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Weiss v. Price

United States District Court, D. Maryland

March 5, 2018

MARY PATRICIA WEISS et al., Plaintiffs,
v.
THOMAS PRICE, M.D., SECRETARY, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al. Defendants.

          MEMORANDUM

          Ellen Lipton Hollander United States District Judge

         Mary Patricia Weiss, plaintiff in her individual capacity and as representative of the estate of her deceased husband, Ronald A. Weiss (the “Estate”) (collectively, “plaintiffs”), filed suit against Defendants Thomas Price, M.D., Secretary, United States Department of Health and Human Services (the “Secretary”), and the United States Department of Health and Human Services (the “Agency”). ECF 1-1 (Complaint). Pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, plaintiffs seek a declaration that the United States Government “has no legal interest in the escrowed settlement funds recovered by Mary Weiss as a result of the wrongful death of her husband, Ronald A. Weiss.” Id. at 11. Ms. Weiss also asks this Court to (1) reverse findings made by the Medicare Appeals Council, and (2) award Ms. Weiss “an interest penalty” due to the length of time the settlement funds have been escrowed. Id. at 11-12.

         Defendants have filed a “Partial Motion to Dismiss Plaintiff Mrs. Weiss's Individual Claims” (ECF 12), along with a memorandum of law (ECF 12-1) (collectively, “Motion”). In particular, the Motion seeks to dismiss each of Ms. Weiss's claims brought in her individual capacity. The Motion has been fully briefed, [1] and no hearing is necessary to resolve it. See Local Rule 105.6.

         For the reasons that follow, I will grant defendants' Motion. However, both sides agree that the Estate, as the affected beneficiary, is legally entitled to appeal the determination of the Medicare Appeals Council in this Court. See ECF 17 at 9 n.2; ECF 21 at 8. Therefore, although I shall grant the Motion, this case will proceed as to the Estate's appeal.

         I. Factual Background

         The relevant facts in this matter are essentially uncontested. Ms. Weiss's late husband, Ronald A. Weiss (“Mr. Weiss” or the “Decedent”), was a Medicare recipient. ECF 1-1, ¶ 2. In 2007, Mr. Weiss died at a Maryland hospital during a necessary heart operation. Id. ¶¶ 14, 15. Thereafter, Ms. Weiss filed a medical malpractice lawsuit in state court in Maryland. Id. ¶ 11. The medical malpractice lawsuit asserted two distinct claims: a wrongful death claim on behalf of Ms. Weiss in her individual capacity, and survivorship claims for conscious pain and suffering and medical expenses, asserted by Ms. Weiss on behalf of the Estate. Id. ¶¶ 16-18. The parties to the medical malpractice lawsuit reached a confidential settlement before trial. Id. ¶ 24. Ms. Weiss and the Estate then filed a “Petition for Court Approval of Settlement and Allocation, ” asking the state court to allocate the settlement proceeds between Ms. Weiss and the Estate, as plaintiffs to the medical malpractice lawsuit. Id. ¶¶ 25, 29.

         Although Ms. Weiss sent a copy of that petition to the Medicare Secondary Payer Recovery Contractor, the Department of Health and Human Services' Center for Medicare Services (“Medicare”) was not a party to the medical malpractice lawsuit and did not participate in the proceeding. Id. ¶¶ 26, 27, 29, 31.[2] In accordance with plaintiffs' request in the petition, the state court judge determined that the Estate had no recoverable damages, and allocated all of the settlement proceeds to Ms. Weiss in her individual capacity. Id. ¶¶ 28, 30, 32.

         Thereafter, Ms. Weiss and the Estate notified Medicare that a confidential settlement had been reached. Id. ¶ 33. Upon receipt of the notice, Medicare made a claim against the Estate for $26, 404.20 in medical expenses that it had paid on the Decedent's behalf. Id. 34, 36. To comply with Maryland law, Ms. Weiss's attorney escrowed those funds pending resolution of Medicare's claim. Id. ¶ 37. The Estate appealed Medicare's claim through the administrative appeals process, citing the state court's allocation of the settlement to Ms. Weiss's wrongful death claim, but the Medicare Appeals Council reached a contrary conclusion and ruled in Medicare's favor. Id. ¶¶ 38-39.

         This lawsuit followed. The Estate appeals Medicare's ruling and Ms. Weiss seeks a declaratory judgment that the escrowed settlement funds belong to Ms. Weiss, not to Medicare. ECF 1-1.

         II. Subject Matter Jurisdiction

         Defendants contend that this Court lacks jurisdiction over the claims Ms. Weiss asserts in her individual capacity. See generally ECF 12. Because “a court that lacks jurisdiction has no power to adjudicate and dispose of a claim on the merits, ” S. Walk at Broadlands Homeowner's Ass'n, Inc. v. Open Band at Broadlands, LLC, 713 F.3d 175, 185 (4th Cir. 2013), the jurisdictional issue is necessarily antecedent to any consideration of the merits. Under Federal Rule of Civil Procedure 12(b)(1), the plaintiff bears the burden of proving, by a preponderance of evidence, the existence of subject matter jurisdiction. See Demetres v. East West Const., Inc., 776 F.3d 271, 272 (4th Cir. 2015); see also Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999).

         A challenge to subject matter jurisdiction under Rule 12(b)(1) may proceed either by a facial challenge, asserting that the allegations pleaded in the complaint are insufficient to establish subject matter jurisdiction, or a factual challenge, asserting “‘that the jurisdictional allegations of the complaint [are] not true.'” Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (citation omitted) (alteration in original); see also Buchanan v. Consol. Stores Corp., 125 F.Supp.2d 730, 736 (D. Md. 2001). In a facial challenge, “the facts alleged in the complaint are taken as true, and the motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction.” Kerns, 585 F.3d at 192.

         In support of their facial challenge to subject matter jurisdiction, defendants note that, “[a]bsent a waiver, sovereign immunity shields the [federal] Government and its agencies from suit.” FDIC v. Meyer, 510 U.S. 471, 475 (1994). Any waiver of sovereign immunity by Congress must be express and unequivocal. Gomez-Perez v. Potter, 553 U.S. 474, 491 (2008). The Declaratory Judgment Act “plainly does not operate as an express waiver of sovereign immunity . . . because it ‘neither provides nor denies a jurisdictional basis for actions under federal law, but merely defines the scope of available declaratory relief.'” Muirhead v. Mecham, 427 F.3d 14, 17 n.1 (1st Cir. 2005) (citation omitted); see Goldstein v. Moatz, 364 F.3d 205, 219 (4th Cir. 2004) (“If a declaratory judgment proceeding actually constitutes a suit against the sovereign, it is barred absent a waiver of sovereign immunity.”).

         Thus, for Ms. Weiss to maintain her declaratory judgment action against Medicare, a government agency, Ms. Weiss bears the burden to establish an applicable waiver of sovereign immunity. She argues that the waiver can be found in two places: (1) the Administrative Procedures Act; and (2) the fact that Defendants acted ...


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