Source: http://mt.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20181121_0003538.C09.htm/qx
Timestamp: 2020-07-11 21:39:11
Document Index: 577685714

Matched Legal Cases: ['§ 1085', '§ 1021', '§ 1021', '§ 1085', '§ 1085', '§ 1085', '§ 1021', '§ 1021', '§ 1021', '§ 1021', '§ 1085', '§ 1021', '§ 1021', '§ 1396', '§ 1085', '§ 1085', '§ 1085', '§ 1021', '§ 1085', '§ 1085', '§ 1021', '§ 1021']

FindACase™ | Independent Living Center of Southern California, Inc. v. Kent
Independent Living Center of Southern California, Inc. v. Kent
Independent Living Center of Southern California, Inc., a nonprofit corporation; Gray Panthers of Sacramento, a nonprofit corporation; Gray Panthers of San Francisco, a nonprofit corporation; Gerald Shapiro, Pharm. D., DBA Uptown Pharmacy and Gift Shoppe; Sharon Steen, DBA Central Pharmacy; Tran Pharmacy, Inc.; Mark Beckwith; Margaret Dowling, Petitioners-Appellants,
Jennifer Kent, Director of Department of Health Care Services of the State of California; Department of Health Care Services, Respondents-Appellees. SACRAMENTO FAMILY MEDICAL CLINICS, INC.; ACACIA ADULT DAY SERVICES; RONALD B. MEAD, D.D.S.; THEODORE M. MAZER, M.D., Intervenors-Appellants,
JENNIFER KENT, Director of Department of Health Care Services of the State of California; DEPARTMENT OF HEALTH CARE SERVICES, Respondents-Appellees.
Argued and Submitted September 26, 2018 Pasadena, California
Appeal from the United States District Court Nos. 2:08-cv-03315-CAS-MAN, 2:08-cv-03315-CAS-MAN for the Central District of California Christina A. Snyder, District Judge, Presiding
Erwin Chemerinsky (argued), University of California, Berkeley, School of Law, Berkeley, California; Stanley L. Friedman and Rafael Bernardino, Jr., Law Offices of Stanley L. Friedman, Los Angeles, California; for Petitioners-Appellants.
Craig J. Cannizzo (argued), Hooper, Lundy & Bookman, P.C., San Francisco, California; Lloyd A. Bookman and Jordan B. Keville, Hooper, Lundy & Bookman, P.C., Los Angeles, California; for Intervenors-Appellants.
Susan M. Carson (argued), Supervising Deputy Attorney General; Julie Weng-Gutierrez, Senior Assistant Attorney General; Xavier Becerra, Attorney General of California; Office of the Attorney General, San Francisco, California; for Respondents-Appellees.
Before: WILLIAM A. FLETCHER, MILAN D. SMITH, JR., and MORGAN CHRISTEN, Circuit Judges.
The panel reversed the district court's denial of plaintiffs' request for attorneys' fees following the settlement of litigation concerning California's Assembly Bill X3 5, which reduced the Medi-Cal rate of reimbursement for healthcare providers by ten percent.
Plaintiffs sought a writ of mandamus under Cal. Civ. Proc. Code § 1085 on the ground that AB 5 violated Section 30(A) of the Medicaid Act, thereby conflicting with federal law and violating the Supremacy Clause. The Ninth Circuit upheld the district court's preliminary injunction against enforcement of the ten percent reduction, to apply both prospectively and retroactively. The Supreme Court vacated and remanded in light of the Centers for Medicare & Medicaid Services' approval of certain plan amendments to implement AB 5. The parties subsequently entered into a settlement agreement in which plaintiffs reserved the right to move for attorneys' fees. Plaintiffs did so pursuant to Cal. Civ. Proc. Code § 1021.5, and the district court denied their motions.
