Court Opinion

ID: 148432
Source: CourtListenerOpinion
Date Created: 2010-06-11 17:50:13+00
Date Added: 2024-06-11T15:01:47.828513
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 09-1441

D.T.M., a minor child, by his mother Penny McCartney; E.C.,
a minor child, by his mother Selena McMillan; K.T., a minor
child, by her father, Greg Tipton, individually and on
behalf of all others similarly situated,

                Plaintiffs - Appellees,

           v.

LANIER M. CANSLER, Secretary of North Carolina Department of
Health and Human Services, in his official capacity,

                Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Greenville. Malcolm J. Howard,
Senior District Judge. (7:08-cv-00057-H)

Argued:   May 13, 2010                    Decided:   June 11, 2010

Before TRAXLER, Chief Judge, WILKINSON, Circuit Judge, and
Samuel G. WILSON, United States District Judge for the Western
District of Virginia, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Ronald Moore Marquette, NORTH CAROLINA DEPARTMENT OF
JUSTICE, Raleigh, North Carolina, for Appellant. Douglas Stuart
Sea, LEGAL SERVICES OF SOUTHERN PIEDMONT, INC., Charlotte, North
Carolina, for Appellees.   ON BRIEF: Roy Cooper, North Carolina
Attorney General, Belinda A. Smith, Special Deputy Attorney
General, Tracy J. Hayes, Assistant Attorney General, NORTH
CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for
Appellant. Jane Perkins, Sarah Jane Somers, NATIONAL HEALTH LAW
PROGRAM, Chapel Hill, North Carolina, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

        Lanier     Cansler,       the    Secretary        of     the   North     Carolina

Department of Health and Human Services (“HHS”), appeals the

denial of his motion to dismiss this suit alleging that HHS has

reduced or terminated Medicaid benefits received by plaintiffs

and   others     in    violation        of   the    Due   Process      Clause       and   the

Medicaid     Act.          The   Secretary         primarily     argues      that    he    is

entitled to Eleventh Amendment immunity.                       Finding no error, we

affirm.

                                             I.

        Medicaid      is     a   cooperative         federal-state        program         that

assists     states      in   providing       medical      services     to     the    needy.

States need not participate in Medicaid, but once they choose to

do    so,   they      must       implement        plans    for     providing        medical

assistance that comply with detailed federal standards.                              See 42

U.S.C.A. § 1396a (West 2003 & Supp. 2009).                       As is relevant here,

state plans are required to “provide for granting an opportunity

for a fair hearing . . . to any individual whose claim for

medical assistance . . . is denied or is not acted upon with

reasonable promptness.”              42 U.S.C.A. § 1396a(a)(3).                 The state

plans    also    must      contain      reasonable     standards       for    determining

individuals’ eligibility.                See 42 U.S.C.A. § 1396a(a)(17).                    In

Medicaid parlance, “medical assistance” means payment of part or

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all   of    the    cost    of    care    and        services      or    provision             of    the

services themselves.             See 42 U.S.C. § 1396d(a), as amended by

the Patient Protection and Affordable Care Act, Pub. L. No. 111-

148, § 2304, 124 Stat. 119, 296 (Mar. 23, 2010).                              These services

generally include “health care, diagnostic services, treatment,

and other measures . . . to correct or ameliorate defects and

physical     and    mental       illnesses”         in    children.           42    U.S.C.A.          §

1396d(r)(5) (West Supp. 2009).

      HHS    is    the     state    agency          responsible         for    administering

Medicaid     programs       in     North      Carolina.            See    42        U.S.C.A.          §

1396a(a)(5).          In     approximately               2006,    HHS    contracted                with

ValueOptions,       Inc.     (“VO”),       to       be    HHS’s    statewide            agent        to

administer        behavioral       health           and     developmental               disability

services     for    North       Carolina’s          Medicaid      program.              The    three

plaintiffs in this action are children who have been denied the

level of medical assistance that they requested.                              North Carolina

requires     preauthorization           for     medical      assistance            of    the       type

Plaintiffs sought.          See 42 C.F.R. § 440.230(d) (2008) (providing

that states “may place appropriate limits on a service based on

. . . utilization control procedures”).                           If a preauthorization

request is granted, Medicaid pays for the service for a certain

length of time—90 days for Community Support Services and one

year for the Community Alternatives Program for persons with

mental retardation/developmental disabilities.                           An applicant may

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appeal    an    adverse       decision    to       the   North    Carolina     Office    of

Administrative Hearings (“OAH”), with or without first appealing

informally to the HHS hearing office.                     During the pendency of a

timely filed appeal, North Carolina authorizes the provision of

services at the existing level of care.

