2003 WL 24891765 (E.D.Cal.) (Trial Pleading) United States District Court, E.D. California.
CALIFORNIA MEDICAL ASSOCIATION; American Academy of Pediatrics-California District Ix; American College of Obstetricians and Gynecologists-District Ix; California Chapter, American College of Cardiology; California Chapter, American College of Emergency Physicians; California Dental Association; Long Term Care Pharmacy Alliance; California Foundation for Independent Living Centers; California Pharmacists Association; Aids Healthcare Foundation; Professional Pharmacy Alliance of California, Inc.; Brain Injury Policy Institute; Long Term Care Management Council; Osteopathic Physicians and Surgeons of California, Disabled Rights
Union, Plaintiffs, v.
Diana M. BONTA, Director of the Department of Health Services, State of California, Defendant.
No. CIV-S-03-2336 DFL PAN. November 19, 2003.
First Amended Complaint for Injunctive and Declaratory Relief
Craig J. Cannizzo (SBN 70379), Byron J. Gross (SBN 76626), Jon P. Neustadter (SBN 172348), Berta H. Schweinberger (SBN 113216), Hooper, Lundy & Bookman, Inc., 180 Montgomery Street, Suite 1000, San Francisco, CA 94104, Telephone: (415) 875-8500, Facsimile: (415) 875-8519, Attorneys for Plaintiffs
INTRODUCTION
1. By this action, several groups of Medi-Cal providers (physicians, dentists and pharmacists and beneficiaries seek to enjoin a five percent cutback in Medi-Cal rates that was recently mandated by the California Legislature and is scheduled to take effect on January 1, 2004. This decrease in payments will directly affect Medi-Cal beneficiaries, physicians, dentists, pharmacists and many other non-institutional providers of health services. The rate reduction is being imposed on a system already in crisis, wherein inadequate payment levels have resulted in a scarcity of willing providers, creating serious access hurdles for Medi-Cal beneficiaries. A further reduction in rates will result in additional providers withdrawing from the Medi-Cal program and will exacerbate the current access problems, making it more difficult for Medi-Cal beneficiaries to find physicians, dentists, or other health care providers who are willing to treat them or fill their prescriptions.
2. The Medi-Cal rate reduction has been imposed solely due to the state budget deficit projected for the 2003-04 fiscal year and notwithstanding special efforts passed earlier this year by Congress to augment federal matching payments to avoid further Medicaid cutbacks by the states. Such a reduction is illegal, because federal law does not permit Medicaid rate reductions solely based on budgetary constraints. Pursuant to 42 U.S.C. § 1396a(a)(30)(A) ( “Section 30(A)”), states must assure that Medicaid payments are consistent with efficiency, economy, and quality of care, which requires the states to consider the costs of providing quality care when setting rates. Further, Section 30(A) requires that payments be sufficient to enlist a sufficient number of providers so that services are available to Medicaid beneficiaries at least to the extent that such medical services are available to the general public, i.e. to assure sufficient access to services for Medicaid beneficiaries. By imposing the five percent rate reduction, California has failed to consider the costs of the services involved or whether the rate reduction will have an impact on the ability of Medi-Cal beneficiaries to have adequate access to services. Further, the rate reduction violates certain other requirements of federal law and regulations (42 C.F.R. §§ 447, et seq. and 42 U.S.C. § 1396b(m)(2)(iii)), California law (Welf. & Inst. Code § 14079) and California’s Medicaid State Plan. In fact, by its terms, the rate reduction, which allows for rates to be reduced below the rates set in the California Code of Regulations, is an amendment to the State Plan, which may not be implemented prior to federal approval.
3. For these and other reasons, the five percent rate reduction violates federal Medicaid law, which is binding on the State. The imposition of this rate reduction will cause irreparable injury to Plaintiffs, their members and the populations they serve,
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both providers and beneficiaries. Causing providers of services to withdraw from the Medi-Cal program because reimbursement levels will fall so far below the costs of providing services, the rate reduction will threaten the health of beneficiaries by interrupting provider/patient relationships and by resulting in the inability of many beneficiaries to obtain necessary health care. Accordingly, Plaintiffs seek a preliminary and permanent injunction to prevent the rate reduction from taking effect.
JURISDICTION
4. This Court has jurisdiction to resolve the important questions of federal Medicaid law involved in this lawsuit pursuant to 28 U.S.C. §§ 1331 and 1343 and may compel Defendant Diana Bonta, Director of the California Department of Health Services (the “Director”) to comply with the mandatory provisions of the federal Medicaid law pursuant to 28 U.S.C. § 1361.
VENUE
5. Venue lies in this judicial district under 28 U.S.C. § 1391, in that the Director has offices within this judicial district and is thus deemed to reside within this judicial district.
THE PARTIES
6. Defendant DIANA M. BONTA is the Director of the California Department of Health Services (the “Department”), the single state agency charged with the administration of California’s Medicaid program, known as Medi-Cal. See California Welf. & Inst. Code §§ 14000 et seq. Defendant Bonta’s office is located in Sacramento, California.
7. Plaintiff CALIFORNIA MEDICAL ASSOCIATION (“CMA”) is a nonprofit, incorporated professional association of more than 30,000 physicians practicing in the State of California, with its principal office in Sacramento, California. CMA’s membership includes a large number of California physicians who are engaged in the private practice of medicine, in all specialities. CMA’s primary purposes are “to promote the science and art of medicine, the care and well-being of patients, the protection of the public health, and the betterment of the medical profession.” CMA brings this action in its representative capacity on behalf of its members, many of whom are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of its members’ patients.
8. Plaintiff AMERICAN ACADEMY OF PEDIATRICS, CALIFORNIA DISTRICT DC (AAP-CA), is an organized group of over 5,000 board-certified pediatrician members of all four California regional Chapters. AAP-CA’s mission is to attain optimal physical, mental and social health and well-being for all infants, children, adolescents and young adults in California. A top priority for the AAP-CA is to assure for all children living in California access to preventive and comprehensive, costeffective quality health care, including access for those with special health care needs. AAP-CA brings this action in its representative capacity on behalf of its members, many of whom are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of its members’ patients.
9. Plaintiff AMERICAN COLLEGE OF OBSTETRICIANS AND GYNECOLOGISTS, DISTRICTED (“ACOG”) was founded in 1951. ACOG is the nation’s leading group of professionals providing health care for women. Based in Washington, D.C., it is a private, voluntary, nonprofit membership organization with over 43,000 members. California is represented by ACOG, District DC, which counts in excess of 4,300 obstetrician-gynecologists among its membership. District DC’s mission is to protect and improve the health and welfare of all California women and to unite qualified physicians practicing obstetrics and gynecology for the improvement of patient care. ACOG brings this action in its representative capacity on behalf of its members, many of whom are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of its members’ patients.
10. Plaintiff CALIFORNIA CHAPTER, AMERICAN COLLEGE OF CARDIOLOGY (CA-ACC) is an organization composed of about 1200 cardiologists practicing in California. CA-ACC contributes to the prevention of cardiovascular
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diseases, to ensure optimal quality care for the individuals with such diseases, and to foster the highest professional ethical standards. CA-ACC maintains a high level of involvement with socioeconomic issues, which may influence access to high quality cardiovascular health care for all individuals. CA-ACC brings this action in its representative capacity on behalf of its members, many of whom are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of its members’ patients.
11. Plaintiff CALIFORNIA CHAPTER OF THE AMERICAN COLLEGE OF EMERGENCY PHYSICIANS (CAL/ACEP) is an organization composed of over 2000 emergency physicians in California. Membership includes emergency physicians who practice in a wide variety of settings including large and small groups, academic centers, and managed care. CAL/ACEP brings this action in its representative capacity on behalf of its members, many of whom are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of its members’ patients.
12. Plaintiff CALIFORNIA DENTAL ASSOCIATION is a nonprofit, professional association representing over 19,000 dentists throughout the state of California. This number reflects over two-thirds of all California licensed dentists. Founded in 1870, CDA is the largest constituent member of the American Dental Association. Through public policy, advocacy, education and other means, CDA has promoted the health of the public, the profession and the individuals it serves for over a century. CDA brings this action in its representative capacity on behalf of its members, many of whom are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of its members’ patients.
13. Plaintiff LONG TERM CARE PHARMACY ALLIANCE (“LTCPA”) is a national trade association organized as a Delaware Limited Liability Corporation. LTCPA members operate “long-term care” pharmacies dedicated to providing services to residents of nursing facilities, most of whom are Medi-Cal eligible beneficiaries. Unlike retail pharmacies, LTCPA’s members operate “closed pharmacies,” meaning they are not open to the public and do not provide retail services. The vast majority of prescriptions that LTCPA member pharmacies provide are to nursing facility residents. LTCPA brings this action in its representative capacity on behalf of its members who are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of the Medi-Cal patients served by its members.
14. Plaintiff CALIFORNIA FOUNDATION FOR INDEPENDENT LIVING CENTERS (“CFILC”) is a statewide, nonprofit organization made up of more than two dozen Independent Living Centers, which arrange for the provision of needed healthcare services for people with disabilities, most of which is funded by the Medi-Cal program. The CFILC’s mission is to support independent living centers in their local communities through advocating for systems change and promoting access and integration for people with disabilities. The threatened Medi-Cal rate reduction will adversely affect the CFILC’s ability to coordinate and arrange for needed healthcare services for people with disabilities. The increase in difficulty for persons with disabilities served b) CFLIC and its members will frustrate the ability of CFLIC to carry out its mission and will drain its resources. CFILC and its members will be forced to use its limited resources to pay for, obtain or coordinate medical care, rather than other components of its mission.
15. Plaintiff CALIFORNIA PHARMACISTS ASSOCIATION (“CPA”) represents over 5,000 pharmacists in California. It is the largest state professional association of pharmacists in the United States. The mission of the Association is to represent pharmacists in all practice settings in the State, and to advocate the role of pharmacy as an essential venue of care for patients. CPA brings this action in its representative capacity on behalf of its members who are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of the Medi-Cal patients served by its members.
16. Plaintiff AIDS HEALTHCARE FOUNDATION (“AHF”) is a California nonprofit corporation. It is the largest private provider of AIDS medical care in California. AHF operates licensed community clinics and pharmacies in Los Angeles, San Bernardino, Alameda, and San Francisco counties, and provides direct medical and pharmacy services to approximately 6,000 Californians with HIV/AIDS. AHF and its physicians are providers under California’s Medi-Cal program. AHF also operates a Medi-Cal Primary Care Case Management plan known as Positive Healthcare. AHF and the Medi-Cal beneficiaries it serves will be directly and adversely affected by the threatened rate reduction, and on behalf of its members’ patients.
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17. Plaintiff PROFESSIONAL PHARMACY ALLIANCE OF CALIFORNIA, INC. (“PPA”) is a for-profit corporation owned by 63 independent pharmacists residing in the San Joaquin Valley of California. The PPA is also a clearinghouse for information regarding the practice of pharmacy within the State of California. PPA’s members are providers under California’s Medi-Cal program. A significant number of pharmacies operated by PPA’s members will be adversely affected by the threatened rate reduction and may be forced to close if the 5% Medi-Cal rate reduction is implemented. PPA brings this action in its representative capacity on behalf of its members who are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of the Medi-Cal patients served by its members.
18. Plaintiff BRAIN INJURY POLICY INSTITUTE (“BET’) is a nonprofit corporation representing the interests of survivors of traumatic brain injuries (TBI), their families and caregivers for over twenty-two years in California. Currently, the association has a Board of Directors of fifteen individuals and advisers who are assigned to specific subject matter areas for providing information, technical assistance and referrals on head injury prevention plus home and community-based options for residential and day programs. Medi-Cal is the major payment source of the medical service system for the majority of such survivors. BIPI has made an organizational priority taking action to preserve Medi-Cal provider rates and optional benefits on behalf of such survivors. Since survivors of traumatic brain injuries will be adversely affected by the threatened Medi-Cal rate reduction, BIPI will be frustrated in its ability to carry out its programs and mission.
19. Plaintiff LONG TERM CARE MANAGEMENT COUNCIL (“LTCMC”) was established in 1992. Its mission, then and now, is to enhance the effectiveness and efficiency of long term pharmaceutical services in a cost effective manner that will have a positive impact upon patient care. LTCMC voting membership is comprised of long term care pharmacy owners, representing a large portion of California’s long term care pharmacies. LTCMC brings this action in its representative capacity on behalf of its members who are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of the Medi-Cal patients served by its members.
20. Plaintiff OSTEOPATHIC PHYSICIANS AND SURGEONS OF CALIFORNIA (“OPSC”) serves to advance the practice of osteopathic medicine as an independent, scientific, and complete system of medicine for the restoration and preservation of good health. OPSC presents programs of education and information that contribute to the effective professional practice of osteopathic health care, for the benefit of all members of the profession. OPSC brings this action in its representative capacity on behalf of its members who are providers under California’s Medi-Cal program and will be directly and adversely affected by the threatened rate reduction, and on behalf of the Medi-Cal patients served by its members.
21. Plaintiff DISABLED RIGHTS UNION (“DRU”) is a nonprofit association registered with the State of California and composed of over 400 members. Its membership consists of poor and disabled individuals, many of them eligible for Supplemental Security Income (“SSF’) and Medi-Cal. Through its small staff of volunteers, DRU assists its members in obtaining SSI, Medi-Cal, food stamps, and other government benefits. DRU brings this action in its representative capacity on behalf of its members, most of whom are eligible for benefits under the Medi-Cal program and will be directly and adversely affected by the threatened rate reduction.
PLAINTIFFS’ STANDING AND RIGHT TO SEEK ENFORCEMENT OF THE LAW
22. As associations representing the interests of beneficiaries and providers of health care services under the Medi-Cal program, Plaintiffs have a right and an enforceable interest to maintain this action against the Director under the Supremacy Clause of the United States Constitution and under the Civil Rights Act, 42 U.S.C. § 1983, to enjoin the Director’s continuing violation of the federal Medicaid law and to compel the Director to comply with the provisions of the applicable federal Medicaid law. Moreover, under 28 U.S.C. § 2201, Plaintiffs are entitled to a declaration of their rights under the federal Medicaid law and state law.
FEDERAL MEDICATD LAW
23. Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq., the Medicaid Act, authorizes federal financial support to states for medical assistance to low-income persons who are aged, blind, disabled, or members of families with dependent
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children. The program is jointly financed by the federal and state governments and administered by the states, with the federal financial participation level currently ranging between 53 to 80 percent. The states, in accordance with federal law, decide eligible beneficiary groups, types and ranges of services, payment level for services, and administrative and operative procedures. Payment for services is made directly by states to the individuals or entities that furnish the services. 42 C.F.R. § 430.0.
24. In order to receive matching federal financial participation, states must agree to comply with the applicable federal Medicaid law and regulations, 42 U.S.C. §§ 1396 et seq.
25. At the state level, the Medicaid program is administered by a single state agency, which is charged with the responsibility of establishing and complying with a state Medicaid plan (the “State Plan”) that, in turn, must comply with the provisions of the applicable federal Medicaid law. 42 U.S.C. § 1396a(a)(5) and 42 C.F.R. §§ 430.10 and 431.10. The State Plan must be submitted to the Secretary of the United States Department of Health and Human Services (the “Secretary”) for approval and must describe the policies and methods to be used to set payment rates for each type of service included in the state Medicaid plan. 42 C.F.R. §§ 430.10 and 447.201(b). Changes to the State Plan may not be implemented by the state prior to being approved by the Secretary.
26. Each State’s Medicaid plan must provide that medical assistance will be furnished with reasonable promptness to all eligible individuals. 42 U.S.C § 1396a(a)(8).
27. Each state’s Medicaid plan must “provide such methods and procedures ... relating to the utilization of, and the payment for, care and services available under the plan which may be necessary ... to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general public in the geographic area___” 42 U.S.C. § 1396a(a)(30)(A), emphasis added.
28. Historically, Medicaid services have generally been provided through fee-for-service plans under which Medicaid recipients obtain medical services from providers of their choice, who then bill the state agency for these services and are reimbursed for said services in accordance with rates set by the states. As an alternative to a state’s providing Medicaid services on a fee-for-service basis, federal law permits states to establish contracts with health plans to provide some or all of the medical services covered by the state’s Medicaid plan in return for payment determined under a prepaid capitation basis or other risk basis. 42 U.S.C. § 1396b(m). Under such payment arrangements, health plans receive a predetermined periodic payment for each person for whose medical care they are responsible. Federal law required that prepaid payments to health plans under Medicaid be made on an “actuarially sound basis.” 42 § 1396b(m)(2)(A)(iii). Further, for Medicaid managed care plans that have been approved subject to a cost-effectiveness and efficiency waiver -applicable to all of California’s Medicaid health plans - reimbursement must be consistent with access, quality, and the efficient and economic provision of covered care and services.
29. In a recent effort to forestall further Medicaid cutbacks by the states faced with difficult budget situations, on May 28, 2003, Congress enacted H.R. 2, the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Pub.LNo. 108-27, Sec. 401,117 Stat. 752,764 (2003), which increased the federal government’s matching percentage under Medicaid by $10,000,000,000 over 18 months. California’s current federal matching percentage is 53 percent.
CALIFORNIA MEDI-CAL PROGRAM
30. The State of California has elected to participate in the Medicaid program. California has named its program “Medi-Cal”. See Cal. Welf. & Inst. Code §§ 14000 et seq.; 22 Cal. Code of Regs. §§ 50000 et seq.
31. In adopting the Medi-Cal program, the California Legislature has stressed that all eligible Medi-Cal beneficiaries receive necessary care and has established a system designed to ensure that physicians and other health care providers will be available to render this care. To achieve this goal of accessible quality health care for the poor, and to remain eligible for the federal Medicaid subsidies, the California Legislature enacted a statutory scheme designed to enhance the Medicaid program’s effectiveness. This system includes provisions ensuring that physicians and other health care providers receive
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prompt and adequate payment and ensuring that Medi-Cal beneficiaries have reasonable access to physicians and dental services. Further, state law requires that Medi-Cal fee-for-service rates be adopted pursuant to the regulatory process and requires that the Department annually review Medi-Cal rates for physician and dental services, taking into account annual Consumer Price Index cost increases, reimbursement levels under Medicare and other third party payors, prevailing customary charges and other factors. See generally, 42 U.S.C. 1396a(a)(32), 42 C.F.R. § 447.45, Cal. Welf. & Inst. Code §§ 14075,14079,14105.
MEDI-CAL RATES FOR NON-INSTITUTIONAL SERVICES
32. The Department has adopted regulations under California law establishing payment practices for services reimbursable under Medi-Cal. Relevant to this lawsuit are rates for certain non-institutional services, including physician, dental and pharmacy services. Regulations setting forth the payment rates for said services are found at 22 C.C.R. §§ 51503 (physician services); 51506 (dental services); 51506.1 (maxillofacial dental services); 51506.2 (orthodontic dental services); 51513 (pharmaceutical services and prescribed drugs). The dental rates in Sections 51506, 51506.1 and 51506.2 do not accurately reflect the most recent rate change effective August 1, 2000. The current dental rates can be found in the Denti-Cal Schedule of Maximum Dental Allowances in the Denti-Cal Provider Manual at Section 4, Program Policy, regarding “Denti-Cal Schedule of Maximum Dental Allowances.” Further, the pharmacy rates in § 51513 are not current, having been subject to numerous statutory changes in the past 8 years that have not been included in the applicable regulations.
33. The methodology the Department must use to determine Medi-Cal rates for non-institutional services is contained in attachment 4.19-B to the State Plan which has been approved by the Secretary. The State Plan provides that reimbursement for non-institutional services “will be at the lesser of usual charges or the limits specified in the California Code of Regulations (CCR) Title 22, Division 3, Chapter 3, Article 7 (commencing with Section 51501) and CCR, Title 17, Chapter 4, Subchapter 13, Sections 6800-6874, for EPSDT health assessment activities.”
34. The State Plan further requires the Department, when setting rates, to 1) develop an evidentiary base or rate study resulting in the determination of a proposed rate, 2) present the proposed rate at a public hearing to gather public input, 3) determine the final rate based on the evidentiary base including the pertinent public input, and 4) establish the payment rate through adoption of regulations specifying such rates.
35. In 1982, the California Legislature mandated that Medi-Cal payment rates for most services be reduced by 10%. The rate reductions were not implemented in accordance with the rate setting methodology in the State Plan. Thus, an amendment to the Plan was submitted by the Department and approved by the Secretary which allowed rate adjustments when required by state statute provided the applicable requirements of 42 C.F.R. Part 447 are met.
HISTORY OF REVISIONS TO RATES FOR PHYSICIAN SERVICES
36. Effective August 1, 1985, the Department revised the Medi-Cal payment rates for non-institutional healthcare services. The net effect of this rate change was an increase of 2% over the rates that were in effect prior to the 1982 rate reduction.
37. In January 1987, the Department proposed a 10% decrease in Medi-Cal rates for physicians (except maternity care services), pharmacists, dentists and most other Medi-Cal providers that would be effective for services provided on or after February 1, 1987 through June 30, 1987. This decrease was enjoined as a result of a lawsuit filed in the Eastern District of California by plaintiff California Medical Association and other provider and beneficiary groups and individuals. California Medical Association. et al., v. Kizer, Docket No. Civ S 87-0182 LKK. This case resulted in a Consent Decree, dated October 24, 1989, which permanently enjoined the Department from imposing a 10% reduction in reimbursement rates to physicians and other Medi-Cal providers.
38. With the 1987 proposed change enjoined, the 1985 rate changes were, for 15 years, the only changes that the Department made to all of the non-institutional Medi-Cal rates in an “across-the-board” fashion. For a period of 15 years, between 1985 and 2000, the Department modified only a few selected rates for non-institutional services: physician rates for obstetrical care, office exams of children and portable x-ray transportation services.
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39. For fiscal year 2000-2001, effective August 1, 2000, the Department granted the first Medi-Cal general across-the-board rate increase in fifteen years for physician and allied health providers. Rather than increase all rates by a uniform percentage, the Department implemented a realignment of rates, with varying increases given for different services. The total amount of the increase was driven by the funds appropriated by the Budget Act of 2000, with the Department determining how to allocate the rate increases among the various services.
40. In spite of the rate increases that were made in 2000-2001, Medi-Cal rates for physician services remained far below Medicare rates for comparable services. Rates for a large number of services that had been particularly low (1180 procedure codes, including common physician office visits) were increased to 43% of Medicare rates following the 2000-2001 rate increases. Many other rates were increased by 13.26%. No rates were increased to be more than 80% of the Medicare rates for comparable services, with most well below that level.
41. The Department failed to consider efficiency, economy, quality of care, and patient access in setting rates prior to 1982 and in making each of the rate changes described above. The Department failed to demonstrate a reasonable connection between the factors of efficiency, economy, quality of care, and patient access and the rates it established pursuant to the rate modifications described above.
42. Despite the few rate increases that have been made during the past 21 years, including the large set of increases made effective August 1, 2000, the disparity between the costs of providing physician services and the Medi-Cal payment rates for such services has grown tremendously.
43. Despite the 2000-01 rate increases, nearly half of all physicians in urban counties in California are unwilling to treat Medi-Cal beneficiaries. According to one recent study of Medi-Cal access in urban counties published by the Medi-Cal Policy Institute, an independent source of information on the Medi-Cal program that is funded by the California HealthCare Foundation, only 50% of primary care physicians, 55% of medical specialists and 52% of surgical specialists accepted MediCal patients in their practices.
44. A recent study published by the Medi-Cal Policy Institute determined that the percentage of physicians who are willing to accept new Medi-Cal patients into their practice is low. Among physicians accepting new patients into their practices, only 55% of primary care physicians, 48% of medical specialists and 43% of surgical specialists were willing to accept any MediCal patients.
45. A recent study published by the Medi-Cal Policy Institute shows that physician services are not available to Medi-Cal beneficiaries to the same degree that they are available to the general population. The number of available primary care physicians per capita for Medi-Cal beneficiaries in 2001 was one-third less than for the general population. The number of medical specialists available per capita for Medi-Cal beneficiaries in 2001 was one-half less than for the general population. The number of surgical specialists available per capita for Medi-Cal beneficiaries in 2001 was two-thirds less than for the general population.
46. Overall, the ratio of primary care physicians available for Medi-Cal beneficiaries in 2001 (46 per 100,000) was well below the workforce standards established by the Health Resources Services Administration (which recommends 60 to 80 per 100,000) according to a recent study published by the Medi-Cal Policy Institute.
47. The level of participation by physicians in the Medi-Cal program is significantly lower than the level of participation by physicians in the Medicaid programs of most other states. Despite the rate increases in 2000-01, Medi-Cal rates for physician services still lag significantly behind payment rates of other California payors. Further, Medi-Cal payment rates are low compared to the payment rates for physician services in the Medicaid programs of most other states.
HISTORY OF RATES FOR DENTAL SERVICES
48. In most California counties, the Department contracts with a private insurance company, Delta Dental, to administer the provision of dental services to Medi-Cal beneficiaries. The dental Medi-Cal program is known as “Denti-Cal.”
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49. As with other non-institutional rates, dental rates were reduced in 1982. However, unlike other non-institutional rates, dental rates were not increased in 1985. See supra paragraph 34.
50. In 1987, Denti-Cal beneficiaries filed a class action lawsuit against the Department because of alleged federal violations that resulted in a significant access problem. A federal district court held that the Department violated 42 U.S.C. Section 1396a(a)(30)(A), that there was a significant dental services access problem, and that the Department’s Denti-Cal rates were insufficient to result in the requisite access under federal law. This decision was affirmed by the Ninth Circuit.
51. In 1992, as a result of the aforementioned class action lawsuit, the Department was forced to increase the rates for 56 of the most common dental procedures. However, in 1993, the Department threatened to eliminate Denti-Cal benefits to all adults; in a negotiated settlement, Denti-Cal rates for the 56 most common procedures were cut by approximately 15 percent in 1994.
52. Until the August 1, 2000 general rate increase mentioned above, dental rates for all services other than the 56 most common procedures remained at 1982 levels. The August 1, 2000 dental rate increase was spread mostly to the less common procedures, since they had been frozen for 18 years. Thus, dental rates for the overwhelming majority of the 56 most common procedures have remained at 1994 levels to this day.
53. In recent years, California legislative committees, the Department of Health Services and provider groups all have had hearings and/or meetings focused on the lack of sufficient access to Denti-Cal services. A study in 2000 published by Center for California Health Workforce of the University of California at San Francisco Center for the Health Professions focused on the availability of Denti-Cal providers throughout Medical Service Study Areas” (“MSSAs”) in California. An MSSA is a rational services area used by state agencies such as the Office of Statewide Health Planning and Development (“OSHPD”) for the administration of various programs. According to the study, 22 % of MSSAs in California have no active Denti-Cal dentists. Half of the MSSAs in California have fewer than one Denti-Cal dentist for every 1,000 Medi-Cal beneficiaries eligible for Denti-Cal services.
54. Despite the two dental rate increases that have been made during the past 21 years, the disparity between the costs of providing dental services and the Denti-Cal payment rates for such services has grown tremendously.
HISTORY OF REVISIONS TO RATES FOR PHARMACY SERVICES
55. Pursuant to 42 C.F.R. § 447.331, State Medicaid programs must provide reimbursement for drugs by providing payment for two separate items: the estimated acquisition cost of the drug, plus a reasonable dispensing fee. In accordance with federal regulations, California provides reimbursement under its Medi-Cal program under two different methodologies, depending on whether the item is a brand-named drug or a generic drug. Reimbursement for brand-name drugs is equal to average wholesale price (“AWP”) (less a specified percentage), plus a dispensing fee. AWP is the price for a drug product or a medical supply listed in certain reference sources used by the Department, as set forth in 22 C.C.R. § 51513(a)(7). Generic drugs are paid subject to two upper-limit price systems: federal upper limit (“FUL”) and California maximum allowed ingredient cost (“MAIC”)- Pharmacy providers are reimbursed the acquisition price of the generic drug pursuant to the lesser of these fee screens, plus the same dispensing fee paid for brand-name drugs. Some generic drugs, for which an FUL or MAIC limit has not been established, are paid based on AWP.
56. Prior to 1995, brand-name drugs were reimbursed based on the AWP minus five percent (5%), plus a dispensing fee of $4.05. Generic drugs are reimbursed as described above, plus the $4.05 dispensing fee. This dispensing fee applied to both retail pharmacies and long term care (institutional) pharmacies. The rates paid prior to 1995 are still reflected in the most recent version of the applicable regulation, 22 C.C.R. § 51513.
57. In 1995, based on budgetary restraints, California reduced the dispensing fee paid for each prescription by $.50, to $3.55 per prescription, effective January 1, 1995. Calif. Welf. & Inst. Code § 14105.336.
58. In 1999, the California legislature passed legislation increasing the dispensing fee that had been reduced in 1995.
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Effective January 1, 2000, the dispensing fee was increased by $.25, to $3.80, for each prescription reimbursed through the Medi-Cal program. Effective July 1, 2002, the reimbursement for each prescription claim was increased by another $.15 per prescription, to $3.95. Calif. Welf. & Inst. Code § 14105.337(a) and (b).
59. This latter increase was short-lived. Effective September 30, 2002, the $.25 and $.15 increases that had been implemented were eliminated, but only as applied to retail pharmacies. Since September 30, 2002, retail pharmacies are entitled to a dispensing fee of $3.55 per prescription, while long term care pharmacies are entitled to dispensing fees of $3.95 per prescription. Calif. Welf. & Inst. Code § 14105.337(c).
60. In addition to the decrease in the dispensing fee, the reimbursement rate for the acquisition cost of drugs was decreased from AWP less 5% to the AWP less 10%, effective September 30, 2002. Calif. Welf. & Inst. Code § 14105.46(b)(2).
61. In June 2002, the Department published a study of Medi-Cal pharmacy reimbursement that had been conducted pursuant to a directive from the California legislature that the Department perform a study of the adequacy of Medi-Cal pharmacy rates, including the cost of providing prescription drugs and services. Calif. Bus. & Prof. Code § 4426. The major component of the study was a survey of pharmacy dispensing costs. Pursuant to this study, it was determined that the average dispensing cost, weighted by Medi-Cal volume, was $7.21 per prescription.
62. Because the dispensing fee paid by Medi-Cal is only about half of the average dispensing cost to pharmacies, pharmacists must recoup this cost from the difference between their purchase price for the drugs and the acquisition cost paid by MediCal. To the extent such a cushion exists for some drugs, any further rate reductions will eliminate this cushion, which allows pharmacists to recoup their costs on some drugs reimbursed through the Medi-Cal program.
63. Increasing the financial pressure on pharmacists already subject to low Medi-Cal rates, since 1999 the California legislature has required that, as a condition of participation in the Medi-Cal program, pharmacies must charge Medicare beneficiaries a price for prescription medications that does not exceed the Medi-Cal reimbursement rate. Calif. Bus. & Prof. Code
§ 4425. Any further decrease in Medi-Cal reimbursement rates to pharmacists will thus also impact rates that can be charged to Medicare beneficiaries, thus multiplying the impact of the rate reduction.
64. Due to the already existing low reimbursement rates for drugs, some retail pharmacists have ceased participating as MediCal providers. The five percent rate reduction will likely result in additional pharmacists withdrawing from Medi-Cal, thus making it more difficult for Medi-Cal beneficiaries to access needed medications.
THE FIVE PERCENT RATE REDUCTION
65. On August 11, 2003, the California Legislature enacted AB1762 for the 2003-2004 budget year. Section 62.5 of said act added Welfare and Institutions Code § 14105.19, which provides, in relevant part, as follows: (a) Due to the significant state budget deficit projected for the 2003-04 fiscal year, and in order to implement changes in the level of funding for health care services, the Director of Health Services shall reduce provider payments as specified in this section.
(b) (1) Payments shall be reduced by 5 percent for Medi-Cal program services for dates of services on and after January 1, 2004.
(2) Payments shall be reduced by 5 percent for non-Medi-Cal programs described in Section 14105.18, for dates of service on and after January 1, 2004.
(3) The payments made to managed health care plans shall be reduced by the actuarial equivalent amount of 5 percent at the time of the plan’s next rate determination.
(e) Notwithstanding Chapter 3.4 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government
9

