,. Case 2II:09-cv-00722-CAS-MAN Document 1 ·~·

Filed 01/29/09 Page 1 of 37 Page ID #:1

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HOOPER,.EIINDM &BQOKMAN,. INC.

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San Francisco,.CA94105:, . 4, Telepli9ne:,C41~~875-8500

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Facsnnile: (4I5) 875-8519

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5 E-Mail:. ccannizzo@healtli-law.com

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7 JORDAN B~·KBVILLE (State Bar No. 217868)

HQQPER,. LUNDY & BQQKMAN, INC.

8. I 875 Cen!IDY Park East, Suite I 600

Los Angeles~ California. 90067-25I 7

9 Telephone: 310}551-8111 .

Facsimile: ( 10) 551-8181

10

Attorneys for Plaintiffs

11

'

12

.UNITED STATES DISTRICT COURT

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N \.D
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-l

13

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

14

15 CALIFORNIA PHARMACISTS

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ASSOCIATION; CALIFORNIA rviEDICAL

16 ASSOCIATION; CALIFORNIA DENTAL

COMPLAINT

ASSOCIATION; CALIFORNIA HOSPITAL

17 ASSOCIATION; CALIFORNIA

ASSOCIATION FOR ADULT DAY

18 SERVICES; MARIN APOTHECARY;, INC. d/b/a ROSS VALLEY PHARMACY; ~OUTH

19 SACR.AlvfENTOPHARMACY; FARMACIA

RErviEDIOS, INC.; ACACIA ADULT DAY

20 SERVICES; SHARP rviEMORIAL HOSPITAL;

GROSSMONT HOSPITAL CORPORATION;

21 SHARP CHULA VISTArviEDICAL CENTER;

SHARP CORONADO HOSPITAL AND

22 HEALTHCARE CENTER; FEY GARCIA and

CHARLES GALLAGHER,

23

Plaintiffs,

24

vs.

25

DAVID MAXWELL-JOLLY, DIRECTOR OF

26 THE CALIFORNIA DEPARTrviENT OF

HEALTH CARE SERVICES;

27

28

2018549.4

. COMPLAINT

----·--··-··-··-

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 2 of 37 Page ID #:2

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

JURISDICTION AND VENUE

2

1. Plaintiffs California Pharmacists Association (“CPhA”), California

3 Medical Association (“CMA”), California Dental Association (“CDA”), California

4 Hospital Association (“CHA”), the California Association for Adult Day Services

5 (“CAADS”), Marin Apothecary, Inc. d/b/a Ross Valley Pharmacy, South

6 Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp

7 Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical

8 Center, Sharp Coronado Hospital and Healthcare Center Fey Garcia and Charles

9 Gallagher bring this complaint pursuant to 28 U.S.C. section 1331, the Supremacy

10 Clause and 42 U.S.C. section 1983. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96

11 n. 14 (1983). This court further may compel Defendant David Maxwell-Jolly,

12 Director of the California Department of Health Care Services (the “Director”) to

13 comply with the mandatory provisions of the federal Medicaid law pursuant to 28

14 U.S.C. § 1361.

15

2. Venue lies in this judicial district under 28 U.S.C. § 1391, in that the

16 Director has offices within this judicial district and is thus deemed to reside within

17 this judicial district.

18

INTRODUCTION

19

3. California’s Medicaid program, Medi-Cal1, is a major component of the

20 “safety net” that ensures the State’s poor have access to health care services.

21 Unfortunately for those who depend on it to access basic healthcare services, the

22 low rates at which the State currently pays providers to care for Medi-Cal patients

23 have created a gaping hole in that net. Health care providers of virtually every type

24 have been steadily leaving the Medi-Cal program or scaling back services because

25 the rates they are being paid are not even sufficient to cover the costs they incur in

26
27 1 For the purposes of this pleading, the term "Medi-Cal" is used to encompass all 28 components of the California Medi-Cal program, including Denti-Cal.

2018549.4

2
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 3 of 37 Page ID #:3

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 providing services. The exodus of providers from the program is leaving massive

2 numbers of Californians without access to critical services or is forcing them to

3 obtain care in the already over-crowded and increasingly scarce emergency

4 departments of hospitals throughout the state. Despite this disturbing state of

5 affairs and an injunction prohibiting the reduction of Medi-Cal rates for certain

6 providers, California has decided to reduce Medi-Cal rates again, without regard to

7 the impact of these reductions.

8

4. The deterioration of the California safety net is perhaps most evident in

9 Los Angeles County, where, in some areas, the healthcare system is now in crisis.

10 Emergency room and hospital closures in Los Angeles County make Los Angeles

11 County especially vulnerable to reductions in Medi-Cal payments. As other

12 providers limit their participation in the Medi-Cal program, increasing numbers of

13 patients will seek care at Los Angeles County's remaining emergency rooms, which

14 will have to struggle operationally and financially to care for them.

15

5. By this action, several groups of Medi-Cal providers (physicians,

16 dentists, pharmacies, hospitals, and adult day health care centers ("ADHCs")) seek

17 an injunction to invalidate and stop the implementation of additional cutbacks in

18 Medi-Cal rates that were mandated by the California Legislature and are scheduled

19 to take effect on March 1, 2009 as to all services except inpatient hospital services.

20 The new rate reductions for inpatient hospital services became effective October 1,

21 2008. These decreases in payments will drastically impair payments to, and

22 accordingly, participation, by physicians, dentists, pharmacies, hospitals, ADHCs

23 and many other providers of health services, creating significant gaps in access for

24 Medi-Cal beneficiaries.

25

6. Such reductions are illegal because California failed to fulfill its legal

26 mandate to ensure that Medi-Cal payment rates are sufficient to enlist enough

27 providers so that beneficiaries have access to health care services to the extent such

28 services are available to the general insured public. The rates are invalid as the State

2018549.4

3
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 4 of 37 Page ID #:4

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 failed to ensure that those rates are consistent with efficiency, economy, quality of

2 care and sufficiency of access. The State further violated federal law by enacting

3 the rate reductions without the proper public process required for rate adjustments.

4 In fact, by its terms, these rate reductions require an amendment to the California

5 Medi-Cal State Plan, which may not be implemented prior to federal approval.

6

7. For these and other reasons, these rate reductions violate federal law.

7 The imposition of these rate reductions will cause irreparable injury to Plaintiffs,

8 their members and the populations they serve, both providers and beneficiaries.

9 Causing providers of services to withdraw from the Medi-Cal program because

10 reimbursement levels will fall so far below the costs of providing services, the rate

11 reductions will threaten the health of beneficiaries by interrupting provider/patient

12 relationships and by resulting in the inability of many beneficiaries to obtain

13 necessary health care. Accordingly, Plaintiffs seek declaratory and injunctive relief

14 to prevent the rate reductions from taking effect.

15

16

FEDERAL MEDICAID LAW

17

8. Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq., the

18 Medicaid Act, authorizes federal financial support to states for medical assistance to

19 low-income persons who are aged, blind, disabled, or members of families with

20 dependent children. The program is jointly financed by the federal and state

21 governments and administered by the states, with the federal financial participation

22 level currently ranging between 50 to 83 percent. The states, in accordance with

23 federal law, decide eligible beneficiary groups, types and ranges of services,

24 payment level for services, and administrative and operative procedures. Payment

25 for services is made directly by states to the individuals or entities that furnish the

26 services. 42 C.F.R. § 430.0.

27

9. In order to receive matching federal financial participation, states must

28 agree to comply with the applicable federal Medicaid law and regulations, 42

2018549.4

4
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 5 of 37 Page ID #:5

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 U.S.C. §§ 1396 et seq. Once a state has decided to participate in the Medicaid

2 program, compliance with the federal Medicaid law and regulations is mandatory.

3

10. At the state level, the Medicaid program is administered by a single

4 state agency, which is charged with the responsibility of establishing and complying

5 with a state Medicaid plan (the “State Plan”) that, in turn, must comply with the

6 provisions of the applicable federal Medicaid law. 42 U.S.C. § 1396a(a)(5) and 42

7 C.F.R. §§ 430.10 and 431.10. The State Plan must be submitted to the Secretary of

8 the United States Department of Health and Human Services (the “Secretary”) for

9 approval and must describe the policies and methods to be used to set payment rates

10 for each type of service included in the state Medicaid plan. 42 C.F.R. §§ 430.10

11 and 447.201(b). Changes to the State Plan may not be implemented by the state

12 prior to being approved by the Secretary.

13

11. Each State’s Medicaid plan must provide that medical assistance will

14 be furnished with reasonable promptness to all eligible individuals. 42 U.S.C §

15 1396a(a)(8) (hereinafter "Section (a)(8)").

16

12. For hospitals and certain other institutional providers, states must

17 establish rates through a public process that includes: (a) publication of proposed

18 rates, the methodologies underlying the establishment of such rates, and

19 justifications for the rates; (b) a reasonable opportunity for comment on the

20 proposed rates, methodologies and justifications by providers, beneficiaries and

21 their representatives, and other concerned State residents; and (c) publication of the

22 final rates, the methodologies underlying the establishment of such rates, and

23 justifications for such final rates. See 42 U.S.C. § 1396a(a)(13)(A) (hereinafter

24 “Section 13(A)”); 42 C.F.R. § 447.205.

25

13. Each state's Medicaid plan must "provide such methods and

26 procedures . . . relating to the utilization of, and the payment for, care and services

27 available under the plan which may be necessary . . . to assure that payments are

28 consistent with efficiency, economy, and quality of care and are sufficient to enlist

2018549.4

5
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 6 of 37 Page ID #:6

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

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

2 the extent that such care and services are available to the general public in the

3 geographic area . . . ." 42 U.S.C. § 1396a(a)(30)(A) (hereinafter "Section 30(A)")

4 (emphasis added); 42 C.F.R. § 447.204.

5

6

CALIFORNIA MEDI-CAL PROGRAM

7

14. The State of California has elected to participate in the Medicaid

8 program. California has named its program “Medi-Cal.” See Cal. Welf. & Inst.

9 Code §§ 14000 et seq.; 22 Cal. Code of Regs. §§ 50000 et seq.

10

15. Medi-Cal healthcare payments are disbursed in two ways. The first is a

11 "fee for service" process whereby the Department of Health Care Services (the

12 “Department”) determines whether the healthcare services were covered and

13 furnished to an eligible beneficiary, and, if so, pays the service providers directly.

14 Alternatively, the Department administers Medi-Cal through various managed care

15 models operated by public and private entities under contract.

16

16. In 1982, the California Legislature authorized the Department to enter

17 into contracts with selected hospitals to furnish inpatient services in accordance

18 with the terms set forth in those contracts. The system is known as the selective

19 provider contracting program ("SPCP"). See Cal. Welf. and Inst. Code § 14081 et

20 seq. The hospitals pursuant to the SPCP are often referred to as "contract hospitals"

21 and generally are paid based on negotiated per diem rates for inpatient services

22 furnished by the hospital. Hospitals that do not have SPCP contracts are referred to

23 herein as "noncontract hospitals" and are paid directly by the Department from the

24 fee for service program.

25

26

MEDI-CAL PAYMENTS TO PROVIDERS

27

17. Payments from the Medi-Cal fee for service program to providers are

28 governed by various statutes, regulations, the State Plan, and in some instances,

2018549.4

6
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 7 of 37 Page ID #:7

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 informal handbooks, manuals or bulletins.

2

18. Specific payments for different providers include the following:

3

a. Physician Services: Medi-Cal pays physicians for their services

4

pursuant to a physician services fee schedule. Physician payment rates

5

are set forth in 22 C.C.R. § 51503.

6

b. Dental Services: Medi-Cal pays dentists for their services

7

pursuant to a dental services fee schedule. Dental rates are set forth in

8

22 C.C.R. §§ 51506, 51506.1 and 51506.2, but these provisions do not

9

accurately reflect the most recent rate changes. The current dental rates

10

can be found in the Denti-Cal Schedule of Maximum Allowances in the

11

Denti-Cal Program Provider Handbook and/or the Denti-Cal Provider

12

Bulletin, Volume 24, Number 1.

13

c. Pharmacy Services/Drugs: Payment rates to pharmacies for

14

drugs are governed by Welfare and Institutions Code § 14105.45.

15

Pharmacy reimbursement for drugs under Medi-Cal is composed of two

16

distinct components: payment for the ingredient cost of the drug

17

product dispensed, plus a professional dispensing fee. Some

18

pharmacies also provide certain medical supplies and durable medical

19

equipment (“DME”) to Medi-Cal beneficiaries pursuant to Welfare

20

and Institutions Code section 14105.48 and Title 22, California Code of

21

Regulations, sections 51520 and 51521.

22

d. Hospital Services:

23

i.

Payments for inpatient hospital services to

24

noncontract hospitals are governed by 22 C.C.R. §§ 51545-

25

51556 and Attachment 4.19-A to the State Plan. Hospitals are

26

reimbursed the lowest of (1) their reasonable costs determined

27

using Medicare reasonable cost principles, (2) an all-inclusive

28

rate per discharge based on cumulative annual adjustments to a

2018549.4

7
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 8 of 37 Page ID #:8

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
2018549.4

base rate, (3) the 60th percentile rate per discharge of hospitals in

the same peer group, or (4) customary charges. Hospitals receive

interim payments throughout each year which are an estimate of

the final reimbursement due the hospital. Final reimbursement is

determined based on a cost report submitted by the hospital after

the close of its fiscal year.

ii.

Payments for outpatient hospital services are

addressed at 22 C.C.R. § 51509. In general, specific rates are

established for the use of hospital facilities and hospitals are paid

for other services, such as laboratory or radiology services, at the

rates that are payable to non-hospital providers. Payments

provided in certain hospital outpatient departments are governed

by Welfare and Institutions Code §14105.24.

iii.

Payments for services provided by nursing facilities

that are located as a part of hospitals (Distinct Part/Nursing

Facilities, or "DP/NFs") are governed by 22 C.C.R. § 51511 and

Attachment 4.19-D to the State Plan. Reimbursement is the

lower of (1) the hospital's projected costs of providing DP/NF

services or (2) a statewide per diem rate computed by the

Department. Payments for subacute and pediatric subacute

services are governed by 22 C.C.R. §§ 51511.5 and 51511.6. In

general, such payments are the lower of (1) the hospital’s

projected costs of providing subacute services or (2) a statewide

per diem rate computed by the Department.

iv.

Payments for clinics affiliated with hospitals and

other outpatient services are governed by Welfare and

Institutions Code § 14105.24, and 22 CCR §§ 51503.1, 51507,

51507.1, 51507.2, and 51509.1.

8
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 9 of 37 Page ID #:9

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

e. Adult Day Health Care Services: Medi-Cal pays ADHCs

2

$76.22 as a bundled per diem payment for services. 22 C.C.R. § 54501

3

does not reflect the current reimbursement rate for ADHCs.

4

Reimbursement rates for ADHC services may be found in the

5

Inpatient/Outpatient Manual, Part 2.

6 Plaintiffs maintain the right to supplement this description of and authority cited for

7 reimbursement rates.

8

9

THE AB 5 RATE REDUCTION

10

19. On February 16, 2008, the California Legislature enacted Assembly

11 Bill X3 5 ("AB 5") in special session. Section 14 of said Act added Section

12 14105.19 to the Welfare and Institutions Code. Pursuant to paragraph (b)(1) of

13 Welfare and Institutions Code § 14105.19, payments under the Medi-Cal fee for

14 service program for physicians, dentists, pharmacies, ADHCs, clinics, health

15 systems and other providers were to be reduced by ten percent for services provided

16 on or after July 1, 2008. The rate reduction will also impact inpatient services

17 furnished by noncontract hospitals, outpatient services furnished by all hospitals,

18 subacute and DP/NF services.

19

20. The Legislature also enacted Welfare and Institutions Code §

20 14166.245, which reduced payments to noncontract hospitals for inpatient services

21 furnished on or after July 1, 2008, by ten percent. This is accomplished by reducing

22 interim payments for inpatient hospital services furnished by noncontract hospitals

23 on or after July 1, 2008, by ten percent, and by limiting the final reimbursement for

24 each patient day of inpatient hospital services furnished on or after July 1, 2008, to

25 90% of the hospital's audited allowable cost per day.

26

21. The rate and payment reductions set forth in Welfare and Institutions

27 Code sections 14105.19(b)(1) and 14166.245 as enacted by AB 5 are referred to

28 herein as "the AB 5 Rate Reductions."

2018549.4

9
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 10 of 37 Page ID #:10

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

22. On April 22, 2008, Independent Living Center of Southern California

2 ("ILCSC") and other Plaintiffs filed a lawsuit in Los Angeles Superior Court against

3 Sandra Shewry to challenge the AB 5 Rate Reduction. The essence of the complaint

4 was that the AB 5 Rate Reduction violated Section 30(A) of the federal Medicaid

5 Act. The State removed this action to federal court.

6

23. On June 25, 2008, Judge Cristina Snyder of the Central District denied

7 ILCSC a preliminary injunction on the grounds that Plaintiffs had not established a

8 likelihood on its legal claims. The Plaintiffs immediately appealed the denial of the

9 preliminary injunction to the Ninth Circuit Court of Appeals.

10

24. By order dated July 16, 2008, the Ninth Circuit reversed the Court's

11 denial of the injunction, holding that the Supremacy Clause does provide a vehicle

12 for prospective enforcement of federal laws such as Section 30(A). On September

13 17, 2008, the Ninth Circuit issued its Opinion on its July 16, 2008 Order. Indep.

14 Living Ctr. Of S. Cal. v. Shewry (9th Cir. 2008) 543 F.3d 1050.

15

25. Upon remand, the district court on August 18, 2008, issued a

16 preliminary injunction ordering the State to refrain from implementing the AB 5

17 Rate Reduction for services. Indep. Living Ctr. of S. Cal. v. Shewry (C.D.Cal. 2008)

18 2008 WL 3891211. The district court found that the petitioners in that case had

19 established a likelihood of success on the merits because the Department did not

20 offer sufficient evidence that it “made the [inquiries required by Section 30(A)] in

21 deciding to enact the ten percent reduction.” The district further determined that the

22 AB 5 Rate Reduction as applied to pharmacies, physicians, dentists and ADHCs had

23 a likelihood of irreparably harming Medi-Cal beneficiaries by limiting access to the

24 healthcare services provided by these classes of providers.

25

26. On September 15, 2008, the court clarified its injunction to specify that

26 it applied to services provided by pharmacies, physicians, dentists and adult day

27 health care services, but not hospitals.

28

27. The preliminary injunction is currently on appeal to the Ninth Circuit.

2018549.4

10
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 11 of 37 Page ID #:11

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 A hearing before the Ninth Circuit is set for February 18, 2009.

2

3

THE AB 1183 RATE REDUCTIONS

4

28. On September 18, 2008, after a protracted budget stalemate, Governor

5 Schwarzenegger signed Assembly Bill 1183 (“AB 1183”), the budget trailer bill for

6 fiscal year 2008-09. A true and correct copy of AB 1183 is attached hereto and

7 incorporated herein as Exhibit A. AB 1183 amended Welfare and Institutions Code

8 section 14105.19, making most aspects of the AB 5 Rate Reduction effective only

9 through February 29, 2009. AB 1183 made the AB 5 Rate Reduction of Welfare

10 and Institutions Code section 14105.19 applicable to small and rural hospitals until

11 October 31, 2008.

12

29. AB 1183 implemented the following modified rate reductions, subject

13 to certain exemptions, effective March 1, 2009, by implementing Welfare and

14 Institutions Code section 14105.191:

15

a. A five percent rate reduction for Medi-Cal fee-for-services

16

benefits paid to certain intermediate care facilities, skilled nursing

17

facilities that are distinct parts of general acute care hospitals, rural

18

swing-bed facilities, subacute care units that are, or are parts of, distinct

19

parts of general acute care hospitals, pediatric subacute care units that

20

are, or are parts of, distinct parts of general acute care hospitals, and

21

adult day health care centers.

22

b. A five percent rate reduction to payments to pharmacies and

23

adult day health care.

24

c. A one percent rate reduction for all other Medi-Cal fee-for-

25

service benefits.

26

30. AB 1183 also imposed additional reductions on reimbursement from

27 the Medi-Cal program to noncontract hospitals for inpatient hospital services by

28 amending Welfare and Institutions Code section 14166.245 to result in the following

2018549.4

11
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 12 of 37 Page ID #:12

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 payment rates, effective March 1, 2009:

2

a. For most noncontract hospitals, interim payments for inpatient

3

hospital services are the lesser of 90% of the interim rate or 95% of an

4

“average regional per diem contract rate.” Final reimbursement is

5

limited to the lesser of 90% of the hospital's audited allowable cost per

6

day or 95% of an “average regional per diem contract rate.”

7

b. “Small and rural hospitals” are exempted from these limitations.

8

c. Certain hospitals in open health facility planning areas are

9

subject only to the 10% rate reductions and not the “average regional

10

per diem contract rate” limitations.

11

31. The reductions enacted by Welfare and Institutions Code sections

12 14105.191 and 14166.245 enacted by AB 1183 are hereinafter referred to as the

13 “AB 1183 Rate Reductions.” In this lawsuit, Plaintiffs contest the AB 1183 Rate

14 Reductions insofar as they impact Medi-Cal payments directly from the Department

15 to providers. Plaintiffs reserve any rights they may have to contest payments from

16 Medi-Cal managed care plans to providers.

17

32. Plaintiffs are informed and believe and thereon allege that, like the

18 Director’s failures enjoined in ILCSC v. Shewry, prior to enacting or implementing

19 AB 1183, no studies or other analyses were conducted by the Legislature or by the

20 Director to determine the impact the AB 1183 Rate Reductions would have on the

21 ability of Medi-Cal beneficiaries to have access to health care services to the same

22 extent as the general public. Plaintiffs are informed and believe and further allege

23 that the Legislature has long been aware that prior to and as of the date of

24 enactment of AB 1183, Medi-Cal beneficiaries did not have adequate access to

25 health care services.

26

33. Plaintiffs are informed and believe and thereon allege that, prior to

27 enacting or implementing this statute, no studies or other analyses were conducted

28 by the Legislature or by the Director to determine whether the Medi-Cal payment

2018549.4

12
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 13 of 37 Page ID #:13

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 rates resulting from the AB 1183 Rate Reductions would be consistent with

2 efficiency, economy and quality of care or with the costs of providing the services

3 affected by the rate reduction.

4

5 THE AB 1183 RATE REDUCTIONS WILL EXACERBATE THE ACCESS

6 PROBLEMS ALREADY CAUSED BY INADEQUATE MEDI-CAL RATES

7

34. As recognized in the district court’s opinion in ILCSC v. Shewry, the

8 implementation of AB 1183 Rate Reductions, like the AB 5 Rate Reduction, will

9 irreparably harm Medi-Cal beneficiaries by limiting their access to healthcare

10 services.

11

35. The Legislative Analyst's Office ("LAO") in 2001 acknowledged that

12 "[d]espite state and federal requirements, [the Department] has not conducted

13 annual rate reviews or made periodic adjustments to Medi-Cal rates to ensure

14 reasonable access to health care services." The LAO concluded that "there is not a

15 rational basis for Medi-Cal rates." The access problems extant in 2001 have only

16 worsened with time.

17

36. The Legislature's passage of the AB 1183 Rate Reductions will cause

18 numerous providers to further reduce the services they currently provide to Medi-

19 Cal beneficiaries or cease caring for Medi-Cal beneficiaries at all. The Director

20 again attempts to unlawfully impair Medi-Cal beneficiaries' access to healthcare

21 services, in a manner that will cause a ripple effect across the health care landscape.

22

23

DEFENDANT’S VIOLATIONS OF LAW

24

37. Defendant has violated, and continues to violate federal Medicaid

25 statutes, federal Medicaid regulations and the State Plan by failing to analyze Medi-

26 Cal reimbursement rates for the services affected by the AB 1183 Rate Reductions

27 to ensure that those rates are sufficient to ensure that beneficiaries of the Medi-Cal

28 program have access to services to the same extent as the general public. The

2018549.4

13
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 14 of 37 Page ID #:14

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 Medi-Cal rates currently paid for physician, hospital, dentist, ADHC and pharmacy

2 services do not afford Medi-Cal beneficiaries adequate access to services. The AB

3 1183 Rate Reductions will only exacerbate this already severe access problem.

4

38. Violation of Federal Statute: The AB 1183 Rate Reductions are invalid

5 and may not lawfully be implemented because they violate federal Medicaid law,

6 and are therefore preempted by the Supremacy Clause, because:

7

a. The AB 1183 Rate Reductions violate Section 30(A) because

8

i.

The rates resulting from the AB 1183 Rate

9

Reductions are not consistent with efficiency, economy, and

10

quality of care, and are not sufficient to enlist enough providers

11

so that care and services under the Medi-Cal program are

12

available at least to the extent that such care and services are

13

available to the general population;

14

ii.

Neither the Director nor the Legislature considered

15

the factors of efficiency, economy, quality of care, and access to

16

services prior to enacting the AB 1183 Rate Reductions;

17

iii.

Neither the Director nor the Legislature

18

demonstrated a reasonable connection between the AB 1183

19

Rate Reductions and the efficient and economical provision of

20

quality care, or ensuring access to services, prior to enacting the

21

AB 1183 Rate Reductions; and/or

22

iv.

Neither the Legislature nor the Director considered

23

the costs of providing quality care or demonstrated a reasonable

24

connection between Medi-Cal rates as affected by the AB 1183

25

Rate Reductions and provider costs.

26

b. The AB 1183 Rate Reductions violate Section (a)(8) because

27

they fail to ensure that Medi-Cal beneficiaries may access care in

28

a prompt manner; and/or

2018549.4

14
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 15 of 37 Page ID #:15

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

c. The AB 1183 Rate Reductions violate Section 13(A) as to

2

hospital services (including subacute and DP/NF services)

3

because they were not adopted through a public process as

4

required by this provision.

5

39. Violation of Federal Regulations: The AB 1183 Rate Reductions are

6 invalid and may not lawfully be implemented because they violate federal Medicaid

7 regulations, and are therefore preempted by the Supremacy Clause, because:

8

a. The AB 1183 Rate Reductions violate 42 C.F.R. § 447.204 by

9

failing to ensure that “payments [are] sufficient to enlist enough

10

providers so that services under the [State Plan] are available to

11

recipients at least to the extent that those services are available to the

12

general population” and/or

13

b. The AB 1183 Rate Reductions violate 42 C.F.R. § 447.205 as to

14

hospital services (including DP/NF services) because they were not

15

adopted through a public process as required by this provision.

16

40. Violation of the State Plan: As mentioned above, the Director must

17 follow the State Plan as a Federal requirement for participation in the Medicaid

18 program. The AB 1183 Rate Reductions are invalid and may not lawfully be

19 implemented as they violate the State Plan, and accordingly, Federal law, and are

20 therefore preempted by the Supremacy Clause, because:

21

a. Neither the Director nor the Legislature ensured that Medi-Cal

22

payment rates incorporating the AB 1183 Rate Reductions are

23

sufficient to establish equal access to services for Medi-Cal

24

beneficiaries;

25

b. With respect to non-institutional services, neither the Director

26

nor the Legislature (1) Developed an evidentiary base or rate

27

study resulting in the determination of proposed rates

28

incorporating the AB 1183 Rate Reductions; (2) Presented the

2018549.4

15
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 16 of 37 Page ID #:16

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

proposed rates incorporating the AB 1183 Rate Reductions at a

2

public hearing to gather public input; (3) Determined the final

3

rates based on the evidentiary base including the pertinent public

4

input; or (4) established the payment rates incorporating the AB

5

1183 Rate Reductions through adoption of regulations specifying

6

such rates; and/or

7

c. With respect to non-institutional services, the rate adjustments

8

made by the AB 1183 Rate Reductions otherwise fail to meet the

9

requirements of 42 C.F.R. Part 447.

10

41. No State Plan Amendment: The AB 1183 Rate Reductions are invalid

11 and may not lawfully be implemented because they are inconsistent with and

12 violates the State Plan, including, but not limited to, Attachment 4.19-A of the State

13 Plan as to hospital inpatient services and Attachment 4.19-D as to DP/NF services.

14 The AB 1183 Rate Reductions are therefore preempted by the Supremacy Clause.

15 The Director may not lawfully implement the AB 1183 Rate Reductions unless and

16 until it obtains federal approval of the necessary amendments to the State Plan to

17 the federal government. Plaintiffs are informed and believe, and thereon allege,

18 that the Director has not obtained federal approval for the AB 1183 Rate

19 Reductions.

20

21

THE PARTIES

22

42. Defendant DAVID MAXWELL-JOLLY is the Director of the

23 Department of Health Care Services and, as such, has the responsibility to

24 administer the Medi-Cal program consistent with the Medicaid Act. The Director is

25 sued in his official capacity. The Department is the single state agency charged

26 with the administration of California's Medicaid program, known as Medi-Cal. See

27 California Welf. & Inst. Code §§ 14000 et seq. The Director has an office in the

28 County of Los Angeles.

2018549.4

16
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 17 of 37 Page ID #:17

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

43. Plaintiff CALIFORNIA PHARMACISTS ASSOCIATION (“CPhA”)

2 represents more than 5,000 pharmacists in California. CPhA is incorporated in the

3 State of California with its principal office in Sacramento, California. It is the

4 largest state professional association of pharmacists in the United States. Many of

5 CPhA's members own or operate pharmacies in the State of California, many of

6 which are providers under California's Medi-Cal program. The mission of CPhA is

7 to represent pharmacists in all practice settings in the State, and to advocate the role

8 of pharmacy as an essential venue of health care for patients. CPhA brings this

9 action on its own behalf and in its representative capacity on behalf of its members

10 who will be directly and adversely affected by the threatened rate reduction, and on

11 behalf of the Medi-Cal patients served by its members.

12

44. Plaintiff CALIFORNIA MEDICAL ASSOCIATION (“CMA”) is a

13 nonprofit, incorporated professional association of more than 30,000 physicians

14 practicing in the State of California, with its principal office in Sacramento,

15 California. CMA’s membership includes California physicians who are engaged in

16 the private practice of medicine, in all specialties. CMA’s primary purposes are “to

17 promote the science and art of medicine, the care and well-being of patients, the

18 protection of the public health, and the betterment of the medical profession.”

19 CMA brings this action on its own behalf and in its representative capacity on

20 behalf of its members, many of whom are providers under California’s Medi-Cal

21 program and will be directly and adversely affected by the threatened rate

22 reduction, and on behalf of its members’ patients.

23

45. Plaintiff CALIFORNIA DENTAL ASSOCIATION is a nonprofit,

24 professional association representing more than 22,000 dentists throughout the State

25 of California. This number reflects 72 percent of all California licensed dentists.

26 Founded in 1870, CDA is the largest constituent member of the American Dental

27 Association. CDA is incorporated in the State of California with its principal office

28 in Sacramento, California. Through public policy, advocacy, education and other

2018549.4

17
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 18 of 37 Page ID #:18

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 means, CDA has promoted the health of the public, the profession and the

2 individuals it serves for over a century. CDA brings this action on its own behalf

3 and in its representative capacity on behalf of its members, many of whom are

4 providers under California’s Medi-Cal program and will be directly and adversely

5 affected by the threatened rate reduction, and on behalf of its members’ patients.

6

46. Plaintiff CALIFORNIA HOSPITAL ASSOCIATION ("CHA") is a

7 trade association representing the interests of hospitals in the State of California.

8 CHA is incorporated in the State of California with its principal office in

9 Sacramento, California. CHA's member hospitals provide both inpatient and

10 outpatient hospital services. In addition, many of CHA's members operate special

11 units, such as emergency departments or distinct part nursing units ("DP/NFs") that

12 provide skilled nursing care. CHA represents nearly 450 hospitals and health

13 systems throughout California, including general acute care hospitals, children’s

14 hospitals, rural hospitals, psychiatric hospitals, academic medical centers, county

15 hospitals, investor-owned hospitals, and multi-hospital health systems. These

16 hospitals furnish vital health care services to millions of our states’ citizens CHA

17 also represents more than 150 Executive, Associate and Personal members. CHA

18 brings this action on its own behalf and in its representative capacity on behalf of its

19 members, many of which are providers under California’s Medi-Cal program and

20 will be directly and adversely affected by the threatened rate reduction, and on

21 behalf of its members’ patients.

22

47. Plaintiff CALIFORNIA ASSOCIATION FOR ADULT DAY

23 SERVICES ("CAADS") is a 501(c)(6) nonprofit statewide association to support

24 the development of adult day services as an alternative to institutional care.

25 CAADS is incorporated in the State of California with its principal office in

26 Sacramento, California. Established in 1977, CAADS is the largest state

27 association for adult day services in the nation, representing more than 133 licensed

28 ADHC providers. CAADS is a membership-based association supported by dues,

2018549.4

18
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 19 of 37 Page ID #:19

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 grants and educational activities. CAADS members include providers, case

2 managers, consultants, vendors and others interested in supporting the mission of

3 the organization. The vast majority of the provider members own and/or operate

4 ADHCs, which are licensed pursuant to the California Adult Day Health Care Act,

5 Health and Safety Code § 1570, et seq, and are a benefit under the Medi-Cal

6 Program pursuant to the Adult Day Health Medi-Cal Law, Welfare and Institutions

7 Code § 14520, et seq. ADHCs provide intensive day services through a multi-

8 disciplinary team of health and social services professionals to frail elderly and

9 disabled persons, in order to maintain their ability to reside in the community.

10 Without such ADHC services, many of the ADHC participants would, within a

11 short period of time, have to rely on emergency department visits or be prematurely

12 placed in a nursing facility. CAADS brings this action on its own behalf and in its

13 representative capacity on behalf of its members, many of which are providers

14 under California’s Medi-Cal program and will be directly and adversely affected by

15 the threatened rate reduction, and on behalf of its members’ patients.

16

48. Plaintiffs CPhA, CMA, CDA, CHA, and CAADS are hereinafter

17 referred to collectively as Associational Plaintiffs.

18

49. Plaintiff Marin Apothecary, Inc. d/b/a Ross Valley Pharmacy (“Ross

19 Valley”) is a pharmacy licensed in the State of California. Ross Valley’s business

20 address is 2 Bonaire Road, #130, Larkspur, California. As part of its pharmacy

21 practice and business, Ross Valley provides drug products and services to Medi-Cal

22 patients. Ross Valley’s current practice consists of approximately five percent cash

23 patients, 80 percent private insurance (including Medicare Part D plans), and 15

24 percent medical participation. The services provided by Ross Valley include

25 dispensing of prescription and OTC medications and devices, process of TARS,

26 delivery, immunizations and consulting regarding the proper use of prescription and

27 OTC drugs, vitamins, herbals, and medical devices.

28

50. Plaintiff South Sacramento Pharmacy (“South Sacramento”) is a

2018549.4

19
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 20 of 37 Page ID #:20

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 pharmacy licensed in the State of California. South Sacramento’s business address

2 is 5385 Franklin Boulevard, Suite 1, Sacramento, California 95820. As part of its

3 pharmacy practice and business, South Sacramento provides drug products and

4 services to Medi-Cal patients. Its current practice consists of approximately six

5 percent cash patients, 64 percent private insurance (including Medicare Part D

6 plans), and 30 percent Medi-Cal participation. South Sacramento provides services

7 including dispensing of prescription and OTC medications and devices, delivery

8 services, TARS processing, consulting regarding the proper use of prescription OTC

9 drugs, and counseling in non-English languages such as Spanish.

10

51. Plaintiff Farmacia Remedios, Inc. is a pharmacy licensed in the State of

11 California. As part of its pharmacy practice and business, Farmacia Remedios, Inc.

12 provides drug products and services to Medi-Cal patients. Its current practice

13 consists of approximately 10 percent cash patients, 60 percent private insurance

14 (including Medicare Part D plans), and 30 percent Medi-Cal participation

15 (100 percent fee for service and 0 percent Medi-Cal managed care. The services

16 provided by Farmacia Remedios, Inc., include dispensing of prescription and over

17 the counter (“OTC”) medications and devices, Treatment Authorization Requests

18 (“TARS), Spanish language, high services, extra prescription consultation,

19 medication compliance technologies (Medisets) and consulting regarding the proper

20 use of prescription and OTC drugs, vitamins, and herbals.

21

52. Plaintiff Acacia Adult Day Services (“AADS”) is a non-profit

22 organization incorporated in the State of California. AADS is licensed by the State

23 of California to operate an ADHC located at 11391 Acacia Parkway, Garden Grove,

24 California. ADHCs provide intensive day services through a multi-disciplinary

25 team of health and social services professionals to frail elderly and disabled persons,

26 in order to maintain their ability to reside in the community. In operation for almost

27 29 years, AADS is viewed as a model program for Alzheimer's care and services for

28 frail elders and disabled adults. AADS currently serves 163 participants, all of

2018549.4

20
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 21 of 37 Page ID #:21

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 whom have complex, fragile medical conditions. The majority of these participants

2 are insured by Medi-Cal, including Medi-Cal fee-for-service. Since AADS is

3 dependent on Medi-Cal reimbursement for the majority of our participants, any

4 change to the reimbursement or cash flow has an immediate impact on its financial

5 status. As a result of the AB 1183 Rate Reductions, AADS will lose additional

6 Medi-Cal funding.

7

53. Plaintiff Sharp Memorial Hospital ("SMH") is a California non-profit

8 public benefit corporation. SMH operates five hospital facilities, including SMH,

9 Sharp Cabrillo Hospital, Sharp Mary Birch Hospital for Women, and Sharp Mesa

10 Vista Hospital, all in San Diego, CA. SMH, Sharp Cabrillo Hospital, Sharp Mary

11 Birch Hospital for Women and Sharp Mesa Vista Hospital all participate in the

12 Medi-Cal program and are reimbursed directly by the Medi-Cal program for

13 services provided to Medi-Cal beneficiaries. Sharp Cabrillo Hospital provides

14 distinct part nursing services. Accordingly, SMH is directly impacted by the AB

15 1183 Rate Reductions.

16

54. Plaintiff Sharp Chula Vista Medical Center is a California nonprofit

17 public benefit corporation. Sharp Chula Vista Medical Center operates a hospital

18 named Sharp Chula Vista Medical Center in Chula Vista, CA. Sharp Chula Vista

19 Medical Center also operates the adjacent Birch-Patrick Skilled Nursing Facility,

20 which provides distinct part nursing services. Sharp Chula Vista Medical Center

21 participates in the Medi-Cal program and is reimbursed directly by the Medi-Cal

22 program for services provided to Medi-Cal beneficiaries. Accordingly, Sharp Chula

23 Vista Medical Center is directly impacted by the AB 1183 Rate Reductions.

24

55. Plaintiff Grossmont Hospital Corporation is a California nonprofit

25 public benefit corporation. Grossmont Hospital Corporation operates under a single

26 license a hospital named Grossmont Hospital and the Briar Patch Skilled Nursing

27 Facility, which provides distinct part nursing services, in La Mesa, CA. Grossmont

28 Hospital Corporation participates in the Medi-Cal program and is reimbursed

2018549.4

21
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 22 of 37 Page ID #:22

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 directly by the Medi-Cal program for services provided to Medi-Cal beneficiaries.

2 Accordingly, Grossmont Hospital Corporation is directly impacted by the AB 1183

3 Rate Reductions.

4

56. Plaintiff Sharp Coronado Hospital And Healthcare Center ("SCHHC")

5 is a California nonprofit public benefit corporation. SCHHC operates under one

6 license a hospital named Sharp Coronado Hospital and Healthcare Center and the

7 Villa Coronado Skilled Nursing Facility, which provides distinct part nursing

8 services and subacute services, in Coronado, CA. SCHHC participates in the Medi-

9 Cal program and is reimbursed directly by the Medi-Cal program for services

10 provided to Medi-Cal beneficiaries. Accordingly, SCHHC is directly impacted by

11 the AB 1183 Rate Reductions.

