20 12) ............ ...... ............... .. ...................................... 9, 15

Sprewell v. Golden State Warriors 266 F.3d 979 (9th Cir.2001) ................................................................................................ 10, 12

Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc. 454 U.S. 464 (1982) .................................................................................................................. 16

Warth v. Seldin 422 U.S. 490 (1975) ............................................................................. .... ................................. 16

II

Defend ant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3 : I 5-cv-05 120)


2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

STATUTES

United States Code, Title 42


§ 426 ................................................................................................... ..... ............................ ........ 4 § 1395c ............................. ......................................................................................... ...... ..... ...... .4 § I 395d(a) ................................................................................. ...................................... ........... .4 § I 395 i-3 ................................................................................... ......... ... ... .. ........ ................. .. 5, 18 § I 395 i-3(b)-(g) .................................................................................................. ......................... 5 § 1395 i-3(e)(3) .......................... ..... ................................. ..................... ..... ................................ 18 § 1395 i-3(f)(l) ................... ....... .... ...... ... .................................................................................... 19 § I 395i-3(h) ................. .............. ............................................................................................ 6, 19 § 1395 i-3(h)(2)(B)(ii) ................................... .... .................. .. ............ .. ....................... .... ....... ....... 6 § 1395kk .. .......................................... ... ...... ... ....................... .. ............................ ........ ...... ........... 5 § 1396 ................................................... ....................................................................................... 2 § 1396a .................... .. ....... ... ............ .... ....... ............. ... ...... ........ .......... ..... ........... ..................... 2, 3 § 1396a(a)(5) ............................................................................ .. ........................ ........................ .3 § 1396a(a)(28)(D)(ii), (iii) ... ........... .. .. .. ........ ....................................................... ........... ........... .4 § I 396d(a) .................................................................................................................................. .4 § 1396r ................... .. ............ .. ...... .. .......................................... .. ........ ... ...... ...... .. ............ .. .. l8,22 § 1396r(c)(2)(D)(iii) ... ......... ........... ... ........ .. .. ........ ........ ......... ..................... .... · ................. ... .. 5, 12 § 1396r(e) ... ...... ... .. .. .. ....... ..................... .. .. .................. ..... ...... .. .. ........................ .................... ..... 3 § l 396r(e)(3) ........ .......... ..... .. ............. .. ........ ...................................................... ... ................ 5, 18 § 1396r(g) ............................ ...... ........ .. ...... .... ........................................ .. .............. .................. 4, 5 § 1396r(h)(2)(B), (D) .......................................... ...... .. ..... ......................... ............................ ..... .4 § 1983 .................. .. .......... .... .. ........................ ..................... ................... ........ ............ ........ passin1

Ca li fornia Code of Civi l Proceedures § 1094.5 .. ...................................................... .. ................ ....................................................... 8, 23

Ca li fornia Health & Safety Code § 1254(a) ............................... ..... ...... .... .. ... .. .... ................ ... ............ .. .................. .. ....................... 6 § 1417. 1 ............... ........................... ........................................................................................... .. 6 § 1423(a) ................................ ....... .. ...... .... ..... .............. ..... ... .......... ............................................. 6 § 1423(a)( l ) .. ...... ... ... .. .. .. .. ...... ... .................. ........ ....... .... ....................... .... ......................... .. .. ..... 7 § 1425 ............................... .... .............. .... ...... ............................................ ... ................... ............. 7 § 1429. l (a) ...... ............. .... ............. ... ...... ....... ............. .. .... ........... .. .............................................. 7 § 1430 .... .. ........ ...... ........... ....... ......... .................. ............. .............................. .......................... .. .. 8 § 1430(b) .......................... ........... .............................................................................. 9, 13, 14, 15 § 100 17 1 ...................................................................................................................................... 8

Ca lifornia Welfare & Jnstitutions Code § 10740 ........................................................................................................................................ 3 § I 4000 ................ .... ........................ .............. ............... ..... .......................... ....... .................. .. .... .3 § 14043.7 ......................................................................... ............................. ... ............... .. ........ ... 7 § 14133.3(a) ................................................................................................................................ 7

I l l

Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: I 5-cv-05 120)


2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20 2 1

22

23

24

25

26

27

28

COURT RULES

Federal Rules of C ivil Procedure


Ru le l 2(b )( I) ......................................................................................................................... 1, 1 O Rule 12(b)(6) ......................................................................................................................... l, 10

OTHER AUTHORITIES

Code of Federal Regu lations, Title 42 Chapter JV ................ ..... ....................................................... .................................................... ... 5 § 430.10 ...................... ................................................................................................................. 3 § 430.15 ............................................................................................................................ .3 , 4, 22 § 430.18 ....................................... .......................................................................................... 4, 22 § 43 I .202 ............................................................................................. ........................................ 8 § 431.246 ........................................................................................................................... passin? § 43 I .246 .... .................. ........... ........................................... ....... ........... ..................................... 20 § 483. I 2(a)(2) ........ ...................................................................................................................... 8 § 488.406 ........ .. ........................................................................................................................... 7 §488.4 17 ................................................................................................................... ... ............... 7 §488.4 18 ..................................................................................................................................... 7 § 488.424 ............................................... ...... ...................... ................................ ............ ............. . 6 § 488.430 ............................................................................................................................ ...... ... 7

54 Fed. Reg. 53 16, 53 17 (Feb. 2, 1989) ..................................................................... .. ..................... 5

66 Op. Cal. Att'y Gen 310 (1983) 1983 WL 1448 13 ....................................................................... 7

IV Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support

(3: I 5-cv-05 120)


NOTICE OF MOTION AND MOTION TO DISMISS

2 PLEASE TAKE NOTICE that on Thursday, February 11 , 2016, at 2:00 p.m., or as soon

3 thereafter as the matter may be heard before the Honorable Judge Haywood S. Gilliam, Jr. in the

4 Un ited States District Court for the Northern District of California, Courtroom Fifteen, located on

5 the l st11 Floor of the Un ited States Courthouse, at 450 Go lden Gate Avenue, San Francisco,

6 California, Defendant Diana Dooley, in her official capacity as Secretary of the California Health

7 and Human Services Agency, wi ll and hereby does move the court to dismiss the action pursuant

8 to Rules 12(b)(J) and (6) of the Federal Rules of Civil Procedure.

9 This motion is made on the grounds that the Court lacks j urisdiction over the subject matter

Io of the action against Defendant, and that the complai nt, including the claims for relief asserted

11 therein, fa ils to state a cause of action upon which relief may be granted because Plaintiffs ( I)

12 lack standing; (2) lack a private right of action; and (3) have fai led to state a claim upon which

13 relief may be granted. The motion wi ll be and is based on this Notice of Moti on and Motion, the

14 accompany ing Memorandum of Points and Authorities, the plead ings and papers fi led herein, and

15 the argu ment of counse l at the time of the hearing.

16 Dated: December 30, 20 15 Respectfully Submitted,

KAMALAD. HARRIS 17

18

19

20

21

22

23

24

25

26

27

28

Attorney General of Californ ia SUSAN M. CARSON Supervising Deputy Attorney General

Isl J-{acfara 'R. Stanton HADA RA R. ST ANTON DANE C. BARCA Deputy Attorneys Genera l Attorneys for Defendant

STATEMENT OF ISSUES TO BE DECIDED

I. Do Plaintiffs meet Article lll 's standing requ irements?

2. Do Plaintiffs lack a private right of action to bring this lawsuit?

3. Have Plaintiffs fai led to state a claim?

4. Ts the regulation set forth at 42 C.F.R. § 431.246 enforceable through a 42 U.S.C.

§ 1983 cause of action?

Defendant 's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: I 5-cv-05 l 20)


MEMORANDUM OF POINTS AND AUTHORITIES

2 INTRODUCTION

3 Plainti ffs are three ind ividuals, and an organization, who allege that they have been harmed

4 because the nursing fac ilities the ind ividual Plaintiffs had res ided in before being hospitalized

5 have not readmitted them despite an administrative order requiring them to be readmitted.

6 Although the cause of this alleged injury is the nursing fac ilities that have not readmitted them,

7 those fac ili ties are not parties to this lawsuit. Nor do Plaintiffs allege that they have availed

8 themselves of any of the many enforcement options avai lable under state law to compel facili ties

9 to re-admit res idents, or face sanctions.