Code, the department may implement this section by means of provider bulletin, or similar instruction, without taking regulatory action.
(f) The department shall promptly seek all necessary federal approvals in order to implement this section, including necessary amendments to the state plan.
66. Pursuant to paragraph (b)(l) of Welfare and Institutions Code § 14105.19, payments under the Medi-Cal fee-for-service program for physicians, pharmacists, dentists and other non-institutional providers will be reduced by 5 percent for services provided on or after January 1, 2004.
67. Pursuant to paragraph (b)(3) of Welfare and Institutions Code § 14105.19, the Department has determined the actuarial equivalent of the 5 percent reduction and is informing Medi-Cal managed care plans that their capitation rates will be reduced by this actuarially equivalent percentage upon their contract renewal date. On information and belief, Plaintiffs allege that the actuarially equivalent amount by which managed care capitation rates are being reduced will vary from plan to plan, but is approximately 1.8%. These reductions will be passed down in varying amounts to physicians, dentists, and pharmacists. In many cases, contractual arrangements between managed care plans and physicians and dentists are based on the Medi-Cal fee-for-service rates, so the rates paid by the managed care plans to the physicians and dentists are being reduced by 5%.
68. Prior to enacting or implementing this statute, no studies or other analyses were conducted by the Legislature or by the Department to determine whether the Medi-Cal rates resulting from the five percent reduction would be consistent with efficiency, economy and quality of care or with the costs of providing the services affected by the rate reduction.
69. Prior to enacting or implementing this statute, no studies or other analyses were conducted by the Legislature or the Department to determine what impact the rate reduction would have on the ability of Medi-Cal beneficiaries to have access to health care services to the same degree as the general public in the geographic areas where beneficiaries are located.
FIRST CLAIM
(Violation of 42 U.S.C. § 1396a(a)(8), § 1396a(a)(30)(A), § 1396b(m)(2)(A)(iii) and § 1396n(b))
70. The five percent Medi-Cal fee-for-service rate reduction for physicians, pharmacy, dental and other noninstitutional services, and the actuarially equivalent reduction for Medi-Cal managed care providers of the same services, violate the requirements of 42 U.S.C. § 1396a(a)(30)(A), in that the rate reduction was imposed for purely budgetary reasons, without any consideration as to whether the resulting rates are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the State Plan at least to the extent that such care and services are available to the general public in the geographic area. The 5% rate reduction also violates the terms of 42 U.S.C. § 1396a(a)(8), in that the decrease in available providers that will be a direct result of the rate reduction will cause harmful delays in the ability of Medi-Cal beneficiaries to access services. Further, the rate reduction to managed care plans violates the requirements of 42 U.S.C. § 1396b(m)(2)(A)(iii) that Medicaid managed care notes be actuarially sound, and of § 1396n(b) that reimbursement be consistent with access, quality and efficient and economic provision of covered care and services. In imposing this rate reduction, the Department has not considered the relevant factors to determine whether the requirements of 42 U.S.C. § 1396a(a)(8), 42 U.S.C. § 1396a(a)(30)(A), 42 U.S.C. § 1396b(m)(2)(A)(iii) or 42 U.S.C. § 1396n(b) have been met. The Department has failed to set the rates after relying on responsible cost studies to determine whether the rates have some relationship to the costs of providing services to Medi-Cal beneficiaries, and, to the extent such rates deviate from those determined costs, failed to provide a justification for that deviation. Further, the rates resulting after the five percent rate reduction is imposed will not be consistent with efficiency, economy, and quality of care, nor will the resulting rates be sufficient to enlist enough providers so that care and services are available under the State Plan at least to the extent that such care and services are available to the general public in the geographic area.
SECOND CLAIM
10

(Violation of 42 C.F.R. §§ 447 et seq.)
71. The five percent Medi-Cal rate reduction for physicians, pharmacy, dental and other noninstitutional services, and the actuarially equivalent reduction for Medi-Cal managed care, violate the requirements of 42 C.F.R. §§ 447 et seq., which are applicable by law and are also specifically made applicable by the State Plan, in that: a. The reduced rates will not be sufficient to enlist enough providers so that services under the State Plan are available to recipients at least to the extent that those services are available to the general population, in violation of 42 C.F.R. § 447.204.
b. The Department has failed to provide public notice of the reduction in rates and provide an opportunity for public comment, in violation of 42 C.F. R. § 447.205.
THIRD CLAIM
(Violation of State Plan) 72. The five percent Medi-Cal rate reduction for physicians, pharmacy, dental and other noninstitutional services, and the actuarially equivalent reduction for Medi-Cal managed care, violates the requirements of the State Plan in that: a. The State Plan requires that rates be set at the lesser of usual charges or the limits specified in the California Code of Regulations, but Welfare and Institutions Code § 14105.19 provides for a five percent rate reduction that is to be implemented without any regulatory action. Thus, the resulting rates will not be consistent with rates established in the California Code of Regulations, as required by the State Plan.
b. The State Plan requires the Department to follow certain procedures before setting rates, but the five percent rate reduction is being imposed without regard to these required procedures. The State Plan requires the Department to 1) develop an evidentiary base or rate study resulting in the determination of a proposed rate, 2) present the proposed rate at a public hearing to gather public input, 3) determine the final rate based on the evidentiary base including the pertinent public input, and 4) establish the payment rate through adoption of regulations specifying such rates. None of these procedures have been followed by the Department, and therefore the rates resulting from the five percent reduction are illegal and invalid.
FOURTH CLAIM
(Implementation of State Plan Amendment Prior to Federal Approval)
73. As set forth above, the five percent rate reduction violates the requirements of the State Plan, because the Department is establishing rates that will not be set forth in the California Code of Regulations and because the required procedures for development of a rate study, public hearings and the consideration of public input are not being followed. By adopting rates in this manner, the Department is, in effect, amending the State Plan. However, pursuant to the Medicaid Act and its implementing regulations, including 42 U.S.C. § 1396n(f) and 42 C.F.R. § 430.12(c), amendments to the State Plan may not be implemented prior to federal approval. Since the federal government has not approved the de facto amendments to the State Plan, the threatened rate reduction is invalid.
FIFTH CLAIM
(Violation of Consent Decree) 74. The five percent Medi-Cal rate reduction for physicians, pharmacy, dental and other noninstitutional services, and the
11

actuarially equivalent reduction for Medi-Cal managed care, violates the permanent injunction ordered in California Medical Association, et al. v. Kizer. United States District Court, Eastern District of California, Case No. Civ S 87-0182 LKK.
SIXTH CLAIM
(Violation of Calif. Welf. & Inst. Code § 14079)
75. The five percent Medi-Cal rate reduction for physicians, pharmacy, dental and other noninstitutional services, and the actuarially equivalent reduction for Medi-Cal managed care, violates Calif. Welf. & Inst. Code § 14079, in that the rate reduction was implemented in such a way as to not ensure reasonable access by Medi-Cal beneficiaries to physician and dental services and without consideration of Consumer Price Index increases, reimbursement levels under Medicare and other third party payors, prevailing customary charges and other factors required by the statute to be considered.
DECLARATORY RELIEF
76. An actual and justiciable controversy exists between Plaintiffs and the Defendant regarding the validity of the five percent rate reduction in Medi-Cal payment rates for non-institutional services that is scheduled to take effect on January 1, 2004. Plaintiffs contend that the rate reduction is invalid and unlawful in violation of federal law, federal regulations, State law and the State Plan, while the Defendant contends that the rate reduction is valid in all respects. Accordingly, pursuant to 28 U.S.C. § 2201, Plaintiffs request this Court to declare that the rate reduction is invalid and unlawful.
PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF
77. Unless and until Defendant is enjoined from reducing Medi-Cal rates for noninstitutional services, as set forth in Welfare and Institutions Code § 14105.19, Plaintiffs will be irreparably harmed because of the invalid and illegal reduction in MediCal rates in violation of federal law, federal regulations and the State Plan, in that: a. Because the reduction in rates will result in a large number of physicians and other non-institutional providers of health care services to either withdraw from or reduce their participation the Medi-Cal program due to the inadequacy of the MediCal rates to meet the costs of providing services, Medi-Cal beneficiaries in need of health care services will have increasing difficulty gaining access to needed services. This will result in delays in the receipt of necessary health care services or the inability of Medi-Cal beneficiaries to receive needed services at all.
b. The relationships between patients and providers will be permanently and irreparably disrupted, because many Medi-Cal beneficiaries will be forced to interrupt current courses of treatment with their providers, as those providers are forced to withdraw from or reduce their participation in the Medi-Cal program due to the decrease in Medi-Cal rates.
c. The reduction in Medi-Cal rates below the levels necessary to be consistent with efficiency, economy and quality of care will make it increasingly difficult for providers who do remain in the Medi-Cal program to provide services consistent with community standards of quality care since they will incur costs in providing those services greater than the applicable MediCal payments, thus endangering the health and well-being of Medi-Cal beneficiaries and the financial solvency of the MediCal providers.
78. No administrative appeal process or other administrative remedy is available to Plaintiffs to challenge the five percent Medi-Cal rate reduction for noninstitutional services.
79. All of the said injuries are great, immediate, and irreparable, for which damages at law are inadequate, and for which plaintiffs have no plain, adequate or speedy relief at law or otherwise.
12

WHEREFORE, Plaintiffs pray for judgment as follows:
1. For an Order declaring that the Medi-Cal rate reduction imposed by Welfare and Institutions Code § 14105.19 violates the provisions of 42 U.S.C. § 1396a(a)(8), 42 U.S.C. § 1396a(a)(30)(A), 42 U.S.C. § 1396b(m)(2)(A)(iii), 42 U.S.C. § 1396n(b), 42 C.F.R. § § 447, et seq., Calif. Welf. & Inst. Code § 14079, the California State Medi-Cal Plan, and the permanent injunction in California Medical Ass’n. et al. v. Kizer. and is therefore illegal and invalid;
2. For an Order declaring that the Medi-Cal rate reduction imposed by Calif. Welf. & Inst. Code § 14105.19 represents a de facto amendment to the California State Medi-Cal Plan and, therefore, said rate reduction cannot be imposed without prior federal approval;
3. For an Order declaring that, when setting rates in the future, the Department must rely upon reliable cost studies to determine whether the rates have some relationship to the costs of providing services to Medi-Cal beneficiaries, and, to the extent that rates deviate from such costs, must provide a justification for the deviation;
4. For an Order preliminarily and permanently enjoining Defendant from effectuating the Medi-Cal rate reduction imposed by Welfare and Institutions Code § 14105.19 or reducing to any degree the Medi-Cal rates for noninstitutional services that are affected by Calif. Welf. & Inst. Code § 14105.19;
5. For an Order requiring the Department to perform the annual review of rates mandated by Calif. Welf. & Inst. Code § 14079 in order to ensure reasonable access of Medi-Cal beneficiaries to physician and dental services;
6. For the costs of this suit, including reasonable attorneys’ fees incurred by Plaintiffs; and
7. For such other relief as this Court may deem just and proper
DATED: November 19,2003 HOOPER, LUNDY & BOOKMAN, INC.
CRAIG J. CANNIZZO
BYRON J. GROSS
<<signature>>
Craig J. Cannizzo
<<signature>>
Byron J. Gross
Attorneys for Plaintiffs
PROOF OF SERVICE I declare as follows:
I am employed in the County of San Francisco, State of California. I am over the age of eighteen and not a party to the within action. My business address is First Legal Support Services, 1814 “I” Street, Sacramento, California
On November 19, 2003, I served a true copy of the foregoing document(s) described as FIRST AMENDED COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF in this action as follows:
13

Irene K. Tamura, Esq. Deputy Attorney General Office of the Attorney General P.O. Box 944255 1300 “I” Street Sacramento, CA 94244 Attorneys in Related Case Telephone: (916) 322-2587 Fax: (916) 324-5567
SQU BY MAIL: By placing a true copy thereof enclosed in a sealed envelope addressed as above, with postage thereon fully prepaid in the United States mail, at San Francisco, California. I am readily familiar with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with U.S. Postal service on the same day with postage thereon fully prepaid at San Francisco, California, in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. SQU BY OVERNIGHT COURIER: I caused the above-referenced document(s) to be delivered to__________for delivery to the above address(es). X BY FAX: I transmitted a copy of the foregoing document(s) this date via telecopier to the facsimile numbers shown above. SQU BY PERSONAL SERVICE: I caused such envelope to be delivered by hand to the offices of the addressee(s). SQU [State] I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. X [Federal] I declare under penalty of perjury that I am employed by the office of a member of the bar of this Court, at whose direction this service was made. Executed on November 19, 2003, at San Francisco, California. First Legal Support Services
14

 
 Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 1 of 43

1

FilE

2

3

4

5

IN THE UNITED STATES DISTRICT COURT

6

FOR THE EASTERN DISTRICT OF CALIFORNIA

7

8 JAMES CLAYWORTH, R.Ph., doing business under the fictitious
9 name and style of Clayworth Healthcare Pharmacy; WAYNE
10 ROBERTS, and MADELEINE MADDEN, Plaintiffs,
11
v. 12
DIANA M. BONTA, Director of the 13 Department of Health Services,
State of California, and 14 DEPARTMENT OF HEALTH SERVICES,
a department of the State of 15 California,
Defendants. 16

CIV-S-03-2110 DFL/PAN CIV-S-03-2336 DFL/PAN
MEMORANDUM OF OPINION AND ORDER

17

CALIFORNIA MEDICAL ASSOCIATION,

18 et al.,

Plaintiffs,

19

v.

20

DIANA M. BONTA, Director of the

21 Department of Health Services,

State of California,

22

Defendant.

23

24

25

26

1

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 2 of 43

1

Medi-Cal providers and beneficiaries challenge the State of

2 California's impending 5% reduction in the reimbursement J:ate

3 paid to providers. Plaintiffs contend that the rate reduction

4 violates the Medicaid statute, particularly the quality of care

5 and equal access provisions, and they seek a preliminary

6 injunction preventing defendant Diana Bonta, the Director of the

7 California Department of Health Services, from implementing the

8 rate reduction when it is scheduled to go into effect on January

9 I, 2004.

10

The case presents two sorts of issues. First, the court

11 must decide whether plaintiffs have standing and whether Congress

12 has given them a cause of action under 42 U.S.C. § 1983 to

13 enforce certain provisions of the Medicaid statute. The court

14 concludes that Medi-Cal beneficiaries have both standing and a

15 cause of action and that Medi-Cal providers have third party

16 standing to assert claims on behalf of beneficiaries concerning 17 fee-for-service rates. However, the court does not find that

18 either beneficiaries or providers have a claim under § 1983 to

19 enforce the provisions in the Medicaid statute relating to

20 managed care plans. Those statutory provisions are addressed to

21 the Secretary of Health and Human Services, are designed to

22 reduce the State's costs, and do not unequivocally confer rights

23 on either providers or beneficiaries. Furthermore, because

24 managed care providers are contractually bound to provide

25 adequate services to Medi-Cal beneficiaries, beneficiaries in

26 managed care plans should not be adversely affected by the rate

2

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 3 of 43

1 cut. As will be explained, there are other avenues available to

2 managed care providers to protest the rate cut.

