Title: Williams v. Hank's Ambulance Service
Citation: 699 So. 2d 1230
Docket Number: 1950683
State: Alabama
Issuer: Alabama Supreme Court
Date: April 18, 1997

699 So. 2d 1230 (1997)
Gwendolyn WILLIAMS, et al.
v.
HANK'S AMBULANCE SERVICE, INC., et al.
1950683.

Supreme Court of Alabama.
April 18, 1997.
Rehearing Denied July 18, 1997.
Bill Pryor, atty. gen.; William O. Butler and J. Richard Piel, asst. attys. gen., Medicaid Agency; Herman H. Hamilton, Jr., deputy atty. gen.; and James H. McLemore of Capell, Howard, Knabe &amp; Cobbs, P.A., Montgomery, for appellants.
Jesse P. Evans III and Laurie Boston Sharp of Najjar Denaburg, P.C., Birmingham; and Jack G. Paden and Bill Thomason of Paden &amp; Thomason, Bessemer, for appellees.
HOUSTON, Justice.
The defendants, Gwendolyn H. Williams, in her capacity as commissioner of the Alabama Medicaid Agency, and the State of Alabama, appeal from a partial summary judgment in favor of the plaintiffs. The plaintiffs are a class of ambulance companies and other providers of medical services to two statutorily defined groups of persons covered under the Medicare Act, 42 U.S.C. § 1395, and the Medicaid Act, 42 U.S.C. § 1396. We affirm in part, reverse in part, and remand.
The named plaintiffs in this action also filed an action in the United States District Court for the Middle District of Alabama, Northern Division, challenging the legality of the rate of reimbursement established by the commissioner for certain medical services provided to the two groups referred to above (known as "qualified Medicare beneficiaries" *1231 (or "QMBs") and "dual eligibles"), and seeking declaratory and injunctive relief. Approximately two months later, the plaintiffs filed the present class action in a state court. The state action challenged the legality of the commissioner's reimbursement plan on the same grounds alleged in the federal action and, in addition, it sought to require the commissioner to authorize retroactive payment to the plaintiffs for previous services they had provided to "QMBs" and "dual eligibles." The plaintiffs also sought to stay proceedings in the state action until the federal action had been concluded. The federal district court ruled in favor of the defendants; however, the Eleventh Circuit Court of Appeals reversed the district court's judgment, holding that the commissioner's reimbursement plan was not in accordance with federal law. For an explanation of what "QMBs" and "dual eligibles" are, and to better understand the facts and issues surrounding this dispute, see Haynes Ambulance Service, Inc. v. Alabama, 36 F.3d 1074 (11th Cir.1994), and Pennsylvania Medical Society v. Snider, 29 F.3d 886 (3d Cir.1994), which was relied on by the Haynes court. Relying on the Eleventh Circuit's decision, the plaintiffs moved in the state court for a partial summary judgment as to liability. The trial court granted their motion, stating:
After a thorough consideration of the record, the briefs, the parties' oral arguments, and the Eleventh Circuit's decision in Haynes, we find no basis upon which to reverse the trial court's judgment insofar as that judgment is based on the Eleventh Circuit's interpretation of federal law. Therefore, we affirm the following portion of the trial court's order:
However, we find persuasive the defendants' contention that the trial court *1232 lacked subject matter jurisdiction to order the commissioner to retroactively reimburse the plaintiff class for services rendered by that class since January 1, 1989.
In Gunter v. Beasley, 414 So. 2d 41, 48 (Ala.1982), this Court stated the general Alabama rule with respect to sovereign immunity:
(Emphasis in original.)
The summary judgment in the present case would no doubt require the state to pay millions of dollars to qualified members of the plaintiff class in the form of reimbursement for services rendered since January 1, 1989. Therefore, applying well-established principles of state sovereign immunity, we conclude that the judgment would "directly [affect] a ... property right of the State." Consequently, unless this action can be fairly placed in one of those categories this Court has recognized as not coming within the prohibition of § 14, then that portion of the judgment requiring the retroactive reimbursement to the plaintiffs is unconstitutional and must be set aside.
Relying primarily on State of Alabama Highway Department v. Milton Construction Co., 586 So. 2d 872 (Ala.1991); Gunter v. Beasley, supra; Curry v. Woodstock Slag Corp., 242 Ala. 379, 6 So. 2d 479 (1942); and Horn v. Dunn Brothers, Inc., 262 Ala. 404, 79 So. 2d 11 (1955), the plaintiff class "seeks for the Alabama Department of Medicaid to perform a clear ministerial or legal duty in reimbursing [the class] with monies that are due and owing for services rendered to the State which the State failed to pay under a mistaken interpretation of the law." In Milton, supra, this Court, holding that the State Highway Department was under a legal duty to pay for road construction work that the department had duly contracted for, stated:
586 So. 2d  at 875.
In Gunter, supra, a former lieutenant governor sued the state treasurer, the state comptroller, and the state finance director, seeking retroactive reimbursement for expenses he had incurred during his two previous terms in office. The evidence indicated that the Legislature, by resolution, had duly authorized reimbursement for the lieutenant governor's expenses; that the Senate Ethics Committee had set the expense allowance at a fixed sum of $1,500 per month; and that the state comptroller had initially authorized several payments in that amount, but had ceased payment after receiving an advisory opinion from the attorney general ruling that the reimbursements were unconstitutional. The trial court determined that the expense allowance had been wrongfully withheld from the former lieutenant governor and entered a judgment against the defendants in the amount of $124,350. After rejecting the constitutional issues raised by the defendants, this Court affirmed, stating:
414 So. 2d  at 48-49.
In Curry, supra, a taxpayer sued the Alabama revenue commissioner, seeking a judgment declaring that a sales tax was not applicable. In affirming the trial court's order overruling the commissioner's demurrer to the complaint, this Court stated:
242 Ala. at 380-81, 6 So. 2d  at 480-81.
In Horn v. Dunn Brothers, Inc., supra, a taxpayer sued the Alabama revenue commissioner, seeking a judgment declaring that it was entitled to a refund of taxes under Title 51, § 913, Ala.Code of 1940. The taxpayer had previously received a favorable ruling by the trial court on its complaint challenging its liability for the taxes, and that ruling had not been appealed. The trial court found in favor of the taxpayer and ordered the commissioner to refund $5,731.92 to the taxpayer. This Court affirmed, stating:
262 Ala. at 408-10, 79 So. 2d  at 15-17. (Emphasis in Roquemore original.)
To summarize, Milton involved a clear contractual obligation on the part of the State highway director to pay a sum certain for road construction, and that obligation was held to be enforceable; Gunter involved a constitutional decision by the Legislature (the governmental body specifically charged with the constitutional authority to spend the State's money, see Ala. Const.1901, § 72; Opinion of the Justices, No. 66, 244 Ala. 632, 15 So. 2d 41 (1943)), to reimburse a state official for expenses incurred during his term of office; Curry did not involve the payment of any funds from the State treasury; and Horn involved the ministerial act of refunding tax money pursuant to a statutory refund procedure established by the Legislature money that the State was clearly not entitled to and that had not been legally earmarked for public expenditure. As was noted in Horn, this Court has tried to take a case-by-case commonsense approach to interpreting § 14 and applying the State's sovereign immunity. "We have pointed out that it is the nature of the suit or the relief demanded which the courts consider in determining whether an action against a State officer is in fact a suit against the State in violation of the Constitutional prohibition." 262 Ala. at 408, 79 So. 2d  at 15. The common thread running through the cases discussed above is the unfairness that would have occurred from allowing the State to arbitrarily avoid its financial obligations. There was, and is, no legitimate reason to allow State department heads to avoid their clear contractual or ministerial obligations (once those obligations are determined), even if the performance of those obligations ultimately touches the State treasury. Such avoidance of legal and moral responsibility by the State was not the intent of the framers of the Constitution. Likewise, there was, and is, no legitimate reason (or constitutional authority) for this Court to interfere in the legislative appropriation process, as long as that process passes constitutional muster.
However, the present case is different, we think, from those cases just discussed. Although we appreciate, and regret, the fact that the plaintiff class, as a whole, was denied full payment for certain services rendered since 1989, based on what has now been judicially determined by the Eleventh Circuit Court of Appeals to be a mistaken interpretation of the Medicare and Medicaid Acts by the commissioner, we nonetheless believe that the circumstances surrounding the commissioner's actions militate against any further relaxation of the prohibitive effect of § 14 in this case. It is not seriously disputed that the Medicare and Medicaid Acts are torturous reading and not easily decipherable, even by those trained in the law. The Fourth Circuit Court of Appeals in Rehabilitation Ass'n of Virginia, Inc. v. Kozlowski, *1238 42 F.3d 1444, 1450 (4th Cir.1994), cert. denied, ___ U.S. ___, 116 S. Ct. 60, 133 L. Ed. 2d 23 (1995), characterized these Acts as follows:
In addition, we find it significant that the commissioner's interpretation of the Medicare and Medicaid Acts was consistent with the interpretation placed on those acts by the Secretary of the Department of Health and Human Services, the agency of the United States Government specifically charged with overseeing and enforcing those Acts. For these reasons, we cannot easily pigeonhole this case into one of the clear contractual-obligation or ministerial-duty categories previously recognized by this Court as not coming under the prohibition of § 14. There was no apparent bad faith or other improper motivation underlying the commissioner's implementation of the Medicaid Agency's reimbursement plan, and although that plan has now been judicially determined to have been inconsistent with federal law, we are not persuaded that the pecuniary remedy sought by the plaintiff class (requiring disbursement from the State treasury), is constitutionally allowable under § 14.
Therefore, we reverse the following portion of the trial court's order:
For the foregoing reasons, the judgment is affirmed in part and reversed in part and the cause is remanded.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
HOOPER, C.J., and MADDOX, SHORES, KENNEDY, BUTTS, and SEE, JJ., concur.