JO Instead, without any statutory authority, and desp ite the oversight of the United States

J l Department of Health and Human Services (HHS), the federal agency expressly charged by

12 Congress with the responsibility to ensure that states, and nursing fac ilities, comply with the

13 requirements of the Medicaid and Medicare Acts in exchange for federal fu nds, Plaintiffs are

J 4 aski ng thi s Court to order Cali fornia to create a new mechanism for enforcement, one that they

15 seem to believe is better than the ones that already exist in Ca li forn ia, and that HHS has approved.

16 Even if Plaintiffs had standing (they do not), and even if Plaintiffs had a private right of

17 action (they do not), their lawsuit nevertheless fa ils because their claim is premised on a federa l

18 regulation that does not even clearly require the mechanism they seek to compel the State to

J 9 create. A federa l regulation, however, cannot create rights enforceable through 42 U .S.C. § 1983.

20 For all these reasons, as set fort h below, Plaintiffs ' Complaint must be dismissed with prejudice.

2 1 BACKGROUND

22 A. HHS Administers the Medicaid Act

23

24

25

26

27

28

Medicaid is a cooperative federal-state program that provides federa l fund ing for states to

prov ide med ical assistance to low-income persons. 42 U.S.C. § 1396 et seq. Medicaid is jointly

financed by the federa l and state governments and is admin istered by the states through a

Medicaid State Plan (State Plan) approved by the HHS Secretary.1 42 U.S.C. § 1396a. States

I To distinguish the Secretary of the Un ited States Department of Health and Human Services, who is responsible for the Medicaid and Medicare programs, from Defendant here, the

2 (continued .. . )

Defendant 's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: 15-cv-05 120)


2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

that choose to participate must submit a " plan for medica l ass istance" that complies with statutory

and regulatory requirements to HHS fo r approval in order for federal funds to be prov ided. Id.;

Dev. Servs. Network v. Douglas, 666 F.3d 540, 544 (9th Cir. 2011), citing Wilder v. Va. Hosp.

Ass'n, 496 U.S. 498, 502 (1990). The California Department of Health Care Services (DHCS) is

the single-state agency charged with oversight of the Medicaid program in California. Cal. Welf.

& Inst. Code§§ 10740, 14000 et seq.; see also 42 U.S.C. § 1396a(a)(5).

The Centers for Medicare and Medicaid Services (CMS) administers the Medicaid program

on behalf of HHS, including reviewing and approving State Plans, State Plan Amendments, and

State Plan wai vers. Pharm. Research & Mf,-s. of Am. v. Walsh, 53 8 U.S. 644, 650, n. 3 (2003);

see also 42 C.F.R. §§ 430.10, 430.15(b). "Before granting approva l, the agency [CMS] reviews

the State's plan and amendments to determine whether they comply with the statutory and

regulatory requirements governing the Medicaid program." Douglas v. Indep. Living Cent. of

Southern California, Inc. , 132 S.Ct. 1204, 1208 (2012).

Multiple requirements in California's State Plan approved by CMS are applicable to the

all egations here. One requirement is that the State Plan must " prov ide fo r granting an opportunity

for a fa ir hearing before the State agency to any individual whose claim for medical ass istance

under the plan is denied or is not acted upon with reasonable promptness." California's State

Plan contains the requisite provisions for such fair appeals processes and those have been

approved by CMS. State Plan, Attachments 4.2.2 Another requirements is that the State Plan

must provide fo r compliance with 42 U.S.C. § I 396r(e) - "state requirements relat ing to nursing

fac ility requirements" - and would include the provision for "state appeals process fo r transfers

and di scharges." Id. ,§§ 1396a(a)(28)(D)(i), 1396r(e)(3). Accordingly, Cali fornia's State Plan

contains prov isions fo r appeals processes that, again, have been approved by CMS. State Plan,

Attachments 4.28.3 Tn add ition, the Medicaid Act requires states to conduct surveys of fac ilities

( . .. continued) Secretary of the Califo rnia Health and Human Services Agency, the fo llowing shall be used: "HHS" shall refer to the federal Secretary, and "Secretary Dooley" shall refer to Defendant. DHCS and CDPH are departments within the California Health and Human Services Agency.

2 www.dhcs.ca.gov/formsandpubs/laws/Documents/StatePlan%20Section%204.2.pdf \vww.dhcs.ca.gov/formsandpubs/laws/Documents/State%20Plan%20Section%204.28.pdf

3 Defendant 's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support

(3: I 5-cv-05 120)


to determine compliance, and if, on the basis of such surveys finds a faci lity to be out of

2 compliance, states must estab lish and apply specific remedies to enforce requirements of the Act.

3 42 U.S.C. §§ I 396a(a)(28)(D)(ii), (iii), I 396r(g), (h)(2)(B), (D) . Accord ingly, California's State

4 Plan contains provisions for "enforcement of compliance for nursing facilities," that have been

5 approved by CMS. State Plan, Attachments 4.35-A - H.4

6 Should CMS determine that a state is out of compliance with either its State Plan or the

7 Medicaid Act, CMS can withhold federa l funds. 42 C.F.R. §§ 430.15, 430.18; 430.35;

8 Armstrong v. Exceptional Child Cent. , Inc. , 135 S.Ct. 1378, 1385 (2015) ("the sole remedy

9 Congress provided for a State' s failure to comply with Medicaid 's requirements ... is the

IO withho lding of Medicaid funds by the Secretary of Health and Human Services."); Dev. Servs.

11 Network, 666 F.3d at 544 ("lf CMS determines that a state plan or plan amendment does not

12 comply with those requirements, it may deny the state federal funds.").

13 B. The Federal Nursing Home Reform Act

14 Medicare is a federally-administered and federally-financed program that provides payment

15 for medica l serv ices for certain elderly or disab led persons, including coverage for certain nursing

16 home services. 42 U.S.C. §§ 426, 1395c, 1395d(a), 1396d(a). Thi s Act, and the Medicaid Act

17 (co llectively, the Acts), were amended when Congress passed the Omnibus Budget

18 Reconciliation Act of 1987, to include the Federal Nursing Home Reform Amendments

19 (FNHRA). Id. , § 1396r et seq. Before this amendment, "only two sanctions were available

20 against nursing homes for noncompliance with federa l parti cipation requirements," and those

21 were rarely invoked. Grammer v. John.! Kane Reg '/ Ctrs.- Glen Hazel, 570 f J d 520, 523 (3rd

22 Cir. 2009). To address the concern "that the Federa l Government, through the Medicaid program,

23 continues to pay nursing fac ilities for providing poor quality care to vulnerab le elderly and

24 di sabled beneficiaries," Congress passed the FNHRA to provide for oversight and inspection of

25 nursing faciliti es that participate in Medica id and Medicare. H.R. Rep. No. L. No. 100-391(!), at

26

27

28

4 www.dhcs.ca.gov/formsandpubs/laws/Documents/StatePlan%20Attachment%204.35-A-1-1.pdf


(3 : I 5-cv-051 20)


2

3

4

5

6

7

8

9

10

1 1

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

452 ( 1987), as reprinted in 1987 U.S.C.C.A.N. 23 13-1 , 23 13- 272; codified at 42 U.S.C §§ 1395 i-

3 (Medicare) and I 396r (Medicaid).

As with other Spending Clause legislation, 42 U.S.C. § I 395i-3 imposes requirements on

participating nursing facilities, states, and the federal government. To be certified under these

Acts, facilities must comply with certain requirements, including meeting standards fo r "quali ty

of care," "resident ri ghts," and administration. 42 U.S.C. §§ 1395i-3(b)-(g), 1396r(g). In

addition, as relevant here, it is the responsibility of the facilities, as a "requirement[] relating to

provision of services," to :

establi sh and fo llow a written poli cy under which a resident (I) who is eligible for medica l assistance for nursing facility services under a State plan; (JI) who is transferred from the facility fo r hospitalization or therapeutic leave; and (Ill) whose hospitalization or therapeutic leave exceeds a period paid for under the State plan for the holding of a bed in the facili ty for the resident, will be permitted to be readmitted to the facility immediately upon the first availability of a bed in a semiprivate room in the facility if, at the time of readmission, the resident requires the services provided by the facility.

