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Wicomico Nursing Home v. Padilla

United States District Court, D. Maryland

August 7, 2017

WICOMICO NURSING HOME, as assignee and/or authorized representative of Margaret Smith, Peggy Outten, Ruby Bounds, Shirley Hackett, Carol Snyder, and William Soil, et al., Plaintiffs,
v.
LOURDES R. PADILLA, in her Official Capacity as Secretary of the Maryland Department of Human Services, and DENNIS R. SCHRADER, in his Official Capacity as Secretary of the Maryland Department of Health, Defendants.

          MEMORANDUM OPINION

          Richard D. Bennett United States District Judge

         This is the third of three similar actions filed in this Court over the past three years based on the allegedly unlawful processing of Medicaid benefit applications by the Secretaries of the Maryland Department of Human Services (“MDHS”) and the Maryland Department of Health (“MDH”). See Oakview SNF LLC v. Malhotra, , RDB-14-2966; Lorien Life Center Baltimore County Inc., et al v. Malhotra, , MJG-15-2865. In the instant case, plaintiffs Wicomico Nursing Home (“Wicomico”), Oakview SNF, LLC d/b/a Oakview Rehabilitation and Nursing Center (“Oakview”), [2] Anchorage Nursing, LLC d/b/a Anchorage Rehabilitation and Nursing Center (“Anchorage”), and Brooke Grove Foundation (“Brooke Grove”) (collectively, “plaintiffs” or the “Facilities”), as assignees and/or authorized representatives of eleven (11) of their current and former residents, [3] have filed a putative class action complaint against defendants Lourdes R. Padilla (“Padilla”) and Dennis R. Schrader (“Schrader”) (collectively “defendants” or the “Secretary Defendants”), in their official capacities as Secretary of the Maryland Department of Human Services (“MDHS”) and Secretary of the Maryland Department of Health (“MDH”), respectively.

         In their Amended Complaint, plaintiffs allege that defendants have violated federal law by failing to timely issue Medicaid eligibility determinations as required under the federal Medicaid Act, 42 U.S.C. §§ 1396(a)(8) and 1396(a)(1), and its implementing regulations, 42 C.F.R. § 435.912 and 42 C.F.R. § 435.930. (ECF No. 30 at 2.) Plaintiffs also allege that the “systematic unjustified delays in processing of Medicaid applications at [MDHS] and [MDH]…constitutes unlawful discrimination” in violation of the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101, et seq. (Id.) In addition, plaintiffs allege that defendants violated the residents' Due Process rights under the Fourteenth Amendment to the United States Constitution by permitting these systematic delays to continue and by issuing certain misleading and confusing communications to the residents during the processing of their applications for benefits. (Id.) Through this action, plaintiffs seek declaratory and injunctive relief, as well as money damages for expenses previously incurred by the residents while they awaited determinations on their applications for Medicaid benefits.

         Now pending before this Court is defendants' Motion to Dismiss, or in the Alternative, for Summary Judgment (“Defendants' Motion”). (ECF No. 31.) In support of their Motion, defendants assert that they are entitled to state sovereign immunity under the Eleventh Amendment to the United States Constitution and, thus, that this Court is without subject matter jurisdiction over this action. (ECF No. 31-1 at 16-19.) Defendants also raise several defenses under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

         The parties' submissions have been reviewed, and no hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the reasons stated below, Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction is GRANTED, and this case is DISMISSED.

         BACKGROUND

         As noted above, within the past three years, plaintiffs' counsel, the law firm of Schutjer Bogar, LLC a/k/a sb2, Inc., has litigated in this Court two strikingly similar actions based on MDHS and MDH's allegedly unlawful processing of Medicaid benefit applications. Oakview SNF LLC v. Malhotra, , RDB-14-2966; Lorien Life Center Baltimore County Inc., et al v. Malhotra, , MJG-15-2865. In addition to the similar nature of the allegations made, plaintiff Oakview previously sought relief on behalf of resident Cheryl Hart in the RDB-14-2966 case. The undersigned dismissed the Oakview case on May 8, 2015 following a hearing at which several of the arguments again raised in this case were addressed. (RDB-14-2966, ECF No. 36.) Similarly, Judge Garbis of this Court dismissed the Lorien case by written Memorandum and Order (MJG-15-2865, ECF No. 21) dated April 28, 2016-that is, only two weeks after the instant case was filed-which explained that the retrospective relief sought by plaintiffs placed their claims outside of the Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441 (1908), exception to the doctrine of state sovereign immunity. Lorien Life Ctr. Baltimore Cty., Inc. v. Malhotra, MJG-15-2865, 2016 WL 1696451, at *2 (D. Md. Apr. 28, 2016). Relevant to the instant case, Judge Garbis expressly rebuffed plaintiffs' argument that the relief sought was prospective, as all the residents identified there were either already receiving Medicaid benefits, or were deceased. Lorien, 2016 WL 1696451, at *2.[4] No appeal was taken in either case.

