Brown v. Day

477 F.Supp.2d 1110

Dena K. BROWN, Plaintiff, v. Robert M. DAY, in his official capacity as Director, Kansas Division of Health Policy and Finance, Defendant.

Civil Action No. 06-2212-KHV.

United States District Court, D. Kansas.

February 28, 2007.

Molly M. Wood, Stevens & Brand, L.L.P., Lawrence, KS, for Plaintiff.

Reid Stacey, Kansas Health Policy Authority, Topeka, KS, for Defendant.

MEMORANDUM AND ORDER

VRATIL, District Judge.

On May 25, 2006, plaintiff filed suit under 42 U.S.C. § 1983 alleging that the State of Kansas disqualified her from Medicaid benefits in violation of federal law. On October 27, 2006, in reliance on the Younger abstention doctrine, the Court dismissed plaintiffs action. See Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971); Memorandum And Order (Doc. # 27). The Court determined that (1) a state administrative proceeding involving this matter was pending when plaintiff initiated her federal action; (2) the state proceedings afforded plaintiff an adequate forum in which to raise her federal claims; (3) the state proceedings implicated important state interests; and (4) plaintiff could show no exceptional circumstances which suggested that abstention was improper. See id. This matter comes before the Court on Plaintiff's Motion To Alter Or Amend Judgment (Doc. # 31) filed November 9, 2006. Plaintiff argues that in dismissing her claim, the Court clearly misapprehended applicable law.

Factual Background

The material facts are undisputed and may be summarized as follows:

Plaintiff is a developmentally disabled adult who resides at a private not-for-profit residential care facility. Absent medical assistance, she would be responsible for approximately $5,000 a month for services which she receives there.

Robert M. Day is director of the Kansas Division of Health Policy and Finance ("HPF"). Day is responsible for administering state medical assistance programs, including Medicaid.

Plaintiffs mother died in 2003, and plaintiff became a beneficiary of a residuary trust which gave the trustee discretion to distribute income and/or principal for plaintiffs health, education, support and maintenance. In August of 2005, HPF notified plaintiff that effective August 31, 2005, she was ineligible for medical assistance because her interest in the trust counted as an available resource under applicable law. Plaintiff timely requested an administrative hearing, at which time the hearing officer reversed the decision to terminate benefits. On April 26, 2006, HPF reversed the hearing officer decision and reinstated the termination of benefits. See Final Order, Exhibit 10 attached to Plaintiffs Response In Opposition To Motion To Dismiss (Doc. # 16) filed July 6, 2006. In a letter to plaintiff dated April 28, 2006, HPF indicated that the termination would become effective May 31, 2006. See Exhibit A attached to Complaint (Doc. # 1) filed May 25, 2006.

On May 25, 2006, plaintiff filed suit against Day in his official capacity as director of HPF. Plaintiff brings suit under 42 U.S.C. § 1983, alleging that HPF's decision to count the assets of her mother's trust as an available resource violates federal Medicaid law. Plaintiff seeks injunctive and declaratory relief.

Discussion

Rule 59(e), Fed.R.Civ.P., permits plaintiffs motion to alter or amend the Court's judgment. Only limited grounds support a Rule 59(e) motion. See Adams v. Reliance Standard Life Ins. Co., 225 F.3d 1179, 1186 n. 5 (10th Cir.2000) (Rule 59(e) motions "should be granted only to correct manifest errors of law or to present newly discovered evidence"); Brumark Corp. v. Samson Res. Corp., 57 F.3d 941, 948 (10th Cir.1995) (reconsideration requires intervening change in controlling law, new evidence or need to correct clear error or prevent manifest injustice).

Plaintiff argues that in abstaining under Younger, the Court clearly misapprehended applicable law. Specifically, plaintiff argues that (1) the Court applied an exhaustion requirement in violation of Supreme Court precedent which holds that plaintiff need not exhaust state remedies before bringing a Section 1983 claim in federal court, and (2) Younger does not apply because plaintiffs federal action does not attempt to interfere with the validity of the state administrative process.

I. Exhaustion Of State Remedies

This case neatly presents the question whether plaintiff may sue in federal court under Section 1983 without first exhausting opportunities for judicial review of an administrative proceeding which she initiated under state law. This question highlights the tension between the rule that plaintiff is generally not required to exhaust state remedies before bringing a Section 1983 claim in federal court, see Monroe v. Pape, 365 U.S. 167, 183, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961); Patsy v. Board of Regents of the State of Florida, 457 U.S. 496, 516, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982), and the rule that federal courts generally may not interfere with ongoing state proceedings, see Younger, 401 U.S. at 53, 91 S.Ct. 746.