42 U.S.C. § 1396r(c)(2)(D)(iii).5

HHS is responsible for overseeing the im plementation of FNHRA. 42 U.S.C. § I 395kk.

The Med icare Act provides that " [i]t is the duty and responsibility of the [United States HHS]

Secretary to assure that requirements which govern the provision of care in skilled nursing

fac ilities under thi s subchapter, and the enforcement of such requirements, are adequate to protect

the health, safety, welfare, and right of residents and to promote the effective and effi cient use of

public moneys." Id.,§ 1395i-3(f)( l). HHS is also required to promulgate regulations setting out

the "requirements that facilities furni shing long term care are required to meet to participate in

both the Medicare and Medicaid programs." See 54 Fed. Reg. 53 16, 53 17 (Feb. 2, 1989).

Plaintiffs ' allegations rely on the single regulation for "corrective acti on," set fo rth at 42

C.F.R. § 43 1.246, which fa lls within the "Procedures" section for Fair Hearings for Applicants

and Benefic iaries. 42 C.F.R. Ch. IV, Subch. C, Pt. 43 1, Subpt. E. To ensure fac ili ties'

5 This is a separate requirement, imposed on the faci lities, and is not included within the subsection under which Plainti ffs sue here, that is, the provision for "State requirements relating to nursing faci li ty requirements," requiring an appeals process for transfers and discharges. 42 U.S.C. § l 396r(e)(3).

5 Defendant' s Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support

(3: I 5-cv-05 I 20)


compliance with the requirements of federa l law, separate from these provisions for hearings fo r

2 beneficiaries, HHS has a number of enforcement options under the FNHRA-directly against

3 fac ilities- if facil ities are found to be non-compliant. 42 U.S.C. § 1395 i-3(h)(2)(B)(ii). HHS

4 may deny such nursing fac ilities payment, levy civil monetary penalties, monitor the fac ility,

5 and/or terminate a facil ity's parti cipation in Medicare, if warranted. Id.§ l395 i-3(h).

6

7

8

9

10

11

12

13

14

15

16

17

18

c. Options in California to Enforce Facilities' Compliance

The California Department of Public Health (CDPH) is the state agency responsible for

inspecting and li censing all health faci lities in California, but does not make admission or re-

admiss ion assessments of individual residents. Cal. Health & Safety Code§ l 254(a). As part of

this state enforcement scheme, California enacted the Long-Term Care, Health, Safety, and

Security Act of 1973 (Long-Term Care Act) with the purpose of establishing:

(I) a citation system for the imposition of prompt and effective civi l sanctions against long-term health care fac ilities in violation of the laws and regu lati ons of this state, and the federa l laws and regulations as applicable to nursing fac ilities as defined in subdivision (k) of Section 1250, relating to patient care; (2) an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations pertaining to patient care; and (3) a provisional licensing mechani sm to ensure that fu ll-term licenses are issued only to those long-term health care fac ilities that meet state standards relating to patient care.

Ca l. Health & Safety Code§ 1417. 1.

1. Federal and State mechanisms to bring facilities into compliance

l 9 In accordance with federal and state law, CDPH can utilize a variety of enforcement powers

20 when it determines that a fac ili ty has wrongfu lly refused to re-admit a resident fo llowing

21 discharge from a general acute care fac ility. CDPH can issue citations and fines to faci lities that

22 violate state and federa l laws and regu lations. Cal. Health & Safety Code§ 1423(a). A faci li ty

23 rece iving such a citation has an obligation to immediately rectify the condition which precipitated

24 the citation. Id. , subd. (b ). If CDPH finds this correction untimely or insufficient, the

25 Department can impose directed plans of correction on offending fac ilities to force timely

26 corrective measures. 42 C.F.R. § 488.424. Additional ly, fo llowing a citation, CDPH has the

27 authority to im pose a dai ly civi I penalty for each day a deficiency continues beyond the date

28 6

Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: l 5-cv-05 120)


specified in the citation for correction. Cal. Health & Safety Code § 1425. Further, these civ il

2 penalties can be trebled if a faci lity has a subsequent violation of the same class. Id. , § l 428(g).

3 CDPH can also recommend federa l civil monetary penalties when fac ilities are not in

4 compliance with state requirements for Medicaid participation- requ irements that include re-

5 admiss ion. 42 C.F.R. § 488.430. These civi l monetary penalties can reach $10,000 per day for

6 defic iencies which cause immediate jeopardy to patients, and $3,000 per day for defi ciencies

7 wh ich have the potentia l for harm. Id. , § 488.438(a) . In addition, CDPH can recommend the

8 imposition of federa l enforcement remedies. Cal. Health & Safety Code§§ 1423(a)(l), 1429. 1 (a).

9 Federal enforcement remedies include: (I) denial of Medicare or Medicaid payment for new

10 admissions to a fac ility; (2) a ban on admissions; (3) payment denials for all Medicare or

11 Medicaid patients in a facility; and (4) the termination of a faci lity's Medicare and/or Medicaid

12 provider agreements. 42 C.F.R. §§ 488.406, 488.417, 488.418, 488.430.

13 2. DHCS has additional enforcement mechanisms

14 ln addition, DHCS has other enforcement mechanisms when a fac ility wrongfu lly refuses to

15 re-admit a res ident fo llowing a discharge from a general acute care fac ili ty. DHCS has the

16 authori ty to aud it faci li ties where re-admission violations are alleged. Cal. Welf. & Inst. Code§§

17 14043 .7 (authorizing unannounced visits to fac ilities), 14124.2 (authorizing inspection of

18 fac ilities, books, and records of fac ilities). DHCS also has the authority to prohibit all new Medi-

19 Cal admissions to a facility that has a continuing record of violations. 66 Op. Cal. Att'y Gen 310

20 (1983) 1983 WL 1448 13, 1-2. If a sk illed nursing fac ility is part of or related to the hospital in

21 which the resident was admitted, DHCS has the additional authority to treat the two faci lities as a

22 single provider and deny the higher-level reimbursement for hospital-level services prov ided to

23 the res ident after the nursing fac ility refused re-admission. Cal. Welf. & Inst. Code§ 14 l 33.3(a)

24 (requiring fu lly documented medical justification from providers fo r requested services).

25 Add itionally, should DHCS find that an improper refusal to readmit a resident is a breach of the

26 Medi-Cal Provider Agreement, DHCS can assert an offset/recoupment against nursing facilities

27 for non-medically necessary care provided at a hospital as a resul t of the re-admission violation.

28 Id. ,§ 14 133 .3(a)-(b) . 7

Defendant's Notice of Motion and Motion to Dismiss Complai nt; Memorandum of Points and Authorities In Support (3: l 5-cv-051 20)


2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

2 1

22

23

24

25

26

27

28

3. The Office of the Attorney General has statutorily defined authority to secure re-admission

Another enfo rcement mechanism, in addition to the foregoing, is the California Office of

the Attorney General 's state law statutorily-defined authority to secure a resident's re-admiss ion

to a non-comp liant ski lled nursing faci lity. Cal. Health & Safety Code§ 1430. The Office of the

Attorney General- acting at its own vo lition, or by way of referral, or at the behest of an

ind ividual compla inant-may seek a court injunction directing the nursing home to immediately

re-admit a resident. Id. , § 1430(a). The Office of the Attorney General is also permitted to seek

monetary damages from an offending fac ility in this situation. Id.

4. Nursing Home Residents Themselves Can Bring Individual or Class Actions Against Nursing Homes for Re-Admission Violations

Separate from the remedies available to the federal oversight authority and the state

agencies, residents of nursing faci liti es have an independent right to a fair hearing when it is

alleged that a facili ty violates their rights. This right is provided for by federal regulations, set

fo rth at 42 C.F.R. § 43 1.202 el seq. , and is included in California ' s State Plan approved by CMS.

State Plan, 4.2.6 In Cali fornia, these are called " transfer and discharge appeal (TOA) decisions."

Comp I., Ex. 2, citing L & C Policy and Procedure Manual, § 618.0 l. The authority for these

specific hearings arises under 42 C.F.R. § 483.12(a)(2).