12

57. Plaintiffs SMH, Sharp Chula Vista Medical Center, Grossmont

13 Hospital Corporation and SCHHC provide hospital outpatient services that are

14 subject to reduction by the AB 1183 Rate Reductions.

15

58. Plaintiffs Ross Valley Pharmacy, Zweber Apothecary, South

16 Sacramento, Farmacia Remedios, Inc., AADS, SMH, Sharp Chula Vista Medical

17 Center, Grossmont Hospital Corporation and SCHHC are hereinafter referred to

18 collectively as Provider Plaintiffs.

19

59. Plaintiff Fey Garcia is an 85 year old woman who lives alone in San

20 Francisco. Ms. Garcia is a Medi-Cal beneficiary and attends North & South of

21 Market Adult Day Health, an ADHC, five days per week. Ms. Garcia has very poor

22 eyesight due to macular degeneration, being blind in the right eye and having badly

23 blurred vision in the left eye. She suffers from degenerative joint disease, a weak

24 right knee, severe arthritis in her shoulder, high blood pressure and high cholesterol.

25 Ms. Garcia walks with a cane and benefits from the physical therapy she receives at

26 the ADHC. She also has a history of major depression and benefits from the

27 support, counseling and social contact she receives.

28

60. Plaintiff Charles Gallagher is a 54 year old man who lives in Napa,

2018549.4

22
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 23 of 37 Page ID #:23

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 California and has been attending Adult Day Services of Napa Valley (“ADSNV”)

2 since 1998. When Mr. Gallagher was 36, he had an aneurism, which permanently

3 damaged his brain and left him severely disabled. He was in a wheelchair for

4 several years, but eventually learned to walk with a walker or cane with the help of

5 ADSNV. He has a history of seizures and has a shunt in his brain to drain off

6 excess fluid. He also has a history of hypertension and depression. Mr. Gallagher

7 lives alone and is dependent for assistance on a part-time caregiver at home and on

8 ADSNV. He has been able to maintain some independence due as a result of the

9 physical therapy and the nursing monitoring he receives at ADSNV, which helps

10 him manage the 15 medications he currently takes and monitors his medical

11 condition. Without adult day health care services, it is likely that Mr. Gallagher

12 could not longer live independently.

13

14

ASSOCIATIONAL PLAINTIFFS’ STANDING

15

61. Many of the members of Associational Plaintiffs are Medi-Cal

16 providers. These Medi-Cal providers will suffer a concrete economic injury in the

17 form of reduced payment for services by the unlawful implementation of the AB

18 1183 Rate Reductions.

19

62. Medi-Cal providers are in a unique position to advance the interests of

20 Medi-Cal beneficiaries. The members of Associational Plaintiffs which provide

21 services to Medi-Cal beneficiaries have an extremely close relationship with their

22 Medi-Cal beneficiary patients who seek that care. A Medi-Cal beneficiary cannot

23 secure medical services without his/her health care providers, and without

24 reimbursement by Medi-Cal for those services. Medi-Cal providers are better

25 positioned and informed as to the impact of a reimbursement rate cut on the

26 services they intend to provide.

27

63. Furthermore, Medi-Cal beneficiaries face economic hindrances to their

28 ability to assert their own rights in this case. To qualify for Medi-Cal, an individual

2018549.4

23
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 24 of 37 Page ID #:24

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 must demonstrate financial need for medical assistance from the State. In light of

2 their finances and the cost of litigation, Medi-Cal beneficiaries may not be able to

3 effectively protect their interests.

4

64. Associational Plaintiffs, as associations representing the interests of

5 doctors, dentists, pharmacies, hospitals and ADHCs that participate in the Medi-Cal

6 program and the Medi-Cal beneficiaries served by these providers, and as parties

7 seeking to compel the Director to comply with his public duties as defined by

8 federal law, have a right and an enforceable interest to maintain this action to: (1)

9 enjoin Defendant’s continuing violation of federal Medicaid law; and (2) compel

10 Defendant to comply with the provisions of the applicable federal laws.

11

65. Moreover, Associational Plaintiffs have a right and an enforceable

12 interest to maintain this action against the Director under the Supremacy Clause of

13 the United States Constitution and under the Civil Rights Act, 42 U.S.C. § 1983, to

14 enjoin the Director's continuing violation of the federal Medicaid law and to compel

15 the Director to comply with the provisions of the applicable federal Medicaid law.

16

66. Under 28 U.S.C. section 2201, Associational Plaintiffs are entitled to a

17 declaration of their rights, their members’ rights, and/or their members’ patients’

18 rights under federal Medicaid law.

19

20

PROVIDER PLAINTIFFS STANDING

21

67. As providers in the Medi-Cal program, the Provider Plaintiffs will

22 suffer a concrete economic injury in the form of reduced payment for services if the

23 AB 1183 Rate Reductions are implemented.

24

68. Provider Plaintiffs have a sufficiently close relationship with their

25 patients who are Medi-Cal beneficiaries to have third-party standing on behalf of

26 their beneficiary plaintiffs. There are hindrances or genuine obstacles to Medi-Cal

27 beneficiaries’ ability to assert their own interests. Here, the obstacle Medi-Cal

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

2018549.4

24
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 25 of 37 Page ID #:25

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 reimbursement rates on providers in light of providers' costs and the further effect of

2 a rate cut on the provision of services to Medi-Cal beneficiaries. Providers are the

3 ones who know the relationship of reimbursement to their cost of services.

4

69. Moreover, Provider Plaintiffs have a right and an enforceable interest to

5 maintain this action against the Director under the Supremacy Clause of the United

6 States Constitution and under the Civil Rights Act, 42 U.S.C. § 1983, to enjoin the

7 Director's continuing violation of the federal Medicaid law and to compel the

8 Director to comply with the provisions of the applicable federal Medicaid law.

9

70. Under 28 U.S.C. section 2201, Provider Plaintiffs are entitled to a

10 declaration of their rights, their members’ rights, and/or their members’ patients’

11 rights under federal Medicaid law.

12

13

FIRST CAUSE OF ACTION

14 (VIOLATION OF 42 U.S.C. § 1396a(a)(30)(A)/SUPREMACY CLAUSE)

15

71. Plaintiffs hereby incorporate by reference paragraphs 1 through 68,

16 inclusive, as though fully set forth herein.

17

72. The AB 1183 Rate Reductions violate Section 30(A) of the Medicaid

18 Act because:

19

a. The rates resulting from the AB 1183 Rate Reductions are not

20

consistent with efficiency, economy, and quality of care, and are not

21

sufficient to enlist enough providers so that care and services under the

22

Medi-Cal program are available at least to the extent that such care and

23

services are available to the general population;

24

b. Neither the Director nor the Legislature considered the factors of

25

efficiency, economy, quality of care, and access to services prior to

26

enacting the AB 1183 Rate Reductions;

27

c. Neither the Director nor the Legislature demonstrated a

28

reasonable connection between the AB 1183 Rate Reductions and the

2018549.4

25
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 26 of 37 Page ID #:26

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

provision of quality care in an efficient and economic manner, or

2

ensuring access to services, prior to enacting the AB 1183 Rate

3

Reductions; and

4

d. Neither the Legislature nor the Director considered the costs of

5

providing quality care or demonstrated a reasonable connection

6

between Medi-Cal rates as affected by the AB 1183 Rate Reductions

7

and provider costs.

8

73. The AB 1183 Rate Reductions are thus preempted by the Supremacy

9 Clause of the United States Constitution, art. IV, because the mandated across-the-

10 board rate reductions, enacted solely for budgetary reasons in disregard of the

11 Section 30(A) statutory factors, stand as an obstacle to the accomplishment and

12 execution of the full purposes and objectives of Congress in the enactment of said

13 Section.

14

SECOND CAUSE OF ACTION

15

(VIOLATION OF 42 U.S.C. § 1396a(a)(8)

16

SUPREMACY CLAUSE/42 U.S.C. § 1983)

17

74. Plaintiffs hereby incorporate by reference paragraphs 1 through 41,

18 inclusive, as though fully set forth herein.

19

75. The AB 1183 Rate Reductions violate Section (a)(8) because they fail

20 to ensure that Medi-Cal beneficiaries may access care in a prompt manner.

21

76. The AB 1183 Rate Reductions are thus preempted by the Supremacy

22 Clause of the United States Constitution, art. IV.

23

24

THIRD CAUSE OF ACTION

25

(VIOLATION OF 42 U.S.C. § 1396a(a)(13)(A)

26

SUPREMACY CLAUSE/42 U.S.C. § 1983)

27

77. Plaintiffs hereby incorporate by reference paragraphs 1 through 74,

28 inclusive, as though fully set forth herein.

2018549.4

26
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 27 of 37 Page ID #:27

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

78. The AB 1183 Rate Reductions violate Section 13(A) as to hospital

2 services (including DP/NF and subacute services) because they were not adopted

3 through a public process as required by this provision.

4

79. The AB 1183 Rate Reductions are thus preempted by the Supremacy

5 Clause of the United States Constitution, art. IV.

6

7

FOURTH CAUSE OF ACTION

8

(VIOLATION OF 42 C.F.R. § 447.204/SUPREMACY CLAUSE)

9

80. Plaintiffs hereby incorporate by reference paragraphs 1 through 77,

10 inclusive, as though fully set forth herein.

11

81. The AB 1183 Rate Reductions are invalid and may not lawfully be

12 implemented because they violate 42 C.F.R. § 447.204, and are therefore preempted

13 by the Supremacy Clause, by failing to ensure that “payments [are] sufficient to

14 enlist enough providers so that services under the [State Plan] are available to

15 recipients at least to the extent that those services are available to the general

16 population.”

17

18

FIFTH CAUSE OF ACTION

19

(VIOLATION OF 42 C.F.R. § 447.205/SUPREMACY CLAUSE)

20

82. Plaintiffs hereby incorporate by reference paragraphs 1 through 79,

21 inclusive, as though fully set forth herein.

22

83. The AB 1183 Rate Reductions are invalid and may not lawfully be

23 implemented because they violate 42 C.F.R. § 447.205 as to hospital services

24 (including DP/NF services), and are therefore preempted by the Supremacy Clause,

25 because they were not adopted through a public process as required by this

26 provision.

27 / / /

28 / / /

2018549.4

27
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 28 of 37 Page ID #:28

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

SIXTH CAUSE OF ACTION

2

(VIOLATION OF STATE PLAN/ FAILURE TO AMEND STATE

3

PLAN/SUPREMACY CLAUSE)

4

84. Plaintiffs hereby incorporate by reference paragraphs 1 through 81,

5 inclusive, as though fully set forth herein.

6

85. The AB 1183 Rate Reductions are invalid and may not lawfully be

7 implemented as they violate the State Plan, including, but not limited to,

8 Attachment 4.19-A of the State Plan as to hospital inpatient services and

9 Attachment 4.19-D as to DP/NF services, and accordingly, Federal law, and are

10 therefore preempted by the Supremacy Clause, because:

11

a. Neither the Director nor the Legislature ensured that Medi-Cal

12

payment rates incorporating the AB 1183 Rate Reductions are

13

sufficient to establish equal access to services for Medi-Cal

14

beneficiaries;

15

b. With respect to non-institutional services, neither the Director

16

nor the Legislature (1) Developed an evidentiary base or rate study

17

resulting in the determination of proposed rates incorporating the AB

18

1183 Rate Reductions; (2) Presented the proposed rates incorporating

19

the AB 1183 Rate Reductions at a public hearing to gather public input;

20

(3) Determined the final rates based on the evidentiary base including

21

the pertinent public input; or (4) established the payment rates

22

incorporating the AB 1183 Rate Reductions through adoption of

23

regulations specifying such rates; and/or

24

c. With respect to non-institutional services, the rate adjustments

25

made by the AB 1183 Rate Reductions otherwise fail to meet the

26

requirements of 42 C.F.R. Part 447.

27

86. The Director may not lawfully implement the AB 1183 Rate

28 Reductions unless and until it obtains federal approval of the necessary amendments

2018549.4

28
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 29 of 37 Page ID #:29

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 to the State Plan to the federal government.

2

3

SEVENTH CAUSE OF ACTION

4

(DECLARATORY RELIEF)

5

87. Plaintiffs hereby incorporate by reference paragraphs 1 through 84,

6 inclusive, as though fully set forth herein.

7

88. An actual and justiciable controversy exists between Plaintiffs and

8 Director regarding the validity of the AB 1183 Rate Reductions that are scheduled

9 to take effect on March 1, 2009. Plaintiffs contend that the rate reduction is invalid

10 and unlawful in violation of federal statute, federal regulations, and the State Plan,

11 while the Director contends that the rate reductions are valid in all respects.

12

89. Accordingly, pursuant to 28 U.S.C. § 2201, Plaintiffs request this

13 Court to declare that the rate reductions are invalid and unlawful.

14

90. No administrative appeal process or other administrative remedy is

15 available to Plaintiffs to challenge the AB 1183 Rate Reductions.

16

91. All of the said injuries are great, immediate, and irreparable, for which

17 damages at law are inadequate, and for which plaintiffs have no plain, adequate or

18 speedy relief at law or otherwise.

19

20

WHEREFORE, Plaintiffs pray for judgment as follows:

21

1. For an Order declaring that the AB 1183 Rate Reductions violate 42

22 U.S.C. sections 1396a(a)(30)(A), 1396a(a)(8) and 1396a(a)(13), 42 C.F.R. sections

23 447.204 and 447.205, and the California State Plan and are thus invalid and

24 preempted by the Supremacy Clause of the United States Constitution, art. IV;

25

2. For an Order declaring that the AB 1183 Rate Reductions represent a

26 de facto amendment to the State Plan and therefore said rate reductions cannot be

27 imposed without federal approval;

28

3. For an Order declaring that, when setting Medi-Cal rates in the future,

2018549.4

29
COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 30 of 37 Page ID #:30

1 the Department must consider whether the rates have a reasonable relationship to the

2 costs of providing services to Medi-Cal beneficiaries and are sufficient to ensure

3 equal access to services for Medi-Cal beneficiaries and, to the extent rates deviate

4 from such costs or are insufficient to ensure equal access, may not alter nor adjust

5 the rates;

6

4. For an Order preliminarily and permanently enjoining Director from

7 effectuating the AB 1183 Rate Reductions or reducing to any degree the Medi-Cal

8 rates for health care services that are affected by Welfare and Institutions Code§§

9 14105.191 and 14166.245; and

. 10

5. For the costs of suit, including reasonable attorneys' fees incurred by

11 Plaintiffs; and

12

6. Such other and further relief as may be just and proper.

13 DATED: January 29,2009

HOOPER, LUN Y & BOOKMAN, INC.

14

15

OYD A. BOOKMAN

16

s for Plaintiffs

17

18

19

20

21

22

23

24

25

26

27

28

2018549.4

COMPLAINT

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 31 of 37 Page ID #:31
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
NOTICE OF ASSIGNMENT TO UNITED STATES MAGISTRATE JUDGE FOR DISCOVERY
This case has been assigned to District Judge Christina A. Snyder and the assigned discovery Magistrate Judge is Charles Eick. The case number on all documents filed with the Court should read as follows:
CV09- 722 CAS (Ex)
Pursuant to General Order 05-07 of the United States District Court for the Central District of California, the Magistrate Judge has been designated to hear discovery related motions.
All discovery related motions should be noticed on the calendar ofthe Magistrate Judge

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ··
NOTICE TO COUNSEL

A copy of this notice must be served with the summons and complaint on all defendants (if a removal action is filed, a copy of this notice must be served on all plaintiffs).

Subsequent documents must be filed at the following location:

[X] Western Division
312 N. Spring St., Rm. G-8 Los Angeles, CA 90012

U Southern Division

U Eastern Division

411 West Fourth St., Rm. 1-053

3470 Twelfth St., Rm. 134

Santa Ana, CA 92701-4516

Riverside, CA 92501

Failure to file at the proper location will result in your documents being returned to you.

CV-18 (03/06)

NOTICE OF ASSIGNMENT TO UNITED STATES MAGISTRATE JUDGE FOR DISCOVERY

...

Case 2:09-cvU-0N0IT7E2D2-SCTAATS,~!-iM'A~ONISTRDIoCcTuCCmOIVeUInRLtTC1O, CVEERFNSiTlHeREdAETL01D/I2S9TR/0I9C~1-~P-awgCeA3L2IFoOfR3N7IA Page ID #:32

I (a).PLAINTIFFS (Check.box if you are representing:yourself[Jh!,:;,,,,,fi~''''VYl''0r,Ar:''· , DEFENDANTS

CALIFORNIAJ?HARMACISTS,ASSOCIATION~.v;;,_,.:.A' .:;~"*''• .• I: DAVID MAXWELL-JOLLY, DIRECTOR OF THE CALIFORNIA

r"' 11 .•.~.• CAL.l.E.ORNI&ME···DIC~ASSOCIATION;.CA;LIEOR.N. IA,·.·•••·· DENTAL AssociATION; CALIFORNIA HOSPITAL ···•·

.DEPARTMENTOFHEALTHCAREl~E~Y__~~E ). ~

.

DASASYOSCEIRAVTIIOCENS; ;CMAALRIFIONRANPIOATAHSESCOACRfYA~TIINOCN.FdO/bK/a'ARDOUSLST

\~ \.,., ~.

\, \, '':"-

VALLEYPHARMACY; SOUTII SACRAMENTO\·

· I

PHARMACY; FARMACIA REMEDIOS, INC:; ACACIA

ADULTDAY SERVICES;SHARP_MEMORIAE..HOSPlTAL;

GROSSMONT HOSPITAL CORPORATION; SHARP CHULA

VISTA MEDICALCENTER; SHARP CORONADO'

HOSPITAL AND HEALTHCARE CENTER; FEY GARCIA

and CHARLES GALLAGHER,

(b) Attorneys (Firm Name, Address and Telephone Number. Ifyou.are representing yourself, provide same.)
CraigJ. Cannizzo, Felicia Y Sze·and Michael A. Dubin HOOPER, LUNDY AND BOOKMAN, INC., 575 Market Street,

Attorneys (If Known)

Ste. 2300, San Francisco, CA 94105 (415) 875-8500 Byron J. Gross, Lloyd A. Bookman and Jordan B. Keville

HOOPER, LUNDY AND BOOKMAN, INC.

1875 Century Park East, Ste 1600

Los Angeles, CA 90067

(310) 551-8111

an-xinone·-box -u. B"A~aS-OF JURISDICTION (Piace

on·iy.)·--"·"·-- iii:- CITIZENSHIP OF PRiNCIPAL PARTIES .. For Diversity Cases Only

(Place an X in one box for plaintiff and one for defendant.)

0 I U.S. Government Plaintiff 0 2 U.S. Government Defendant

1813 Federal Question (U.S.
Government Not a Party

Citizen ofThis State

PTF DEF
·0 I 0 I

0 4 Diversity (Indicate Citizenship Citizen ofAnother Stlte of Parties in Item III)

02 02

Citizen or Subject of a Foreign Comtry 0 3 0 3

PTF DEF
Incorporated or Principal Place 04 04
bfBusiness in this State
Incorporated and Principal Place 0 5 0 5
of Business in Another State
Foreign Nation

IV. ORIGIN (Place an X in one box onl .)

1811 Original 0 2 Removed from 0 3 Remanded from 0 4Reinstated or 0 5 Transferred from another district (specify): 0 6Multi- 0 7 Appeal to District

Proceeding

State Court

Appellate Court

Reopened

District

Judge from

Litigation Magistrate Judge

V. REQUESTED IN COMPLAINT: JURY DEMAND: 0 Yes 181 No (Check 'Yes' only if demanled in complaint.)

CLASS ACTION under F.R.C.P. 23: 0 Yes 181 No

0 MONEY DEMANDED IN COMPLAINT:$ r.OO

VI. CAUSE OF ACTION (Cite the U. S. Civil Statute under which you are filing and write a brief statement ofcause. Do not cite jurisdictional statutes unless diversity.) Plaintiff claims that Defendant's AB 1183 rate reductions violate, among other things, the federal Medicaid Act, 42 U.S.C. ss. 1396a(a)(30(A), 1396a(a)(8), 1396a(a)(13)(A) and 42 C.F.R. ss. 447.204 and 447.205. VII. NATURE OF SUIT (Place an X in one box only.)

CV-71 (05/08)

CIVIL COVER SHEET

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OTHECR aSTsAeTU2T:E0S9-cv-00722CO-CNTARSAC-TMAN DocumTOeRnTtS1 Filed 01T/2OR9T/S09 Page 3P3RISoOfN3ER7 Page ID #LA:3B3OR

400 State Reapportionment 410 Antitrust

110 Insurance 120 Marine

PERSONAL INJURY 310 Airplane

PERSONAL ROPERTY

ETITIONS

710 Fair Labor Standards

510 Motions to Vacate

Act

430 Banks and Banking
450 Commerce/ICC Rates/etc.
460 Deportation 470 Racketeer Influenced
and Corrupt Organizations

130 Miller Act
140 Negotiable Instrument
150 Recovery of Overpayment & Enforcement of Judgment
151 Medicare Act

315 Airplane Product Liability
320 Assault, Libel & Slander
330 Fed. Employers' Liability
340 Marine

370 Other Fraud 371 Truth in Lending
380 Other Personal Property Damage
385 Property Damage Product Liability
BANKRUPTCY

Sentence Habeas Corpus 530 General 535 Death Penalty 540 Mandamus/ Other 550 Civil Rights

720 Labor/Mgmt. Relations
730 Labor/Mgmt. Reporting & Disclosure Act
740 Railway Labor Act
790 Other Labor

480 Consumer Credit 490 Cable/Sat TV 810 Selective Service 850 Securities/Commodities/
Exchange 875 Customer Challenge 12
USC 3410 890 Other Statutory Actions 891 Agricultural Act 892 Economic Stabilization
Act 893 Environmental Matters 894 Energy Allocation Act 895 Freedom of Info. Act 900 Appeal of Fee Determi-
nation Under Equal Access to Justice 950 Constitutionality of State Statutes

152 Recovery of Defaulted Student Loan (Excl. Veterans)
153 Recovery of Overpayment of Veteran's Benefits
160 Stockholders' Suits 190 Other Contract 195 Contract Product
Liability 196 Franchise
REAL PROPERTY
210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property

345 Marine Product Liability
350 Motor Vehicle 355 Motor Vehicle
Product Liability 360 Other Personal
Injury 362 Personal Injury-
Med Malpractice 365 Personal Injury-
Product Liability 368 Asbestos Personal
Injury Product Liability
IMMIGRATION
462 Naturalization Application
463 Habeas CorpusAlien Detainee
465 Other Immigration

22 Appeal 28 USC 158
423 Withdrawal 28 USC 157
CIVIL RIGHTS
441 Voting 442 Employment 443 Housing/Acco-
mmodations 444 Welfare 445 American with
Disabilities – Employment 446 American with Disabilities – Other 440 Other Civil Rights

555 Prison Condition
FORFEITURE / PENALTY
610 Agriculture 620 Other Food &
Drug 625 Drug Related
Seizure of Property 21 USC 881 630 Liquor Laws 640 R.R.& Truck 650 Airline Regs 660 Occupational Safety /Health 690 Other

Litigation 791 Empl. Ret. Inc.
Security Act PROPERTY RIGHTS 820 Copyrights 830 Patent 840 Trademark
SOCIAL SECURITY
61 HIA(1395ff) 862 Black Lung (923) 863 DIWC/DIWW
405(g)) 864 SSID Title XVI 865 RSI (405(g)) FEDERAL TAX SUITS 870 Taxes (U.S. Plaintiff
or Defendant) 871 IRS-Third Party 26
USC 7609

Actions

FOR OFFICE USE ONLY: Case Number:

.

AFTER COMPLETING THE FRONT SIDE OF FORM CV-71, COMPLETE THE INFORMATION REQUESTED BELOW.

CV-71 (05/08)

CIVIL COVER SHEET

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Page 1 of 2

Case 2:09-cv-00722-CAS-MAN Document 1 Filed 01/29/09 Page 34 of 37 Page ID #:34

UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA
CIVIL COVER SHEET

VIII(a). IDENTICAL CASES: Has this action been previously filed in this court and dismissed, remanded or closed? [ZJ NoD Yes
I If yes, list case number(s):
Vlll(b). RELATED CASES: Have any cases been previously filed in this court that are related to the present case? D No [ZJ Yes If yes, list case number(s): 12:08-cv-03315; 2:09-cv-0382

Civil cases are deemed related if a previously filed case and the present case:

Check all boxes that apply)

[ZJ A. Arise from the same or closely related transactions, happenings, or events; or [ZJ B. Call for determination of the same or substantially related or similar questions of law and fact; or
0 C. For other reasons would entail substantial duplication oflabor if heard by different judges; or 0 D. Involve the same patent, trademark or copyright, and one of the factors identified above in a, b or c also is present.

IX. VENUE: (When completing the following information, use an additional sheet if necessary.)

a) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH named plaintiff resides.

D Check here if the government, its agencies or employees is a named plaintiff. If this box is checked, go to item (b).

County in this District:*

California County outside of this District; State, if other than California; or Foreign Country

ACACIA ADULT DAYSERVJCES- Orange County

CAL. PHARMACISTS ASSOCIATION- Sacramento County CALIFORNIA MEDICAL ASSOCIATION- Sacramento County CALIFORNIA DENTAL ASSOCIATION- Sacramento County CALIFORNIA HOSPITAL ASSOCIATION - Sacramento County CAL. ASSOC. FOR ADULT DAY SERV.- Sacramento County SOUTH SACRAMENTO PHARMACY - Sacramento County MARIN APOTHECARY, INC.- Marin County FARMACIA REMEDIOS, INC. - Alameda County SHARP MEMORIAL HOSPITAL- San Diego County GROSSMONT HOSPITAL CORPORATION- San Diego County SHARP CHULA VISTA MEDICAL CENTER- San Diego County SHARP CORONADO HOSP. AND HTHCR. CTR.- San Diego County FEY GARCIA - San Francisco County CHARLES GALLAGHER- Napa County

b) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH named defendant resides. D Check here if the government, its agencies or employees is a named defendant. If this box is checked, go to item (c).

County in this District:*

California County outside of this District; State, if other than California; or Foreign Country

DAVID MAXWELL-J()LLY, DIRECTOR OF THE

CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICESlocated in Sacramento County but has offices in Los Angeles

Offices

in

Sacramento

and

Los

Angeles

Counties.

County

c) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH claim arose. Note: In land condemnation cases, use the location of the tract of land involved.

County in this District: •

California County outside of this District; State, if other than California; or Foreign Countrv
Each of the claims in the Complaint arose, among other places, in Sacramento County

• Los Angeles, Orange, San Bernardino, Riverside, Ventura, Santa B~;a, or San Luis Obispo Counties

Note: In land condemnation cases, use the location of the tract of~p inv d

I ~./~ft-- X. SIGNATURE OF ATTORNEY (OR PRO PER):

loate ~anuary 29, 2009

Doyd Moo"Krrlan

-----

Notice to CounseVParties: The CV-71 (JS-44) Civil Cover Sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or otl1er papers as required by law. This form, approved by the Judicial Conference of the United States in September 1974, is required pursuant to Local Rule 3 -1 is not filed but is used by the Clerk of the Court for the purpose of statistics, venue and initiating the civil docket sheet. (For more detailed instructions, see separate instructions sheet.)

CV-71 (05/08)

CIVIL COVER SHEET

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Key to StatisCticaalscoede2s r:e0la9tin-gctvo-S0oc0ia7l S2e2cu-rCityACaSse-sM: AN Document 1 Filed 01/29/09 Page 35 of 37 Page ID #:35
Nature of Suit Code Abbreviation Substantive Statement of Cause of Action

861

HIA

All claims for health insurance benefits (Medicare) under Title 18, Part A, of the Social Security Act, as amended.

Also, include claims by hospitals, skilled nursing facilities, etc., for certification as providers of services under the

program. (42 U.S.C. 1935FF(b))

862

BL

All claims for "Black Lung" benefits under Title 4, Part B, of the Federal Coal Mine Health and Safety Act of 1969.

(30 U.S.C. 923)

863

DIWC

All claims filed by insured workers for disability insurance benefits under Title 2 of the Social Security Act, as

amended; plus all claims filed for child's insurance benefits based on disability. (42 U.S.C. 405(g))

863

DIWW

All claims filed for widows or widowers insurance benefits based on disability under Title 2 of the Social Security

Act, as amended. (42 U.S.C. 405(g))

864

SSID

All claims for supplemental security income payments based upon disability filed under Title 16 of the Social Security

Act, as amended.

865

RSI

All claims for retirement (old age) and survivors benefits under Title 2 of the Social Security Act, as amended. (42

U.S.C. (g))

CV-71 (05/08)

CIVIL COVER SHEET

Page 2 of 2
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HOOCPaEsRe, 2L:U09N-DcvY-0&07B2O2-OCKAMS-/MANINCD. ocument 1 Craig J. Cannizzo (State Bar No. 7u379) 575 Market Street, 23rd Floor San Francisco, California 94105 Telephone: 415.875.8500 Lloyd A. Bookman (State Bar No. 89251) 1875 Century Park East, #1600 Los Angeles, California 90067

Filed 01/29/09 Page 36 of 37 Page ID #:36

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

California Pharmacists Association; California Medical Association; California Dental Association; California Hospital

CASE NUMBER

Association; California Association for Adult Day Services; Marin

Apothecary, Inc. d/b/a Ross Valley Pharmacy; South Sacramento

Pharmacy; Farmacia Remedios, Inc.; Acacia Adult Day Services;

Sharp Memorial Hospital; Grossmont Hospital Corporation; Sharp

Chula Vista Medical Center; Sharp Coronado Hospital and

Healthcare Center; Fey Garcia and Charles Gallagher

,

(

PLAINTIFF(Sf

v.

David Maxwell-Jolly, Director of the California Department of Health Care Services,
DEFENDANT(S).

SUMMONS

TO:DEFENDANT(S): David Maxwell-Jolly, Director of the California Department of Health Care Services
A lawsuit has been filed against you.
Within twenty (20) days after service of this summons on you (not counting the day you received it), you
must serve on the plaintiff an answer to the attached k8J complaint D __illlle nded complaint
D D counterclaim cross-claim or a motion under Rule 12 ofthe Federal Rules of Civil Procedure. The answer
or motion must be served on the plaintiffs attorney, Crai J. Canni o, whose address is 575 Market Street, Suite 2300, San Francisco, CA 94105 . If you fail to do so, judg ent y default will be entered against you for the relief demanded in the complaint. You also must file yo a wer f'/ffiOtion WI the court.

JAN 29 200§ Dated: -------------------------

(Seal ofthe Court)

[Use 60 days ifthe defendant is the United States or a United States agency, or is an officer or employee ofthe United States. Allowed
60 days by Rule 12(a)(3)}.

CV-OIA (12/07)

SUMMONS

American LegaiNet, Inc. www.USCourtForms.com

HOOCPaEsRe,2L:0U9N-cDvY-0&07B2O2-OCKAMS.-MANINCD. ocument 1 Craig J. Cannizzo (State Bar No. '!0379) 575 Market Street, 23rd Floor San Francisco, California 94105 Telephone: 415.875.8500 Lloyd A. Bookman (State Bar No. 89251) 1875 Century Park East, #1600 Los Angeles, California 90067

Filed 01/29/09 Page 37 of 37 Page ID #:37

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

California Pharmacists Association; California Medical Association; California Dental Association; California Hospital

CASE NUMBER

Association; California Association for Adult Day Services; Marin Apothecary, Inc. d/b/a Ross Valley Pharmacy; South Sacramento

Pharmacy; Farmacia Remedios, Inc.; Acacia Adult Day Services;

Sharp Memorial Hospital; Grossmont Hospital Corporation; Sharp Chula Vista Medical Center; Sharp Coronado Hospital and

)

Healthcare Center; Fey Garcia and Charles Gallagher

PLAINTIFF(S)

v.

David Maxwell-Jolly, Director of the California Departmentof Health Care Services,
DEFENDANT(S).

SUMMONS

TO:DEFENDANT(S): David Maxwell-Jolly, Director of the California Department of Health Care Services
A lawsuit has been filed against you.
Within twenty (20) days after service of this swnmons on you (not counting the day you received it), you
0 must serve on the plaintiff an answer to the attached fZ] complaint __illl1e nded complaint 0 0 counterclaim cross-claim or a motion under Rule 12 ofthe Federal Rules of Civil Procedure. The answer
or motion must be served on the plaintiffs attorney, Craig J. Cannizzo, whose address is 575 Market Street, Suite 2300, San Francisco, CA 94105 . If you fail to do so, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court.

Clerk, U.S. District Court

JAN 29 2009
Dated: _ _ _ _ _ _ _ _ _ _ __

LA'REE HORN
By: __________~~------------
o$f- 1UL·Y L~-IC- n•<,,.,
t"fj~/ . '·

et}6?

[Use 60 days ifthe defendant is the United States or a United States agency, or is an officer or-~e~(~il

60 days by Rule 12(a)(3)].

, '

CV-OIA (12/07)

SUMMONS

American LegaiNet, Inc. www.USCourtForms.com

 
 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-722 CAS (MANx)

Date April 16, 2010

CALIFORNIA PHARMACISTS ASSOCIATION, ET AL. V. DAVID MAXWELL JOLLY

Present: The Honorable CHRISTINA A. SNYDER

CATHERINE JEANG

Not Present

N/A

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(Chambers:) Order Vacating this Court’s March 9, 2009 Order and Granting Plaintiffs’ Motion for Preliminary Injunction Pursuant to the Ninth Circuit Court of Appeals Mandate Issued March 25, 2010 (09-55365)

The facts and procedural history of this action are known to the parties and summarized in this Court’s March 9, 2009 order denying plaintiffs’ motion for preliminary injunction with regard to the reimbursement rate reduction to hospitals in Assembly Bill 1183 (“AB 1183"), which was signed by the Governor and filed with the Secretary of State on September 30, 2008.

On March 3, 2010, the Ninth Circuit Court of Appeals reversed this Court’s March 9, 2009 order. No. 09-55365, slip op. at 5 (9th Cir. Mar. 3, 2010). Specifically, the Ninth Circuit reversed the Court’s denial of a preliminary injunction, and remanded to this Court “to enjoin AB 1183's five percent Medi-Cal reimbursement rate reduction as to the [relevant] hospital services.” Id. On March 25, 2010, the Ninth Circuit issued a mandate that the judgment entered March 3, 2010 was to take effect this date.

Pursuant to the mandate from the Ninth Circuit, this Court hereby vacates the March 9, 2009 order denying plaintiffs’ motion for preliminary injunction with regard to AB 1183's reimbursement rate reduction to hospitals. Accordingly, the Court hereby grants plaintiffs’ motion for preliminary injunction and orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. & Inst. Code § 14105.191 and 14166.245, as modified by AB 1183, beginning on April 16, 2010, by refraining from reducing by five percent payments to hospitals for services provided under the Medi-Cal fee-for-service

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 1 of 2

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-722 CAS (MANx)

Date April 16, 2010

CALIFORNIA PHARMACISTS ASSOCIATION, ET AL. V. DAVID MAXWELL JOLLY

program, which include non-contract inpatient hospital services, outpatient services, Distinct Part Nursing Facilities, and subacute services.

IT IS SO ORDERED.

Initials of Preparer

00 : 00 CMJ

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 2 of 2

 
 Case 2:09-cv-00722-CAS-MAN Document 86 Filed 06/16/10 Page 1 of 2 Page ID #:4301

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 CRAIG J. CANNIZZO (State Bar No. 70379) FELICIA Y SZE (State Bar No. 233441)
2 HOOPER, LUNDY & BOOKMAN, PC 575 Market Street, Suite 2300
3 San Francisco, CA 94105 Telephone: (415) 875-8500
4 Facsimile: (415) 875-8519

5 BYRON J. GROSS (State Bar No. 76626) LLOYD A. BOOKMAN (State Bar No. 89251)
6 JORDAN B. KEVILLE (State Bar No. 217868) E-Mail: jkeville@health-law.com
7 HOOPER, LUNDY & BOOKMAN, PC 1875 Century Park East, Suite 1600
8 Los Angeles, California 90067-2517 Telephone: (310) 551-8103
9 Facsimile: (310) 551-8181

10 Attorneys for Plaintiffs

11

12

UNITED STATES DISTRICT COURT

13

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

14 CALIFORNIA PHARMACISTS 15 ASSOCIATION, et al.,

16

Plaintiffs,

17

vs.

18

DAVID MAXWELL-JOLLY, DIRECTOR OF THE CALIFORNIA

19

DEPARTMENT OF HEALTH CARE SERVICES; and DOES 1

20 through 20, inclusive,

21

Defendants.

CASE NO. CV09-722 CAS (MANx) ORDER RE JOINT MOTION FOR MODIFICATION OF COURT'S APRIL 16, 2010 PRELIMINARY INJUNCTION ORDER

22

23

24

25

26

27

28

1081458.1

[PROPOSED] ORDER RE JOINT MOTION TO MODIFY APRIL 16, 2010 ORDER

Case 2:09-cv-00722-CAS-MAN Document 86 Filed 06/16/10 Page 2 of 2 Page ID #:4302

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

ORDER

2

Having considered the Hospital Plaintiffs and the Director's Joint Motion For

3 Modification of this Court's April 16, 2010 Order and good cause appearing

4 therefor,

5

IT IS HEREBY ORDERED that the Hospital Plaintiffs and Director's Joint

6 Motion is GRANTED. The Court's April 16 order will be amended to read as

7 follows:

8

Pursuant to the mandate from the Ninth Circuit, this Court hereby

9

vacates the March 9, 2009 order denying plaintiffs' motion for a

10

preliminary injunction with regard to AB 1183's reimbursement rate

11

reduction to hospitals. According, the Court hereby grants plaintiffs'

12

motion for preliminary injunction and orders respondent Director, his

13

agents, servants, employees, attorneys, successors, and all those

14

working in concert with him to refrain from enforcing Cal. Welf. &

15

Inst. Code 14105.191 and 14166.245 with respect to services provided

16

under the fee-for-service Medi-Cal program, by refraining from

17

reducing by five percent payments to hospitals for distinct part nursing

18

facility services and subacute services, by refraining from reducing by

19

one percent payments to hospitals for outpatient services, and by

20

refraining from limiting interim or final payments for inpatient services

21

provided by hospitals that are not under contract with the Department

22

of Health Care Services pursuant to Welfare and Institutions Code

23

section 14081, et seq. to 95 percent of the applicable regional average

24

per diem contract rate for tertiary hospitals and for all other hospitals,

25

as described in Welfare and Institutions Code section 14166.245.

26

IT IS SO ORDERED.

27 DATED: June 16, 2010 28

By: Christina A. Snyder Judge of the United States District Court

1081458.1

[PROPOSED] ORDER RE JOINT MOTION TO MODIFY APRIL 16, 2010 ORDER

 
 Case 2:09-cv-00722-CAS-MAN Document 86 Filed 06/16/10 Page 1 of 2 Page ID #:4301

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1 CRAIG J. CANNIZZO (State Bar No. 70379) FELICIA Y SZE (State Bar No. 233441)
2 HOOPER, LUNDY & BOOKMAN, PC 575 Market Street, Suite 2300
3 San Francisco, CA 94105 Telephone: (415) 875-8500
4 Facsimile: (415) 875-8519

5 BYRON J. GROSS (State Bar No. 76626) LLOYD A. BOOKMAN (State Bar No. 89251)
6 JORDAN B. KEVILLE (State Bar No. 217868) E-Mail: jkeville@health-law.com
7 HOOPER, LUNDY & BOOKMAN, PC 1875 Century Park East, Suite 1600
8 Los Angeles, California 90067-2517 Telephone: (310) 551-8103
9 Facsimile: (310) 551-8181

10 Attorneys for Plaintiffs

11

12

UNITED STATES DISTRICT COURT

13

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

14 CALIFORNIA PHARMACISTS 15 ASSOCIATION, et al.,

16

Plaintiffs,

17

vs.