The panel held that, even though the case was properly removed from state court based on federal question jurisdiction, plaintiffs brought a state-law claim and were therefore permitted to seek attorneys' fees pursuant to § 1021.5. The panel concluded that plaintiffs' § 1085 Writ was not a federal claim following Armstrong v. Exceptional Child Care Ctr., Inc., 135 S.Ct. 1378 (2015), which held that neither the federal Medicaid statute nor the Constitution provides a cause of action for enforcement of Section 30(A). The panel concluded that the § 1085 Writ endured as a state-law claim because, under California law, § 1085 Writs may issue to compel state agencies to comply with federal requirements. The panel held that federal common law did not govern the award of fees and preclude an award pursuant to state law. The panel concluded that the Erie doctrine supported allowing plaintiffs to seek fees under § 1021.5. The panel reversed the district court's holding that plaintiffs were precluded from seeking an award of attorneys' fees under § 1021.5, and remanded to the district court to determine whether plaintiffs met the requirements of § 1021.5 to obtain a fee award, and if so, to calculate that award.
The panel further held that the district court abused its discretion in denying plaintiffs' motion to set aside funds for attorneys' fees following the decision permitting retroactive monetary relief from the Medi-Cal reimbursement reduction. The panel remanded for a determination of whether plaintiffs could recover any fees from the retroactive relief.
Concurring, Judge Christen wrote that she concurred in the result reached by the majority opinion but reached the same conclusion in a different way. Judge Christen wrote that plaintiffs could seek attorneys' fees under § 1021.5 because the parties' settlement included a state-law request for declaratory relief under § 1085. Judge Christen agreed that it was an abuse of discretion to deny plaintiffs' motion to set aside attorneys' fees from the reimbursement.
MILAN D. SMITH, JR. JUDGE.
This case comes before us once again after a decade-long journey within the federal court system. In these final stages of the litigation, Petitioners-Appellants (Independent Living), a group of health care advocacy organizations and medical care providers, and Intervenors-Appellants (Intervenors, and together with Independent Living, Appellants), another group of health care providers and organizations, seek an award of attorneys' fees from the Director of the California Department of Health Care Services (the Director), and possibly others. We hold that the district court erroneously concluded that Appellants were not entitled to seek fees pursuant to California Civil Procedure Code § 1021.5. In addition, we hold that the district court abused its discretion in denying Independent Living's motion to set aside fees from the retroactive monetary relief obtained in 2010. Accordingly, we remand to the district court to determine whether, in light of our ruling, Appellants meet the requirements to obtain attorneys' fees pursuant to § 1021.5 and Section III (C)(1)(a) and (b) of the Settlement Agreement (infra), and whether it is possible and appropriate at this stage of the litigation for Independent Living to recoup attorneys' fees "from Medicaid providers that purportedly obtained a benefit from counsel's work," pursuant to Section III (C)(1)(c) of the Settlement Agreement, and that received payments from the Department of Health Care Services (DHCS) as a result of this litigation.
The Medicaid Act authorizes the federal government to distribute funds to states for the purpose of providing medical assistance to low-income persons. Participating states are subject to certain conditions. Armstrong v. Exceptional Child Care Ctr., Inc., 135 S.Ct. 1378, 1382 (2015). One such condition is the "equal access" provision (Section 30(A)), which requires that states set provider reimbursement rates that 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." 42 U.S.C. § 1396a(a)(30)(A).
On February 16, 2008, the California legislature enacted Assembly Bill X3 5 (AB 5). AB 5 reduced the Medi-Cal-California's Medicaid program-rate of reimbursement for healthcare providers by ten percent. These cuts took effect on July 1, 2008.
On April 22, 2008, Independent Living filed in Los Angeles County Superior Court a petition for a writ of mandamus against the DHCS and the Director, pursuant to California Code of Civil Procedure § 1085 (the § 1085 Writ). The petition alleged that the ten percent rate reduction enacted pursuant to AB 5 violated Section 30(A), thereby conflicting with federal law, and violating the Supremacy Clause. In addition to the § 1085 Writ, Independent Living sought an injunction preventing the implementation of AB 5, as well as attorneys' fees pursuant to California's Private Attorney General Act, Cal. Civ. Proc. Code § 1021.5. On May 19, 2008, the Director removed this action to federal court based on federal question jurisdiction, and Independent Living filed the § 1085 Writ in federal court. On June 1, 2008, Independent Living dismissed the DHCS from its action, leaving only the Director as a defendant.
