Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-00435/USCOURTS-caed-2_06-cv-00435-1/pdf.json

Nature of Suit Code: 444
Nature of Suit: Civil Rights Welfare
Cause of Action: 42:1983 Civil Rights Act

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

INDEPENDENT LIVING CENTER OF No. 2:06-cv-0435-MCE-KJM

SOUTHERN CALIFORNIA, INC., a 

nonprofit California 

corporation; MARGARET DOWLING, 

NATHAN THORNTON, SYLVIA HEDBIG, 

LINDA BLOCK, HECTOR REYES, 

MICHAEL FERONA, HOMA KARIMZAD, 

and BLANE BECKWORTH,

Plaintiffs,

v. MEMORANDUM AND ORDER

MICHAEL LEAVITT, Secretary of

U.S. Department of Health and

Human Services; SANDRA SHEWRY,

Director of California

Department of Health Services;

and STEVE WESTLY, Controller

of the State of California,

Defendants.

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Plaintiffs include the Independent Living Center of 1

Southern California, Inc. (“ILC”), an independent living center

established under the auspices of California Welfare and

Institutions Code § 19801 to provide services to disabled

persons, as well as eight individuals who qualify as dual

eligibles and who claim to have been impacted by implementation

of the MMA. 

All further references to “Rule” or “Rules” are to the 2

Federal Rules of Civil Procedure unless otherwise noted.

2

Through the present action, Plaintiffs seek to enjoin 1

implementation of the Medicare Prescription Drug, Modernization

and Improvement Act of 2003, 42 U.S.C. § 1395w-101, et seq.

(“MMA”) to the extent that changes in prescription drug coverage

available to individuals who are both eligible for benefits under

Medicare and Medicaid (so-called “dual eligibles”) are

unconstitutional. Defendant Michael Leavitt, Secretary of the

United States Department of Health and Human Services (“Federal

Defendant”), now moves to dismiss Plaintiffs’ claims against the

government pursuant to Federal Rule of Civil Procedure 12(b)(1),2

on grounds that this Court lacks subject matter jurisdiction over

such claims. The Federal Defendant also requests that

Plaintiffs’ claims be dismissed for failure to state a claim upon

which relief can be granted under Rule 12(b)(6). For the reasons

set forth below, the Federal Defendants’ Motion will be granted. 

BACKGROUND

Title XVIII of the Social Security Act, commonly known as

the Medicare Act, establishes a program of federally subsidized

health insurance for the elderly and disabled. 42 U.S.C. §§

1395, et seq. 

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3

Coverage available under Medicare includes hospital inpatient and

related care (Part A), supplemental coverage for outpatient

services (Part B), and a managed-care alternative to Part B

(known as Part C). Through enactment of the MMA, Congress

provided Medicare coverage for drugs. Part D became effective on

January 1, 2006.

Another portion of the Social Security Act, Title XIX,

establishes a separate federal-state program providing medical

assistance for categorically low-income persons. 42 U.S.C. §§

1396, et seq. This coverage, known as Medicaid, or MediCal in

California, is administered by the states and funded in part

through federal aid so long as each state’s program complies with

applicable Medicaid laws and regulations. See Alexander v.

Choate, 469 U.S. 287, 289 n.l (1985). California’s MediCal

program is administered by the California Department of Health

Services.

So-called “dual eligibles” qualify for both Medicare and

Medicaid benefits. For those individuals, Medicare generally

pays first and Medicaid provides protection for services not

covered under Medicare. Prior to enactment of the MMA, Medicaid

paid for dual eligibles’ prescription drugs. In addition to

receiving a fifty percent contribution from the federal

government for benefits provided under Medicaid, including

prescription drugs, the Medicaid Act also required pharmaceutical

companies to make substantial rebate payments in return for

dispensing their products under Medicaid.

Exclusive provision of prescription drugs through Medicaid

has changed with the advent of the MMA. 