18

DAVID MAXWELL-JOLLY, DIRECTOR OF THE CALIFORNIA

19

DEPARTMENT OF HEALTH CARE SERVICES; and DOES 1

20 through 20, inclusive,

21

Defendants.

CASE NO. CV09-722 CAS (MANx) ORDER RE JOINT MOTION FOR MODIFICATION OF COURT'S APRIL 16, 2010 PRELIMINARY INJUNCTION ORDER

22

23

24

25

26

27

28

1081458.1

[PROPOSED] ORDER RE JOINT MOTION TO MODIFY APRIL 16, 2010 ORDER

Case 2:09-cv-00722-CAS-MAN Document 86 Filed 06/16/10 Page 2 of 2 Page ID #:4302

HOOPER, LUNDY & BOOKMAN, INC.
1875 CENTURY PARK EAST, SUITE 1600 LOS ANGELES, CALIFORNIA 90067-2517 TEL: (310) 551-8111 • FAX: (310) 551-8181

1

ORDER

2

Having considered the Hospital Plaintiffs and the Director's Joint Motion For

3 Modification of this Court's April 16, 2010 Order and good cause appearing

4 therefor,

5

IT IS HEREBY ORDERED that the Hospital Plaintiffs and Director's Joint

6 Motion is GRANTED. The Court's April 16 order will be amended to read as

7 follows:

8

Pursuant to the mandate from the Ninth Circuit, this Court hereby

9

vacates the March 9, 2009 order denying plaintiffs' motion for a

10

preliminary injunction with regard to AB 1183's reimbursement rate

11

reduction to hospitals. According, the Court hereby grants plaintiffs'

12

motion for preliminary injunction and orders respondent Director, his

13

agents, servants, employees, attorneys, successors, and all those

14

working in concert with him to refrain from enforcing Cal. Welf. &

15

Inst. Code 14105.191 and 14166.245 with respect to services provided

16

under the fee-for-service Medi-Cal program, by refraining from

17

reducing by five percent payments to hospitals for distinct part nursing

18

facility services and subacute services, by refraining from reducing by

19

one percent payments to hospitals for outpatient services, and by

20

refraining from limiting interim or final payments for inpatient services

21

provided by hospitals that are not under contract with the Department

22

of Health Care Services pursuant to Welfare and Institutions Code

23

section 14081, et seq. to 95 percent of the applicable regional average

24

per diem contract rate for tertiary hospitals and for all other hospitals,

25

as described in Welfare and Institutions Code section 14166.245.

26

IT IS SO ORDERED.

27 DATED: June 16, 2010 28

By: Christina A. Snyder Judge of the United States District Court

1081458.1

[PROPOSED] ORDER RE JOINT MOTION TO MODIFY APRIL 16, 2010 ORDER

 
 California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

630 F.Supp.2d 1144 United States District Court,
C.D. California, Western Division.
CALIFORNIA PHARMACISTS ASSOCIATION, et al., Plaintiff(s), v.
David Maxwell JOLLY, Defendant.
Case No. CV 09–722 CAS (MANx). | March 9, 2009.
Synopsis Background: Health care providers and others brought suit against the Director of the Department of Health Care Services of the State of California, challenging the validity of legislation mandating a five percent rate reduction for Medi-Cal’s fee-for-service benefits paid to adult day health centers (ADHCs). Plaintiffs moved for preliminary injunctive relief.
Holdings: The District Court, Christina A. Snyder, J., held that:
[1] Eleventh Amendment did not bar the suit;
[2] plaintiffs had standing; and
[3] preliminary injunctive relief was warranted.
Ordered accordingly.
Attorneys and Law Firms
*1146 Byron J. Gross, Craig J. Cannizzo, Felicia Y. Sze, Jordan Brian Keville, Lloyd A. Bookman, Michael A. Dubin, Hooper Lundy & Bookman Inc., Los Angeles, CA, for Plaintiffs.
Gregory Martin Cribbs, Randall R. Murphy, CAAG, Office of Attorney General of California, Los Angeles, CA, Shannon M. Chambers, CAAG, Office of the Attorney General, Sacramento, CA, for Defendant.
Opinion

ORDER GRANTING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION AS TO ADULT DAY
HEALTH CENTERS
CHRISTINA A. SNYDER, District Judge.
I. INTRODUCTION AND BACKGROUND On September 16, 2008, the California Legislature passed Assembly Bill 1183 (“AB 1183”), which was subsequently signed by the Governor and filed with the Secretary of State on September 30, 2008. AB 1183, inter alia, amends Cal. Welf. & Inst.Code. § 14105.191 and § 14166.245, mandating that, for dates of service on or after March 1, 2009, Medi–Cal reimbursement payments to some fee-for-service providers are reduced by one percent, five percent, or ten percent, depending on provider type. Particularly relevant to the instant action, AB 1183 mandates a five percent rate reduction for Medi–Cal fee-for-service benefits paid to pharmacies and Adult Day Health Centers (“ADHCs”).
These reductions mandated in AB 1183 replace the ten percent rate reduction put into place by Assembly Bill X35 (“AB 5”), which terminates on February 28, 2009. See Cal. Welf. & Inst.Code § 14105.19(b)(1). AB 5 was passed by the California Legislature on February 16, 2008. On August 18, 2008, the ten percent rate reduction mandated by AB 5 was partially enjoined by this Court in a related action, Independent Living Center of Southern California, Inc. v. Sandra Shewry, CV–08–3315–CAS. In issuing the preliminary injunction, this Court found that petitioners had, inter alia, demonstrated a strong likelihood of success in showing that AB 5 was preempted by § 30(A) of the Medicaid Act (referred to herein as “§ 30(A)”). The Court’s August 18, 2008 order is currently being appealed to the Court of Appeals for the Ninth Circuit.1
On January 29, 2009, plaintiffs California Pharmacists Association; California Medical Association; California Dental Association; California Hospital Association; California Association for Adult Day Services; Marin Apothecary, Inc.; South Sacramento Pharmacy; Farmacia Remedios, Inc.; Acacia Adult Day Services; Sharp Memorial Hospital; Grossmont Hospital Corporation;
1

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

Sharp Chula Vista Medical Center; Sharp Coronado Hospital and Healthcare *1147 Center; Fey Garcia; and Charles Gallagher filed the instant action against David Maxwell–Jolly, Director of the Department of Health Care Services of the State of California. Plaintiffs’ complaint challenges the AB 1183 Medi–Cal reimbursement rate reductions to various providers.
On February 11, 2009, plaintiffs filed the instant motion for a preliminary injunction. Specifically, plaintiffs seek an order for a preliminary injunction restraining and enjoining the defendant from reducing Medi–Cal fee-for-service rates to pharmacies and adult day health care centers (“ADHCs”) pursuant to AB 1183.
On February 27, 2009, this Court issued an injunction in the related case Managed Pharmacy Care, et al. v. David Maxwell–Jolly, CV09–382–CAS, ordering defendant “Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. & Inst.Code § 14105.191(b)(3), as modified by AB 1183 beginning on March 1, 2009, by refraining from reducing by five percent payments to pharmacies for prescription drugs (including prescription drugs and traditional over-the-counter drugs provided by prescription) provided under the Medi–Cal fee-for-service program.” Therefore, the Court considers plaintiffs’ request for an injunction as to pharmacies to be moot, and considers herein only their request for injunction as to ADHCs.2
On February 26, 2009, defendant filed an opposition to plaintiff’s motion for preliminary injunction. A reply was filed on March 4, 2009. After carefully considering the arguments set forth by the parties, the Court finds and concludes as follows.
II. LEGAL STANDARD [1] [2] A preliminary injunction is appropriate when the moving party shows either (1) a combination of probable success on the merits and the possibility of irreparable harm, or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in the moving party’s favor. See Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir.1987). These are not two distinct tests, but rather “the opposite ends of a single ‘continuum in which the required showing of harm varies inversely with the required showing of meritoriousness.’ ” Id. A “serious question” is one on which the movant “has a fair chance of success on the

merits.” Sierra On–Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1421 (9th Cir.1984).
III. DISCUSSION
A. ELEVENTH AMENDMENT AND PRUDENTIAL STANDING [3] Before addressing the merits of plaintiffs’ argument for preliminary injunction, the Court must first address two arguments raised by defendant: (1) that *1148 plaintiffs’ suit is barred by the Eleventh Amendment and (2) that plaintiffs lack standing. The Court finds that neither of these arguments is persuasive.
The essence of defendant’s Eleventh Amendment argument is that plaintiffs’ suit effectively amounts to a request for money damages to be paid out of the state treasury, in violation of the Eleventh Amendment. See Opp’n at 25, n. 22 (“Plaintiffs seek to recover money against the State for funds above the 5% payment reduction”), citing Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974) (“Thus the rule has evolved that a suit by private parties seeking to impose a liability which must be paid from public funds in the state treasury is barred by the Eleventh Amendment”). However, the Court disagrees with defendant’s characterization of plaintiffs’ claim. Plaintiffs complaint does not seek money damages, but instead seeks only prospective injunctive relief—namely, an injunction preventing defendant from enforcing a state law that, defendants argue, is preempted by the Medicaid Act. Such prospective injunctive relief against a state official is permissible under Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), even where such an injunction will have an effect on the state treasury. See, e.g., Milliken v. Bradley, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977) (federal courts permitted “to enjoin state officials to conform their conduct to requirements of federal law, notwithstanding a direct and substantial impact on the state treasury”).
[4] Defendant also argues that plaintiffs lack prudential standing, because they are health care providers who have no “rights” under the federal law they seek to enforce. Opp’n at 25, n. 22. The Court disagrees. In its September 17, 2008 order in the related action Independent Living, 543 F.3d at 1065, the Ninth Circuit determined that petitioners in that action had standing:
Petitioners include independent
2

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

pharmacies and health care providers participating in the State’s Medi–Cal program that, according to their complaint, will be directly injured, by loss of gross income, when the ten-percent rate reduction takes effect. The Supreme Court repeatedly has recognized that such [direct economic] injuries establish the threshold requirements of Article III standing. Moreover, this injury is directly traceable to the Director’s implementation of AB 5, and would certainly be redressed by a favorable decision of this court enjoining the ten-percent rate reduction.
As in Independent Living, plaintiffs in the instant action include ADHC providers, who, plaintiffs allege, would be directly injured by the five percent Medi–Cal reimbursement rate reduction.
Furthermore, the Ninth Circuit in Independent Living noted that
petitioners also include several individual Medi–Cal beneficiaries, who will be injured or put at risk of injury by implementation of the 10% provider payments cuts because those cuts will reduce quality services, and access to quality services. This injury, like the injury to medical providers discussed above, is the direct result of the Director’s implementation of AB 5, and would certainly be remedied by a decision granting injunctive relief. Such an injury to those individuals most directly affected by the administration of [a state welfare] program is sufficient to allow petitioners to seek injunctive relief in federal court.
543 F.3d 1050 (9th Cir.2008). Because plaintiffs in this case also include Medi–Cal beneficiaries who may be harmed by AB 1183 rate reductions, the Court finds defendant’s *1149 argument that plaintiffs lack standing

to be without merit.
B. LIKELIHOOD OF SUCCESS ON THE MERITS [5] [6] Pursuant to the holding of the Ninth Circuit in the related action Independent Living, 543 F.3d at 1065, the Court finds, as an initial matter, that plaintiffs may pursue a claim for relief under the Supremacy Clause based on the allegation that AB 1183 is preempted by § 30(A). Here, plaintiffs’ Supremacy Clause claim is predicated upon federal conflict preemption. Under general principles of federal preemption, state law is preempted only to the extent that it actually conflicts with federal law. Pacific Gas & Elec. Co. v. State Energy Comm’n, 461 U.S. 190, 204, 103 S.Ct. 1713, 75 L.Ed.2d 752 (1983). Such a conflict may arise either where “compliance with both federal and state regulations is a physical impossibility, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id. at 203–04, 103 S.Ct. 1713 (citations omitted).
Thus, to prevail on the merits plaintiffs will have to prove either that it is not possible for the Department to comply with both AB 1183 and the Medicaid Act or that AB 1183 stands as an obstacle to the enforcement of § 30(A). As such, the Court turns to the statutory provisions at issue here.
The “quality of care” provision of § (30)(A) provides that:
[a] State plan for medical assistance must ... provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care.
42 U.S.C. § 1396a(30)(A). The “equal access” provision of § 30(A) provides that:
[a] State plan for medical assistance must ... provide such methods and procedures relating to
3

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments 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 population in the geographic area.
Id.
In Orthopaedic Hospital v. Kizer, 1992 WL 345652 (C.D.Cal.1992) ( “Orthopaedic I ”), plaintiff-hospital providers filed suit pursuant to 42 U.S.C. § 1983 (“§ 1983”), claiming that the Director violated § 30(A) by setting reimbursement rates for hospital outpatient services without considering the effect of hospital costs on efficiency, economy, and quality of care.3 Id. at *1. The district court concluded that § 30(A) was enforceable in a § 1983 action, and that the Department “had a judicially enforceable obligation” to consider and make findings each time it modified reimbursement rates. Id. at *2. According to the district court, § 30(A) obligated the Department to consider efficiency, economy, and quality of care, which it referred to as the “relevant factors.” Id. at *4. The district court found that the Director had acted arbitrarily and capriciously in establishing six of the seven challenged rates. Id. The court then remanded the matter to *1150 the Department for further consideration. Id. at *14. Upon remand, the Department conducted a rate study, and readopted the reimbursement rates without change. Orthopaedic Hospital II/III v. Belshe, 103 F.3d 1491, 1495 (9th Cir.1997).
The hospitals returned to the district court, filing two lawsuits (Orthopaedic II/III ) that the district court consolidated, arguing that the adopted rates did not comply with § 30(A). Id. The district court entered judgment in favor of the Department, finding that the Department was not statutorily required to consider hospital costs when setting reimbursement rates. Id. The hospitals appealed, and the Ninth Circuit reversed. The Ninth Circuit’s interpretation held that § 30(A) “provides that payments for services must be consistent with efficiency, economy, and quality of care, and that those payments must be sufficient to enlist enough providers to

provide access to Medicaid recipients.” Id. at 1496 (emphasis in original). The Ninth Circuit therefore concluded that under § 30(A)
the Director must set hospital outpatient reimbursement rates that bear a reasonable relationship to efficient and economical hospitals’ costs of providing quality services, unless the Department shows some justification for rates that substantially deviate from such costs. To do this, the Department must rely on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting.
Id.4 Further, the Ninth Circuit found that “[i]t is not justifiable for the Department to reimburse providers substantially less than their costs for purely budgetary reasons.” Id. at 1499 n. 3.5
Whatever else its effect may have been, it is clear that Sanchez v. Johnson, 416 F.3d 1051 (9th Cir.2005) left undisturbed the rule announced in Orthopaedic II/III that § 30(A) creates duties on behalf of the Department, i.e., the duty to consider efficiency, economy, and quality of care when establishing reimbursement rates. Indeed, the Sanchez court recognized that “[§ 30(A) ] speaks ... of the State’s obligation to develop ‘methods and procedures’ for providing services generally.” Sanchez, 416 F.3d at 1059 (emphasis added).
Because Orthopaedic II/III is binding authority on this Court, the Court finds that when the State of California seeks to modify reimbursement rates for health care services provided under the Medi–Cal program, it must consider efficiency, economy, and quality of care, as well as the effect of providers’ costs on those relevant statutory factors.
*1151 In the instant motion for preliminary injunction, plaintiffs argue that AB 1183’s five percent reimbursement rate reduction to ADHCs is preempted by § 30(A), because the Legislature did not consider any of the relevant factors as required by Orthopaedic II/III. Specifically, plaintiffs argue that the legislative history indicates that the bill was passed solely for budgetary reasons, arguing that “AB 1183’s legislative history presents no evidence that the Legislature made any consideration of efficiency, economy, quality of care, and
4

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

equality of access, as well as the effect of providers’ costs on those relevant statutory factors in the 24–hour period between AB 1183’s amendment and its passage.” Mot. at 13.

Defendants, however, argue that the requirements of Orthopaedic II/III are in fact satisfied, because the Department itself performed a detailed analysis of the relevant factors. Specifically, defendant submits the Department’s report “Analysis of Assembly Bill 1183 Medi–Cal Reimbursement for Adult Day Health Care Centers,” (“Department ADHC Analysis”), completed in February 2009, well after the enactment of AB 1183 on September 16, 2008. Opp’n at 11. The Department ADHC Analysis concludes that:

After a 5% payment reduction is

implemented on March 1, 2009,

Medi–Cal reimbursement paid to

ADHCs will comply with title 42,

United States Code, section

1396(a)(30)(A). The available data

indicates that Medi–Cal recipients

will continue to have sufficient

access to ADHC services to the

extent required by federal law. In

fact they will actually have far

better access to ADHC services

than the general population does ...

The 5% payment reduction will

result in more efficient and

economical Medi–Cal coverage. It

will not have any negative impact

for Medi–Cal recipients. The

number of ADHCs participating in

Medi–Cal has tripled since 1998

and 94% of all licensed ADHCs are

actively enrolled in Medi–Cal.

Finally, the Department determined

that Medi–Cal reimbursement will

in the aggregate compensate

provider costs at a level that is well

above the ‘range of reasonableness’

that was acceptable under the

repealed Boren Amendment. Thus,

reduced reimbursement will be

sufficient under the more flexible

requirements

of

section

1396(a)(30)(A).

Department ADHC Analysis at 10–11.

Plaintiffs, however, argue that the Department’s post-hoc analysis does not satisfy the requirements of Orthopaedic II/III. The Court agrees. First, the Court notes that AB 1183, as passed by the Legislature, does not provide the Department with any discretion to determine whether the five percent rate reduction should be implemented based on the Department’s consideration of the relevant factors. See Cal. Welf. & Inst.Code. § 14105.191 (“Notwithstanding any other provision of law, or order to implement changes in the level of funding for health care services, the director shall reduce provider payments, as specified in this section ...”) (emphasis added). In Orthopaedic II/III, in which rates set by the Department, rather than the Legislature, were at issue, the court stated that the “the Department must rely on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting.” 103 F.3d at 1496 (emphasis added); see also id. at 1499–1500 (“Since the Department did not adequately consider hospitals’ costs when readopting its rates, the Department’s actions were arbitrary and capricious and contrary to law”) (emphasis added). The Orthopaedic II/III holding therefore indicates that the body responsible for rate setting must consider the relevant factors contemporaneously with the adoption of the rates. Because the Department has no authority to alter *1152 the rate reduction imposed by the Legislature, the Department’s post hoc analysis does not satisfy the requirements of Orthopaedic II/III.
Furthermore, in this case, it does not appear that the Legislature appropriately considered any of the relevant factors before passing AB 1183. Defendant responds to plaintiffs’ arguments that the legislature did not perform the required analysis by submitting evidence indicating that (1) between May 2008 and September 2008, Department employees provided information to legislative staff members concerning the rate reductions; (2) in June 2008, the Subcommittee 3 Health Human Services, Labor, and Veterans Affairs Major Action Report included modifications and rejections of certain rate reductions proposed by the Administration; and (3) in July 2008, the Summary Overview Budget Conference Committee Report includes discussions of the rate reductions. See Trueworthy Decl. ¶ 5, Exs. A–E. However, none of this demonstrates that the Legislature relied on responsible cost studies providing reliable data in setting the rates. See Orthopaedic Hospital II/III, 103 F.3d at 1496. Furthermore, even if a post hoc analysis of the relevant factors was sufficient, the Court is not persuaded that the analysis actually conducted by the Department was adequate, given that the Department
5

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

relied on NF–A data, which may not be an adequate proxy for ADHC costs. Reply at 12.
Therefore, because it appears that the Legislature and the Department did not properly consider the relevant factors prior to the passage of the five percent rate reduction in AB 1183, the Court finds that plaintiffs have a strong likelihood of success on the merits.
C. IRREPARABLE HARM The next question before this Court is whether plaintiffs have shown that Medi–Cal beneficiaries will be irreparably harmed if the five percent rate reduction to ADHCs is permitted to go into effect. Defendant argues that plaintiffs cannot show irreparable harm resulting from the five percent rate reduction to ADHCs, given that the Department ADHC Analysis estimates that after AB 1183, ADHCs will be compensated at a level above 100 percent of necessary and reasonable ADHC costs.6 Mot. at 16–17; Department ADHC Analysis at 8. Furthermore, with regard to access, defendants argue that, because Medicare and other health insurance plans do not cover ADHC services, ADHC services are not generally available to the general population, and therefore, “[p]laintiffs cannot meet their burden of proving that any payment reduction, let alone a 5% payment reduction, is going to affect access to services to which the general population has limited access in the first place.” Mot. at 17; see Ferreria Decl. ¶ 3. In addition, defendant argues that, since 1998, an additional 212 ADHCs have enrolled in the Medi–Cal program, indicating that “for profit” ADHCs have found the reimbursement rate to be sufficiently profitable to join and remain in the Medi–Cal program. Mot. at 17; Department ADHC Analysis at 10. Finally, the Department’s ADHC Analysis found that when the ten percent rate reduction was in effect between July 1, 2008 and August 17, 2008, there was only a two percent decrease in paid ADHC claims compared to a similar *1153 period the prior year, indicating that a more moderate reduction will not result in a decrease in access. Mot. at 18; ADHC Analysis at 10.
Plaintiffs, however, submit declarations from ADHC providers which, they argue, indicate that ADHC provider costs currently exceed the reimbursement rate of $76.22 per patient participant (“participant”) per day, and that the five percent rate reduction will serve to exacerbate this disparity. Mot. at 18; see Kauffman Decl. ¶ 6 (costs are $97.48 per participant per day); Vega Decl. ¶ 10 (costs are $95 per participant per day; five percent rate reduction

will increase daily per participant deficit from $18.78 to $22.59); Regalia Decl. ¶ 7 (costs are $102 per participant per day). Plaintiffs further submit evidence that many ADHCs have closed in recent years due to financial pressures. Mot. at 18; Puckett Decl. ¶ 5 (closure of ADHC site in 2007 due to failure of Medi–Cal reimbursement to keep pace with costs); Vega Decl. ¶ 6 (Orange County ADHC closed in 2007 due to unmet costs by Medi–Cal). Plaintiffs argue that the declarations of ADHC providers indicate that many more ADHCs may be forced to close as a result of the AB 1183 rate reductions. Puckett Decl. ¶ 12 (five percent cut “threatens the very existence of our program”); Vega Decl. ¶ 11 (changes in Medi–Cal reimbursement places ADHC in jeopardy of closing.); Kauffman Decl. ¶¶ 8–10; Nolcox Decl. ¶ 9. Other ADHCs, plaintiffs argue, would be forced to take on fewer participants, meaning that some unserved Medi–Cal beneficiaries may be forced to enter a nursing home. Puckett Decl. ¶ 11 (as a result of AB 1183 reductions, ADHC cannot provide participants with transportation and will have to delay admissions); Kauffman Decl. ¶ 9 (reimbursement rate reductions will force ADHC to make additional cutbacks to services and staff); Davis Decl. ¶¶ 5–7. Furthermore, plaintiff argues that the rate reduction will force ADHC participants to receive care in higher cost settings, such as emergency rooms and skilled nursing facilities, and that, due to shortages in skilled nursing facilities, some participants will be forced into institutions far from their families. Mot. at 20; Missaelides Decl. ¶¶ 20–21; Kauffman Decl. ¶¶ 10–11; Puckett Decl. ¶ 12; Pl’s RJN Ex. 6 (Legislative Analyst’s Office Analysis of 2008–09 Budget) at C–39 (“if rate reductions force Adult Day Health Care Centers to close, beneficiaries who rely on services provided by the centers to stay in their homes may be forced to enter into relatively more costly nursing homes or other assisted living facilities”). Plaintiffs also argue that plaintiffs Charles Gallagher and Fe Garcia, who both attend ADHC’s, would be irreparably harmed if their ADHCs were to close. Mot at 22–23; Gallagher Decl. ¶¶ 7–8; Garcia Decl. ¶¶ 2, 4.
The Court finds that the evidence submitted by plaintiffs indicate that Medi–Cal beneficiaries are at risk of losing access to ADHC services due to the AB 1183 rate reduction. Furthermore, the Court is not convinced that the Department’s data comparing the number of Medi–Cal claims under AB 5 to the previous year demonstrates that the rate reductions will not affect access, given that this data reflects claims immediately after the AB 5 rate reductions were implemented, when the full effect of the rate reduction might not yet have
6

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

been felt by ADHCs. See Reply at 18. Therefore, the Court finds that plaintiffs have established sufficient irreparable harm so as to warrant an injunction.
D. BALANCE OF HARDSHIPS The Court is mindful of the difficulty facing the State of California in light of its fiscal crisis.7 However, the State has accepted *1154 federal funds under the Medicaid Act. In so doing, the State agreed to abide by the conditions imposed by Congress. Further, retroactive relief for Medi–Cal beneficiaries will likely be inadequate and, and it will come too late, to remedy their pain, suffering, and harm to their mental and physical well-being. See e.g., Lopez v. Heckler, 713 F.2d 1432, 1437 (9th Cir.1983). In light of the significant threat to the health of Medi–Cal recipients, reducing payments to healthcare service providers will likely cause, and given that nothing in this Court’s order prevents respondent from imposing a rate reduction after she has appropriately considered and applied the relevant factors, the Court finds that the balance of hardships tips in favor of granting the preliminary injunction.

would be injured by the grant of preliminary relief.” Hybritech v. Abbott Laboratories, 849 F.2d 1446, 1458 (1988). Clearly, there is a public interest in ensuring that the State has enough money to meet its financial obligations in the face of competing demands. However, there is also a public interest in ensuring access to health care. In light of all the circumstances, including the fact that the State may decide to implement a rate change upon making a properly reasoned and supported analysis, the Court finds that the public interest does not weigh against the issuance of a preliminary injunction.
IV. CONCLUSION For the foregoing reasons, the Court GRANTS plaintiffs’ motion for preliminary injunction. The Court hereby orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. & Inst.Code § 14105.191, as modified by AB 1183 beginning on March 9, 2009, by refraining from reducing by five percent payments to ADHCs provided under the Medi–Cal fee-for-service program.

IT IS SO ORDERED.

E. PUBLIC INTEREST [7] “The district court’s public interest analysis should be
whether there exists some critical public interest that

Footnotes

1

The Court’s August 18, 2008 order was issued on remand from the Ninth Circuit, after plaintiffs appealed this Court’s original

June 25, 2008 ruling on their preliminary injunction motion. The Court’s June 25, 2008 order found that plaintiffs in Independent

Living lacked any federal rights under § 30(A), and therefore had denied petitioners’ motion for preliminary injunction. On appeal,

the Ninth Circuit held that plaintiffs could bring suit under the Supremacy Clause to enjoin AB 5 as preempted under the Medicaid

Act, and remanded to this Court. See Independent Living Center of Southern California et al. v. Sandra Shewry et al., 543 F.3d

1050 (9th Cir.2008).

2

In Managed Pharmacy Care, et al. v. David Maxwell–Jolly, CV09–382–CAS, plaintiffs’ arguments regarding irreparable harm

focused on brand and generic drugs dispensed by pharmacies. The Court therefore found that plaintiffs had not shown irreparable

harm as to the effect of the five percent rate reduction on other pharmacy products, and limited the scope of the injunction to drug

products dispensed by pharmacies.

In their reply, plaintiffs request that the Court rule on the merits of their motion for injunction as to pharmacies, arguing that the

scope of the injunction requested in the instant action is broader than that granted in Managed Pharmacy Care,

CV09–382–CAS. However, plaintiffs offer no basis for extending the scope of the injunction as to pharmacies issued in

Managed Pharmacy Care, and, after examining the evidence submitted by plaintiffs in the instant action, the Court finds no

basis for such an extension.

3

The hospitals did not, however, challenge the rates under the “equal access” provision. Orthopaedic I, 1992 WL 345652 at *14 n.

4.

4

See e.g., Alaska Dep’t of Health & Soc. Servs. v. Ctrs. for Medicare & Medicaid Servs., 424 F.3d 931, 940–41 (9th Cir.2005); see

7

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1144 (2009)

also Arkansas Med. Soc’y v. Reynolds, 6 F.3d 519, 530 (8th Cir.1993) (“We agree with the trial court’s conclusion that the relevant factors that DHS is obliged to consider in its rate-making decisions are the factors outlined in 42 U.S.C. § 1396a(a)(30)(A).”); cf. Methodist Hosps. v. Sullivan, 91 F.3d 1026, 1030 (7th Cir.1996) (finding that § 30(A) does not require a state to consider any particular factors, but rather, requires that the state arrive at substantive results consistent with the Medicaid Act); Rite Aid, Inc. v. Houstoun, 171 F.3d 842 (3d Cir.1999) (same).

5

Subsequently, in Sanchez v. Johnson, 416 F.3d 1051 (9th Cir.2005), the Ninth Circuit held that § 30(A) does not confer individual

rights that are enforceable under 42 U.S.C. § 1983. Id. at 1060. However, in Independent Living, 543 F.3d 1050 (9th Cir.2008), the

Ninth Circuit held that “a plaintiff seeking injunctive relief under the Supremacy Clause on the basis of federal preemption need

not assert a federally created ‘right,’ in the sense that term has been recently used in suits brought under § 1983, but need only

satisfy traditional standing requirements.” Independent Living, 543 F.3d 1050, 1058 (9th Cir.2008).

6

The Department states that because it is in the process of auditing costs of ADHCs, it is not able to assess how current ADHC

reimbursement in the aggregate compares to the reasonable and allowable costs that ADHCs incur. See Eng Decl. ¶ 4. Therefore,

the Department’s analysis uses as a proxy the costs of intermediate care facilities (“NF–As”). Plaintiff disputes the validity of this

proxy, arguing that there is no basis for equating the costs of NF–As with the costs of ADHCs. Reply at 12.

7

Furthermore, if the five percent rate reduction is given effect, many Medi–Cal beneficiaries may turn to more costly forms of

medical care, such as emergency room care, thereby diminishing the State’s projected savings. See e.g., Rodde v. Bonta, 357 F.3d

988, 999 (9th Cir.2004).

8

 
 California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)

630 F.Supp.2d 1154 United States District Court,
C.D. California, Western Division.
CALIFORNIA PHARMACISTS ASSOCIATION, et al., Plaintiffs, v.
David Maxwell JOLLY, Defendant.
Case No. CV 09–722 CAS (MANx). | March 9, 2009.
Synopsis Background: Hospitals, healthcare associations, and others brought action challenging reimbursement rate reductions under California’s Medicaid program. Plaintiffs moved for preliminary injunction, seeking to enjoin reduction of reimbursement rates for certain hospitals.
Holdings: The District Court, Christina A. Snyder, J., held that:
[1] plaintiffs established strong likelihood of success on the merits of claim that rate reductions were preempted by federal Medicaid Act, but
[2] plaintiffs failed to establish irreparable harm.
Motion for preliminary injunction granted.
Stay pending appeal granted, 563 F.3d 847.
Attorneys and Law Firms
*1156 Byron J. Gross, Hooper Lundy & Bookman Inc., Los Angeles, CA, Craig J. Cannizzo, Hooper Lundy and Bookman Inc., San Francisco, CA, Felicia Y. Sze, Jordan Brian Keville, Lloyd A. Bookman, Michael A. Dubin, Hooper Lundy and Bookman Inc., Los Angeles, CA, for Plaintiffs.
Gregory Martin Cribbs, Randall R. Murphy, Office of Attorney General of California, Los Angeles, CA, Shannon M. Chambers, Office of the Attorney General, Sacramento, CA, for Defendant.

Opinion
ORDER DENYING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION AS TO HOSPITALS
CHRISTINA A. SNYDER, District Judge.
I. INTRODUCTION AND BACKGROUND On September 16, 2008, the California Legislature passed Assembly Bill 1183 (“AB 1183”), which was subsequently signed by the Governor and filed with the Secretary of State on September 30, 2008. AB 1183, inter alia, amends Cal. Welf. & Inst.Code. § 14105.191 and § 14166.245, mandating that, effective March 1, 2009, Medi–Cal reimbursement payments to some fee-for-service providers will be reduced by one percent, five percent, or ten percent, depending on provider type.
These reductions mandated in AB 1183 replace the ten percent rate reduction put into place by Assembly Bill X3 5 (“AB 5”), which terminated on February 28, 2009. See Cal. Welf. & Inst.Code § 14105.19(b)(1). AB 5 was passed by the California Legislature on February 16, 2008. On August 18, 2008, the ten percent rate reduction mandated by AB 5 was partially enjoined by this Court in a related action, Independent Living Center of Southern California, Inc. v. Sandra Shewry, CV–08–3315–CAS. In issuing the preliminary injunction, this Court found that petitioners had, inter alia, demonstrated a strong likelihood of success in showing that AB 5 was preempted by § 30(A) of the Medicaid Act (referred to herein as “§ 30(A)”). The Court enjoined the rate reduction as to physicians, dentists, pharmacies, adult day health care centers (“ADHCs”), and clinics. However, the Court did not enjoin the rate reduction as to non-contract hospitals, finding that plaintiffs had not presented sufficient evidence of irreparable harm to those providers. The Court’s August 18, 2008 order is currently being appealed to the Court of Appeals for the Ninth Circuit.1
*1157 On January 29, 2009, plaintiffs California Pharmacists Association; California Medical Association; California Dental Association; California Hospital Association; California Association for Adult Day Services; Marin Apothecary, Inc.; South Sacramento Pharmacy; Farmacia Remedios, Inc.; Acacia Adult Day

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)

Services; Sharp Memorial Hospital; Grossmont Hospital Corporation; Sharp Chula Vista Medical Center; Sharp Coronado Hospital and Healthcare Center; Fey Garcia; and Charles Gallagher filed the instant action against David Maxwell–Jolly, Director of the Department of Health Care Services of the State of California. Plaintiffs’ complaint challenges the AB 1183 Medi–Cal reimbursement rate reductions to various providers.
On February 11, 2009, plaintiffs filed the instant motion for a preliminary injunction. Plaintiffs seek an order for a preliminary injunction restraining and enjoining the defendant from reducing Medi–Cal fee-for-service rates to hospitals pursuant to Assembly Bill 1183. Defendant filed an opposition thereto on February 26, 2009. A reply was filed on March 4, 2009. After carefully considering the arguments set forth by the parties, the Court finds and concludes as follows.
II. HOSPITAL REIMBURSEMENT BEFORE AND AFTER AB 1183 In their motion, plaintiffs distinguish between four distinct types of hospital services, for which Medi–Cal reimbursement rates are determined in different ways: (1) inpatient services, (2) outpatient services, (3) Distinct Part Nursing Facilities (“DP/NF’s”), and (4) subacute services.
The reimbursement rates for inpatient services at issue in this motion are those provided to a specific type of hospital, known as a “non-contract hospitals.” In 1982, the California Legislature authorized the Department to enter into contracts with certain hospitals for inpatient services, under the selective provider contracting program (“SPCP”). Mot at 3; See Cal. Welf Inst.Code §§ 14081 et seq. Hospitals with SPCP contracts are referred to as “contract hospitals” and are generally reimbursed for MediCal at per diem rates, which are negotiated by the California Medical Assistance Commission (“CMAC”). Mot. at 3; Opp’n at 7; Chell Decl. ¶¶ 3, 5. Reimbursement rates to contract hospitals are not affected by AB 1183. By contrast, non-contract hospitals operating outside of a geographic area where a contract hospital exists are reimbursed for inpatient services to Medi–Cal patients, at a rate equaling the lowest of (1) its customary charge, (2) its reasonable costs determined using Medicare principles, (3) an all-inclusive rate per discharge determined by computing a base year cost per discharge and then limiting annually increases to the base rate, or (4) the 60th percentile rate per discharge of the hospitals in its “peer group.”23 Mot. at 3; Opp’n at 8.