The Office of Administrative Hearings and Appeals (OAHA) conducts the hearings. See

Cal. Health & Safety Code § I 0017 1. The parties to such hearings are the res ident and the

nursing home faci lity, and either party has a right to appeal the decision by way of a writ of

admin istrati ve mandamus to the superior court. Cal. Code Civ. Proc.,§ I 094.5. Neither the

Califo rnia Health and Human Services Agency, nor Secretary Dooley, nor CDPH is involved in

these private proceedings. CDPH wi ll investigate the complaints that resulted in a TOA, and if

during that complaint investigation process COPH finds a violation of state or federal law, state

or federal remedies may be app li ed, as described above. Compl. , Ex. 2.

6 A va i lab le at http://www.dhcs.ca.gov/form sandpubs/laws/Pages/Section%204.aspx


(3: l 5-cv-05 120)


Following a fair hearing, as "corrective action," the federal regulations require that the state

2 "agency must promptly make corrective payments retroacti ve to the date an incorrect action was

3 taken, and , if appropriate, provide for admiss ion or readmission of an individual to a faci lity if (a)

4 [t]he hearing decision is favorab le to the app licant or beneficiary; or (b) [t]he agency decides in

5 the applicant's or beneficiary's favor before the hearing." 42 C.F.R. § 431.246, emphasis added.

6 In the event a facility does not readmit a res ident despite a hearing decision requiring

7 readmission, California law empowers current or former residents to " bring a civil action against

8 the licensee of a faci lity who violates any rights of the resident or patient as set forth in the

9 Patients Bill of Rights ... or any other right provided for by federa l or state law or regulation."

IO Cal. Health & Safety Code § l 430(b ). Remedies include monetary damages, attorneys' fees, and

I I injunctive relief. Id.; see Shuts v. Covenant Holdco, 208 Cal. App. 4th 609, 625 (Cal. Ct. App.

12 201 2) (holding that the "clear, understandable, unmistakable terms" of secti on 1430, subdivision

13 (b) indicate an intent to create a private right of action aga inst a faci li ty).

14 D. Plaintiffs and T heir Claims

15 The fo ur Plaintiffs here are three individuals and an organization, California Advocates for

16 Nursing Home Reform (CANHR), that allege that Secretary Dooley is "failing to comply with

17 federa l law," and "has created a pointless appeal process that the State refuses to enforce, which

18 does not provide for prompt readmiss ion after a successfu l hearing." Comp!., 36. Plaintiffs

19 allege that the three individual Plaintiffs "won their readmiss ion hearings, yet [have] been denied

20 readmiss ion because Defendants [sic] refuse to enforce the decisions." Comp!., ~ 41. Plaintiffs

21 do not a llege that the faci li ti es have available beds, or that they are qualified to provide the

22 individual Plaintiffs with their current level of care needs. Nor do Plaintiffs allege that any of the

23 fac iliti es are state run fac iliti es, such that the state agency would " provide for admiss ion or

24 readmission" to the fac ility. 42 C.F.R. § 43 1.246; Comp!., il1 12- 14.

25 Wh ile they allege that, "[i]n fa iling to provide Plaintiffs Anderson, Wilson and Austin with

26 a proper hearing procedure, the State has violated federa l law and deprived them of their right to

27 due process and their property right to a bed," Plaintiffs do not dispute that they received a fair

28 hearing. Nor do they quarrel with the provisions in the State Plan. Instead, their so le cause of 9

Defendant's Notice of Motion and Motion to Dismiss Compla int; Memorandum of Points and Authorities In Support (3: I 5-cv-05 120)


action ari ses under § 1983, but Plaintiffs do not allege a statutory violation, but rather seek to

2 enforce a federal regulation. Comp!.,~ 42, 52-54. Plaintiffs also seek declaratory relief on the

3 alleged "controversy" over "Defendants ' [sic] duty to create a hearing and enforcement process

4 that complies with federal law." Comp!.,~ 56.

5 LEGAL STANDARD FOR MOTION TO DISMISS

6 Under Ru le 12(b)(l) of the Federal Rules of Civ il Procedure, the di stri ct court must di smiss

7 the complaint for " lack of subject matter jurisdiction." When a plaintiff lacks standing under the

8 Article lll "case or controversy" requirement, federal courts lack subject matter jurisdi cti on over

9 the suit, and the case must be dismissed. Cetacean Community v. Bush, 386 F.3d 1169, I 174 (9th

10 Cir.2004). Once a party has moved to di smiss for lack of subject matter jurisdiction under Rule

11 12(b )( I), the opposing party bears the burden of establi shing the cowt's jurisdiction. See

12 Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 111 5, 11 22 (9th Cir. 20 I 0).

13 And, under Rule 12(b )(6) of the Federal Ru les of Civil Procedure, a district court properly

14 di smisses a complaint fo r fa ilure to state a claim upon which relief may be granted if "there is a

15 ' lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable

16 legal theory."' Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir.20 11 ) (citations

17 omitted) . To survive a motion to dismiss, a complaint must contain suffi cient factual matter,

18 accepted as true, to "state a claim to relief that is plausible on its face." Bell Atlantic Corp. v.

19 Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibi lity "when the plaintiff pleads

20 factual content that allows the court to draw the reasonable inference" that the defendant may be

21 liable. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), citing Twombly, 550 U.S. at 556.

22 ln considering a motion pursuant to Ru le 12(b)(6), a court must accept as true all material

23 allegations in the complaint, as well as all reasonab le inferences to be drawn from them. Pareto

24 v. FD.I C., 139 F.3d 696, 699 (9th Cir.1998). The complaint must be read in the light most

25 favorab le to the nonmoving party. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th

26 Cir.200 I ). However, courts are not "required to accept as true allegations that are merely

27 conc lusory, unwarranted deductions of fact, or unreasonable inferences." Id. The ultimate

28 determination of "whether a complaint states a plausible claim for relief wi ll ... be a context-10

Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3 : l 5-cv-05 120)


specific task that requires the reviewing court to draw on its judicial experience and common

2 sense." Iqbal, 556 U.S. at 679.

3 ARGUMENT

4 I. PLAINTIFFS LACK ARTICLE III STANDING

5 To have standing to maintain this lawsuit against state Secretary Dooley, Plaintiffs would

6 have to meet all three requirements of Arti cle TTT: (I) that plaintiffs had suffered an injury in fact

7 that was concrete and particularized, and actua l or imminent; (2) that the injury is fairly traceable

8 to the challenged conduct; and (3) that the injury is likely to be redressed by a favorab le court

9 decision. Levine v. Vi/sack, 587 F.3d 986, 991-992 (9th Cir. 2009); see also Lujan v. Defenders

10 of Wildlife , 504 U.S. 555, 560- 61 (1992). Because Plaintiffs cannot establish any of these

11 requirements necessary fo r Article III standing, the Court should di smiss this Complaint for lack

12 of jurisdiction. Even if the Court finds that the individual Plaintiffs7 have suffered an injury, that

13 al leged injury is not the result of any unlawfu l conduct by Secretary pooley, nor could the court

14 grant any relief that wou ld be consistent with FNHRA and the Congressional allocation of

15 statutory responsibility. Thus, Plaintiffs lack Article III standing. "A su it brought by a plaintiff

16 without Article III standing is not a 'case or controversy,' and an Article III federal court

17 therefo re lacks subject matter jurisdiction over the suit." Cetacean Cmty. , 386 F.3d at p. 1174.

18 A. Plaintiffs Have Not and Will Not Suffer Any Injury As the Result of Any State Action or Inaction

19

20

21

22

23

24

25

26

The alleged injury of the individual Plaintiffs is that, having prevailed on their

admin istrative fair hearings, they have not been readmitted to the fac ilities where they had been

admitted before being hospitalized. Comp!., ,r,r 12-14. In turn, Plaintiffs assert that it is

Secretary Dooley who must redress this readmiss ion problem. Comp!., ,r 15. However, even if

the individual Plaintiffs have been injured by the faci lities' fai lure to readmit them, this does not

constitute a concrete injury in fact with respect to the so le Defendant here, as required by Arti cle

m.

27 7 The three individual Plaintiffs, Anderson, Wilson and Austin, are referred to co llectively

28 as " individual Plaintiffs."