      Plaintiffs brought this suit under 42 U.S.C.A. § 1983 (West

2003),     alleging         that   HHS    violated        their     rights     under    the

Medicaid       Act    and    the   Due    Process        Clause    of    the   Fourteenth

Amendment by arbitrarily and capriciously denying their requests

for   services,       terminating        or   reducing      their       benefits    without

providing timely and adequate written notice and a fair hearing,

and failing to ensure that their benefits continued while their

appeals        were     pending.              Plaintiffs’         complaint        requests

declaratory relief as well as an order enjoining the Secretary,

his agents, successors, and employees to

           (a) continue to provide behavioral health and
      developmental disability services to all persons who
      have been receiving them, until Defendant corrects the
      practices and procedures alleged herein;

            (b) prospectively reinstate behavioral health and
      developmental disability services previously provided
      to the named Plaintiffs and members of the Plaintiff
      class that were improperly reduced or terminated under
      the illegal practices and procedures alleged herein;
      [and]

           (c) comply with the Due Process Clause of the
      U.S. Constitution and the Medicaid Act.

J.A. 40.

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     After      filing       suit,    Plaintiffs       filed       a   motion    in    the

district court to certify this suit as a class action.                                 The

Secretary opposed class certification and moved to dismiss for

lack of subject-matter jurisdiction and for failure to state a

claim upon which relief can be granted.                        See Fed. R. Civ. P.

12(b)(1),      (6).          Regarding      subject-matter         jurisdiction,       the

Secretary      argued    that    he    was    entitled       to   Eleventh      Amendment

immunity,      that    the    Plaintiffs      lacked    standing,        and    that   the

action   had    become       moot.     He     also    sought      to   dismiss   because

abstention     under     Younger      v.    Harris,    401     U.S.    37   (1971),    was

appropriate.          The district court denied the motion to dismiss

and denied the class-certification motion without prejudice to

Plaintiffs’ right to refile the motion after further discovery.

                                             II.

     On appeal, the Secretary argues that the district court

erred in not dismissing the suit based on Eleventh Amendment

immunity. *    We disagree.

     A district court order denying a motion to dismiss on the

ground of Eleventh Amendment immunity is immediately appealable.

     *
       The Secretary also maintains that the Plaintiffs lacked
standing when they initiated this suit, and, alternatively, that
the suit has become moot since it was filed.      We decline to
address those issues at this time.    See Antrican v. Odom, 290
F.3d 178, 191 (4th Cir. 2002).

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See Antrican v. Odom, 290 F.3d 178, 184 (4th Cir. 2002).                                We

review such an order de novo.                See CSX Transp., Inc. v. Bd. of

Pub. Works, 138 F.3d 537, 541 (4th Cir. 1998).

       Although the Eleventh Amendment generally bars individual

suits     against    non-consenting          states      and    state     officers,     an

exception exists under the doctrine of Ex parte Young, 209 U.S.

123 (1908), for official capacity suits requesting prospective

relief to achieve the officials’ compliance with federal law.

See Litman v. George Mason Univ., 186 F.3d 544, 549-50 (4th Cir.

1999).      In such a case, a federal court may enjoin a state

officer from engaging in future conduct in violation of federal

law.      See Antrican, 290 F.3d at 184.                In determining whether the

Ex parte Young exception applies, “a court need only conduct a

‘straightforward inquiry into whether the complaint alleges an

ongoing     violation      of   federal      law    and       seeks   relief     properly

characterized as prospective.’”                  Verizon Md. Inc. v. Pub. Serv.

Comm’n, 535 U.S. 635, 645 (2002) (alteration omitted).