3

Second, the court must decide whether the across-the-board

4 5% rate cut, which was enacted by the California legislature,

5 violates the quality and equal access requirements of the 6 Medicaid Act. Under binding Ninth Circuit law, the Medicaid

7 statute grants a right to beneficiaries to a rate setting

8 decision by the State that is not arbitrary and that takes into

9 account provider costs, quality of service, and equal access to

10 medical services for Medi-Cal recipients. See Orthopaedic HOsp. 11 v. Belshe, 103 F.3d 1491, 1500 (9th Cir. 1997). Where the 12 administrative record reveals a considered decision by the

13 Department of Health Services that a certain rate is consistent

14 with the requirements of the Medicaid Act and the approved State

15 plan, the court will review that decision with deference. Given

16 the complexity of the Medi-Cal system, deference to the expertise 17 of the Department of Health Services is not only appropriate, it

18 is virtually a necessity. However, in this case, there is no 19 record of considered decisionmaking. There is no evidence that

20 the Director recommended the rate reduction, that the State

21 legislature ever sought the recommendation of the Director, or 22 that any responsible official in State government made a 23 determination that the pending rate reduction is consistent with 24 quality care and equal access in light of provider costs. Thus, 25 as to this rate reduction, there is no considered decisionmaking 26 process that the court may review. The decision to cut fee-for-

3

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 4 of 43

1 service rates across the board without analyzing the effect on

2 services to beneficiaries is arbitrary and violates federal law.

3 Accordingly, the court finds that the preliminary injunction

4 should issue as to the non-managed care, fee-for-service

5 reimbursement rates affected by the pending 5% rate reduction.

6

There are undoubtedly many ways in which the Director may

7 reduce overall Medi-Cal costs. For example, some of the medical

8 services provided by Medi-Cal are optional in the sense that they

9 are not required by the Medicaid statute. A decision to cut

10 these services from Medi-Cal would not implicate federal law even

11 though the decision could leave some beneficiaries without

12 coverage for medical care that few would consider "optional" in

13 the normal sense of the term. But when the decision involves a

14 cut to a reimbursement rate for a service that the State either

15 must or has elected to include within Medi-Cal, federal law

16 requires that the decision be based on a considered finding that

17 in light of provider costs the rate reduction will not affect the

18 quality of service afforded to beneficiaries or their equal

19 access to such medical service.

20

I . Facts and Procedural History

21 A. The Federal Medicaid Program
22 Medicaid is a federal program that distributes funds to
23 states in order to provide health care services for poor persons
24 who are aged, blind, disabled, or members of families with
25 dependent children. 42 U.S.C. §§ 1396a-1396v. The program is
26 jointly funded by the federal and state governments and is

4

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 5 of 43

1 administered by the states. The states determine eligibility,

2 the types of services covered, payment levels for services, and

3 other aspects of administration, within the confines of federal

4 law. See Orthopaedic Hosp., 103 F.3d at 1493. Federal law

5 requires participating states to provide a basic array of

6 services and allows states to provide certain additional optional

7 services, such as dental care, if they so choose. 42 U.S.C. §

8 1396a(a) (10) i Elizabeth Blackwell Health Ctr. for Women v. Knoll,

9 61 F.3d 170, 173 (3d Cir. 1995).

10

In order to receive federal funds, a state prepares and

11 submits a state plan, which describes the standards and methods

12 to be used to set reimbursement rates for the services covered.

13 Orthopaedic Hosp., 103 F.3d at 1494. The state plan must be

14 approved by the Secretary of Health and Human Services. The

15 Medicaid Act sets out the requirements of a state plan at 42

16 U.S.C. § 1396a(a) (1) - (65). The provision central to these two 17 suits is § 1396a(a) (30) (A) ("Section 30 (A)") . Section 30(A)

18 requires a state plan to:

19

provide such methods and procedures relating to the

20

utilization of, and the payment for, care and services available under the plan. . as may be necessary.

21

to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to

22

enlist enough providers so that care and services are available under the plan at least to the extent that

23

such care and services are available to the general population in the geographic area.

24 These Section 30(A) standards are referred to as the "efficiency,
25 economy, and quality" requirement and the "equal access"
26 requirement.

5

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 6 of 43

1

The requirements of § 1396a, including Section 30(A). apply

2 to Medicaid programs that operate on the traditional fee-for-

3 service basis. Under this model, a Medicaid recipient may see

4 any enrolled service provider, who is reimbursed directly by the

5 state. 42 U.S.C. § 1395a. However, by way of a waiver from the

6 Secretary of Health and Human Services, states have the

7 alternative of contracting with managed care plans to provide

8 some or all of the covered services in exchange for payment under

9 a prepaid capitation rate or some other risk-based arrangement.

10 42 U.S.C. § 1396b(m). Under this arrangement, the managed care

11 plans receive predetermined periodic payments in return for

12 providing the required services. Under 42 U.S.C. §

13 1396b(m) (2) (A) (iii), the rates paid to the managed care plans

14 must be made on an "actuarially sound basis." Under 42 U.S.C. §

15 1396n(b) (4), the Secretary of Health and Human Services may grant

16 the necessary waivers that permit a state to require Medicaid

17 recipients to receive care through managed care programs, so long

18 as the managed care providers "meet, accept, and comply with the

19 reimbursement, quality, and utilization standards under the State

20 plan, which standards .

are consistent with access, quality,

21 and efficient and economic provision of covered care and

22 services."

23

B. The California Medi-Cal Program

24

California's Medicaid program is known as Medi-Cal. See

25 Cal. Welf. & Inst. Code §§ 14000 et seq. It is administered by

26 the California Department of Health Services. Medi-Cal operates

6

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 7 of 43

1 on both a fee-for-service and managed care basis. California has

2 elected to provide 35 of the 36 available optional services. 1

3 (Menda Decl. Ex. A, p. 2.) The yearly cost of the Medi-Cal

4 program to the State is $12 billion. The federal government

5 contributes something just over this amount to the State for the

6 operation of Medi-Cal.

7

California has an extensive regulatory framework for the

8 setting of reimbursement rates. See, e.g., Cal. Welf. & Inst.

9 Code §§ 14075, 14079, 14105. However, on the basis of the record

10 now before the court, it appears that the Department of Health

11 Services does not have any continuous study of rates and their

12 adequacy to meet the Section 30(A) requirements. 2 Nor is there

13 any record that the State legislature - authorized by the State

14 plan to make rate adjustments - has any ongoing study of rates

15 independent of the Department of Health Services.

16

In January 2003 and again in May 2003, the then-Governor

17

18

19

1 These optional services include: dental care; podiatry; optometry; physical therapy; occupational therapy; speech

20

pathology; audiology; drugs; prosthetic appliances; eyeglasses; diagnostic, screening, preventive, and rehabilitative services;

21

hospice; psychology; certified midwife; medical supplies; hearing aids; acupuncture; and drug addiction treatment and

22 rehabilitation. (Menda Decl. ~ 4.) In addition, Medi-Cal pays for illegal alien medical services provided by emergency rooms,

23 which is the most expensive way in which to provide medical services that are not actual emergencies. (See Campbell Decl.

24 Ex. D, p. 3. (illegal alien coverage costs $852 million))

25

2 According to the Legislative Analyst, the Department

has "no rational basis" for its rate system and has not for many

26 years. (Campbell Decl. Ex. D, p. 16.) The rates for various services have been adjusted a number of times over the last 15

years, mostly on an "ad hoc" basis. (Id.)

7

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 8 of 43

1 proposed an across-the-board 15% rate cut in Medi-Cal

2 reimbursement rates as part of his proposed budget. (S. Thompson

3 Decl. ~ 7.) When the State legislature failed to enact a budget

4 by July 1, 2003 (as required by state law), a compromise budget

5 proposal was negotiated. (Id. ~ 9.) This proposal, which was

6 ultimately enacted into law, includes a 5% cut in the Medi-Cal

7 reimbursement rate. This rate cut applies across-the-board,

8 though certain services are excepted. The rate cut is codified

9 in Welf. & Inst. Code § 14105.19, as follows:

10

(a) Due to the significant state budget deficit

projected for the 2003-04 fiscal year, and in order to

11

implement changes in the level of funding for health

care services, the Director of Health Services shall

12

reduce provider payments as specified in this section.

13

(b) (1) Payments shall be reduced by 5 percent for Medi-Cal program services for dates of service on and

14

after January 1, 2004.

15 The statute also requires the Department of Health Services to

16 reduce the capitation payments to managed care plans by the

17 "actuarial equivalent" of 5%. Welf. & Inst. Code §

18 14105.19(b) (3). The actuarial equivalent of the reimbursement

19 rate reduction varies depending on the characteristics of the

20 managed care plan and its members, but the typical reduction is

21 approximately 3%. (See Campbell Declo Ex. E, pp. 1-3; Tough 22 Decl. ~ 6.) The rate cut is anticipated to save $245 million in

23 reimbursement costs borne by the State between January 1 and June 24 30, 2004. (Menda Decl. ~ 9.)

25

C. The Parties

26

The plaintiffs in CIV-S-03-2110 are a pharmacist enrolled as

8

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 9 of 43

1 a Medi-Cal provider and two Medi-Cal recipients. The plaintiffs

2 in CIV-S-03-2336 are all membership organizations that represent

3 the interests of Medi-Cal providers and recipients. Only one of

4 these organizations, the Disabled Rights Union, has members who

5 are Medi-Cal recipients. (See Edmon Decl. ~~ 3-4.) Others, for

6 example, the California Chapter of the American College of

7 Cardiology, have members who are Medi-Cal providers. 3 (See Watson

8 Decl. ~ 3.) Two organizations, the Brain Injury Policy Institute

9 and the California Foundation for Independent Living, advocate on

10 behalf of Medi-Cal recipients, but have no Medi-Cal beneficiaries

11 as members. (See Vick Decl. ~~ 1-5; Yeager Decl. ~ 3.)

12

Diana Bonta is the defendant in both suits. She i s ~3ued in

13 her official capacity as Director of the Department of Health

14 Services. 4

15

II. Standing

16 The question of plaintiffs' standing is the first of a set

17 of interrelated issues relating to whether plaintiffs, or some of

18 them, may assert a claim under § 1983. Because standing affects

19 the court's jurisdiction to go any further, it must be addressed

20 first.
21

But the standing inquiry is not independent of the two

22 At least one of these, the AIDS Healthcare Foundation, is

23

itself a Medi-Cal provider. (Stidham Decl. ~ 4.) The Foundation operates a Medi -Cal managed care plan. (Id. ~ 5.)

24

4 Plaintiffs in CIV-S-03-2110 also name the Department of

25

Health Services as a defendant. However, the Department is immune from suit under the 11th Amendment and, therefore, must be

26 dismissed, leaving Director Bonta as the sole defendant. Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 100,

104 S.Ct. 900 (1984).

9

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 10 of 43

1 additional questions that must be addressed before reaching the

2 merits of the dispute: (1) does the Medicaid statute confer any

3 rights on either Medi-Cal providers or recipients that may be

4 enforced by a private right of action under 42 U.S.C. § 1983; and

5 (2) if there is such a right, what is the substance of that

6 right? In the sections that follow the standing analysis, the

7 court concludes that only Medi-Cal recipients have a claim under

8 § 1983, not providers, and that this claim extends only so far as

9 the equal access to quality care provisions of Section 30(A).

10 Further, in keeping with Ninth Circuit precedent, the court finds

11 that the right guaranteed by Section 30(A) has a large procedural

12 component: Medi-Cal recipients are entitled to a considered rate

13 making decisional process in which equal access to quality care

14 is evaluated in relation to provider costs and the proposed rate.

15 The standing analysis presages these conclusions by focusing on

16 beneficiary standing to advance the procedural component of the

17 Section 30(A) entitlement.

18

Standing consists of two broad levels of analysis, both of

19 which are implicated in this case. The most basic analysis

20 involves whether plaintiffs satisfy the constitutional minimum

21 requirements of injury-in-fact, causation, and redressability.

22 Courts have also crafted various prudential standing doctrines,

23 two of which, associational standing and third-party standing,

24 are at issue here. The first question is whether Medi-Cal

25 beneficiaries and providers have Article III standing to seek to

26 enjoin the 5% rate cut. The second question is whether Medi-Cal

10

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 11 of 43

1 providers have third-party standing to assert the rights of Medi2 Cal beneficiaries. The final standing issue is whether 3 beneficiary and provider organizations, who make up most of the

4 plaintiffs in these suits, have associational standing to bring 5 suit on behalf of their respective members.

6

A. Article III Standing of Medi-Cal Beneficiaries and

Providers
7

8

To comply with the requirements of Article III standing, a

9 plaintiff must satisfy three elements: injury-in-fact, causation,

10 and redressability. See Lujan v. Defenders of Wildlife, 504 U.S. 11 555, 560-61, 112 S.Ct. 2130 (1992).

12

The Article III standing analysis in this case is relatively

13 straightforward. Medi-Cal beneficiaries and providers will

14 suffer concrete injury caused by the 5% cut if it is permitted to

15 go into effect. The injury to providers is obvious. As to 16 beneficiaries, plaintiffs have presented sufficient evidence

17 showing that at least some Medi-Cal providers will cease 18 participating in the Medi-Cal program altogether or will refuse 19 to take on new Medi-Cal patients if rates are reduced by _c-) i0s • 5

20

21

5 For instance, one practice group that provided primary care and OB/GYN services for 1500 Medi-Cal fee-for-service

22

patients will stop providing anything but OB/GYN services to those patients, and may discontinue even those services as well.

23

(Polansky Supp. Decl. ~ 4.) Another provider is one of the only dermatological practices in the Bay Area to treat Medi-Cal

24

patients. (Geisse Decl. ~ 6.) Appointments for Medi-Cal patients are already restricted to "children, emergencies, severe

25 debilitating dermatologic conditions, and cancer victims." (Id.) After the rate reduction, this practice will have to stop taking

26 most new Medi-Cal patients. (Id. ~ 11.) Additionally, plaintiffs have presented statistical evidence that physician

participation in Medi-Cal was low before the rate reduction.

11

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 12 of 43

1 (See, e.g., Mazer Decl. ~ 9j Kuon Decl. ~ 10.) This reduction in

2 the number of providers in the program will adversely affect

3 beneficiaries' equal access to medical care and, quite possibly,

4 its quality.

5

Moreover, as to redressability, an injunction prohibiting

6 the rate reduction at least until a proper study of reimbursement

7 rates has been conducted would redress providers' and

8 beneficiaries' impending injury. Under the relaxed

9 redressability standards applicable in procedural standing cases,6

10 plaintiffs need demonstrate only that proper consideration of 11

12 (Bindman Decl. Ex. A, p. 2.) All of this evidence tends to
confirm the statements made in many declarations that 13 reimbursement rates for many services are already set below
providers' costs. (See, e.g., Yelamanchili Decl. ~ 10j Coughlin 14 Decl. ~ 7.)

15

6 Plaintiffs seek to vindicate what is in part a procedural

right, the right to have the State of California consider certain 16 factors when setting Medi-Cal reimbursement rates. See

Orthopaedic Hosp., 103 F.3d at 1500j infra at 32-34. This is a 17 "procedural rightH in the sense that it is a "procedural

requirement the disregard of which could impair a separate and 18 concrete interest ofH plaintiffs (i.e., Medi-Cal beneficiaries'

19

interest in receiving equal access to medical care). Lujan, 504 U.S. at 572. In a case involving a procedural right, the

20

standards of redressability and causation applied in normal standing cases are relaxed. See Laub v. U.S. Dep't of the

21

Interior, 342 F.3d 1080, 1086-87 (9th Cir. 2003) j Hall v. Norton, 266 F.3d 969, 975 (9th Cir. 2001) j Lujan, 504 U.S. at 572 & n.7.

22

Plaintiffs in a procedural standing case need not establish that, were the government to follow the proper procedures, its ultimate

23

action would be different. Instead, plaintiffs in a procedural standing case need demonstrate only that the factors the

24 government failed to consider could have an influence on the ultimate outcome. Laub, 342 F.3d at 1087j Hall, 266 F.3d at 977.

25 Thus, in order to establish causation and redressability, plaintiffs in this case need demonstrate only that consideration

26 of Medi-Cal providers' costs in relation to equal access to quality services could influence the reimbursement rates the

State ultimately sets.

12

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 13 of 43

1 provider costs in setting Medi-Cal reimbursement rates could

2 influence the ultimate level at which those rates are set., See

3 Laub, 342 F.3d at 1087; Hall, 266 F,3d at 977. Plaintiffs have

4 made this demonstration. Thus, both Medi-Cal providers and

5 beneficiaries have Article III standing to pursue this case.

6

B. Third-Party Standing

7

In addition to advancing their own interests, the provider

8 organization plaintiffs seek to assert the interests of their

9 Medi-Cal beneficiary patients. To assert such third-party 10 standing, the person or entity seeking to represent another: (1)

11 must have suffered an inj ury- in- fact, (2) must have a close 12 relationship with the third party, and (3) there must be "some 13 hindrance" or a "genuine obstacle" to the third party's ability 14 to assert l"tS own lnterests. Powers v. Ohio, 499 U.S. 400, 410-

15 411, 111 S.Ct. 1364 (1991); Singleton v. Wulff, 428 U.S. 106,

16 112-116, 96 S.Ct. 2868 (1976). All of these criteria are
17 satl'sf 'led 'In t hl' S case.
18 Medi-Cal providers will suffer a concrete economic injury if
19 the 5% cut in their reimbursement rate is implemented. Moreover,
20 Medi-Cal providers have a sufficiently close relationship with
21 their patients who are Medi-Cal beneficiaries to meet the second
22 factor in the third-party standing analysis. Indeed, the
23 providers are in a unique position to advance the interests of
24 Medi-Cal beneficiaries, since it is they who can predict the
25 effect of a reimbursement rate cut on the services they intend to
26 provide. See, e.g., Singleton, 428 U.S. at 117 (explaining that

13

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 14 of 43

1 a patient cannot secure medical services without the aid of a

2 doctor and that an impecunious patient cannot secure medical

3 services without his or her doctor's being reimbursed by the

4 government for the doctor's services).

5

Whether Medi-Cal beneficiaries face "some hindrance u or a

6 "genuine obstacle u to their ability to assert their own rights is

7 a closer question. Here, the obstacle Medi-Cal beneficiaries

8 face is a lack of information about the effect of Medi-Cal

9 reimbursement rates on providers in light of providers' costs and

10 the further effect of a rate cut on the provision of services to

11 Medi-Cal beneficiaries. 7 Providers are the ones who know the

12 relationship of reimbursement to service and to their costs. As

13 compared to beneficiaries, they are in a far better position to

14 evaluate the State's decisional process and the data relied upon

15 by the State in determining reimbursement rates. This

16 informational hurdle is similar in kind to those found sufficient

17 in Powers and Singleton to confer third-party standing, and it

18

19

7 The Supreme Court has in the past recognized a lack of incentive in the form of "practical barriers to suit U because of

20

"the small financial stake involved and the economic burdens of litigationu as an obstacle sufficient for third-party standing

21

purposes. Powers, 499 U.S. at 414-415. Defendant points out that the Ninth Circuit has held that "[a] simple lack of

22

motivation does not constitute a 'genuine obstacle' to asserting an interest. u Viceroy Gold Corp. v. Aubry, 75 F.3d 482, 489 (9th

23

Cir. 1996) (holding that an employer does not have third-party standing to challenge a labor statute on its employees' behalf

24 simply because the "employees probably would not be motivated to assert their own interests because they lack a sufficient

25 individual economic stake in the outcome u ). There seems to be some tension between Powers and Viceroy Gold on this point, but

26 it is not material to the "genuine obstacle u analysis in this case.

14

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 15 of 43

1 suffices, at least at this point in the litigation, to confer

2 third-party standing on Medi-Cal providers to assert the

3 interests of their patients who are Medi-Cal beneficiaries.

4

C. Associational Standing

5

In CIV-S-03-2336, all of the plaintiffs are organizations

6 whose members are either Medi-Cal providers or Medi-Cal

7 beneficiaries. Under Hunt v. Wash. State Apple Adver. Comm'n, 8 432 U.S. 333, 343, 97 S.Ct. 2434 (1977), an organization has

9 standing to sue on behalf of its members if "(a) its members

10 would otherwise have standing to sue in their own right; (b) the
11 interests it seeks to protect are germane to the organization's 12 purpose; and (c) neither the claim asserted nor the relief 13 requested requires the participation of individual members in the 14 lawsuit."
15
1. Beneficiary Organizations 16
The only true beneficiary organization is the Disabled 17
Rights Union. 8 It has about 400 members, the "vast majority" of 18
whom are Medi-Cal beneficiaries. 9 (Edmon Decl. ~ 3.) In light of 19

20

8 Defendant argues that there is no evidence (outside of

21

plaintiffs' affidavits) of the existence of this organization, in that there is no record of its registration with the California

22

Secretary of State or the Attorney General. However, a supplemental declaration from Beverly Edmon, the director of the

23 Disabled Rights Union, makes clear that the Disabled Rights Union is a bona fide organization that has been registered with the

24 Secretary of State since 1981 as "an unincorporated nonprofit association." (Edmon Suppl. Decl. ~ 3.)

25
9 At the hearing on this motion, defendant also pointed out 26 that Ms. Edmon is not herself a Medi-Cal beneficiary. This is
irrelevant for purposes of determining whether the Disabled Rights Union has associational standing to assert its members'

15

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 16 of 43

1 its membership and purpose, the first two steps of the

2 associational standing test are met: Medi-Cal beneficiaries

3 would have standing to sue in their own right, and one of the

4 purposes of the Disabled Rights Union is to help Medi-Cal 5 recipients obtain access to Medi-Cal services. (Edmon Decl. ~~ 6 4, 6, 8.) The final requirement - whether the claim or relief

7 requires individual members to participate - is also satisfied.

8 As the Third Circuit recently pointed out in a case based on

9 similar facts, "[t]he need for some individual participation

10 . does not necessarily bar associational standing under this

11 third criterion." Pa. Psychiatric Soc'y v. Green Spring Health

12 Servs., Inc. ("PPS"), 280 F.3d278, 283 (3dCir. 2002).

13 Here, plaintiffs seek only injunctive relief such that an 14 individualized showing on damages will not be required.

15 Moreover, whatever individualized showing may be made as to

16 access and quality, a significant component of plaintiffs' claim

17 is directed at the State's failure to follow a considered

18 decisionmaking process as required by Orthopaedic Hospital.

19 Evidence about what the State considered - or failed to consider

20 - when it enacted the rate reduction will not require

21 individualized proof by beneficiary members. 22 at 286. 23

See PPS, 280 F.3d

24
25 26 interests. Ms. Edmon's declarations state that the "vast
majority" of the Disabled Rights Union's members are Medi-Cal beneficiaries.

16

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 17 of 43

1

2. Provider Organizations

2

The next question is whether the provider organizations that

3 make up most of the plaintiffs in these suits have associational

4 standing to assert both the direct interests of their Medi-Cal

5 provider members and their members' third-party interest in

6 protecting the rights of their Medi-Cal patients.

7

Medi-Cal providers have standing to sue in their own right

8 to enjoin a reimbursement cut.10 Less well-established is whether 9 a provider organization may claim associational standing to

10 assert the interests of beneficiaries, where association members

11 have third-party standing on behalf of beneficiaries. In the

12 most analogous case, the Third Circuit found that associational 13 standing followed from the third party standing of association

14 members. In that case an organization of psychiatrists was 15 permitted to assert the interests of patients because its 16 members' individually had third party standing to advance their 17 patients' interests. See PPS, 280 F.3d at 291; Tacy F. Flint, ~

18 New Brand of Representational Standing, 70 U.Chi.L.Rev. 1037

19 (2003) (arguing that there is no constitutional impediment to

20 combining associational and third party standing) . The reasoning

21 in PPS is persuasive. As to the second Hunt factor, there is no

22 dispute that the interests of Medi-Cal providers and

23 beneficiaries are germane to the purposes of these organizations.

24

25

10 Defendant argues that Medi-Cal providers lack standing

because they do not have a right to enforce 42 U.S.C. §

26 1396a(a) (30) (A) under 42 U.S.C. § 1983. (Def. 's Opp'n at 7-8.) This is not an argument about standing but about the merits of

the providers' legal theory.

