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The Evangelical Lutheran Good Samaritan Society, Inc. v. Randol

United States District Court, D. Kansas

July 20, 2017

MICHAEL RANDOL, in his official capacity as the Director of the Kansas Department of Health and Environment, Defendant.


          Daniel D. Crabtree United States District Judge

         The plaintiffs in this case include skilled nursing home facilities headquartered in South Dakota and 21 of its patients.[1] The Evangelical Lutheran Good Samaritan Society (“Good Samaritan”) operates facilities in Kansas and provides 24-hour skilled nursing care to its patients, including the 21 plaintiff patients named in this case. This matter is before the court today on defendant Kansas Department of Health and Environment's (“KDHE”) Motion to Dismiss (Doc. 8) and plaintiffs' two Motions to Amend Complaint (Docs. 19, 24). For reasons explained below, the court grants defendant's Motion and denies plaintiffs' motions.

         I. Background

         “Medicaid is a program administered cooperatively by states and the federal government to provide ‘health care to persons who cannot afford such care.'” Morris v. Okla. Dep't of Human Servs., 685 F.3d 925, 928 (10th Cir. 2012) (quoting Brown v. Day, 555 F.3d 882, 885 (10th Cir. 2009)). States “choosing to participate receive federal funds for state-administered Medicaid services provided they comply with the requirements of the Medicaid Act.” Lewis v. N.M. Dep't of Health, 261 F.3d 970, 974 (10th Cir. 2001). The requirements for the Medicaid Act are found in 42 U.S.C. § 1396 et seq., and its implementing regulations, 42 C.F.R. §§ 430 et seq. Id. Subsection (c)(3)(ii) of § 435.912 provides that the state agency may not take more than 45 days to determine the eligibility of Medicaid applicants who apply on any basis other than a disability.

         Each of the patient plaintiffs were admitted to a Good Samaritan facility in Kansas between 2011 and 2016. Each patient plaintiff requires 24-hour skilled nursing care, and each one applied for Medicaid in Kansas on non-disability bases. As of November 21, 2016, defendant had approved Medicaid benefits for 10 patient plaintiffs, defendant had denied Medicaid benefits for eight patient plaintiffs, and two cases were still pending. Doc. 10-1 at 12.[2]One denial, separate from the eight noted above, resulted in an administrative appeal that was later withdrawn by the applicant's authorized representative. Id.

         Plaintiffs assert that defendant failed to make a Medicaid eligibility determination within 45 days for each of the patient plaintiffs' applications and thus did not comply with federal regulation § 435.912(c)(3)(ii). Plaintiffs assert defendants violated the Americans with Disabilities Act (“ADA”) by denying benefits to the patient plaintiffs and unfairly discriminated against plaintiffs on the basis of their disabilities. And, plaintiffs assert that defendant violated their Fourteenth Amendment due process and equal protection rights. Plaintiffs seek the following relief: “Issuing an Order requiring the defendant [to] automatically approv[e] the plaintiffs' Medicaid benefits” (Doc. 1 at 17); (2) “take other such actions as are proper and necessary to remedy the defendant's violations and order such equitable relief as will make Plaintiffs whole for Defendant's unlawful conduct.” Id.

         Defendant moves to dismiss the case under Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6). Defendant contends the court lacks subject matter jurisdiction over the case, and defendant contends the court's personal jurisdiction over the case is “questionable.” Defendant also contends that even if subject matter and personal jurisdiction exist, plaintiffs have not stated a claim upon which relief may be granted.

         Plaintiffs first asked the court for leave to amend the Complaint on January 9, 2017. Doc. 19. Plaintiffs asked for leave again on May 25, 2017, before the court had ruled the first Motion to Amend. Doc. 24. In both motions, plaintiffs complied with D. Kan. Rule 15.1 and attached their proposed amended complaint to their motion. Defendant opposes plaintiffs' motions and asserts that granting plaintiffs leave to amend their Complaint would be futile. Docs. 22, 26.