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4

Under Part D, Medicare becomes the primary payer for dual

eligibles as to all drugs covered under Medicare. The Medicaid

Act was consequently amended to provide that Medicaid is not

available for such drugs. 42 U.S.C. § 1396u-5(d)(1). The State

of California similarly enacted Welfare and Institutions Code §

14133.23, which eliminated the provision of drug benefits under

MediCal to dual-eligible beneficiaries that would otherwise now

be covered under Medicare, Part D.

The Enrollment Clause of the MMA requires that all dual

eligibles be automatically enrolled into private-entity

prescription drug plans on a random basis, with MediCal drug

coverage to cease on enrollment. 42 U.S.C. § 1395w-101(b)(1)(C). 

The formularies for such plans are to be approved by the

Secretary of the U.S. Department of Health and Human Services

(“Secretary”). 42 U.S.C. § 1395w-111(e)(1). Each drug plan must

include drugs within each therapeutic category and class of

covered Part D drugs, although not necessarily all drugs with

such categories or classes. 42 U.S.C. § 1395w-104(b)(3)(C)(i). 

If a particular drug is not covered under the assigned formulary

and a prescription is accordingly denied, a dissatisfied enrollee

can request review by an independent, outside entity. 

42 U.S.C. § 1395w-22(g)(4). 

In essence, the MMA shifts the cost of providing

prescription drugs to dual eligibles from Medicaid at Title XIX

to Medicare at Title XVIII. 

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This is a change from prior coverage available to dual 3

eligibles under Medicaid, which provided that no services would

be denied on account of a beneficiary’s “inability to pay a

deduction, cost sharing, or similar charge...” 42 U.S.C. §

1396o(e).

5

In exchange for assuming this obligation, under the so-called

“clawback” provision of the MMA the states must reimburse the

federal government for fifty percent of the cost of providing

dual eligibles prescription drugs, which mirrors the fact that

prior to the enactment of the MMA the states were required to

provide such drugs, with a fifty percent contribution from the

federal government. 42 U.S.C. §§ 1396u-5(c)(1)-(2). Under the

MMA, however, unlike Medicaid, pharmaceutical companies no longer

are required to make rebate payments. In addition, under Part D,

even dual eligibles with incomes not exceeding the poverty level

must make a modest co-payment for needed drugs, ranging from $1

for generic medicines to $3 for name brands.3

In order to ease transition difficulties between drug

payment under MediCare and reassignment of dual eligibles to

coverage under Medicare Part D, the California Legislature

enacted legislation on an emergency basis to pay for Part D

drugs. California Welfare and Institutions Code § 14133.23(f). 

That emergency legislation was subsequently extended until May

16, 2006. 

 In filing the present lawsuit, Plaintiffs contend that

transfer of dual eligibles’ prescription drug coverage to

Medicare has created a “dire situation” rife with the potential

for damage to dual eligibles’ health if needed medications cannot

be obtained. 

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6

Plaintiffs also contend that formularies assigned by Medicare are

less comprehensive than the drug benefits formerly available

under MediCal. Although they concede that dual eligibles can

apply for a waiver/exception if drugs not on the formulary are

determined to be necessary, Plaintiffs contend that because the

pharmacy cannot represent the dual eligible in obtaining such a

waiver/exception, the process is too cumbersome inasmuch as

treating physicians simply will not take the time necessary to

make such an appeal. Plaintiff contends that this creates an

“extraordinary barrier” for dual eligibles to obtain necessary

medicine. 

Plaintiffs further contend that many dual eligibles have not

in fact been automatically enrolled into a drug formulary under

Medicare, which also poses a significant obstacle in obtaining

needed drugs. 

Finally, Plaintiffs argue that the co-payment requirement

imposed by Part D (whether $1 or $3) is impermissible because

many dual eligibles simply cannot afford any co-payment.