17

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 18 of 43

1 Finally, for the same reasons discussed above in the context of

2 beneficiary organizations, individual participation by members is

3 not necessary. Thus, the provider organizations here have

4 standing to assert the interests of providers and beneficiaries

5 alike.

6 I II. Existence of an Enforceable Right Under 42 U.S.C. § 1983

7

The plaintiffs bring suit under 42 U.S.C. § 1983, which

8 provides a remedy for persons who are deprived of "any rights, 9 privileges, or immunities secured by the Constitution and laws." 10 The Supreme Court has held that the phrase "and laws" permits 11 persons to sue for the violation of rights secured to them by

12 federal statute. See Maine v. Thiboutot, 448 U.S. 1, 4-8, 100 13 S.Ct. 2502 (1980) However, not all federal statutes create

14 individual rights that can be enforced through § 1983. See 15 Blessing v. Freestone, 520 U.S. 329, 340, 117 S.Ct. 1353 (1997)

16 The Court has developed a three factor test to determine whether

17 a federal statutory provision creates an enforceable right: (1) 18 Congress must have intended that the provision benefit the 19 plaintiff; (2) the right must not be so "vague and amorphous"

20 that its enforcement would strain judicial competence; and (3) 21 the statute must unambiguously impose a binding obligation on the 22 states. Id. at 340-41. 23
The Court recently clarified this test in Gonzaga University 24
v. Doe, 536 U.S. 273, 283, 122 S.Ct. 2268 (2002). The plaintiff 25
in Gonzaga brought suit under § 1983 to enforce a provision in 26
the Family Educational Rights and Privacy Act (FERPA), which

18

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 19 of 43

1 limits the release of a student's educational records without

2 permission. The Court found that FERPA does not confer an

3 enforceable right because the language of the statute does not

4 focus on the protected student, but rather on the Secretary and

5 the educational institution, and is couched in terms of a "policy

6 and practice" rather than anyone individual's entitlement.

7 Moreover, the Court found that the structure of the statute also

8 suggests that Congress did not intend to create a right under §

9 1983 because the statute provides for an administrative remedy.

10 In reaching its holding, the Court rejected the view that it is

11 enough for a plaintiff to show membership in a group generally

12 benefitted by a statute; rather, "[f]or a statute to create such

13 private rights, its text must be 'phrased in terms of the persons

14 benefitted, '" not the person regulated or any aggregate group.

15 Id. at 284. Thus, Gonzaga requires close attention to the 16 wording and structure of a statute to determine whether Congress 17 has created an individual entitlement that may give rise to a 18 claim under section 1983.

19

There is an additional complication in applying the !30nzaga

20 test to § 1396a of the Medicaid statute. In two identical 21 statutes, Congress spoke directly, if opaquely, to the approach

22 courts should use in determining whether Congress intended to

23 create an enforceable right in different portions of the Social

24 Security Act, including its Medicaid provisions. See 42 U.S.C. 25 §§ 1320a-2 & 1320a-l0. These statutes are identically worded,

26 and the fact that there are two such statutes is probably a

19

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 20 of 43

1 mistake. 11 The statutes provide as follows:

2

In an action brought to enforce a provision of this

chapter, such provision is not to be deemed

3

unenforceable because of its inclusion in a section of

this chapter requiring a State plan or specifying the

4

required contents of a State plan. This section is not

intended to limit or expand the grounds for determining

5

the availability of private actions to enforce State

plan requirements other than by overturning any such

6

grounds applied in Suter v. Artist M., 112 S.Ct. 1360

(1992), but not applied in prior Supreme Court

7

decisions respecting such enforceability; provided,

however, that this section is not intended to alter the

8

holding in Suter v. Artist M. that section 671 (a) (15)

of this title is not enforceable in a private right of

9

action. 42 U.S.C. § 1320a-2.

10 The two statutes were enacted in 1994 after the Court's decision

11 in Suter v. Artist M., 503 U.S. 347, 112 S.Ct. 1360 (1992).12 The

12 intended effect of the statutory language is at best uncertain

13 because the reference to "any such grounds applied in [Suter],

14 but not applied in prior Supreme Court decisions" is open to

15 interpretation. However, "the fairest reading of Section 1320a-2

16 [and 1320a-10] is that Congress was concerned .

. that a court

17 should not eviscerate an otherwise enforceable right merely

18 because it appears in a statute mandating that participating

19 states include a particular provision in their state plans."

20 Messier v. Southbury Training School, 916 F.Supp. 133, 144-45

21 (D. Conn. 1996); see also Harris v. James, 127 F.3d 993, 1002-03

22
(11th Cir. 1997). But see LaShawn A. v. Barry, 69 F.3d 556, 568-

23

24 11 See Pub. L. 1 03 - 3 8 2 (4 2 U. S . C. § 13 2 0a - 2); Pub. L. 1 03 -
25 432 (42 U.S.C. § 1320a-10).

26

12 The Supreme Court did not consider the effect of this

statute in Blessing, which dealt with Title IV-D of the Social

Security Act. Blessing, 520 U.S. at 332.

20

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 21 of 43

1 70 (D.C. Cir. 1995), vacated by 87 F.3d 303 (1996) (holding that,

2 because Suter did not use an approach different from past cases,

3 §§ 1320a-2 & 1320a-l0 are without any effect) . In light of

4 sections 1320a-2 and 1320a-l0, when applying Gonzaga to the

5 particular sections of the Medicaid Act at issue here, the court

6 will not consider that an individual entitlement is absent simply

7 because the wording of the statute is directed to the required

8 contents of a state plan as opposed to the rights of a

9 beneficiary or provider under a plan. Thus, provisions that

10 require certain contents in state plans can create rights

11 enforceable under § 1983, so long as they otherwise meet the test

12 employed by the Court in Suter, Blessing and Gonzaga.13

13

A. Section 30(A)

14

Plaintiffs contend that Section 30(A) creates an individual

15 right for both Medicaid providers and beneficiaries. They rely

16 primarily on the Ninth Circuit's decision in Orthopaedic Hospital

17 v. Belshe, 103 F.3d 1491 (9th Cir. 1997), and the Supreme Court's 18 decision in Wilder v. Virginia Hospital Association, 496 U.S.

19 498, 110 S. Ct. 2510 (1990). In Orthopaedic Hospital, the Ninth

20 Circuit held that a Medi-Cal rate reduction violated Section

21 30 (A) . 103 F.3d at 1496. The case was brought under § 1983 by a 22

23

13 The court respectfully notes that Congress would give

24

greater assistance to the courts, and retain its proper authority over an important policy and political question - when and by

25 whom suit may be brought - by directly stating which provisions give rise to a claim under section 1983, and for whom, rather

26 than commenting, in vague language, on particular approaches adopted by the Supreme Court to divine Congress' unexpreElsed

intent.

21

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 22 of 43

1 provider hospital, and the district court had held that Section

2 30(A) creates an enforceable right for Medicaid providers. 14

3 (Bookman Decl. Ex. A, p. 7.) However, this question was not

4 addressed by the Ninth Circuit and apparently was not put in

5 issue on appeal. Since the question was not actually decided by

6 the court, but only assumed, Orthopaedic is not binding on

7 whether providers have an enforceable right under Section 30(A)

8 and § 1983. See Sorenson v. Mink, 239 F.3d 1140, 1149 (9th Cir.

9 2001) ("unstated assumptions on non-litigated issues are not

10 precedential holdings"); Estate of Magnin v. Comm'r, 184 F.3d

11 1074, 1077 (9th Cir. 1999).

12

The plaintiffs' reliance upon the Supreme Court's decision

13 in Wilder is similarly unavailing. Wilder did not deal with 14

15

14 Plaintiffs contend that this holding of the district

court precludes the defendant from arguing that Section 30(A) 16 does not create an enforceable right. (CMA's Mot. at 19--21.)

The court, however, declines to find preclusion. First, the 17 district court's June 28, 1991 decision in Orthopaedic Hospital

came before the Supreme Court's decisions in Suter, Blessing, and 18 Gonzaga, which refined the enforceable rights analysis. See

19

Steen v. John Hancock Mut. Life Ins. Co., 106 F.3d 904, 914 (9th Cir. 1997) (holding that collateral estoppel does not apply when

20

there is a "significant change in the legal climate"). Second, because of the unique position of the government in litigation, a

21

state should not ordinarily be subjected to nonmutual offensive issue preclusion. See United States v. Mendoza, 464 U.S. 154,

22

162-63, 104 S.Ct. 568 (1984) (holding that nonmutual offensive issue preclusion does not apply against federal government);

23

Hercules Carriers, Inc. v. Claimant Fla., 768 F.2d 1558, 1577 -15 82 (11th Cir. 1985) (holding that nonmutual offensive

24

issue preclusion is not available against the state government) ; Chambers v. Ohio Dep't of Human Servs., 145 F.3d 793, 801 n.14

25

(6th Cir. 1998) (holding that nonmutual issue preclusion should not apply against the state government); Helene Curtis, Inc. v.

26 Assessment Appeals Bd., 76 Cal.App.4th 124, 133, 90 Cal.Rptr.2d 31 (1999) (holding that, as a matter of state law, nonmutual

offensive issue preclusion does not apply against the state).

22

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 23 of 43

1 Section 30(A) but with another provision of the Medicaid Act, 42

2 U. S. C. § 13 96a (a) (13) (A), the Boren Amendment, which subsequently

3 has been repealed. 496 U.S. at 501. The Court in Wilder held

4 that the Boren Amendment created an enforceable right for

5 Medicaid providers. Id. The Boren Amendment required states to

6 pay certain providers rates that "the State finds, and makes

7 assurances satisfactory to the Secretary, are reasonable and

8 adequate to meet the costs which must be incurred by efficiently

9 and economically operated facilities in order to provide care and

10 services in conformity with applicable State and Federal laws."

11 Id. at 503. Plaintiffs argue that the language of Section 30(A)

12 is indistinguishable from the Boren Amendment.

13

Even assuming the continued vitality of Wilder after

14 Gonzaga, the language of Section 30(A) is not the same as that of

15 the Boren Amendment. Both the Fifth and the Third Circuits have

16 so held. See Pa. Pharmacists Assln v. Houstoun, 283 F.3d 531,

17 538 (3d Cir. 2002) (en banc) ("The language of Section 30 (A)

18 contrasts sharply with that of the Boren Amendment.

.n);

19 Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908,

20 926-28 (5th Cir. 2000) ("However, in contrast to the Boren

21 Amendment, section 30(A) does not create an individual

22 entitlement in favor of any provider."). Gonzaga makes clear

23 that a court must examine the specific statutory provision at 24 issue in determining whether it creates an enforceable right.

25 Thus, the question here is whether Section 30(A), not the

26 repealed Boren Amendment, creates an enforceable right under the

23

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 24 of 43

1 standards announced in Gonzaga, as modified by 42 U.S.C. §§

2 1320a-2 and 1320a-l0.

3

1. Congressional Intent to Confer a Right

4

The first step under Gonzaga is to determine whether

5 Congress unambiguously intended to create an enforceable right. 6 Gonzaga, 536 U.S. at 280. The focus is on the text and structure

7 of the statute. Id. at 284-86. As the Third Circuit has found, 8 the efficiency and economy requirements of Section 30(A) are

9 aimed at benefitting the State and preserving Medi-Cal/Medicaid

10 funds. Pa. Pharmacists, 283 F.3d at 537. Neither requirement 11 assists either providers or beneficiaries. Moreover, as both the

12 Third and Fifth Circuits further found, quality and access do not 13 benefit providers, but do directly benefit beneficiaries. Id.; 14 Evergreen Presbyterian Ministries, 235 F.3d at 928-29. Further 15 in favor of a claim by beneficiaries, the two requirements are 16 not phrased in aggregate or indirect terms - such as requiring a 17 general policy or requiring substantial compliance - that might 18 suggest that no single beneficiary is entitled to quality care or 19 equal access. Thus, the statutory language suggests that 20 providers do not have an enforceable right under § 1983, but that

21 beneficiaries do.
22 Admittedly, as to beneficiaries, the language of Section
23 30(A) is not the paragon of rights-creating language, like Title
24 VI of the Civil Rights Act. However, the structure of §
25 1396a(a), as a list of requirements that a state plan must meet,
26 largely prevented Congress from using the sort of "no person

24

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 25 of 43

1 shall" language cited by the Gonzaga Court. And it is precisely

2 this structure -- a provision's inclusion as a requirement of a

3 state plan

that Congress, in §§ 1320a-2 and 1320a-l0, directed

4 the courts to ignore when determining whether the provision

5 creates an enforceable right under § 1983. Moreover, it has been

6 generally understood, even after Suter and Blessing, that Section

7 30(A) creates an enforceable right for recipients. See P,~

8 Pharmacists, 283 F.3d at 544 ("Medicaid recipients plainly

9 satisfy the intended-to-benefit requirement and are thus

10 potential private plaintiffs."); Evergreen Presbyterian

11 Ministries, 235 F.3d at 928 ("[T]he recipient plaintiffs have an

12 individual entitlement to the equal access guarantee of section

1330(A)."). Finally, unlike the statute in Gonzaga, a Medi-Cal

14 beneficiary can resort to no administrative procedure to seek

15 quality care or equal access.

16

Such legislative history as there is also supports the

17 conclusion that Congress intended a private enforcement action

18 under section 1983 for beneficiaries but not for providers.
19 When the Boren Amendment was repealed, the legislative history 20 indicates a congressional intent to end provider suits. See H.R. 21 Rep. No. 105-149, at 590 (1997) ("It is the Committee's intention 22 that, following enactment of this Act, neither this nor any other 23 provision of [42 U.S.C. § 1396a] will be interpreted as 24 establishing a cause of action for hospitals and nursing 25 facilities relative to the adequacy of the rates they receive.") 26 Indeed, this was Congress' "dominant objective."

25

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 26 of 43

1 Pharmacists, 283 F.3d at 540 n.15. On the other hand, in passing

2 certain 1981 amendments to section 30(A), Congress noted that "in

3 instances where the States or the Secretary fail to observe these

4 statutory requirements, the courts would be expected to take

5 appropriate remedial action." H.R. Rep. No. 97-158, at 301

6 (1981). As the Third Circuit noted, this statement suggests

7 that Congress intended that some class of plaintiffs, such as

8 beneficiaries, would be able to enforce the terms of section

9 30(A) by private suit under § 1983.

10

The court holds that in Section 30(A) Congress created

11 rights to quality care and equal access that may be enforced by

12 Medicaid recipients under § 1983. However, the language of the 13 statute does not unambiguously create such rights in Medicaid

14 providers, given that economy, efficiency, quality, and equal

15 access do not evince an intent to benefit providers. The focus

16 of Section 30(A), and the Medicaid Act generally, is upon

17 Medicaid recipients. Providers are benefitted only incidentally,

18 not directly, and Gonzaga clarifies that simply receiving a

19 benefit is not enough to demonstrate the intentional creation of

20 an enforceable right. The two circuit courts to have considered

21 the enforceability of Section 30(A) most recently both decided

22 that Congress intended to create a right for Medicaid recipients

23 but not providers. Pa. Pharmacists, 283 F.3d at 544; Evergreen

24 Presbyterian Ministries, 235 F.3d at 928-29. The court follows

25 these holdings and the reasoning of these decisions. 26

26

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 27 of 43

1

2. Vague and Ambiguous

2

The second factor in the enforceable rights analysis is

3 whether the right at issue is too vague and ambiguous for

4 judicial enforcement. As previously discussed, Section 30(A) is

5 intended to create a right to both quality care and equal access.

6 Equal access - access equivalent to privately insured persons in

7 the same geographic area - is sufficiently definite for

8 enforcement by courts. See, e.g., Evergreen Presbyterian

9 Ministries, 235 F.3d at 930 (agreeing with "the many other courts

10 that have addressed the equal access provision that it is not too

11 vague and amorphous to be beyond the competence of the judiciary

12 to enforce") .

13

The term "quality of care" is less definite. Unlike the

14 access language, there is no point of reference - for example,

15 equal in quality to that received by the general population in

16 the geographic area. However, the Ninth Circuit has already

17 construed the term "quality of care" as meaning that rates must 18 "bear a reasonable relationship to efficient and economical 19 [providers'] costs." Orthopaedic Hosp., 103 F.3d at 1496. This 20 formulation requires the State to consider providers' costs in 21 setting rates. Given this construction, further discussed below, 22 the right of recipients to quality care is not so vague and 23 ambiguous that its enforcement would strain judicial competence. IS 24

25 IS The court expresses no opinion as to whether a claim to
26 quality services would be judicially manageable where the issue were other than whether rates have been set in consideration of cost of service.

27

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 28 of 43

1

3. Binding Obligation

2

The final factor in the enforceable rights analysis is

3 whether the statutory provision imposes a binding obligation on 4 the states. Gonzaga, 536 U.S. at 282. The provision must. be 5 phrased in "mandatory, rather than precatory, terms. " Id!... 6 (quoting Blessing, 520 U.S. at 340-41.). Although Medicaid is an 7 optional program, once a state elects to participate, the

8 contents of the state plan specified in § 1396a(a) are required, 9 not optional. Section 30(A) uses only mandatory language. It

10 imposes a binding obligation on any state that participates in

11 the Medicaid program.

12

In sum, the quality and access provisions of Section 30(A)

13 meet the Supreme Court's three factor test, as clarified in 14 Gonzaga, for finding a statutory right enforceable through §

15 1983. However, this right extends only to recipients and not to
16 providers.
17 B. Managed Care Provisions
18 There are two Medi-Cal managed care provisions that the
19 plaintiffs claim create rights enforceable under § 1983: 42
20 U.S.C. §§ 1396b(m) (2) (A) (iii) and 1396n(b) (4). Section
21 1396b (m) (2) (A) (iii) requires states to pay "actuarially sound"
22 rates to Medicaid managed care plans. Nothing in this provision
23 benefits, or creates rights for, Medicaid recipients. By
24 contracting with the State, the managed care plan must guarantee
25 to provide services to recipients. (Pierson Decl. ~ 3.) The
26 actuarial soundness provision does not add anything that directly

28

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 29 of 43

1 benefits the recipients, such as requirements of quality care or

2 equal access. Moreover, it is at least unclear that the

3 actuarial soundness provision is intended to create a right for

4 providers to a certain reimbursement rate. It is equally

5 plausible that the section is intended to protect the State plan

6 from overpayment.

7

The plaintiffs argue that the applicable regulation suggests

8 that the term "actuarially sound" is intended to benefit

9 providers. (CMA's Reply at 33.) However, even assuming that it

10 is permissible to base a § 1983 right on a regulation,16 the

11 applicable regulation is itself far from clear:

12

Actuarially sound capitation rates means capitation

13

rates that--

(A) Have been developed in accordance with

14

generally accepted actuarial principles and

practices;

15

(B) Are appropriate for the populations to be

covered, and the services to be furnished

16

under the contract; and

(C) Have been certified, as meeting the

17

requirements of this paragraph (c), by

actuaries who meet the qualification

18

standards established by the American Academy

of Actuaries and follow the practice

19

standards established by the Actuarial

Standards Board. 42 C.F.R. § 438.6 (c) (1) (1)

20

Plaintiffs argue that the requirement that the rates be 21

22

23

16 Whether federal regulations can create rights

enforceable under § 1983 is not at all clear. However, there are

24 good reasons to think that they cannot. See Wright v. City of Roanoke Redev. & Hous. Auth., 479 U.S. 418, 437-38, 107 S.Ct. 766

25 (1987) (O'Connor, J., dissenting) (noting concerns with allowing regulations to create enforceable rights); S. Camden Citizens in

26 Action v. N.J. Dep't of Envtl. Prot., 274 F.3d 771, 790 (3d Cir. 2001) (holding that regulations do not create enforceable rights

when they are too far removed from congressional intent) .

29

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 30 of 43

1 "appropriate for the populations to be covered, and the services

2 to be furnished under the contract" is intended to create a right

3 to a minimum payment level for providers. (CMA's Reply at 33.)

4 But plaintiffs read too much into the word "appropriate." The

5 plain meaning of this regulation is that to be "actuarially

6 sound" a rate must be based on the demographics of the area to be

7 served and the services provided there. Nothing in this concept

8 requires any particular level of reimbursement or consideration

9 of provider costs. In light of Gonzaga, this language is too

10 oblique to create an enforceable right under § 1983 for

11 providers.

12

The second managed care provision at issue, § 1396n(b) (4),

13 states that:

14

The Secretary, to the extent he finds it to be

15

cost-effective and efficient and not inconsistent with the purposes of this subchapter, may waive such

16

requirements of section 1396a of this title .

as

may be necessary for a State- .

(4) to restrict the

17

provider from (or through) whom an individual (eligible for medical assistance under this subchapter) can

18

obtain services (other than in emergency circumstances) to providers or practitioners who undertake to provide

19

such services and who meet, accept, and comply with the reimbursement, quality, and utilization standards under

20

the State plan, which standards shall be consistent with the requirements of section 1396r-4 of this title

21

and are consistent with access, quality, and efficient and economic provision of covered care and services, if

22

such restriction does not discriminate among classes of providers on grounds unrelated to their demonstrated

23

effectiveness and efficiency in providing those services and if providers under such restriction are

24

paid on a timely basis in the same manner as health care practitioners must be paid under section

25

1396a(a) (37) (A) of this title. 42 U.S.C. § 1396n (b) (4) .

26 The convoluted grammar of this section defeats authoritative

30

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 31 of 43

1 interpretation. But unlike Section 30(A), § 1396n(b) (4) does not

2 directly confer a right to equal access to quality care upon

3 Medi-Cal beneficiaries. Rather, the section permits the

4 following sequence:

5

1. The Secretary in his guided discretion ("to the extent

6 he finds it to be cost-effective and efficient and not

7 inconsistent with the purposes" of Medicaid);

8

2. May waive other requirements of § 1396a and grant

9 permission to a state to create managed care programs that

10 restrict beneficiaries to certain managed care providers;
11 3. If the providers agree to comply with the state plan,
12 including the requirements of "access, quality, and efficient and
13 economic provision" of services.
14
The apparent intention of this provision is not to benefit
15 Medi-Cal recipients, who would otherwise have a greater degree of
16 choice of providers under the fee-for-service system, but to
17 benefit the state plan by providing a possibly more cost-
18 effective way to provide medical services.
19 Furthermore, this provision, and managed care in general,
20
inserts the managed care plan as an intermediary between the 21
patient-recipient and the practitioner-providers. In the fee22
for-service context, it is the State itself that is obligated to 23
provide access to quality services to Medi-Cal beneficiaries. In
24
the managed care system, it is the managed care plan that
25
assumes, by its contract with the State, the obligation of 26
providing access and quality services to beneficiaries. The two

31

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 32 of 43

1 examples of plan contracts In the record contain quite detailed

2 provisions relating to the quality of services and the managed

3 care plan's duty to provide access to those services. 17

4 Pierson Decl. Exs. 1 & 2.) If the managed care plan fails to

5 provide required services, then there are internal grievance

6 procedures for plan members, and the State may also take action

7 against the provider for fail ing to adhere to its contract. (Id.

8 Ex . 1, pp. 8 - 34, 8 - 36 . ) Under the contract, whatever the

9 capitation rates paid to the managed care provider, the duties

10 owed by the provider do not vary. For example, the managed care

11 plans are specifically bound by contract to "maintain adequate

12 numbers and types of specialists within the network."

13 7-4.) If a plan causes too many of its specialists to stop

14 seeing Medi-Cal patients, by passing along the full capitation

15 rate reduction to its doctors, then the plan will be in breach of

16 its contract with the State. If a beneficiary plan member is

17 denied needed medical treatment because the plan has failed to

18 enroll specialists, then the beneficiary may initiate an

19 administrative proceeding. If the managed care plan defaults

20 because of the capitation rate, then Medi-Cal beneficiaries will

21 be eligible for regular fee-for-service coverage. In sum, §

22 1396n(b) (4) is directed toward the relationship between the State

23 and the managed care plan, has little direct effect upon the

24

25

17 For example, the Health Net of California plan contract

requires Health Net to maintain a network of primary care

26 physicians, who are located within thirty minutes or ten miles of beneficiaries' residences. (Pierson Decl. Ex. 2, Exhibit A,

Attachment 6.8.)