11 Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support

(3: l 5-cv-05 120)


The Court is not "required to accept as true allegations that are merely conclusory,

2 unwarranted deductions of fact, or unreasonable inferences." Sprewell, 266 F.3d at p. 988. To

3 find injury here, the Court wou ld have to look beyond the facts that Plaintiffs have alleged, and

4 infer, or accept as true, the conclusory inferences that Plaintiffs assert. Based on the alleged fact

5 that they have not been re-admitted, Plaintiffs are asking the Court to infer all of the fo llowing:

6 ( I) that the individual Plaintiffs have a right to return to the specific fac ility where they had been

7 admitted; (2) that the facility must accept them; (3) that the individual Plaintiffs meet al l the

8 requirements for admission at the individua l faci lities; (4) that there are beds available at the

9 facilities; and (5) that the individual Plaintiffs are harmed by not being readmitted to those

10 specific faci lities. See 42 U.S.C. § 1396r(c)(2)(D)(iii); but see Comp!. ,~~ 12- 14. Plaintiffs have

I 1 not, and cannot, assert any facts to support these tenuous allegations.

12 There are also no facts that support Plaintiffs ' contention that this is a systemic problem.8

13 While the Court is required at this stage to accept the truth of the facts alleged in the Complaint,

14 the on ly facts properly before the Court are those of three individuals who allege that they "a ll

15 have won their federa lly-mandated DHCS readmission hearings," but "none of them has been

16 able to return home." Comp!.,~ 5. The so le reason given for why they have not been readmitted

17 is: " [b ]ecause the State will not enforce their readmiss ion hearing orders." Id. However, as this

18 is merely a conclusory assertion, the court is not required to accept this as true. "[T]he tenet that

19 a court must accept as true all of the allegations contained in a complaint is inapplicable to lega l

20 conclusions. Threadbare recitals of the elements of a cause of action, supported by mere

21 conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. Nor do Plaintiffs proffer any facts

22 in support of their claim that this problem, encountered by three individuals, is of statewide

23 proportions. Comp!.,~ 1. To the contrary, the HHS letter attached to the Complaint

24 demonstrates ongoing communications with the federa l agency charged with enforcement of the

25

26

27

28

8 In fact, according to a report on CANHR's website, there are approximately 100,000 res idents of California nursing fac ilities, but only three named plaintiffs here. http://www.canhr.org/reports/2007/[,TCFactFigu rcs07.pdf; see also


(3: I 5-cv-05 120)


Medica id and Medicare Acts, and there is no indication, either in the Complaint or in this

2 correspondence, that Cali fornia is out of compliance. See Com pl., Ex. I.

3 Plaintiffs also seem to allege that the cost to the Medi-Cal program for a hospital stay is

4 greater than the cost for a faci lity stay. Campi.,~~ 7, 17, 20. However, this programmati c state

5 cost does not constitute an injury to Plaintiffs, so Plainti ffs lack standing to maintain thi s claim.

6 Moreover, fi scal oversight of federal funds is squarely within the purview of HHS, and thus,

7 prudential concerns we igh against judicial rev iew of this in the first instance.

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

B. California Has An Effective Process and Secretary Dooley Has Not Caused Plaintiffs Any Injury

For Article Tri standing, Plaintiffs must show that there is a causal connection between the

inj ury they have suffered and Secretary Dooley's conduct. Nat '! Ass'n for the Advancement of

Multijurisdiction Practice v. Berch, 773 F.3d 1037, 1044 (9th Cir.2014), citing Susan B. Anthony

List v. Driehaus, - U.S. --, 134 S.Ct. 2334, 234 1, 189 L.Ed.2d 246 (2014). This they cannot

do. Even assuming, arguendo, that the individual Plaintiffs have been injured by not being

readmitted to the fac ilities, this fa ilure to readmit was not caused by Secretary Dooley. Plaintiffs

allege that Secretary Dooley must provide a process to prov ide for readmission, but the contrary

suppos ition- that fa ilure to provide a process is the cause of their injury- is not accurate.

Under Plaintiffs' own theory, their injury is that the facilities have not readmitted them. If

the fac ilities are obligated to readmit the individual Plaintiffs, and if the fac ilities have not

readmitted them, the clear and direct cause of the alleged injury is the fac ilities' refusal to comply,

not any action on the part of the State. That the State regulates fac il ities does not make Secretary

Dooley, or any other state entity, responsible for any individual fac ility' s wrongfu l conduct.

Plaintiffs fai l complete ly to assert, other than by way of legal conclusion, that any action by

Secretary Dooley, much less any state action, is the cause of their injury. Again, if the subject

fac ilities are vio lating the law and their duties to the individual Plaintiffs, Plaintiffs cou ld bring an

action against those specific fac ilities, either individually or as a class action. See Cal. Health &

Safety Code§ 1430(b) ("A current or former resident or patient of a ski lled nursing fac ili ty ...

may bri ng a civil action against the licensee of a fac il ity who violates any rights of the resident or


(3: 15-cv-051 20)


patient as set forth in the Patients Bill of Rights ... or any other right provided for by federa l or

2 state law or regulation. The su it shall be brought in a court of competent jurisdi ction ... . The

3 licensee shall be liable for up to five hundred dollars ($500), and for costs and attorney fees, and

4 may be enjoined from permitting the violation to continue."). Plaintiffs cannot choose instead to

5 sue in federal court a different entity, which does not have direct re-admiss ion compulsion

6 authority, to avo id the remedies that are statutorily avai lable to them to accomp lish that very

7 result. Nor, as described below, would a favorab le deci sion in this case against Secretary Dooley

8 redress the alleged injury caused by third parties not before this court.

9 C. Any Alleged Injury Caused By the Facilities Cannot Be Redressed By a Favorable Decision Here.

10

11 The crux of Plaintiffs ' standing problem is that any alleged injury the individual Plaintiffs

12 have suffered cannot be redressed by a favorab le decision here. Despite Plaintiffs'

13 characterization of this case as a situation in which Defendant is "violat[ing] Plaintiffs' rights"

14 warranting "an injunction prohibiting Defendants' [sic] ill egal practices," Plaintiffs' fail to allege

15 any action by Defendant that the Court must enjoin. Campi.,~ 54, Prayer for Relief,~ A. Instead,

16 Plaintiffs are asking this Court to assume the duti es of the federa l HHS, to rev iew state policy and

17 practice, and then to order Secretary Dooley to "create a hearing and enforcement process that

18 complies with federal law" ( even though CMS has already found that the state fair hearing

19 procedures do comply with federa l law). Campi.,~ 56. Not on ly does this attempt impermissibly

20 invade the authority express ly conferred on HHS by Congress, as described more full y below, but

21 it would not even redress the injury the individual Plaintiffs allege here. When "a plaintiffs

22 asserted injury arises from the government's allegedly unlawful regulation (or lack of regulation)

23 of someone else, much more is needed." Lujan, 504 U.S. at 56 1.

24 The individua l Plaintiffs allege that their injury is not being readmitted to the specific

25 fac ility they had been ad mitted to before their hospitalization . They have options to redress that,

26 such as the state statutory right to sue the facility to compel their re-admiss ion. "[B]y enacting

27 section 1430, subdivision (b), the Legislature spec ifi cally authorized skilled nursing facil ity

28 residents themselves to bring actions to remedy violations of their rights rather than forcing them 14

Defendant 's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: l 5-cv-05 120)


to depend upon the CDPI--1 to take action." Shuts, 208 Cal.App.4th at 623-624. In fact, CANHR

2 itself has specifically noted that under this statute, "Californ ia nursing home residents have the

3 express ab ility to enforce their rights in court," noting that "Residents of many other states are not

4 legally allowed to sue fo r enforcement of their rights, making Health and Safety Code section

5 1430(b) a uniquely powerful tool for ensuring personal freedom and good quality care in

6 Cali forn ia nu rsing homes."9 Def. 's Req. fo r Jud. Ntc., Ex. E. And yet here, Plaintiffs do not

7 allege they have avai led themselves of this option, or of any of the "various enforcement actions

8 it cou ld take," as set forth in Secretary Dooley's November 4, 2015, letter to CANHR. Comp!.,

9 15 1. A court order here, compelling Secretary Dooley to craft some type of new mechanism

IO would not redress the alleged injury caused by the fac ilities failure to comply with their

11 requirements. It is Plaintiffs burden to demonstrate causation and redressability of injury, and

12 they cannot meet this burden, as "third parties not before the court must change their behavior in

13 order fo r any injury suffered to be redressed." Levine, 587 F.3d at 992.