STANDARD

In moving to dismiss for lack of subject matter jurisdiction

pursuant to Rule 12(b)(1), the challenging party may either make

a “facial attack” on the allegations of jurisdiction contained in

the complaint or can instead take issue with subject matter

jurisdiction on a factual basis (“factual attack”). 

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7

Thornhill Publ’n Co. v. Gen. Tel. & Elect. Corp., 594 F.2d 730,

733 (9th Cir. 1979); Mortensen v. First Fed. Sav. & Loan Ass’n,

549 F.2d 884, 891 (3d Cir. 1977). If the motion constitutes a

facial attack, the Court must consider the factual allegations of

the complaint to be true. Williamson v. Tucker, 645 F.2d 404,

412 (5 Cir. 1981); Mortensen, 549 F.2d at 891. If the motion th

constitutes a factual attack, however, “no presumptive

truthfulness attaches to plaintiff’s allegations, and the

existence of disputed material facts will not preclude the trial

court from evaluating for itself the merits of jurisdictional

claims.” Thornhill, 594 F.2d at 733 (quoting Mortensen, 549 F.2d

at 891).

On a motion to dismiss for failure to state a claim under

Rule 12(b)(6), all allegations of material fact must be accepted

as true and construed in the light most favorable to the

nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,

337-38 (9th Cir. 1996). A complaint will not be dismissed for

failure to state a claim unless it appears beyond doubt that

plaintiff can prove no set of facts in support of his [or her]

claim that would entitle him [or her] to relief. Yamaguchi v.

Dep’t of the Air Force, 109 F.3d 1475, 1480 (9th Cir. 1997)

(quoting Lewis v. Tel. Employees Credit Union, 87 F.3d 1537, 1545

(9th Cir. 1996).

If the Court grants a motion to dismiss a complaint, it must

then decide whether to grant leave to amend. Generally, leave to

amend should be denied only if it is clear that the deficiencies

of the complaint cannot be cured by amendment. Broughton v.

Cutter Labs., 622 F.2d 458, 460 (9th Cir. 1980).

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8

ANALYSIS

A. Exhaustion of Administrative Remedies.

The case law firmly establishes that “virtually all legal

attacks” implicating the Medicare statutory scheme must be

routed, at least initially, through the Medicare administrative

appeals process. Ill. Council on Long Term Care v. Shalala, 529

U.S. 1, 13 (2000). Exhaustion of administrative remedies is

generally required in order to prevent “premature interference

with agency processes, so that the agency may function

efficiently and so that it may have an opportunity to correct its

own errors, to afford the parties and the courts the benefit of

its experience and expertise, and to compile a record which is

adequate for judicial review.” Weinberger v. Salfi, 422 U.S.

749, 765 (1975). Exhaustion applies with full force to the

claims of individual Medicare beneficiaries (Heckler v. Ringer,

466 U.S. 602, 615-17 (1984), citing Mathews v. Eldridge, 424 U.S.

319, 328 (1976)), including beneficiaries seeking to raise

constitutional claims. Weinberger v. Salfi, 422 U.S. at 763-64.

Exhaustion of Medicare claims contains two components. 

First, there is a nonwaivable requirement that a claim for

benefits be presented to the agency. Heckler v. Ringer, 466 U.S.

at 617. Second, a claimant must fully pursue the prescribed

administrative remedies prescribed by the Medicare system,

although this requirement may be waived. Id. Initial claim

presentment is “an essential and distinct precondition” for

jurisdiction and is “purely ‘jurisdictional’ in the sense that it

cannot be ‘waived’ by the Secretary in a given case.” 

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Paragraph 122 does allege that two Plaintiffs, Blane 4

Beckworth and Margaret Dowling, were able to successfully obtain

drug exceptions from their formularies in order to obtain needed

medicine. Although those Plaintiffs may consequently have

presented a claim, the fact that they apparently obtained

favorable redress through the administrative process does not

allow their claims to satisfy the presentment requirement

necessarily applicable to other claims upon which administrative

relief was not forthcoming. 

