Lewis v. Becerra

111 F.4th 65

Carol A. LEWIS and Douglas B. Sargent, on behalf of themselves and all others similarly situated, Appellants, v. Xavier BECERRA, in his capacity as Secretary of the United States Department of Health and Human Services, Appellee.

No. 23-5152

United States Court of Appeals, District of Columbia Circuit

Argued May 7, 2024

Decided August 2, 2024

Appeal from the United States District Court for the District of Columbia (No. 1:18-cv-02929).

James Pistorino argued the cause for appellants. With him on the briefs were David B. Goroff, Michael D. Leffel, and Andrew C. Gresik,

Joshua M. Koppel, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Abby C. Wright, Attorney, Samuel R. Bagenstos, General Counsel, U.S. Department of Health and Human Services, and David Hoskins, Attorney.

Before: Katsas, Rao, and Walker, Circuit Judges.

Katsas, Circuit Judge:

Carol Lewis and Douglas Sargent sued the Secretary of Health and Human Services to obtain reimbursement for the cost of certain medical equipment. They won. But they nevertheless appeal, seeking to challenge the district court's earlier denial of class certification. By itself, their desire to serve as class representatives does not create a cognizable Article III interest. And Lewis and Sargent do not allege that the denial of class certification has caused them any other, concrete individual injury. We therefore dismiss their appeal for lack of constitutional standing.

I

A

The Medicare program provides health insurance for the elderly and disabled. See 42 U.S.C. § 1395 et seq. Part B of Medicare covers "durable medical equipment." 42 U.S.C. § 1395m(a).

Congress has provided for limited judicial review of Medicare eligibility determinations. The Medicare Act incorporates the judicial-review provisions of the Social Security Act, which require a beneficiary to exhaust administrative remedies and then to seek review within sixty days of the final agency determination. See 42 U.S.C. §§ 1395ii, 1395ff(b)(1)(A) (Medicare); id. § 405(g) (Social Security); Am. Hosp. Ass'n v. Azar, 895 F.3d 822, 825-26 (D.C. Cir. 2018). In some circumstances, courts may excuse a beneficiary's failure to exhaust, Bowen v. City of New York, 476 U.S. 467, 482, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986), and may equitably toll the sixty-day deadline for seeking judicial review, id. at 481, 106 S.Ct. 2022.

B

Diabetes is a chronic condition where the body fails to produce or properly respond to insulin, which regulates blood-sugar levels. A blood-sugar level too high or low can cause serious health problems. So, diabetics must monitor their blood-sugar levels.

Continuous glucose monitors provide one means of doing so. A sensor placed under the skin measures glucose levels and transmits the measurements to an external receiver. The Centers for Medicare & Medicaid Services, which administers Medicare for HHS, has taken different positions on whether these monitors are covered "durable medical equipment." In 2017, CMS issued guidance concluding that Part B does not generally cover these monitors. J.A. 693-95. But in 2021, CMS promulgated a rule extending Part B coverage to continuous glucose monitors with a dedicated receiver. 86 Fed. Reg. 73,860 (Dec. 28, 2021). In 2022, CMS rescinded the 2017 guidance and instructed administrative adjudicators to apply the rule to all outstanding reimbursement claims. J.A. 587.

C

Lewis and Sargent are diabetics and Medicare beneficiaries. They sought reimbursement for their continuous glucose monitors and related supplies from 2015 to 2017. After HHS denied reimbursement, Lewis and Sargent timely pursued judicial review of the denials. They also moved to represent a class of "[a]ll persons who submitted claims for coverage of [continuous glucose monitor] equipment or supplies whose claims were denied (and not later reversed on appeal) since December 13, 2012"—regardless of whether these individuals had exhausted administrative remedies or timely sought judicial review. J.A. 48.

The district court denied Lewis and Sargent's motion for class certification. The court noted that the claims of most putative class members were unexhausted, untimely, or both. J.A. 538-39. It then concluded that neither waiver of the exhaustion requirement nor equitable tolling of the limitations period would be appropriate. Id. at 539-45. The court therefore excluded individuals with unexhausted or untimely claims, which reduced the putative class to seventeen individuals. Id. at 549. Then, the court held that this group was too small to meet the numerosity requirement for class certification. Id. at 550.

