T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T SANTA ROSA M EM ORI AL HO SP I TAL, aC a lif o rn iac o rp o r a tio n ; e t a l., P l ai n t i ffs - A p p el l ees, v. D A V I D M A X W E L L - J O L L Y , D i r e c t orof the C al i forni a D epartm entof H ea l th C ar e S erv i ces, D e f

e n d a n t - A p p e lla n t. N o. 09- 17633 D . C. N o . 3 : 0 8 - c v - 0 5 1 7 3 - SC ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e N o rth e rn D is tr ic t o f C a lif o rn ia S a m ue l C ont i , D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d M a y12, 2010 S a n F r a n c is c o , C a lif

o rn ia B efo re: H U G , R Y M E R an d M cK E O W N , C i rcu i tJu d g es. D a v id M a x w e ll- J o lly , th e D ir e c to ro f th e C a lif

o rn iaD e p a rtm e n t o f

H e a lth C a r e S e rvi c e s ( D i r e c t or ) , appe a l s apr e l i m i na ryi nj unc t i on pr ohi bi t i ng hi m f r om i m p l em en t i n g 1 0 p ercen tM ed i cai d rei m b u rsem en trat e red u ct i o n s ag ai n st 

# FI LED MA Y27 2 010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS- 2-

P l a i nt i f f s . T he di s tr i c tc ourthe l d tha tP l a i nt i f f s de m ons tr a t e d al i ke l i hood of succ es s on the m er i t s thatthe ra t e r educt i on s vi ol at e 42 U . S . C . § 1 39 6a(a )( 30 )( A ), w h ic h r e q u ir e s s ta te s to e n s u r e th a t M e d ic a id r e im b u r s e m e n ts a r e c o n s is te n t w ith

“ e f f i c i e n c y , e c o n o my , a n d q u a l i ty o f c a r e . ” W e a f

f i rm. P la in tif f s h a v e d e m o n s tr a te d alik e lih o o d o f s u c c e s s o n th e m e r its . T h is ap p eal i s co n tro l l ed b y Ca lifo rn ia P h a rm a c is ts A s s o c ia tio n v . M a x w e ll-J o lly , w h e r e w e g r a n te d am o tio n f o ras ta yo f

A B 1 1 8 3 ’s M e d ic a id r e im b u r s e m e n t r a te re d u ctio n s. 5 6 3 F .3 d 8 4 7 , 8 4 9 , 8 5 3 (9 th C ir. 2 0 0 9 ). Q u o ti n g th e d istrict co u rt’s o rd er , w e r ea so n ed th at “A B 1 1 8 3 g iv es th e [ D ep ar tm en t o f H ea lth C ar e S er v ices ] no di s c r e t i on t o a l t e rthe r a t e c ut s ba s e d on the D e pa rtm e nt ’ s ow n a na l y s i s , a nd, the r e f or e , the c ut s w e r e not‘ ba s e d on’ the D e pa rtm e nt ’ s c ons i de r a t i on of the r e l e va ntf

a c t or s , buti ns t e a d c ons t i tut e d apos t - hoc r a t i ona l i z a t i on f oral e gi s l a t i ve deci si on thathad al re ady bee n m ade. ” I d. a t850. A B 5 s i m i l a r l ygi ve s the D e pa rtm e ntof

H e a l th C a r e S e rvi c e s no di s c r e t i on t o a l t e rthe r a t e c ut s a ti s s ue here . T he D i r e c t or ’ s a tt e m pt s t o di s t i ngui s h Cal i f orni a P harm ac is t

s A s s oc i at i on a r e u n a v a i l i n g . Ev e n a s s u mi n g th e Ca l i f o rn i aA s s e mb l yc o u l d f

u l f i l l 4 2 U . S. C. § 1 39 6a(a )( 30 )( A )’ s proce du ra l re qu i re m ent s, A B 5 d oes notconst i tut e a

“ resp o n si b l e co ststu d [y] ” as d escri b ed b y O r thopae di c H os pi tal v . B e l s he , 103- 3-

F . 3d 1491, 1496 ( 9th C i r . 1997) . T he T oby D ougl a s de c l a r a t i on c onc e rni ng the C a lif o rn iaA s s e m b ly ’s m o tiv a tio n f o rp a s s in g A B 5 s im ila r lyf a ils to d e m o n s tr a te th a t a n y e n tityc o n d u c te d ac o s t s tu d y . [ E R at 1146- 47] P l a i n t i f f s wi l l a l s o s u f

f e ri rr e p a r ab l e h a rm ab s e n ta n i n j u n c t i o n . As reco g n i zed b y Cal i

f orni a P harm ac is t

s A s s oc i at i on , P l ai nt i ff

s c anno tre cover u n la w f u llyw ith h e ld M e d ic a id r e im b u r s e m e n ts in af e d e r a l s u it f

o rd a m a g e s d u e to C a lif o rn ia ’s s o v e r e ig n im m u n ity . See 563 F . 3d a t851- 52. T he di stri ctcourtal so di d n otabuse i t s di sc re t i on i n fi nd i ng thatthe equi t i es a n d p u b lic in te r e s t w e ig h in f a v o ro f P la in tif f s . A s s ta te d b yth is c o u rt in I n de p e n de n t L iv in gC e n te ro f So u th e rn Ca lifo rn ia , I n c . v . M a x w e ll-J o lly , “th e r e is ar obus tpubl i c i nt e r e s ti n s a f e gua r di ng a c c e s s t o he a l th c a r e f orthos e e l i gi bl e f

or M e di c a i d, w hom C ongr e s s ha s r e c ogni z e d a s the m os tne e dyi n the c ountry . ” 572 F . 3d 64 4, 65 9 (9th C i r. 20 09 ) ( i nt ernal qu ot at i on m arks om i tt ed). T he di stri ctcourt di d n oterr i n fi nd i ng the sa m e e qu i t i es w ei gh i n favor of P l ai nt i ff s i n thi s c as e. F i n al l y, th e d i stri ctco u rtd i d n o terr i n d ecl i n i n g t o req u i re P l ai n t i ffs t o p o st a bon d u nd erF eder al R ul e of C i vi l P roce du re 65 (c ). T hi s c ou rthas r ec og ni ze d that n o b o n d o ran o m in a l b o n d m a y b e ap p r o p r ia te in c a s e s in v o lv in g th e p u b lic in te r e s t. See Sa ve O u r So n o ra n , In c. v. Flo w ers , 40 8 F . 3d 11 13 , 11 26 (9th C i r. 2 0 0 5 ) ; V an D e Kam

p v. T ah oe R eg’l

P lan ni ngA gency , 766 F . 2d 1319, 1325- 26- 4-

(9 th C i r. 1 9 8 5 ). T h e d i stri ctco u rtd i d n o tab u se i t s d i scret i o n i n fi n d i n g P l ai n t i ffs’ a c t i on f orM e di c a i d r e i m bur s e m e nt s f a l l s w i thi n tha tc l a s s . I n a ddi t i on, w e di d not re qu i re the po st i ng of a bon d i n ei ther I nde pe nde nt L i v i ng or Ca lifo rn ia P harm ac is t

s A s s oc i at i on . T h e D ir e c to r ’s r e m a in in g c o n te n tio n s a r e w ith o u t m e r it. AF F I RME D.