9

Mathews v. Eldridge, 424 U.S. at 328-29.

While the Complaint (at ¶¶ 121-22) does allege that certain

Plaintiffs have been denied coverage for certain drugs, the

Complaint does not allege that any Plaintiff presented an

unsuccessful exemption claim paving way for this Court’s

jurisdiction. The MMA contains procedures for both presenting 4

claims to the sponsor of the Medicare Part D drug formulary and 

pursuing those claims through an administrative appeals process. 

42 U.S.C. §§ 1395w-104(g)-(h) (incorporating 42 U.S.C. §§ 1395w22(g)(1)-(5). Plaintiffs’ failure to establish that any concrete

appeals have been presented, yet alone pursued and denied,

prevents them from resorting to the jurisdiction of this Court. 

As explained by N.Y. Statewide Senior Action Council v. Leavitt,

409 F. Supp. 2d 325, 329 (S.D.N.Y. 2005):

“The Medicare Act does not contemplate that... an individual

can file a complaint in federal court before even attempting

to present a claim to the agency. It would be a wholesale

subversion of the Medicare Act’s legislative intent to avoid

overburdening the courts (citation omitted) if beneficiaries

were able to bring federal cases where a simple phone call,

e-mail or letter might straighten out the problem.”

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 That position is wrong inasmuch as an appeal from a 5

preliminary injunction does not deprive a district court of

jurisdiction. See Moltan Co. v. Eagle-Picher Indus., Inc., 55

F.3d 1171, 1174 (6th Cir. 1995) (district court may proceed with

action on the merits where order denying preliminary injunction

appealed). 

10

Plaintiffs have not substantively opposed this Motion, other

than to incorporate arguments previously made in their Memorandum

For Preliminary Injunction, filed April 2, 2006, and to allege

that this Court should refrain from considering this matter in

any event pending the Ninth Circuit’s ruling on Plaintiffs’

appeal from the May 19, 2006 denial of that request for

preliminary injunctive relief. (Pls.’ Opp’n, 2:8-17). 5

Tellingly, however, Plaintiffs’ Complaint, at ¶ 126, does make

the blanket statement that seeking any administrative relief

would be “futile”. In addition, while Plaintiffs do not

specifically incorporate by reference their Reply filed in

support of their Motion for Preliminary Injunction, that Reply,

in response to Federal Defendants’ argument that no adequate

exhaustion had been established, also states that it would be

“futile” to seek any administrative remedy given the

constitutional violations alleged by Plaintiff.

A blanket futility argument, however, is insufficient to

skirt the mandate of exhaustion. First, as indicated above, the

presentment requirement cannot be waived under any circumstance,

including, as indicated above, cases where constitutional

challenges are raised. Weinberger v. Salfi, 422 U.S. at 764. 

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11

In addition, merely alleging that further exhaustion would be

“futile”, as Plaintiffs appear to claim, is inadequate to excuse

even the waivable requirement that subsequent levels of

administrative review be exhausted. Id. at 766 (exhaustion may

not be dispensed with by a mere conclusion of futility).

Significantly, to avail themselves of the futility doctrine

for purposes of excusing further compliance with the

administrative appeals process, Plaintiffs must also show, with

respect to constitutional issues like those advanced by their

lawsuit, that such issues are “wholly collateral” to a claim for

Medicare benefits and that any alleged injury could not be

“remedied by the retroactive payment of benefits after exhaustion

of administrative remedies.” Heckler v. Ringer, 466 U.S. at 618. 

Plaintiffs have not, and cannot, argue that their claims against

the Federal Defendant are “wholly collateral” to claims for

prescription drug benefits. Instead, implicit in their claims is

the contention that drug benefits are either too low (by

requiring a co-payment, for example) too narrow (with respect to

available medications within a particular formulary), or too

cumbersome in terms of presenting a claim in the first instance. 