After CMS issued its 2022 guidance, HHS moved for partial judgment in Lewis and Sargent's favor. Over their objection, the district court granted the motion, set aside the denials of Lewis and Sargent's claims, declared that continuous glucose monitors and their related supplies are durable medical equipment, and dismissed Lewis and Sargent's other claims as moot. J.A. 625-26. Lewis and Sargent then appealed.

II

On appeal, Lewis and Sargent do not challenge any aspect of their favorable merits judgment. Instead, they challenge only the denial of their motion for class certification.

The government does not question our jurisdiction. But "federal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction" and "must raise and decide jurisdictional questions that the parties either overlook or elect not to press." Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011). In particular, federal courts of appeals lack jurisdiction if the appellant has not shown standing to pursue the appeal. See, e.g., West Virginia v. EPA, 597 U.S. 697, 718, 142 S.Ct. 2587, ___ L.Ed.2d ___ (2022); Hollingsworth v. Perry, 570 U.S. 693, 715, 133 S.Ct. 2652, 186 L.Ed.2d 768 (2013). Considering the issue on our own, we hold that Lewis and Sargent lack appellate standing.

A

Article III limits the judicial power of the United States to resolving "Cases" or "Controversies." U.S. Const. Art. III, § 2. "Article III denies federal courts the power to decide questions that cannot affect the rights of litigants in the case before them, and confines them to resolving real and substantial controversies admitting of specific relief through a decree of a conclusive character." Lewis v. Cont'l Bank Corp., 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990) (cleaned up). To this end, any party invoking a federal court's jurisdiction must prove its "standing." Lujan v. Defs. of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In a federal district court, "a plaintiff must show (i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief." TransUnion LLC v. Ramirez, 594 U.S. 413, 423, 141 S.Ct. 2190, 210 L.Ed.2d 568 (2021). Similarly, in a federal appellate court, an appellant must show a concrete and particularized injury "fairly traceable to the judgment below" and likely to be redressed by a favorable ruling on appeal.

West Virginia, 597 U.S. at 718, 142 S.Ct. 2587.

In Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 100 S.Ct. 1166, 68 L.Ed.2d 427 (1980), the Supreme Court considered when prevailing plaintiffs may appeal a denial of class certification. The Court first acknowledged that federal appellate courts normally lack jurisdiction to entertain appeals from litigants who obtained favorable judgments: "A party who receives all that he has sought generally is not aggrieved by the judgment affording the relief and cannot appeal from it." Id. at 333, 100 S.Ct. 1166. But the Court also explained that, in some circumstances, the victorious party "retains a stake in the appeal satisfying the requirements of Art[icle] III." Id. at 334, 100 S.Ct. 1166. In those cases, it may appeal an "adverse ruling collateral to the judgment on the merits." Id.; see also id. at 336, 100 S.Ct. 1166 ("Federal appellate jurisdiction is limited by the appellant's personal stake in the appeal."). In short, the Court held that prevailing plaintiffs may appeal a denial of class certification if, but only if, they satisfy the ordinary requirements for Article III standing.¹

In Roper, the prevailing plaintiffs alleged that the denial of class certification caused them a pocketbook harm—an "obvious" Article III injury, see TransUnion, 594 U.S. at 426, 141 S.Ct. 2190. They argued that a successful appeal would allow them to shift part of their litigation costs "to those who [would] share in its benefits if the class is certified and ultimately prevails." Roper, 445 U.S. at 336, 100 S.Ct. 1166. In other words, the named plaintiffs alleged that the denial of class certification forced them to bear all of the "fees and expenses" incurred during the litigation, whereas absent class members would have otherwise picked up part of the tab. See id. at 334 n.6, 100 S.Ct. 1166. Based on this pocketbook injury, the Court held that the prevailing plaintiffs had a continuing Article III stake in their appeal. Id. at 340, 100 S.Ct. 1166.

Roper noted other "interests" of the prevailing plaintiffs, including their "right as litigants" to invoke class-certification rules and the duty of named plaintiffs "to represent the collective interests of the putative class." 445 U.S. at 331, 100 S.Ct. 1166. Roper also noted the "substantial advantages" of class actions, such as facilitating the adjudication of small individual claims, and it described these "policy considerations" as "not irrelevant" to the jurisdictional question presented. Id. at 338-40, 100 S.Ct. 1166. This language from Roper—combined with the reasoning of U.S. Parole Commission v. Geraghty, 445 U.S. 388, 100 S.Ct....