14 D. Article III and Prudential Standing Principles Bar CANHR's Claim

15 Plaintiff CANHR also cannot meet the three requirements necessary for Article TTT

16 standing. As an organization, CANHR can demonstrate injury in fact only through "specific

l 7 ev idence that a challenged statute or policy frustrates the organizati on' s goals and requires the

18 organizati on to expend resources in representing clients they otherwise wou ld spend in other

19 ways." Camile de Jornaleros de Redondo Beach v. City of Redondo Beach, 657 F.3d 936, 943

20 (9th Cir. 2011). However, expenditu re of resources must be established independent of this

21 lawsuit. id. CAN HR fa ils to make thi s showing.

22 CANHR does not- nor can it given the multitude of adequate remedies of law that

23 exist- provide spec ific evidence that it has expended resources in representing clients that it

24 would not otherwise have expended on account of the regu lation that it challenges (42 C.F.R. §

25 43 1.246). Indeed, even were CANHR's representation of clients in this matter necessary,

26 CANHR's stated organ izational purpose is to "protect the rights of Cali fornia residents and ...

27

28 9 http://www.canhr.org/LRS/Elder AbuseL itigation/Residents _Rights_ Lit.htm

15 Defendant 's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities ln Support

(3: l 5-cv-05120)


help[) residents, including Plaintiffs Anderson, Wilson, and Austin, obtain readmission to their

2 homes after temporary hospitalization." Comp!. ,~ 15. Because CANHR states that their purpose

3 as an organization is to litigate matters such as this one, the organization cannot make a co lorable

4 argument that the resources spent in thi s matter would otherwise be spent in another manner.

5 Camile de Jornaleros de Redondo Beach, 657 F. 3d at 943. Even were CANHR to estab li sh

6 injury in fact, however, it would still be unable to demonstrate causation or redressability because

7 ( I) Secretary Dooley has not caused any fac ili ty to deny admiss ion to any of the individual

8 peti tioners; and (2) a favorable decision in this matter would, at best, add a superfluous new

9 remedy to the broad spectrum of adequate and direct remedies already available to the individual

l O Plainti ffs under state law.

11 Additionally, two separate prudential standing doctrines bar CANHR's claim aga inst

12 Secretary Dooley. First, CANHR impermissibly rests its claim entirely on the alleged rights or

13 interests of third parties- the individual Plaintiffs. See Warth v. Seldin, 422 U.S. 490, 499 (1975)

l 4 ("The plaintiff generally must assert his own legal rights and interests, and cannot rest hi s claim

15 to relief on the legal rights or interests of third parties."); see also Valley Forge Christian Coll. v.

16 Americans United for Separation of Church and State, Inc., 454 U.S. 464, 474 (1 982). Second,

l 7 CAN HR's advocacy interests are not within the "zone of interests to be regulated by the statute or

18 constitutional guarantee in question." Valley Forge, 454 U.S. at 475. On the most basic leve l,

l 9 Plaintiff CANHR cannot pass the zone of interests test because federal regulations are reflective

20 of executive and not congressional intent. Because CANHR is ( I ) suing exclusively on behalf of

21 thi rd parties; and (2) not within the "zone of interests" envisaged by any plausible congressional

22 intent, prudential standing principles preclude CANHR from asserting its claims against Secretary

23 Dooley.

24 II. PLAINTIFFS LACK A FEDERAL PRIVATE R IGHT OF ACTION To B RING THIS LAWSUIT

25

26 Even if Plaintiffs had stand ing, and even if federal law required Secretary Dooley to

27 implement a system to enforce hearing decisions, as Plaintiffs allege (and Defendant disputes),

28 Plainti ffs nevertheless lack a federa l private right of action. Plaintiffs allege that "the 16

Defendant 's Notice of Motion and Motion to Dismiss Compla int; Memorandum of Points and Authorities In Support (3: l 5-cv-05 120)


implementing federa l regulations require Defendants [sic] to take corrective action to implement

2 a hearing decision wh ich is favorab le to the nursing home resident." Compl., 53. As described

3 be low, this claim fa ils for a number of reasons, including that Plaintiffs cannot enforce a federal

4 regulation, even if the regu lation required what Plaintiffs' allege (which it does not).

5 The Supreme Court has established a three-part test for determining whether a statutory

6 provision creates a right that can be enfo rced by a private lawsuit under § 1983: ( I) "Congress

7 must have intended that the provision in question benefit the plaintiff '; (2) "the plaintiff must

8 demonstrate that the right asserted ly protected by the statute is not so vague and amorphous that

9 its enforcement would strain judicial competence"; and (3) "the statute must unambiguous ly

10 impose a binding ob li gat ion on the States." Blessing v. Freestone, 520 U.S. 329, 340-41 (1997)

11 ( citations and internal quotation marks omitted). And, Congress must have created new rights in

12 "clear and unambiguous terms." Gonzaga University v. Doe, 536 U.S. 273, 290 (2002).

13 Plaintiffs cannot meet any of these requirements. "Spending Clause legislation like

14 Medicaid Act ' is much in the nature ofa contract. "' Armstrong, 135 S.Ct. at 1387, citing

15 Pennhurst State Sch. & Hosp. v. Halderman, 45 1 U.S. l , 17 (198 1). Congress enacted the

16 Medica id Act not as a mandate, but as a type of entirely vo luntary agreement to which states may

17 subscribe in order to receive federa l funds. See Pennhurst, 45 1 U.S. at 11 ("Like other federal-

18 state cooperative programs, the Act is voluntary and the States are given the choice of complying

19 with the conditions set forth in the Act or forgo ing the benefits of federal funding."). And, as the

20 Supreme Court recently and spec ifically noted in Armstrong, not even "beneficiaries of the

2 1 federa l-state Medicaid agreement" have the right to sue to enforce the obligations of contracts

22 between two governments. Armstrong, 135 S.Ct. at 1387.

23 Nor has Congress either created the right Plaintiffs ' allege, or imposed any binding

24 ob ligation on the states to create the mechanism Plaintiffs' seek. Far from asserting any explicit

25 right, in "clear and unambiguous terms," Plaintiffs instead attempt to cobble together

26 requi rements from multiple provisions of federal law and regulation to allege that the state must

27 not only create a fai r hearing system for private parties to address disputes about re-admiss ions to

28 fac il ities, but also that the state must itself enforce those decisions. Plaintiffs then allege that, 17

Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: l 5-cv-05 120)


having not done so, "through [] acts and omissions," the state is violating federal law and

2 Pla intiffs' ri ght to due process. Campi.,, 54. However, this claim fails for the very simple

3 reason that there is no such requirement under the law. Plaintiffs' fa il to cite any statute that

4 "unambiguously impose[s] a binding obligation on the States." Blessing, 520 at 340-34 1. Instead,

5 Plaintiffs rely on two provisions of the FNHRA in an effort to bootstrap in their claim regarding a

6 regulati on. The first provision, at 42 U.S.C. § I 395i-3, describes the "requirements for, and

7 assuring quality of care in, skilled nursing fac ilities." The second provision, cod ified at 42 U.S.C.

8 § 1396r, sets forth the "requirements for nursing faci li ties." The specifi c subsections within each

9 statute upon which Plaintiffs rely is that which requires the states to "provide a fair mechanism

10 fo r hearing appeals on transfers and discharges of residents of such facilities." 42 U.S.C. §§

11 1395 i-3(e)(3), 1396r(e)(3). Cali fornia has done so. And neither provision requires the state to

12 create the mechanism Plaintiffs' seek.

13 Further making this claim "so vague and amorphous that its enforcement would strain

14 judicial competence" is the fact that HHS has approved the provi sions of the State Plan that set

15 fo rth the processes that California uses to comply with the requirements for fair hearings, appeals,

16 and enforcement. Cali fo rnia has "a fair mechanism for hearing appeals on transfers and

17 discharges of res idents," and it has been approved by CMS. State Plan, Attachments 4.2, 4.28,

18 4.35-A-H. Plaintiffs do not dispute that Californ ia's processes, and its State Plan, comply with

19 the Acts and state law requirements. lt is undisputed, and even affirmatively asserted by the

20 individual Plaintiffs, that they had their readmiss ion hearings that form the basis for due process.