These claims are all inextricably intertwined with claimed drug

benefits and are not entirely independent, or wholly collateral,

so as to excuse compliance with the administrative appeals

process.

The mere fact that Plaintiffs’ Complaint does not address

the exhaustion requirement mandates dismissal under Rule 12(b)(1)

in and of itself. 

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12

The Complaint is devoid of any allegations that concrete claims

have been unsuccessfully presented, and in the absence of such

allegations no federal jurisdiction is present. Moreover, even

if such claims had been identified, which they have not,

Plaintiffs cannot rely on an argument that further administrative

appeals would be “futile” under the circumstances present here in

any event.

While the Federal Defendant is consequently entitled to

dismissal of Plaintiffs’ claims on jurisdictional grounds alone,

the Court cannot rule out that Plaintiffs might be able to remedy

the deficiencies of their Complaint in that regard through

amendment. It hence becomes appropriate for the Court to look

beyond the current jurisdictional shortcomings of the Complaint

and assess Plaintiffs’ allegations on their merits. Examination

of the various claims asserted, as delineated below, shows that

those claims are not viable, presenting yet another justification

for dismissal of this action. 

 

B. Tenth Amendment Concerns. 

Plaintiffs assert, in their First Claim, that by shifting

the provision of prescription medications away from the states,

the federal government has interfered with state sovereignty over

administration of states’ own poverty drug programs for its

poorest citizens. 

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Plaintiffs also make a related argument that the same 6

conduct violates the Necessary and Proper Clause of Article I,

section 8 of the Constitution, on grounds that the Constitution

permits Congress only to make laws as “necessary and proper” to

effectuate the powers granted to the federal government by the

Constitution. Plaintiffs appear to assert that because the care

of the poor is reserved to the states under the Tenth Amendment,

federal enactment of laws intruding on such sovereignty is also

impermissible under the Necessary and Proper Clause.

13

Plaintiffs contend that such conduct runs afoul of the Tenth

Amendment’s reservation, to the states, of powers not delegated

to the United States by the Constitution. Plaintiffs 6

specifically contend that the MMA’s clawback provision, in

requiring state participation in payment for Part D Medicare

costs incurred for dual eligibles, is impermissible. Plaintiffs

argue that the federal government has no power to command such an

involuntary payment from the states, despite the fact as

indicated above that the switch from Medicaid to Medicare appears

to have simply entailed a change from states’ direct

responsibility under Medicaid for fifty percent of expenditures

to a new system whereby, in exchange for federal assumption of

payment responsibility, the state simply pays the federal

government the same fifty percent it would otherwise have had to

incur.

The Federal Defendant opposes Plaintiffs’ Tenth Amendment

challenge primarily on grounds that private individuals like

Plaintiffs herein simply lack standing to raise any question

under the Tenth Amendment, pursuant to well-established precedent

dating back to Tenn. Elec. Power Co. v. TVA, (“TVA”) 306 U.S.

118, 144 (1939). 

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14

While Plaintiffs have not disputed the import of the TVA holding

in this regard, they argued, in connection with their previous

preliminary injunction request, that TVA has been overruled by a

subsequent Supreme Court decision, N.Y. v. U.S., 505 U.S. 144

(1992). In passing, the Court’s N.Y. decision noted that “the

Constitution divides authority between federal and state

governments for the protection of individuals” (Id. at 

181), and while one Seventh Circuit decision has deemed that

pronouncement to have effectively overruled TVA (see Gillespie v.

City of Indianapolis, 185 F.3d 693, 700-03 (7th Cir. 1999), other

courts have concluded just the opposite, reasoning that because

the N.Y. decision does not even mention TVA, it cannot be

construed as effectively overruling it. See Medeiros v. Vincent,

431 F.3d 25, 34 (1st Cir. 2005). In Artichoke Joe’s Cal. Grand

Casino v. Norton, 278 F. Supp. 2d 1174, 1181 (E.D. Cal. 2003),

Judge Levi found that the Supreme Court has not overruled its TVA

holding while noting other cases, including the Seventh’s

Circuit’s Gillespie opinion, that reached the opposite

conclusion.

