Anderson v. Dooley

BRUCE ANDERSON, et al., Plaintiffs, v. DIANA DOOLEY, Defendant.

Case No. 15-cv-05120-HSG

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

June 7, 2016

ORDER DISMISSING COMPLAINT WITH PREJUDICE

Re: Dkt. No. 11

Pending before the Court is a motion to dismiss brought by Defendant Diana Dooley in her official capacity as Secretary of the California Department of Health and Human Services. Dkt. No. 18. For the reasons articulated below, the motion is GRANTED.

I. BACKGROUND

On November 9, 2015, Plaintiffs Bruce Anderson, John Wilson, and Robert Austin, (together, the "Individual Plaintiffs") and Plaintiff California Advocates for Nursing Home Reform ("CANHR") brought an action under 42 U.S.C. § 1983, requesting a declaration that Defendant Diana Dooley, in her official capacity as Secretary of the California Department of Health and Human Services, has been violating subsections of the Federal Nursing Home Reform Act, 42 U.S.C. §§ 1395i-3, 1396r (1996) (the "FNHRA"). Dkt. No. 1 ("Compl."). Specifically, Plaintiffs "seek to stop California Secretary of Health and Human Services Diana Dooley from willfully violating federal laws that protect vulnerable nursing home residents from being forcibly removed from their homes and dumped into hospitals." Id. ¶ 1.

Plaintiffs' complaint alleges the following: The Individual Plaintiffs were each removed from their nursing homes and sent to hospitals. Id. ¶¶ 12-14. Upon termination of their hospital stays, the Individual Plaintiffs availed themselves of federally mandated readmission hearings before the California Department of Health Care Services ("DHCS"). Id. ¶ 5. At their readmission hearings, the Individual Plaintiffs all received favorable outcomes, presumably entitling them to readmission at their prior nursing homes. Id. However, the Individual Plaintiffs have been unable to return to their nursing homes because Defendant has been violating the FNHRA by failing to require either DHCS or the California Department of Public Health ("CDPH") to enforce favorable readmission orders. Id. ¶¶ 4-5.

II. APPLICABLE STATUTORY LAW

The FNHRA, an amendment to the Medicaid Act, applies to all nursing home residents and sets out requirements for notice, hearings, and appeals of discharges. Id. ¶ 24; 42 U.S.C. §§ 1395i-3, 1396r (1996). Under FNHRA subsection (e)(3), "[t]he State . . . must provide for a fair mechanism for hearing appeals on transfers and discharges of residents of [skilled nursing facilities]. Such mechanism must meet the guidelines established by the Secretary under subsection (f)(3) of this section." 42 U.S.C. § 1395i-3 (e)(3). Subsection (f)(3) provides that "the Secretary shall establish guidelines for minimum standards which State appeals processes under subsection (e)(3) of this section must meet to provide a fair mechanism for hearing appeals on transfers and discharges of residents from skilled nursing facilities." 42 U.S.C. § 1395i-3 (f)(3).

In response to the FNHRA's directive, the Centers for Medicare and Medicaid Services ("CMS") adopted several federal regulations. Most relevant to the current action, 42 C.F.R. § 431.205(b) requires that the hearing be before the state's Medicaid agency or provide for a right of appeal to that agency. 42 C.F.R. § 431.205(b). Moreover, under 42 C.F.R. § 431.246:

The agency must promptly make corrective payments, retroactive to the date an incorrect action was taken, and, if appropriate, provide for admission or readmission of an individual to a facility if—

(a) The hearing decision is favorable to the applicant or beneficiary;

or

(b) The agency decides in the applicant's or beneficiary's favor before the hearing.

42 C.F.R. § 431.246.

III. DISCUSSION

Defendant articulates four main reasons that Plaintiffs' complaint should be dismissed: (1) Plaintiffs lack Article III standing to bring this action; (2) Plaintiffs have no private federal rightenforceable through § 1983; (3) Plaintiffs fail to state a claim for equitable relief; and (4) federal regulations such as 42 C.F.R. § 431.246 are not enforceable through § 1983. Dkt. No. 11 ("MTD") at 1. In the alternative, Defendant contends that the case should be stayed under the doctrine of primary jurisdiction. Id. Because the Court holds that Plaintiffs have no private federal right enforceable through § 1983, the Court need not address Defendant's other arguments.¹