21 Com pl.,,, 12-14. Plaintiffs do not argue, nor could they, that these fa ir hearings did not comply

22 with the federa l or state statutory or regulatory requirements. Instead, they argue that because

23 neither DHCS nor CDPH "enforce" the decisions, "the State has not provided residents with their

24 right to an administrative procedure that provides for prompt readmission if they are successful. "

25 Campi., , 40. But Congress did not codify any post-hearing requirement in the statutes upon

26 wh ich Plaintiffs' rely. Instead, Plaintiffs allege generally that despite HI-I S's express approval of

27 California's State Plan, the state is somehow acting " illegally." Comp!., ,, 6, 9, 5 1. Th is

28 conclusory assertion fai ls. 18

Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support (3: l 5-cv-05120)


2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

"It is the duty and responsibility of the Secretary [of HHS] to assure that requirements

which govern the prov ision of care in skilled nursing fac ilities under thi s subchapter, and the

enforcement of such requirements, are adequate to protect the health, safety, welfare, and rights of

residents and to p romote the effecti ve and efficient use of public moneys." 42 U.S.C. § 1395 i-

3(t)( l ) (emphasis added) . Congress provided HHS with a number of remedies to address a

facility's noncompliance. For example, if a facility is not meeting its obligations, HHS may

(among other options): ( l) deny payment to the fac ility; (2) impose monetary penalties; (3)

appoint temporary management to oversee the operation of the fac ility; or (4) terminate the

facility's participation in Medicare. See 42 U.S.C. § 1395 i-3(h) . Because Congress vested the

federal government alone with the authority to enforce these Medicare-provider requirements, it

is improbable that Congress simultaneously intended to permit concomitant private lawsuits

"before thousands of federal- and state- court judges." See Gonzaga, 536 U.S . at 290.

Accordingly, because there is no right protected by the FNHRA or any other statute,

Plaintiffs cannot state a claim under 42 U.S.C. § 1983. "Secti on 1983 prov ides a cause of action

for the ' deprivation of any rights, privileges, or immunities secured by the Constitution and laws'

of the United States." Buckley v. City of Redding, Cal., 66 F.3d 188, 190 (9th Cir. 1995), citing

Wilder, 496 U.S. at 508. Here, however, Plaintiffs cannot establish either that they have any

statutory right to compel the Secretary to do more than required by the federal law, or that their

rights have been violated by the state process that comports with the law. And Congress very

specifically delegated responsibility for the administration of this complicated program to HHS,

and HHS has approved California's State Plan. Thus, hav ing fa iled to allege either any statutory

right, or any action that Secretary Dooley has taken, Plaintiffs cannot state a claim under §

1983 .10

Ill. P LAINTIFFS CAN)'IOT STATE A C LAIM FOR RELIEF

Assuming, arguendo, that Plainti ffs have standing and that the provisions of the FNHRA

under which Plainti ffs sue confer individual rights enforceable through § 1983, Plaintiffs' claims

10 Thus distinguishing the facts of this case from those presented in Grammer, 570 F.3d 520, in which the defendant nursing home facil ity was operated by the county.

19 Defendant ' s Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities In Support

(3: I 5-cv-05 120)


nevertheless fail. First, Plaintiffs cannot sue to enforce a federa l regu lation, even if it required

2 what Plaintiffs all ege, and it does not. Second, Plaintiffs cannot state a claim for equitable relief

3 because they have a number of adeq uate remedies at law.

4

5

6

7

8

9

10

11

12

13

14

15

16

17

l8

19

20

21

22

23

24

25

26

27

28

A. Plaintiffs Cannot State a Claim for an Alleged Violation of a Federal Regulation

Plaintiffs' Complaint, and specifically the allegations in the First Cause of Action, make

clear that it is a federa l regulation, not federa l statutes, that they seek to enforce. Compl., 53.

While the First Cause of Action cites FNHRA for the proposition that it "requires Defendants [sic]

to establish a ' fair mechanism for hearing appea ls' ," there is no dispute over California's hearing

and appeals process. Compl., 53. Rather, Plaintiffs seek to compel Secretary Dooley to enact

new procedures fo r a post-hearing process, which, they allege, stems from the regu lation

regard ing corrective action. Id. Plaintiffs thus do not allege that any statute requ ires states to

establish a post-hearing mechanism. Id. Instead, they rely on language in an HHS regulation.

However, Plaintiffs cannot state a claim because § 1983 cannot be used to seek recovery for

the violation of agency regu lations. This is because "agency regulations cannot independently

create rights enforceable through § 1983." Save Our Valley v. Sound Transit, 335 F.3d 932, 939

(9th Cir.2003). ln Save Our Valley, the question was whether a federa l agency regulation

"creates an individual federa l right that can be enforced through a§ 1983 action." Id. Relying on

controlling Supreme Court precedent, the Ninth Circui t determined that "only violations of rights,

not laws, give rise to § 1983 actions," and because only Congress can create federal ri ghts

through statutes, only Congress can create rights enforceab le through § 1983. Id. , at p. 938-939.

The Ninth Circuit thus concluded "that agency regulations cannot independently create rights

enforceable through § l 983," and that such conclusion "results directly from the broader,

venerated constitutional law principle that Congress, rather than the executive, is the lawmaker in

our democracy." Save Our Valley, 335 F.3d at 939. According ly, because Plaintiffs cannot

enforce 42 C.F.R. § 431.246 through a§ 1983 cause of action, this claim must be dismissed.

Even if Plaintiffs could state a claim for violation of a federal regulation, and they cannot,

their claim wou ld nevertheless fail because the regulation does not compel the result they seek. A


(3: J 5-cv-05120)


plain reading of the regulation shows that, contrary to Plaintiffs' characterization, there is no

2 requirement that the State create a mechanism for readmission. Instead, the regulation requires

3 the state to "promptly make payments" and permits, " if appropriate" ( emphasis added) to provide

4 for readmission of an individual to a facility. 42 C.F.R. § 431.246. However, where readmission

5 would be to a private fac ility, such as the ones referenced in thi s lawsu it, it wou ld not be

6 "appropriate" for the state to provide for readmission where that is beyond the role of the state

7 agencies, or where there may be another reason why re-admiss ion to a specific fac ility may not be

8 "appropriate." As HHS has prev iously noted in its letter to Californ ia state officials on this very

9 topic: "we are unaware of any provisions of the Act or regulations that explicitly requ ire the State

10 to institute court actions in th is context." Def. 's Req. Judicial Ntc., Ex. D. at 2.

11 To the extent Plaintiffs are argu ing that the regulation itself violates Plaintiffs' " ri ght to due

12 process" by fa iling to require the State "to take corrective action to implement a hearing

13 decision," Secretary Dooley is not the proper defendant. Comp!.,,, 53-54. Secretary Dooley is

14 not responsible for the federal regu lation that Plai ntiffs' contend does not go far enough, and

15 HHS is not a party to this lawsuit. 11

16

17

18

19

20

21

22

23

24

25

26

27

28

B. Plaintiffs Cannot State a Claim for Equitable Relief Because They Have Adequate Remedies at Law

Because Plaintiffs have adequate remedies at law, neither injuncti ve nor declaratory relief is

appropriate. Agua Caliente Band of Cahuilla Indians v. Hardin, 223 F.3d I 041 , I 050 (9th Cir.

2000) ("[C]ourts must necessarily consider the adequacy of any remedy at law before awarding

equitab le relief."). Because these adequate remedies ex ists, injunctive relief in this matter is

inappropriate. Plaintiffs ' assertion that Californ ia lacks an enforcement mechanism to secure

petitioners' re-admiss ion is belied by the facts, including that:

( I ) CDPH has broad enforcement mechanisms to enforce compliance with re-admittance orders that include citations and monetary penalties. Cal. Health & Safety Code§§ 1423(a)- (b), 1425, 1428(g) (2015); 42 C.F.R. § 488.424 (20 12).