       The Secretary asserts three arguments against application

of   Ex    parte    Young:       that     Plaintiffs           seek   a   compensatory,

monetary remedy against the state rather than prospective relief

against     him;    that     Plaintiffs          have   not     alleged    an    ongoing

violation     of    federal     law;   and       that   the    Secretary    is    not   an

appropriate party.         We will address these arguments seriatim.

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                                          A.

      In arguing that Plaintiffs do not seek prospective relief,

the Secretary focuses on one part of the relief requested in the

amended complaint, that being Plaintiffs’ request to enjoin him,

his agents, successors, and employees to prospectively reinstate

services   to    the   named    Plaintiffs.        However,      the   request   for

prospective reinstatement of benefits is precisely the type of

relief that we recognized in Kimble v. Solomon, 599 F.2d 599,

605 (4th Cir. 1979), that plaintiffs may seek consistent with

the   Eleventh    Amendment       when     they   allege     a     state   Medicaid

agency’s reduction of their benefits violated federal law.                       The

Secretary argues that the facts alleged in the complaint do not

legally    entitle     Plaintiffs        to    prospective       reinstatement    of

benefits since the benefits allegedly denied were for a discrete

period in the past.            However, even assuming arguendo that the

Secretary is correct on this point, the fact that Plaintiffs

cannot prove entitlement to the prospective relief they seek

does not mean that the relief they seek is not prospective.                      See

Verizon, 535 U.S. at 646 (“[T]he inquiry into whether suit lies

under Ex parte Young does not include an analysis of the merits

of the claim.”).        And, in any event, even if the prospective

reinstatement of benefits—the remedy on which the Secretary has

focused—were not a prospective remedy, injunctive relief from

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the continuation of HHS’s allegedly illegal practices would be,

and the Ex parte Young exception would apply.

                                          B.

     The Secretary’s second argument, that Plaintiffs have not

alleged an ongoing violation of federal law, is also a merits-

based   argument      dressed    in   Eleventh    Amendment       clothing.        The

Secretary argues that to determine whether Plaintiffs allege an

ongoing violation for Ex parte Young purposes, “this Court must

determine what pre-deprivation and post-deprivation process is

provided and whether it is constitutionally adequate.”                      Brief of

Appellant, at 45.         However, to fall within the Ex parte Young

exception, it is sufficient for Plaintiffs’ suit to allege an

ongoing    violation      of    federal   law;    actually    proving       such    an

ongoing violation is unnecessary.              See Verizon, 535 U.S. at 646;

Burlington N. & Santa Fe Ry. Co. v. Vaughn, 509 F.3d 1085, 1092

(9th Cir. 2007); Deposit Ins. Agency v. Superintendent of Banks

(In re Deposit Ins. Agency), 482 F.3d 612, 621 (2d Cir. 2007);

McCarthy v. Hawkins, 381 F.3d 407, 415-17 (5th Cir. 2004).

                                          C.

     The   Secretary      finally     maintains    that     his    status    as    the

official responsible for administering North Carolina’s Medicaid

program    is   not   a   sufficient      connection   to    the    complained-of

actions to justify applying the Ex parte Young exception to him.

We disagree.

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     The    complaint   makes    clear    that   it   is    challenging    the

practices of the public agency.           The Secretary, as the person

responsible for assuring that the agency’s decisions comply with

federal law, was properly named as the defendant.               See Ogden v.

United States, 758 F.2d 1168, 1177 (7th Cir. 1985) (“[W]here

injunctive, as opposed to monetary relief is sought, no ‘direct

and personal’ involvement is required in order to hold high-

level officials responsible for the actions of subordinates and

to subject them to the equitable jurisdiction of the court.”).

And, the Ex parte Young exception was therefore properly applied

to him.      See Antrican, 290 F.3d at 188-89 (holding Ex parte

Young     exception   was   properly      applied     to    state   officials

overseeing the North Carolina Medicaid program in suit alleging

wrongful denial of Medicaid services).

                                   III.

     In    sum,   because   we   conclude    that     the    district     court

properly ruled that the Secretary was not entitled to Eleventh

Amendment immunity, we affirm.

                                                                     AFFIRMED

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