A. Legal Standard

i. Rule 12(b)(6) Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This "facial plausibility" standard requires the plaintiff to allege facts that add up to "more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. On a motion to dismiss, the court accepts as true a plaintiff's well-pleaded factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But, the plaintiff must allege facts sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.

ii. Federal Private Right of Action Enforceable Through § 1983

A plaintiff may enforce rights created by federal statutes through § 1983. Blessing v. Freestone, 520 U.S. 329, 340 (1997); Henry A. v. Willden, 678 F.3d 991, 1005 (9th Cir. 2012).However, for a federal statute to be privately enforceable through § 1983, "it must create an individual right." Henry A., 678 F.3d at 1005. In other words, § 1983 can only be used to enforce violations of federal rights rather than violations of federal law. Id. at 1005; Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002). The Supreme Court has held that "if Congress wishes to create new rights enforceable under § 1983, it must do so in clear and unambiguous terms." Gonzaga Univ., 536 U.S. at 290. "Anything short of an unambiguously conferred right will not support a 1983 action." Watson v. Weeks, 436 F.3d 1152, 1159 (9th Cir. 2006).

The Supreme Court has set out a three-factor test for determining whether a federal statute creates an individual right: (1) Congress must have intended that the provision at issue benefit plaintiff; (2) the right protected by the statute cannot be so "vague and amorphous" that enforcement would strain judicial competence; and (3) the statute must impose a binding obligation on the state. Blessing, 520 U.S. at 340-41. If a statute satisfies the Blessing test, the plaintiff's right is "presumptively enforceable by § 1983 subject only to a showing that Congress specifically foreclosed a remedy under § 1983." Ball v. Rodgers, 492 F.3d 1094, 1116 (9th Cir. 2007) (internal citations omitted). A state can demonstrate that Congress foreclosed § 1983 actions either explicitly in the language of the statute or implicitly "by creating a comprehensive enforcement scheme incompatible with individual enforcement." Id.

B. Analysis

Plaintiffs contend that two subsections of the FNHRA, 42 U.S.C. § 1395i-3 (e)(3) and 42 U.S.C. § 1395i-3 (f)(3), read in conjunction with two federal regulations, 42 C.F.R. § 431.205(b) and 42 C.F.R. § 431.246, confer a private federal right enforceable through § 1983. Compl., ¶¶ 23-35. The Court finds that Congress did not clearly and unambiguously create the right Plaintiffs assert.

Evidence of congressional intent to create a private right "can be found in a statute's language as well as in its overarching structure." Ball, 492 F.3d at 1105. To create a new federal right, "the statute must be phrased in terms of the persons benefited . . . with an unmistakable focus on the benefited class." Id. at 1106 (emphasis in original). Moreover, an agency regulation "may be relevant in determining the scope of the right conferred by Congress." Save Our Valleyv. Sound Transit, 335 F.3d 932, 943 (9th Cir. 2003). However, an agency regulation cannot create an individual right enforceable under § 1983. Id.; Ball, 492 F.3d at 1114.

i. FNHRA Subsections (e)(3) and (f)(3)

Section 1395i-3 of the FNHRA, entitled "Requirements for, and assuring quality of care in, skilled nursing facilities," provides that "The State . . . must provide for a fair mechanism for hearing appeals on transfers and discharges of residents of [skilled nursing homes]. Such mechanism must meet the guidelines established by the Secretary under subsection (f)(3) of this section." 42 U.S.C. § 1395i-3 (e)(3). FNHRA subsection (f)(3), entitled, "Federal guidelines for State appeals process for transfers and discharges," clarifies that "the Secretary shall establish guidelines for minimum standards which State appeals processes under subsection (e)(3) of this section must meet to provide a fair mechanism for hearing appeals on transfers and discharges of residents from skilled nursing facilities." 42 U.S.C. § 1395i-3 (f)(3).

Defendant asserts that FNHRA subsections (e)(3) and (f)(3) are "[f]ar from asserting any explicit right, in 'clear and unambiguous terms,'" and argues that Plaintiffs attempt to "bootstrap in their claim" through federal regulations. MTD at 17-18. Plaintiffs respond that they possess a private right of action under FNHRA subsections (e)(3) and (f)(3) because they are "the very individuals the anti-dumping statute and the fair hearing statute were designed to protect" and Medicaid Act provisions "virtually indistinguishable" from the applicable FNHRA subsections have been held to confer enforceable private rights. Opp'n at 15. Further, according to Plaintiffs, federal regulations 42 C.F.R. § 431.205(b) and 42 C.F.R. §...