On June 25, 2008, the district court denied Independent Living's motion for a preliminary injunction preventing the enforcement of AB 5. We vacated that decision on July 11, 2008, holding that a plaintiff "may bring suit under the Supremacy Clause to enjoin implementation of a state law allegedly preempted by federal statute." Indep. Living Ctr. of S. Cal. v. Shewry, 543 F.3d 1047, 1049 (9th Cir. 2008) (per curiam); see Indep. Living Ctr. of S. Cal. v. Shewry, 543 F.3d 1050 (9th Cir. 2008) (Shewry).
On August 18, 2008, the district court enjoined enforcement of the ten percent reduction. On August 27, 2008, the court modified its injunction to apply only prospectively from the date of the injunction because sovereign immunity purportedly barred retroactive relief.
On appeal, we analyzed whether retroactive application of the injunction violated California's sovereign immunity. Indep. Living Ctr. of S. Cal. v. Maxwell-Jolly, 572 F.3d 644, 660-63 (9th Cir. 2009), vacated and remanded on other grounds sub nom. Douglas v. Indep. Living Ctr. of S. Cal., 132 S.Ct. 1204 (2012). We first found this retroactive relief would violate California's sovereign immunity absent the Director's waiver of that immunity. Id. at 661. We then noted that the Director would have waived sovereign immunity by removing the suit to federal court if California had previously consented to similar suits in state court. Id. Consequently, after reviewing numerous California state court decisions that permitted § 1085 mandamus actions seeking disbursement of unlawfully withheld funds, we held that the Director had waived sovereign immunity. Id. at 663. Therefore, we concluded that the injunction should also have applied retroactively to Medi-Cal payments between the time of AB 5's implementation and the date of the district court's injunction (the retroactive period). Id.
On March 15, 2010, Independent Living moved to set aside a portion of the monies paid, or to be paid, to Medicaid providers for the retroactive period to set up a fund from which attorneys' fees could be paid. The district court dismissed this motion because it believed it was premature and that "[n]either side has provided any reason why [the court] at the conclusion of the case could not fashion an order requiring . . . California to pay attorneys' fees based on what is ultimately the value of any judgment or settlement."
In 2011, the United States Supreme Court granted the Director's petition for a writ of certiorari with respect to the Supremacy Clause issue. Preceding oral argument before the Supreme Court, the Centers for Medicare & Medicaid Services (CMS), the federal agency in charge of administering Medicaid, disapproved the Director's submitted plan amendments to implement AB 5 because they did not satisfy Section 30(A). Douglas, 132 S.Ct. at 1209. However, after oral argument, and before the Supreme Court issued its opinion, CMS approved some of the pending amendments. Id.
The Supreme Court ultimately held that CMS's decisions regarding the plan amendments changed the procedural posture of the case, and remanded it to our court to consider whether the providers could maintain an action pursuant to the Supremacy Clause. Id. at 1209-11. The Supreme Court thus vacated, but did not reverse, our decision affirming the preliminary injunction.
Following Douglas, the parties resolved this case in mediation, and produced a Settlement Agreement specifying the terms of their concord. In Sections III (C)(1)(a) and (b) of the Settlement Agreement, Appellants reserved the right to move for attorneys' fees before the district court. The state retained the right to oppose any such request. In addition, Section III (C)(1)(c) of the Settlement Agreement permitted "any plaintiffs' attorney" who had appeared in one of the listed cases to seek attorneys' fees "from Medicaid providers that purportedly obtained a benefit from counsel's work," but not from "DHCS or any of the State Released Entities."
Independent Living and Intervenors separately moved for attorneys' fees pursuant to § 1021.5. The district court denied the motions, reasoning that this case involved only federal law claims, so the district court could not award attorneys' fees pursuant to a state-law provision like § 1021.5. Independent Living and Intervenors timely appealed, and their consolidated appeals are before us now.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JURISDICTION AND ...