Hospitality Hse Inc v. Gilbert ( 2002 )

REVISED AUGUST 27, 2002
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 01-50759
_____________________
HOSPITALITY HOUSE, INC; STONEBRIDGE HEALTH CENTER, INC;
REGENCY VILLAGE CARE CENTER, LTD; MEDICAL HOSPITAL OF BUNA,
INC; RIDGECREST RETIREMENT CENTER, LTD; TEXAS ALLIANCE FOR
FAIR NURSING HOME REIMBURSEMENT
Plaintiffs - Appellees
v.
DON A GILBERT, Commissioner of the Texas Health and Human
Services Commission; ERIC M BOST, Commissioner of the Texas
Department of Human Services; DAVID HERNDON, Chairman of the
Board, Texas Department of Human Services; ELIZABETH SEALE,
Member of the Board of the Texas Department of Human
Services; JOHN A CUELLAR, Member of the Board of the Texas
Department of Human Services; TERRY DURKIN WILKINSON, Member
of the Board of the Texas Department of Human Services;
CAROLE WOODARD, Member of the Board of the Texas Department
of Human Services
Defendants - Appellants
_________________________________________________________________
Appeal from the United States District Court
for the Western District of Texas
_________________________________________________________________
July 16, 2002
Before KING, Chief Judge, and GARWOOD and HIGGINBOTHAM, Circuit
Judges.
KING, Chief Judge:
The Defendants-Appellants, officials of the Texas Health and
Human Services Commission and the Texas Department of Human
Services, appeal the district court’s denial of their motion to
dismiss in which they asserted Eleventh Amendment immunity from
the district court’s exercise of jurisdiction over an action
brought by operators of nursing homes in Texas to enforce a
settlement agreement. Because the district court does not have
subject matter jurisdiction over the enforcement action, we do
not reach the issue of Eleventh Amendment immunity. Instead, we
vacate the district court’s order denying the state health
officials’ motion to dismiss and remand this case to the district
court with instructions to dismiss the nursing home operators’
enforcement action against the state health officials for lack of
subject matter jurisdiction.
I. BACKGROUND
The Defendants-Appellants in this case are various officials
of the Texas Health and Human Services Commission and the Texas
Department of Human Services (collectively the “state health
officials”). The Plaintiffs-Appellees are five businesses that
operate nursing homes in Texas and one non-profit corporation
that advocates adequate and fair Medicaid reimbursement rates for
nursing homes in Texas (collectively the “nursing home
operators”). The nursing home operators initiated the instant
case on February 28, 2001, when they filed suit in the district
court to enforce a settlement agreement (the “Agreement”) that
was negotiated pursuant to a prior lawsuit brought by the Texas
Health Care Association (“THCA”) against the state health
2
officials.1 Alleging that the state health officials had failed
to comply with the Agreement, the nursing home operators sought
declaratory and injunctive relief as intended beneficiaries of
the Agreement (or as representatives of intended beneficiaries).
The Agreement arose from a lawsuit filed by the THCA in
November 1996 to compel the state health officials to satisfy
their obligations under the Boren Amendment, 42 U.S.C.
§ 1396a(a)(13)(A) (1994) (repealed 1997).2 The Boren Amendment
required that the medical assistance plans submitted by states
participating in the Medicaid program provide for reimbursement
for “hospital services, nursing facility services, and services
in an intermediate care facility for the mentally retarded” at
rates “reasonable and adequate to meet the costs which must be
incurred by efficiently and economically operated facilities.”
42 U.S.C. § 1396a(a)(13)(A); see also Wilder v. Vir. Hosp. Ass’n,
496 U.S. 498, 524 (1990) (holding that “[t]he Boren Amendment to
the [Medicaid] Act creates a right, enforceable in a private
cause of action pursuant to § 1983, to have the State adopt rates
that it finds are reasonable and adequate rates to meet the costs
of an efficient and economical health care provider”).3 After
1
The Texas Health Care Association is a private non-profit
organization whose members own nursing home facilities in Texas.
2
Congress repealed the Boren Amendment in August 1997.