         II. Analysis

         Plaintiffs' Complaint purports to assert four causes of action, but the court condenses their claims into two causes of action for two reasons. First, Count I of the Complaint seeks “declaratory judgment relief” that defendants violated 42 C.F.R. § 435.912(c)(3) when it failed to determine the patient plaintiffs' Medicaid eligibility within 45 days of receiving their application. Plaintiffs bring this claim under 28 U.S.C. § 2201 and Federal Rule of Civil Procedure 57. But § 2201 and Rule 57 do not supply “an independent source of federal jurisdiction.” Schilling v. Rogers, 363 U.S. 666, 677 (1960); see also Fed. R. Civ. P. 57 (explaining that Rule 57 governs the procedure for obtaining a declaratory judgment under § 2201). The “availability of such [declaratory judgment] relief presupposes the existence of a judicially remediable right.” Id. Count I thus does not state an independent cause of action. Second, Count IV of plaintiffs' Complaint demands “temporary and permanent injunctive relief.” Doc. 1 at 16. But Count IV similarly fails to state an independent cause of action. Count IV is best characterized as plaintiffs' prayer for relief. So, this Order and the court's analysis focus on Counts II and III and whether the claims they assert can survive defendant's Motion to Dismiss.

         Ordinarily, the court first would address defendant's jurisdictional arguments under Rules 12(b)(1) and 12(b)(2). See Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006) (“Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.”); see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (“The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum” that lacks personal jurisdiction over him). But defendant's jurisdictional arguments in its Motion to Dismiss read more like arguments under 12(b)(6). See Doc. 10-1 at 16-17 (asserting that plaintiffs have failed to assert facts necessary to support their ADA and Fourteenth Amendment Claims). So, the court first determines whether plaintiffs have stated claims upon which relief can be granted and then addresses any remaining jurisdictional concerns.

         A. Legal Standard: Motion to Dismiss

         Federal Rule of Civil Procedure 8(a)(2) provides that a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Although this Rule “does not require ‘detailed factual allegations, '” it demands more than “[a] pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “Under this standard, ‘the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.'” Carter v. United States, 667 F.Supp.2d 1259, 1262 (D. Kan. 2009) (quoting Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)).

         On a motion to dismiss under Rule 12(b)(6)-like this one-the court assumes that a complaint's factual allegations are true, but need not accept mere legal conclusions as true. Id. at 1263. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements” are not enough to state a claim for relief. Iqbal, 556 U.S. at 678. In addition to the complaint's factual allegations, the court also may consider “attached exhibits and documents incorporated into the complaint by reference.” Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citations omitted).

         1. Count II: Americans with Disabilities Act

         Plaintiffs allege defendant violated 42 U.S.C § 12132, the ADA. Section 12132 provides: “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C. § 12132. To state a claim under the ADA, a plaintiff must allege: “(1) that he is a qualified individual with a disability; (2) that he was ‘either excluded from participation in or denied the benefits of some entity's services, programs, or activities, [ . . .]' and (3) ‘that such exclusion, denial of benefits, or discrimination was by reason' of his disability.'” Villa v. D.O.C. Dep't of Corrections, 664 F.App'x 731, 734 (10th Cir. 2016) (quoting J.V. v. Albuquerque Pub. Sch., 813 F.3d 1289, 1295 (10th Cir. 2016)).

         Plaintiffs have not stated a viable ADA claim. They assert that all “of the plaintiffs are ‘qualified individuals with a disability.'” Doc. 1 at 14. And, plaintiffs describe each plaintiff's disability with some specificity. Doc. 1 at 3-7. But plaintiffs have not asserted that they were denied benefits because of their disability, a required element of an ADA claim. See Villa, 664 F.App'x at 734 (holding that plaintiff had not alleged facts sufficient to support a claim under the ADA merely by asserting that there was “discrimination against [him] because of [his] disabilities, ” but otherwise failing to elaborate on this “conclusory statement”). Plaintiffs merely assert that that they are disabled and that defendant did not provide them the benefits that they are entitled to receive under federal law. Doc. 1 at 12-14. By failing to assert facts to support the third element of an ADA claim, plaintiffs have failed to state a claim for which relief can be granted under that Act. The court thus grants defendant's Motion to Dismiss for plaintiffs' ADA claim.

         2. Count III: ...

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