Court Opinion

ID: 4255981
Source: CourtListenerOpinion
Date Created: 2018-03-19 17:00:18.143871+00
Date Added: 2024-06-11T14:44:57.191605
License: Public Domain

NOT PRECEDENTIAL

                UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT
                         ______________

                               No. 17-3569
                             ______________

       ELIZABETH D. WILLIAMS, an incapacitated person, by and
        through Dana Bookbinder, Esquire, as Guardian Ad Litem,
                                        Appellant

                                     v.

          ELIZABETH CONNOLLY, Commissioner, New Jersey
          Department of Human Services, in her official capacity;
MEGHAN DAVEY, Director, New Jersey Department of Human Services,
Division of Medical Assistance and Health Services, in her official capacity;
       SARA E. MALONEY, Deputy Director of Cape May County
             Board of Social Services, in her official capacity
                            ______________

    ON APPEAL FROM THE UNITED STATES DISTRICT COURT
            FOR THE DISTRICT OF NEW JERSEY
                    (D.C. No. 1-17-cv-01631)
              District Judge: Hon. Robert B. Kugler
                         ______________

            Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                            March 14, 2018
                           ______________

      Before: JORDAN, SHWARTZ, and KRAUSE, Circuit Judges.

                     (Opinion Filed: March 19, 2018)
                                    ______________

                                       OPINION*
                                    ______________

SHWARTZ, Circuit Judge.

      Plaintiff Elizabeth Williams appeals the District Court’s order dismissing her

complaint. Because Williams effectively seeks retroactive monetary relief that would be

paid for by the State of New Jersey, we agree with the District Court that the Eleventh

Amendment bars her claims and therefore will affirm.

                                            I1

      Williams has cognitive difficulties, and in 2012, her son, John Davis, Sr., began

caring for her. In January 2012, Davis brought Williams to live with him in his home to

provide better care and supervision, and the next month, Williams purchased that home

from her son for $379,122. Williams required full-time care, which was provided mostly

by Davis, with some help from caregivers who assisted Williams on a part-time basis.

After being diagnosed with Alzheimer’s disease and suffering physical injuries, Williams

moved to a long-term care facility in October 2014. In December 2014, Davis purchased

his home back from Williams for $1.

      *
         This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
       1
         Because this case comes before us on a Rule 12(b)(1) and 12(b)(6) motion to
dismiss, see Mammaro v. N.J. Div. of Child Prot. & Permanency, 814 F.3d 164, 166 (3d
Cir. 2016), we draw the factual background from the allegations in the complaint, which
we accept as true, Hartig Drug Co. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir.
2016); Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690, 693 n.2 (3d Cir. 1996).
                                            2
       On March 11, 2015, Williams applied to the Cape May County Board of Social

Services (“CMCBSS”) for Medicaid assistance. Ultimately, CMCBSS issued a notice

stating that Williams was eligible for Medicaid as of March 1, 2015, but she was subject

to a “transfer penalty” for having transferred her home for less than fair market value.

See 42 U.S.C. §§ 1396p(c)(1)(A)-(B); N.J. Admin. Code §§ 10:71-4.10(c), (m). The

penalty covers 1,219 days’ worth of Medicaid payments to the long-term care facility.

CMCBSS also said that the transfer did not fall within the “caregiver child exemption” to

Medicaid ineligibility. App. 43. That exemption provides that a person is not ineligible

for Medicaid assistance if the assets were transferred to a child who provided care and

was residing in the person’s home for at least two years immediately before the person

became institutionalized. 42 U.S.C. § 1396p(c)(2)(A)(iv); N.J. Admin. Code § 10:71-

4.10(d)(4).2 CMCBSS stated that Davis had not provided full-time care and that

Williams had paid for her own caregiving.

       Williams sought a hearing before an Administrative Law Judge (the “ALJ”). The

ALJ determined that the caregiver child exemption did apply to the transfer of Williams’s

       2
           The exemption requires that

       [t]he care provided by the individual’s son or daughter . . . shall have
       exceeded normal personal support activities . . . . The individual’s physical
       or mental condition shall have been such as to require special attention and
       care. The care provided by the son or daughter shall have been essential to
       the health and safety of the individual and shall have consisted of activities
       such as, but not limited to, supervision of medication, monitoring of
       nutritional status, and insuring the safety of the individual.

N.J. Admin. Code § 10:71-4.10(d)(4)(i).
                                             3
home but upheld a transfer penalty of 87.78 days for transfers of other assets. However,

in its final agency decision, the New Jersey Department of Human Services (“DHS”),

Division of Medical Assistance and Health Services, found that the exemption did not

apply and thus re-imposed the 1,219-day penalty. DHS noted that Williams paid for

aides to assist her for approximately 35 hours per week, and Davis owned a business and

a home in Florida, which suggested that he did not provide full-time care.

       Final agency decisions are reviewable in the Superior Court of New Jersey,

Appellate Division, N.J. Ct. R. 2:2-3(a)(2), but Williams did not appeal to state court.