See Balanced Budget Act of 1997, Pub. L. No. 105-33, § 4711(a),
111 Stat. 251, 507-08 (1997).
3
Congress replaced the Boren Amendment’s “reasonable and
adequate rate” requirement with the requirement that states
3
negotiations, the THCA and the state health officials entered
into the Agreement on January 27, 1997.
Under the Agreement, the state health officials were
obligated, inter alia, (1) to adopt specified reimbursement rates
for 1997, (2) “to evaluate the overall adequacy of
[reimbursement] rates and . . . the methodology [for rate
determination]” with the goal of “achiev[ing] a rate that is
reasonable and adequate to meet the costs that efficiently and
economically operated providers must incur in order to provide
care and services in conformity with applicable State and Federal
laws, regulations and quality and safety standards,” (3) to
negotiate in good faith with the nursing home operators in an
attempt to reach agreements on various issues related to Medicaid
reimbursement rates, and (4) to submit recommended changes in the
reimbursement procedure to the state legislature. In exchange,
the THCA agreed “not to bring a Boren Amendment challenge to the
1997 rates adopted pursuant to this agreement,” with the caveat
that “[t]his covenant not to sue shall not preclude THCA from
bringing any subsequent action to enforce the terms and covenants
of this agreement.” The Agreement further provided that the
parties would move for dismissal of the case without prejudice
participating in the Medicaid Program “provide . . . for a public
process for determination of rates of payment . . . for hospital
services, nursing facility services, and services of intermediate
care facilities for the mentally retarded.” Balanced Budget Act
of 1997, Pub. L. No. 105-33, § 4711(a), 111 Stat. 251, 507 (1997)
(codified at 42 U.S.C. § 1396a(a)(13)(A) (Supp. III 1997)).
4
“within three working days” after the Board of the Texas
Department of Human Services adopted the 1997 rates specified in
the Agreement.
Pursuant to the Agreement, the THCA and the state health
officials filed an agreed motion to dismiss the case without
prejudice on January 30, 1997. In this motion, the parties
incorporated by reference the Agreement, which was attached as an
exhibit. The district court granted the motion to dismiss,
entering the following order:
Before the Court is the parties’ Agreed Motion to
Dismiss. Following consideration, the Court finds the
Motion should be granted.
IT IS THEREFORE ORDERED that Civil Action No. A-96-
CA-744-SS be and said action is hereby DISMISSED WITHOUT
PREJUDICE.
Approximately four years after the district court dismissed
the THCA’s case against the state health officials, the nursing
home operators filed the instant suit to enforce the Agreement in
the same district court. The state health officials filed a
motion to dismiss on the ground that they were entitled to
Eleventh Amendment immunity. On July 13, 2001, the district
court denied the state health officials’ motion to dismiss,
concluding that the court had “jurisdiction to construe and
declare the terms of the settlement agreement . . . that was
incorporated into its [dismissal] order” and that the state
health officials were not entitled to Eleventh Amendment
5
immunity.4 In this interlocutory appeal of the denial of their
motion to dismiss, the state health officials contend that the
district court not only erred in rejecting their assertion of
Eleventh Amendment immunity from the exercise of that court’s
jurisdiction, but also erred in making the preliminary
determination that the district court had subject matter
jurisdiction (in the form of ancillary jurisdiction) to enforce
the Agreement.
II. APPELLATE JURISDICTION AND STANDARD OF REVIEW
This court has jurisdiction to address on interlocutory
appeal both the state health officials’ claim that they are
entitled to Eleventh Amendment immunity and their claim that the
district court lacks subject matter jurisdiction over the nursing
home operators’ enforcement action. Under the collateral order
doctrine, appellate courts have jurisdiction to review on
interlocutory appeal a district court’s denial of a motion to
dismiss based on a state’s assertion of Eleventh Amendment
immunity. Reickenbacker v. Foster, 274 F.3d 974, 976 (5th Cir.
2001). We review such denials de novo. Id. Further, where, as
4
The state health officials argued that the Eleventh
Amendment barred the district court from exercising jurisdiction
over the nursing home operators’ suit because the repeal of the
Boren Amendment meant that enforcement of the Agreement would no
longer remedy violations of federal law. In rejecting this
assertion of Eleventh Amendment immunity, the district court
reasoned that “the subject matter of the settlement agreement,
i.e., Medicaid reimbursement rates, is merely coincidental to the
fact that plaintiffs are seeking to enforce a prior settlement
agreement between parties before this Court.”