32

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 33 of 43

1 services made available to beneficiaries, and does not provide a

2 standard by which capitation rates can be evaluated. Under

3 Gonzaga, beneficiaries are too indirectly benefitted, if at all,

4 by § 1396n (b) (4) to assert a right enforceable under § 19B3.

5

Section 13 96n (b) (4) also fails to create any right for the

6 managed care plans themselves. The quality and access language

7 does not benefit the plan. Moreover, the managed care plan's

8 relationship with the State is contractual. If the State has

9 breached its contract by lowering the payment to the plan, then

10 the plan's remedy is a breach of contract action in state court.

11 If the contract allows the State to reduce rates in this manner,

12 then that is a risk assumed by the plan. Section 1396n(b) (4)

13 affords no rights to managed care providers in their dealings

14 with the State.

15

IV. The Scope of Plaintiffs' Rights

16 Having decided that the beneficiary plaintiffs who are not

17 in managed care plans have rights to equal access and quality

18 care enforceable under § 1983, the court must determine the scope
19 of those rights. In doing so, the court is guided by the Ninth

20 Circuit's decision in Orthopaedic Hospital. In Orthopaedic

21 Hospital, plaintiff challenged adjustments to reimbursement rates

22 for several procedures and services. Orthopaedic Hosp., 103 F.3d

23 at 1494. The court held that Section 30(A) requires the State

24 "to consider the costs of providing.

. services" and that

25
reimbursement rates "should bear a reasonable relationship to an

26 efficient and economical [provider's] costs of providing quality

33

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 34 of 43

1 care." Id. at 1500. The court reviewed the State's rate setting

2 under an arbitrary and capricious standard. 18

3

The Orthopaedic Hospital rule is mostly procedural - the

4 state agency must consider the proper factors in developing a

5 reimbursement rate. Because costs were not considered by the

6 State, the court did not reach the further question of whether

7 the resulting rate was appropriate under Section 30(A).

8

The Ninth Circuit's approach has substantial practical

9 benefits. The Medicaid Act is clearly intended to give states

10 discretion and flexibility in setting reimbursement rates, within

11 the limits of federal law. See Evergreen Presbyterian 12 Ministries, 235 F.3d at 361 n.12; Children's Hosp. and Health 13 Ctr. v. Belshe, 188 F.3d 1090, 1103 (9th Cir. 1999). The 14 arbitrary and capricious standard limits the court's review of 15 the State's rate setting and permits the court to defer to the 16

17

18 The arbitrary and capricious standard is normally used 18 to review federal administrative action under the Administrative

19

Procedure Act, but that act does not address review of state actions. Dep't of Transp. & Dev. of La. v. Beaird-Poulan, Inc.,

20

449 U.S. 971, 973, 101 S.Ct. 383 (1980) ("the APA is of course not applicable to state agencies"). However, most courts have

21

used this standard to review state agency rate setting under Medicaid. See Ark. Med. Soc'y, Inc. v. Reynolds, 6 F.3d 519,

22

529-30 (8th Cir. 1993) (reviewing compliance with Section 30 (A) under arbitrary and capricious standard); Concourse Rehab. &

23

Nursing Ctr. Inc. v. Whalen, 249 F.3d 136, 145 (2d Cir. 2001) (reviewing compliance with Boren Amendment under arbitrary and

24 capricious standard) i Lett v. Magnant, 965 F.2d 251, 257 (7th Cir. 1992) (Boren Amendment) i AMISUB (PSL), Inc. v. Colo. Dep't

25 of Soc. Servs., 879 F.2d 789, 799-800 (lOth Cir. 1989) (Boren Amendment) i see Wilder, 496 U.S. at 520 n.18 (noting that "the

26 Courts of Appeals generally agree that .

a federal court

employs a deferential standard of review" in reviewing state

Medicaid rate setting) .

34

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 35 of 43

1 judgment of specialists in a complex regulatory field. Envtl.

2 Def. Ctr., Inc. v. U.S. EPA, 344 F.3d 832, 858 n.36 (9th Cir.

3 2003). Furthermore, it is fair to assume that a rate that is set

4 arbitrarily, without reference to the Section 30(A) requirements,

5 is unlikely to meet the equal access and quality requirements.

6 Thus, a beneficiary plaintiff may insist that the State, at a

7 minimum, consider the effect of a rate reduction on equal access

8 to quality services in light of provider costS. 19 Orthopaedic

9 Hosp., 103 F.3d at 1500.

10

v. Preliminary Injunction Standard

11

The traditional factors for granting a preliminary

12 injunction are: (1 ) a strong likelihood of success on the merits;

13 (2 ) irreparable injury; (3 ) a balance of hardships in the

14 movant's favor; and (4 ) the public interest (in cases affecting

15 it) . See L.A. Mem'l Coliseum Comm'n v. Nat'l Football League,

16 634 F.2d 1197, 1200 (9th Cir. 1980). The moving party can meet 17 its burden by making "a clear showing of either (1) a combination 18 of probable success on the merits and a possibility of 19 irreparable injury, or (2) that its claims raise serious 20

21

19 In general, the Director's approach to Orthopaedic

22

Hospital in this litigation has been puzzling. The defendant has argued extensively in briefs and at argument that Orthopaedic was

23

wrongly decided, even stating at one point that its "holding must be overturned." (Def.'s Supp. Brief at 2.) The defendant has

24 attempted to convince the court that it simply cannot comply with Orthopaedic Hospital's requirement of conducting cost studies,

25 declaring that "Orthopaedic is an example of the impractical and unreasonable requirement of relying upon cost studies as a basis

26 for rate setting." (Opp'n to CMA's Mot. at 27.) If the defendant wishes to argue the impracticality or invalidity of

Orthopaedic Hospital, she must do so before the Ninth Circuit.

35

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 36 of 43

1 questions as to the merits and that the balance of hardships tips

2 in its favor." Conn. Gen. Life Ins. Co. v. New Images of Beverly

3 Hills, 321 F.3d 878, 881 (9th Cir. 2003). "These two

4 formulations represent two points on a sliding scale in which the

5 required degree of irreparable harm increases as the probability

6 of success decreases." Taylor By and Through Taylor v. Honig,

7 910 F.2d 627, 631 (9th Cir. 1990).

8

A. Irreparable Injury

9

An irreparable injury is one that cannot be adequately

10 redressed by a legal or equitable remedy following trial.

11 Campbell Soup Co. v. COnAgra, Inc., 977 F.2d 86, 91 (3d Cir.

12 1992). Plaintiffs come forward with adequate evidence that the 13 rate reduction has a likelihood of reducing the recipient 14 plaintiffs' access to medical services, including services by

15 pharmacists. 20 (See supra note 5.) Medi-Cal recipients who must

16 wait until after trial to receive appropriate services may well 17 sustain irreparable injury, whether in pain suffered or 18 irremediable worsening of a condition. A future permanent 19 injunction after a full trial is not an adequate remedy for 20 someone who has been denied necessary medical care in the 21 interim. 22

23

24

20 Both plaintiffs and defendant make evidentiary objections to each others' submissions. The objections either

25

lack merit or do not affect the court's overall assessment of the record. See also Flynt Distrib. Co. / Inc. v. Harvey, 734 F.2d

26 1389, 1394 (9th Cir. 1984) (holding that court can consider inadmissible evidence in the context of a motion for preliminary

inj unction) .

36

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 37 of 43

1

Defendant argues that there is too much uncertainty

2 surrounding the impact of the 5% rate reduction to support

3 plaintiffs' claim of irreparable injury. (Opp'n to CMA's Mot. at

4 28.) But plaintiffs have produced evidence of serious access

5 problems even under the current rates. (See, e.g., Anaya, Sr.

6 Decl. ~~ 4-6; Anaya, Jr. Decl. ~~ 4-6; Geisse Decl. ~~ 5-6, 11;

7 Low Decl. ~~ 7-8.) Plaintiffs have also produced evidence of

8 providers who will stop taking new Medi-Cal patients or stop

9 serving Medi-Cal patients altogether if the rate reduction is

10 implemented. (See, e.g., Polansky Declo ~~ 4-6; Germano Declo ~~

11 3-6; Geisse Decl. ~ 11.) Given plaintiffs' high likelihood of

12 success on the merits, discussed below, this evidence of

13 irreparable injury is sufficient to support a preliminary

14 injunction.

15

B. Likelihood of Success on the Merits

16

Section 30(A) requires the State to consider quality and

17 access when setting Medi-Cal reimbursement rates. In order to

18 properly consider quality and access, the State must consider

19 what it costs providers to perform the various services and

20 procedures. Orthopaedic Hosp., 103 F.3d at 1500.
21 The State's purpose in enacting the rate reduction was to
22
reduce the budget deficit. The statute declares on its face that 23
the rate reduction is "[d]ue to the significant state budget 24
deficit projected for the 2003-04 fiscal year." Cal. Welf. & 25
Inst. Code § 14105.19(a). While the State certainly is entitled 26
to conserve funds, the defendant has produced no evidence that

37

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 38 of 43

1 the State legislature based the rate reduction on evidence that

2 the reduction could be sustained by providers, in light of their

3 costs, without a loss of quality or equal access for Medi-Cal

4 recipients. Indeed, what little evidence there was before the

5 State legislature suggested that a rate reduction might be

6 inconsistent with quality and access. For example, the

7 Legislative Analyst's report on the original proposed 15% rate

8 reduction states that California's reimbursement rates, when

9 adjusted for cost-of-living, are among the ten lowest in the

10 country. (Campbell Decl. Ex. D, p. 16.) The report warns that a

11 rate reduction could negatively affect access to services. (Id. ,

12 pp. 14-16.) Finally, the report declares that California has "no

13 rational basis for [its] rate system" which can lead to

14 "overpayments for some medical procedures and underpayments for

15 others. "21 (Id., p. 16.)

16

The defendant argues that the State legislature's initial

17 rejection of the 15% rate cut shows that it did consider the

18 relevant factors in enacting the lower cut. (Opp'n to CMA's Mot.

19 at 22-24.) The defendant cites an Assembly subcommittee agenda

20 that directed certain inquiries to the Department of Health

21

22

21 In 2001, the Legislative Analyst produced a report entitled A More Rational Approach to Setting Medi-Cal Physician

23

Rates. Elizabeth Hill, A More Rational Approach to Setting MediCal Physician Rates, available at

24

http://www.lao.ca.gov/2001/020101_medi-cal rates.pdf. The report is critical of the Department of Health Services for not

25

conducting regular, periodic rate reviews to ensure the consistency of rates with access to quality medical care.

It

26

also argues that the rate adjustments the Department has made over the years have not been based upon any assessment of

recipients' access. Id. at 1-4.

38

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 39 of 43

1 Services. (Campbell Decl., Ex. C.) The agenda does show that

2 the Assembly was concerned about "the impact of such a

3 significant rate reduction on the availability of providers."

4 (Id., p. 5.) However, there is no evidence of any response from

5 the Department to the committee's inquiries that could now

6 support a 5% cut.

7

In CIV-S-03-2110, which is focused solely on pharmacy

8 services, the defendant argues that the State has met the

9 Orthopaedic Hospital standard because the rates it pays are based

10 on a pharmacy's acquisition costs. (Def.'s Suppl. Brief After

11 Hearing at 5-6.) The evidence does show that reimbursement rates 12 for prescription drugs are based upon a formula that includes the

13 acquisition costs of drugs. (Hillbloom Decl. ~~ 5-8.) However,

14 there is no evidence that the State legislature had any evidence

15 about the consistency of the rate cut with access to quality

16 pharmacy services. 22

17

under the standard of Orthopaedic Hospital, the plaintiffs

18 demonstrate a high likelihood of success on the merits. There is

19 no evidence that the State considered the relevant factors when

20 it enacted the rate reduction. Budget constraints are not alone

21 a valid justification for rate setting. See Ark. Med. So~

22 Inc., 6 F.3d at 531 ("Abundant persuasive precedent supports the

23

24

22 The defendant has produced some evidence to show that

pharmacies' costs will continue to be met after the 5% rate

25 reduction. (Def.'s Suppl. Brief at 6-7.) If so, the record suggest that this outcome is by luck, not design. Nonetheless,

26 there is no evidence that the State considered the possible effect on beneficiaries' access to pharmacist services.

39

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 40 of 43

1 proposition that budgetary considerations cannot be the

2 conclusive factor in decisions regarding Medicaid. H ); Orthopaedic

3 Hosp., 103 F.3d at 1499 n.3; AMISUB, 879 F.2d at 800-01.

4

C. Public Interest and the Balance of Hardships

5

In deciding to grant an injunction, a court must conEdder

6 the balance of hardships and, in a case such as this, the public

7 interest. The defendant argues that the court should refrain

8 from issuing a preliminary injunction because of the State's

9 "unprecedented budget deficit." (Opp'n to CMA's Mot. at 43.)

10 The defendant maintains that the State was faced with very

11 difficult choices and made the best decision that it could.

12 (Id.) For example, the defendant points out that instead of 13 reducing rates across the board, "the state could have chosen to 14 eliminate certain optional benefits such as prescription drugs

15 for adults," but that this would be a harsh result (rd.)
16 The court is mindful of the difficult position facing
17 California. However, the terms of the State's participation in
18 Medicaid do not permit it to continue to receive federal monies
19 while violating the requirements of the statute, even for a good
20 purpose, such as maintaining optional benefits. As long as the
21 State wishes to be a part of the Medicaid program, it must meet
22 the requirements of the Medicaid Act.
23 The court also notes that this injunction does not leave the
24 State without options for reducing its Medicaid expenditures.
25 First, after proper study and consideration of the relevant
26 factors, the defendant may be able to show that a reduced

40

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 41 of 43

1 reimbursement rate in some medical services is not arbitrary but

2 in fact is consistent with quality care and equal access.

3 Second, there are other ways the State can save money within the

4 Medi-Cal program. The Legislative Analyst has recommended

5 several alternatives to an across-the-board rate reduction

6 including expanding the medical case management program,

7 increasing copayments for non-essential services, increasing

8 competition for the State's managed care contracts, and expanding

9 managed care enrollment among the elderly and disabled.

10 (Campbell Declo Ex. D, pp. 18, 20, 24, 25.) The State also

11 chooses to provide Medi-Cal recipients with a number of services

12 not required by federal law. An earlier proposal called for

13 eliminating 18 of the 34 offered optional benefits, which would

14 have saved the State approximately $360 million. (Id. Ex. C, p.

15 6.) While all of these "optional" services are obviously

16 important to the recipients, the State does have the authority to

17 drop optional services to reduce costs. What the State cannot do

18 under the statutory terms of its participation in Medicaid is to

19 elect to provide a service but then fail to fund it such that

20 Medi-Cal recipients receive less than equal access to quality

21 care for that service.

22

Given that the State has other options available to it and

23 that plaintiffs are likely to succeed on the merits of their

24 claim, the court finds that the public interest does not weigh

25 against issuance of a preliminary injunction. 26

41

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 42 of 43

1

VI. Conclusion

2

Because the State failed to consider the effect of a rate

3 reduction on beneficiaries' equal access to quality medical

4 services, ln view of provider costs, the pending rate reduction

5 is arbitrary and cannot stand. Defendant Bonta is enjoined from

6 implementing the 5% reimbursement rate reduction required by

7 Welfare and Institutions Code § 14105.19 pending further

8 proceedings in this court. This injunction does not apply to §

9 14105.19 (b) (3), which reduces capitation rates paid to managed

10 care plans by the actuarial equivalent of 5%. The injunction

11 also does not apply to § 14105.19 (b) (2), which reduces payments

12 made in certain non-Medi-Cal programs.

13

The Department of Health Services is dismissed from CIV-S-

14 03-2110 on the basis of 11th Amendment immunity.
15 IT IS SO ORDERED.
16 Dated:
17

18

19

DAVID F. LEVI

20

United States District Judge

21

22 23

24

25

26

42

Case 2:03-cv-02110-DFL-EFB Document 46 Filed 12/23/03 Page 43 of 4l3jr United States District Court for the
Eastern District of California December 23, 2003

* * CERTIFICATE OF SERVICE * *

Clayworth v.
Bonta

2:03-cv-02110 2:03-cv-02336

I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District Court, Eastern District of California.
That on December 23, 2003, I SERVED a true and correct copy(ies) of the attached, by placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said envelope in the U.S. Mail, by placing said copy(ies) into an inter-office delivery receptacle located in the Clerk's office, or, pursuant to prior authorization by counsel, via facsimile.

Lynn S Carman Law Offices of Lynn S Carman 1035 Cresta Way Suite 3 San Rafael, CA 94903

HV/DFL

Irene K Tamura Attorney General's Office for the State of California PO Box 944255 Sacramento, CA 94244-2550

Craig J Cannizzo
Hooper Lundy and Bookman Incorporated 180 Montgomery Street Suite 1000 San Francisco, CA 94104

Jac~ L.

BY:

 
 Case 2:03-cv-02110-DFL-EFB Document 70 Filed 02/10/04 Page 1 of 5
F""' ILE"r..-
1

2

IN THE UNITED STATES DISTRICT COURTClERK, us" DISTRICT CO

3

eASTERN DISTRICTOF CALIF

FOR THE EASTERN DISTRICT OF CALIFOR~~~--~~~~__~___
f)FPII~\ ::lE'" 4

5
JAMES CLAYWORTH, R.Ph., doing 6 business under the fictitious
name and style of Clayworth 7 Healthcare Pharmacy; WAYNE
ROBERTS; and MADELEINE MADDEN,
8

9

Plaintiffs,

10

v.

CIV-S-03-2110 DFL/PAN CIV-S-03-2336 DFL/PAN
MEMORANDUM OF OPINION AND ORDER

11 DIANA M. BONTA, Director of the Department of Health Services,
12 State of California; and DEPARTMENT OF HEALTH SERVICES, a
13 department of the State of California,
14

15

Defendants.

16
CALIFORNIA MEDICAL ASSOCIATION, 17 et al.,

18

Plaintiffs,

19 v.
20 DIANA M. BONTA, Director of the
21 Department of Health Services, State of California,
22

23

Defendant.

24

25

Defendant Diana Bonta ("defendant" or "Bonta") moves for

26 reconsideration of the court's December 23, 2003 order issuing a

1

Case 2:03-cv-02110-DFL-EFB Document 70 Filed 02/10/04 Page 2 of 5

1 preliminary injunction preventing the California Department of

2 Health Services ("DHS") from implementing the five-percent cut in

3 the reimbursement rate paid to Medi-Cal providers.

4 "Reconsideration is appropriate if the district court (1) is

5 presented with newly discovered evidence, (2) committed clear

6 error or the initial decision was manifestly unjust, or (3) if

7 there is an intervening change in controlling law. There may be

8 other, highly unusual, circumstances warranting reconsideration."

9 Sch. Dist. No. IJ, Multnomah County, Or. v. A,C, & S, Inc., 5

10 F.3d 1255, 1263 (9th Cir. 1993). Defendant presents two grounds

11 for reconsideration, and neither one meets the requirements of 12 this test.

13

First, defendant points to Sanchez v. Johnson, No. C 00-

14 01593 CW (N.D.Cal. Jan. 5, 2004), a district court order issued

15 after this court's December 23, 2003 order. In that order, the

16 district judge reconsidered her earlier ruling and held that 42

17 U.S.C. § 1396a(a) (30) (A) ("section 30 (A)") does not create a

18 right to quality of care and equal access enforceable by Medi-Cal

19 beneficiaries under 42 U.S.C. § 1983. The Sanchez order does not

20 persuade the court to reconsider its earlier ruling for several

21 reasons. First, as a ruling of another district court, the

22 Sanchez order does not constitute an intervening change in

23 controlling law. Second, the district judge reconsidered her

24 earlier ruling in light of Gonzaga University v. Doe, 536 U.S.

25 273, 122 S.Ct. 2268 (2002), which was issued after her initial

26 ruling. By contrast, this court fully considered Gonzaga in its

2

Case 2:03-cv-02110-DFL-EFB Document 70 Filed 02/10/04 Page 3 of 5

1 December 23, 2003 order and concluded that Gonzaga does not

2 foreclose an enforceable right to equal access and quality care

3 for Medi-Cal beneficiaries under § 1983. Finally, the Sanchez

4 order does not consider 42 U.S.C. §§ 1320a-2 & 1320a-l0, which

5 indicate that provisions of the Medicaid Act, including section

6 30(A), should not be construed as foreclosing an enforceable

7 right under § 1983 for Medicaid beneficiaries just because the

8 benefits conferred on those beneficiaries are phrased in terms of

9 requirements that a state's Medicaid plan must meet. For these 10 reasons, the Sanchez order does not cause the court to reconsider

11 its order granting a preliminary injunction.

12

Second, defendant submits a study produced in January 2004

13 ("2004 DHS study"), which purports to show that the proposed

14 five-percent cut would result in reimbursement rates to

15 pharmacists that bear a reasonable relationship to the cost of

16 acquiring and dispensing drugs in a quality manner, in accordance

17 with the standard established by the Ninth Circuit in Orthopaedic

18 Hospital v. Belshe, 103 F.3d 1491, 1500 (9th Cir. 1997). This

19 study is not newly discovered evidence that might provide grounds

20 for reconsidering the court's previous order. The 2004 DHS study

21 relies on figures for pharmacists' costs from the 2002 Myers &

22 Stauffer study previously provided to the court. It adjusts

23 these cost figures for inflation to 2004 levels and compares them

24 to the proposed reduced Medi-Cal reimbursement rates. There is

25 no reason that defendant could not have conducted this study

26 before the court issued the preliminary injunction. It is thus

3

Case 2:03-cv-02110-DFL-EFB Document 70 Filed 02/10/04 Page 4 of 5

1 not an appropriate basis on which to reconsider the December 23,

2 2003 order. The 2004 DHS study may well be appropriate to

3 consider at a later stage in deciding whether to vacate the

4 preliminary injunction or to make it permanent. Before that

5 time, however, the parties are entitled to conduct discovery and

6 develop the record in this case. Neither party may short-circuit

7 or circumvent the normal rules of procedure by developing or

8 finding something favorable to its case and then immediately

9 insisting that the court either vacate its earlier order or make

10 it permanent before the other side has an opportunity to take

11 depositions and undertake its own expert studies.

12

For the foregoing reasons, defendant's motion for

13 reconsideration is DENIED. The parties are ordered to submit a

14 joint status order within ten (10) days of this order. The court

15 is open to an expedited schedule in view of the public importance

16 of the issues presented.

17

18 IT IS SO ORDERED.
19

20 Dated:
21

22

DAVID F. LEVI

23

United States District Judge

24

25

26

4

Case 2:03-cv-02110-DFL-EFB Document 70 Filed 02/10/04
United States District Court for the
Eastern District of California February 11, 2004

Page 5 of l5jr

* * CERTIFICATE OF SERVICE * *

Clayworth v.
Bonta

2:03-cv-02110 2:03-cv-02336

I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District Court, Eastern District of California.
That on February 11, 2004, I SERVED a true and correct copy(ies) of the attached, by placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said envelope in the U.S. Mail, by placing said copy(ies) into an inter-office delivery receptacle located in the Clerk's office, or, pursuant to prior authorization by counsel, via facsimile.