*1158 For outpatient services as opposed to inpatient services, hospitals are reimbursed at established rates set by the Department. Mot. at 4; 22 CCR § 51509. For DP/NF’s, Medi–Cal reimbursement is determined by a prospectively established per diem reimbursement rate for daily services, which is the lesser of a facility’s projected costs or a prospectively determined median per diem rate. Mot. at 4; 22 CCR § 51511(a)(2). For subacute services, facilities are reimbursed per diem at a rate equal to the lesser of the facility’s per day costs as projected by the Department or the class median per diem rate established by the Department. Mot. at 5; 22 CCR § 51511.5(a)(1).
For inpatient services at non-contract hospitals, AB 1183 amends Cal. Welf. & Inst.Code § 14166.245 to retain AB 5’s ten percent reduction to both interim and final payment rates, and to mandate that such reimbursement be limited to “the applicable regional per diem contract rate for tertiary hospitals and for all other hospitals ... Reduced by 5%, multiplied by the number of Medi–Cal covered inpatient days ... [“the CMAC limit”]” Cal. Welf. & Inst.Code 14166.245(b)(2)(A), (c)(3)(B).4 For DP/NF and subacute services, AB 1183 mandates a five percent reduction (from pre-AB 5 rates) in reimbursement rates. Cal. Welf. & Inst.Code § 14105.191. AB 1183 also mandates a one percent reimbursement rate reduction (from pre-AB 5 rates) for outpatient services. Cal. Welf. & Inst.Code § 14105.191.
III. LEGAL STANDARD [1] [2] A preliminary injunction is appropriate when the moving party shows either (1) a combination of probable success on the merits and the possibility of irreparable harm, or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in the moving party’s favor. See Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir.1987). These are not two distinct tests, but rather “the opposite ends of a single ‘continuum in which the required showing of harm varies inversely with the required showing of meritoriousness.’ ” Id. A “serious question” is one on which the movant “has a fair chance of success on the merits.” Sierra On–Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1421 (9th Cir.1984).
IV. DISCUSSION
A. LIKELIHOOD OF SUCCESS ON THE MERITS [3] [4] [5] Pursuant to the holding of the Ninth Circuit in the

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)

related action Independent Living, 543 F.3d at 1065, the Court finds, as an initial matter, that plaintiffs may pursue a claim for relief under the Supremacy Clause based on the allegation that AB 1183 is preempted by § 30(A). Here, plaintiffs’ Supremacy Clause claim is predicated upon federal conflict preemption. Under general principles of federal preemption, state law is preempted only to the extent that it actually conflicts with federal law. Pacific Gas & Elec. Co. v. State Energy Comm’n, 461 U.S. 190, 204, 103 S.Ct. 1713, 75 L.Ed.2d 752 (1983). Such a conflict may arise either where “compliance with both federal and state regulations is a physical impossibility, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id. at 203–04, 103 S.Ct. 1713 (citations omitted).
*1159 Thus, to prevail on the merits plaintiffs will have to prove either that it is not possible for the Department to comply with both AB 1183 and the Medicaid Act or that AB 1183 stands as an obstacle to the enforcement of § 30(A). As such, the Court turns to the statutory provisions at issue here.
The “quality of care” provision of § (30)(A) provides that:
[a] State plan for medical assistance must ... provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care.
42 U.S.C. § 1396a(30)(A). The “equal access” provision of § 30(A) provides that:
[a] State plan for medical assistance must ... provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments 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 population in the geographic area.
Id.
In Orthopaedic Hospital v. Kizer, 1992 WL 345652 (C.D.Cal.1992) ( “Orthopaedic I ”), plaintiff-hospital providers filed suit pursuant to 42 U.S.C. § 1983 (“§ 1983”), claiming that the Director violated § 30(A) by setting reimbursement rates for hospital outpatient services without considering the effect of hospital costs on efficiency, economy, and quality of care.5 Id. at *1. The district court concluded that § 30(A) was enforceable in a § 1983 action, and that the Department “had a judicially enforceable obligation” to consider and make findings each time it modified reimbursement rates. Id. at *2. According to the district court, § 30(A) obligated the Department to consider efficiency, economy, and quality of care, which it referred to as the “relevant factors.” Id. at *4. The district court found that the Director had acted arbitrarily and capriciously in establishing six of the seven challenged rates. Id. The court then remanded the matter to the Department for further consideration. Id. at *14. Upon remand, the Department conducted a rate study, and readopted the reimbursement rates without change. Orthopaedic Hospital II/III v. Belshe, 103 F.3d 1491, 1495 (9th Cir.1997).
The hospitals returned to the district court, filing two lawsuits (Orthopaedic II/III ) that the district court consolidated, arguing that the adopted rates did not comply with § 30(A). Id. The district court entered judgment in favor of the Department, finding that the Department was not statutorily required to consider hospital costs when setting reimbursement rates. Id. The hospitals appealed, and the Ninth Circuit reversed. The Ninth Circuit’s interpretation held that § 30(A) “provides that payments for services must be consistent with efficiency, economy, and quality of care, and that those payments must be sufficient to enlist enough providers to provide access to Medicaid recipients.” Id. at 1496 (emphasis in original). The Ninth Circuit therefore concluded that under § 30(A)
*1160 the Director must set hospital outpatient reimbursement rates that bear a reasonable relationship to efficient and

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)

economical hospitals’ costs of providing quality services, unless the Department shows some justification for rates that substantially deviate from such costs. To do this, the Department must rely on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting.
Id.6 Further, the Ninth Circuit found that “[i]t is not justifiable for the Department to reimburse providers substantially less than their costs for purely budgetary reasons.” Id. at 1499 n. 3.7
Whatever else its effect may have been, it is clear that Sanchez v. Johnson, 416 F.3d 1051 (9th Cir.2005) left undisturbed the rule announced in Orthopaedic II/III that § 30(A) creates duties on behalf of the Department, i.e., the duty to consider efficiency, economy, and quality of care when establishing reimbursement rates. Indeed, the Sanchez court recognized that “[§ 30(A) ] speaks ... of the State’s obligation to develop ‘methods and procedures’ for providing services generally.” Sanchez, 416 F.3d at 1059 (emphasis added).
[6] Because Orthopaedic II/III is binding authority on this Court, the Court finds that when the State of California seeks to modify reimbursement rates for health care services provided under the Medi–Cal program, it must consider efficiency, economy, and quality of care, as well as the effect of providers’ costs on those relevant statutory factors.
[7] In the instant motion for preliminary injunction, plaintiffs argue that AB 1183’s rate reductions to hospitals is preempted by § 30(A), because the Legislature did not consider any of the relevant factors as required by Orthopaedic II/III. Specifically, plaintiffs argue that the legislative history indicates that “the California Legislature did not undertake studies of hospital costs prior to enacting AB 1183, or give any consideration to whether the payment rates which would be in effect under the application of the AB 1183 Hospital Rate Cuts would be reasonably related to hospital costs.” Mot. at 13. Furthermore, plaintiffs argue that the language of AB 1183 itself indicates that it was passed purely for budgetary reasons. For example, Cal. Welf. & Ins.Code § 14166.245, the provision implementing reductions to inpatient hospital services, states
The Legislature finds and declares

that the state faces a fiscal crisis that requires unprecedented measures to be taken to reduce General Fund expenditures to avoid reducing vital government *1161 services necessary for the protection of the health, safety, and welfare of the citizens of the State of California.
Defendants, however, argue that the requirements of Orthopaedic II/III are in fact satisfied, because the Department itself performed a detailed analysis of the relevant factors. Specifically, defendant argues that beginning in October 2008 and continuing into February 2009, the Department conducted formal written analyses of reimbursement under AB 1183 for non-contract hospital inpatient services, DP/NF, and subacute services, which are contained in the reports entitled “[Amended] Analysis of the Impact of Welfare and Institutions Code Section 14166.245 Concerning Medi–Cal Reimbursement for Non–Contract Hospital Inpatient Services” (“Amended Department Inpatient Analysis”) and “Analysis of Assembly Bill 1183 Medi–Cal Reimbursement For Various Nursing Facility Services” (“Department Nursing Analysis”).
[8] Plaintiffs, however, argue that the Department’s post-hoc analysis does not satisfy the requirements of Orthopaedic II/III. The Court agrees. First, the Court notes that AB 1183, as passed by the Legislature, does not provide the Department with any discretion to determine whether the five percent rate reduction should be implemented based on the Department’s consideration of the relevant factors. See Cal. Welf. & Inst.Code. § 14105.191 (“Notwithstanding any other provision of law, or order to implement changes in the level of funding for health care services, the director shall reduce provider payments, as specified in this section ...”) (emphasis added). In Orthopaedic II/III, in which rates set by the Department, rather than the Legislature, were at issue, the court stated that the “the Department must rely on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting.” 103 F.3d at 1496 (emphasis added); see also id. at 1499–1500 (“Since the Department did not adequately consider hospitals’ costs when readopting its rates, the Department’s actions were arbitrary and capricious and contrary to law”) (emphasis added). The Orthopaedic II/III holding therefore indicates that the body responsible for rate setting must consider the relevant factors contemporaneously with the adoption of the rates.

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)

Because the Department has no authority to alter the rate reduction imposed by the Legislature, the Department’s post hoc analysis does not satisfy the requirements of Orthopaedic II/III.
Furthermore, in this case, it does not appear that the Legislature appropriately considered any of the relevant factors before passing AB 1183.8 Defendant responds to plaintiffs’ arguments that the Legislature did not perform the required analysis by submitting evidence indicating that (1) between May 2008 and September 2008, Department employees provided information to legislative staff members concerning the rate reductions; (2) in June 2008, the Subcommittee 3 Health Human Services, Labor, and Veterans Affairs Major Action Report included modifications *1162 and rejections of certain rate reductions proposed by the Administration; and (3) in July 2008, the Summary Overview Budget Conference Committee Report includes discussions of the rate reductions. See Trueworthy Decl. ¶ 5, Exs. A–E. However, none of this evidence demonstrates that the Legislature relied on responsible cost studies providing reliable data in setting the rates. See Orthopaedic Hospital II/III, 103 F.3d at 1496.
Therefore, because it appears that the Legislature and the Department did not properly consider the relevant factors prior to passing the rate reductions in AB 1183, the Court finds that plaintiffs have a strong likelihood of success on the merits.9
B. IRREPARABLE HARM [9] The next question before this Court is whether plaintiffs have shown that MediCal beneficiaries will be irreparably harmed if the rate reduction to hospitals is permitted to go into effect. First, plaintiffs argue that the rates under AB 1183 are not reasonably related to provider costs. Mot. at 11. With regard to inpatient services, plaintiffs’ submit an analysis of the effect of the AB 1183 ten percent rate reduction, which finds that, under AB 1183, no non-contract hospital will receive more than 90 percent of costs for inpatient services, while one-third of the hospitals will receive less than 55 percent of their costs for inpatient services. Mot. at 11; Zaretsky Decl. Ex. D (Comparison of Medi–Cal Percentages of Costs Paid Under 2009 Payment Limit and Under Prior, Cost Reimbursement, System); Ex E (Frequency Distribution of the MediCal Percentages of Cost Paid Under the 2008 Reimbursement Limit and Under the Cost Reimbursement System). By contrast, plaintiffs argue, prior to AB 5 and AB 1183, 87 of the 95 affected

hospitals were reimbursed between 95 and 100 percent of their costs for inpatient services. Id. Furthermore, plaintiffs argue, the CMAC limit imposed by AB 1183 does not take into account variations among hospitals in their costs in setting reimbursement, and, therefore, the reimbursement rates do not take reflect the costs of the individual hospital. Mot. at 12–13.
With regard to DP/NF services, which are reimbursed based on the lower of the projected costs or a statewide “median” cost per diem, and are subject to a five percent rate reduction under AB 1183, plaintiffs argue that the median cost per diem excludes certain DP/NF’s with high costs, and that, as a result, the median is artificially deflated. Plaintiffs argue that while before AB 5 and AB 1183, 84 percent of costs of DP/NF services were reimbursed, under AB 1183, only 79 percent of costs will be reimbursed, and many facilities will receive less than half of their costs. Mot. at 14; Zaretsky Decl. ¶ 23.
With regard to subacute services, which are also subject to a five percent rate reduction under AB 1183, plaintiffs argue that the percentage of reimbursed costs will decrease from 98 percent (before AB 5 and AB 1183) to 93 percent of costs for non-ventilator service providers, and from 95 percent (before AB 5 and AB 1183) to 91 percent of costs for ventilator services providers. Zaretsky Decl. ¶ 25.
*1163 With regard to hospital outpatient services, which are subject to a one percent rate reduction under AB 1183, plaintiffs argue that reimbursement for costs will decrease from 43 percent of costs (before AB 5 and AB 1183) to 41 percent of costs. Mot. at 14; Zaretsky Decl. ¶ 21.
Plaintiffs next argue that these rate reductions will cause irreparable harm, in the form of reduced hospital services to Medi–Cal beneficiaries. Plaintiffs argue first that many hospitals have already eliminated services due to the AB 5 rate cuts, which has in turn impacted the availability of medical services in certain communities. Duaner Decl. ¶ 8; Jordan Decl. ¶ 6; Miller ¶ 4; DeNio ¶ 4. Plaintiffs argue that AB 1183 will render inevitable further reductions and elimination of some hospital services. McKague Decl. ¶ 6; Delmore Decl. ¶ 6; Riccioni ¶¶ 4–5. For example, plaintiffs argue that the rate cuts will likely result in the forced closure of (1) the emergency department at Central Valley General Hospital in Hanford, CA; (2) skilled nursing and subacute units at Sharp Coronado Hospital and Healthcare Center; and (3) the Diabetes Education Center and Children’s Speciality Clinic at El Centro Regional Medical Center in El Centro California (forcing patients to travel two hours to San Diego to obtain these

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)

services).10 Mot. at 21–22; McKague Decl. ¶ 6; Hall Decl. ¶¶ 5–7; Farmer Decl. ¶¶ 7–8.
Defendant, however, argues that the showing of harm by plaintiffs is too speculative. With regard to inpatient services, defendant argues that the Amended Department Inpatient Analysis determined that Medi–Cal reimbursement for noncontract hospital inpatient services will compensate approximately 91 percent of hospitals’ audited costs under AB 1183; if small and rural hospitals, which are exempt from the rate reduction, are excluded from the analysis, 86 percent of hospitals’ audited costs will continue to be reimbursed under AB 1183. Opp’n at 9; Amended Department Inpatient Analysis at 13. With regard to DP/NF and subacute services, defendant argues that under AB 1183, DP/NF and subacute providers will be reimbursed within a “range of reasonableness” (i.e. 85–95 percent of costs), and that the Department Nursing Analysis indicates that there will be sufficient access to these services.11 Opp’n at 10–11; Yien Decl. ¶ 4, 8. In addition, defendant notes that the transition from AB 5 to AB 1183 will in fact increase by 5.5 percent the reimbursement for these types of services. Opp’n at 11; Yien Decl. ¶¶ 2–18. Similarly, with regard to outpatient services, defendant notes that under AB 5 there was a ten percent rate reduction in effect, which is decreased to one percent under AB 1183. Opp’n at 11.
Defendants also argue that plaintiffs’ evidence does not take into account the fact that Medi–Cal pays substantial supplemental *1164 reimbursement to many non-contract hospitals, which is not affected by AB 1183. Opp’n at 14; Liu Decl. ¶ 18. In fact, defendant argues that several of the hospitals submitting declarations in support of the preliminary injunction receive substantial additional reimbursement under one of the supplemental reimbursement programs not impacted by AB 1183, and that, additionally, many of the hospitals submitting declarations are making large profits.12 Hutchinson Decl. ¶ ¶ 1–18 (describing various supplemental reimbursement programs paying extra money to hospitals including some submitting declarations); Ong Decl. ¶ 17 (14 of 19 hospitals submitting declarations were profitable in fiscal year ending in 2007, having a collective net income of $181.3 million; five hospitals operating at a loss, with a collective net loss of $29.2 million). Furthermore, defendant notes that reimbursement for hospital outpatient services has significantly increased between 2001 to 2004 to 43 percent above the levels in effect three years earlier. Opp’n at 12; Machado Decl. ¶ 9.
The Court agrees with defendant that plaintiffs have failed to show that AB 1183 rate reductions to hospitals will

result in irreparable harm so as to warrant the issuance of an injunction. First, the Court notes that the Legislative Analyst Office’s Report on the 2008–09 budget specifically recommended that the Legislature accept the Governor’s proposal to reduce Medi–Cal reimbursement rates to hospitals, and indeed suggested that the Legislature increase the proposed reductions for hospitals. Legislative Analyst’s Office Report, 2008–09 Analysis (“LAO Report”) at C–39. The LAO report concluded (“[w]e recommend the Legislature reject the Governor’s proposal to reduce payments for all providers except hospitals ... Our review indicates that hospitals have received significant rate increases relative to other provider types in recent years, and hospitals are generally among the most expensive settings to provide care”). LAO Report at C–39.
More importantly, there is evidence showing that approximately 90 percent of hospital inpatient services are provided by contract hospitals that are not subject to the AB 1183 rate reductions, and that such hospitals are contractually obligated to provide inpatients services to all Medi–Cal beneficiaries for whom such services are medically necessary and covered by Medi–Cal. See Amended Department Inpatient Analysis at 14. Moreover, there is evidence that there are 87 Federally Qualified Health Centers (“FQHC’s”) and 284 Rural Health Clinics (“RHC’s”) throughout California that provide outpatient services, which are not subject to the AB 1183 rate reduction. Opp’n at 12; Shine Decl. ¶ 4. Therefore, although there may be certain limited exceptions, it appears unlikely that Medi–Cal beneficiaries will go without access to needed inpatient and outpatient services under the AB 1183 rate reductions. Furthermore, defendant has submitted evidence demonstrating that many of the hospitals submitting declarations were profitable in the fiscal year ending in 2007, indicating that these facilities are likely capable of continuing to provide services even with the rate reductions in effect. Ong Decl. ¶ 17. Based on the present record, this evidence presented is too speculative to support a finding of irreparable harm.13
*1165 V. CONCLUSION For the foregoing reasons, the Court DENIES plaintiffs’ motion for preliminary injunction with regard to AB 1183’s reimbursement rate reduction to hospitals, without prejudice to its being renewed after the Ninth Circuit rules on the appeal in Independent Living Center of Southern California, Inc. v. Sandra Shewry, CV–08–3315–CAS.

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)

IT IS SO ORDERED

Footnotes

1

The Court’s August 18, 2008 order was issued on remand from the Ninth Circuit, after plaintiffs appealed this Court’s original

June 25, 2008 ruling on their preliminary injunction motion. The Court’s June 25, 2008 order found that plaintiffs in Independent

Living lacked any federal rights under § 30(A), and therefore had denied petitioners’ motion for preliminary injunction. On appeal,

the Ninth Circuit held that plaintiffs could bring suit under the Supremacy Clause to enjoin AB 5 as preempted under the Medicaid

Act, and remanded to this Court. See Independent Living Center of Southern California et. al. v. Sandra Shewry et al., 543 F.3d

1050 (9th Cir.2008).

2

By contrast, where non-contract hospitals are located in the same geographic area (known as a Health Facility Planning Area)

where contract hospitals are providing adequate services to the area’s populations, the hospitals not covered by a contract will be

reimbursed only in emergency situations.

3

Defendant note that non-contract hospitals may also receive supplemental MediCal reimbursements under programs such as the

disproportionate share hospital (DSH) program, the Safety Net Care Pool (SNCP) program, and the Health Care Coverage

Initiative (HCCI) program. Opp’n at 8; Amended Department Inpatient Analysis at 12.

4

Certain hospitals, including small and rural hospitals, are exempt.

5

The hospitals did not, however, challenge the rates under the “equal access” provision. Orthopaedic I, 1992 WL 345652 at *14 n.

4.

6

See e.g., Alaska Dep’t of Health & Soc. Servs. v. Ctrs. for Medicare & Medicaid Servs., 424 F.3d 931, 940–41 (9th Cir.2005); see

also Arkansas Med. Soc’y v. Reynolds, 6 F.3d 519, 530 (8th Cir.1993) (“We agree with the trial court’s conclusion that the relevant

factors that DHS is obliged to consider in its rate-making decisions are the factors outlined in 42 U.S.C. § 1396a(a)(30)(A).”); cf.

Methodist Hosps. v. Sullivan, 91 F.3d 1026, 1030 (7th Cir.1996) (finding that § 30(A) does not require a state to consider any

particular factors, but rather, requires that the state arrive at substantive results consistent with the Medicaid Act); Rite Aid, Inc. v.

Houstoun, 171 F.3d 842 (3d Cir.1999) (same).

7

Subsequently, in Sanchez v. Johnson, 416 F.3d 1051 (9th Cir.2005), the Ninth Circuit held that § 30(A) does not confer individual

rights that are enforceable under 42 U.S.C. § 1983. Id. at 1060. However, in Independent Living, 543 F.3d 1050 (9th Cir.2008), the

Ninth Circuit held that “a plaintiff seeking injunctive relief under the Supremacy Clause on the basis of federal preemption need

not assert a federally created ‘right,’ in the sense that term has been recently used in suits brought under § 1983, but need only

satisfy traditional standing requirements.” Independent Living, 543 F.3d 1050, 1058 (9th Cir.2008).

8

Defendant argues that “the Legislature followed the advice of the Legislative Analyst Office’s (LAO) report concerning the

2008–2009 Budget ... While the LAO expressed concerns about reductions for physician services, the LAO stated that ‘Hospitals

and some other providers have received recent rate increases. In contrast to physicians, Medi–Cal adjusts on an annual basis the

reimbursement rates for certain other providers.’ ” Opp’n at 1. While defendant is correct that the LAO report discussed the

possible rate reduction for hospital services, and ultimately concluded that such reductions were advisable, defendant presents no

evidence to indicate that the Legislature actually reviewed or considered the LAO’s report in passing AB 1183.

9

Plaintiffs also argue that (1) AB 1183 is preempted by § 13(A) of the Medicaid Act, because the State failed to comply with that

provision’s notice-and-comment requirements, and (2) AB 1183 violates 42 C.F.R. §§ 430.12, 447.252, 447.256(a)(I) because it

was implemented without approval from the Federal government. Because the Court finds herein that plaintiffs have established a

strong likelihood of success in demonstrating that the AB 1183 rate reductions for hospitals are preempted by § 30(A), the Court

need not reach these issues.

10 Plaintiffs also argue that hospitals will suffer pecuniary harm, and that such harm is irreparable because retroactive monetary claims are barred by the Eleventh Amendment in this action. Mot. at 22, citing Kansas Health Care Assoc. v. Kansas Dept. Of Social and Rehabilitation Svcs., 31 F.3d 1536, 1543 (10th Cir.1994) (harm from inadequate Medicaid reimbursement rates would be irreparable because Eleventh Amendment bars retrospective monetary relief). However, the Court notes that in that case, the Court held “the Eleventh Amendment bar simply indicates irreparability, but does not, in itself, establish harm.” See id.

California Pharmacists Ass’n v. Jolly, 630 F.Supp.2d 1154 (2009)
11 Plaintiffs argue that the disparity between plaintiffs’ cost estimate (reimbursement at 79 percent of costs) and defendant’s cost estimate is that defendant included in the analysis supplemental payments, which were only received by 13 of the 78 hospitals included in the analysis. Reply at 15–16.
12 Plaintiffs, however, respond that many of the supplemental reimbursement programs provide funding for services to non-MediCal patients. Reply at 13.
13 Because the Court finds herein that plaintiffs have failed to show irreparable harm, the Court determines that, regardless of the Court’s findings regarding the balance of hardships and the public interest, a preliminary injunction is not warranted.

 
 Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 1 of 21
(MANx), CLOSED, DISCOVERY, MANADR, RELATED−G
UNITED STATES DISTRICT COURT for the CENTRAL DISTRICT OF CALIFORNIA (Western Division − Los Angeles)
CIVIL DOCKET FOR CASE #: 2:09−cv−00722−CAS−MAN

California Pharmacists Association et al v. David Maxwell−Jolly Date Filed: 01/29/2009

Assigned to: Judge Christina A. Snyder

Date Terminated: 06/01/2011

Referred to: Magistrate Judge Margaret A. Nagle

Jury Demand: None

Related Case: 2:08−cv−03315−CAS−MAN

Nature of Suit: 950 Constitutional − State

Case in other court: 9th CCA, 09−55365 9th CCA, 09−55532

Statute Jurisdiction: Federal Question

Cause: 28:2201 Constitutionality of State Statute(s)

Plaintiff

California Pharmacists Association

represented by Byron J Gross Hooper Lundy &Bookman Watt Plaza 1875 Century Park E, Ste 1600 Los Angeles, CA 90067−2799 310−551−8111 Fax: 310−551−8181 Email: gross@healthlaw.org LEAD ATTORNEY ATTORNEY TO BE NOTICED

Craig J Cannizzo Hooper Lundy and Bookman PC 575 Market Street 23rd Floor San Francisco, CA 94105 415−875−8500 Fax: 415−875−8519 Email: ccannizzo@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Felicia Y Sze Hooper Lundy and Bookman PC 575 Market Street Suite 2300 San Francisco, CA 94105 415−875−8500 Fax: 415−875−8519 Email: fsze@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville Hooper Lundy &Bookman PC Watt Plaza 1875 Century Park East Suite 1600 Los Angeles, CA 90067−2799 310−551−8111 Fax: 310−551−8181 Email: jkeville@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman Hooper Lundy &Bookman PC 1875 Century Park East Suite 1600 Los Angeles, CA 90067

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 2 of 21

310−551−8111 Fax: 310−551−8181 Email: lbookman@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin Hooper Lundy and Bookman Inc 1875 Century Park East, Suite 1600 Los Angeles, CA 90067−2799 310−551−8111 Email: mdubin@dubinlawfirm.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff California Medical Association

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff California Dental Association

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address)

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 3 of 21

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff California Hospital Association

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
California Association For Adult Day Services

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 4 of 21

Plaintiff Marin Apothecary, Inc. doing business as Ross Valley Pharmacy
Plaintiff South Sacramento Pharmacy

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lloyd Alan Bookman

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 5 of 21

(See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Farmacia Remedios, Inc.

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Acacia Adult Day Services

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 6 of 21

ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Sharp Memorial Hospital

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Grossmont Hospital Corporation

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 7 of 21

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Sharp Chula Vista Medical Center

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
Sharp Coronado Hospital and Healthcare Center

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address)

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 8 of 21

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Fey Garcia

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Charles Gallagher

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 9 of 21

V.
Defendant
David Maxwell−Jolly Director of The California Department of Health Care Services

represented by Gregory Martin Cribbs CAAG − Office of Attorney General of California 300 S Spring Street Ste 1702 Los Angeles, CA 90013 213−897−2446 Fax: 213−897−2805 Email: gregory.cribbs@doj.ca.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Randall R Murphy CAAG − Office of Attorney General of California 300 South Spring Street, Ste 1702 Los Angeles, CA 90013−1230 213−897−2446 Fax: 213−897−2805 Email: randall.murphy@doj.ca.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Shannon M Chambers State Personnel Board Appeals − Administrative Law Judge 801 Capitol Mall Sacramento, CA 95814 916−653−0544 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jennifer M Kim CAAG − Office of CA Attorney General California Department of Justice 300 South Spring Street Suite 1702 Los Angeles, CA 90012 213−897−2443 Fax: 213−897−2805 Email: jennifer.kim@doj.ca.gov ATTORNEY TO BE NOTICED

Date Filed 01/29/2009
01/29/2009 01/29/2009

# Docket Text
1 COMPLAINT against Defendant David Maxwell−Jolly. (Filing fee $ 350 PAID.), filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (et) (ds). (Entered: 02/02/2009)
20 DAY Summons Issued re Complaint − (Discovery) 1 as to Defendant David Maxwell−Jolly. (et) (Entered: 02/02/2009)
2 CERTIFICATION AND NOTICE of Interested Parties filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 10 of 21

01/29/2009 02/02/2009 02/02/2009 02/03/2009 02/03/2009 02/04/2009
02/04/2009 02/10/2009
02/11/2009 02/11/2009

Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (et) (ds). (Entered: 02/02/2009)
3 NOTICE TO PARTIES OF ADR PILOT PROGRAM filed. (et) (Entered: 02/02/2009)
4 EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction filed by Plaintiff California Pharmacists Association.(Gross, Byron) (Entered: 02/02/2009)
5 MEMORANDUM in Support of EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction 4 filed by Plaintiff California Hospital Association. (Attachments: # 1 Declaration of Jordan B. Keville re Ex Parte Notice)(Gross, Byron) (Entered: 02/02/2009)
6 MEMORANDUM in Support of EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction 4 AMENDED TO ATTACH EXH A TO DECLARATION OF JORDAN B. KEVILLE. (Gross, Byron) (Entered: 02/03/2009)
8 NOTICE TO COUNSEL: This case has been assigned to the calendar of Judge Christina A. Snyder. (See Notice for further details). (mmu) (Entered: 02/04/2009)
7 PROOF OF SERVICE Executed Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia, upon David Maxwell−Jolly served on 2/2/2009, answer due 2/22/2009. The Summons and Complaint were served by Personal service, by Federal statute, upon Connie Ullrich, Authorized Agent. Due Dilligence declaration no. Original Summons no. (Sze, Felicia) (Entered: 02/04/2009)
9 MINUTES OF IN CHAMBERS ORDER by Judge Christina A. Snyder re: EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction 4 . Upon the Court's rview, the Court hereby DENIES Plaintiffs' Ex Parte Application to Exceed Normally Applicable Page limits for Briefing on Motion for Preliminary Injunction. (mmu) (mmu). (Entered: 02/05/2009)
11 STIPULATION for Extension of Time to File First Motion for Preliminary Injunction, Second Motion for Preliminary Injunction, Oppositions and Replies filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Proposed Order Regarding Briefing Schedule for Motions for Preliminary Injunction)(Keville, Jordan) (Entered: 02/10/2009)
12 ORDER RE TRANSFER PURSUANT TO Local Rule 83−1.3.1 and General Order 08.05 −Related Case− filed. Related Case No: CV 08−3315 CAS (MANx). Case referred from Magistrate Judge Charles F. Eick to Magistrate Judge Margaret A. Nagle for Discovery. The case number will now read as follows: CV 09−00722 CAS (MANx). Signed by Magistrate Judge Margaret A. Nagle. (rn) (Entered: 02/11/2009)
13 NOTICE OF MOTION AND MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Fey Garcia. Motion set for hearing on 3/9/2009 at 10:00 AM before Judge Christina A. Snyder. (Attachments: # 1 memo of ps and as, # 2 request for judicial notice, # 3

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 11 of 21

02/11/2009 02/12/2009 02/13/2009
02/13/2009

lodgment of state authorities, # 4 Proposed Order proposed order, # 5 Declaration Guadarrama decl, # 6 Declaration gallagher decl., # 7 Declaration Garcia decl., # 8 Declaration dirks decl, # 9 Declaration Mendez decl., # 10 Declaration Simmons decl., # 11 Declaration Traylor decl., # 12 Declaration Lamar decl., # 13 Declaration Crown decl., # 14 Declaration Regalia decl., # 15 Declaration Kauffman decl., # 16 Civil Cover Sheet Davis decl., # 17 Declaration puckett decl., # 18 Declaration Vega decl., # 19 Declaration nolcox, # 20 Declaration Kakar decl., # 21 Declaration Dominguez decl., # 22 Declaration Harper decl., # 23 Declaration sharp decl., # 24 Declaration Mee decl., # 25 Civil Cover Sheet Salameh decl., # 26 Declaration Jeha decl., # 27 Declaration Medina decl., # 28 Declaration cable decl., # 29 Declaration davis decl., # 30 Declaration Light decl., # 31 Declaration Basrai decl., # 32 Declaration youredjian decl., # 33 Declaration Gaffney decl., # 34 Declaration Meyers, # 35 Civil Cover Sheet Cronin decl., # 36 Civil Cover Sheet wandel decl., # 37 Declaration Simbeck decl., # 38 Declaration Brinton decl., # 39 Civil Cover Sheet Leonelli decl., # 40 Declaration Bains decl., # 41 Declaration Lofholm decl., # 42 Declaration Carrico decl., # 43 Declaration Lunagaria decl., # 44 Declaration bertelli decl., # 45 Declaration Markarian decl., # 46 Declaration Steen decl., # 47 Declaration Park decl., # 48 Declaration Akanwo decl., # 49 Declaration On decl., # 50 Declaration Prevost decl., # 51 Declaration Raymond decl. pt 1, # 52 Declaration Raymond decl. pt 2, # 53 Declaration Raymond decl. pt 3, # 54 Declaration Missaelides decl., # 55 Declaration Rolston decl., # 56 Declaration Schondelmeyer decl., # 57 proof of service)(Sze, Felicia) (Entered: 02/11/2009)
14 ORDER REGARDING BRIEFING SCHEDULE FOR MOTIONS FOR PRELIMINARY INJUNCTION by Judge Christina A. Snyder: Upon Stipulation of the parties 11 , the Court hereby orders the following briefing schedule: 2/11/2009 Filing date for First Motion for Preliminary Injunction (pharmacies and adult day health care centers); 2/13/2009 Filing date for Second Motion for Preliminary Injunction (hospitals); 2/26/2009 Due Date for Defendant's Oppositions to both motions; 3/4/2009 Due Date for Plaintiffs' Reply Briefs to both motions; 3/9/2009 at 10:00 AM Hearing Date. (gk) (Entered: 02/12/2009)
15 NOTICE Notice of Errata filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Fey Garcia. (Sze, Felicia) (Entered: 02/12/2009)
16 NOTICE OF MOTION AND MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. Motion set for hearing on 3/9/2009 at 10:00 AM before Judge Christina A. Snyder. (Attachments: # 1 Memorandum of Points and Authorities, # 2 Proposed Order, # 3 Declaration of Abigail Wong, # 4 Declaration of Ann Pumpian, # 5 Declaration of Art DeNio, # 6 Declaration of Byron Chell, # 7 Declaration of C. Duane Dauner, # 8 Declaration of Deborah Keel, # 9 Declaration of Dennis Haghighat, # 10 Declaration of Don Miller, # 11 Declaration of Edward McDonald, # 12 Declaration of Henry Zaretsky (part 1 of 2), # 13 Declaration of Henry Zaretsky (part 2 of 2), # 14 Declaration of Jim Vaughn, # 15 Declaration of Karen Testman, # 16 Declaration of Kathleen Farmer, # 17 Declaration of Katie Delmore, # 18 Declaration of Ken Jordan, # 19 Declaration of Kirby McKague, # 20 Declaration of Marcia Hall, # 21 Declaration of Mich Riccioni, # 22 Declaration of Robert Trautman)(Bookman, Lloyd) (Entered: 02/13/2009)
17 DECLARATION of James Lott in support of MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 12 of 21

02/13/2009
02/13/2009
02/20/2009 02/20/2009 02/23/2009 02/26/2009

Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Declaration of James Lott, part 2, # 2 Declaration of James Lott, part 3, # 3 Declaration of James Lott, Part 4, # 4 Declaration of James Lott, Part 5, # 5 Declaration of James Lott, Part 6, # 6 Declaration of James Lott, Part 7)(Bookman, Lloyd) (Entered: 02/13/2009)
18 SUPPLEMENT to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 Appendix of State Authority in support of motion filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Appendix Part 2, # 2 Appendix Part 3)(Bookman, Lloyd) (Entered: 02/13/2009)
19 REQUEST FOR JUDICIAL NOTICE re MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Exhibit RJN Part 2, # 2 Exhibit RJN Part 3, # 3 Exhibit RJN Part 4, # 4 Exhibit Part 5, # 5 Exhibit RJN Part 6, # 6 Exhibit RJN Part 7, # 7 Exhibit RJN Part 8)(Bookman, Lloyd) (Entered: 02/13/2009)
20 STIPULATION for Extension of Time to File Response as to Complaint − (Discovery), Complaint − (Discovery), Complaint − (Discovery) 1 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order Re Stipulation to Extend time for Defendant to file Its Answer and/or Responsive Pleading to the Summons and Complaint)(Murphy, Randall) (Entered: 02/20/2009)
21 Amendment to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 Notice of Errata re Declaration of Chell filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Keville, Jordan) (Entered: 02/20/2009)
24 ORDER upon Stipulation 20 granting defendant David Maxwell−Jolly extension to file answer to complaint to 3/5/2009 by Judge Christina A. Snyder (lc) (Entered: 03/03/2009)
22 MEMORANDUM in Opposition to MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Appendix of State Authorities in Support, # 2 Declaration of Alan Eng, # 3 Declaration of Connie Kwan, # 4 Declaration of Debra Ferreria, # 5 Declaration of Eric Lazarus, # 6 Declaration of Joe Ann Carroll, # 7 Declaration Judith Phelps, # 8 Declaration of Kevi Gorospe, # 9 Declaration of Susan Flores, # 10 Declaration of T Allan Hansen, # 11 Declaration of K. Truworthy, # 12 Declaration of Douglas − Part 1, # 13 Declaration of Douglas − Pharm − Part 2, # 14 Declaration of DOuglas − Pharm − Part 3, # 15 Declaration of Douglas − Pharm − Part 4, # 16 Declaration of Douglas − Pharm − Part 5, # 17 Declaration of Douglas − Pharm − Part 6, # 18 Declaration of Douglas − Pharm − Part 7, # 19 Declaration of Douglas − Pharm − Part 8, # 20 Supplement Proof of Service re Pharmacies)(Kim, Jennifer) (Entered: 02/27/2009)

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 13 of 21

02/27/2009
03/04/2009 03/04/2009 03/04/2009 03/04/2009 03/04/2009 03/05/2009

23 MEMORANDUM in Opposition to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Appendix of State Authorities, # 2 Declaration of Alan Eng, # 3 Declaration of Donna Shine, # 4 Declaration of Eric Lazarus, # 5 Declaration Ernest Ong, # 6 Declaration Joe Ann Carroll, # 7 Declaration of Keith Berger, # 8 Declaration of Linda Machado, # 9 Declaration of Nancy Hutchison, # 10 Declaration of Sandra Yien, # 11 Declaration of Timothy Matsumoto, # 12 Declaration of William Lau, # 13 Declaration of William Liu, # 14 Declaration of Douglas − Hospital − Part 1, # 15 Declaration of Douglas − Hospital − Part 2, # 16 Declaration of Douglas − Hospital − Part 3, # 17 Declaration of Douglas − Hospital − Part 4, # 18 Declaration of Douglas − Hospital − Part 5, # 19 Declaration of Douglas − Hospital − Part 6, # 20 Declaration of Douglas − Hospital − Part 7, # 21 Declaration of Douglas − Hospital − Part 8, # 22 Supplement Proof of Service − Hospital)(Kim, Jennifer) (Entered: 02/27/2009)
25 REPLY in support MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., Farmacia Remedios, Inc., Acacia Adult Day Services, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, California Medical Association, Fey Garcia. (Attachments: # 1 Declaration (Supplemental) of Henry W. Zaretsky)(Keville, Jordan) (Entered: 03/04/2009)
26 REPLY to Opposition to Motion for Preliminary Injunction filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
27 DECLARATION of Stephen W. Schondelmeyer in Support of MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
28 DECLARATION of Lydia Missaelides in Support of MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
29 LODGMENT OF STATE AUTHORITIES re MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 (REPLY TO OPPOSITION) filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
30 ANSWER to Complaint − (Discovery), Complaint − (Discovery), Complaint − (Discovery) 1 filed by Defendant David Maxwell−Jolly.(Murphy, Randall) (Entered: 03/05/2009)

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 14 of 21

03/05/2009 03/05/2009 03/09/2009
03/09/2009 03/09/2009 03/09/2009 03/10/2009

31 SUPPLEMENT to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 Lodgment of State Authority in Support of Reply filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., Farmacia Remedios, Inc., Acacia Adult Day Services, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Lodgment of State Authority (part 2 of 3), # 2 Lodgment, part 3 of 3)(Keville, Jordan) (Entered: 03/05/2009)
32 MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: Proceedings: Order Setting Scheduling Conference on 5/4/2009 at 11:00 AM before Judge Christina A. Snyder. The Scheduling Conference will be held pursuant to F.R.Civ.P 16(b). The parties are reminded of their obligations to disclose information and confer on a discovery plan not later than 21 days prior to the date of the Rule 16(b) Scheduling Conference and to report to the Court not later than 14 days after they confer on a discovery plan and the other matters required by F.R.Civ.P. 26(f) and the Local Rules of this Court. (See document for further details). (mg) (Entered: 03/06/2009)
33 First EX PARTE APPLICATION for Leave to File a Supplemental Memorandum of Points and Authorities in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Memorandum of Points and Authorities in Support of Ex Parte Application to File a Supplemental MPA in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services, # 2 Declaration Declaration of Jordan B. Keville in support of Ex PArte Application ot File a Supplemental MPA in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services, # 3 Supplemental MPA in support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services, # 4 Proposed Order Proposed Order Granting Ex Parte Application)(Sze, Felicia) (Entered: 03/09/2009)
34 MINUTES of Motion Hearing held before Judge Christina A. Snyder: Proceedings: Plaintiff's MOTION for Preliminary Injunction of AB 1183 Rate Reductions for Pharmacies and Adult Day health Care Centers 13 ; Plaintiff's MOTION for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services 16 . Hearing held and counsel are present. Tentatives are provided. The Court confers with counsel and counsel argue. The Court takes the above−motions under submission. The Court will issue a final ruling. Court Reporter: Laura Elias. (mg) (Entered: 03/10/2009)
35 ORDER by Judge Christina A. Snyder GRANTING Plaintiffs' MOTION for Preliminary Injunction as to Adult Day Health Centers 13 . The Court GRANTS plaintiffs' motion for preliminary injunction. The Court hereby orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. &Inst. Code § 14105.191, as modified by AB 1183 beginning on March 9, 2009, by refraining from reducing by five percent payments to ADHCs provided under the Medi−Cal fee−for−service program. (mg) (Entered: 03/10/2009)
36 ORDER by Judge Christina A. Snyder DENYING Plaintiffs' MOTION for Preliminary Injunction as to Hospitals 16 . The Court DENIES plaintiffs' motion for preliminary injunction with regard to AB 1183's reimbursement rate reduction to hospitals, without prejudice to its being renewed after the Ninth Circuit rules on the appeal in Independent Living Center of Southern California, Inc. v. Sandra Shewry, CV−08−3315−CAS. (mg)TT (Entered: 03/10/2009)
37 ORDER by Judge Christina A. Snyder DENYING EX PARTE APPLICATION for Leave to File a Supplemental Memorandum of Points and Authorities in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services 33 . (mg) (Entered: 03/10/2009)

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 15 of 21

03/10/2009 03/11/2009 03/11/2009
03/11/2009 03/12/2009 03/12/2009 03/16/2009
03/23/2009

