Tulare Local Health Care District et al v. California Department of Health Care Services et al

Northern District of California, cand-4:2015-cv-02711

ORDER by Judge Samuel Conti denying {{4}} Motion to Remand (sclc1, COURT STAFF)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 For the Northern District of California United States District Court 9 TULARE LOCAL HEALTH CARE) Case No. 3:15-cv-02711-SC DISTRICT, a California local) 10 health care district, dba TULARE) ORDER DENYING PETITIONERS' REGIONAL MEDICAL CENTER, et al.,) MOTION TO REMAND 11) Petitioners,) 12) v.) 13) CALIFORNIA DEPARTMENT OF HEALTH) 14 CARE SERVICES, et al.,)) 15 Respondents.)) 16 17 Now before the Court is Petitioners Tulare Local Health Care 18 District, et al.'s ("Tulare") motion to remand. ECF No. 4 19 ("Mot."). The motion is fully briefed,1 and the Court finds it 20 suitable for disposition without oral argument pursuant to Civil 21 Local Rule 7-1(b). For the reasons set forth below, Petitioners' 22 motion is DENIED. 23 24 I. BACKGROUND 25 Respondent California Department of Health Care Services 26 ("DHCS") administers Medi-Cal, a federally-subsidized program that 27 1 ECF Nos. 14 ("Opp'n"), 15 ("Reply"), 18 ("Resp. Suppl. Br."), 19 28 ("Pet. Suppl. Br."). 1 provides medical services to California's "aged" and those "who 2 lack sufficient annual income to meet the costs of health care." 3 Cal. Welf. & Inst. Code § 14000. To receive federal funding for 4 Medi-Cal, the state must present the federal government with its 5 Medicaid "plan" which, among other things, determines the rates at 6 which the state will reimburse providers of health services. See 7 42 U.S.C. §§ 1396-1, 1396a(a) (2012). 8 Petitioners are seventeen hospitals that provide services to For the Northern District of California United States District Court 9 persons covered by Medi-Cal. On May 14, 2015, they filed suit 10 against DHCS in California Superior Court. In their first cause of 11 action, Petitioners seek a writ of mandate to enforce 42 U.S.C. § 12 1396a(a)(30)(A) ("Section (30)(A)") which requires state plans to 13 "assure that payments are consistent with efficiency, economy, and 14 quality of care and are sufficient to enlist enough providers so 15 that care and services are available under the plan at least to the 16 extent that such care and services are available to the general 17 population in the geographic area." The petition alleges that DHCS 18 violated Section (30)(A) from July 1, 2008 to April 3, 2011 by 19 allegedly reimbursing providers at rates lower than Section (30)(A) 20 permits. The second cause of action alleges that DHCS treated 21 "contract" hospitals differently than "noncontract" hospitals in 22 the reimbursement rates provided for in the Medicaid State plan, 23 violating the Equal Protection Clauses of the Fourteenth Amendment 24 of the United States Constitution and Article I, Section 7 of the 25 California Constitution. The third cause of action seeks 26 declaratory relief that the rate cuts are invalid and unlawful. 27 Petitioners seek an order "(a) declaring the. . . rate cuts 28 to be void and invalid; (b) compelling the Department not to apply 2 1 said rate cuts and to reverse any such rate cuts that have been 2 applied; and (c) commanding the Department to disgorge and pay the 3 Petitioners the amounts wrongfully withheld from them, plus 4 interest." ECF No. 1 ("Pet.") at 20. They also seek "Retroactive 5 and prospective Medi-Cal reimbursement reversing in full the 6 effects of the illegal rate cuts" and "compensatory damages" and 7 "attorneys' fees." Id. 8 On June 17, 2015, Respondents removed this action to the For the Northern District of California United States District Court 9 United States District Court for the Northern District of 10 California on the grounds that this Court maintains original 11 jurisdiction over claims arising under the laws of the United 12 States. On June 22, 2015, Petitioners filed a motion to remand 13 back to state court. 14 15 II. LEGAL STANDARD 16 "A motion to remand is the proper procedure for challenging 17 removal." Moore–Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 18 1244 (9th Cir. 2009). Remand may be ordered either for lack of 19 subject matter jurisdiction or for any defect in the removal 20 procedure. See 28 U.S.C. § 1447(c). "[R]emoval statutes are 21 strictly construed against removal." Luther v. Countrywide Home 22 Loans Servicing, LP, 533 F.3d 1031, 1034 (9th Cir. 2008). "The 23 presumption against removal means that the defendant always has the 24 burden of establishing that removal is proper." Moore–Thomas, 553 25 F.3d at 1244. As such, any doubts regarding the propriety of the 26 removal favor remanding the case. See Gaus v. Miles, Inc., 980 27 F.2d 564, 566 (9th Cir. 1992). 28 3 1 III. DISCUSSION 2 The federal removal statute provides, in pertinent part, that 3 "any civil action brought in a State court of which the district 4 courts of the United States have original jurisdiction, may be 5 removed by the defendant or the defendants, to the district court 6 of the United States for the district and division embracing the 7 place where such action is pending." 28 U.S.C. § 1441(a). Federal 8 district courts "have original jurisdiction of all civil actions For the Northern District of California United States District Court 9 arising under the Constitution, laws, or treaties of the United 10 States." Id. § 1331. The "arising under" qualification of § 1331 11 confers jurisdiction to hear "[o]nly those cases in which a well- 12 pleaded complaint establishes either that [1] federal law creates 13 the cause of action or that [2] the plaintiff's right to relief 14 necessarily depends on resolution of a substantial question of 15 federal law." Armstrong v. N. Mariana Islands, 576 F.3d 950, 954– 16 55 (9th Cir. 2009). "The presence or absence of federal-question 17 jurisdiction is governed by the 'well-pleaded complaint rule,' 18 which provides that federal jurisdiction exists only when a federal 19 question is presented on the face of plaintiff's properly pleaded 20 complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 21 (1987). 