6
in the instant case, we have interlocutory appellate jurisdiction
to review a district court’s denial of Eleventh Amendment
immunity, we may first determine whether there is federal subject
matter jurisdiction over the underlying case. See Timpanogos
Tribe v. Conway, 286 F.3d 1195, 1201 (10th Cir. 2002) (“[B]ecause
we have appellate jurisdiction over the interlocutory appeal of
defendants’ assertion of Eleventh Amendment immunity, we also
have appellate jurisdiction to determine whether the district
court had subject matter jurisdiction over the Tribe’s underlying
claim against defendants in the first instance.”); cf. Texas v.
Real Parties in Interest, 259 F.3d 387, 391 (5th Cir. 2001)
(noting that “[w]ith appellate jurisdiction [over the state’s
interlocutory appeal of the denial of Eleventh Amendment
immunity] established,” it was proper “to address the primary
jurisdictional inquiry in this appeal: whether the district court
erred by exercising removal jurisdiction over this state court
action under the All Writs Act”).5
The nursing home operators contend that this court should
decline to address the state health officials’ claim that the
district court is without subject matter jurisdiction because the
officials failed to raise this issue in the district court.
Initially, we note that “parties cannot waive a want of subject
5
Generally, appellate courts do not have jurisdiction to
review on interlocutory appeal a district court’s denial of a
motion to dismiss based on lack of subject matter jurisdiction.
See Catlin v. United States, 324 U.S. 229, 236 (1945).
7
matter jurisdiction.” Ziegler v. Champion Mortgage Co., 913 F.2d
228, 229 (5th Cir. 1990). Furthermore, as the Supreme Court has
stated: “On every writ of error or appeal, the first and
fundamental question is that of jurisdiction, first, of this
court, and then of the court from which the record comes. This
question the court is bound to ask and answer for itself, even
when not otherwise suggested.” Steel Co. v. Citizens for a
Better Env’t, 523 U.S. 83, 94 (1998) (internal quotations and
citation omitted); see also Ruhrgas AG v. Marathon Oil Co., 526
U.S. 574, 583 (1999) (“[S]ubject-matter delineations must be
policed by the courts on their own initiative even at the highest
level.”). Accordingly, it is appropriate for this court to
determine whether there is federal jurisdiction over the nursing
home operators’ enforcement action before considering whether the
Eleventh Amendment bars the exercise of federal jurisdiction.
III. SUBJECT MATTER JURISDICTION: A DISTRICT COURT’S ANCILLARY JURISDICTION
TO ENFORCE A SETTLEMENT AGREEMENT
In Kokkonen v. Guardian Life Insurance Co., 511 U.S. 375
(1994), the Supreme Court explained that “[e]nforcement of [a]
settlement agreement . . . is more than just a continuation or
renewal of the dismissed suit, and hence requires its own basis
for jurisdiction.” Id. at 378. The Court held that a court’s
“ancillary jurisdiction” “to manage its proceedings, vindicate
its authority, and effectuate its decrees” provides such an
independent jurisdictional basis to enforce a settlement
agreement only if “the parties’ obligation to comply with the
8
terms of the settlement agreement ha[s] been made part of the
order of dismissal.” Id. at 380-81. The Court specified two
ways in which a court may make a settlement agreement part of its
dismissal order: “either by separate provision (such as a
provision ‘retaining jurisdiction’ over the settlement agreement)
or by incorporating the terms of the settlement agreement in the
order.” Id.6
In the instant case, there is no question that the district
court did not make the Agreement part of its dismissal order by
including a separate provision retaining jurisdiction to enforce
the Agreement. Rather, the district court concluded that it had
ancillary jurisdiction because it incorporated the Agreement’s
terms into its dismissal order. Specifically, the district court
stated:
On January 27, 1997, the parties signed a settlement
agreement and submitted it as an attachment to an agreed
motion to dismiss. On January 31, 1997, this Court
granted the agreed motion to dismiss, and incorporated
the settlement agreement into its Order by attaching it
as an exhibit as requested by the parties.