Lynn S Carman Law Offices of Lynn S Carman 1035 Cresta Way Suite 3 San Rafael, CA 94903

HV/DFL

Irene K Tamura Attorney General's Office for the State of California PO Box 944255 Sacramento, CA 94244-2550

Craig J Cannizzo
Hooper Lundy and Bookman Incorporated 180 Montgomery Street Suite 1000 San Francisco, CA 94104

 
 Case 2:03-cv-02110-DFL-EFB Document 114 Filed 11/30/06 Page 1 of 2

1 LYNN S. CARMAN SB No. 028860
2 28 Newport Landing Dr. Novato, CA 94949
3 Telephone: (714) 554-0632 4 Facsimile: (714) 554-0682
5 Attorney for Plaintiffs

6

7

8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10 11 JAMES CLAYWORTH, et aI.,

No. CIV.S-03-02110 DFL-EFB

12 13 -vs.-

Plaintiffs,

STIPULATION FOR DISMISSAL

14 DIANA M. BONTA, Director of the 15 Department of Health Services, State
of California; and DEPARTMENT 16 OF HEALTH SERVICES, State of
California, 17

18

Defendants.

19 ---------------------------/

20

IT IS HEREBY AGREED AND STIPULATED by each of the Plaintiffs JAMES

21 CLAYWORTH, et aI., and each of the Defendants DIANA M. BONTA, Director of the
22 Department of Health Services, State of California, and DEPARTMENT OF HEALTH
23 24 SERVICES, State of California, by and through their attorneys of record Lynn S. Carman for

25 Plaintiffs and Julie Weng-Gutierrez, Deputy Attorney General for Defendants, respectively,
26 that this action be dismissed in its entirety as to all parties and all causes of action, pursuant to 27
Rule 41(a)(1) (ii) of the Federal Rules of Civil Procedure. Each party will bear their own costs 28

JOINT STIPULATION FOR DISMISSAL [PROPOSED- ORDER

Case 2:03-cv-02110-DFL-EFB Document 114 Filed 11/30/06 Page 2 of 2

1 and attorneys fees.
2 DATED: November
3

,2006

4

1:&t' 5
6 DATED: ---U..J~'------' 2006

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26 27

28

lsi Lynn Carman LYNN S. CARMAN
Attorney for Plaintiffs
Attorneys for Defendants

 
 Case 2:03-cv-02336-DFL-EFB Document 6 Filed 11/19/03 Page 1 of 3

1

FILED

2

3

I .~ ·~: 1 9 2003

4

EAii~~K~.S. DISTRICT COURT

1'3Y

STRICT OF CAUFORNI!

5

""PUtv -:•.e~o:

6
IN THE UNITED STATES DISTRICT COURT
7
FOR THE EASTERN DISTRICT OF CALIFORNIA 8

9

10 CALIFORNIA MEDICAL ASSOCIATION, et al.,
11
Plaintiffs 12
v. 13
DIANA M. BONTA, Director of 14 the Department of Health
Services, State of California, 15
16 __________D_e_f_e_n_d_a_n_t.__________/

CIV. NO. S-03-2336 DFL PAN RELATED CASE ORDER

17 MEL-PHAM INC., et al.,

18
Plaintiffs, 19

20

v.

21 DIANA M. BONTA, Director of

the Department of Health

22 Services, State of California,

et al.,

23

Defendants.

24

I

CIV. NO. S-03-2371 WBS JFM

25

Examination of the above-entitled actions reveals that

26 these actions are related within the meaning of Local Rule

I

Case 2:03-cv-02336-DFL-EFB Document 6 Filed 11/19/03 Page 2 of 3

1 83-123 (E.D. Cal. 1997). Accordingly, the assignment of the

2 matters to the same judge and magistrate judge is likely to

3 effect a substantial savings of judicial effort and is also

4 likely to be convenient for the parties.

5

The parties should be aware that relating the cases under

6 Local Rule 83-123 merely has the result that these actions are

7 assigned to the same judge and magistrate judge; no consolidation

8 of the actions is effected. Under the regular practice of this

9 court, related cases are generally assigned to the judge and

10 magistrate judge to whom the first filed action was assigned.

11

IT IS THEREFORE ORDERED that the action denominated CIV. NO.

12 S-03-2371 WBS JFM be reassigned to Judge David F. Levi and

13 Magistrate Judge Peter A. Nowinski for all further proceedings,

14 and any dates currently set in this reassigned case only are

15 hereby VACATED. The parties are referred to the attached Order

16 Requiring Joint Status Report. Henceforth, the caption on

17 documents filed in the reassigned case shall be shown as CIV. NO.

18 S-03-2371 DFL PAN.

19

IT IS FURTHER ORDERED that the Clerk of the Court make

20 appropriate adjustment in the assignment of civil cases to

21 compensate for this reassignment.

22

IT IS SO ORDERED.

(I/ 23 DATED:

f ~( '2oo3

24

25

DAVID F. LEVI

United States District Judge

26

2

Case 2:03-cv-02336-DFL-EFB Document 6 Filed 11/19/03 Page 3 of 3bd United States District Court for the
Eastern District of California November 19, 2003
* * CERTIFICATE OF SERVICE * *
2:03-cv-02336
CA Medical Assoc v.
Bonta

I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District Court, Eastern District of California.
That on November 19, 2003, I SERVED a true and correct copy(ies) of the attached, by placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said envelope in the U.S. Mail, by placing said copy(ies) into an inter-office delivery receptacle located in the Clerk,s office, or, pursuant to prior authorization by counsel, via facsimile.

Craig J Cannizzo Hooper Lundy and Bookman Incorporated 180 Montgomery Street Suite 1000 San Francisco, CA 94104

HV/DFL SH/WBS TM/PAN CF/JFM

Jack L.

, Clerk

BY:

 
 Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 1 of 8
U.S. District Court Eastern District of California − Live System (Sacramento)
CIVIL DOCKET FOR CASE #: 2:03−cv−02110−DFL−EFB

CLOSED

Clayworth, et al v. Bonta, et al Assigned to: Judge David F. Levi Referred to: Magistrate Judge Edmund F. Brennan Demand: $0 Cause: 42:1396 − Tort Negligence
Plaintiff

Date Filed: 10/06/2003 Date Terminated: 12/01/2006 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question

James Clayworth R.Ph Doing business as Clayworth Healthcare Pharmacy

represented by Lynn S Carman Law Offices of Lynn S Carman 28 Newport Landing Drive Novato, CA 94949 (415) 927−4023 Fax: (415) 499−1687 Email: a7827@comcast.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Wayne Roberts

represented by Lynn S Carman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Madeleine Madden

represented by Lynn S Carman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

V.
Defendant
Diana M Bonta Director of the Dept of Health Services, State of CA

represented by Irene K Tamura Attorney General's Office for the State of California PO Box 944255 1300 I Street Suite 125 Sacramento, CA 94244−2550 916−445−9555 Email: Irene.Tamura@doj.ca.gov TERMINATED: 09/10/2004 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Julie Weng−Gutierrez CA Office of the Attorney General 1300 I Street, Suite 125 P.O. Box 944255 Sacramento, CA 94244−2550 (916) 445−8223 Fax: (916) 324−5567 Email: julie.wenggutierrez@doj.ca.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 2 of 8

Defendant
Dept of Health Svcs a department of the State of California TERMINATED: 12/23/2003

represented by Irene K Tamura (See above for address) TERMINATED: 12/23/2003 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 03/19/2003 10/06/2003 10/06/2003 10/06/2003 10/15/2003
10/15/2003 10/15/2003 10/15/2003 10/15/2003 10/15/2003 10/16/2003
10/30/2003
10/30/2003 10/30/2003

# Docket Text
79 TRANSCRIPT of 12/3/03 hearing on motion for permanent injunction by C/R Dennis F McKinnon (ljr) (Entered: 03/22/2004)
1 COMPLAINT for injunctive or mandamus relief, fee status paid, receipt # 205 5602, assigned to Chief Judge David F. Levi, referred to Magistrate Judge Peter A. Nowinski (mdk) (Entered: 10/07/2003)
2 ORDER REQUIRING JOINT STATUS REPORT by Chief Judge David F. Levi and informing the parties on the procedure to follow in pursuing this action (mdk) (Entered: 10/07/2003)
3 ORDER RE DISCOVERY by Magistrate Judge Peter A. Nowinski informing the parties on the procedure to follow in pursuing this action (mdk) (Entered: 10/07/2003)
4 NOTICE OF MOTIONS for permanent injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden , or alternatively for preliminary injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden ; motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set For 11/12/03 at 9:00 (ljr) (Entered: 10/16/2003)
5 REQUEST for Judicial notice by pltfs James Clayworth, Wayne Roberts, Madeleine Madden in support of motions for injunctive or mandamus relief (ljr) (Entered: 10/16/2003)
6 DECLARATION by pltfs of James Clayworth R.Ph in support of motions for permanent injunction, preliminary injunction or writ of mandamus [4−1] (ljr) (Entered: 10/16/2003)
7 DECLARATION of by pltfs of Madeleine Madden in support of motions for permanent injunction, preliminary injunction or writ of mandamus [4−1] (ljr) (Entered: 10/16/2003)
8 DECLARATION of by pltfs of Wayne Roberts in support of motions for permanent injunction, preliminary injunction or writ of mandamus [4−1] (ljr) (Entered: 10/16/2003)
9 PROOF OF SERVICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden of [8−1], [7−1], [6−1], [5−1], [4−1], [4−2], [1−1] (ljr) (Entered: 10/16/2003)
10 COURT NOTICE: from CRD motion for permanent injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−1]; re motion for preliminary injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−2] HEARING RESET FOR 10:00 11/12/03 (cc: all counsel) (ljr) (Entered: 10/17/2003)
11 EX PARTE APPLICATION by dfts for order extending time in which to respond to plts' motions for permanent injunction, or alternatively, a preliminary injunction or writ of mandamus; order extending time in which to respond to complaint and order continuing hearing on plts' motions (ndd) (Entered: 10/31/2003)
12 DECLARATION of Irene K Tamura in support of dfts' Ex Parte Application [11−1] (ndd) (Entered: 10/31/2003)
LODGED Order Granting Ex Parte Application by defendants (ndd) (Entered: 10/31/2003)

Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 3 of 8

10/31/2003
11/03/2003 11/03/2003
11/03/2003
11/05/2003 11/07/2003 11/14/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/26/2003
11/26/2003 12/01/2003 12/01/2003 12/01/2003 12/01/2003

13 COURT NOTICE: from CRD motion for permanent injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden re motion for preliminary injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−2] HEARING RESET FOR 10:00 12/3/03 (cc: all counsel) (ljr) (Entered: 11/03/2003)
LODGED Document: proposed order granting ex parte application by dfts CA Health Services and Diana M Bonta lodged on 10/30/03 (NOT TO BE SIGNED PER JUDGE) (ljr) (Entered: 11/04/2003)
14 NOTICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden of hearing motion for permanent injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−1]; motion for preliminary injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−2] HEARING RESET FOR 3:00 12/3/03 (ljr) (Entered: 11/04/2003)
15 COURT NOTICE: from CRD hearing motion for permanent injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−1]; motion for preliminary injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−2] HEARING RESET FOR 3:00 12/3/03 (cc: all counsel) [14−1] (cc: all counsel) (ljr) (Entered: 11/04/2003)
16 ANSWER by defendant Diana M Bonta, defendant Dept of Health Svcs to complaint [1−1] (ljr) (Entered: 11/05/2003)
17 NOTICE of related case 03−CV−2336 DFL PAN (mdk) (Entered: 11/10/2003)
18 NOTICE by pltfs of related case(s) CIV.S−03−2336 DFL PAN and CIV.S−03−2371 WBS JFM (nac) (Entered: 11/17/2003)
19 NOTICE OF MOTION AND MOTION for judgment on the pleadings by defendants motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set For 10:00 12/17/03 (mdk) (Entered: 11/20/2003)
20 MEMORANDUM OF POINTS AND AUTHORITIES by defendants in SUPPORT of motion for judgment on the pleadings [19−1] (mdk) (Entered: 11/20/2003)
21 OPPOSITION by defendants to motion for permanent injunction by pltfs [4−1], to motion for preliminary injunction by pltfs [4−2] (mdk) (Entered: 11/20/2003)
22 DECLARATION of Kathleen Menda in support of defendants' opposition to motion for a permanent injunction/preliminary injunction [21−1] (mdk) (Entered: 11/20/2003)
23 DECLARATION of Irvin B White in support of defendants' opposition to motion for permanent injunction/preliminary injunction [21−1] (mdk) (Entered: 11/20/2003)
24 REQUEST for Judicial notice by defendants in support of opposition to motion for a permanent injunction/preliminary injunction (mdk) (Entered: 11/20/2003)
25 ORDER by Chief Judge David F. Levi ORDERING declarations containing facts re motion for preliminary injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden filing ddl 5:00 pm 12/1/03 [4−1] (cc: all counsel) (ljr) (Entered: 12/01/2003)
26 PROOF OF SERVICE by defendant Diana M Bonta, defendant Dept of Health Svcs of [19−1], [20−1], [22−1], [21−1], [23−1], [24−1] (ljr) (Entered: 12/01/2003)
27 REPLY to opposition to motion for permanent injunction by pltfs [4−1], motion for preliminary injunction by pltfs [4−2] (mdk) (Entered: 12/02/2003)
28 REQUEST for Judicial notice by plaintiffs (mdk) (Entered: 12/02/2003)
29 DECLARATION of Lee R Stranberrg, R.Ph., Ph.D, in support of pltfs' motions for injunctive and mandamus relief [4−1], [4−2] (mdk) Modified on 12/02/2003 (Entered: 12/02/2003)
30 SUPPLEMENTARY DECLARATION of James Clayworth, R.Ph, in support of pltfs' motions for injunctive or mandamus relief [4−1], [4−2] (mdk) (Entered:

Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 4 of 8

12/01/2003 12/01/2003 12/03/2003 12/03/2003 12/03/2003
12/04/2003 12/08/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/11/2003 12/12/2003 12/12/2003 12/17/2003 12/23/2003

12/02/2003)
31 NOTICE by plaintiffs of opinion of Richard D Wilson, CPA in support of pltfs' motions for injunctive or mandamus relief [4−1], [4−2] (mdk) (Entered: 12/02/2003)
32 NOTICE by plaintiffs of opinion of Paul W Lofholm, PharmD, FACA in support of pltfs' motions for injunctive or mandamus relief [4−1] [4−2], w/survey of the CA Korean Pharmacists' Associations as Exhibit A (mdk) (Entered: 12/02/2003)
33 AMENDED PROOF OF SERVICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden of [32−1] (ljr) Modified on 12/03/2003 (Entered: 12/03/2003)
34 OPPOSITION by plaintiff James Clayworth, plaintiff Wayne Roberts, plaintiff Madeleine Madden to motion for judgment on the pleadings by defendants [19−1] (ljr) (Entered: 12/03/2003)
35 MINUTES before Chief Judge David F. Levi motion for permanent injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−1] SUBMITTED after furhter briefing; motion for preliminary injunction by pltfs James Clayworth, Wayne Roberts, Madeleine Madden [4−2] SUBMITTED after further briefing; briefs to be filed by 12/10/03; C/R D McKinnon (ljr) (Entered: 12/04/2003)
36 DECLARATION of Douglas B Hillblom in opposition to motion for preliminary injunction [4−2] (ljr) (Entered: 12/05/2003)
37 TRANSCRIPT of 12/3/03 hearing on motion for permanent injunction by C/R Dennis F McKinnon (ljr) (Entered: 12/09/2003)
38 CORRECTED OPPOSITION by pltfs James Clayworth, Wayne Roberts, Madeleine Madden to motion for judgment on the pleadings by defendants [19−1] (ljr) (Entered: 12/11/2003)
39 CLOSING BRIEF by pltfs James Clayworth, Wayne Roberts, Madeleine Madden (ljr) (Entered: 12/11/2003)
40 REPLY to pltfs' opposition to motion for judgment on the pleadings by defendants [19−1] (ljr) (Entered: 12/11/2003)
41 SUPPLEMENTAL BRIEF by dfts Diana M Bonta, Dept of Health Svcs after hrg on pltfs' motion for injunctive relief [4−1] (ljr) (Entered: 12/11/2003)
42 APPENDIX by defendant Diana M Bonta, defendant Dept of Health Svcs of authorities cited in dfts' reply to opposition to motion for judgment on the pleadings [40−1] (ljr) (Entered: 12/12/2003)
43 CORRECTED APPENDIX of authorities by defendants cited in dfts' reply to opposition to motion for judgment of the pleadings [40−1] (mdk) (Entered: 12/15/2003)
44 OBJECTION by plaintiffs to statement in the declaration of Douglas B Hillbloom [36−1] (mdk) (Entered: 12/15/2003)
45 MINUTES before Chief Judge David F. Levi: motion for judgment on the pleadings by defendants [19−1] SUBMITTED; order to be prepared by the Court; C/R D McKinnon (mdk) (Entered: 12/18/2003)
46 MEMORANDUM OPINION AND ORDER by Chief Judge David F. Levi because the State failed to consider the effect of the rate reduction on beneficiaries' equal access to quality medical services, in view of provider costs, the pending rate reduction is arbitrary and connot stand; dft Bonta is enjoined from implementing the 5% reimbursement rate reduction required by Welfare and Institutions Code Sec 14105.19 pending further proceedings in this court; this injunction does not apply to Sec 14105.19(b)(3), which reduces capitation rate paid to managed care plans by the actuarial equivalent of 5%; the injunction also does not apply to Sec 14105.19(b)(2), which reduces payments made in certain non−Medi−Cal programs; the Department of Health Services is DISMISSED from CIV S 03−2110 on the basis of 11th Amendment immunity [4−1] in CIV S 03−2110 DFL PAN; [9−1] in CIV S 03−cv−2336 DFL PAN; party Dept of Health Svcs DISMISSED in

Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 5 of 8

01/08/2004
01/08/2004 01/08/2004 01/14/2004
01/14/2004 01/14/2004
01/22/2004
01/28/2004 01/28/2004
01/28/2004 01/28/2004
02/02/2004 02/02/2004 02/03/2004 02/04/2004 02/04/2004 02/04/2004 02/04/2004 02/05/2004 02/06/2004

CIV S 03−2110 DFL PAN (cc: all counsel) (ljr) (Entered: 12/23/2003)
47 NOTICE OF MOTION AND MOTION for reconsideration by defendant , memorandum of points and authorities; motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set for 10:00 2/11/04 (mdk) (Entered: 01/09/2004)
48 DECLARATION of Stan Rosenstein in support of dft's motion for reconsideration [47−1] (mdk) Modified on 01/09/2004 (Entered: 01/09/2004)
49 REQUEST for Judicial notice by defendant in support of dft's motion for reconsideration (mdk) (Entered: 01/09/2004)
50 NOTICE OF MOTION for summary judgment by pltfs James Clayworth, Madeleine Madden , or in the alternative for final permanent injunction or writ of mandamus by pltfs James Clayworth, Madeleine Madden ; motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set For 2/11/04 at 10:00 (ljr) (Entered: 01/15/2004)
51 SUPPLEMENTARY DECLARATION of Madeleine Madden [50−1], [50−2], [7−1] (ljr) (Entered: 01/15/2004)
52 LETTER to court from counsel for pltfs James Clayworth, Madeleine Madden regarding pltfs were unable to serve the 2nd suppl declaration of James Clayworth R Ph upon dfts [51−1] (ljr) (Entered: 01/15/2004)
53 WITHDRAWAL by pltfs James Clayworth, Wayne Roberts, Madeleine Madden of motion for summary judgment by pltfs James Clayworth, Madeleine Madden [50−1] TERMINATED, motion for final permanent injunction or writ of mandamus by pltfs James Clayworth, Madeleine Madden [50−2] TERMINATED (ljr) (Entered: 01/23/2004)
54 OPPOSITION by plfts James Clayworth, Wayne Roberts, Madeleine Madden to motion for reconsideration by defendant [47−1] (ljr) (Entered: 01/29/2004)
55 SECOND SUPPLEMENTARY OPINION part I by pltfs James Clayworth, Madeleine Madden, Dept of Health Svcs of Paul W Lofholm PharmD, FACA (ljr) (Entered: 01/29/2004)
56 OPINION part II by pltfs James Clayworth, Madeleine Madden, Dept of Health Svcs of Paul W Lofholm PharmD, FACA (ljr) (Entered: 01/29/2004)
57 SECOND SUPPLEMENTARY OPINION by pltfs James Clayworth, Madeleine Madden, Dept of Health Svcs of Lee R Strandberg R.Ph.,Ph.D (ljr) (Entered: 01/29/2004)
58 JOINT STATUS REPORT (mdk) (Entered: 02/03/2004)
59 REQUEST for Judicial notice by plaintiffs' (mdk) (Entered: 02/03/2004)
60 CORRECTION OF ERRATA by plaintiffs to opposition to dft's motion to reconsider order of 12/23/03 [54−1] (mdk) (Entered: 02/04/2004)
61 REPLY to opposition to motion for reconsideration by defendant [47−1] (mdk) (Entered: 02/05/2004)
62 DECLARATION of T Allan Hansen in support of dft's reply to opposition to motion for reconsideration [61−1] (mdk) (Entered: 02/05/2004)
63 REQUEST for Judicial notice by defendant in support of dft's reply to opposition to motion for reconsideration (mdk) (Entered: 02/05/2004)
64 REPLY by defendant to CMA pltf's objections to declaration of Stan Rosenstein (mdk) (Entered: 02/05/2004)
65 CORRECTED REPLY to oppositon to motion for reconsideration by defendant [47−1] (mdk) (Entered: 02/06/2004)
66 EX PARTE APPLICATION by plaintiffs for order to strike all references to the Myers and Stauffer analysis of 8/2002 and the 7.9 % aggregate net profit there claimed, or in the alternative, for an order to continue to the 2/11/04 hearing, or for

Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 6 of 8

02/06/2004 02/06/2004 02/10/2004 02/10/2004
02/25/2004 02/25/2004 02/26/2004 03/08/2004 03/11/2004 03/11/2004 03/11/2004 03/17/2004 03/18/2004 03/19/2004 03/22/2004 04/02/2004 04/15/2004 04/15/2004 04/15/2004

an order to strike factual statements and conclusions not supported by any evidence or data in the record (mdk) (Entered: 02/06/2004)
67 DECLARATION of Lynn S Carman in suppport of pltfs' ex parte application to continue hearing and for other orders [66−1] (mdk) (Entered: 02/06/2004)
68 OPPOSITION by defendant Diana M Bonta (the Director of the California Dept of Health Services) to pltfs' ex parte application to strike or in the alternatice to continue hearing [66−1] (ljr) (Entered: 02/09/2004)
69 APPENDIX OF AUTHORITIES by pltfs James Clayworth, Wayne Roberts, Madeleine Madden (ljr) (Entered: 02/10/2004)
70 MEMORANDUM OPINION AND ORDER by Chief Judge David F. Levi motion for reconsideration by dft [47−1] DENIED; the parties are ordered to submit a joint status order within 10 days of this order; the court is open to an expedited schedule in view of the public importance of the issues presented (cc: all counsel) (ljr) (Entered: 02/11/2004)
LODGED stipulation and order extending time to file motion for award of attorneys' fees by defendant Diana M Bonta, plaintiff James Clayworth, plaintiff Wayne Roberts, plaintiff Madeleine Madden (ljr) (Entered: 02/25/2004)
71 JOINT STATUS REPORT by defendant Diana M Bonta, plaintiff James Clayworth, plaintiff Wayne Roberts, plaintiff Madeleine Madden (ljr) (Entered: 02/26/2004)
72 STIPULATION AND ORDER by Chief Judge David F. Levi that pltfs motion for award of attys' fees filing ddl set for 4/15/04 (cc: all counsel) (ljr) (Entered: 02/26/2004)
73 INTERLOCUTORY (Preliminary Injunction) Appeal to 9th Circuit Court of Appeals by defendant Diana M Bonta (mm1) (Entered: 03/09/2004)
74 MAILED case information/docket fee payment notice, copy of Notice of Appeal to 9th Circuit Court of Appeals, copy of appeal and docket sheet to all parties (mm1) (Entered: 03/11/2004)
75 BILL FOR FEES DUE: $255.00 appeal fee due from Diana M Bonta re: appeal [73−1] (mm1) (Entered: 03/11/2004)
76 TRANSCRIPT DESIGNATION and Ordering Form for dates 12/3/03, 12/17/03 and 12/2003 pltfs motion for preliminary injunction; 12/17 dft's motion for judgment on the pleadings re appeal [73−1] (ljr) (Entered: 03/11/2004)
NOTIFICATION by 9th Circuit of Appellate Docket Number 04−15498 (ljr) (Entered: 03/17/2004)
77 APPEAL fee paid by the State of CA as to dt Diana Bonta receipt # 202 10997 [73−1] (ljr) (Entered: 03/19/2004)
78 TRANSCRIPT of 12/17/03 hearing on motion for preliminary injunction by C/R Dennis F McKinnon (ljr) (Entered: 03/22/2004)
80 CERTIFICATE OF RECORD transmitted to 9th Circuit on transcripts [79−1], [80−1] re appeal [73−1] (notice sent) (ljr) (Entered: 03/22/2004)
81 TRANSCRIPT DESIGNATION and Ordering Form for dates 12/17/03 re appeal [73−1] (mdk) (Entered: 04/05/2004)
82 NOTICE OF MOTION AND MOTION for attorneys' fees by pltfs motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set For 10:00 5/19/04 (mdk) Modified on 04/19/2004 (Entered: 04/19/2004)
83 DECLARATION of Lynn S Carman in SUPPORT of pltfs' motion for attorneys' fees [82−1] (mdk) Modified on 04/19/2004 (Entered: 04/19/2004)
84 DOCUMENTS/EXHIBITS by plaintiffs in SUPPORT of motion for attorneys' fees [82−1] (mdk) Modified on 04/19/2004 (Entered: 04/19/2004)

Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 7 of 8

04/19/2004 04/19/2004 04/26/2004 05/05/2004 05/07/2004 05/12/2004 05/12/2004 05/14/2004 05/25/2004 05/27/2004 06/04/2004 06/04/2004
06/23/2004
07/22/2004 08/24/2004 08/30/2004
09/10/2004 09/22/2004

85 CORRECTED DECLARATION of Lynn S Carmen in SUPPORT of ptfs' motion for attorneys' fees [82−1] (mdk) (Entered: 04/20/2004)
86 LETTER to court from counsel for plaintiff regarding corrected declaration of Lynn S Carman [85−1] (mdk) (Entered: 04/20/2004)
87 NOTICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden Verification of declaration of Lynn S Carman in support of attorneys' fees [82−1] (ljr) (Entered: 04/27/2004)
88 OPPOSITION by defendant Diana M Bonta to motion for attorneys' fees by pltfs [82−1] (ljr) (Entered: 05/06/2004)
89 PROOF OF SERVICE by defendant Diana M Bonta of [88−1] (ljr) (Entered: 05/10/2004)
90 REPLY to dfts's opposition to fees by pltfs [82−1] (ljr) (Entered: 05/13/2004)
91 FURTHER REQUEST for Judicial notice by pltfs James Clayworth, Wayne Roberts, Madeleine Madden (ljr) (Entered: 05/13/2004)
92 NOTICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden of adoption of brief and declarations and supplementary request for judicial notice [82−1] (ljr) (Entered: 05/17/2004)
93 NOTICE of related cases CIV.S−04−1008 GEB DAD and CIV.S−03−2336 DFL PAN filed by pltfs' in case 04−cv−1008 (mdk) (Entered: 05/26/2004)
94 NOTICE of related cases CIV.S−04−1036 LKK KJM and CIV.S−03−2336 DFL PAN (mdk) (Entered: 05/28/2004)
95 ORDER by Chief Judge David F Levi: Related Case Notice [93−1] DENIED because factual issues are quite different (cc: all counsel) (mm1) (Entered: 06/04/2004)
96 RELATED CASE ORDER by Chief Judge David F. Levi ORDERING the action denominated CIV.S−04−1036 LKK KJM be reassigned to Judge David F. Levi and Magistrate Peter A. Nowinski for all further proceedings; The Clerk to make appropriate adjustment in the assignment of civil to compensate for this reassignment; relating case(s) 2:03−cv−2110 with member cases 2:03−cv−2336 and 2:04−cv−1036 (cc: all counsel) (nac) Modified on 06/04/2004 (Entered: 06/04/2004)
97 MEMORANDUM OPINION AND ORDER by Chief Judge David F. Levi awarding atty's fees in these cases would be premature; motion for attorneys' fees by pltfs [82−1] DENIED in 2:03−cv−02110, motion for attorney fees by pltfs [137−1] DENIED in 2:03−cv−02336 without prejudice to their later renewal (cc: all counsel) (ljr) (Entered: 06/23/2004)
LODGED Stipulation &(Proposed) Order extending dft's time to respond to pltf's Motion for Summary Judgment (mm1) (Entered: 07/26/2004)
98 NOTICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden in 2:03−cv−02110 DFL PAN, and case 2:03−cv−2336 DFL PAN of related case(s) with 2:04−cv−1729 WBS PAN (ljr) (Entered: 08/25/2004)
99 RELATED CASE ORDER by Chief Judge David F. Levi relating case(s) 2:03cv2110 DFL PAN with member cases 2:04cv1729 WBS PAN and 2:03cv2336 DFL PAN ; case 2:04cv1729 shall be REASSIGNED to DFL for all furhter proceedings; any hearing dates in case 04cv1729 are hereby VACATED (cc: all counsel) (ljr) (Entered: 08/30/2004)
100 SUBSTITUTION OF ATTORNEY Julie Weng−Gutierrez replacing attorney Irene K Tamura for Diana M Bonta in 2:03−cv−02110 and 2:03−cv−02336 (ljr) (Entered: 09/13/2004)
101 NOTICE of related case(s) by pltfs Developmental Svcs, Mountain View Child, Mountain Shadows, Brian Cook in CIV S 04−1501 MCE DAD with case(s) CIV S 03−2110 DFL PAN and CIV S 03−2336 DFL PAN (ljr) (Entered: 09/23/2004)

Case: 2:03-cv-2110 As of: 12/07/2010 12:07 PM PST 8 of 8

09/29/2004
09/30/2004
10/28/2004 11/03/2004 04/19/2005 04/20/2005 05/12/2005 05/12/2005 05/24/2005
06/14/2005
12/19/2005 12/22/2005 03/09/2006 08/29/2006
11/30/2006 11/30/2006 12/01/2006

102 RELATED CASE ORDER by Chief Judge David F. Levi that the action denominated 2:04cv1501 MCE DAD be REASSIGNED to DFL and PAN for all further proceedings in 2:03cv02110, 2:03cv02336 (cc: all counsel) (ljr) (Entered: 09/29/2004)
103 NOTICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden in 2:03cv02110, by pltfs James Clayworth, Central Care, Independent Living in 2:04cv01729 of related case(s) 2:04cv2064 FCD DAD, 2:04cv1729 DFL PAN, 2:03cv2110 DFL PAN, 2:03cv2336 DFL PAN, 2:04cv1036 DFL PAN, 2:04cv1501 DFL PAN (ljr) (Entered: 10/01/2004)
CLERK'S record on appeal transmitted to 9th Circuit #04−15498: case file 5 volumes; 3 transcripts; and copy of docket mailed to 9th Circuit regarding appeal [73−1] (ljr) (Entered: 10/28/2004)
RETURNED Receipt from USCA of case files (mdk) (Entered: 11/04/2004)
104 NOTICE of RELATED CASE 05−762 by James Clayworth (Carman, Lynn) (Entered: 04/19/2005)
105 NOTICE of RELATED CASE 05−00767, 03−2110, 03−2336 by James Clayworth filed by Thuong Van Tran (Carman, Lynn) (Entered: 04/20/2005)
106 NOTICE of CHANGE of ADDRESS by Lynn S Carman (Carman, Lynn) (Entered: 05/12/2005)
107 NOTICE of RELATED CASE 2:5−CV−00767, CiV−S−03−2336, CIV−S−03−2336 by James Clayworth Amended (Carman, Lynn) (Entered: 05/12/2005)
108 ORDER re 107 Notice of Related Case signed by Judge David F. Levi on 5/24/05. The Court finds that the case ARE NOT to be related or reassigned. This Order issued for informational purposes only, and shall have no effect on status of cases.(Marciel, M) (Entered: 05/24/2005)
109 RELATED CASE ORDER with 2:03cv2110 DFL PAN, 2:03cv2336 DFL PAN, 2:04cv1124 DFL GGH, 2:04cv1501 DFL PAN, 2:04cv1729 DFL PAN and 2:05cv409 WBS DAD. REASSIGNING case(s) 2:04cv1124 and 2:05cv409 to Judge David F. Levi and Peter A. Nowinski for all further proceedings. signed by Judge David F. Levi on 6/9/2005. (Reader, L) (Entered: 06/14/2005)
110 USCA JUDGMENT #04−15498 as to 73 Notice of Interlocutory Appeal filed by Diana M Bonta, decision of district court REVERSED (Reader, L) (Entered: 12/20/2005)
111 APPEAL RECORD RETURNED: 5 volumes of Clerk's files and 3 Reporters Transcripts. (Text only entry) (Matson, R) (Entered: 12/23/2005)
112 NOTICE OF TEMPORARY ASSIGNMENT notifying parties that due to the retirement of Magistrate Judge Peter A. Nowinski, this action is temporarily reassigned to Magistrate Judge John F. Moulds. (Brown, T) (Entered: 03/09/2006)
113 ORDER by Chief Judge David F. Levi ORDERING due to the recent appointment of Magistrate Judge Edmund F. Brennan to the bench of the Eastern District, this action is REASSIGNED from Magistrate Judge Peter A. Nowinski for all further proceedings. (Brown, T) (Entered: 08/29/2006)
114 STIPULATION of DISMISSAL by Diana M Bonta. (Weng−Gutierrez, Julie) (Entered: 11/30/2006)
115 PROPOSED ORDER Granting Stipulation for Dismissal by Diana M Bonta. (Weng−Gutierrez, Julie) (Entered: 11/30/2006)
116 STIPULATION and ORDER 115 signed by Judge David F. Levi on 12/1/06 DISMISSING CASE in its entirety pursuant to FRCP 41(a)(1)(ii). Each party shall bear their own costs and attorneys fees. CASE CLOSED (Krueger, M) (Entered: 12/01/2006)

 
 Clayworth v. Bonta, 140 Fed.Appx. 677 (2005)

140 Fed.Appx. 677 This case was not selected for publication in the
Federal Reporter. Not for Publication in West’s Federal Reporter See
Fed. Rule of Appellate Procedure 32.1 generally governing citation of judicial decisions issued on or after Jan. 1, 2007. See also Ninth Circuit Rule 36-3.
(Find CTA9 Rule 36-3) United States Court of Appeals,
Ninth Circuit.
James CLAYWORTH, R.Ph, dba Clayworth Healthcare Pharmacy; Wayne Roberts; Madeleine
Madden, Plaintiffs-Appellees, v.
Diana M. BONTA, Director of the Department of Health Services, state of California, Defendant-Appellant, and
Department of Health Services, a department of the state of California, Defendant.
California Medical Association; American Academy of Pediatrics-California District;
American College of Obstetricians and Gynecologists-District IX; California Chapter American College of Emergency Physicians; California Dental Association; Long Term Care Pharmacy Alliance; California Foundation for
Independent Living Centers; California Pharmacists Association; Aids Healthcare Foundation; Professional Pharmacy Alliance of California; Brain Injury Policy Institute; Long Term Care Management Council; Osteopathic
Physicians and Surgeons of California, Plaintiffs-Appellees, v.
Diana M. Bonta, Director of the Department of Health Services, State of California, Defendant-Appellant.
Nos. 04-15498, 04-15532. | Argued & Submitted Dec. 8, 2004.**
This panel unanimously finds this case suitable for decision without oral argument. See Fed. R.App. P. 34(a)(2).
| Decided Aug. 2, 2005.
Synopsis Background: Medicaid providers and beneficiaries brought action challenging California’s impending 5% reduction in reimbursement rate paid to providers. The

United States District Court for the Eastern District of California, David F. Levi, J., 295 F.Supp.2d 1110, granted plaintiffs’ motion for preliminary injunction. State of California appealed.

Holding: The Court of Appeals held that neither Medicaid recipients nor providers had private right to challenge California’s compliance with Medicaid quality and access provisions under § 1983.

Reversed.

Attorneys and Law Firms

*678 Lynn S. Carman, Esq., San Rafael, CA, Byron J. Gross, Esq., Craig J. Cannizzo, Esq., Hooper, Lundy & Bookman, Inc., San Francisco, CA, for Plaintiffs-Appellees.

Irene K. Tamura, Esq., Julie Weng-Gutierrez, Esq., Office of the California Attorney General Department of Justice, Sacramento, CA, for Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of California, David F. Levi, District Judge, Presiding. D.C. Nos. CV-03-02110-DFL, CV-03-02336-DFL. Before O’SCANNLAIN, COWEN,** and BEA, Circuit Judges.

**

The Honorable Robert E. Cowen, Senior United States

Circuit Judge for the Third Circuit, sitting by

designation.

Opinion
MEMORANDUM*** *** This disposition is not appropriate for publication and
may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.
James Clayworth, dba Clayworth Healthcare Pharmacy, and two Medicaid recipients, brought suit against Diana Bonta, in her official capacity as Director of the California Department of Health Services, and the California Department of Health Services.1 Separately, a consortium of 14 Medi-Cal service providers and the Disabled Rights Union, a non-profit association of
1

Clayworth v. Bonta, 140 Fed.Appx. 677 (2005)

disabled persons, also brought suit against Bonta. From adverse judgments in district court, Bonta brought these appeals, which we have consolidated.

1

The case against the California Department of Health

Services was eventually dismissed on the basis of

Eleventh Amendment immunity and no cross-appeal

has been filed.

The legal issue here has been resolved by Sanchez v. Johnson, 416 F.3d 1051 (9th Cir.2005), filed this date, in

which we held *679 that neither Medicaid recipients nor providers have a private right to challenge California’s compliance with Medicaid provision § 30(A) under 42 U.S.C. § 1983.
The judgment of the district court is
REVERSED.

2

 
 Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 1 of 12
U.S. District Court Eastern District of California − Live System (Sacramento)
CIVIL DOCKET FOR CASE #: 2:03−cv−02336−DFL−EFB

CLOSED

CA Medical Assoc, et al v. Bonta, et al Assigned to: Judge David F. Levi Referred to: Magistrate Judge Edmund F. Brennan Demand: $0 Cause: 42:1396 − Tort Negligence
Plaintiff

Date Filed: 11/07/2003 Date Terminated: 11/01/2006 Jury Demand: None Nature of Suit: 890 Other Statutory Actions Jurisdiction: Federal Question

CA Medical Assoc

represented by Craig J Cannizzo Hooper Lundy and Bookman Incorporated 180 Montgomery Street Suite 1000 San Francisco, CA 94104 415−875−8500 Fax: 875−8519 Email: ccannizzo@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
American Academy of Pediatrics−California District IX

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
American College of Obstetricians and Gynecologists−District IX

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
California Chapter American College of Cardiology

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
California Chapter American College of Emergency Physicians

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff California Dental Association

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Long Term Care Pharmacy Alliance

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 2 of 12

Plaintiff California Foundation for Independent Living Centers
Plaintiff California Pharmacists Association
Plaintiff Aids Healthcare Foundation
Plaintiff Professional Pharmacy Alliance of California Inc
Plaintiff Brain Injury Policy Institute
Plaintiff Long Term Care Management Council
Plaintiff Osteopathic Physicians and Surgeons of California

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

V.
Defendant
Diana M Bonta Director of the Department of Health Services State of CA

represented by Irene K Tamura Attorney General's Office for the State of California PO Box 944255 1300 I Street Suite 125 Sacramento, CA 94244−2550 916−445−9555 Email: Irene.Tamura@doj.ca.gov TERMINATED: 09/10/2004 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Julie Weng−Gutierrez

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 3 of 12

CA Office of the Attorney General 1300 I Street, Suite 125 P.O. Box 944255 Sacramento, CA 94244−2550 (916) 445−8223 Fax: (916) 324−5567 Email: julie.wenggutierrez@doj.ca.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Disabled Rights Union

represented by Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lisa A. Grigg Minasian, Spruance, Meith, Soares &Sexton, LLP P.O. Box 1679 Oroville, CA 95965 (530) 533−2885 Fax: (530) 533−0197 Email: lgrigg@minasianlaw.com TERMINATED: 11/20/2003 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 11/07/2003 11/07/2003 11/07/2003 11/07/2003 11/09/2003
11/14/2003 11/19/2003
11/19/2003

# Docket Text
1 COMPLAINT for injunctive and declaratory relief, fee status paid, receipt # 202 10222, assigned to Chief Judge David F. Levi, referred to Magistrate Judge Peter A. Nowinski (mdk) (Entered: 11/10/2003)
2 NOTICE by plaintiff of related case 03−CV−2110 DFL PAN (mdk) (Entered: 11/10/2003)
3 ORDER REQUIRING JOINT STATUS REPORT by Chief Judge David F. Levi and informing the parties on the procedure to follow in pursuing this action (mdk) (Entered: 11/10/2003)
4 ORDER RE DISCOVERY by Magistrate Judge Peter A. Nowinski informing the parties on the procedure to follow in pursuing this action (mdk) (Entered: 11/10/2003)
7 FIRST AMENDED COMPLAINT by pltfs CA Medical Assoc, Amer Acdmy Pediatric, Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys adding Disabled Rights Union; complaint [1−1] TERMINATED (ljr) (Entered: 11/20/2003)
5 NOTICE by plaintiff of related case(s) CIV.S−03−2110 DFL PAN and CIV.S−03−2371 WBS JFM (nac) (Entered: 11/17/2003)
6 ORDER by Chief Judge David F. Levi ORDERING relating case(s) 2:03−cv−2336 with member cases 2:03−cv−2371 ; action denominated CIV S−03−2371 WBS JFM is ORDERED to be reassigned to Judge David F Levi and Magistrate Judge Peter A Nowinski for all further proceedings, and any dates currently set in this reassigned case only are vacated; it is ordered that Clk shall make appropriate adjustment in the assignment of civil cases to compensate for this reassignment (cc: all counsel) (bd) (Entered: 11/19/2003)
8 RETURN OF SERVICE executed upon defendant Diana M Bonta on 11/10/03 (ljr) (Entered: 11/20/2003)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 4 of 12

11/19/2003
11/19/2003
11/19/2003
11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003

9 NOTICE OF MOTION and motion for preliminary injunction by pltfs CA Medical Assoc, Amer Acdmy Pediatric Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, Disabled Rights Union; motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set For 12/17/03 at 10:00 (ljr) (Entered: 11/20/2003)
10 MEMORANDUM OF POINTS AND AUTHORITIES by pltfs in SUPPORT of motion for preliminary injunction by pltfs CA Medical Assoc, Amer Acdmy Pediatric Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, Disabled Rights Union [9−1] (ljr) (Entered: 11/20/2003)
LODGED proposed order granting preliminary injunction by pltfs CA Medical Assoc, Amer Acdmy Pediatric Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, Disabled Rights (ljr) (Entered: 11/20/2003)
11 DECLARATION of Heather Campbell in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
12 DECLARATION of Liz Snow in suppor of motion for pleliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
13 DECLARATION of Sanjay Patel DDS in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
14 DECLARATION of Andrew B Bindman MD in support of motion for preliminary injunction [9−1] (ljr) Modified on 11/20/2003 (Entered: 11/20/2003)
15 DECLARATION of Shirow Sasaki Pharm D in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
16 DECLARATION of Dennis Vermillion Pharm D in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
17 DECLARATION of Jack Rustigan Pharm D in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
18 DECLARATION of Douglas Foster Phrm D in support of motion for preliminary injuction [9−1] (ljr) (Entered: 11/20/2003)
19 DECLARATION of Wesley fields MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
20 DECLARATION of Burns Vick JD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
21 DECLARATION of Michael John Feinstein DO in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
22 DECLARATION of Paula Akin in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
23 DECLARATION of John H Kirk in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
24 DECLARATION of Tracey St Julien in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
25 DECLARATION of Paul W Rohrer in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
26 DECLARATION of R Paige Talley in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 5 of 12

11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003

27 DECLARATION of Paul W Baldwin in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
28 DECLARATION of Donald N Isetti in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
29 DECLARATION of John A Cronin in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
30 DECLARATION of Robert Black MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
31 DECLARATION of Kris Calvin in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
32 DECLARATION of Patricia Yeager in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
33 DECLARATION of Robert Roberts in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
34 DECLARATION of R Bruce Scarborough in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
35 DECLARATION of Marlene Pompetti in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
36 DECLARATION of Sapana Majmudar DDS in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
37 DECLARATION of Chester T Low DDS in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
38 DECLARATION of Lonnie Lovingier DDS in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
39 DECLARATION of Elizabeth Mertz MPA in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
40 DECLARATION of Arthur C Whitney in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
41 DECLARATION of Lloyd Bookman in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
42 DECLARATION of Kathleen Creason in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
43 DECLARATION of David Robison in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
44 DECLARATION of Beverly Edmon in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
45 DECLARATION of John Anaya Jr in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
46 DECLARATION of John Anaya Sr in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
47 DECLARATION of Lita L Watson in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
48 DECLARATION of Barry Coughlin MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
49 DECLARATION of Rainilda Valencia MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
50 DECLARATION of Douglas L Gillott MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 6 of 12

11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003 11/19/2003
11/20/2003
11/20/2003 11/20/2003
12/03/2003
12/03/2003

51 DECLARATION of William G Edwards MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
52 DECLARATION of Lu−Weiking MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
53 DECLARATION of Michael Vizcarra MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
54 DECLARATION of Rajeev Yelamanchili MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
55 DECLARATION of Sandra L Perez MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
56 DECLARATION of Ralph Kuon MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
57 DECLARATION of Steven Polansky MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
58 DECLARATION of John K Geisse MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
59 DECLARATION of Donna Stidham RN in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
60 DECLARATION of Ted Mazer MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
61 DECLARATION of Ann Ewalt Hamilton MD in support of motion for preliminary injunction [9−1] (ljr) (Entered: 11/20/2003)
62 PROOF OF SERVICE by pltfs CA Medical Assoc, Amer Acdmy Pediatric Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, of [61−1], [60−1], [59−1], [58−1], [57−1], [56−1], [55−1], [54−1], [53−1], [52−1], [51−1], [50−1], [49−1], [48−1], [47−1], [46−1], [45−1], [44−1], [43−1], [42−1], [41−1], [40−1], [39−1], [38−1], [37−1], [36−1], [35−1], [34−1], [33−1], [32−1], [31−1], [30−1], [29−1], [28−1], [27−1], [26−1], [25−1], [24−1], [23−1], [22−1], [21−1], [20−1], [19−1], [18−1], [17−1], [16−1], [15−1], [14−1], [13−1], [12−1], [11−1], [0−0], [10−1], [9−1] (ljr) (Entered: 11/20/2003)
63 APPENDIX of authorities by pltfs CA Medical Assoc, Amer Acdmy Pediatric Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, Disabled Rights Union (ljr) (Entered: 11/20/2003)
64 DESIGNATION OF COUNSEL FOR SERVICE Craig J Cannizzo replacing attorney Byron J Gross for Disabled Rights Union (ljr) (Entered: 11/20/2003)
65 PROOF OF SERVICE by pltfs CA Medical Assoc, Amer Acdmy Pediatric Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, Disabled Rights Union of [10−1] (ljr) (Entered: 11/21/2003)
66 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION by dft Diana M Bonta to motion for preliminary injunction by pltfs CA Medical Amer Acdmy Pediatric Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Term Care Mgt, Osteopathic Phys, Disabled Rights Union; [9−1] (ljr) (Entered: 12/03/2003)
67 OBJECTIONS by defendant Diana M Bonta to evidence (ljr) (Entered: 12/03/2003)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 7 of 12

