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United 

States District 

Court

For the Northern District of California 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SANTA ROSA MEMORIAL HOSPITAL, et 

al., 

 Plaintiffs, 

 v. 

DAVID MAXWELL-JOLLY, Director of 

the California Department of 

Health Care Services, 

 Defendant. 

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Case No. 08-CV-5173 SC

ORDER DISMISSING COMPLAINT AND 

ALL RELATED CLAIMS 

 The Court now turns to a request by Plaintiffs for dismissal 

pursuant to Fed. R. Civ. P. 12(b)(6), Fed. R. Civ. P. 41(a)(2), and 

pending motions for summary judgment. ECF Nos. 127, 129, 147, 148. 

Any hearing associated with the complaint, motion for voluntary 

dismissal, or cross-motion for summary judgment is hereby VACATED, 

as the Court finds the matters are appropriate for resolution 

without oral argument under Civil Local Rule 7-1(b). 

 The Court has heard from Plaintiffs who agree with the Ninth 

Circuit that their Section 30(A) claim should be dismissed in light 

of a recent decision, and also request "that the Court dismiss the 

other pending claims" pursuant to Fed. R. Civ. P. 41(a)(2). This 

request is reminiscent of the one the Court reviewed and denied in 

Case 3:08-cv-05173-SC Document 149 Filed 07/20/15 Page 1 of 5
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United 

States District 

Court

For the Northern District of California 

its order dated May 30, 2014, ECF No. 124. At the time of that 

order, the merits were not before the Court and there was no clear 

guidance on whether the Supremacy Clause permitted the substantive 

action Plaintiffs sought to bring. The Court reasoned that had the 

Ninth Circuit instructed the Court not to hear Plaintiffs' claims, 

Plaintiffs' contention that it was not simply trying to avoid the 

federal courts would be colorable. It was absent such direction 

and in that former posture that the Court made its earlier 

decision. 

 Now, upon review of the Ninth Circuit's decision in 

Exceptional Child Ctr. v. Armstrong, Case No. 12-35382 (9th Cir. 

June 5, 2015), Dkt. No. 50, a copy of which was provided to the 

Court at ECF No. 147, the law is settled and the Court has a clear 

directive from the Ninth Circuit, who in turn received its 

instructions from the United States Supreme Court. There is no 

implied private right of action or ability for Medicaid providers 

to proceed in equity for enforcement under Section 30(A). See id. 

(explaining Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 

1378 (2015)). The Court is cognizant, however, of speculation 

relating to other -- albeit unlikely -- postures this case might 

take (e.g., an APA case). Accordingly, the Court DISMISSES WITHOUT 

PREJUDICE the Complaint under Fed. R. Civ. P. 12(b)(6) insofar as 

it alleges violations of Section 30(A) of the Medicare Act. 

 Insofar as any claim might be deemed to remain with the Court, 

the Court has been asked by Plaintiffs to voluntarily dismiss 

pursuant to Fed. R. Civ. P. 41(a)(2). Such a motion is left to 

"the district court's sound discretion and the court's order will 

not be disturbed unless the court has abused its discretion." 

Case 3:08-cv-05173-SC Document 149 Filed 07/20/15 Page 2 of 5
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United 

States District 

Court

For the Northern District of California 

Westlands Water Dist. v. United States, 100 F.3d 94, 96 (9th Cir. 

1996) (internal citations omitted). However, the Court must 

consider whether "the defendant will suffer some plain legal 

prejudice as a result of the dismissal." Id. (citing Hyde & Drath 

v. Baker, 24 F.3d 1162, 1169 (9th Cir. 1994); Hamilton v. Firestone 

Tire & Rubber Co., 679 F.2d 143, 145 (9th Cir. 1982)). Examples of 

such prejudice include loss of a federal forum, the right to a jury 

trial, a statute-of-limitations defense, precluding rights and 

defenses available to a defendant in future litigation, or 

rendering parties unable to conduct sufficient discovery to 

untangle complex fraud claims and adequately defend themselves 

against charges of fraud. Westlands, 100 F. 3d at 97-98. Failure 

of the Court to consider whether attorneys' fees should be granted 

is reversible error, but awarding the fees is not mandatory so long 

as the Court duly considered the issue. Id. at 98. 

 Defendant argues that dismissal without prejudice would 

deprive the Defendant of a federal forum and favorable judgment on 

the merits. In support, Defendant cites Westlands and their belief 

that they are highly likely in the federal forum to obtain judgment 

against the Plaintiffs. ECF No. 145 at 7-8. In McCovey, the Court 

rejected claims by Defendants that they would be harmed where the 

case had barely progressed beyond the complaint, answer, and crossmotions, and also where Defendants failed to explain how their case 

would suffer as a result of Plaintiffs' case being voluntarily 

dismissed. See McCovey v. Astrazeneca Pharms., L.P., No. C-06-

0681, 2006 U.S. Dist. LEXIS 58914, *5-*6. Here, the case has 

involved a complaint, answer, injunctions, and appeals which caused 

cross-motions for summary judgment to be stayed. While this has 

Case 3:08-cv-05173-SC Document 149 Filed 07/20/15 Page 3 of 5
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United 

States District 

Court

For the Northern District of California 

taken a long time, the Court is satisfied that the case is closer 

to having "barely progressed" than being fully prepared for trial. 

Moreover, Defendant fails to cite any argument which would be 

foreclosed in our sister courts in the State of California should 

the federal case be dismissed without prejudice.1 Conclusory 

statements and predictions are not sufficient for the Court to 

overcome Plaintiffs' concerns over creating piecemeal litigation, 

unnecessary duplication of efforts, potentially inconsistent 

results, and unnecessary trouble and expense to litigants. 

Therefore, the Court finds the loss of a federal forum will not 

unduly harm the Defendant. 

 The Court agrees it seems unfair the Defendant has been forced 

to litigate for over six years in a federal forum which Plaintiffs 

now voluntarily eschew. Even so, the Court does not order that 

some appropriate portion of litigation costs and associated 

attorneys' fees be awarded to Defendant. Plaintiffs' case was 

meritorious enough to be heard by the Supreme Court, and no 

provision by the statute or contractual provision entitles the 

Defendant to fees. Therefore, both by operation of the "American 

Rule," Fleischmann Distilling Corp. v. Maier Brewing Co., 87 S. Ct. 

1404, 1406-1407 (1967), and discretion of the Court, Westlands, 100 

F. 3d at 98, each side shall bear its own costs and fees. 

 Accordingly, the Court DISMISSES WITHOUT PREJUDICE all 

remaining claims before the Court pursuant to Fed. R. Civ. P. 

41(a)(2). All pending motions for summary judgment are DENIED as 

moot. The parties are ORDERED to file a joint statement within 30 

 

1

 Insofar as the Defendant argues the Court retains jurisdiction, 

the Court is inclined to agree but does not reach the issue. 

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United 

States District 

Court

For the Northern District of California 

days of the issuance of this order if any matter still requires the 

attention of this Court. 

 IT IS SO ORDERED. 

 Dated: July 20, 2015 

 UNITED STATES DISTRICT JUDGE

Case 3:08-cv-05173-SC Document 149 Filed 07/20/15 Page 5 of 5