Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-01211/USCOURTS-azd-2_10-cv-01211-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 42:1983 Civil Rights Act

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WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Robert Lundergan; Darlene Lundergan,

individually and as guardians and

conservators of Michael Lundergan, an

incapacitated adult, 

Plaintiffs, 

vs.

State of Arizona;; Arizona Department of

Economic Security, a political subdivision;

Arizona Health Care Cost Containment

System Administration, a political

subdivision, 

Defendants. 

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No. 10-CV-1211-PHX-GMS

AMENDED ORDER

Pending before the Court is Plaintiff’s Emergency Motion for Temporary Restraining

Order and Stay of Administrative Decision. (Dkt. # 2.) For the following reasons, the Court

denies the Motion without prejudice.

The Complaint alleges the following facts. Plaintiffs Robert Lundergan and Darlene

Lundergan are the legal guardians and conservators of Michael Lundergan, an incapacitated

adult. Michael was born with multiple health problems, requiring extensive treatment.

Michael’s treatment has generally included in-home nursing care provided 24 hours per day

and 365 days per year.

As a result of a settlement in a prior case, the Lundergans received payments through

Case 2:10-cv-01211-GMS Document 29 Filed 07/12/10 Page 1 of 7
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 Arizona contracted with United to serve as a third party administrator to administer

health benefits available under Arizona’s Benefits Option self-insurance program.

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Arizona’s Benefits Option program from the Arizona Department of Administration

(“ADOA”). In July 2007, however, the ADOA informed the Lundergans that it would stop

making health care payments and that Michael’s future care needs would be met by the

Lundergans’ health plan vendor, United HealthCare Insurance Company (“United”).1

 In

August 2007, the ADOA and United informed the Lundergans that Michael’s care would be

reduced from 24 hours per day to 2 hours per day.

The Lundergans then filed a complaint on Michael’s behalf in Pima County Superior

Court seeking to enjoin the State of Arizona, United, and the ADOA to provide 24-hour care.

In March 2008, the parties reached a settlement agreement, which guaranteed Michael 24-

hour care through a newly-retained third-party nursing care provider, AristoCare. Under the

agreement, the defendants in that action agreed to make distributions to AristoCare to fund

Michael’s ongoing care.

In July 2009, however, the ADOA informed the Lundergans that United would no

longer serve as the plan administrator and that Michael would be allotted only 168 hours of

home healthcare service per year. The Lundergans were then given an option to choose a

168-hour plan during the open enrollment period. In August, the ADOA partially recanted,

stating that United would continue to provide one of the medical plan options and that United

would help the Lundergans find alternatives for Michael’s care. Despite this promise, the

Complaint alleges that the Lundergans never received any assistance and that Michael’s care

was reduced in violation of the settlement agreement reached in March 2008.

In September 2009, the Lundergans filed a complaint in Pima County Superior Court

against the State of Arizona, United, and ADOA, requesting a temporary restraining order

(“TRO”) enjoining defendants from reducing Michael’s benefits. The State removed the case

to Maricopa County Superior Court. While Judge Trujillo granted the request for a TRO, the

case was transferred to Judge Ronan, who, after an evidentiary hearing, denied the request

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for a preliminary injunction in March 2010. The Lundergans then filed a Petition for Special

Action with the Arizona Court of Appeals, which accepted jurisdiction and affirmed Judge

Ronan’s denial of the request for a preliminary injunction.

In addition to the payments sought through United and the ADOA, it appears that the

Lundergans also had been receiving payment from the Arizona Department of Economic

Security’s Division of Developmental Disabilities (“DES/DDD”). DES/DDD had provided

the Lundergans with funding to receive 257.3 hours of nursing per month, or a little more

than 8 hours per day. In April 2010, DES/DDD then concluded that Michael qualified for

a Level 2 medical rate, which authorized DES/DDD to provide Michael with 8 hours per day

of nursing care and 12 hours per day of attendant care. The Lundergans responded that the

offer was insufficient and sought an expedited appeal of the decision. This request for an

expedited appeal was denied. Although DES/DDD later determined that Michael qualified

for a Level 3 service rate, which is the highest level of home and community based service

(“HCBS”) provided, the Lundergans still requested 24-hour in-home care. The request was

denied because it was not cost-effective or federally-reimbursable. The Lundergans

requested that DES/DDD provide them with an expedited state fair hearing, but DES/DDD

set the hearing for approximately four weeks from now.