38 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents. The following error(s) was found: No Certification of Interested Parties, Local Rule 7.1−1 RE: Defendant's Answer to Complaint filed 3/5/2009 30 . In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. (gk) (Entered: 03/10/2009)
39 NOTICE of Interested Parties filed by Defendant David Maxwell−Jolly, (Murphy, Randall) (Entered: 03/11/2009)
40 NOTICE OF APPEAL to the 9th CCA filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. Appeal of Order, 36 . (Filing fee $455, receipt number 09730000000005018086.) (Attachments: # 1 Civil Cover Sheet Civil Appeals Docketing Statement, # 2 Representation Statement)(Keville, Jordan) (Entered: 03/11/2009)
41 FIRST AMENDED NOTICE OF APPEAL to 9th CIRCUIT filed by Plaintiffs California Hospital Association, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center. Amending Notice of Appeal to 9th Circuit Court of Appeals,, 40 Filed On: 3/11/09; Entered On: 3/11/09; (Attachments: # 1 Amended Representation Statement)(Keville, Jordan) (Entered: 03/11/2009)
42 NOTICE OF APPEAL NOTIFICATION form issued regarding Notice of Appeal to 9th Circuit Court of Appeals,, 40 as to Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (lr) (Entered: 03/12/2009)
43 NOTIFICATION by Circuit Court of Appellate Docket Number 09−55365, 9th CCA Filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sa cramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia regarding Notice of Appeal to 9th Circuit Court of Appeals, 40 (car) (Entered: 03/12/2009)
44 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The appeal filed March 11, 2009 is a preliminary injuction appeal. Accordingly, Ninth Circuit Rule shall apply. Brief schedule set. (cbr) (Entered: 03/17/2009)
45 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The court has reviewed appellants' emergency motion for an injunction pending appeal, the oppostion thereto, and the

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 16 of 21

03/25/2009
03/27/2009 03/27/2009
04/06/2009 04/06/2009
04/07/2009 04/07/2009 04/08/2009 04/08/2009 04/08/2009 04/08/2009

reply in support of the motion. The parties shall make themselves available for telephonic oral argument on the emergency motion on Friday, March 27, 2009, at 3 p.m. Within two days after the date of this order, each party shall provide written notice to the court of the name and telephone number of the attorney who will be appearing at the telephonic argument. Each side shall have fifteen minutes for argument. Order received in this district on 3/23/09. (lr) (Entered: 03/25/2009)
46 NOTICE OF MOTION AND Renewed MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Pharmacies filed by Plaintiffs California Pharmacists Association, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc.. Motion set for hearing on 4/13/2009 at 10:00 AM before Judge Christina A. Snyder. (Cannizzo, Craig) (Entered: 03/25/2009)
47 PROOF OF SERVICE re: Order,, 35 (Gross, Byron) (Entered: 03/27/2009)
48 MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: Pursuant to the Local Rules, the filing of Plaintiffs' Renewed Motion for Preliminary Injunction of AB 1183 Rate Reductions for Pharmacies 46 for an 4/13/2009 hearing date is untimely. Therefore, the Court continues Plaintiffs' motion to 4/20/2009 at 10:00 AM before Judge Christina A. Snyder, to allow the allotted time for briefing pursuant to the Local Rules. Court Reporter: Not Present. (gk) (Entered: 03/30/2009)
49 Request to Take Hearing Off Calendar re: Renewed MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Pharmacies 46 (Cannizzo, Craig) (Entered: 04/06/2009)
55 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The Plaintiffs MOTION FOR STAY PENDING APPEAL IS GRANTED. Order received in this district on 4/06/09. (lr) (Entered: 04/10/2009)
50 NOTICE OF APPEAL to the 9th CCA filed by Defendant David Maxwell−Jolly. Appeal of Order,, 35 . (Kim, Jennifer) (Entered: 04/07/2009)
51 Civil Appeals Docketing Statement received from forwarded to 9th CCA. RE: Notice of Appeal to 9th Circuit Court of Appeals 50 (Kim, Jennifer) (Entered: 04/07/2009)
52 NOTICE OF APPEAL NOTIFICATION form issued regarding Notice of Appeal to 9th Circuit Court of Appeals 50 as to Defendant David Maxwell−Jolly. (lr) (Entered: 04/08/2009)
54 APPEAL FEE PAID: re Notice of Appeal to 9th Circuit Court of Appeals 50 as to Defendant David Maxwell−Jolly; Receipt Number: 117558 in the amount of $455. (dmap) (Entered: 04/09/2009)
56 NOTIFICATION by Circuit Court of Appellate Docket Number 09−55532, 9th CCA regarding Notice of Appeal to 9th Circuit Court of Appeals 50 as to Defendant David Maxwell−Jolly. (lr) (Entered: 04/10/2009)
57 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. The appeal filed April 7, 2009 is a preliminary injunction appeal. Accordingly, Ninth Circuit Rule 3−3 shall apply. A review of this court's docket reflects that the filing and docketing fees for this preliminary injuntion appeal remain due. Within 21 days after the date of this order, appellant shall pay to the district court the $455.00 filing and docketing fees for this appeal and file in this court proof of such payment or file in this court a motion to proceed in forma pauperis. Failure to pay the fees or file a motion to proceed in forma pauperis shall result in the automatic dimissal of the appeal by the Clerk for failure to prosecute. See 9th Cir. R. 42−1. The Clerk shall serve a Form 4 financial affidavit on appellant. If they have not already done so, within 7 calendar

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 17 of 21

04/09/2009 04/10/2009 04/10/2009 04/13/2009 04/17/2009 05/04/2009 05/14/2009

days of the filing date of this order, the parties shall make arrangment to obtain from the court reporter in official transcript of proceedings in the district court that will be included in the record on appeal. The briefing schedule is established as follows: the opening brief is due not later than May 5, 2009; the answering brief is due June 2, 2009 or 28 days after service of the opening brief, whichever is earlier; and the optional reply brief is due within 14 days of service of the answering brief. See 9th Cir. R. 3−3(b). If appellant fails to file timely the opening brief, this appeal will be dismissed automatically by the Clerk for failure to prosecute. See 9th Cir. R. 42−1. Order received in this district on 4/08/09. (lr) (Entered: 04/13/2009)
53 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents. The following error(s) was found: incorrect event selected (misc. document). Correct event is Motion related filings − Request for Leave RE: Miscellaneous Document 49 . In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. (vh) (Entered: 04/09/2009)
58 MINUTES OF IN CHAMBERS ORDER held before Judge Christina A. Snyder: The hearing of April 20, 2009 on Plaintiffs Renewed Motion for Preliminary Injunction of AB 1183 Rate Reductions for Pharmacies filed March 25, 2009, is hereby vacated. The Court is also in receipt of the Ninth Circuit Mandate filed April 6, 2009. The Court hereby sets a Status Conference re: Case and Appeal on May 4, 2009 at 11:00 a.m., to be heard simultaneous with the continued Scheduling Conference, set on that same date and time. (es) (Entered: 04/13/2009)
61 MINUTES OF IN CHAMBERS ORDER by Judge Christina A. Snyder. On the Courts own motion, the Court continues the Scheduling Conference, only, fromMay 4, 2009 to July 13, 2009 at 11:00 A.M. The Joint Report and ADR Questionnaireshall be filed on or before June 29, 2009.Note that the Status Conference re: Case and Appeal shall remain as previouslycalendared on May 4, 2009 at 11:00 A.M. (pp) (Entered: 04/23/2009)
59 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. Appellant has paid the filing and docketing fees for this prelimiary injunction appeal. The briefing schedule established by the court's April 8, 2009 order shall remain in effect. Order received in this district on 4/13/09. (lr) (Entered: 04/14/2009)
60 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. This is a preliminary injunction appeal. Appellant's oral motion for a 14−day extension of time to file the opening brief is granted. The opening brief is now due May 19, 2009; the answering brief is due June 16, 2009; and the optional reply brief is due within 14 days after service of the answering brief. Order received in this district on 4/17/09. (lr) (Entered: 04/21/2009)
62 MINUTE ORDER RE Status Conference re: Case and Appeal held before United States District Judge Christina A. Snyder. Hearing held and counsel are present. The Court confers with counsel regarding the parties pending Notice of Appeals before the 9th Circuit. The Court continues the Status Conference re: Case and Appeal to July 13, 2009 at 11:00 a.m., to be heard simultaneously with the Scheduling Conference on calendar on the same date and time. Court Reporter: Laura Elias. (pp) (Entered: 05/04/2009)
63 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. This is a preliminary injunction appeal. The unopposed oral motion for a seven−day extension of time to file the reply brief is granted. The reply brief is due May 27, 2009. Order received in this district on 5/14/09. (lr) (Entered: 05/15/2009)

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 18 of 21

05/26/2009 05/28/2009
06/15/2009 06/29/2009 07/01/2009 07/13/2009

64 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The order order received in this district on 5/26/2009. Plaintiffs−Appellants are directed to file a response to Defendant−Appellee's Petition for Rehearing En Banc. Response shall not exceed 15 pages, shall be filed within 21 days of the date of this order. (lra) (Entered: 05/27/2009)
65 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. We consider the Urgent Motion for Clarification Pursuant to Circuit Rules 27−3(b) and 27−10 filed by Plaintiffs−Appellants California Pharmacists Association, et al. (the Hospital Plaintiffs). The Hospital Plaintiffs filed the instant motion more than fourteen days after the date of our April 6, 2009 Order, in violation of Circuit Rule 27−10(a). Nevertheless, we find that the Hospital Plaintiffs were not, and could not have been, aware of the matter in which the Director would implement our Order until after the fourteen−day period had passed. Under the circumstances, and pursuant to Circuit Rule 27−10 (a), we enlarge the said fourteen−day period, and consider the motion. We resolve the Hospital Plaintiffs' motion and clarify our April 6, 2009 Order as follows: Those sections, or portions of sections, of the California Welfare and Institutions Code added or amended by Assembly Bill 5 that were not purportedly amended or deleted by the text of California Assembly Bill 1183 are not covered by, nor is the implementation thereof stayed by, our April 6, 2009 Order. Order received in this district on 5/28/09. (lr) (Entered: 06/01/2009)
66 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The Reply Brief submitted on June 1, 2009 is filed. Within five(5) working days of the filing of this order, Appellants are ordered to file tne (10) copies of the brief in paper format, with a Grey cover, accompanied by certification (attached to the end of each copy of the biref) that the brief is identical to the version submitted electronically. A sample certificate is available on the Court's website, www.ca9uscourts.gov, at the CM/ECF button. Order received in this district on 6/15/09. (lr) (Entered: 06/17/2009)
67 STIPULATION to Continue Scheduling Conference from 7/13/09 to 10/19/09 Re: Status Conference, Set Hearings,, 62 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Continue Scheduling Conference)(Cribbs, Gregory) (Entered: 06/29/2009)
68 ORDER TO CONTINUE SCHEDULING CONFERENCE by Judge Christina A. Snyder: Upon Stipulation 67 , the Scheduling Conference is continued to 10/19/2009 11:00 AM before Judge Christina A. Snyder. The status conference, currently scheduled for 7/13/2009 at 11:00 AM, will remain on calendar. (gk) (Entered: 07/01/2009)
69 MINUTES OF Status Conference Re Case and Appeal held before Judge Christina A. Snyder: The Court confers with counsel regarding the parties pending Notice of Appeals before the 9th Circuit. The Court continues the Status Conference re: Case and Appeals to 10/19/2009 11:00 AM before Judge Christina A. Snyder. Court

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 19 of 21

08/19/2009 08/24/2009
09/28/2009 10/14/2009
10/19/2009 01/04/2010 01/05/2010 03/17/2010
03/25/2010 03/25/2010 04/05/2010 04/12/2010

Reporter: Laura Elias. (gk) (Entered: 07/14/2009)
70 ORDER DENYING TRANSFER by the Judicial Panel on Multidistrict Litigation, MDL 2069, that the motion by Plaintiffs in an action in the Northern District of California (3:08−5173), pursuant to 28 U.S.C. Section 1407, for centralization of the six actions listed on Schedule A (attached) is denied. (gk) (Entered: 08/19/2009)
71 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The panel has unanimously voted to deny the petition for rehearing en banc. The full court has been advised of the petition for rehearing en banc and no judge of the court has requested a vote on it. Fed. R. App. P. 35. The petition for rehearing en banc is DENIED. Order received in this district on 8/24/09. (lr) (Entered: 08/25/2009)
72 STIPULATION to Continue Scheduling Conference from 10/19/09 to 1/18/10 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Continue Scheduling Conference)(Cribbs, Gregory) (Entered: 09/28/2009)
73 ORDER TO CONTINUE SCHEDULING CONFERENCE by Judge Christina A. Snyder(Note: Changes Made by the Court): Upon Stipulation of the parties 72 , the Scheduling Conference, currently set for October 19, 2009, at 11:00 a.m., is continued to January 11, 2010, at 11:00 a.m. The status conference, currently scheduled to be heard simultaneously with the requested continued Scheduling Conference, on October 19, 2009, at 11:00 a.m., will remain on calendar. (jre) (Entered: 10/15/2009)
74 MINUTES OF Status Conference held before Judge Christina A. Snyder: The matter is continued to January 11, 2010, at 11:00 a.m.Court Reporter: Margaret Babykin. (pso) (Entered: 10/20/2009)
75 STIPULATION to Continue Scheduling Conference and Status Conference from 1/11/10 to 4/12/10 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Continue Scheduling Conference and Status Conference)(Cribbs, Gregory) (Entered: 01/04/2010)
76 ORDER TO CONTINUE SCHEDULING CONFERENCE AND STATUS CONFERENCE by Judge Christina A. Snyder: Upon Stipulation 75 , the Scheduling Conference and Status Conference are continued to 4/12/2010 11:00 AM before Judge Christina A. Snyder. (gk) (Entered: 01/07/2010)
79 MINUTES (IN CHAMBERS) HEARING ON MANDATE OF THE NINTH CIRCUIT COURT OF APPEAL by Judge Christina A. Snyder: THE COURT REVIEWS the mandate (judgment or order) of the Ninth Circuit Court of Appeals Reversing and Remanding 78 . The Court will address the mandate in the appeal no. 09−55365 at the current scheduled Status Conference and Scheduling Conference set on 4/12/2010 at 11:00 AM. Court Reporter: Not Present. (gk) (Entered: 04/01/2010)
77 MANDATE of 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 , CCA # 09−55532. The decision of the district court is affirmed. Mandate received in this district on 3/25/2010. (dmap) (Entered: 03/26/2010)
78 MANDATE of 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 40 , CCA # 09−55365. The decision of the district court is affirmed. Mandate received in this district on 3/25/2010. (dmap) (Entered: 03/26/2010)
80 JOINT RULE 26f CONFERENCE REPORT filed by Plaintiff California Pharmacists Association. (Gross, Byron) (Entered: 04/05/2010)
82 MINUTES OF Scheduling Conference held before Judge Christina A. Snyder:Hearing held and counsel are present. The Court confers with counsel. The

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 20 of 21

04/12/2010 04/16/2010
05/27/2010 06/04/2010 06/16/2010 06/16/2010

Court spreads the 9th Circuit Mandates for appeal nos. 09−55532 and 09/55365. The Court denies defendant's oral motion to stay the above−referenced action and schedules the following dates: Amended Pleadings due by 5/14/2010. Discovery cut−off 12/31/2010. Final Pretrial Conference set for 5/2/2011 11:00 AM before Judge Christina A. Snyder. Jury Trial set for 6/14/2011 09:30 AM before Judge Christina A. Snyder.Court Reporter: Laura Elias. (yl) (Entered: 04/30/2010)
83 AMENDED MINUTES of Scheduling Conference 82 held before Judge Christina A. Snyder: The Court spreads the 9th Circuit Mandates for appeal nos. 09−55532 and 09−55365. The Court denies defendant's oral motion to stay the action and schedules the following dates: Request for leave to file amended pleadings or to add parties 5/14/2010; Discovery Cut−off 12/31/2010; Last Day to File Motions 2/28/2011; Pretrial Conference/Hearing on Motions in Limine 11:00 AM 5/2/2011; and Jury Trial 9:30 AM 6/14/2011. Court Reporter Laura Elias. (gk) (Entered: 05/04/2010)
81 MINUTES (IN CHAMBERS): Order Vacating this Court's 3/9/2009 Order and Granting Plaintiffs' Motion for Preliminary Injunction Pursuant to the Ninth Circuit Court of Appeals Mandate Issued 3/25/2010 (09−55365) by Judge Christina A. Snyder: Pursuant to the mandate from the Ninth Circuit, this Court hereby vacates the 3/9/2009 order denying plaintiffs' motion for preliminary injunction with regard to AB 1183's reimbursement rate reduction to hospitals 36 . Accordingly, the Court hereby grants plaintiffs' Motion for Preliminary Injunction 46 and orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. &Inst. Code Section 14105.191 and 14166.245, as modified by AB 1183, beginning on April 16, 2010, by refraining from reducing by five percent payments to hospitals for services provided under the Medi−Cal fee−for−service program, which include non−contract inpatient hospital services, outpatient services, Distinct Part Nursing Facilities, and subacute services. Court Reporter: Not Present. (gk) (Entered: 04/16/2010)
84 NOTICE OF MOTION AND Joint MOTION to AMEND Order on Motion for Preliminary Injunction,,,, 81 filed by Plaintiff California Pharmacists Association. Motion set for hearing on 6/28/2010 at 10:00 AM before Judge Christina A. Snyder. (Keville, Jordan) (Entered: 05/27/2010)
85 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents RE: Notice of Motion and Joint Motion for Modification of Court's 4/16/2010 Preliminary Injunction Order filed 5/27/2010 84 . The following error(s) was found: Proposed Document was not submitted as a separate attachment. The proposed order is within the motion papers, pages 8 and 9. It lacks a separate title page, Local Rule 11−3.8, and two lines of text on the page that has the line provided for the signature of the judge, Local Rule 58−10. In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. You need not take any action in response to this notice unless and until the court directs you to do so. (gk) (Entered: 06/07/2010)
86 ORDER by Judge Christina A. Snyder GRANTING Joint Motion for Modification of Court's April 16, 2010 Preliminary Injunction Order 84 . The Court's April 16 order will be amended to read as follows: Pursuant to the mandate from the Ninth Circuit, this Court hereby vacates the March 9, 2009 order denying plaintiffs' motion for a preliminary injunction with regard to AB 1183's reimbursement rate reduction to hospitals. According, the Court hereby grants plaintiffs' motion for preliminary injunction and orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. &Inst. Code 14105.191 and 14166.245 with respect to services provided under the fee−for−service Medi−Cal program, by refraining. (See attached Order for further information). (jp) (Entered: 06/17/2010)
87 MINUTES IN CHAMBERS by Judge Christina A. Snyder: Plaintiffs Joint MOTION for Modification of Court's April 16, 2010 Preliminary Injunction Order 84 and noticed for hearing on 6/28/2010 at 10:00 AM. Pursuant to FRCP 78 and Local Rule 7−15, the Court hereby dispenses with oral argument on the above−referenced motion and decides the motion on the basis of the papers

Case: 2:09-cv-722 As of: 02/09/2013 03:05 PM PST 21 of 21

02/02/2011 02/04/2011 06/01/2011
04/26/2012 05/22/2012

submitted. Therefore, the parties are not to appear before this Court on 6/28/2010 at 10:00 AM. The Court hereby GRANTS Plaintiffs' Motion and Joint Motion for Modification of Courts April 16, 2010 Preliminary Injunction Order forthwith. The Court will issue a separate order. (jp) (Entered: 06/17/2010)
88 STIPULATION to Stay Case pending decision by the Supreme Court, STIPULATION to Vacate Existing Dates and deadlines filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Vacate Existing Dates and for a Stay of the Proceedings)(Kim, Jennifer) (Entered: 02/02/2011)
89 ORDER TO VACATE EXISTING DATES AND FOR A STAY OF THE PROCEEDINGS by Judge Christina A. Snyder: Upon Stipulation 88 , the dates and deadlines previously set by the Court, by order dated 4/12/2010, are hereby vacated and the action is stayed pending a decision by the Supreme Court in the case of Maxwell−Jolly v. California Pharmacists Ass'n, U.S.S.C. Case No. 09−1158 and/or matter consolidated therewith. (gk) (Entered: 02/07/2011)
90 MINUTES (IN CHAMBERS) − ORDER REMOVING ACTION FROM THE ACTIVE LIST OF CASES, PURSUANT TO A STAY IN THE ACTION by Judge Christina A. Snyder: THE COURT, having approved a stay in this matter on 2/4/2011; IT IS HEREBY ORDERED that this action is hereby removed from this Court's active caseload until further application by the parties or order of this Court. IT IS FURTHER ORDERED that counsel shall file a joint report detailing the status of the case within 90 days and every quarter thereafter until the action has been reactivated on this Court's active caseload or a stipulation for dismissal is filed. This Court retains full jurisdiction over this action and this Order shall not prejudice any party to this action. (Made JS−6. Case Terminated.) Court Reporter: Not Present. (gk) (Entered: 06/02/2011)
91 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. The parties are directed to file contemporaneous supplemental briefs in their respective cases concerning the effect of Douglas v. Independent Living Center of Southern California, Inc., 132 S.Ct.1204(2012). Briefs shall be due 45 days from the filing of this order and shall not exceed 30 pages in length. Order received in this district on 4/26/12. (car) (Entered: 04/30/2012)
92 ORDER from 9th CCA filed, CCA # 08−56422, 08−57016, 09−55532, 09−55692. The parties' unanimous joint motion to refer Case Nos. 08−56422, 08−57016, 09−55532, and 09−55692 to mediation, and to continue the supplemental briefing schedule during the pendency of mediation [D.E. 49−1], is hereby GRANTED. Order received in this district on 5/22/12 (car) (Entered: 05/24/2012)

 
 General Docket United States Court of Appeals for the Ninth Circuit

Court of Appeals Docket #: 09-55532 Nature of Suit: 3950 Constitutionality of State Statutes California Pharmacists Associa, et al v. David Maxwell-Jolly Appeal From: U.S. District Court for Central California, Los Angeles Fee Status: Paid

Docketed: 04/08/2009

Case Type Information: 1) civil 2) private 3) null

Originating Court Information:

District: 0973-2 : 2:09-cv-00722-CAS-MAN

Court Reporter: Blanca Carvajal

Trial Judge: Christina A. Snyder, District Judge

Date Filed: 01/29/2009

Date

Date Order/Judgment

Order/Judgment:

EOD:

03/09/2009

03/10/2009

Date NOA Filed:
04/07/2009

Date Rec'd COA:
04/07/2009

Prior Cases: None

Current Cases: Lead
Companion 09-55365
Related 09-16359 09-16359 09-16359 09-55692 09-55692

Member
09-55532
09-55365 09-55532 09-55692 09-55365 09-55532

Start

End

04/08/2009

07/24/2009 07/24/2009 07/24/2009 05/19/2009 05/19/2009

CALIFORNIA PHARMACISTS ASSOCIATION
Plaintiff - Appellee,

Craig Cannizzo [COR LD NTC Retained] Hooper, Lundy & Bookman, Inc. 575 Market St. San Francisco, CA 94105
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] HOOPER, LUNDY & BOOKMAN, INC.

Ste. 1600 1875 Century Park East Los Angeles, CA 90067-2799

Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] HOOPER, LUNDY & BOOKMAN, P.C. Watt Plaza 1875 Century Park East Los Angeles, CA 90067

Felicia Y. Sze, Attorney [COR LD NTC Retained] Hooper, Lundy & Bookman, Inc. 575 Market St. San Francisco, CA 94105

Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] HOOPER, LUNDY & BOOKMAN, INC. 1875 Century Park East Los Angeles, CA 90067-2799

Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] HOOPER, LUNDY & BOOKMAN, INC. Suite 1600 1875 Century Park East Los Angeles, CA 90067-2799

CALIFORNIA MEDICAL ASSOCIATION Plaintiff - Appellee,

Craig Cannizzo [COR LD NTC Retained] (see above)

Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)

Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)

Felicia Y. Sze, Attorney [COR LD NTC Retained]

(see above)

Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)

Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

CALIFORNIA DENTAL ASSOCIATION Plaintiff - Appellee,

Craig Cannizzo [COR LD NTC Retained] (see above)

Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)

Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)

Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)

Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)

Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

CALIFORNIA HOSPITAL ASSOCIATION Plaintiff - Appellee,

Lloyd A. Bookman, Esquire, Attorney [COR LD NTC Retained] (see above)

Craig Cannizzo [COR LD NTC Retained] (see above)

Michael A. Dubin, Esquire

Direct: 310-551-8111 [COR LD NTC Retained] (see above)

Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)

Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)

Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

CALIFORNIA ASSOCIATION FOR ADULT Craig Cannizzo

DAY SERVICES

[COR LD NTC Retained]

Plaintiff - Appellee,

(see above)

Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)

Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)

Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)

Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)

Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

MARIN APOTHECARY, INC., DBA Ross Valley Pharmacy
Plaintiff - Appellee,

Craig Cannizzo [COR LD NTC Retained] (see above)

SOUTH SACRAMENTO PHARMACY Plaintiff - Appellee,

Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)
Craig Cannizzo [COR LD NTC Retained] (see above)
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125

FARMACIA REMEDIOS, INC. Plaintiff - Appellee,
ACACIA ADULT DAY SERVICES Plaintiff - Appellee,

[COR NTC Retained] (see above)
Craig Cannizzo [COR LD NTC Retained] (see above)
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)
Craig Cannizzo [COR LD NTC Retained] (see above)
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)

Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)

Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

SHARP MEMORIAL HOSPITAL Plaintiff - Appellee,

Lloyd A. Bookman, Esquire, Attorney [COR LD NTC Retained] (see above)

Craig Cannizzo [COR LD NTC Retained] (see above)

Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)

Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)

Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)

Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

GROSSMONT HOSPITAL CORPORATION Lloyd A. Bookman, Esquire, Attorney

Plaintiff - Appellee,

[COR LD NTC Retained]

(see above)

Craig Cannizzo [COR LD NTC Retained] (see above)

Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained]

SHARP CHULA VISTA MEDICAL CENTER
Plaintiff - Appellee,
SHARP CORONADO HOSPITAL AND HEALTHCARE CENTER
Plaintiff - Appellee,

(see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)
Lloyd A. Bookman, Esquire, Attorney [COR LD NTC Retained] (see above)
Craig Cannizzo [COR LD NTC Retained] (see above)
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)
Lloyd A. Bookman, Esquire, Attorney [COR LD NTC Retained] (see above)
Craig Cannizzo

FEY GARCIA Plaintiff - Appellee,

[COR LD NTC Retained] (see above)
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)
Craig Cannizzo [COR LD NTC Retained] (see above)
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

CHARLES GALLAGHER Plaintiff - Appellee,
v.

Craig Cannizzo [COR LD NTC Retained] (see above)
Michael A. Dubin, Esquire Direct: 310-551-8111 [COR LD NTC Retained] (see above)
Jordan B. Keville, Esquire, Attorney [COR LD NTC Retained] (see above)
Felicia Y. Sze, Attorney [COR LD NTC Retained] (see above)
Lloyd A. Bookman, Esquire, Attorney [COR NTC Retained] (see above)
Byron J. Gross, Esquire, Attorney Direct: 310-551-8125 [COR NTC Retained] (see above)

DAVID MAXWELL-JOLLY, Director of The Shannon Michelle Chambers

California Department of Health Care Services Direct: 916-323-3903

Defendant - Appellant,

[COR LD NTC Dep State Aty Gen]

AGCA - OFFICE OF THE CALIFORNIA

ATTORNEY GENERAL (SAC)

Firm: 800-952-5225

P.O. Box 944255

Sacramento, CA 94244-2550

Gregory Martin Cribbs, Esquire, Deputy Assistant Attorney General Direct: 213-897-2441 [COR LD NTC Dep State Aty Gen] AGCA - OFFICE OF THE CALIFORNIA ATTORNEY GENERAL (LA) 1702 300 South Spring Street

Los Angeles, CA 90013
Randall Raymond Murphy Direct: 213-897-2493 [COR LD NTC Dep State Aty Gen] AGCA - OFFICE OF THE CALIFORNIA ATTORNEY GENERAL (LA) Ste. 1702 300 South Spring Street Los Angeles, CA 90013
Susan Marie Carson, Deputy Assistant Attorney General [COR NTC Dep State Aty Gen] AGCA - OFFICE OF THE CALIFORNIA ATTORNEY GENERAL 455 Golden Gate Avenue San Francisco, CA 94102-7004
James M. Humes, Chief Deputy Attorney General Direct: 916-324-5435 [COR NTC Dep State Aty Gen] AGCA - OFFICE OF THE CALIFORNIA ATTORNEY GENERAL (SAC) Firm: 800-952-5225 P.O. Box 944255 Sacramento, CA 94244-2550
Elizabeth A. Linton, Deputy Attorney General Direct: 916-323-8549 [COR NTC Dep State Aty Gen] AGCA - OFFICE OF THE CALIFORNIA ATTORNEY GENERAL (SAC) Firm: 800-952-5225 P.O. Box 944255 Sacramento, CA 94244-2550
Joshua Sondheimer Direct: 415-703-5615 [COR NTC Dep State Aty Gen] AGCA - OFFICE OF THE CALIFORNIA ATTORNEY GENERAL Suite 11000 455 Golden Gate Avenue San Francisco, CA 94102-7004

CALIFORNIA PHARMACISTS ASSOCIATION; CALIFORNIA MEDICAL ASSOCIATION; CALIFORNIA DENTAL ASSOCIATION; CALIFORNIA HOSPITAL ASSOCIATION; CALIFORNIA ASSOCIATION FOR ADULT DAY SERVICES; MARIN APOTHECARY, INC., DBA Ross Valley Pharmacy; SOUTH SACRAMENTO PHARMACY; FARMACIA REMEDIOS, INC.; ACACIA ADULT DAY SERVICES; SHARP MEMORIAL HOSPITAL; GROSSMONT HOSPITAL CORPORATION; SHARP CHULA VISTA MEDICAL CENTER; SHARP CORONADO HOSPITAL AND HEALTHCARE CENTER; FEY GARCIA; CHARLES GALLAGHER,

Plaintiffs - Appellees, v.

DAVID MAXWELL-JOLLY, Director of The California Department of Health Care Services,

Defendant - Appellant.

04/08/2009

1

1 pg, 129.93 KB

DOCKETED CAUSE AND ENTERED APPEARANCES OF COUNSEL. SEND CADS: No. Fee due from Appellant David Maxwell-Jolly on 04/07/2009. Referred to MOATT pursuant to FRAP 3-3. ALL FILINGS ARE TO BE SENT DIRECTLY TO MOATT. (BG)

04/08/2009

2

2 pg, 1.96 KB

Received representation notice of Shannon M. Chambers for Appellant. Served on 04/07/2009. (BG)

04/08/2009

3

2 pg, 54.98 KB

Filed Appellant David Maxwell-Jolly Civil Appeals Docketing Statement. Served on 04/07/2009. (BG)

04/08/2009

4

8 pg, 49.42 KB

Filed order MOATT: (LC) docket fee due.; Setting schedule as follows: Appellant David Maxwell-Jolly opening brief due 05/05/2009. Appellee Acacia Adult Day Services, Appellee California Association For Adult Day Services, Appellee California Dental Association, Appellee California Hospital Association, Appellee California Medical Association, Appellee California Pharmacists Association, Appellee Farmacia Remedios, Inc., Appellee Charles Gallagher, Appellee Fey Garcia, Appellee Grossmont Hospital Corporation, Appellee Marin Apothecary, Inc., Appellee Sharp Chula Vista Medical Center, Appellee Sharp Coronado Hospital and Healthcare Center, Appellee Sharp Memorial Hospital and Appellee South Sacramento Pharmacy answering brief due 06/02/2009. Appellant's optional reply brief is due 14 days after service of the answering brief. Failure to pay the fees or file a motion to proceed in forma pauperis shall result in the automatic dismissal of the appeal by the Clerk for failure to prosecute. See 9th Cir. R. 42-1. If appellant fails to file timely the opening brief, this appeal will be dismissed automatically by the Clerk for failure to prosecute. See 9th Cir. R. 42-1. (DAF)

04/09/2009

5

1 pg, 67.7 KB

Received notification from District Court re: payment of docket fee. Amount Paid: USD 455.00 Date paid: 04/08/2009. (RL)

04/13/2009

6

1 pg, 24.24 KB

Filed clerk order (Deputy Clerk:LC ): Appellant has paid the filing and docketing fees for this preliminary injunction appeal. The briefing schedule established by the court’s April 8, 2009 order shall remain in effect. (BJB)

04/17/2009

7

1 pg, 24.43 KB

Filed clerk order (Deputy Clerk:NMG ): This is a preliminary injunction appeal. Appellant’s oral motion for a 14-day extension of time to file the opening brief is granted. The opening brief is now due May 19, 2009; the answering brief is due June 16, 2009; and the optional reply brief is due within 14 days after service of the answering brief. (BJB)

05/05/2009

8

Case rejected from Circuit Mediation Program. [09-15230, 0915286, 09-15296, 09-15298, 09-15363, 09-15448, 09-15463, 09-

15483, 09-15486, 09-15530, 09-15641, 09-15642, 09-15664, 09-

35212, 09-55049, 09-55119, 09-55123, 09-55154, 09-55354, 09-

55478, 09-55532] (SB)

05/13/2009

9

122 pg, 5.13 MB

Filed (ECF) Appellant California Hospital Association in 09-55365 Urgent Motion for miscellaneous relief [Urgent Motion for Clarification Pursuant to Circuit Rules 27-3(B) and 27-10]. Date of service: 05/13/2009. [6919269] [09-55365, 09-55532] (JBK)

05/19/2009

10

25 pg, 88.96 KB

Filed (ECF) Appellant David Maxwell-Jolly response opposing motion (Motion (ECF Filing) ,Motion (ECF Filing) motion for miscellaneous relief (to be used only if no other relief applies)). Date of service: 05/19/2009. [6926548] (GMC)

05/19/2009

11
44 pg, 125.78 KB

Submitted (ECF) Opening brief for review. Submitted by Appellant David Maxwell-Jolly. Date of service: 05/19/2009. [6926567]

(GMC)

05/20/2009

13

Filed Appellant David Maxwell-Jolly excerpts of record in 5 volumes. Served on 05/19/2009 (PK)

05/21/2009

12
24 pg, 758.95 KB

Filed (ECF) Appellant California Hospital Association in 09-55365 reply to response (Motion (ECF Filing) ,Motion (ECF Filing) motion

for miscellaneous relief (to be used only if no other relief applies),

Response to Motion (ECF Filing) ). Date of service: 05/21/2009.

[6929294] [09-55365, 09-55532] (JBK)

05/22/2009

14

1 pg, 23.29 KB

Filed order (STEPHEN R. REINHARDT, WILLIAM A. FLETCHER and MILAN D. SMITH, JR.) The court has reviewed appellants’ urgent motion for clarification, the opposition thereto, and the reply in support of the motion. The parties shall make themselves available for telephonic oral argument on the emergency motion on Wednesday, May 27, 2009, at 3 p.m. Each party shall provide written notice to the court of the name and telephone number of the attorney who will be appearing at the telephonic argument by

noon on Tuesday, May 26, 2009. Each side shall have fifteen minutes for argument.[09-55365, 09-55532] (KD)

05/26/2009
1 pg, 27.63 KB

Filed clerk order: Opening Brief [11] filed by David Maxwell-Jolly. Within 5 working days of the filing of this order, filer is ordered to file 10 copies of the brief in paper format, with a Blue cover, accompanied by certification, attached to the end of each copy of the brief, that the brief is identical to the version submitted electronically. (LA)

05/26/2009

17

Received 10 paper copies of Opening brief [11] filed by David Maxwell-Jolly. One copy to Case Files, the remainder to Records.

(WP)

05/27/2009

16
39 pg, 182.63 KB

Submitted (ECF) Reply brief for review. Submitted by Appellee California Hospital Association in 09-55532. Date of service:

05/27/2009. [6934780] [09-55365, 09-55532] (JBK)

05/28/2009

18

2 pg, 45.04 KB

Filed clerk order: Electronically-filed document [16] Brief Submitted for Review (ECF Filing) is stricken because there is an error in the document. Brief was submitted incorrectly in case 09-55532, and has deficiencies. See order for details. [09-55365, 09-55532] (LA)

06/12/2009

19

1 pg, 24.25 KB

Filed clerk order (Deputy Clerk: DAF): This is a preliminary injunction appeal. The oral motions for a 14-day extension of time to file the answering and reply briefs are granted. The answering brief is now due June 30, 2009. The reply brief is now due July 28, 2009. (DAF)

06/30/2009

20
60 pg, 125.32 KB

Submitted (ECF) Answering brief for review. Submitted by Appellees Acacia Adult Day Services, California Association For

Adult Day Services, Charles Gallagher and Fey Garcia. Date of

service: 06/30/2009. [6975733] (JBK)

07/02/2009

21

2 pg, 29.63 KB

Filed clerk order: Answering Brief [20] filed by Acacia Adult Day Services, California Association For Adult Day Services, Fey Garcia and Charles Gallagher. Within 5 working days of the filing of this order, filer is ordered to file 10 copies of the brief in paper format, with a Red cover, accompanied by certification, attached to the end of each copy of the brief, that the brief is identical to the version submitted electronically. [6979134] (PK)

07/06/2009

22

Received 10 paper copies of Answering brief [20] filed by Acacia Adult Day Services, California Association For Adult Day Services,

Fey Garcia and Charles Gallagher in 09-55532. One copy to Case

Files, the remainder to Records. [6981841] (SJ)

07/28/2009

23
43 pg, 115.09 KB

Submitted (ECF) Reply brief for review. Submitted by Appellant David Maxwell-Jolly. Date of service: 07/28/2009. [7007163]

(GMC)

07/30/2009

24

2 pg, 29.91 KB

Filed clerk order: Reply Brief [23] filed by David Maxwell-Jolly. Within 5 working days of the filing of this order, filer is ordered to file 10 copies of the brief in paper format, with a Grey cover, accompanied by certification, attached to the end of each copy of the brief, that the brief is identical to the version submitted electronically. [7010403] (PK)

08/04/2009

25

Received 10 paper copies of Reply brief [23] filed by David Maxwell-Jolly in 09-55532. One copy to Case Files, the remainder to

Records. [7016166] (SD)

11/20/2009

27

6 pg, 154.86 KB

Filed (ECF) Appellant David Maxwell-Jolly Motion for miscellaneous relief [Request To Set Oral Argument (9th Cir. Rules

3-3 & 34-3)]. Date of service: 11/20/2009. [7138211] (GMC)

12/02/2009

28

UPDATED CASE CALENDARED: 01/19/2010 9:30 AM Pasadena, CA Courtroom 1 [7149332] [09-55692, 09-55365, 09-16359, 09-

55532] (AW)

12/02/2009

29

3 pg, 27.51 KB

Filed clerk order (Deputy Clerk:WL): The State Defendants’ request to set oral argument in these cases pursuant to Ninth Circuit Rule 343 is GRANTED. The parties shall appear for oral argument on Tuesday, January 19, 2010, at 9:30 a.m. in Pasadena, California. Each side shall have fifteen minutes for argument in each case. [7149348] [09-16359, 09-55365, 09-55532, 09-55692] (WL)

12/04/2009

30

7 pg, 401.44 KB

Notice of Oral Argument on JANUARY Calendar. Please return ACKNOWLEDGMENT OF HEARING NOTICE form to: PASADENA Office. Attention: The Notice of Docket Activity may not list your case number. Please open attached documents to view details about your case. [7152655] [09-55365, 09-55532] (LN)

01/14/2010

31

1 pg, 338.69 KB

Filed (ECF) notice of appearance of James M. Humes for Appellant David Maxwell-Jolly. Date of service: 01/14/2010. [7195705] (JMH)

01/14/2010

32

Added attorney James M. Humes for David Maxwell-Jolly. [7195856] (RL)

01/14/2010

33
34 pg, 958.51 KB

Filed (ECF) Appellant David Maxwell-Jolly Motion for miscellaneous relief [Motion to Disqualify Pursuant to 28 U.S.C. s

455(a)]. Date of service: 01/14/2010. [7195938] (JMH)

01/15/2010

34

6 pg, 52.96 KB

Filed order (STEPHEN R. REINHARDT, WILLIAM A. FLETCHER and MILAN D. SMITH, JR.)...The motion to disqualify pursuant to 28 U.S.C. § 455(a) is DENIED. [7197125] [09-16359, 09-55365, 09-55532, 09-55692] (KKW)

01/15/2010

35

7 pg, 55.01 KB

Filed order (STEPHEN R. REINHARDT, WILLIAM A. FLETCHER and MILAN D. SMITH, JR.) ...The motion to

disqualify pursuant to 28 U.S.C. § 455(a) is DENIED. [7197514]

[09-16359, 09-55365, 09-55532, 09-55692] (KKW)

01/19/2010

36

ARGUED AND SUBMITTED TO STEPHEN R. REINHARDT, WILLIAM A. FLETCHER and MILAN D. SMITH, JR.. [7199044]

[09-55365, 09-55532] (LN)

03/03/2010

37
34 pg, 515.78 KB

FILED OPINION (STEPHEN R. REINHARDT, WILLIAM A. FLETCHER and MILAN D. SMITH, JR.) AFFIRMED. Judge: MDS

Authoring. FILED AND ENTERED JUDGMENT. [7250575] (RP)

03/25/2010

38 MANDATE ISSUED.(SR, WAF and MDS) [7278098] (SW)

1 pg, 81.15 KB

03/26/2010

39

1 pg, 27.53 KB

Received notice from the Supreme Court: petition for certiorari filed on 03/24/2010. Supreme Court Number 09-1158. [7281772] [09-

55532, 09-55365, 09-55692, 09-16359] (SW)

01/21/2011

40

1 pg, 49 KB

Received notice from the Supreme Court. Petition for certiorari GRANTED on 01/18/2011. Supreme Court Number 09-1158. [7620366] [09-55532, 09-55365, 09-55692, 09-16359] (SW)

09/09/2011

41

Transmitted to the U.S. Supreme Court: 1 volume(s) of 9th Circuit U.S. Court of Appeals record proceedings; The district court record

is electronic. U.S. Supreme Court Case Number: 09-1158. Tracking

Information: FedEx 943607195608. [7887746] (SS)

03/26/2012

42
20 pg, 145.04 KB

Received copy of Supreme Court opinion dated 02/22/2012. The judgment or mandate of this Court will not issue for at least 25-days

pursuant to Rule 45. Should a petition for rehearing be filed timely,

the judgment or mandate will be further stayed pending this Court's

action on the petition for rehearing. Supreme Court No: 09-1158.