11 Plaintiff CANHR has, in fact, recently prov ided its comments directly to CMS regarding proposed regulations that were published in the Federal Register on July 16, 2015. http://w1,,vw.canhr.org/newsroorn/newdev _ archive/201 5/CA NHR-cornments-011 -proposed-rcq u iremen ts-o f-partici pat ion. pdf


(3: I 5-cv-05 120)


(2) CDPH 's mechanisms are complemented by federal penalties intended to induce compliance that include monetary damages, bans on new admittees, payment denials,

2 and the termination of provider agreements. Ca l. Health & Safety Code

3 §§ 1423(a)(l), 1429.l (a) (2015); 42 C.F.R. §§ 488.406, 488.430, 488.438(a) (20 12).

(3) DHCS has add itional statutory enforcement powers that include audits as well as 4 strict monetary penalties. Ca l. Welf. & Inst. Code§§ 14043.7, 14124.2, 14133.3(a)-

(b) (2015);660p. Cal. Att'y Gen 310 (1983) 1983 WL 144813, 1- 2. 5

( 4) The Office of the Attorney General has the statutory authority to seek a court 6 injunction to force compliance as we ll as monetary damages. Cal. Health & Safety

Code § 1430 (2005). 7

(5) The individual petitioners in this action have a statutorily-defined right to bring 8 actions against the fac ilities they allege deny them re-admission. These causes of

action include provisions for damages, injunctive relief, and attorneys' fees. Cal. 9 Health & Safety Code§ 1430(b) (2005); see Shuts v. Covenant Holdco, 208 Cal. App.

4th 609, 625 (2012). 10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Plaintiffs' assertion that the "State's refusal to enforce its own decisions is plain ly il legal"

ignores these existing enforcement mechanisms. Campi. ,~ 6. Contrary to Plaintiffs ' allegations,

DHCS and CDPH have strong statutory enforcement mechanisms to apply to offending faci lities,

and a broad range of adequate remedies at law exist that preclude declaratory relief. In the

absence of any actual controversy, Secretary Dooley cannot be compelled to requ ire either CDPH

or DHCS to exercise their enforcement actions in a particular manner, especially in the absence of

any statutory requirement, and based only on ambiguous regulatory language. Nor is there any

allegation in the Complaint that those enforcement actions are inadequate. When faced with a

declaratory reli ef claim, "federal courts must take care to ensure the presence of an actual case or

controversy, such that the judgment does not become an unconstitutional advisory op inion."

Rhoades v. Avon Products, Inc., 504 F.3d 11 5 1, 11 57 (9th Cir.2007). HHS is responsible for

enforcement of the Acts, and for oversight of both residents in facil ities as we ll as management of

federa l funds. 42 C.F.R. §§ 430.15, 430.18. IfHHS believes a state is not complying with the

req uirements of the State Plan, or is in violation of federa l laws or regulations, it has the option to

withhold federa l funds to bring the state into compliance, and has enforcement options directly

against non-compliant faci lities. Id., § 430.35; Armstrong, 135 S.Ct. at 1385; Dev. Servs.

Network, 666 F.3d at 544.


(3: l 5-cv-05 120)


Moreover, one of the reasons Congress passed FNHRA was specifically to increase the

2 enforcement options for HHS. 42 U.S.C. § l 396r et seq; H.R. Rep. No. L. No. l 00-391 (I), at 452

3 (l 987), as reprinted in 1987 U.S.C.C.A.N. 23 13-1 , 23 13- 272. Although Plaintiffs provide

4 evidence that HHS has rev iewed Ca li fornia 's process, there is no indication that HHS has found

5 any vio lation or cause for concern. A court order here, especially in the nature of "declaratory

6 relief" would impermiss ibly intrude on an area where Congress has clearly delegated

7 responsibility to a particular agency. See, e.g. , Chevron, US.A., Inc. v. Natural Resources

8 Defense Counsel, 467 U.S. 837, 842 (1984) ("If the intent of Congress is clear, that is the end of

9 the matter, for the cou11."). Moreover, it would run the risk of courts rendering numerous,

IO potential ly conflicting decisions of these Medicaid and Medicare Acts provisions. Gonzaga, 536

11 U.S. at 290 ("It is implausible to presume that the same Congress nonetheless intended private

12 suits to be brought before thousands of federal- and state- court judges, which could only resu lt

13 in the sort of"multiple interpretations" the Act explicitly sought to avoid."). And, as set forth

14 below, what Plaintiffs are seeking is not for Defendant to cease any alleged unlawful activity, 12

15 but rather for the State to affirmatively create a new post-hearing state-enforcement mechanism to

16 compel readmission, and to do so in the absence of any federal or state statutory requirement.

17 Additionally, Plaintiffs repeatedly, but misguided ly, refer to an August 6, 2015, letter

18 stating that OAHA does not retain jurisd iction and, hence, does not have the authority to enfo rce

19 its own orders. See, e.g., Comp!. ,~~ 44, 46. But there is an important reason for thi s. OAHA

20 does not retain jurisd iction because, among other reasons, Plaintiffs, individually or as a class,

21 can compel offending facilities to re-admit petitioners. Moreover, under the requirements of

22 Cali forn ia's Administrative Procedure Act, OAHA may not retain jurisdiction when the

23 enforcement and dispute of final OAHA deci sions is properly the province of a superior court.

24 See e.g ., Cal. Code Civ. Proc. § 1094.5. Plaintiffs cite no ministerial duty for OAHA to retain

25 jurisdiction in these matters and, given the abundance of adequate state, federa l, and individua l

26

27

28

12 Although Plaintiffs use the language "the State's illegal conduct must cease immediately," it is clear from their Complaint that they are seeking to compel the state to act affirmati ve ly, not to refrain from acting in any specific manner.


(3: l 5-cv-05 120)


enforcement remedies available to benefit Plaintiffs, neither injunctive nor declaratory relief is

2 appropriate in thi s matter.

3 IV. THE COMPLAINT SHOULD ALSO BE DISMISSED UNDER PRIMARY J URISDICTION

4 The Complaint should also be dismissed under the doctrine of primary jurisdiction, so that

5 HHS, the federal agency charged by Congress with the responsibility to enforce the standards of

6 faci li ties, and accountability for the considerable amounts of federal funds, has the opportunity to

7 address in the first instance whether what Plaintiffs seek is actually required. The doctrine of

8 primary jurisdiction permits courts to exercise discreti on to stay an action pending "referral" of

9 the issues to an administrati ve body. Chabner v. United Omaha Life Ins. Co ., 225 F.3d I 042,

10 105 1 (9th Cir.2000); Farmers Ins. Exch. v. Superior Court, 2 Cal.4th 377, 386- 390 ( 1992). Thi s

11 permits the court to stay or dismiss proceedings to permit plaintiffs to pursue admin istrative

12 remedies. Clark v. Time Warner Cable, 523 F.3d 1110, 111 5 n. 9 (9th Cir.2008).

13 Primary juri sd iction is particu larly appropriate here, because the Medicare and Medicaid

14 Acts are specifically delegated to HHS to administer. This doctrine is applicable "when a claim is

15 originally cognizable in the courts, but is also subject to a regulatory scheme that is enforced by

16 an administrative body of special competence." Chabner, 225 F.3d at 105 1. There is no specific

17 form ula for determin ing whether primary jurisd iction applies, but a court may cons ider: "( I)

18 whether application will enhance court decision-making and efficiency by allowing the court to

19 take advantage of administrative expertise; and (2) whether application will help assure unifo rm

20 application of regulatory laws." Id. Both factors apply here, as HHS has the administrative

2 1 experience and expertise to assess these issues, and its determination would assure that the laws

22 apply equally, regard less of whether, and in what courts, individuals may fi le lawsuits, seeking to

23 create new responsibilities under these programs.

24 II

25 II

26 II

27 II

28 24

Defendant's Notice of Motion and Motion to Dismiss Complaint; Memorandum of Points and Authorities ln Support (3: l 5-cv-05 120)


CONCLUSION

2 For all the foregoing reasons, Secretary Dooley respectfully requests that the Court dismiss

3 Plaintiffs' lawsuit, and all the claims therein, with prejudice.

4

5

6

7

8

9

lO

1 I

Dated: December 30, 201 5 Respectfully Submitted,

KAMALA D. H ARRIS Attorney General of Cali fornia SUSAN M. CARSON Supervising Deputy Attorney General

Isl J{acfara R. St ant on H ADA RA R. ST ANTON D ANE C. BARCA Deputy Attorney General Attorneys for Defendant

12 SF20 15403249

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4 1442582.doc


(3: I 5-cv-05 120)