The Lundergans then filed this case, seeking injunctive relief, as well as fees and

costs. The Lundergans raise two claims: (1) violation of Title XIX of the Social Security Act

(“Medicaid Act”), 42 U.S.C. § 1396, et seq., and (2) violation of 42 U.S.C. § 1983.

DISCUSSION

“The standard for issuing a [temporary restraining order] is the same as that for

issuing a preliminary injunction.” Phillips v. Fremont Inv. & Loan, 2009 WL 4898259 at *1

(D. Ariz. Dec. 11, 2009) (citing Brown Jordan Int’l, Inc. v. The Mind’s Eye Interiors, Inc.,

236 F. Supp. 2d 1152, 1154 (D. Haw. 2007)). Therefore, a district court may grant a

preliminary injunction or temporary restraining order under two sets of circumstances.

Guzman v. Shewry, 552 F.3d 941, 948 (9th Cir. 2009). Under the traditional criteria, a

plaintiff must demonstrate: “(1) a strong likelihood of success on the merits, (2) the

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possibility of irreparable injury to plaintiff if preliminary relief is not granted, (3) a balance

of hardships favoring the plaintiff, and (4) advancement of the public interest (in certain

cases).” Id. (internal quotations omitted). Alternatively, a temporary restraining order or

preliminary injunction is appropriate “if the plaintiff demonstrates either a combination of

probable success on the merits and the possibility of irreparable injury or that serious

questions are raised and the balance of the hardships tips sharply in [its] favor.” Id. (internal

quotations omitted). While a showing of serious questions on the merits is a lower standard

than showing probable success, Plaintiffs nonetheless must demonstrate at least a “fair

chance of success.” Arcamuzi v. Continental Air Lines, Inc., 819 F.2d 935, 937 (9th Cir.

1987). 

Plaintiffs’ Motion for TRO does not explain how they have either demonstrated

probable success on the merits or raised serious questions on the merits. The majority of the

Motion recites various facts alleged in the Complaint, but the Motion lacks both meaningful

analysis and citation to authority. 

A. 42 U.S.C. § 1396, et seq.

The Complaint alleges a violation of the Medicaid Act, 42 U.S.C. § 1396, et seq.,

which governs grants to states for medical assistance programs. This claim challenges only

the sufficiency of the benefits received from DES/DDD, which distribute state funding for

Arizona Health Care Cost Containment System (“AHCCCS”), Arizona’s Medicaid system.

While states opting to participate in Medicaid programs must follow appropriate federal

statutes and regulations, see J.K. By & Through R.K. v. Dillenberg, 836 F. Supp. 694, 696

(D. Ariz. 1993), Plaintiffs have not explained what specific statutes or regulations Defendants

have violated by declining to provide Michael with 24-hour in-home care.

The Complaint correctly notes that the goal of the Medicaid Act is 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.” AlohaCare v. Haw. Dep’t

of Human Servs., 572 F.3d 740, 742 (9th Cir. 2009) (quoting 42 U.S.C. § 1396-1).

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Specifically, the Complaint cites 42 C.F.R. § 440.230(b), which states, “Each service must

be sufficient in amount, duration, and scope to reasonably achieve its purpose.” Plaintiffs,

however, do not explain how receiving the maximum HCBS benefits that DES/DDD can

provide is a violation of this sufficiency requirement.

“Medicaid programs do not guarantee that each recipient will receive that level of

health care precisely tailored to his or her particular needs.” Alexander v. Choate, 469 U.S.

287, 303 (1985). The Medicaid Act gives states like Arizona “substantial discretion to

choose the proper mix of amount, scope, and duration limitations on coverage, as long as

care and services are provided in ‘the best interest of recipients.’” Id. (quoting 42 U.S.C. §

1396a(a)(19)); see also Parry By and Through Parry v. Crawford, 990 F. Supp. 1250, 1257

(D. Nev. 1998) (explaining that states have “great flexibility” under 42 C.F.R. § 440.230(b)

“to determine the scope and duration” of state-funded treatment for individuals); Callen v.