[8117290] [09-55532, 09-55365, 09-55692, 09-16359] (RR)

03/26/2012

43

7 pg, 225.7 KB

Received Supreme Court 02/22/2012 certified judgment. On Consideration Whereof, it is ordered and adjudged by this Court that the judgments of the above court are vacated with costs, and the cases are remanded to the United States Court Of Appeals for the Ninth Circuit thereby permitting parties to argue the matter before that Circuit in the first instance. It Is Further Ordered that the petitioners Toby Douglas, Director, California Department of Health Care Services, et al. recovers from Independent Living Center of Southern California, et al. California Pharmacists Association, et al.; Califonia Hospital Association, et al.; Lydia Dominguez, By and Through Her Mother and Next Friend Lisa Brown, et al.; and Santa Rosa Memorial Hospital, et al. Four Thousand Seven Hundred Sixtythree Dollars and Sixty-six Cents ($4,763.66) for costs herein expended. Supreme Court case number: 09-958, 09-1158, and 10283. [8117387] [08-56422, 08-56554, 08-57016, 09-55532, 0955365, 09-55692, 09-16359, 09-17633] (RR)

04/26/2012

44

4 pg, 39.34 KB

Filed order (STEPHEN R. REINHARDT, WILLIAM A. FLETCHER and MILAN D. SMITH, JR.) The parties are directed to file contemporaneous supplemental briefs in their respective cases concerning the effect of Douglas v. Independent Living Center of Southern California, Inc., 132 S. Ct. 1204 (2012). Briefs shall be due 45 days from the filing of this order and shall not exceed 30 pages in length. SO ORDERED. [8154673] [08-56422, 08-57016, 09-55532, 09-55692] (BJB)

05/21/2012

45

2 pg, 686.92 KB

Filed (ECF) notice of appearance of Joshua Nathan Sondheimer for Appellant David Maxwell-Jolly. Date of service: 05/21/2012. [8185498]--[COURT UPDATE: Attached correct notice. Resent NDA. 05/23/2012 by RY] (JS)

05/22/2012

46

4 pg, 31.27 KB

Filed order (STEPHEN R. REINHARDT, WILLIAM A. FLETCHER and MILAN D. SMITH, JR.) The parties’ unanimous joint motion to refer Case Nos. 08-56422, 08-57016, 09-55532, and 09-55692 to mediation, and to continue the supplemental briefing schedule during the pendency of mediation [D.E. 49-1], is hereby GRANTED. SO ORDERED. [8187111] [08-56422, 08-57016, 0955532, 09-55692] (BJB)

05/23/2012

47

Added attorney Joshua Sondheimer for David Maxwell-Jolly, in case 09-55532. [8188772] (CW)

05/25/2012

48

10 pg, 61.74 KB

Filed order MEDIATION (BS): Pursuant to this court’s order, filed May 22, 2012, these appeals have been referred to the Mediation Program. See Fed. R. App. P. 33 and Ninth Cir. R. 33-1. The court has scheduled a telephone settlement assessment conference, with counsel only, on June 7, 2012, at 2:00 p.m. PACIFIC (San Francisco) Time to discuss whether this case is appropriate for participation in the Mediation Program. The Circuit Mediator will initiate the conference call by contacting each person on the attached list of participants at the telephone number listed. Please be available for the call at least five minutes before the scheduled time. Counsel should review the attached list and inform Mediation Assistant Beatriz Smith by email (Beatriz_Smith@ca9.uscourts.gov) at least 72 hours in advance of the scheduled call of any of the following: (1) any attorneys on the list of counsel who will not be participating in the conference; (2) the direct dial phone number of any participant if it is not listed; and (3) any other corrections to the list. Please notify Chief Circuit Mediator Claudia Bernard immediately by email (Claudia_Bernard@ca9.uscourts.gov) if the dispute is settled, the appeal is dismissed or if counsel has an unavoidable scheduling conflict. Please copy all counsel on any such communications. All discussions that take place in the context of the assessment conference are strictly confidential. For more detailed information

about the assessment conference, confidentiality, the Mediation Program and its procedures generally, please see the attachment to this order and the Mediation Program web site: www.ca9.uscourts.gov/mediation. [8192544] [08-56422, 08-56554, 08-57016, 09-55365, 09-55532, 09-55692] (BJB)

05/29/2012

49

2 pg, 371.13 KB

Filed (ECF) notice of appearance of Susan M. Carson for Appellant David Maxwell-Jolly. Date of service: 05/29/2012. [8194348]-[COURT UPDATE: Attached corrected notice. Resent NDA. 05/30/2012 by RY] (SMC)

05/30/2012

50

2 pg, 514.86 KB

Filed (ECF) notice of appearance of Elizabeth Linton for Appellant David Maxwell-Jolly. Date of service: 05/30/2012. [8195690] (EAL)

05/30/2012

51

Added attorney Elizabeth A. Linton for David Maxwell-Jolly. [8195719] (RL)

05/31/2012

52

Added attorney Susan Marie Carson for David Maxwell-Jolly. [8197695] (RL)

06/08/2012

53

5 pg, 40.53 KB

Filed order MEDIATION (CLB): A dial-in telephonic conference will be held on June 22, 2012, at 10:00 a.m. PACIFIC (San Francisco) Time. Dial-in information is available to counsel of record as an attachment to the electronic filing notification of this order. If any counsel of record is not able to access the dial-in information, please notify the Mediation Program immediately at ca09_mediation@ca9.uscourts.gov. The court will hold an in-person mediation with counsel only on June 27, 2012, at 10:00 a.m., at the U.S. Court of Appeals, 95 Seventh Street, Suite 109, San Francisco, California [telephone (415) 355-7900]. Confidential mediation statements shall be submitted to the undersigned by e-mail (Claudia_Bernard@ca9.uscourts.gov) or by fax (415-355-8566) on or before June 25, 2012. (See order for full text) [8207435] [0856422, 08-56554, 08-57016, 09-55365, 09-55532, 09-55692] (BJB)

06/26/2012

54

5 pg, 31.22 KB

Filed order MEDIATION (CLB): The briefing schedule in 10-55462 is vacated. That case shall be mediated along with the other captioned appeals. In addition to the mediation scheduled for counsel only on June 27, 2012, noticed by previous order, the court will hold an in-person mediation with counsel and principals on August 8, 2012, at 10:00 a.m., at the U.S. Court of Appeals, 95 Seventh Street, Suite 109, San Francisco, California [telephone (415) 355-7900]. All participants should plan to spend the entire day engaged in settlement discussions. [8227815] [08-56422, 08-56554, 08-57016, 09-55365, 09-55532, 09-55692, 10-55462] (BJB)

08/13/2012

55

5 pg, 40.07 KB

Filed order MEDIATION (CLB): The court will hold an in-person mediation on September 6, 2012, at 10:00 a.m., in Sacramento,

California, the exact location of which will be established in a future

08/31/2012

56

5 pg, 32.01 KB

09/11/2012

57

5 pg, 29.98 KB

10/17/2012

58

5 pg, 29.67 KB

07/12/2013

59

5 pg, 40.85 KB

order. The following counsel shall attend the mediation on behalf of plaintiffs: Lynn Stuart Carman, Esq. and Stanley Lester Friedman, Esq. Individual plaintiffs may attend the mediation, but are not required to do so. The following counsel shall attend the mediation on behalf of intervenors: Craig J. Cannizzo, Esq. and Lloyd A. Bookman, Esq. Representatives of the intervenors shall attend the mediation. The following counsel shall attend the mediation on behalf of defendants: Karin S. Schwartz, Esq. and Elizabeth Linton, Esq. The following individuals shall attend the mediation on behalf of the State defendants (although they need not appear until 1:00 p.m.): Toby Douglas, Director of the Department of Health Care Services and Douglas Press, Deputy Director and Chief Counsel of the Department of Health Care Services. A dial-in telephonic conference will be held on August 15, 2012, at 11:00 a.m. PACIFIC (San Francisco) Time. Dial-in information is available to counsel of record as a separate document attached to the electronic filing notification of this order. If any counsel of record is not able to access the dial-in information, please notify the Mediation Program immediately at ca09_mediation@ca9.uscourts.gov. [8284371] [0856422, 08-56554, 08-57016, 09-55365, 09-55532, 09-55692, 1055462] (BJB)
Filed order MEDIATION (CLB): The in-person mediation in these cases previously established by the court’s order of August 13, 2012, will take place at the U. S. District Courthouse, 501 “I” Street, Sacramento, California, at 10:00 a.m., on September 6, 2012. All participants shall meet in the lobby of the Sixth Floor. The undersigned will then escort participants to the location of the mediation. Assisted listening devices will be provided. Susan Carson shall replace Elizabeth Linton as counsel for the State parties. [8306743] [08-56422, 08-56554, 08-57016, 09-55365, 09-55532, 0955692, 10-55462] (BJB)
Filed order MEDIATION (CLB): The court will hold a further inperson mediation with all counsel of record on October 11, 2012, at 10:30 a.m., at the Richard H. Chambers U.S. Court of Appeals Building, 125 South Grand Avenue, Pasadena California. The parties shall gather in the Attorneys’ Lounge. [8318120] [08-56422, 0856554, 08-57016, 09-55365, 09-55532, 09-55692, 10-55462] (BJB)
Filed order MEDIATION (CLB): By October 26, 2012, the State parties shall provide the undersigned and all other parties with a draft settlement agreement. [8363964] [08-56422, 08-56554, 08-57016, 09-55365, 09-55532, 09-55692, 10-55462] (BJB)
Filed order MEDIATION (CLB): The court will hold an in-person mediation on August 21, 2013, at 10:00 a.m., at the U.S. Court of

Appeals, 95 Seventh Street, Suite 109, San Francisco, California [telephone (415) 355-7900]. The following counsel shall attend the mediation on behalf of plaintiffs: Lynn Stuart Carman, Esq. and Stanley Lester Friedman, Esq. The following counsel shall attend the mediation on behalf of intervenors: Craig J. Cannizzo, Esq. and Lloyd A. Bookman, Esq. The following counsel shall attend the mediation on behalf of defendants: Karin S. Schwartz, Esq. and Elizabeth Linton, Esq. The following individuals shall attend the mediation on behalf of the State defendants: Douglas Press, Deputy Director and Chief Counsel of the Department of Health Care Services. [8701342] [08-56422, 08-56554, 08-57016, 09-55365, 0955532, 09-55692, 10-55462] (BJB)

 
 Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 1 of 22
(MANx),CLOSED,DISCOVERY,MANADR,RELATED−G
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA (Western Division − Los Angeles)
CIVIL DOCKET FOR CASE #: 2:09−cv−00722−CAS−MAN

California Pharmacists Association et al v. David Maxwell−Jolly Date Filed: 01/29/2009

Assigned to: Judge Christina A. Snyder

Date Terminated: 06/01/2011

Referred to: Magistrate Judge Margaret A. Nagle

Jury Demand: None

Related Case: 2:08−cv−03315−CAS−MAN

Nature of Suit: 950 Constitutional − State

Case in other court: 9th CCA, 09−55365 9th CCA, 09−55532

Statute Jurisdiction: Federal Question

Cause: 28:2201 Constitutionality of State Statute(s)

Plaintiff

California Pharmacists Association

represented by Byron J Gross Hooper Lundy & Bookman Watt Plaza 1875 Century Park E, Ste 1600 Los Angeles, CA 90067−2799 310−551−8111 Fax: 310−551−8181 Email: byronjgross@gmail.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Craig J Cannizzo Hooper Lundy and Bookman PC 575 Market Street 23rd Floor San Francisco, CA 94105 415−875−8500 Fax: 415−875−8519 Email: ccannizzo@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Felicia Y Sze Rotenberg & Sze 572 17th Avenue San Francisco, CA 94121 415−686−7531 Email: felicia@rshealthlaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville Hooper Lundy & Bookman PC Watt Plaza 1875 Century Park East Suite 1600 Los Angeles, CA 90067−2799 310−551−8111 Fax: 310−551−8181 Email: jkeville@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman Hooper Lundy and Bookman PC 1875 Century Park East Suite 1600 Los Angeles, CA 90067 310−551−8111 Fax: 310−551−8181 Email: lbookman@health−law.com

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 2 of 22

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin Hooper Lundy and Bookman Inc 1875 Century Park East, Suite 1600 Los Angeles, CA 90067−2799 310−551−8111 Email: mdubin@dubinlawfirm.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff California Medical Association

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff California Dental Association

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 3 of 22

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff California Hospital Association

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
California Association For Adult Day Services

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address)

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 4 of 22

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
Marin Apothecary, Inc. doing business as Ross Valley Pharmacy

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff South Sacramento Pharmacy

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 5 of 22

Plaintiff Farmacia Remedios, Inc.
Plaintiff Acacia Adult Day Services

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Michael A Dubin

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 6 of 22

(See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Sharp Memorial Hospital

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Grossmont Hospital Corporation

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 7 of 22

ATTORNEY TO BE NOTICED

Plaintiff Sharp Chula Vista Medical Center

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
Sharp Coronado Hospital and Healthcare Center

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

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

Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 8 of 22

Plaintiff Fey Garcia
Plaintiff Charles Gallagher

represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Byron J Gross (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Craig J Cannizzo (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Felicia Y Sze (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jordan Brian Keville (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Lloyd Alan Bookman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Michael A Dubin (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 9 of 22

V.
Defendant
David Maxwell−Jolly Director of The California Department of Health Care Services

represented by Gregory Martin Cribbs CAAG − Office of Attorney General of California 300 S Spring Street Ste 1702 Los Angeles, CA 90013 213−897−2446 Fax: 213−897−2805 Email: gregory.cribbs@doj.ca.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Randall R Murphy CAAG − Office of Attorney General of California 300 South Spring Street, Ste 1702 Los Angeles, CA 90013−1230 213−897−2446 Fax: 213−897−2805 Email: randall.murphy@doj.ca.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Shannon M Chambers State Personnel Board Appeals − Administrative Law Judge 801 Capitol Mall Sacramento, CA 95814 916−653−0544 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jennifer M Kim CAAG − Office of CA Attorney General California Department of Justice 300 South Spring Street Suite 1702 Los Angeles, CA 90012 213−897−2443 Fax: 213−897−2805 Email: jennifer.kim@doj.ca.gov ATTORNEY TO BE NOTICED
Susan Marie Carson CAAG − Office of the Attorney General California Department of Justice 455 Golden Gate Avenue Suite 11000 San Francisco, CA 94102 415−703−5580 Fax: 415−703−5480 Email: Susan.Carson@doj.ca.gov ATTORNEY TO BE NOTICED

Date Filed 01/29/2009

# Docket Text
1 COMPLAINT against Defendant David Maxwell−Jolly. (Filing fee $ 350 PAID.), filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (et) (ds). (Entered:

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 10 of 22

01/29/2009 01/29/2009
01/29/2009 02/02/2009 02/02/2009 02/03/2009 02/03/2009 02/04/2009
02/04/2009 02/10/2009
02/11/2009 02/11/2009

02/02/2009)
20 DAY Summons Issued re Complaint − (Discovery) 1 as to Defendant David Maxwell−Jolly. (et) (Entered: 02/02/2009)
2 CERTIFICATION AND NOTICE of Interested Parties filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (et) (ds). (Entered: 02/02/2009)
3 NOTICE TO PARTIES OF ADR PILOT PROGRAM filed. (et) (Entered: 02/02/2009)
4 EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction filed by Plaintiff California Pharmacists Association.(Gross, Byron) (Entered: 02/02/2009)
5 MEMORANDUM in Support of EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction 4 filed by Plaintiff California Hospital Association. (Attachments: # 1 Declaration of Jordan B. Keville re Ex Parte Notice)(Gross, Byron) (Entered: 02/02/2009)
6 MEMORANDUM in Support of EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction 4 AMENDED TO ATTACH EXH A TO DECLARATION OF JORDAN B. KEVILLE. (Gross, Byron) (Entered: 02/03/2009)
8 NOTICE TO COUNSEL: This case has been assigned to the calendar of Judge Christina A. Snyder. (See Notice for further details). (mmu) (Entered: 02/04/2009)
7 PROOF OF SERVICE Executed Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia, upon David Maxwell−Jolly served on 2/2/2009, answer due 2/22/2009. The Summons and Complaint were served by Personal service, by Federal statute, upon Connie Ullrich, Authorized Agent. Due Dilligence declaration no. Original Summons no. (Sze, Felicia) (Entered: 02/04/2009)
9 MINUTES OF IN CHAMBERS ORDER by Judge Christina A. Snyder re: EX PARTE APPLICATION to Exceed Page Limitation for Briefing in Support of Motion for Preliminary Injunction 4 . Upon the Court's rview, the Court hereby DENIES Plaintiffs' Ex Parte Application to Exceed Normally Applicable Page limits for Briefing on Motion for Preliminary Injunction. (mmu) (mmu). (Entered: 02/05/2009)
11 STIPULATION for Extension of Time to File First Motion for Preliminary Injunction, Second Motion for Preliminary Injunction, Oppositions and Replies filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Proposed Order Regarding Briefing Schedule for Motions for Preliminary Injunction)(Keville, Jordan) (Entered: 02/10/2009)
12 ORDER RE TRANSFER PURSUANT TO Local Rule 83−1.3.1 and General Order 08.05 −Related Case− filed. Related Case No: CV 08−3315 CAS (MANx). Case referred from Magistrate Judge Charles F. Eick to Magistrate Judge Margaret A. Nagle for Discovery. The case number will now read as follows: CV 09−00722 CAS (MANx). Signed by Magistrate Judge Margaret A. Nagle. (rn) (Entered: 02/11/2009)
13 NOTICE OF MOTION AND MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers filed by Plaintiffs

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 11 of 22

02/11/2009 02/12/2009 02/13/2009
02/13/2009

Charles Gallagher, California Pharmacists Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Fey Garcia. Motion set for hearing on 3/9/2009 at 10:00 AM before Judge Christina A. Snyder. (Attachments: # 1 memo of ps and as, # 2 request for judicial notice, # 3 lodgment of state authorities, # 4 Proposed Order proposed order, # 5 Declaration Guadarrama decl, # 6 Declaration gallagher decl., # 7 Declaration Garcia decl., # 8 Declaration dirks decl, # 9 Declaration Mendez decl., # 10 Declaration Simmons decl., # 11 Declaration Traylor decl., # 12 Declaration Lamar decl., # 13 Declaration Crown decl., # 14 Declaration Regalia decl., # 15 Declaration Kauffman decl., # 16 Civil Cover Sheet Davis decl., # 17 Declaration puckett decl., # 18 Declaration Vega decl., # 19 Declaration nolcox, # 20 Declaration Kakar decl., # 21 Declaration Dominguez decl., # 22 Declaration Harper decl., # 23 Declaration sharp decl., # 24 Declaration Mee decl., # 25 Civil Cover Sheet Salameh decl., # 26 Declaration Jeha decl., # 27 Declaration Medina decl., # 28 Declaration cable decl., # 29 Declaration davis decl., # 30 Declaration Light decl., # 31 Declaration Basrai decl., # 32 Declaration youredjian decl., # 33 Declaration Gaffney decl., # 34 Declaration Meyers, # 35 Civil Cover Sheet Cronin decl., # 36 Civil Cover Sheet wandel decl., # 37 Declaration Simbeck decl., # 38 Declaration Brinton decl., # 39 Civil Cover Sheet Leonelli decl., # 40 Declaration Bains decl., # 41 Declaration Lofholm decl., # 42 Declaration Carrico decl., # 43 Declaration Lunagaria decl., # 44 Declaration bertelli decl., # 45 Declaration Markarian decl., # 46 Declaration Steen decl., # 47 Declaration Park decl., # 48 Declaration Akanwo decl., # 49 Declaration On decl., # 50 Declaration Prevost decl., # 51 Declaration Raymond decl. pt 1, # 52 Declaration Raymond decl. pt 2, # 53 Declaration Raymond decl. pt 3, # 54 Declaration Missaelides decl., # 55 Declaration Rolston decl., # 56 Declaration Schondelmeyer decl., # 57 proof of service)(Sze, Felicia) (Entered: 02/11/2009)
14 ORDER REGARDING BRIEFING SCHEDULE FOR MOTIONS FOR PRELIMINARY INJUNCTION by Judge Christina A. Snyder: Upon Stipulation of the parties 11 , the Court hereby orders the following briefing schedule: 2/11/2009 Filing date for First Motion for Preliminary Injunction (pharmacies and adult day health care centers); 2/13/2009 Filing date for Second Motion for Preliminary Injunction (hospitals); 2/26/2009 Due Date for Defendant's Oppositions to both motions; 3/4/2009 Due Date for Plaintiffs' Reply Briefs to both motions; 3/9/2009 at 10:00 AM Hearing Date. (gk) (Entered: 02/12/2009)
15 NOTICE Notice of Errata filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Fey Garcia. (Sze, Felicia) (Entered: 02/12/2009)
16 NOTICE OF MOTION AND MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. Motion set for hearing on 3/9/2009 at 10:00 AM before Judge Christina A. Snyder. (Attachments: # 1 Memorandum of Points and Authorities, # 2 Proposed Order, # 3 Declaration of Abigail Wong, # 4 Declaration of Ann Pumpian, # 5 Declaration of Art DeNio, # 6 Declaration of Byron Chell, # 7 Declaration of C. Duane Dauner, # 8 Declaration of Deborah Keel, # 9 Declaration of Dennis Haghighat, # 10 Declaration of Don Miller, # 11 Declaration of Edward McDonald, # 12 Declaration of Henry Zaretsky (part 1 of 2), # 13 Declaration of Henry Zaretsky (part 2 of 2), # 14 Declaration of Jim Vaughn, # 15 Declaration of Karen Testman, # 16 Declaration of Kathleen Farmer, # 17 Declaration of Katie Delmore, # 18 Declaration of Ken Jordan, # 19 Declaration of Kirby McKague, # 20 Declaration of Marcia Hall, # 21 Declaration of Mich Riccioni, # 22 Declaration of Robert Trautman)(Bookman, Lloyd) (Entered: 02/13/2009)
17 DECLARATION of James Lott in support of MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association,

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 12 of 22

02/13/2009 02/13/2009
02/20/2009 02/20/2009 02/23/2009 02/26/2009
02/27/2009

California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Declaration of James Lott, part 2, # 2 Declaration of James Lott, part 3, # 3 Declaration of James Lott, Part 4, # 4 Declaration of James Lott, Part 5, # 5 Declaration of James Lott, Part 6, # 6 Declaration of James Lott, Part 7)(Bookman, Lloyd) (Entered: 02/13/2009)
18 SUPPLEMENT to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 Appendix of State Authority in support of motion filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Appendix Part 2, # 2 Appendix Part 3)(Bookman, Lloyd) (Entered: 02/13/2009)
19 REQUEST FOR JUDICIAL NOTICE re MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Exhibit RJN Part 2, # 2 Exhibit RJN Part 3, # 3 Exhibit RJN Part 4, # 4 Exhibit Part 5, # 5 Exhibit RJN Part 6, # 6 Exhibit RJN Part 7, # 7 Exhibit RJN Part 8)(Bookman, Lloyd) (Entered: 02/13/2009)
20 STIPULATION for Extension of Time to File Response as to Complaint − (Discovery), Complaint − (Discovery), Complaint − (Discovery) 1 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order Re Stipulation to Extend time for Defendant to file Its Answer and/or Responsive Pleading to the Summons and Complaint)(Murphy, Randall) (Entered: 02/20/2009)
21 Amendment to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 Notice of Errata re Declaration of Chell filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Keville, Jordan) (Entered: 02/20/2009)
24 ORDER upon Stipulation 20 granting defendant David Maxwell−Jolly extension to file answer to complaint to 3/5/2009 by Judge Christina A. Snyder (lc) (Entered: 03/03/2009)
22 MEMORANDUM in Opposition to MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Appendix of State Authorities in Support, # 2 Declaration of Alan Eng, # 3 Declaration of Connie Kwan, # 4 Declaration of Debra Ferreria, # 5 Declaration of Eric Lazarus, # 6 Declaration of Joe Ann Carroll, # 7 Declaration Judith Phelps, # 8 Declaration of Kevi Gorospe, # 9 Declaration of Susan Flores, # 10 Declaration of T Allan Hansen, # 11 Declaration of K. Truworthy, # 12 Declaration of Douglas − Part 1, # 13 Declaration of Douglas − Pharm − Part 2, # 14 Declaration of DOuglas − Pharm − Part 3, # 15 Declaration of Douglas − Pharm − Part 4, # 16 Declaration of Douglas − Pharm − Part 5, # 17 Declaration of Douglas − Pharm − Part 6, # 18 Declaration of Douglas − Pharm − Part 7, # 19 Declaration of Douglas − Pharm − Part 8, # 20 Supplement Proof of Service re Pharmacies)(Kim, Jennifer) (Entered: 02/27/2009)
23 MEMORANDUM in Opposition to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Appendix of State Authorities, # 2 Declaration of Alan Eng, # 3

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 13 of 22

03/04/2009 03/04/2009 03/04/2009 03/04/2009 03/04/2009 03/05/2009 03/05/2009

Declaration of Donna Shine, # 4 Declaration of Eric Lazarus, # 5 Declaration Ernest Ong, # 6 Declaration Joe Ann Carroll, # 7 Declaration of Keith Berger, # 8 Declaration of Linda Machado, # 9 Declaration of Nancy Hutchison, # 10 Declaration of Sandra Yien, # 11 Declaration of Timothy Matsumoto, # 12 Declaration of William Lau, # 13 Declaration of William Liu, # 14 Declaration of Douglas − Hospital − Part 1, # 15 Declaration of Douglas − Hospital − Part 2, # 16 Declaration of Douglas − Hospital − Part 3, # 17 Declaration of Douglas − Hospital − Part 4, # 18 Declaration of Douglas − Hospital − Part 5, # 19 Declaration of Douglas − Hospital − Part 6, # 20 Declaration of Douglas − Hospital − Part 7, # 21 Declaration of Douglas − Hospital − Part 8, # 22 Supplement Proof of Service − Hospital)(Kim, Jennifer) (Entered: 02/27/2009)
25 REPLY in support MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., Farmacia Remedios, Inc., Acacia Adult Day Services, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, California Medical Association, Fey Garcia. (Attachments: # 1 Declaration (Supplemental) of Henry W. Zaretsky)(Keville, Jordan) (Entered: 03/04/2009)
26 REPLY to Opposition to Motion for Preliminary Injunction filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
27 DECLARATION of Stephen W. Schondelmeyer in Support of MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
28 DECLARATION of Lydia Missaelides in Support of MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
29 LODGMENT OF STATE AUTHORITIES re MOTION for Preliminary Injunction re: Implementation of rate reduction for pharmacies and adult day health care centers 13 (REPLY TO OPPOSITION) filed by Plaintiffs Charles Gallagher, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Fey Garcia. (Cannizzo, Craig) (Entered: 03/04/2009)
30 ANSWER to Complaint − (Discovery), Complaint − (Discovery), Complaint − (Discovery) 1 filed by Defendant David Maxwell−Jolly.(Murphy, Randall) (Entered: 03/05/2009)
31 SUPPLEMENT to MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Hospital Services 16 Lodgment of State Authority in Support of Reply filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., Farmacia Remedios, Inc., Acacia Adult Day Services, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 14 of 22

03/05/2009 03/09/2009
03/09/2009 03/09/2009 03/09/2009 03/10/2009 03/10/2009

Garcia. (Attachments: # 1 Lodgment of State Authority (part 2 of 3), # 2 Lodgment, part 3 of 3)(Keville, Jordan) (Entered: 03/05/2009)
32 MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: Proceedings: Order Setting Scheduling Conference on 5/4/2009 at 11:00 AM before Judge Christina A. Snyder. The Scheduling Conference will be held pursuant to F.R.Civ.P 16(b). The parties are reminded of their obligations to disclose information and confer on a discovery plan not later than 21 days prior to the date of the Rule 16(b) Scheduling Conference and to report to the Court not later than 14 days after they confer on a discovery plan and the other matters required by F.R.Civ.P. 26(f) and the Local Rules of this Court. (See document for further details). (mg) (Entered: 03/06/2009)
33 First EX PARTE APPLICATION for Leave to File a Supplemental Memorandum of Points and Authorities in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (Attachments: # 1 Memorandum of Points and Authorities in Support of Ex Parte Application to File a Supplemental MPA in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services, # 2 Declaration Declaration of Jordan B. Keville in support of Ex PArte Application ot File a Supplemental MPA in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services, # 3 Supplemental MPA in support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services, # 4 Proposed Order Proposed Order Granting Ex Parte Application)(Sze, Felicia) (Entered: 03/09/2009)
34 MINUTES of Motion Hearing held before Judge Christina A. Snyder: Proceedings: Plaintiff's MOTION for Preliminary Injunction of AB 1183 Rate Reductions for Pharmacies and Adult Day health Care Centers 13 ; Plaintiff's MOTION for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services 16 . Hearing held and counsel are present. Tentatives are provided. The Court confers with counsel and counsel argue. The Court takes the above−motions under submission. The Court will issue a final ruling. Court Reporter: Laura Elias. (mg) (Entered: 03/10/2009)
35 ORDER by Judge Christina A. Snyder GRANTING Plaintiffs' MOTION for Preliminary Injunction as to Adult Day Health Centers 13 . The Court GRANTS plaintiffs' motion for preliminary injunction. The Court hereby orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. & Inst. Code § 14105.191, as modified by AB 1183 beginning on March 9, 2009, by refraining from reducing by five percent payments to ADHCs provided under the Medi−Cal fee−for−service program. (mg) (Entered: 03/10/2009)
36 ORDER by Judge Christina A. Snyder DENYING Plaintiffs' MOTION for Preliminary Injunction as to Hospitals 16 . The Court DENIES plaintiffs' motion for preliminary injunction with regard to AB 1183's reimbursement rate reduction to hospitals, without prejudice to its being renewed after the Ninth Circuit rules on the appeal in Independent Living Center of Southern California, Inc. v. Sandra Shewry, CV−08−3315−CAS. (mg)TT (Entered: 03/10/2009)
37 ORDER by Judge Christina A. Snyder DENYING EX PARTE APPLICATION for Leave to File a Supplemental Memorandum of Points and Authorities in Support of Motion for Preliminary Injunction of AB 1183 Rate Reductions for Hospital Services 33 . (mg) (Entered: 03/10/2009)
38 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents. The following error(s) was found: No Certification of Interested Parties, Local Rule 7.1−1 RE: Defendant's Answer to Complaint filed 3/5/2009 30 . In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. (gk) (Entered: 03/10/2009)

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 15 of 22

03/11/2009 03/11/2009 03/11/2009 03/12/2009 03/12/2009 03/16/2009 03/23/2009
03/25/2009

39 NOTICE of Interested Parties filed by Defendant David Maxwell−Jolly, (Murphy, Randall) (Entered: 03/11/2009)
40 NOTICE OF APPEAL to the 9th CCA filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. Appeal of Order, 36 . (Filing fee $455, receipt number 09730000000005018086.) (Attachments: # 1 Civil Cover Sheet Civil Appeals Docketing Statement, # 2 Representation Statement)(Keville, Jordan) (Entered: 03/11/2009)
41 FIRST AMENDED NOTICE OF APPEAL to 9th CIRCUIT filed by Plaintiffs California Hospital Association, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center. Amending Notice of Appeal to 9th Circuit Court of Appeals,, 40 Filed On: 3/11/09; Entered On: 3/11/09; (Attachments: # 1 Amended Representation Statement)(Keville, Jordan) (Entered: 03/11/2009)
42 NOTICE OF APPEAL NOTIFICATION form issued regarding Notice of Appeal to 9th Circuit Court of Appeals,, 40 as to Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia. (lr) (Entered: 03/12/2009)
43 NOTIFICATION by Circuit Court of Appellate Docket Number 09−55365, 9th CCA Filed by Plaintiffs Charles Gallagher, California Dental Association, California Pharmacists Association, California Hospital Association, California Association For Adult Day Services, Marin Apothecary, Inc., South Sa cramento Pharmacy, Farmacia Remedios, Inc., Acacia Adult Day Services, Sharp Memorial Hospital, Grossmont Hospital Corporation, Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, California Medical Association, Fey Garcia regarding Notice of Appeal to 9th Circuit Court of Appeals, 40 (car) (Entered: 03/12/2009)
44 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The appeal filed March 11, 2009 is a preliminary injuction appeal. Accordingly, Ninth Circuit Rule shall apply. Brief schedule set. (cbr) (Entered: 03/17/2009)
45 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The court has reviewed appellants' emergency motion for an injunction pending appeal, the oppostion thereto, and the reply in support of the motion. The parties shall make themselves available for telephonic oral argument on the emergency motion on Friday, March 27, 2009, at 3 p.m. Within two days after the date of this order, each party shall provide written notice to the court of the name and telephone number of the attorney who will be appearing at the telephonic argument. Each side shall have fifteen minutes for argument. Order received in this district on 3/23/09. (lr) (Entered: 03/25/2009)
46 NOTICE OF MOTION AND Renewed MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Pharmacies filed by Plaintiffs California Pharmacists Association, Marin Apothecary, Inc., South Sacramento Pharmacy, Farmacia

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 16 of 22

03/27/2009 03/27/2009 04/06/2009 04/06/2009
04/07/2009 04/07/2009 04/08/2009 04/08/2009 04/08/2009 04/08/2009
04/09/2009

Remedios, Inc.. Motion set for hearing on 4/13/2009 at 10:00 AM before Judge Christina A. Snyder. (Cannizzo, Craig) (Entered: 03/25/2009)
47 PROOF OF SERVICE re: Order,, 35 (Gross, Byron) (Entered: 03/27/2009)
48 MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: Pursuant to the Local Rules, the filing of Plaintiffs' Renewed Motion for Preliminary Injunction of AB 1183 Rate Reductions for Pharmacies 46 for an 4/13/2009 hearing date is untimely. Therefore, the Court continues Plaintiffs' motion to 4/20/2009 at 10:00 AM before Judge Christina A. Snyder, to allow the allotted time for briefing pursuant to the Local Rules. Court Reporter: Not Present. (gk) (Entered: 03/30/2009)
49 Request to Take Hearing Off Calendar re: Renewed MOTION for Preliminary Injunction re: AB 1183 Rate Reductions for Pharmacies 46 (Cannizzo, Craig) (Entered: 04/06/2009)
55 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The Plaintiffs MOTION FOR STAY PENDING APPEAL IS GRANTED. Order received in this district on 4/06/09. (lr) (Entered: 04/10/2009)
50 NOTICE OF APPEAL to the 9th CCA filed by Defendant David Maxwell−Jolly. Appeal of Order,, 35 . (Kim, Jennifer) (Entered: 04/07/2009)
51 Civil Appeals Docketing Statement received from forwarded to 9th CCA. RE: Notice of Appeal to 9th Circuit Court of Appeals 50 (Kim, Jennifer) (Entered: 04/07/2009)
52 NOTICE OF APPEAL NOTIFICATION form issued regarding Notice of Appeal to 9th Circuit Court of Appeals 50 as to Defendant David Maxwell−Jolly. (lr) (Entered: 04/08/2009)
54 APPEAL FEE PAID: re Notice of Appeal to 9th Circuit Court of Appeals 50 as to Defendant David Maxwell−Jolly; Receipt Number: 117558 in the amount of $455. (dmap) (Entered: 04/09/2009)
56 NOTIFICATION by Circuit Court of Appellate Docket Number 09−55532, 9th CCA regarding Notice of Appeal to 9th Circuit Court of Appeals 50 as to Defendant David Maxwell−Jolly. (lr) (Entered: 04/10/2009)
57 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. The appeal filed April 7, 2009 is a preliminary injunction appeal. Accordingly, Ninth Circuit Rule 3−3 shall apply. A review of this court's docket reflects that the filing and docketing fees for this preliminary injuntion appeal remain due. Within 21 days after the date of this order, appellant shall pay to the district court the $455.00 filing and docketing fees for this appeal and file in this court proof of such payment or file in this court a motion to proceed in forma pauperis. Failure to pay the fees or file a motion to proceed in forma pauperis shall result in the automatic dimissal of the appeal by the Clerk for failure to prosecute. See 9th Cir. R. 42−1. The Clerk shall serve a Form 4 financial affidavit on appellant. If they have not already done so, within 7 calendar days of the filing date of this order, the parties shall make arrangment to obtain from the court reporter in official transcript of proceedings in the district court that will be included in the record on appeal. The briefing schedule is established as follows: the opening brief is due not later than May 5, 2009; the answering brief is due June 2, 2009 or 28 days after service of the opening brief, whichever is earlier; and the optional reply brief is due within 14 days of service of the answering brief. See 9th Cir. R. 3−3(b). If appellant fails to file timely the opening brief, this appeal will be dismissed automatically by the Clerk for failure to prosecute. See 9th Cir. R. 42−1. Order received in this district on 4/08/09. (lr) (Entered: 04/13/2009)
53 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents. The following error(s) was found: incorrect event selected (misc. document). Correct event