22 Here, there can be no question that Plaintiffs' state court 23 complaint raises a number of issues of federal law, including the 24 adequacy of Medi-Cal reimbursements under Section (30)(A) and the 25 Equal Protection Clause of the Fourteenth Amendment. It is true 26 that the federal claims are raised by way of a cause of action 27 created by state law, namely, a writ of mandate under California 28 Civil Procedure Code section 1085. As the Supreme Court has 4 1 explained, however, "even though state law creates [a party's] 2 causes of action, its case might still arise under the laws of the 3 United States if a well-pleaded complaint established that its 4 right to relief under state law requires resolution of a 5 substantial question of federal law." City of Chi. v. Int'l Coll. 6 of Surgeons, 522 U.S. 156, 164 (1997) (quoting Franchise Tax Bd. of 7 State of Cal. v. Constr. Laborers Vacation Trust for S. California, 8 463 U.S. 1, 13 (1983)). Plaintiffs' claims unquestionably fit For the Northern District of California United States District Court 9 within this rule. See, e.g., Medina v. SEIU-United Healthcare 10 Workers W., No. C 13-00858 SBA, 2013 WL 3157923, at *2-*3 (N.D. 11 Cal. June 20, 2013) (upholding on federal question grounds the 12 removal of a California mandamus action that sought to enforce 13 federal law).2 14 Petitioners argue they do not have standing to bring their 15 Section (30)(A) claims in federal court because of the Supreme 16 Court's decision in Armstrong v. Exceptional Child Ctr., Inc., 135 17 S. Ct. 1378 (2015). Without standing, they argue, this Court does 18 not have subject matter jurisdiction and removal from state court 19 was improper. In Armstrong, the Supreme Court held that Section 20 (30)(A) does not confer a private right of action and the sole 21 remedy provided by Congress for a State's failure to comply with 22 2 23 The original complaint in Medina sought a writ of mandate to enforce state law. The court, however, found that the state law 24 was preempted by federal law -- namely, the Labor Management Relations Act ("LMRA") -- such that the writ of mandate actually 25 sought to enforce federal law. Thus, because the action turned on the court's interpretation and application of the LMRA, the court 26 held that removal was proper. See Medina, 2013 WL 3157923, at *2- *3. For our purposes, Medina illustrates that a federal district 27 court has subject matter jurisdiction over actions seeking a writ of mandate where, as here, the writ of mandate seeks to enforce 28 federal law. 5 1 Section (30)(A) is the withholding of Medicaid funds by the 2 Secretary of Health and Human Services. See id. at 1385. Contrary 3 to Petitioners' assertion, the Court never even mentioned standing. 4 See also Armstrong v. Exceptional Child Center, Inc., No. 12-35382, 5 2015 WL 3540552, at *1 (9th Cir. June 5, 2015) (declining on remand 6 to dismiss for lack of standing and dismissing instead for failure 7 to state a claim upon which relief can be granted). 8 Standing contains three elements: injury-in-fact, a causal For the Northern District of California United States District Court 9 relationship between the injury and the conduct complained of, and 10 a likelihood that the injury will be redressed by a favorable 11 decision ("redressability"). See Lujan v. Defenders of Wildlife, 12 504 U.S. 555, 560 (1992). Petitioners argue that they lack 13 standing for want of redressability. Not so. A favorable decision 14 in this case would result in a judicial declaration that the rate 15 cuts at issue are invalid and void and an order requiring DHCS to 16 pay the Petitioners the difference. A favorable decision, in other 17 words, would fully redress Petitioners' alleged injury. 18 It appears that Petitioners are actually arguing that a 19 favorable decision is unlikely in light of Armstrong. 20 Redressability, however, has to do with the likelihood that the 21 injury will be redressed if a favorable decision is rendered, not 22 the likelihood that a favorable decision will be rendered. Cf. 23 Warth v. Seldin, 422 U.S. 490 (1975) (dismissing plaintiffs' case 24 for lack of standing because the requested relief -- an 25 invalidation of zoning ordinances -- was unlikely to redress the 26 alleged injury -- a lack of affordable housing). Regardless, even 27 if Petitioners lacked standing to assert their Section (30)(A) 28 claim, they neglect the fact that they have also alleged a claim 6 1 under the Equal Protection Clause of the Fourteenth Amendment. 2 Petitioners also argue that the Eleventh Amendment deprives 3 this Court of jurisdiction. The Eleventh Amendment has no bearing 4 on this case, however, as it only immunizes the State from suits by 5 its citizens filed in federal court and offers no immunity to a 6 defendant that voluntarily seeks out federal jurisdiction through 7 removal. See Lapides v. Bd. of Regents of the Univ. Sys. of Ga., 8 535 U.S. 613, 620 (2002) (holding that a state waives its Eleventh For the Northern District of California United States District Court 9 Amendment immunity from suit in federal court when it voluntarily 10 invokes federal jurisdiction by removing a case from state court to 11 federal court). Petitioners' argument is therefore without merit. 12 13 IV. CONCLUSION 14 For the forgoing reasons, Petitioners' motion to remand is 15 DENIED. 16 17 IT IS SO ORDERED. 18 19 9 2015 Dated: September __, 20 UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 27 28 7