         In the case now before this Court, the Facilities again allege that the Secretary Defendants failed to “comply with their obligation to process and approve Medicaid applications for residents in a long-term care facility pursuant to federal law.” (ECF No. 30 at 2.) As noted above, the Facilities allege that defendants' delays in rendering Medicaid eligibility determinations violate the Medicaid Act, the Americans with Disabilities Act, and the Residents' Due Process rights under the Fourteenth Amendment. See supra, at 2; ECF No. 30 at 2-3.

         Pertinent to this Court's analysis is the status of each of the residents on whose behalf the Facilities have filed suit. The table below indicates the name of each resident, the name of the facility where he/she resides (or resided), and, for the living residents, the date on which he/she began receiving Medicaid long-term care benefits:

Resident Name

Facility

Effective Date of Benefits

Reference

Cheryl Hart

Oakview

June 2014

(ECF No. 31-3 at ¶ 11)

Margaret Smith

Wicomico

[Deceased]

(ECF No. 30 at ¶ 6)

Peggy Outten

Wicomico

March 2016

(ECF No. 31-2 at ¶ 10)

Ruby Bounds

Wicomico

[Deceased]

(ECF No. 30 at ¶ 8)

Shirley Hackett

Wicomico

October 2015

(ECF No. 31-2 at ¶ 8)

Carol Snyder

Wicomico

January 2016

(ECF No. 31-2 at ¶ 7)

William Soil

Wicomico

October 2015

(ECF No. 31-2 at ¶ 11)

Benjamin Winder

Anchorage

October 2012

(ECF No. 31-2 at ¶ 9)

Frances Johnson

Anchorage

[Deceased]

(ECF No. 30 at ¶ 13)

Eloise Roberson Brooke

Grove

[Deceased]

(ECF No. 30 at ¶ 14)

Mary Imhoff Brooke Grove

[Deceased]

(ECF No. 30 at ¶ 15)

         As this table reflects, all of the residents whom the Facilities allege were harmed by defendants' conduct are currently receiving Medicaid long-term care benefits, or are deceased.

         Plaintiffs' original Complaint was filed in this Court on April 11, 2016. (ECF No. 1.) Defendants then filed a Motion for a More Definite Statement on June 10, 2016. (ECF No. 5.) Plaintiffs opposed defendants' motion, but filed a first, and, later, a second Motion for Leave to File an Amended Complaint. (ECF Nos. 14, 27.) Plaintiffs were permitted to file the now-governing First Amended Complaint, and the Motion for More Definite Statement was withdrawn. (ECF No. 29.) Defendants then filed the now-pending Motion to Dismiss. (ECF No. 31.) This Motion is fully ripe for this Court's resolution.

         STANDARDS OF REVIEW

          I. Motion to Dismiss for Lack of Subject Matter Jurisdiction

         As this Court explained in Dennard v. Towson University, “[a]n assertion of governmental immunity is properly addressed under Rule 12(b)(1) of the Federal Rules of Civil Procedure, which allows defendants to challenge an action for lack of subject matter jurisdiction.” Dennard v. Towson Univ., 62 F.Supp.3d 446, 449 (D. Md. 2014) (citing Smith v. WMATA, 290 F.3d 201, 205 (4th Cir. 2002)). See also Lorien, 2016 WL 1696451, at *2. “When a governmental entity challenges jurisdiction under Rule 12(b)(1), the plaintiff bears the burden of proving that subject matter jurisdiction exists. The district court is to ‘regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.'” Dennard, 62 F.Supp.3d at 449 (quoting Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)). “The district court should only grant the Rule 12(b)(1) motion to dismiss ‘if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.'” Id. (quoting Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999)).

         II. Motion to Dismiss For ...


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