Rather, she filed this suit in the District Court against Defendants Elizabeth Connolly,

Commissioner of DHS; Meghan Davey, Director of the Division of Medical Assistance

and Health Services of DHS; and Sara Maloney, Deputy Director of CMCBSS

(collectively, “Defendants”). Williams sued all Defendants in their official capacities,

alleging that New Jersey’s “policy” imposing a penalty where the caregiver child

exemption is met violates and is preempted by federal Medicaid statutes, and violates her

Fourteenth Amendment due process rights. App. 45-48 (Dkt. 1, Compl. ¶ 67-87). She

seeks (1) to “[e]njoin[] the Defendants from ‘interpreting’ the Federal and State caregiver

child statute and regulation to require only one caregiver, who must be unemployed for

two years prior to [the] applicant’s institutionalization”; (2) an “[o]rder[ ] [that]

Defendants . . . re-determine the Plaintiff’s Medicaid application in accordance with the

Federal Medicaid Act pursuant to 42 U.S.C. § 1396p(c)(2)(A)(iv)”; and (3) a “grant[]

[o]f” “eligibility and exemption of the home transfer from the transfer of asset rules

without imposing a transfer penalty.” App. 49. The District Court granted Defendants’

                                               4
motion to dismiss on Eleventh Amendment grounds because Williams was challenging

the penalty determination—a past action—and essentially sought a damages award

because the State would be required to assume the costs of the transfer penalty. Williams

v. Connolly, Civ. No. 17-1631, 2017 WL 5479508, at *9-10 (D.N.J. Nov. 15, 2017).

       Williams appeals.

                                             II3

       Williams argues that her complaint seeks prospective, not retroactive, relief and

thus should not have been dismissed pursuant to the Eleventh Amendment. We disagree.

       Under the Eleventh Amendment, “an unconsenting State is immune from suits

brought in federal courts by her own citizens as well as by citizens of another State.”

Edelman v. Jordan, 415 U.S. 651, 663 (1974) (citing Hans v. Louisiana, 134 U.S. 1

(1890)). That Amendment precludes private actions seeking damages that would be paid

out of state funds. See id. Under Ex parte Young, 209 U.S. 123 (1908), however, a

private plaintiff may sue state officials for prospective injunctive relief to end ongoing

violations of federal law. Christ the King Manor, Inc. v. Sec’y U.S. Dep’t of Health &

Human Servs., 730 F.3d 291, 318 (3d. Cir. 2013). Without citing the case by name,

Williams attempts to frame her claims to fit within the Ex parte Young exception to state

sovereign immunity.

       3
         The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. We have
jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review over the District
Court’s order dismissing Williams’s complaint under Rule 12(b)(6). See Burtch v.
Milberg Factors, Inc., 662 F.3d 212, 220 (3d Cir. 2011).
                                              5
       Ex parte Young does not apply in this situation, as the Supreme Court explained in

Edelman. The plaintiff in Edelman asserted that state officials were improperly

administering a federal-state aid program. Edelman, 415 U.S. at 655-56. The plaintiff

sought, among other things, an injunction requiring the defendants to award the class of

plaintiffs all benefits that were wrongfully withheld. Id. at 656. The Court observed that

an order in the plaintiffs’ favor would have required “payment of state funds, not as a

necessary consequence of compliance in the future with a substantive federal-question

determination, but as a form of compensation” that would be “measured in terms of a

monetary loss resulting from a past breach of a legal duty on the part of the defendant

state officials.” Id. at 668. Such an “award resembles far more closely the monetary

award against the State itself . . . than it does the prospective injunctive relief awarded in

Ex parte Young.” Id. at 665 (citation omitted).

       The same reasoning applies here. Williams seeks declaratory and injunctive relief

regarding Defendants’ interpretation of the caregiver child exemption and, in particular,

injunctive relief requiring Defendants to reevaluate her Medicaid application and find her

eligible for benefits without a transfer penalty. That would mean awarding her Medicaid

benefits that were withheld as a result of the imposition of transfer penalties, and those

benefits would be paid out of State funds. The Eleventh Amendment bars this type of

retroactive relief against the State. See id. at 664-68; see also Gage v. N.Y. State Dep’t

of Health, 204 F. Supp. 2d 399, 401-02 (N.D.N.Y. 2002) (holding, in a Medicaid benefits

case, that the Eleventh Amendment barred the plaintiffs’ request for recalculation of a

                                               6
transfer penalty period).4 Accordingly, the District Court properly dismissed Williams’s

complaint.

                                            III

       For the foregoing reasons, we will affirm.

       4
          The cases Williams relies on are inapposite because they involved reinstating
benefits from the date of the district court’s order rather than a redetermination of
benefits, Buckhanon v. Percy, 708 F.2d 1209, 1211, 1215-16 (7th Cir. 1983); Kimble v.
Solomon, 599 F.2d 599, 605-06 (4th Cir. 1979), prospective availability and use of
medical equipment, Kostok v. Thomas, 105 F.3d 65, 69 (2d Cir. 1997), and injunctive
relief regarding notice requirements, Eder v. Beal, 609 F.2d 695, 700-02 (3d Cir. 1979).
Williams also relies on Morenz v. Wilson-Coker, 415 F.3d 230 (2d Cir. 2005), to assert
that relief also could have been awarded for the three months prior to the District Court’s
order, but that case concerned a specific Medicaid statute requiring benefits to be made
available three months before a present eligibility determination, id. at 233 & n.2, 237;
see also id. at 237 (“Here, the order that payments begin retroactively is not
compensation for accrued liability, but is rather an incident of the present eligibility
determination required by the Medicaid statute itself.”).
                                             7