In addition, because N.Y. involved only a claim asserted by

the State of New York, the question of private party standing

under the Tenth Amendment was simply not an issue in that case,

and the word standing was never even mentioned in the N.Y.

decision. Id. 

It is well-recognized that only the Supreme Court itself has

the prerogative of overruling its own decisions. City of

Roseville v. Norton, 219 F. Supp. 2d 130, 147-48 (D.D.C. 2002).

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15

The N.Y. decision is not sufficient to overrule a longestablished lack of standing on the part of private litigants to

enforce sovereignty issues under the Tenth Amendment. As the

government has pointed out, California has ample resources to

object to the provisions of the MMA should it choose to do so.

Even aside from standing, which the Court believes is fatal

to Plaintiffs’ Tenth Amendment claims in this case, Congress has

in any event authority under the Tax and Spending Clause to urge

states to adopt legislative programs consistent with federal

interests. N.Y., 505 U.S. at 166-67. See also S.D. v. Dole, 483

U.S. 203, 207 (1987) (condition imposed on receipt of federal

funding upheld against Tenth Amendment challenge). Congress thus

has the “power to fix the terms upon which its money allotments

to states shall be disbursed.” Mayweathers v. Newland, 314 F.3d

1062, 1069 (9th Cir. 2002). 

By providing services to states’ citizens under Medicare

that formerly were provided by the states, the federal government

simply is asking that monies the state formerly paid be

transferred to it. The government hence links its provision of

prescription drug coverage to such payment. While the states

could presumably elect to continue to provide such coverage with

no contribution whatsoever from the federal government,

government funding is linked to its recoupment of a portion of

its expenses from the states. This appears to be permissible

under the Tenth Amendment under the above-cited cases.

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16

C. Unlawful Delegation of Legislative Powers.

Plaintiffs allege, in their Second Claim, that the MMA’s

delegation of responsibility, to the Secretary, for approval of

drug formularies amounts to an abdication of its own legislative

responsibility. According to Plaintiffs, this violates the so

called non-delegation doctrine identified by the Supreme Court in

Panama Refining Co. v. Ryan, 293 U.S. 388, 421-22 (1935).

This argument is patently untenable. It has long been

settled that to burden Congress with all federal rulemaking would

defeat the concept of a workable national government. Loving v.

U.S., 517 U.S. 748, 758 (1996). Hence Congress passes

constitutional muster by legislating in broad terms and leaving a

certain degree of discretion to executive or judicial actors. 

Touby v. U.S., 500 U.S. 160, 165 (1991). To survive a challenge

under the non-delegation doctrine, Congress only has lay down an

intelligible principle pursuant to which a person authorized to

act must conform. Whitman v. Am. Trucking Ass’ns, 531 U.S. 457,

474-75 (2001).

Here, while Congress has given the Secretary discretion to

approve Part D private drug formularies, it has directed that

each formulary include drugs within each therapeutic category and

class of covered Part D drugs, although not necessarily all drugs

with such categories or classes. 42 U.S.C. § 1395w104(b)(3)(C)(i). Hence the Secretary has been given broad

guidelines from which to exercise his discretion in approving

such formularies. 

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In addition, in disapproving drug plans, Congress has indicated

that there must be some evidence that the plan’s practices

discourage enrollment, and that this discouragement will likely

have a substantial effect on certain Medicare beneficiaries. 42

U.S.C. § 1395w-111(e)(2)(D)(I). All of this provides enough

direction to the Director to survive challenge under the nondelegation doctrine.