A. Non-Exhaustion Rule Under Section 1983

It is well established that federal court plaintiffs need not first pursue remedies available in state court before filing suit under Section 1983 in federal court. In Monroe v. Pape, the United States Supreme Court held that Section 1983 is "supplementary to the state remedy" and that available state remedies "need not be first sought and refused before the federal [remedy] is invoked." 365 U.S. at 183, 81 S.Ct. 473. The Supreme Court reaffirmed the general rule of non-exhaustion in Patsy v. Board of Regents, where plaintiff filed suit under Section 1983 alleging discriminatory denial of promotion by a state university. 457 U.S. at 498, 102 S.Ct. 2557. Plaintiff had not pursued available administrative remedies within the university system, see Patsy v. Fla. Int'l Univ., 634 F.2d 900, 913 (5th Cir.1981), and the Fifth Circuit remanded after finding that plaintiff was required to exhaust adequate and appropriate state administrative remedies, 457 U.S. at 498, 102 S.Ct. 2557. The Supreme Court reversed, holding that "exhaustion of state administrative remedies should not be required as a prerequisite to bringing an action pursuant to § 1983." Id. at 516, 102 S.Ct. 2557.

Monroe and Patsy make clear that a plaintiff who brings suit in federal court under Section 1983 is not barred by failure to have pursued and exhausted state remedies. This rule does not dispose of the issue in this case, however, because unlike plaintiffs in Monroe and Patsy, plaintiff here did not first bring suit in federal court: she initiated a state administrative proceeding before HPF and, during its pendency, sought recourse to federal court. Plaintiffs initiation of a state administrative proceeding before filing suit in federal court makes it necessary to also consider Younger abstention.

B. The Younger Doctrine

Under Younger, a federal district court must abstain from hearing a federal case which interferes with certain state proceedings. In Younger, a state criminal defendant filed suit in federal court, seeking to enjoin the state criminal prosecution. 401 U.S. at 38-39, 91 S.Ct. 746. After discussing a long line of authority counseling against federal interference in state court matters, Id. at 43-49, 91 S.Ct. 746, the Supreme Court found no justification for "prohibiting the State from carrying out the important and necessary task of enforcing [its] laws against socially harmful conduct that the State believes in good faith to be punishable under its laws and the Constitution." Id. at 51-52, 91 S.Ct. 746

Though the primary application of Younger involves state criminal proceedings, the doctrine has been extended to ongoing state civil and administrative proceedings as well. See Amanatullah v. Cola Bd. of Med. Exam'rs, 187 F.3d 1160, 1163 (10th Cir.1999). Today, Younger dictates that a federal district court abstain from exercising jurisdiction when (1) a state criminal, civil or administrative proceeding is pending; (2) the state court provides an adequate forum to hear the claims raised in the federal complaint; and (3) the state proceedings involve important state interests, matters which traditionally look to state law for their resolution or implicate separately articulated state policies. Id. Absent extraordinary circumstances, abstention is mandatory when these elements are satisfied. Id.

For purposes of the first Younger element, a proceeding is "pending" if — as of the filing of the federal complaint — not all state appellate remedies have been exhausted. Mounkes v. Conklin, 922 F.Supp. 1501, 1511 (D.Kan.1996); see also Stein v. Legal Adver. Comm. of the Disciplinary Bd., 122 Fed.Appx. 954, 957 (10th Cir.2004) (exhaustion rule clear and sensible approach to Younger). Obviously, where Section 1983 actions are concerned, the Younger exhaustion requirement conflicts with the general non-exhaustion rule of Monroe and Patsy. The Supreme Court has addressed this conflict on two occasions.

In Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975), which involved a civil nuisance proceeding against the operator of a movie theater, government officials obtained a judgment in state court which ordered that the theater be closed and the personal property used in the theater operation be seized and sold. Id. at 598, 95 S.Ct. 1200. The operator of the movie theater did not appeal the judgment within the state judicial system, but filed suit in federal court under Section 1983 alleging that enforcement of the state nuisance statute denied him constitutional rights. Id. Questioning whether the state nuisance proceeding was ongoing for purposes of Younger, the Supreme Court held that a state proceeding remains pending so long as "a losing litigant has not exhausted his state appellate remedies." Id. at 609-10, 95 S.Ct. 1200. In Huffman, plaintiff had state appellate remedies available...