12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003 12/03/2003
12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003

68 APPENDIX by defendant Diana M Bonta of authorities [66−1] (ljr) (Entered: 12/03/2003)
69 DECLARATION of Kathleen Menda in support of opposition to motion for preliminary injunction [66−1] (ljr) (Entered: 12/03/2003)
70 DECLARATION of Irvin White in support of opposition to motion for preliminary injunction [66−1] (ljr) (Entered: 12/03/2003)
71 DECLARATION of Jim Klein in opposition to motion for preliminary injunction [9−1] (ljr) (Entered: 12/03/2003)
72 DECLARATION of Sarah Smith in opposition to motion for preliinary injunction [9−1] (ljr) (Entered: 12/03/2003)
73 DECLARATION of Bryan Quattlebaum DDS in opposition to motion for a preliminary injunction [9−1] (ljr) (Entered: 12/03/2003)
74 DECLARATION of David Noel DDS MPH in opposition to motion for a preliminary injunction [9−1] (ljr) (Entered: 12/03/2003)
75 DECLARATION of Morton Rosenberg DDS in opposition to motion for a preliminary injunction [9−1] (ljr) (Entered: 12/03/2003)
76 DECLARATION of Douglas B Hillblom in opposition to pltfs' motion for preliminary injuncton [9−1] (ljr) (Entered: 12/03/2003)
77 DECLARATION of Gary McCollum in opposition to pltfs' motion for preliminary injunction [9−1] (ljr) (Entered: 12/03/2003)
78 DECLARATION of Carolyn Pierson in opposition to pltfs' motion for preliminary injunction [9−1] (ljr) (Entered: 12/03/2003)
79 DECLARATION of Timothy cornforth in opposition to pltfs' motion for preliminary injunction [9−1] (ljr) (Entered: 12/03/2003)
80 DECLARATION OF SERVICE by defendant Diana M Bonta of [79−1], [78−1], [77−1], [76−1], [75−1], [74−1], [73−1], [72−1], [71−1], [70−1], [69−1], [68−1], [67−1], [66−1] (ljr) (Entered: 12/03/2003)
81 REPLY to response to motion for preliminary injunction by pltfs [9−1] (nac) (Entered: 12/11/2003)
82 OBJECTIONS by pltfs to dft's evidence in support of opposition to pltfs' motion for preliminary injunction [68−1] (nac) (Entered: 12/11/2003)
83 SUPPLEMENTAL APPENDIX of authorities by pltfs (nac) (Entered: 12/11/2003)
84 DECLARATION of Craig J. Cannizzo in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
85 DECLARATION of Steven M. Thompson in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
86 DECLARATION of Byron J. Gross in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
87 DECLARATION of Elizabeth Van Tassell, DDS in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
88 DECLARATION of Sarane Collins in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
89 DECLARATION of C. Dean Germano in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
90 DECLARATION of Laurie L. Meyer in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
91 DECLARATION of Jorge A. Quel, MD in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 8 of 12

12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/10/2003 12/11/2003
12/11/2003
12/12/2003 12/15/2003 12/17/2003 12/17/2003 12/19/2003 12/23/2003

92 DECLARATION of Steven D. Tough in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
93 SUPPLEMENTAL DECLARATION of Lloyd A. Bookman in support of pltf's motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
94 SUPPLEMENTAL DECLARATION of John Cronin in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
95 SUPPLEMENTAL DECLARATION of Steven Polansky, MD in support of pltf's motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
96 SUPPLEMENTAL DECLARATION of Beverly Edmon in support of pltfs' motion for prelininary injunction [9−1] (nac) (Entered: 12/11/2003)
97 SUPPLEMENTAL DECLARATION of Elizabeth Mertz, MPA in support of pltfs' motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
98 SUPPLEMENTAL DECLARATION of Liz Snow in support of pltf's motion for preliminary injunction [9−1] (nac) (Entered: 12/11/2003)
99 PROOF OF SERVICE by pltfs in 2:03−cv−02336 of [98−1], [97−1], [96−1], [95−1], [94−1], [93−1], [92−1], [91−1], [90−1], [89−1], [88−1], [87−1], [86−1], [85−1], [84−1] (nac) (Entered: 12/11/2003)
100 NOTICE OF ERRATA by pltfs CA Medical Assoc, Amer Acdmy Pediatric, Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, Disabled Rights reply brief in support of pltfs' motion for preliminary injunction (ljr) (Entered: 12/12/2003)
101 PROOF OF SERVICE by pltfs CA Medical Assoc, Amer Acdmy Pediatric, Amer Obstetricians, Amer Col Cardiology, Amer Emergency Phys, CA Dental Assoc, Long Term Care Phar, CA Ind Living Ctrs, CA Pharmacists Assoc, Aids Healthcare Fdn, Prof Pharmacy All, Brain Injury Policy, Long Term Care Mgt, Osteopathic Phys, Disabled Rights of [100−1] (ljr) (Entered: 12/12/2003)
102 PROOF OF SERVICE by defendant of [79−1], [78−1], [77−1], [76−1], [75−1], [74−1], [73−1], [72−1], [71−1], [70−1], [69−1], [68−1], [67−1], [66−1] served on Craig Cannizzo (mdk) (Entered: 12/15/2003)
103 NOTICE OF WITHDRAWAL OF CITATION to the case Watts Health Foundation v. Belshe by defendant (mdk) (Entered: 12/16/2003)
104 DECLARATION of Betty Mosher in opposition to pltfs' motion for preliminary injunction [9−1] (mdk) (Entered: 12/18/2003)
105 MINUTES before Chief Judge David F. Levi: motion for preliminary injunction by pltfs [9−1] SUBMITTED; order to be prepared by the Court; C/R D McKinnon (mdk) (Entered: 12/18/2003)
106 PROOF OF SERVICE by defendant Diana M Bonta of [104−1] (ljr) (Entered: 12/22/2003)
107 MEMORANDUM OPINION AND ORDER by Chief Judge David F. Levi because the State failed to consider the effect of the rate reduction on beneficiaries' equal access to quality medical services, in view of provider costs, the pending rate reduction is arbitrary and connot stand; dft Bonta is enjoined from implementing the 5% reimbursement rate reduction required by Welfare and Institutions Code Sec 14105.19 pending further proceedings in this court; this injunction does not apply to Sec 14105.19(b)(3), which reduces capitation rate paid to managed care plans by the actuarial equivalent of 5%; the injunction also does not apply to Sec 14105.19(b)(2), which reduces payments made in certain non−Medi−Cal programs; the Department of Health Services is DISMISSED from CIV S 03−2110 on the basis of 11th Amendment immunity [4−1] in CIV S 03−2110 DFL PAN; [9−1] in CIV S 03−cv−2336 DFL PAN; party Dept of Health Svcs DISMISSED in CIV S 03−2110 DFL PAN (cc: all counsel) (ljr) (Entered: 12/23/2003)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 9 of 12

12/23/2003 12/30/2003 01/06/2004 01/08/2004 01/08/2004 01/08/2004 01/12/2004 01/14/2004
01/21/2004
01/21/2004
01/28/2004 01/28/2004 01/28/2004 01/28/2004 01/28/2004 02/04/2004 02/04/2004

108 STIPULATION to extend time, to and including 12/27/03, for dfts to respond to Complaint [7−1] (ndd) (Entered: 12/24/2003)
LODGED stipulation to extend time to respond to complaint by defendant Diana M Bonta (ljr) (Entered: 12/30/2003)
109 STIPULATION AND ORDER by Chief Judge David F. Levi: Dfts have up through and including 01/12/04 to respond to first amended complaint (cc: all counsel) (pw) (Entered: 01/06/2004)
110 NOTICE OF MOTION AND MOTION for reconsideration by defendant , memorandum of points and authorities; motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set For 10:00 2/11/04 (mdk) (Entered: 01/09/2004)
111 DECLARATION of Stan Rosenstein in support of dft's motion for reconsideration [110−1] (mdk) (Entered: 01/09/2004)
112 REQUEST for Judicial notice by defendant in support of motion for reconsideration (mdk) (Entered: 01/09/2004)
113 ANSWER by defendant Diana M Bonta to first amended complaint [7−1] (ljr) (Entered: 01/12/2004)
LODGED stipulation of time to file motion for award of attys' fees by pltfs CA Medical Assoc in 2:03−cv−02336, Amer Acdmy Pediatric in 2:03−cv−02336, Amer Obstetricians in 2:03−cv−02336, Amer Col Cardiology in 2:03−cv−02336, Amer Emergency Phys in 2:03−cv−02336, CA Dental Assoc in 2:03−cv−02336, Long Term Care Phar in 2:03−cv−02336, CA Ind Living Ctrs in 2:03−cv−02336, CA Pharmacists Assoc in 2:03−cv−02336, Aids Healthcare Fdn in 2:03−cv−02336, Prof Pharmacy All in 2:03−cv−02336, Brain Injury Policy in 2:03−cv−02336, Long Term Care Mgt in 2:03−cv−02336, Osteopathic Phys in 2:03−cv−02336, Disabled Rights in 2:03−cv−02336 (ljr) (Entered: 01/14/2004)
114 STIPULATION AND ORDER by Chief Judge David F. Levi that pltfs shall have up through and including 30 days from the date that the Court rules upon dft's motion for reconsideration on the preliminary injunction within which to file its motion for award of attys' fees pursuant to LR 54−293 [110−1] (cc: all counsel) (ljr) (Entered: 01/21/2004)
115 JOINT STATUS REPORT by pltfs CA Medical Assoc in 2:03−cv−02336, dft Diana M Bonta in 2:03−cv−02336, pltfs Amer Acdmy Pediatric in 2:03−cv−02336, Amer Obstetricians in 2:03−cv−02336, Amer Col Cardiology in 2:03−cv−02336, Amer Emergency Phys in 2:03−cv−02336, CA Dental Assoc in 2:03−cv−02336, Long Term Care Phar in 2:03−cv−02336, CA Ind Living Ctrs in 2:03−cv−02336, CA Pharmacists Assoc in 2:03−cv−02336, Aids Healthcare Fdn in 2:03−cv−02336, Prof Pharmacy All in 2:03−cv−02336, Brain Injury Policy in 2:03−cv−02336, Long Term Care Mgt in 2:03−cv−02336, Osteopathic Phys in 2:03−cv−02336, Disabled Rights in 2:03−cv−02336 (ljr) (Entered: 01/22/2004)
116 OPPOSITION by plaintiff to motion for reconsideration by defendant [110−1] (mdk) (Entered: 01/29/2004)
117 DECLARATION of Michael T Johnsrud, PH.D in support of pltfs' opposition to motion for reconsideration [116−1] (mdk) (Entered: 01/29/2004)
118 DECLARATION of John Cronin in support of pltfs' opposition to motion for reconsideration [117−1] (mdk) (Entered: 01/29/2004)
119 OBJECTIONS by plaintiff to dft's evidence in support of motion for reconsideration [110−1] (mdk) (Entered: 01/29/2004)
120 APPENDIX of authorities by plaintiff in support of opposition to motion for reconsideration [116−1] (mdk) (Entered: 01/29/2004)
121 REPLY to opposition to motion for reconsideration by defendant [110−1] (mdk) (Entered: 02/05/2004)
122 DECLARATION of T Allan Hansen in support of dft's reply to opposition to motion for reconsideration [121−1] (mdk) (Entered: 02/05/2004)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 10 of 12

02/04/2004 02/04/2004 02/05/2004 02/10/2004
02/25/2004
02/25/2004
02/26/2004 03/08/2004 03/11/2004 03/11/2004 03/11/2004 03/18/2004 03/19/2004 03/22/2004 03/25/2004 04/02/2004

123 REQUEST for Judicial notice by defendant in support of dft's reply to opposition to motion for reconsideration (mdk) (Entered: 02/05/2004)
124 REPLY by defendant to CMA pltf's objections to declaration of Stan Rosenstein (mdk) (Entered: 02/05/2004)
125 CORRECTED REPLY to opposition to motion for reconsideration by defendant [110−1] (mdk) (Entered: 02/06/2004)
126 MEMORANDUM OPINION AND ORDER by Chief Judge David F. Levi motion for reconsideration by defendant [110−1] DENIED; the parties are ordered to submit a joint status order within 10 days of this order; the court is open to an expedited schedule in view of the public importance of the issues presented (cc: all counsel) (ljr) (Entered: 02/11/2004)
LODGED stipulation and order extending time to file motion for award of attorneys' fees by pltfs CA Medical Assoc in 2:03−cv−02336, Amer Acdmy Pediatric in 2:03−cv−02336, Amer Obstetricians in 2:03−cv−02336, Amer Col Cardiology in 2:03−cv−02336, Amer Emergency Phys in 2:03−cv−02336, CA Dental Assoc in 2:03−cv−02336, Long Term Care Phar in 2:03−cv−02336, CA Ind Living Ctrs in 2:03−cv−02336, CA Pharmacists Assoc in 2:03−cv−02336, Aids Healthcare Fdn in 2:03−cv−02336, Prof Pharmacy All in 2:03−cv−02336, Brain Injury Policy in 2:03−cv−02336, Long Term Care Mgt in 2:03−cv−02336, Osteopathic Phys in 2:03−cv−02336, Disabled Rights in 2:03−cv−02336 (ljr) (Entered: 02/25/2004)
127 JOINT STATUS REPORT by CA Medical Assoc in 2:03−cv−02336, Amer Acdmy Pediatric in 2:03−cv−02336, Amer Obstetricians in 2:03−cv−02336, Amer Col Cardiology in 2:03−cv−02336, Amer Emergency Phys in 2:03−cv−02336, CA Dental Assoc in 2:03−cv−02336, Long Term Care Phar in 2:03−cv−02336, CA Ind Living Ctrs in 2:03−cv−02336, CA Pharmacists Assoc in 2:03−cv−02336, Aids Healthcare Fdn in 2:03−cv−02336, Prof Pharmacy All in 2:03−cv−02336, Brain Injury Policy in 2:03−cv−02336, Long Term Care Mgt in 2:03−cv−02336, Osteopathic Phys in 2:03−cv−02336, Disabled Rights in 2:03−cv−02336, dft Diana M Bonta in 2:03−cv−02336 (ljr) (Entered: 02/26/2004)
128 STIPULATION AND ORDER by Chief Judge David F. Levi that pltfs shall have up through 4/15/04 in order to file their motion for award of attys' fees pursuant to LR 54−293 (cc: all counsel) (ljr) (Entered: 02/26/2004)
129 INTERLOCUTORY (Preliminary Injunction) Appeal to 9th Circuit Court of Appeals by defendant Diana M Bonta (mm1) (Entered: 03/09/2004)
130 MAILED case information/docket fee payment notice, copy of Notice of Appeal to 9th Circuit Court of Appeals, copy of appeal and docket sheet to all parties (mm1) (Entered: 03/11/2004)
131 BILL FOR FEES DUE: $255.00 appeal fee due from Diana M Bonta in 2:03−cv−02336 re: appeal [129−1] (mm1) (Entered: 03/11/2004)
132 TRANSCRIPT DESIGNATION and Ordering Form for dates 12/17/03 re appeal [129−1] and pltfs motion for preliminary injunction (ljr) (Entered: 03/11/2004)
133 APPEAL fee paid receipt # 202 10998 by State of CA as do dft Diana Bonta [129−1] (ljr) (Entered: 03/19/2004)
134 TRANSCRIPT of 12/17/03 hearing on motion for preliminary injunction by C/R Dennis F McKinnon (ljr) (Entered: 03/22/2004)
135 CERTIFICATE OF RECORD transmitted to 9th Circuit on transcript [134−1] re appeal [129−1] (notice sent) (ljr) (Entered: 03/22/2004)
NOTIFICATION by 9th Circuit of Appellate Docket Number 04−15532 (ljr) (Entered: 03/26/2004)
136 TRANSCRIPT DESIGNATION and Ordering Form for dates 12/17/03re appeal [129−1] (mdk) (Entered: 04/05/2004)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 11 of 12

04/15/2004 04/15/2004 04/15/2004 05/05/2004 05/07/2004 05/12/2004 05/12/2004 05/12/2004 05/25/2004 05/27/2004 06/04/2004 06/04/2004
06/23/2004
08/24/2004 08/30/2004
09/10/2004 09/22/2004 09/29/2004

137 NOTICE OF MOTION AND MOTION for attorney fees by pltfs ; motion TO BE HEARD by Chief Judge David F. Levi; Motion Hearing Set For 10:00 05/19/04 (nac) (Entered: 04/16/2004)
138 MEMORANDUM OF POINTS AND AUTHORITIES by pltfs in SUPPORT of motion for attorney fees by pltfs [137−1] (nac) (Entered: 04/16/2004)
139 DECLARATION of Craig J. Cannizzo in support of motion for award of attorneys' fees and costs [137−1] (nac) (Entered: 04/16/2004)
140 OPPOSITION RESPONSE by defendant Diana M Bonta to motion for attorney fees by pltfs [137−1] (ljr) (Entered: 05/06/2004)
141 PROOF OF SERVICE by defendant Diana M Bonta in 2:03−cv−02336 of [140−1] (ljr) (Entered: 05/10/2004)
142 REPLY in support of motion for attorney fees and costs by pltfs [137−1] (ljr) (Entered: 05/13/2004)
143 SUPPLEMENTAL DECLARATION of Craig J Cannizzo in support of pltfs' reply [142−1] to opposition to motion for award of attorneys' fees and costs [139−1] (ljr) (Entered: 05/13/2004)
144 DECLARATION of Astrid G Meghrigian in support of motion for award of attorneys' fees and costs [137−1] (ljr) (Entered: 05/13/2004)
145 NOTICE of related cases CIV.S−03−2110 DFL PAN and CIV.S−04−1008 GEB DAD filed by pltfs' in case 04−cv−1008 (mdk) (Entered: 05/26/2004)
146 NOTICE of related cases CIV.S−04−1036 LKK KJM and CIV.S−03−2110 DFL PAN (mdk) (Entered: 05/28/2004)
147 ORDER by Chief Judge David F Levi: Related Case Notice [145−1] DENIED because factual issues are quite different (cc: all counsel) (mm1) (Entered: 06/04/2004)
148 RELATED CASE ORDER by Chief Judge David F. Levi ORDERING the action denominated CIV.S−04−1036 LKK KJM be reassigned to Judge David F. Levi and Magistrate Peter A. Nowinski for all further proceedings; The Clerk to make appropriate adjustment in the assignment of civil cases to compensate for this reassignment (cc: all counsel) (nac) (Entered: 06/04/2004)
149 MEMORANDUM OPINION AND ORDER by Chief Judge David F. Levi awarding atty's fees in these cases would be premature; motion for attorneys' fees by pltfs [82−1] DENIED in 2:03−cv−02110, motion for attorney fees by pltfs [137−1] DENIED in 2:03−cv−02336 without prejudice to their later renewal (cc: all counsel) (ljr) (Entered: 06/23/2004)
150 NOTICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden in 2:03−cv−02110 DFL PAN, and case 2:03−cv−2336 DFL PAN of related case(s) with 2:04−cv−1729 WBS PAN (ljr) (Entered: 08/25/2004)
151 RELATED CASE ORDER by Chief Judge David F. Levi relating case(s) 2:03cv2110 DFL PAN with member cases 2:04cv1729 WBS PAN and 2:03cv2336 DFL PAN ; case 2:04cv1729 shall be REASSIGNED to DFL for all furhter proceedings; any hearing dates in case 04cv1729 are hereby VACATED (cc: all counsel) (ljr) (Entered: 08/30/2004)
152 SUBSTITUTION OF ATTORNEY Julie Weng−Gutierrez replacing attorney Irene K Tamura for Diana M Bonta in 2:03−cv−02110 and 2:03−cv−02336 (ljr) (Entered: 09/13/2004)
153 NOTICE of related case(s) by pltfs Developmental Svcs, Mountain View Child, Mountain Shadows, Brian Cook in CIV S 04−1501 MCE DAD with case(s) CIV S 03−2110 DFL PAN and CIV S 03−2336 DFL PAN (ljr) (Entered: 09/23/2004)
154 RELATED CASE ORDER by Chief Judge David F. Levi that the action denominated 2:04cv1501 MCE DAD be REASSIGNED to DFL and PAN for all further proceedings in 2:03cv02110, 2:03cv02336 (cc: all counsel) (ljr) (Entered: 09/29/2004)

Case: 2:03-cv-02336-DFL-EFB As of: 07/02/2013 07:40 AM PDT 12 of 12

09/30/2004
04/20/2005 04/20/2005 05/12/2005 05/24/2005 06/14/2005
12/19/2005 03/07/2006 08/29/2006 10/31/2006 11/01/2006

155 NOTICE by pltfs James Clayworth, Wayne Roberts, Madeleine Madden in 2:03cv02110, by pltfs James Clayworth, Central Care, Independent Living in 2:04cv01729 of related case(s) 2:04cv2064 FCD DAD, 2:04cv1729 DFL PAN, 2:03cv2110 DFL PAN, 2:03cv2336 DFL PAN, 2:04cv1036 DFL PAN, 2:04cv1501 DFL PAN (ljr) (Entered: 10/01/2004)
156 NOTICE of RELATED CASE 05−762, 03−2110, 03−2336 by CA Medical Assoc filed by Thuong Van Tran (Carman, Lynn) (Entered: 04/20/2005)
157 NOTICE of RELATED CASE 05−00767, 03−2110, 03−2336 by CA Medical Assoc filed by Thong Van Tran (Carman, Lynn) (Entered: 04/20/2005)
158 NOTICE of RELATED CASE 2:05−CV−00767, CIV−S−03−2110, CIV−S−03−2336 by CA Medical Assoc Amended Notice Filed by Thuong Van Tran (Carman, Lynn) (Entered: 05/12/2005)
159 ORDER re 158 Notice of Related Case signed by Judge David F. Levi on 5/24/05. The Court finds that the cases ARE NOT to be related or reassigned. This Order issued for informational purposes only, and shall have no effect on the status of cases.(Marciel, M) (Entered: 05/24/2005)
160 RELATED CASE ORDER with 2:03cv2110 DFL PAN, 2:03cv2336 DFL PAN, 2:04cv1124 DFL GGH, 2:04cv1501 DFL PAN, 2:04cv1729 DFL PAN and 2:05cv409 WBS DAD. REASSIGNING case(s) 2:04cv1124 and 2:05cv409 to Judge David F. Levi and Peter A. Nowinski for all further proceedings. signed by Judge David F. Levi on 6/9/2005. (Reader, L) (Entered: 06/14/2005)
161 USCA JUDGMENT #04−15532 as to 129 Notice of Interlocutory Appeal filed by Diana M Bonta, decision of district court REVERSED (Reader, L) (Entered: 12/20/2005)
162 NOTICE OF TEMPORARY ASSIGNMENT notifying parties that due to the retirement of Magistrate Judge Peter A. Nowinski, this action is temporarily reassigned to Magistrate Judge John F. Moulds. (Matson, R) (Entered: 03/07/2006)
163 ORDER by Chief Judge David F. Levi ORDERING due to the recent appointment of Magistrate Judge Edmund F. Brennan to the bench of the Eastern District, this action is REASSIGNED from Magistrate Judge Peter A. Nowinski for all further proceedings. (Brown, T) (Entered: 08/29/2006)
164 STIPULATION and PROPOSED ORDER for Dismissal by Diana M Bonta. (Attachments: # 1 Proposed Order)(Weng−Gutierrez, Julie) Modified on 11/1/2006 (Krueger, M). (Entered: 10/31/2006)
165 STIPULATION AND ORDER 164 signed by Judge David F. Levi on 11/1/06 DISMISSING CASE pursuant to FRCP 41(a)(1)(ii). Each party shall bear their own costs and attorneys fees. CASE CLOSED. (Krueger, M) (Entered: 11/01/2006)