D. Violations of Fifth Amendment Rights.

 Plaintiffs contend that their due process rights as

protected by the Fifth Amendment are violated by the MMA’s

requirement that dual eligibles make nominal co-payments for

needed prescriptions. Plaintiffs appear to argue that requiring

such payments is not only unjustifiable and in derogation of

Fifth Amendment due process but also amounts to discrimination

against the poor in violation of equal protection concerns also

guaranteed by the Fifth Amendment.

It has long been held that the due process clauses of both

the Fifth and Fourteenth Amendments are intended to prevent

governmental abuse of power, and “generally confer no affirmative

right to governmental aid”. DeShaney v. Winnebago County Dep’t

of Soc. Servs., 489 U.S. 189, 196 (1989). Moreover, with respect

to equal protection, the constitutionality of the co-payment

provision must be judged under a rational basis standard, since

poverty alone is not a suspect classification demanding strict

scrutiny. See Harris v. McCrae, 448 U.S. 297, 323 (1980). 

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Consequently the government need only show a rational

relationship between its requirement of co-payments and a

legitimate governmental purpose. Bd. of Trustees of Univ. of

Ala. v. Garrett, 531 U.S. 356, 367 (2001).

Here, the government can show a rational relationship

between allocating limited aid dollars and fostering investment

by dual eligibles in the efficiency of their own medical care

through demanding small co-payments as a demonstration of

accountability.

Plaintiffs also appear to argue that their due process

rights are infringed by the delegation to privately administered

drug formularies of control over their ultimate drug benefits,

and by participants’ random assignment to such formularies. 

Plaintiff ILC, for example, contends that some drug plans are

more comprehensive than others, and some authorize fewer drugs

than would have previously available under MediCal. Plaintiffs

also assert that to the extent dual eligibles are enrolled in a

“bottom” plan, their Fifth Amendment rights are violated. 

Plaintiffs ignore the fact, however, that all drug formularies

must include medications across the therapeutic spectrum. See 42

U.S.C. § 1395w-104(b)(3)(C)(i). In addition, participants who

still claim that they need a particular drug not on the formulary

can apply for a waiver through the appeal process. These

safeguards adequately protect participants’ rights. Plaintiffs

are not entitled to optimal coverage so long as the coverage they

are afforded is adequate, as the Court believes to be the case

here. 

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As indicated above, due process rights are not impinged simply

because of limitations in governmental aid implicit in coverage

that falls short of offering unrestricted access to all

prescription drugs. 

E. Automatic Enrollment Provision. 

For a Third Claim, Plaintiffs appear to assert that dual

eligibles who for whatever reason have not successfully enrolled

in Medicare Part D coverage, despite the automatic enrollment

provisions of the MMA, should be permitted to retain coverage

under MediCal on an indefinite basis if no enrollment occurs. 

This argument is disingenuous in light of the stopgap measures

provided by both California and the federal government in paying

claims temporarily under MediCal.

 

CONCLUSION

As set forth above, Plaintiffs’ Complaint, on its face, does

not establish the prerequisites for federal jurisdiction over

claims sounding in Medicare by failing to allege that requisite

administrative appeals have been unsuccessfully attempted. Even

were Plaintiffs to be granted leave to amend their Complaint for

purposes of correcting those defects, however, examination of the

Complaint on its merits shows that none of the claims advanced by

Plaintiffs are meritorious. 

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Because oral argument will not be of material assistance, 7

the Court orders this matter submitted on the briefing. E.D.

Cal. Local Rule 78-230(h).

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The Federal Defendants’ Motion to Dismiss is GRANTED both under

Rule 12(b)(1) and 12(b)(6). No leave to amend will be permitted 7

under the circumstances, since the Court does not believe that

the overall deficiencies of the Complaint can be remedied through

amendment. 

IT IS SO ORDERED.

DATED: June 28, 2006

_____________________________

MORRISON C. ENGLAND, JR

UNITED STATES DISTRICT JUDGE

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