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 17 of 22

04/10/2009 04/10/2009 04/13/2009 04/17/2009 05/04/2009 05/14/2009
05/26/2009
05/28/2009

is Motion related filings − Request for Leave RE: Miscellaneous Document 49 . In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. (vh) (Entered: 04/09/2009)
58 MINUTES OF IN CHAMBERS ORDER held before Judge Christina A. Snyder: The hearing of April 20, 2009 on Plaintiffs Renewed Motion for Preliminary Injunction of AB 1183 Rate Reductions for Pharmacies filed March 25, 2009, is hereby vacated. The Court is also in receipt of the Ninth Circuit Mandate filed April 6, 2009. The Court hereby sets a Status Conference re: Case and Appeal on May 4, 2009 at 11:00 a.m., to be heard simultaneous with the continued Scheduling Conference, set on that same date and time. (es) (Entered: 04/13/2009)
61 MINUTES OF IN CHAMBERS ORDER by Judge Christina A. Snyder. On the Courts own motion, the Court continues the Scheduling Conference, only, fromMay 4, 2009 to July 13, 2009 at 11:00 A.M. The Joint Report and ADR Questionnaireshall be filed on or before June 29, 2009.Note that the Status Conference re: Case and Appeal shall remain as previouslycalendared on May 4, 2009 at 11:00 A.M. (pp) (Entered: 04/23/2009)
59 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. Appellant has paid the filing and docketing fees for this prelimiary injunction appeal. The briefing schedule established by the court's April 8, 2009 order shall remain in effect. Order received in this district on 4/13/09. (lr) (Entered: 04/14/2009)
60 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. This is a preliminary injunction appeal. Appellant's oral motion for a 14−day extension of time to file the opening brief is granted. The opening brief is now due May 19, 2009; the answering brief is due June 16, 2009; and the optional reply brief is due within 14 days after service of the answering brief. Order received in this district on 4/17/09. (lr) (Entered: 04/21/2009)
62 MINUTE ORDER RE Status Conference re: Case and Appeal held before United States District Judge Christina A. Snyder. Hearing held and counsel are present. The Court confers with counsel regarding the parties pending Notice of Appeals before the 9th Circuit. The Court continues the Status Conference re: Case and Appeal to July 13, 2009 at 11:00 a.m., to be heard simultaneously with the Scheduling Conference on calendar on the same date and time. Court Reporter: Laura Elias. (pp) (Entered: 05/04/2009)
63 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. This is a preliminary injunction appeal. The unopposed oral motion for a seven−day extension of time to file the reply brief is granted. The reply brief is due May 27, 2009. Order received in this district on 5/14/09. (lr) (Entered: 05/15/2009)
64 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The order order received in this district on 5/26/2009. Plaintiffs−Appellants are directed to file a response to Defendant−Appellee's Petition for Rehearing En Banc. Response shall not exceed 15 pages, shall be filed within 21 days of the date of this order. (lra) (Entered: 05/27/2009)
65 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association,

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 18 of 22

06/15/2009
06/29/2009 07/01/2009 07/13/2009 08/19/2009 08/24/2009

Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. We consider the Urgent Motion for Clarification Pursuant to Circuit Rules 27−3(b) and 27−10 filed by Plaintiffs−Appellants California Pharmacists Association, et al. (the Hospital Plaintiffs). The Hospital Plaintiffs filed the instant motion more than fourteen days after the date of our April 6, 2009 Order, in violation of Circuit Rule 27−10(a). Nevertheless, we find that the Hospital Plaintiffs were not, and could not have been, aware of the matter in which the Director would implement our Order until after the fourteen−day period had passed. Under the circumstances, and pursuant to Circuit Rule 27−10 (a), we enlarge the said fourteen−day period, and consider the motion. We resolve the Hospital Plaintiffs' motion and clarify our April 6, 2009 Order as follows: Those sections, or portions of sections, of the California Welfare and Institutions Code added or amended by Assembly Bill 5 that were not purportedly amended or deleted by the text of California Assembly Bill 1183 are not covered by, nor is the implementation thereof stayed by, our April 6, 2009 Order. Order received in this district on 5/28/09. (lr) (Entered: 06/01/2009)
66 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The Reply Brief submitted on June 1, 2009 is filed. Within five(5) working days of the filing of this order, Appellants are ordered to file tne (10) copies of the brief in paper format, with a Grey cover, accompanied by certification (attached to the end of each copy of the biref) that the brief is identical to the version submitted electronically. A sample certificate is available on the Court's website, www.ca9uscourts.gov, at the CM/ECF button. Order received in this district on 6/15/09. (lr) (Entered: 06/17/2009)
67 STIPULATION to Continue Scheduling Conference from 7/13/09 to 10/19/09 Re: Status Conference, Set Hearings,, 62 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Continue Scheduling Conference)(Cribbs, Gregory) (Entered: 06/29/2009)
68 ORDER TO CONTINUE SCHEDULING CONFERENCE by Judge Christina A. Snyder: Upon Stipulation 67 , the Scheduling Conference is continued to 10/19/2009 11:00 AM before Judge Christina A. Snyder. The status conference, currently scheduled for 7/13/2009 at 11:00 AM, will remain on calendar. (gk) (Entered: 07/01/2009)
69 MINUTES OF Status Conference Re Case and Appeal held before Judge Christina A. Snyder: The Court confers with counsel regarding the parties pending Notice of Appeals before the 9th Circuit. The Court continues the Status Conference re: Case and Appeals to 10/19/2009 11:00 AM before Judge Christina A. Snyder. Court Reporter: Laura Elias. (gk) (Entered: 07/14/2009)
70 ORDER DENYING TRANSFER by the Judicial Panel on Multidistrict Litigation, MDL 2069, that the motion by Plaintiffs in an action in the Northern District of California (3:08−5173), pursuant to 28 U.S.C. Section 1407, for centralization of the six actions listed on Schedule A (attached) is denied. (gk) (Entered: 08/19/2009)
71 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals,, 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365. The panel has unanimously voted to deny the petition for rehearing en banc. The full court has been advised of the petition for rehearing en banc and no judge of the court has requested a vote on it. Fed. R. App. P. 35. The petition for rehearing en banc is DENIED. Order received in this district on 8/24/09. (lr) (Entered: 08/25/2009)

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 19 of 22

09/28/2009 10/14/2009
10/19/2009 01/04/2010 01/05/2010 03/17/2010
03/25/2010 03/25/2010 04/05/2010 04/12/2010
04/12/2010
04/16/2010

72 STIPULATION to Continue Scheduling Conference from 10/19/09 to 1/18/10 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Continue Scheduling Conference)(Cribbs, Gregory) (Entered: 09/28/2009)
73 ORDER TO CONTINUE SCHEDULING CONFERENCE by Judge Christina A. Snyder(Note: Changes Made by the Court): Upon Stipulation of the parties 72 , the Scheduling Conference, currently set for October 19, 2009, at 11:00 a.m., is continued to January 11, 2010, at 11:00 a.m. The status conference, currently scheduled to be heard simultaneously with the requested continued Scheduling Conference, on October 19, 2009, at 11:00 a.m., will remain on calendar. (jre) (Entered: 10/15/2009)
74 MINUTES OF Status Conference held before Judge Christina A. Snyder: The matter is continued to January 11, 2010, at 11:00 a.m.Court Reporter: Margaret Babykin. (pso) (Entered: 10/20/2009)
75 STIPULATION to Continue Scheduling Conference and Status Conference from 1/11/10 to 4/12/10 filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Continue Scheduling Conference and Status Conference)(Cribbs, Gregory) (Entered: 01/04/2010)
76 ORDER TO CONTINUE SCHEDULING CONFERENCE AND STATUS CONFERENCE by Judge Christina A. Snyder: Upon Stipulation 75 , the Scheduling Conference and Status Conference are continued to 4/12/2010 11:00 AM before Judge Christina A. Snyder. (gk) (Entered: 01/07/2010)
79 MINUTES (IN CHAMBERS) HEARING ON MANDATE OF THE NINTH CIRCUIT COURT OF APPEAL by Judge Christina A. Snyder: THE COURT REVIEWS the mandate (judgment or order) of the Ninth Circuit Court of Appeals Reversing and Remanding 78 . The Court will address the mandate in the appeal no. 09−55365 at the current scheduled Status Conference and Scheduling Conference set on 4/12/2010 at 11:00 AM. Court Reporter: Not Present. (gk) (Entered: 04/01/2010)
77 MANDATE of 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 , CCA # 09−55532. The decision of the district court is affirmed. Mandate received in this district on 3/25/2010. (dmap) (Entered: 03/26/2010)
78 MANDATE of 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 40 , CCA # 09−55365. The decision of the district court is affirmed. Mandate received in this district on 3/25/2010. (dmap) (Entered: 03/26/2010)
80 JOINT RULE 26f CONFERENCE REPORT filed by Plaintiff California Pharmacists Association. (Gross, Byron) (Entered: 04/05/2010)
82 MINUTES OF Scheduling Conference held before Judge Christina A. Snyder:Hearing held and counsel are present. The Court confers with counsel. The Court spreads the 9th Circuit Mandates for appeal nos. 09−55532 and 09/55365. The Court denies defendant's oral motion to stay the above−referenced action and schedules the following dates: Amended Pleadings due by 5/14/2010. Discovery cut−off 12/31/2010. Final Pretrial Conference set for 5/2/2011 11:00 AM before Judge Christina A. Snyder. Jury Trial set for 6/14/2011 09:30 AM before Judge Christina A. Snyder.Court Reporter: Laura Elias. (yl) (Entered: 04/30/2010)
83 AMENDED MINUTES of Scheduling Conference 82 held before Judge Christina A. Snyder: The Court spreads the 9th Circuit Mandates for appeal nos. 09−55532 and 09−55365. The Court denies defendant's oral motion to stay the action and schedules the following dates: Request for leave to file amended pleadings or to add parties 5/14/2010; Discovery Cut−off 12/31/2010; Last Day to File Motions 2/28/2011; Pretrial Conference/Hearing on Motions in Limine 11:00 AM 5/2/2011; and Jury Trial 9:30 AM 6/14/2011. Court Reporter Laura Elias. (gk) (Entered: 05/04/2010)
81 MINUTES (IN CHAMBERS): Order Vacating this Court's 3/9/2009 Order and Granting Plaintiffs' Motion for Preliminary Injunction Pursuant to the Ninth Circuit Court of Appeals Mandate Issued 3/25/2010 (09−55365) by Judge Christina A. Snyder: Pursuant to the mandate from the Ninth Circuit, this Court hereby vacates the 3/9/2009 order denying plaintiffs' motion for preliminary injunction with regard to AB 1183's reimbursement rate reduction to hospitals 36 . Accordingly, the Court hereby grants plaintiffs' Motion for Preliminary Injunction 46 and orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 20 of 22

05/27/2010 06/04/2010
06/16/2010
06/16/2010 02/02/2011 02/04/2011 06/01/2011

with him to refrain from enforcing Cal. Welf. & Inst. Code Section 14105.191 and 14166.245, as modified by AB 1183, beginning on April 16, 2010, by refraining from reducing by five percent payments to hospitals for services provided under the Medi−Cal fee−for−service program, which include non−contract inpatient hospital services, outpatient services, Distinct Part Nursing Facilities, and subacute services. Court Reporter: Not Present. (gk) (Entered: 04/16/2010)
84 NOTICE OF MOTION AND Joint MOTION to AMEND Order on Motion for Preliminary Injunction,,,, 81 filed by Plaintiff California Pharmacists Association. Motion set for hearing on 6/28/2010 at 10:00 AM before Judge Christina A. Snyder. (Keville, Jordan) (Entered: 05/27/2010)
85 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents RE: Notice of Motion and Joint Motion for Modification of Court's 4/16/2010 Preliminary Injunction Order filed 5/27/2010 84 . The following error(s) was found: Proposed Document was not submitted as a separate attachment. The proposed order is within the motion papers, pages 8 and 9. It lacks a separate title page, Local Rule 11−3.8, and two lines of text on the page that has the line provided for the signature of the judge, Local Rule 58−10. In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. You need not take any action in response to this notice unless and until the court directs you to do so. (gk) (Entered: 06/07/2010)
86 ORDER by Judge Christina A. Snyder GRANTING Joint Motion for Modification of Court's April 16, 2010 Preliminary Injunction Order 84 . The Court's April 16 order will be amended to read as follows: Pursuant to the mandate from the Ninth Circuit, this Court hereby vacates the March 9, 2009 order denying plaintiffs' motion for a preliminary injunction with regard to AB 1183's reimbursement rate reduction to hospitals. According, the Court hereby grants plaintiffs' motion for preliminary injunction and orders respondent Director, his agents, servants, employees, attorneys, successors, and all those working in concert with him to refrain from enforcing Cal. Welf. & Inst. Code 14105.191 and 14166.245 with respect to services provided under the fee−for−service Medi−Cal program, by refraining. (See attached Order for further information). (jp) (Entered: 06/17/2010)
87 MINUTES IN CHAMBERS by Judge Christina A. Snyder: Plaintiffs Joint MOTION for Modification of Court's April 16, 2010 Preliminary Injunction Order 84 and noticed for hearing on 6/28/2010 at 10:00 AM. Pursuant to FRCP 78 and Local Rule 7−15, the Court hereby dispenses with oral argument on the above−referenced motion and decides the motion on the basis of the papers submitted. Therefore, the parties are not to appear before this Court on 6/28/2010 at 10:00 AM. The Court hereby GRANTS Plaintiffs' Motion and Joint Motion for Modification of Courts April 16, 2010 Preliminary Injunction Order forthwith. The Court will issue a separate order. (jp) (Entered: 06/17/2010)
88 STIPULATION to Stay Case pending decision by the Supreme Court, STIPULATION to Vacate Existing Dates and deadlines filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order to Vacate Existing Dates and for a Stay of the Proceedings)(Kim, Jennifer) (Entered: 02/02/2011)
89 ORDER TO VACATE EXISTING DATES AND FOR A STAY OF THE PROCEEDINGS by Judge Christina A. Snyder: Upon Stipulation 88 , the dates and deadlines previously set by the Court, by order dated 4/12/2010, are hereby vacated and the action is stayed pending a decision by the Supreme Court in the case of Maxwell−Jolly v. California Pharmacists Ass'n, U.S.S.C. Case No. 09−1158 and/or matter consolidated therewith. (gk) (Entered: 02/07/2011)
90 MINUTES (IN CHAMBERS) − ORDER REMOVING ACTION FROM THE ACTIVE LIST OF CASES, PURSUANT TO A STAY IN THE ACTION by Judge Christina A. Snyder: THE COURT, having approved a stay in this matter on 2/4/2011; IT IS HEREBY ORDERED that this action is hereby removed from this Court's active caseload until further application by the parties or order of this Court. IT IS FURTHER ORDERED that counsel shall file a joint report detailing the status of the case within 90 days and every quarter thereafter until the action has been reactivated on this Court's active caseload or a stipulation for dismissal is filed. This Court retains full jurisdiction over this action and this Order shall not prejudice any party to this

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 21 of 22

04/26/2012 05/22/2012 10/25/2013 11/05/2013
05/28/2014
05/30/2014 08/19/2014

action. (Made JS−6. Case Terminated.) Court Reporter: Not Present. (gk) (Entered: 06/02/2011)
91 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. The parties are directed to file contemporaneous supplemental briefs in their respective cases concerning the effect of Douglas v. Independent Living Center of Southern California, Inc., 132 S.Ct.1204(2012). Briefs shall be due 45 days from the filing of this order and shall not exceed 30 pages in length. Order received in this district on 4/26/12. (car) (Entered: 04/30/2012)
92 ORDER from 9th CCA filed, CCA # 08−56422, 08−57016, 09−55532, 09−55692. The parties' unanimous joint motion to refer Case Nos. 08−56422, 08−57016, 09−55532, and 09−55692 to mediation, and to continue the supplemental briefing schedule during the pendency of mediation [D.E. 49−1], is hereby GRANTED. Order received in this district on 5/22/12 (car) (Entered: 05/24/2012)
93 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, CCA # 09−55532. The Attorney General's Motion to Remove Certain Counsel from ServiceList is GRANTED. Order received in this district on 10/25/13. (mat) (Entered: 10/30/2013)
94 MINUTES (IN CHAMBERS) STAY OF PROCEEDINGS by Judge Christina A. Snyder: By order dated 7/8/2013, the Court directed the parties in these matters to submit a joint status report. Dkt. #242, in case no. 2:11−CV−09688−CAS(MANx). The joint status report was filed on 7/23/2013. Dkt. #243, in case no. 2:11−CV−09688−CAS(MANx). The Court has reviewed the parties' positions set forth therein, as well as the issues presented by the petition for writ of certiorari now pending in the United States Supreme Court, see Supreme Court Docket No. 13−253. Based on the foregoing, the Court finds that there is good cause to stay the proceedings or, if applicable, to continue the existing stay of the proceedings in the above−entitled cases, pending notification from this Court. The parties are directed to file a joint status report with this Court within 14 days after the Supreme Court has taken any action with respect to the above−referenced petition for writ of certiorari. Court Reporter: Not Present. (gk) (Entered: 11/06/2013)
95 ORDER from 9th CCA filed re: Notice of Appeal to 9th Circuit Court of Appeals 50 filed by David Maxwell−Jolly, Notice of Appeal to 9th Circuit Court of Appeals 40 filed by Sharp Chula Vista Medical Center, Charles Gallagher, South Sacramento Pharmacy, Sharp Memorial Hospital, Fey Garcia, California Pharmacists Association, Grossmont Hospital Corporation, Sharp Coronado Hospital and Healthcare Center, California Dental Association, California Association For Adult Day Services, California Medical Association, Marin Apothecary, Inc., Farmacia Remedios, Inc., California Hospital Association, Acacia Adult Day Services, CCA # 09−55365 and 09−55532. Pursuant to the parties' joint request for dismissal, these appeals are voluntarily dismissed. Fed. R. App. P. 42(b). The parties shall bear their own costs and fees on appeal. A copy of this order shall serve as and for the mandate of this court. Order received in this district on 5/28/14. (mat) (Entered: 05/30/2014)
96 Notice of Electronic Filing re USCA Order 95 e−mailed to Attorney Byron J Gross at gross@healthlaw.org bounced due to invaild email. Primary e−mail address corrected. Notice of Electronic Filing resent addressed to byronjgross@gmail.com. Pursuant to Local Rules it is the attorneys obligation to maintain all personal contact information including e−mail address in the CM/ECF system. THERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY. (ir) TEXT ONLY ENTRY (Entered: 05/30/2014)
97 NOTICE OF MOTION AND Joint MOTION for Settlement Approval of Settlement Agreement filed by Plaintiffs Acacia Adult Day Services, California Association For Adult Day Services, California Dental Association, California Hospital Association, California Medical Association, California Pharmacists Association, Charles Gallagher, Fey Garcia, Grossmont Hospital Corporation, Marin Apothecary, Inc., Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Sharp Memorial Hospital, South Sacramento Pharmacy. Motion set for hearing on 9/22/2014 at 10:00 AM before Judge Christina A. Snyder. (Attachments: # 1 Memorandum of Points and Authorities, # 2 Declaration of Craig J. Cannizzo in

Case: 2:09-cv-722 As of: 10/27/2017 07:01 AM PDT 22 of 22

08/28/2014 09/22/2014 09/22/2014 03/31/2015 04/21/2015
04/22/2015
04/23/2015

Support of Joint Motion for Approval of Settlement Agreement, # 3 Proposed Order Granting Joint Motion for Approval of Settlement Agreement)(Cannizzo, Craig) (Entered: 08/19/2014)
98 Notice of Appearance or Withdrawal of Counsel: for attorney Susan Marie Carson counsel for Defendant David Maxwell−Jolly. Adding Susan M. Carson as attorney as counsel of record for Toby Douglas for the reason indicated in the G−123 Notice. Filed by Defendant Toby Douglas, Director of the Department of Health Care Services, State of California. (Attorney Susan Marie Carson added to party David Maxwell−Jolly(pty:dft))(Carson, Susan) (Entered: 08/28/2014)
99 MINUTES OF MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT 97 Hearing held before Judge Christina A. Snyder. The Court confers with counsel. The Court grants the above−referenced motion. The Court will issue the Proposed Order Granting Joint Motion for Approval of Settlement Agreement forthwith. Court Reporter: Laura Elias. (lom) (Entered: 09/25/2014)
100 ORDER GRANTING JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT 97 by Judge Christina A. Snyder. (lom) (Entered: 09/25/2014)
101 NOTICE filed by Plaintiffs Acacia Adult Day Services, California Association For Adult Day Services, California Dental Association, California Hospital Association, California Medical Association, California Pharmacists Association, Charles Gallagher, Fey Garcia, Grossmont Hospital Corporation, Marin Apothecary, Inc., Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Sharp Memorial Hospital, South Sacramento Pharmacy. re Settlement Effective Date (Cannizzo, Craig) (Entered: 03/31/2015)
102 STIPULATION for Hearing re Motions for Attorneys Fees filed by Plaintiffs Acacia Adult Day Services, California Association For Adult Day Services, California Dental Association, California Hospital Association, California Medical Association, California Pharmacists Association, Charles Gallagher, Fey Garcia, Grossmont Hospital Corporation, Marin Apothecary, Inc., Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Sharp Memorial Hospital, South Sacramento Pharmacy. (Attachments: # 1 Proposed Order)(Cannizzo, Craig) (Entered: 04/21/2015)
103 NOTICE OF MOTION AND Joint MOTION to Dismiss Case filed by Plaintiffs Acacia Adult Day Services, California Association For Adult Day Services, California Dental Association, California Hospital Association, California Medical Association, California Pharmacists Association, Charles Gallagher, Fey Garcia, Grossmont Hospital Corporation, Marin Apothecary, Inc., Sharp Chula Vista Medical Center, Sharp Coronado Hospital and Healthcare Center, Sharp Memorial Hospital, South Sacramento Pharmacy. (Attachments: # 1 Memorandum of Points and Authorities iso Application for Voluntary Dismissal, # 2 Declaration of Craig J. Cannizzo iso Application for Voluntary Dismissal, # 3 Proposed Order Dismissing Action)(Cannizzo, Craig) (Entered: 04/22/2015)
104 ORDER ON PLAINTIFFS' EX PARTE APPLICATION FOR DISMISSAL OF ACTION by Judge Christina A. Snyder: Upon Plaintiff's Ex Parte Application 103 , IT IS HEREBY ORDERED that, pursuant to Federal Rule of Civil Procedure 41(a)(2), Case No. CV 09−722 is hereby dismissed with prejudice, each party to bear its own costs in accordance with Part III.A.3 of the Settlement Agreement of the parties on file herein, with the Court retaining jurisdiction, pursuant to Parts III.A.3 and III.D.17 of the Settlement Agreement, to entertain any application for attorneys' fees as described in Part III.C. of the Settlement Agreement, and for purposes of enforcement of the Settlement Agreement by any parties in the within action, up to and including 1/1/2016. (gk) (Entered: 04/24/2015)

 
 California Pharmacists Ass’n v. Maxwell-Jolly, 596 F.3d 1098 (2010)

596 F.3d 1098 United States Court of Appeals,
Ninth Circuit.
CALIFORNIA PHARMACISTS ASSOCIATION; California Medical Association; California Dental
Association; California Hospital Association; California Association for Adult Day Services;
Marin Apothecary, Inc., DBA Ross Valley Pharmacy; South Sacramento Pharmacy; Farmacia Remedios, Inc.; Acacia Adult Day Services; Sharp Memorial Hospital; Grossmont Hospital Corporation; Sharp Chula Vista Medical Center; Sharp Coronado Hospital and Healthcare
Center; Fey Garcia; Charles Gallagher, Plaintiffs–Appellees, v.
David MAXWELL–JOLLY, Director of The California Department of Health Care Services,
Defendant–Appellant.
No. 09–55532. | Argued and Submitted Jan. 19, 2010. | Filed March 3, 2010.
Synopsis Background: Providers and beneficiaries of adult day health centers (ADHCs) sued Director of California Department of Health Care Services, challenging validity of state legislation mandating five percent rate reduction for reimbursement to ADHCs by Medi-Cal, California’s version of Medicaid. The United States District Court for the Central District of California, Christina A. Snyder, J., 630 F.Supp.2d 1144, granted plaintiffs’ motion for preliminary injunction. Director appealed.
Holdings: The Court of Appeals, Milan D. Smith, Jr., Circuit Judge, held that:
[1] California’s pre-enactment study of rate reduction’s impact on efficiency, economy, quality, and access to care was inadequate;
[2] ADHC providers and beneficiaries would likely suffer irreparable harm absent injunctive relief; and
[3] balance of equities and public interest favored preliminary injunction.

Affirmed.

Attorneys and Law Firms

*1101 Edmund G. Brown Jr., Attorney General of California, Jennifer M. Kim, Shannon M. Chambers and Randall R. Murphy, Supervising Deputy Attorneys General, and Gregory M. Cribbs, Deputy Attorney General, Los Angeles, CA, for defendant-appellant David Maxwell–Jolly.

Lloyd A. Bookman, Byron J. Gross, and Jordan B. Keville, Hooper, Lundy & Bookman, Inc., Los Angeles, CA, for plaintiffs-appellees California Pharmacists Association, et al.

Appeal from the United States District Court for the

Central District of California, Christina A. Snyder,

District

Judge,

Presiding.

D.C.

No.

2:09–cv–00722–CAS–MAN.

Before: STEPHEN REINHARDT, W. FLETCHER and MILAN D. SMITH, JR., Circuit Judges.

Opinion

MILAN D. SMITH, JR., Circuit Judge:

We are once again asked to consider whether the California Department of Health Care Services (Department) Director, David Maxwell–Jolly (Director), should be enjoined from implementing state legislation reducing payments to certain medical service providers. In this latest set of appeals, Plaintiffs–Appellees (California Pharmacists), a group of adult day health care centers (ADHCs), hospitals, pharmacies, and beneficiaries of the State’s Medicaid program, Medi–Cal, challenge a five percent reduction in those payments.1 We affirm, and hold that the district court did not abuse its discretion in granting California Pharmacists’s motion for a preliminary injunction because the State failed to “stud[y] the impact of the *1102 [five] percent rate reduction on the statutory factors of efficiency, economy, quality, and access to care” prior to implementing the rate reductions. Indep. Living Ctr. of S. Cal., Inc. v. Maxwell–Jolly, 572 F.3d 644, 652 (9th Cir.2009) (Independent Living II ).

California Pharmacists Ass’n v. Maxwell-Jolly, 596 F.3d 1098 (2010)

FACTUAL AND PROCEDURAL BACKGROUND
I. Medicaid and Medi–Cal [1] Under Title XIX of the Social Security Act (the Medicaid Act), 42 U.S.C. § 1396 et seq., the federal government provides funds to participating states to “enabl[e] each State, as far as practicable ... to furnish ... medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services.” 42 U.S.C. § 1396–1. “Medicaid is a cooperative federal-state program that directs federal funding to states to assist them in providing medical assistance to low-income individuals.” Katie A. ex rel. Ludin v. Los Angeles County, 481 F.3d 1150, 1153–54 (9th Cir.2007). As we have stated many times, it is the states that choose whether to participate in Medicaid. Should a state choose to participate in the Medicaid program, it must comply with federal Medicaid law. Id. California has chosen to participate in the program.
To receive federal funds, states must administer their programs in compliance with individual “State plans for medical assistance,” which require approval by the federal Secretary of Health and Human Services. 42 U.S.C. § 1396–1. The State plan must “[s]pecify a single State agency established or designated to administer or supervise the administration of the plan.” 42 C.F.R. § 431.10. The Defendant–Appellee’s agency, the Department, “is the state agency responsible for the administration of California’s version of Medicaid, the Medi–Cal program.” Orthopaedic Hosp. v. Belshe, 103 F.3d 1491, 1493 (9th Cir.1997) (Orthopaedic II ).
[2] The Medicaid Act provides detailed requirements for state plans. See 42 U.S.C. § 1396a(a)(1)-(73). One of those provisions is § 1396a(a)(30)(A) (hereafter § 30(A)), the provision at issue in this appeal. Under § 30(A), a state plan must:
provide such methods and procedures relating to ... the payment for ... care and services ... as 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 population in the geographic area.
Id. § 1396a(a)(30)(A). Thus, a state plan must establish health care provider reimbursement rates that are, among other things: (1) “consistent with high-quality medical care” (quality of care); and (2) “sufficient to enlist enough providers to ensure that medical services are generally available to Medicaid recipients” (access to care). Indep. Living Ctr. of S. Cal., Inc. v. Shewry, 543 F.3d 1050, 1053 (9th Cir.2008) (Independent Living I ).
II. Assembly Bill 5 On February 16, 2008, the California legislature enacted Assembly Bill X3 5 (AB 5) in special session. See 2008 Cal. Legis. Serv. 3rd Ex.Sess. Ch. 3. AB 5 reduced by ten percent payments under the Medi–Cal fee-for-service program for physicians, dentists, pharmacies, ADHCs, clinics, health systems, and other providers for services provided on or after July 1, 2008. Cal. Welf. & Inst.Code § 14105.19(b)(1). Section 14105.19 of the California Welfare & Institutions Code also reduced payments to managed health *1103 care plans by the actuarial equivalent of the ten percent payment reduction. Id. § 14105.19(b)(3). Finally, AB 5 reduced payments to acute care hospitals not under contract with the Department for inpatient services. Id. § 14166.245(c). Under AB 5, these cuts were scheduled to take effect on July 1, 2008.
In Independent Living II, a group of pharmacies, health care providers, senior citizens’ groups, and Medi–Cal beneficiaries brought an action under the Supremacy Clause, alleging that AB 5 conflicted with the requirements of § 30(A). We agreed, and held that under Orthopaedic II § 30(A) requires the Director to set provider reimbursement rates that “ ‘bear a reasonable relationship to efficient and economical hospitals’ costs of providing quality services, unless the Department shows some justification for rates that substantially deviate from such costs.’ ” Indep. Living II, 572 F.3d at 651 (quoting Orthopaedic II, 103 F.3d at 1496). We explained that Orthopaedic II interpreted § 30(A) to require the Director to “ ‘rely on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting.’ ” Id. at 652 (quoting Orthopaedic II, 103 F.3d at 1496). However, prior to enacting AB 5,
[t]he Director failed to provide any evidence that the Department or the legislature studied the impact of the ten percent rate reduction on the

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statutory factors of efficiency, economy, quality, and access to care ..., nor did [the Director] demonstrate that the Department considered reliable cost studies when adjusting its reimbursement rates.
Id.
III. Assembly Bill 1183 On September 16, 2008, the California legislature passed Assembly Bill 1183 (AB 1183), which became effective on September 30, 2008. See Cal. Legis. Serv. Ch. 758. AB 1183 amended § 14105.19(b)(1) to provide that the ten percent rate reductions previously called for in AB 5 would end on February 28, 2009. Id. AB 1183 also added § 14105.191 and amended § 14166.245 of the California Welfare & Institutions Code, for either one percent, five percent, or ten percent rate reductions, depending on provider type. See Cal. Welf. & Inst.Code §§ 14105.191, 14166.245.
On January 29, 2009, California Pharmacists challenged the AB 1183 Medi–Cal reimbursement rate reductions. California Pharmacists sought to enjoin the Director from implementing AB 1183’s five percent reduction in payments to ADHCs. ADHCs provide an alternative to institutional care, responding to the State’s need “to establish and to continue a community-based system of quality adult day health care which will enable elderly persons or adults with disabilities to maintain maximum independence.” Cal. Health & Safety Code § 1570.2. Though recognizing the need for custodial care, the California legislature has concluded that “overreliance on [custodial] care has proven to be a costly panacea in both financial and human terms, often traumatic, and destructive of continuing family relationships and the capacity for independent living.” Id.
The district court granted the preliminary injunction. It held that California Pharmacists had demonstrated a likelihood of success on the merits for three reasons. First, the legislative history showed no indication that the legislature considered § 30(A) prior to passage of AB 1183. Second, since the Department was given no discretion to alter the rate reductions imposed by the legislature, any analysis that the Department completed in February 2009, and thus after the reductions were enacted, did not satisfy the requirements of Orthopaedic II. And third, any analysis *1104 conducted by the

Department was inadequate because the Department relied on costs incurred at intermediate care facilities (NF–As), which the district court considered to be an inadequate proxy for ADHC costs. The district court also held that California Pharmacists had demonstrated a risk of irreparable harm and that the balance of equities and public interest weighed in favor of injunctive relief. The Director timely appealed.
The Director raises three issues on appeal. First, the Director argues that the district court erred in holding that the legislature itself was required to conduct cost studies or analyses prior to enactment of AB 1183 to determine whether the proposed rate reductions complied with the efficiency, economy, and quality of care provisions of § 30(A). Second, the Director contends that even if the legislature was required to conduct the relevant analysis, the district court committed clear error in concluding that the legislature did not adequately consider the § 30(A) factors prior to enacting AB 1183. Third, the Director argues that the district court erred in concluding that California Pharmacists had met their burden of demonstrating irreparable harm with respect to reduced reimbursement rates under AB 1183.
JURISDICTION AND STANDARD OF REVIEW
[3] [4] We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1292(a)(1). A district court’s decision to grant or deny a preliminary injunction is reviewed for abuse of discretion. Indep. Living II, 572 F.3d at 651. We recently restated our two-part test used to determine whether a district court has abused its discretion. First, we “determine de novo whether the trial court identified the correct legal rule to apply to the relief requested.” United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir.2009) (en banc). If the trial court did not identify the correct legal rule, it abused its discretion. Id. at 1262.
Second, we must determine if the district court’s “application of the correct legal standard was (1) ‘illogical,’ (2) ‘implausible,’ or (3) without ‘support in inferences that may be drawn from the facts in the record.’ ” Id. (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 577, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)).
[5] [6] In granting a request for a preliminary injunction, a district court abuses its discretion if it “base[s] its decision on an erroneous legal standard or clearly erroneous

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findings of fact.” Earth Island Inst. v. U.S. Forest Serv., 442 F.3d 1147, 1156 (9th Cir.2006), abrogated on other grounds by Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). We review conclusions of law de novo and findings of fact for clear error. Id. Under this standard, “[a]s long as the district court got the law right, it will not be reversed simply because the appellate court would have arrived at a different result if it had applied the law to the facts of the case.” Id. (internal quotation marks omitted).
DISCUSSION
[7] In seeking a preliminary injunction in a case in which the public interest is involved, a plaintiff must overcome four hurdles. Thus, California Pharmacists must show that: (1) they are likely to succeed on the merits; (2) they are likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in their favor; and (4) an injunction is in the public interest. Cal. Pharms. Ass’n v. Maxwell–Jolly, 563 F.3d 847, 849 (9th Cir.2009) (citing Winter, 129 S.Ct. at 376); see also Am. Trucking Ass’ns, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir.2009).
*1105 I. Likelihood of Success on the Merits In Orthopaedic II, we held that § 30(A) requires
the Director [to] set hospital outpatient reimbursement rates that bear a reasonable relationship to efficient and economical hospitals’ costs of providing quality services, unless the Department shows some justification for rates that substantially deviate from such costs. To do this, the Department must rely on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting.
103 F.3d at 1496.
We address the Director’s arguments in turn.

A. The Body Responsible for Complying with § 30(A) [8] First, the Director argues that Orthopaedic II did not hold that rate setting must be based upon pre-enactment legislative studies undertaken and completed by the legislature itself prior to legislative action authorizing a state department to implement rate reductions. According to the Director, at issue in Orthopaedic II were statutorily mandated rate changes not unlike those set pursuant to AB 1183. However, despite those enactments, we focused solely on the Department’s actions, rather than on the legislature’s, and thus only the Department is required to consider the § 30(A) factors. We disagree.
In Orthopaedic II, none of the disputed rate-settings was actually set by the legislature. See Orthopaedic Hosp. v. Kizer, No. 90–4209, 1992 WL 345652 (C.D.Cal. Oct. 5, 1992) (Orthopaedic I ). To the contrary, the legislative enactments granted the Director broad discretion to set the applicable rates in the face of general governing criteria. See, e.g., Orthopaedic I, 1992 WL 345652, at *7 (describing that reimbursement rates for rural hospitals were to “be set at a level which will provide incentives for rural hospitals to focus on the provision of outpatient services and ... reduce the financial losses incurred by the facilities”); id. at *8 (describing that for delivery services rates the Department “shall eliminate the Medi–Cal reimbursement differential for obstetrical services” by equalizing reimbursement for Caesarean and non-Cesarean section deliveries); id. at *9 (statute required the Department to amend the method for reimbursing disproportionate share hospitals for outpatient services, to which the “Department responded by developing a new payment methodology”). Since the Director set the challenged rates, Orthopaedic II addressed whether the Medicaid Act “requires the Department to consider the costs hospitals incur in delivering services when setting specific payment rates under [§ 30(A)].” 103 F.3d at 1496 (emphases added). Looking to the clear language in the statute, we noted that § 30(A) “provides that payments for services must be consistent with efficiency, economy, and quality of care, and that those payments must be sufficient to enlist enough providers to provide access to Medicaid recipients.” Id. We reasoned that costs were an integral factor to be considered in the payment calculus, since “[t]he Department cannot know that it is setting rates that are consistent with [§ 30(A)’s relevant factors] without considering the costs of providing such services.” Id. (emphasis added). Thus, we held that “payments for hospital outpatient services must bear a reasonable relationship to the costs of providing quality of care incurred by efficiently and economically operated hospitals.” Id.