Rogers, 216 Ariz. 499, 503 (Ct. App. 2007) (explaining that the Medicaid Act “does not

require that the ‘medical assistance’ be provided to the extent needed by every individual

recipient of benefits,” but rather that states have the discretion “to place usage limitations on

the assistance even if the limitations are inconsistent with an individual recipient’s personal

medical needs”) (citing 42 C.F.R. § 440.230(d) (permitting state plans to impose coverage

limitations based on medical necessity and utilization review)).

For example, in Alexander, the Supreme Court held that Tennessee’s Medicaid plan

could limit inpatient hospital stays to fourteen days, despite the Medicaid Act’s requirement

that states cover inpatient hospital services. 468 U.S. at 309. While Tennessee’s plan would

not provide care for certain individuals requiring extended hospital stays, the Medicaid Act

does not require that a state plan meet each individual’s needs as long as the general

application of services offered meets the goals and regulations of the Medicaid Act. Id. at

303. In the present case, Defendants have declined to offer Michael DES/DDD benefits that

would fund 24-hour per day in-home care. Plaintiffs do not explain, however, why this

decision violates the Medicaid Act. Nor do Plaintiffs explain how their Medicaid Act claim

is anything other than a request for individual health care benefits for Michael, as opposed

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2

 At the TRO hearing, Plaintiffs’ counsel cited V.L. v. Wagner, 669 F. Supp.2d 1106

(N.D. Cal. 2009), which held that California’s reduction of in-home care services for 97,000

recipients violated the Medicaid Act’s sufficiency requirement. Not only was V.L. decided

on other grounds as well, but also V.L. challenged an overall policy reduction for in-home

care, rather than a challenge to limits on services provided to a single individual.

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to an argument that AHCCCS as a whole has failed to provide sufficient care.2

Moreover, the federal government has granted the State of Arizona the authority to

provide HCBS in an amount “that does not exceed the cost of providing care to the eligible

individual in an institutional setting.” The Demonstration Project, available at

azahcccs.gov/reporting/Downloads/AZ1115Waiver_6-22-09.pdf. Under this authority

granted by the Demonstration Project, the State of Arizona has the discretion to cap the

benefits that individuals like Michael can receive for in-home care. At the TRO hearing,

Defendants’ counsel explained that Defendants had already offered Michael the maximum

amount allowed by the Demonstration Project. It further appears that Defendants have

offered to provide Michael with group home care, where Michael would be able to receive

care 24-hours per day; apparently, Plaintiffs have rejected this offer. Plaintiffs do not explain

how, given the Demonstration Project as governed by existing federal and state law,

Defendants’ refusal to provide 24-hour in-home care is a violation of the Medicaid Act.

Defendants have still offered the maximum allowable under the Demonstration Project and

have offered an alternative under which Michael would receive 24-hour care. Thus, to the

extent Plaintiffs request that Defendants provide services the cost of which exceed the cost

of institutional care, Plaintiffs’ request does not appear to be supported by the Medicaid Act.

This argument is echoed by the Arizona Administrative Code, which provides that

services are covered if they are “medically necessary, cost effective, and federally

reimbursable.” Ariz. Admin. Code § R9-28-201(1). Again, while Plaintiffs contend that 24-

hour care is medically necessary, they do not explain how such services are either costeffective or federally-reimbursable under state or federal law.

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B. 42 U.S.C. § 1983

Plaintiff also alleges a claim based on 42 U.S.C. § 1983, which provides a cause of

action for a plaintiff who was deprived of a right secured by the Constitution or laws of the

United States by those acting under color of state law.” Am. Mfrs. Mut. Ins. Co. v. Sullivan,

526 U.S. 40, 49-50 (1999) (citing 42 U.S.C. § 1983). Neither the Complaint nor the Motion

explains what, if any, federal rights were violated. To the extent Plaintiffs allege a § 1983

claim as a vehicle to bring a claim for a violation of the Medicaid Act, this claim fails as

Plaintiffs have not raised serious questions on the merits of a Medicaid Act claim. 

CONCLUSION

IT IS THEREFORE ORDERED that Plaintiffs’ Motion for a Temporary

Restraining Order and Stay of Administrative Decision (Dkt. # 2) is DENIED WITHOUT

PREJUDICE.

DATED this 12th day of July, 2010.

Case 2:10-cv-01211-GMS Document 29 Filed 07/12/10 Page 7 of 7