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Unlike the statutes at issue in Orthopaedic II, the State has taken a different approach to setting rates under AB 1183. Under AB 1183, the legislature mandated that the Director reduce provider payments by a fixed percentage. See, e.g., *1106 Cal. Welf. & Inst.Code § 14105.191(b)(2) ( “[P]ayments to the following classes of providers shall be reduced by 5 percent for Medi–Cal fee-for-service benefits[.]”). Thus, the Director is misguided in arguing that our focus on the Department in Orthopaedic II absolves the legislature of the same requirements when it sets rates. In other words, in Orthopaedic II, there was no question that the Department set reimbursement rates. Those rates provided payments for the medical service at issue under the State’s plan—there, hospital outpatient services. We had no reason to focus on what the State legislature considered before rates were set since the legislature was one step removed from the regulations promulgated by the Department. As noted, the legislature merely outlined broad goals for the Department, a process separate and distinct from determining the effect of a specific rate reduction on the statutory factors of efficiency, economy, quality, and access to care. Yet if the legislature elects to by-pass the Department, and set rates itself, it must engage in the same principled analysis we required of the Director in Orthopaedic II.
Moreover, in Orthopaedic I, the Director made the inverse of the argument he asserts here. There, he argued that in enacting the governing statutes, the legislature considered the relevant § 30(A) factors, thus excusing the Department’s need to do the same when it set rates based on the legislature’s commands. See Orthopaedic I, 1992 WL 345652, at *7–11. The district court rejected this argument, holding first that the statutes did not “purport to establish any specific payment rates,” id. at *7, and second that even if the legislature had considered the relevant factors, that did not “relieve the Department of the obligation to further consider [the relevant factors] in exercising what discretion it had in implementing the legislature’s general mandate,” id. at *9. In addition, the court noted, “nor is there adequate evidence in the record demonstrating that the state legislature at any time considered [the relevant factors] in connection with the equalization of rates.” Id. The district court explained:
In sum, if there was evidence both that (1) in setting the challenging rates, the Department had merely in rote fashion been implementing a precisely-crafted statutory enactment that did not permit the Department to exercise any significant discretion whatsoever, and further, that (2) the legislature in enacting the statute

had expressly considered “efficiency, economy, and quality of care,” the Court might agree that the Department need not have considered “efficiency, economy, and quality of care,” at all. But there is convincing evidence of neither.
Id. Thus, we are not telling the State something new.
Indeed, we find no distinction between the method by which rates were set under either AB 1183 or AB 5. Under AB 5, the California legislature enacted a statutorily mandated across-the-board rate reduction. In holding that the Director violated § 30(A) when he implemented AB 5’s rate reductions, we held “[t]he Director failed to provide any evidence that the Department or the legislature studied the impact of the ten percent rate reduction on the statutory factors ... prior to enacting AB 5.” Indep. Living II, 572 F.3d at 652 (emphases added). We noted several times our concern with the context in which the legislation was passed, and focused on what State officials failed to consider prior to enactment. See id. at 655–56 (holding that the State’s decision to pass legislation reducing Medi–Cal reimbursement rates for purely budgetary concerns violated federal law); id. at 656 (concluding that the State’s Legislative Analyst was the only “State official” to have “considered— *1107 let alone studied” the impact of the rate reduction on services provided to Medi–Cal beneficiaries); id. at n. 12 (“Nothing in the record connects the decision to cut Medi–Cal reimbursement rates by ten percent across-the-board to a factfinding process initiated by state officials.”). Such an approach is consistent with that of our sister circuits, where in the context of legislative, as opposed to agency, rate-setting, they too have focused on ensuring that the legislative body had information before it so that it could properly consider efficiency, economy, quality of care, and access to services before enacting rates. See Minn. HomeCare Ass’n, Inc. v. Gomez, 108 F.3d 917, 918 (8th Cir.1997) (holding that although the agency did not provide any formal § 30(A) analysis to the legislature, lobbyists “actively participated in the ... legislative session” such that the legislature adequately considered § 30(A) when it raised reimbursement rates); cf. Ark. Med. Soc’y, Inc. v. Reynolds, 6 F.3d 519, 530 (8th Cir.1993) (refusing to consider evidence offered during agency hearings regarding the effect of rate cuts on accessibility because it “could only be confirmed by historical data accumulated after the cuts were made”).2
In sum, we find nothing remarkable in holding that the final body responsible for setting Medicaid reimbursement rates must study the impact of the

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contemplated rate reduction on the statutory factors of efficiency, economy, quality of care, and access to care prior to setting or adjusting payment rates. We emphasize that the State need not follow “any prescribed method of analyzing and considering [the § 30(A) ] factors.” Minn. HomeCare Ass’n, 108 F.3d at 918; Orthopaedic II, 103 F.3d at 1498 (refusing to impose a “rigid formula” for the Department to follow). But as we stated in Orthopaedic II, “Congress intended payments to be flexible within a range; payments should be no higher than what is required to provide efficient and economical care, but still high enough to provide for quality care and to ensure access to services.” 103 F.3d at 1497. The only way to ensure that Congress’s intent is realized is for the State to study the impact of the contemplated rate change on the statutory factors prior to setting rates. Thus, in no way do we mean to suggest that the State is proscribed from setting or adjusting reimbursement rates. We simply reaffirm that if it does so, it must comply with federal law.
B. Legislative Consideration Prior to Setting Rates [9] Having determined that the State legislature was required to study the impact of the five percent rate reduction on the statutory factors of efficiency, economy, quality, and access to care prior to enacting AB 1183, we next consider whether it did so. The Director argues that even though the legislature was not required to do so, the district court committed clear error in concluding that the legislature did not adequately consider the § 30(A) factors prior to implementing AB 1183.
In support of his argument, the Director submits the declaration of the Department’s *1108 Deputy Director for Legislative and Governmental Affairs. The Deputy Director states that in May 2008, the Senate and Assembly proposals were released in public hearings held by the Senate and Assembly Budget Committees. According to the Deputy Director, Department employees “provid[ed] information, technical assistance, and responses to numerous inquiries to legislative staff members concerning the various 5% and 1% rate reductions that were included in AB 1183.” The Director also references the May 30, 2008, agenda released by the Assembly Budget Subcommittee No. 1 on Health and Human Services. That agenda lists certain “items to be heard” including proposed actions to “Maintain Essential Health Care Services and Eligibility,” such as “Restore 10% provider rate cut for physicians and other healthcare providers” and “Partially restore long-term care rate reductions enacted in AB 5 X 3 (reduce cut from 10% to

5%).” The only proposed action that includes a discussion relevant to ADHCs explains that individuals with developmental disabilities living in Intermediate Care Facilities are eligible for ADHC services, and that such clarification in a trailer bill is necessary so that the State’s Department of Developmental Services will no longer have to “fund these ADHC services at 100 percent General Fund cost.”
Next, the Director points to the California Senate Committee on Budget and Fiscal Review for May 30, 2008, which includes recommendations for modification of several rate reductions or elimination of services. With respect to ADHC services, one entry contains the same description of the proposed trailer bill needed to clarify that individuals with developmental disabilities in Intermediate Care Facilities are eligible for participation in the ADHC Program. The other entry relevant to ADHCs is a brief explanation of the Department’s request for an increase in funds for ADHC services due to an increase in enrollees.
The Director also points to the June 11, 2008, Subcommittee 3 Health, Human Services, Labor, and Veterans Affairs Major Action Report. That Report notes certain of the Department’s “Highlights for the Medi–Cal Program.” The Deputy Director calls particular attention to the entry that indicates that the 2008–09 budget bill “Provided a partial restoration to the rates reimbursed under Medi–Cal by providing a 5 percent across-the-board restoration to the 10 percent reduction as proposed by the Governor and taken in Special Session through [AB 5]. In the Medi–Cal Program, this resulted in an increase of about $597 million ($302 million General Fund).” The Report also noted adoption of the ADHC proposals set forth above.
The Director further points to the Budget Conference Committee 2008 Action List dated July 9, 2008, which shows seven items that the Assembly and Senate voted on, ultimately contained in AB 1183, such as “Partial Restoration of Medi–Cal Fee–For–Service Provider Payments” and “Partial Restoration of Medi–Cal Pharmacy Rate.” The Director argues that this Action List illustrates “that the Assembly and Senate voted on the very Medi–Cal rate reduction language that was ultimately contained in AB 1183.” The July 2008 Summary Overview Budget Conference Committee Report summarizes many of the rate reductions enacted as part of AB 1183. Finally, the Director refers to the State’s Legislative Analyst Office’s analysis of the 2008–09 Budget, which includes recommendations from the State’s Legislative Analyst concerning the Governor’s

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proposed reductions to provider reimbursement.
The district court explicitly mentioned the legislative history described above *1109 (with the exception of the Legislative Analyst Office’s analysis), and determined that it does not show that there was consideration of the § 30(A) factors. We agree, since the legislative history nowhere mentions any of the § 30(A) factors, see Orthopaedic I, 1992 WL 345652, at *8 (“Tellingly—although not dispositively the terms ‘efficiency,’ ‘economy,’ and ‘equality [sic] of care’ appear nowhere in these documents.”), and is concerned solely with budgetary matters, see Indep. Living II, 572 F.3d at 659 (“State budgetary concerns cannot ... be the conclusive factor in decisions regarding Medicaid.” (internal quotation marks omitted)). Indeed, the legislative history contains no indication that, in adjusting rates under AB 1183, the State “ ‘rel[ied] on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting.’ ” Id. at 652 (quoting Orthopaedic II, 103 F.3d at 1496). The Legislative Analyst Office’s analysis of the 2008–09 Budget appears to be the very same report we referenced in Independent Living II. See id. at 656. It discusses the Governor’s proposal of a ten percent provider rate reduction, which the State’s own Legislative Analyst recommended rejecting for all providers except hospitals because those rate reductions had “the potential to negatively impact the operation of the Medi–Cal Program and the services provided to beneficiaries by limiting access to providers and services.” It is hardly clear error for the district court to have failed to mention a report conducted without regard to the specific rate reductions before it. Accordingly, we will not disrupt the district court’s factual findings, as they are not clearly erroneous.
C. The Department’s Analysis [10] The Director also argues that the district court erred in failing to consider the analysis conducted by the Department, completed after the law’s enactment. In rejecting the Department’s analysis, the district court held that AB 1183 did not provide the Department with any discretion, citing Cal. Welf. & Inst.Code § 14105.191(a), which provides that “[n]otwithstanding any other provision of law, in order to implement changes in the level of funding for health care services, the director shall reduce provider payments.” (emphasis added). The district court reasoned that since the Department was not given any authority to alter the rate reduction imposed by the legislature, the Department’s post hoc analysis does not satisfy the requirements of Orthopaedic II. The

district court went on to hold that even if a post hoc analysis was sufficient, the Department relied on an inadequate proxy for ADHC costs when it considered data for NF–As.
[11] To satisfy § 30(A), any analysis of reimbursement rates on the statutory factors of efficiency, economy, quality, and access to care, must have the potential to influence the rate-setting process. See Indep. Living II, 572 F.3d at 652 n. 9 (holding that the district court did not abuse its discretion in concluding that post hoc rationalizations of the disputed reimbursement rates do not satisfy the procedural requirements of Orthopaedic II ); see also Orthopaedic II, 103 F.3d at 1499 (“[T]he Department must consider hospitals’ costs based on reliable information when setting reimbursement rates....” (emphases added)); Ark. Med. Soc’y, 6 F.3d at 530. Yet the Department’s analysis of AB 1183 with respect to ADHCs was issued on February 24, 2009, more than five months after the legislature enacted AB 1183, but prior to the cuts’ implementation. Therefore, for the Department’s analysis to have the requisite potential effect, the Director would have to have discretion regarding implementation of the rates.
In his reply brief, and for the first time in this litigation, the Director argues that *1110 the Department’s post-enactment study is sufficient because the Department retained discretion under AB 1183 not to implement the reductions before March 1, 2009. Thus, the Director argues, the Department’s February 24, 2009, analysis would still be meaningful because the Director had authority to affect rates by deciding not to implement them.3 Although the Director has clearly waived this argument by failing to raise it in his opening brief, see Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir.2003), we nevertheless consider and reject the Director’s argument on the merits.
The Director argues that if the Department determined that the reduced payments for any services would not comply with the relevant § 30(A) factors, the Department retained the discretion4 not to implement those reductions. As a result, the legislature made implementation of the rate reductions dependent on whether the Department determined that they complied with federal law.5
The Director relies on § 14105.191(i), which states:
The department shall promptly seek any necessary federal approvals for the implementation *1111 of this

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section. To the extent that federal financial participation is not available with respect to any payment that is reduced or limited pursuant to this section, the director may elect not to implement that reduction or limitation.
Cal. Welf. & Inst.Code § 14105.191(i). The Director also points to the Medi–Cal enabling statute, Cal. Welf. & Inst.Code § 14105(a):
The director shall prescribe the policies to be followed in the administration of this chapter, may limit the rates of payment for health care services, and shall adopt any rules and regulations as are necessary for carrying out, but are not inconsistent with, the provisions thereof.
Subsection (a) goes on to provide:
In order to implement expeditiously the budgeting decisions of the Legislature, the director shall, to the extent permitted by federal law, adopt regulations setting rates that reflect these budgeting decisions within one month after the enactment of the Budget Act and of any other appropriation that changes the level of funding for Medi–Cal services.
Cal. Welf. & Inst.Code § 14105(a).
The Director’s is not the most natural reading of the statute. Section 14105.191(i) does not clearly invest the Director with the discretion not to implement the legislature’s rate reductions. Rather, it first directs the Department to “seek any necessary federal approvals” to implement the rate reductions. Cal. Welf. & Inst.Code § 14105.191(i). Only then does it permit the Director not to implement any reduction “[t]o the extent that federal financial participation is not available.” Id. (emphasis added). Thus, the most natural reading would seem to be one of budgetary concern; if federal money is not available for any particular payment reduction, the Director may choose to save the State money by not implementing the reduction. Such a reading comports

with the budgetary nature of AB 1183’s legislative history. See Ariz. State Bd. For Charter Sch. v. U.S. Dep’t of Educ., 464 F.3d 1003, 1008 (9th Cir.2006) (“When a natural reading of the statute[ ] leads to a rational, commonsense result, an alteration of meaning is not only unnecessary, but also extrajudicial.”).
The Director asks that we read into the statutory text a process by which the Department could first analyze the impact of the five percent payment reduction on the § 30(A) factors and then elect to implement the reduction based on that analysis. However, regardless of whether any such process was contemplated in the statute, the record clearly demonstrates that no process of the kind the Director envisions took place. First, on September 30, 2008, the Department submitted its State Plan Amendment, incorporating AB 1183’s rate reductions. In its State Plan Amendment, the Department stated that it had “determined that payments will continue to comply with any upper spending limits contained in Part 447 that were adopted to implement the ‘efficiency, economy, and quality of care’ provision of [§ 30(A) ]. Beneficiaries will continue to have access to covered services as required by Part 447.” Yet the Department did not issue a § 30(A) analysis until February 24, 2009 and produced nothing that would indicate that it studied the impact of AB 1183 on efficiency, economy, quality, and access to care prior to September 30, 2008. The State Plan Amendment also does not mention the Department’s discretion not to implement the rate reductions based on federal participation.
In addition, on February 13, 2009, the State published notice in the California Regulatory Notice Register that Section 14105.191 of the [Welfare and Institutions] Code is reducing the payments that would *1112 otherwise be paid for [adult day health care services] under the current rate methodology from 10 percent to 5 percent for dates of service on or after March 1, 2009. The State’s Notice further provided that the Department
is mandated by state law to implement the above change in reimbursement. [The Department] has considered the impact of this reimbursement on providers and Medi–Cal beneficiaries. [The Department’s] assessment is that reimbursement will continue to compensate a high percentage of costs incurred for these facility services and that Medi–Cal

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beneficiaries will continue to have access to these services consistent with [§ 30(A) ].
As with the State Plan Amendment, the Notice pre-dates any analysis issued by the Department, yet definitively announces payment reductions from ten to five percent. Moreover, the Notice states that the Department “is mandated” to implement the rates, further undermining the Director’s reading of § 14105.191(i).
In sum, the Director’s argument that he retained discretion not to implement AB 1183’s rate reductions is not supported by the record. The Department’s February 24 analysis issued well after decisions had been made to reduce payments by five percent, and nothing in the record indicates that the Department retained the discretion not to implement the rate reductions based on a § 30(A) analysis. To comply with § 30(A), the State must study the impact of the contemplated rate reduction on the statutory factors of efficiency, economy, quality, and access to care prior to legislative enactment or in a manner that allows meaningful consideration of such input prior to implementation. Here, the State did neither.
In addition, regardless of whether the Director retained the discretion to act in the manner he posits, we agree with the district court that the Department’s analysis was insufficient. Reviewing for clear error, we hold that the district court did not abuse its discretion in finding that the Department’s reliance on NF–A rather than ADHC data was inadequate. The Department looked to the average costs of only six NF–A facilities, with widely varied costs, as a proxy for the 313 ADHCs in the Medi–Cal program. In its ADHC analysis, completed in February 2009, the Department explained that it had “just begun the process of auditing the costs of ADHCs for purposes of establishing rates under the new costs based methodology that is scheduled to go into effect on August 1, 2010[,]” and therefore, “in order to assess how ADHC reimbursement compares to the costs that may be incurred by an ADHC in providing ADHC services to Medi–Cal recipients,” it used as a proxy how Medi–Cal reimbursement compares to NF–A costs. The Director concedes that a prospective cost reimbursement methodology for ADHCs is “still more than one year away.” In the meantime, nothing in the record indicates that the district court clearly erred in concluding that the Department’s use of NF–A costs was an inadequate proxy for ADHC costs. Cf. Orthopaedic II, 103 F.3d at 1500 (holding that the Department violated § 30(A) when readopting reimbursement rates for hospitals “costs by

not considering hospitals ” costs when reevaluating its rates). Accordingly, it was not an abuse of discretion for the district court to have rejected the Department’s analysis.
II. Irreparable Harm [12] The Director also argues that the district court erred in holding that California Pharmacists demonstrated a likelihood of irreparable harm. After reviewing the evidence, the district court held that “the evidence submitted by plaintiffs indicate[s] that Medi–Cal beneficiaries are at risk of *1113 losing access to ADHC services due to the AB 1183 rate reduction.” The Director argues that in determining whether California Pharmacists have shown a likelihood of irreparable harm, the district court was required to compare Medi–Cal beneficiaries’ access to ADHC services to that of the general population’s.
Once again, under § 30(A), each state’s Medicaid plan must be
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 population in the geographic area.
42 U.S.C. § 1396a(a)(30)(A). This is referred to as the “equal access to care provision,” Orthopaedic II, 103 F.3d at 1498, and requires that a state plan establish reimbursement rates sufficient to enlist enough providers to ensure that medical services are generally available to Medicaid recipients, id. at 1497. The Director argues that the district court erred in failing to apply the equal access to care provision in the context of plaintiffs’ claims of irreparable injury. In other words, the Director argues that there can be no finding of irreparable harm where “care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” § 30(A). According to the Director, applying this standard here, the evidence before the district court established that ADHC services are not generally available to the general population and thus California Pharmacists made no showing of irreparable injury.
In Independent Living II, we discussed the distinction between § 30(A)’s procedural and substantive requirements. We considered the “potential difficulties

California Pharmacists Ass’n v. Maxwell-Jolly, 596 F.3d 1098 (2010)

inherent in assessing substantive compliance with the factors laid out in § 30(A),” which made more attractive, by comparison, the “process-oriented view of the statute espoused in Orthopaedic [II].” Indep. Living II, 572 F.3d at 657. While explaining that there is a difference between substantive and procedural compliance with § 30(A), id. at 656, we also explained their interdependence, since “it is fair to assume that a rate that is set arbitrarily, without reference to the Section 30(A) requirements, is unlikely to meet the equal access and quality requirements,” id. at 657 (internal quotation marks omitted). We reaffirmed Orthopaedic II’s requirement that states comply with the procedural components of § 30(A) by setting provider reimbursement rates only after consideration of the relevant statutory factors of efficiency, economy, quality, and access to care. Id.
[13] The Director’s approach to the irreparable harm analysis conflates § 30(A)’s procedural and substantive requirements. We do not require plaintiffs to show the State has committed a substantive violation of § 30(A)’s access provision when they can show that the State did not comply with § 30(A)’s procedural components. In other words, showing a procedural violation of the statute—that is, the State’s failure to consider the impact of the contemplated rate on the statutory factors set forth in § 30(A)—may demonstrate a likelihood of success on the merits that the setting of provider reimbursement rates conflicts with § 30(A). Determining whether plaintiffs have made a sufficient showing of irreparable harm is a separate inquiry, which does not turn on the State’s substantive compliance with § 30(A). Rather, to show a risk of irreparable harm, plaintiffs may show either, as Medicaid beneficiaries, “that enforcement of a proposed rule ‘may deny them needed medical care[,]’ ” Indep. Living II, 572 F.3d at 658 (quoting Beltran v. Myers, 677 F.2d 1317, 1322 (9th Cir.1982)), or, as Medicaid *1114 providers, that they will lose considerable revenue through the reduction in payments that they will be unable to recover due to the State’s Eleventh Amendment sovereign immunity, Cal. Pharms. Ass’n, 563 F.3d at 850–52.
Requiring a substantive violation of the equal access to care provision in order to meet the irreparable injury prong would also run afoul of our Supremacy Clause jurisprudence. In California Pharmacists, we held that in an action brought under the Supremacy Clause, a finding of irreparable harm does not turn on “whether the plaintiffs asserting the economic injury were in any sense intended beneficiaries of the federal statute on which the Supremacy Clause cause of action was premised.” Id. at 851. Because “[a] cause of action based on the Supremacy

Clause obviates the need for reliance on third-party rights,” private parties bringing a Supremacy Clause cause of action can “enforce the structural relationship between the federal and state governments so long as they ha[ve] Article III standing as, essentially, private enforcers of the Supremacy Clause.” Id. Thus, as stated above, plaintiffs need only show harm to Medi–Cal service providers or their members in order to obtain injunctive relief. Id. at 850. The Director’s more narrow approach would allow injunctive relief only where plaintiffs are able to show that Medi–Cal beneficiaries have worse access to care and services than that available to the general population.
Finally, we have stated that even if § 30(A) imposes a substantive requirement, a rate reduction might still conflict with the statute if at least some providers stop treating Medi–Cal beneficiaries. Indep. Living II, 572 F.3d at 656–57. The Director concedes that here, the evidence indicates that at least some ADHC Medi–Cal providers would stop treating beneficiaries due to AB 1183. Thus, even if we were to require a substantive violation of the statute to support a finding of irreparable harm, we would find that violation here.
Therefore, we reject the Director’s argument that there can be no finding of irreparable harm unless the plaintiffs show a substantive violation of § 30(A)’ s access to care provision. The Director makes no serious attempt to dispute the district court’s factual finding that, in light of the evidence, “Medi–Cal beneficiaries are at risk of losing access to ADHC services due to the AB 1183 rate reduction.” Upon our review of the evidence, we do not find the district court’s conclusion to be clearly erroneous. Accordingly, the district court did not abuse its discretion in finding that California Pharmacists established sufficient irreparable harm to warrant a preliminary injunction.
III. Balance of Equities and the Public Interest [14] Finally, the Director argues that because of the State’s deepening fiscal crisis, a preliminary injunction should not issue. The Director insists that the legislature be allowed to exercise “its considered judgment” in a manner that serves the best interests of both Medi–Cal recipients and the State as a whole, and that injunctions against payment reductions have forced the State to eliminate many optional Medi–Cal services. The district court recognized the State’s interest in meeting its financial obligations but held that the State’s financial woes were outweighed by the public’s interest in access to health

California Pharmacists Ass’n v. Maxwell-Jolly, 596 F.3d 1098 (2010)

care, particularly because “nothing ... prevents [the State] from imposing a rate reduction after ... appropriately consider[ing] and appl [ying] the relevant factors.”

[15] “The public interest analysis for the issuance of a preliminary injunction *1115 requires us to consider ‘whether there exists some critical public interest that would be injured by the grant of preliminary relief.’ ” Indep. Living II, 572 F.3d at 659 (quoting Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1458 (Fed.Cir.1988)). We have held that “there is a robust public interest in safeguarding access to health care for those eligible for Medicaid, whom Congress has recognized as ‘the most needy in the country.’ ” Id. (quoting Schweiker v. Hogan, 457 U.S. 569, 590, 102 S.Ct. 2597, 73 L.Ed.2d 227 (1982)). We continue to recognize this important public interest in the context of social welfare cases. As the district court stated, the State is free to exercise its “considered judgment” and reduce Medi–Cal reimbursement rates. Yet it may not do so for purely budgetary reasons, Ark. Med. Soc’y, 6 F.3d at 531, nor may it do so in a manner that violates federal law, Indep. Living II, 572 F.3d at 659. Accordingly, we hold that the district court did not abuse its discretion in concluding that the balance of hardships and the public interest weighed in favor of enjoining implementation of the five percent rate reduction required by AB 1183.

CONCLUSION
We have now handed down multiple decisions instructing the State on § 30(A)’s procedural requirements. We trust that the State now understands that in order for it to comply with § 30(A)’s “requirement that payments for services must be consistent with efficiency, economy, and quality of care, and sufficient to ensure access,” Orthopaedic II, 103 F.3d at 1500, it must: (1) “rely on responsible cost studies, its own or others’, that provide reliable data as a basis for its rate setting,” id. at 1496; and (2) study the impact of the contemplated rate change(s) on the statutory factors prior to setting rates, or in a manner that allows those studies to have a meaningful impact on rates before they are finalized. Because the State did neither with respect to AB 1183, we affirm the district court’s order granting California Pharmacists’s motion for a preliminary injunction.
AFFIRMED.

Footnotes

1

Here we deal only with providers and beneficiaries of ADHCs. Mirroring the analysis of today’s holdings, we address the

challenges to AB 1183 with respect to pharmacy and hospital providers, as well as their beneficiaries, in two separate, concurrently

filed memorandum dispositions.

2

The Director’s reliance on Folden v. Wash. State Dep’t of Soc. & Health Servs., 981 F.2d 1054 (9th Cir.1992), is also misplaced. In

Folden, the owners of fourteen nursing home care facilities challenged Washington state Medicaid payments under a now repealed

section of the Medicaid Act known as the Boren Amendment. 981 F.2d at 1056. We have numerous times rejected the Director’s

attempt to “graft past judicial interpretation of the Boren Amendment onto this court’s interpretation of § 30(A).” Indep. Living II,

572 F.3d at 654–56 & nn. 11–12; Alaska Dep’t of Health and Soc. Servs. v. Ctrs. for Medicare and Medicaid Servs., 424 F.3d 931,

940–41 (9th Cir.2005).

3

The Director’s argument that he has discretion regarding the rates is drawn from a footnote in the district court’s analysis in

Orthopaedic I. There, the Director argued that legislative consideration of the § 30(A) factors excused the Department from again

having to consider § 30(A). In rejecting that argument, the district court noted that the relevant statutory enactments “gave the

Department fairly wide discretion in implementing the basic changes outlined in the statute.” Orthopaedic I, 1992 WL 345652, at

*9. To buttress that conclusion, the district court pointed out that under the Medicaid Act, the “ultimate responsibility” for

administration of a state’s Medicaid program is entrusted to a “single state agency.” Id. at n. 14 (quoting 42 C.F.R. § 431.10). As a

result, the district court concluded that under federal law, the state agency has the “final say in what payment rates to set,

notwithstanding a legislature’s efforts to provide broad guidelines for the agency.” Id. (emphasis added). The court found it

particularly relevant that the California legislature directed the Department to “seek federal approval for this section, if necessary.”

Id. (citing California Senate Bill 2563) (internal quotation marks omitted). The court also noted that subsection (a) under the

Medi–Cal enabling statute grants the Department “extremely broad authority” to “comply with legislative budgetary enactments”

only to the extent that those enactments comply with federal law. Id.

As we have described, there are a number of notable differences between the legislative enactments at issue in Orthopaedic I

and AB 1183, thus raising the question of whether, under AB 1183, the Director had the “final say in what payment rates to set.”

California Pharmacists Ass’n v. Maxwell-Jolly, 596 F.3d 1098 (2010)

Id. However, because we reject the Director’s argument for the reasons set forth below, we do not decide whether differences between AB 1183 and the legislative enactments at issue in Orthopaedic I are dispositive of the Director’s discretion in this case.

4

At oral argument the Director conceded that he did not have authority to change the rates set by the legislature, but, he argued, he

could exercise a veto power based on a determination that the rates did not comply with the statutory factors in § 30(A). We need

not decide whether the type of discretion contemplated by § 14105(a) of the California Welfare & Institutions Code is different

from that under § 14105.191(i). That is, that the Director may “limit the rates,” or “adopt regulations setting rates” under §

14105(a) would seem to provide for a different type of discretion than deciding simply not to implement the rates as set. However,

because we hold that the Director did not retain any discretion to act once rates had been set, we do not discuss the distinction, if

any, between the discretion contemplated by § 14105(a) as opposed to § 14105.191(i).

5

We need not decide whether a study completed after rates have been set complies with § 30(A) where the Department has

discretion not to implement the rates. For purposes of our analysis only, we assume such a study would suffice, but do not so hold

because we find that the Director did not retain any discretion in this case.

 
 563 F.3d 847 (2009)
CALIFORNIA PHARMACISTS ASSOCIATION; California Medical Association; California Dental Association; California Association for Adult Day Services; Marin Apothecary, Inc.
dba Ross Valley Pharmacy; South Sacramento Pharmacy; Farmacia Remedies, Inc.; Acacia Adult Day Services; Fey Garcia; Charles Gallagher, Plaintiffs, and
California Hospital Association; Sharp Memorial Hospital; Grossmont Hospital Corporation; Sharp Chula Vista Medical Center; Sharp Coronado Hospital and Healthcare
Center, Plaintiffs-Appellants, v.
David MAXWELL-JOLLY, Director of the Department of Health Care Services, State of California, Defendant-Appellee.
No. 09-55365.
United States Court of Appeals, Ninth Circuit.
April 6, 2009.
849 *849 Jordan Brian Keville, Esquire, Lloyd A. Bookman, Esquire, Hooper, Lundy & Bookman, Los Angeles, CA, Felicia Y. Sze, Hooper, Lundy & Bookman, Inc., San Francisco, CA, for Plaintiffs and Plaintiffs-Appellants.
Gregory Martin Cribbs, Esquire, Randall R. Murphy, Esquire, Jennifer M. Kim, Office of the Attorney General, Los Angeles, CA, Shannon Michelle Chambers, Office of the California Attorney General, Sacramento, CA, for Defendant-Appellee.
Before: STEPHEN REINHARDT, MARSHA S. BERZON, and MILAN D. SMITH, JR., Circuit Judges.
ORDER
Plaintiffs-Appellants, the California Pharmacists Association, et al., filed this suit to challenge the Medi-Cal reimbursement rate reductions to various providers as set forth in AB 1183. A group of the plaintiffs, the Hospital Plaintiffs, which comprises the California Hospital Association and some individual hospitals, filed a motion in the district court for a preliminary injunction to enjoin the defendant from reducing Medi-Cal fee-for-service rates to hospitals,[1] arguing that AB 1183 was enacted in violation of § 1396a(a)(30)(A) of Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. ((a)(30)(A)). The district court denied the preliminary injunction. The Hospital Plaintiffs filed an Emergency Motion Pursuant to Circuit Rule 27-3 for Preliminary Injunction Pending Appeal.
We review the denial of a preliminary injunction for abuse of discretion. Earth Island Inst. v. U.S. Forest Serv., 442 F.3d 1147, 1156 (9th Cir.2006). A district court abuses its discretion in denying a request for a preliminary injunction if it "base[s] its decision on an erroneous legal standard or clearly erroneous findings of fact." Id. (citation omitted). It also does so if in reaching its decision it makes a material error of law. We review conclusions of law de novo and findings of fact for clear error. Id.
Plaintiffs seeking a preliminary injunction in a case in which the public interest is involved must establish that they are likely to succeed on the merits, that they are likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in their favor, and that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., ___ U.S. ___, 129 S.Ct. 365, 376, 172 L.Ed.2d 249 (2008). When deciding 850 whether to issue a stay, including *850 a stay of a state action that the district court has declined to enjoin, we consider: (1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies. See Humane Soc'y of U.S. v. Gutierrez, 527 F.3d 788, 789-90 (9th Cir.2008).

In this case, the district court found that the Hospital Plaintiffs were likely to succeed on the merits, but that they failed to demonstrate irreparable harm. We address these issues in turn, and, in view of the time-urgency and the irreparability of the harm, also consider the other Winter factors which necessarily follow.
I. Likelihood of Success on the Merits
In Orthopaedic Hospital v. Belshe, 103 F.3d 1491 (9th Cir.1997), we held that 42 U.S.C. § 1396a(a)(30)(A) requires the state to consider efficiency, economy, quality of care, and access before setting Medi-Cal reimbursement rates. Id. at 1496. The district court concluded that the Hospital Plaintiffs have shown a likelihood of success on the merits under Orthopaedic because the Legislature did not consider any such factors before passing the rate cuts in AB 1183. The court ruled that although the Department of Health Care Services (the Department) had performed some studies after AB 1183's passage, those post-hoc studies failed to meet the requirements of Orthopaedic, 103 F.3d at 1496. It noted that AB 1183 gives the Department no discretion to alter the rate cuts based on the Department's own analysis, and, therefore, the cuts were not "based on" the Department's consideration of the relevant factors, but instead constituted a post-hoc rationalization for a legislative decision that had already been made. Cal. Pharmacists Ass'n v. Jolly, No. 09-722, slip op. at 9-11 (C.D.Cal. Mar. 9, 2009). Moreover, the district court determined that, although the state Legislative Analyst Office issued a report analyzing the proposed cuts, there was no evidence the legislature actually considered the report before enacting AB 1183. Id. at 10 n. 8.
We conclude that the district court did not abuse its discretion in concluding that the Hospital Plaintiffs demonstrated a likelihood of success on the merits. Indeed, the Hospital Plaintiffs made a strong showing of such likelihood.
II. Irreparable Harm
The Hospital Plaintiffs must also show a likelihood of irreparable harm. See Winter, 129 S.Ct. at 375.
A. Harm
We first address the type of harm we may consider in the irreparable harm analysis. The Department argues that only harm to Medi-Cal beneficiaries is relevant to this motion, while the Hospital Plaintiffs assert that harm to Medi-Cal service providers is also relevant, and that they need show only the latter type of harm, in this case harm to themselves or their members, in order to obtain injunctive relief. The Hospital Plaintiffs further claim that they or their members will lose considerable revenue between the effective date of AB 1183 and the date their claims can be reviewed on the merits if injunctive relief is denied.
We agree with the Hospital Plaintiffs. In Independent Living Center v. Shewry (ILC), we held that "a plaintiff seeking injunctive relief under the Supremacy Clause on the basis of federal preemption need not assert a federally created `right,' in the sense that term has recently been used in suits brought under § 1983, but need 851 only satisfy traditional standing requirements." 543 F.3d 1050, 1058 (9th *851 Cir.2008). We rejected the contention that federal statutes enacted pursuant to Congress's spending power, such as the one here at issue, are excluded from this principle, id. at 1059-62, and concluded that the health care providers in that case (which at that point did not include hospitals) had standing because:
[A]ccording to their complaint, [they] will be "directly injured, by loss of gross income," when the ten-percent rate reduction takes effect. The Supreme Court "repeatedly has recognized that such [direct economic] injuries establish the threshold requirements" of Article III standing.... Moreover, this injury is directly traceable to the Director's implementation of AB 5 [the statute at issue in that case], and would certainly be redressed by a favorable decision of this court enjoining the tenpercent rate reduction.

Id. at 1065. Notably, ILC did not indicate that the service providers had standing to assert the interests of the beneficiary plaintiffs as third parties, as, for example, the medical service providers do in cases concerning the constitutional rights of patients. See, e.g., Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972). A cause of action based on the Supremacy Clause obviates the need for reliance on third-party rights because the cause of action is one to enforce the proper constitutional structural relationship between the state and federal governments and therefore is not rights-based. In contrast, a case brought to enforce the Due Process or Equal Protection Clauses is rights based, and requires that the rights of someone be advanced, even if not the rights of the plaintiffs who have been injured.
Consistent with this understanding, in the various precedents cited throughout the ILC opinion in which plaintiffs brought cases directly under the Supremacy Clause, the interests asserted were basically economic, and there was no inquiry into whether the plaintiffs asserting the economic injury were in any sense intended beneficiaries of the federal statute on which the Supremacy Clause cause of action was premised. For example, in Bud Antle, Inc. v. Barbosa, one of the cases upon which we relied in ILC, we held that employers could sue to enjoin a California statute as preempted by the National Labor Relations Act (NLRA) "regardless of whether the NLRA conferred a federal `right' on employers." 45 F.3d 1261, 1271 n. 13 (9th Cir.1994). It was for that very reason that we concluded the § 1983 cases were inapposite, and that Sanchez v. Johnson, 416 F.3d 1051 (9th Cir.2005), did not preclude the plaintiffs' suit. Essentially, the line of cases on which we relied held that private parties could enforce the structural relationship between the federal and state governments so long as they had Article III standing as, essentially, private enforcers of the Supremacy Clause; the specific relationship of those parties to the federal statute on which the Supremacy Clause cause of action is premised does not matter.
Given these underpinnings of ILC, there is little basis on which to import an "intended beneficiary" concept back into the case for purposes of determining irreparable injury. Applying this determination to the present motion, it is clear that AB 1183 harms the Hospital Plaintiffs and their members through reductions in Medi-Cal revenue payments.
B. Irreparability of Harm
Having determined that the Hospital Plaintiffs have shown unlawful harm under (a)(30)(A), we next consider whether the harm is irreparable. Typically, monetary harm does not constitute irreparable harm. L.A. Mem'l Coliseum Comm'n v. Nat'l Football League, 634 F.2d 1197, 1202 (9th Cir.1980). The Hospital Plaintiffs argue that 852 in this case, however, the monetary *852 injury is irreparable because the Eleventh Amendment sovereign immunity of the Department (a branch of the State of California government) bars the Hospital Plaintiffs from ever recovering damages in federal court. The most relevant authority on this issue 0907though not controlling 0907supports the Hospital Plaintiffs' argument. See Kan. Health Care Ass'n v. Kan. Dep't of Soc. & Rehab. Servs., 31 F.3d 1536, 1543 (10th Cir.1994) ("Because the Eleventh Amendment bars a legal remedy in damages ... the court held that plaintiffs' injury was irreparable. We agree."). We note also that Supreme Court case law and some of our own cases clarify that economic damages are not traditionally considered irreparable because the injury can later be remedied by a damage award. See Sampson v. Murray, 415 U.S. 61, 90, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974) ("[I]t seems clear that the temporary loss of income, ultimately to be recovered, does not usually constitute irreparable injury.... The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm." (internal quotation omitted)); Rent-A-Center, Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir.1991)("It is true that economic injury alone does not support a finding of irreparable harm, because such injury can be remedied by a damage award." (emphasis added)); Caribbean Marine Servs. Co. v. Baldridge, 844 F.2d 668, 676 (9th Cir. 1988); Arcamuzi v. Cont'l Air Lines, Inc., 819 F.2d 935, 938 (9th Cir.1987); Colo. River Indian Tribes v. Town of Parker, 776 F.2d 846, 850-51 (9th Cir.1985); Goldie's Bookstore, Inc. v. Superior Court, 739 F.2d 466, 471 (9th Cir.1984) ("Mere financial injury ... will not constitute irreparable harm if adequate compensatory relief will be available in the course of litigation." (emphasis added)).

Because the economic injury doctrine rests only on ordinary equity principles precluding injunctive relief where a remedy at law is adequate, it does not apply where, as here, the Hospital Plaintiffs can obtain no remedy in damages against the state because of the Eleventh Amendment. See Kan. Health Care Ass'n, 31 F.3d at 1543.[2]
Considering the relevant authorities, we are persuaded that because the Hospital Plaintiffs and their members will be unable to recover damages against the Department even if they are successful on the merits of their case, they will suffer irreparable harm if the requested injunction is not granted.
III. Equities and the Public Interest
The district court did not reach the question of the equities and the public interest. Although the state argues that these factors weigh in its favor because an injunction will worsen the state's budget crisis, the record reflects that the impact of a stay on the budget crisis will be minimal at most. Further, it is clear that it would not be equitable 853 or in the public's interest to allow the state to continue to *853 violate the requirements of federal law, especially when there are no adequate remedies available to compensate the Hospital Plaintiffs for the irreparable harm that would be caused by the continuing violation. In such circumstances, the interest of preserving the Supremacy Clause is paramount. See Am. Trucking Ass'n v. City of Los Angeles, 559 F.3d 1046, 1059-60 (9th Cir.2009) (considering the public interest represented by "the Constitution's declaration that federal law is to be supreme").
In light of the showing made by the Hospital Plaintiffs in this case, we grant their motion for an order staying the rate cuts in AB 1183 with respect to the specified hospital services pending their appeal to this court of the district court's order denying the motion for preliminary injunction.
MOTION FOR STAY PENDING APPEAL IS GRANTED.
[1] Specifically, the Hospital Plaintiffs sought to enjoin the rate reductions as to four types of services: (1) inpatient services for non-contract hospitals, (2) outpatient services, (3) Distinct Part Nursing Facilities, and (4) subacute services.
[2] We observe that, although damages may become available to the Hospital Plaintiffs in state court, persuasive authority suggests that federal courts may consider only what federal remedies are available. See United States v. New York, 708 F.2d 92, 93-94 (2d Cir. 1983) (per curiam) (holding that "federal courts may consider only the available federal legal remedies"). But see Kan. Health Care Ass'n, 31 F.3d at 1543 ("Because the Eleventh Amendment bars a legal remedy in damages, and the court concluded no adequate state administrative remedy existed, the court held that plaintiffs' injury was irreparable. We agree." (emphasis added)). We find the reasoning of New York to be more persuasive, and consider only prospective federal remedies for the purpose of gauging whether the harm caused to the Hospital Plaintiffs and their members is irreparable.
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