6
The Kokkonen Court made clear that a district court may
have ancillary jurisdiction to enforce a settlement agreement
even where, as in the instant case, the previous dismissal was
not effected by court order, but rather by the filing of “a
stipulation of dismissal signed by all parties” pursuant to
Federal Rule of Civil Procedure 41(a)(1)(ii). FED. R. CIV. P.
41(a)(1)(ii). The Court noted that even though Rule 41(a)(1)(ii)
“does not by its terms empower a district court to attach
conditions to the parties’ stipulation of dismissal,” the
district court has the authority to make a settlement agreement
part of its dismissal order “if the parties agree.” 511 U.S. at
381-82.
9
It is not entirely clear whether the district court meant that
the Agreement had been attached to the dismissal order or to the
motion to dismiss.7 In any event, the parties agree that the
Agreement was not attached to the district court’s dismissal
order.8 Moreover, even assuming that the Agreement were attached
to the order, this fact alone would not be sufficient to
incorporate the Agreement into the order under Kokkonen. At
most, physical attachment of a settlement agreement to a
dismissal order evinces the district judge’s “awareness and
approval of the terms of the settlement agreement,” which “do not
suffice to make them part of his order.” Kokkonen, 511 U.S. at
381.9
7
Notably, while the parties did state in their agreed
motion to dismiss that the Agreement “is attached hereto as
Exhibit 1 and incorporated herein as if fully set forth,” neither
in the motion to dismiss nor in the Agreement did the parties
request that the Agreement be attached to the district court’s
dismissal order “as an exhibit.” Thus, the district court’s
statement that the Agreement had been attached “as an exhibit”
may indicate that the district court was referring to the fact
that the Agreement was attached to the agreed motion to dismiss.
8
Although the nursing home operators argue in their brief
that their agreed motion to dismiss (with the Agreement attached
thereto as an exhibit) was attached to the dismissal order, their
counsel clarified at oral argument that the Agreement was
attached only to the agreed motion to dismiss, not to the
dismissal order.
9
In a pre-Kokkonen decision, this court held that “once a
court dismisses an action with prejudice because of a settlement
agreement, and the agreement is neither approved of nor
incorporated by the court in its decree or order and the court
does not indicate any intention to retain jurisdiction, an action
to enforce the settlement agreement requires federal jurisdiction
independent of the action that was settled.” Langley v. Jackson
State Univ., 14 F.3d 1070, 1074 (5th Cir. 1994) (emphasis added).
10
The Kokkonen Court’s determination that a district court has
ancillary jurisdiction to enforce a settlement agreement only if
the court makes the agreement part of its dismissal order is
based on the principle that “[f]ederal courts are courts of
limited jurisdiction.” Id. at 377. The Court pointed out that
“[n]o federal statute” gives federal courts jurisdiction to hear
a claim for breach of an agreement merely by virtue of the fact
that “part of the consideration for [the agreement] was dismissal
of an earlier federal suit.” Id. at 381. However, the Court
reasoned, where a district court makes the agreement part of its
dismissal order, “a breach of the agreement would be a violation
of the order,” and, thus, enforcement of the agreement would
amount to enforcement of the order, an action that the court may
take pursuant to its ancillary jurisdiction “to manage its
proceedings, vindicate its authority, and effectuate its
decrees.” Id. at 380-81. Correspondingly, the Court explained
that where the district court does not make a settlement
agreement part of its dismissal order, “jurisdiction over [the
agreement] is in no way essential to the conduct of federal-court
business,” and, thus, absent some independent basis for federal
jurisdiction, “enforcement of the settlement agreement is for
state courts.” Id. at 381-82. Accordingly, Kokkonen makes clear
We take this opportunity to clarify that, to the extent that
Langley is inconsistent with Kokkonen’s explicit statement that a
district court’s “mere awareness and approval” of a settlement
agreement is insufficient to provide a basis for ancillary
jurisdiction, Langley is necessarily overruled by Kokkonen.
11
that in the context of ancillary jurisdiction to enforce
settlement agreements, the principle that federal courts are
courts of limited jurisdiction requires distinguishing a district
court’s intention to make the terms of a settlement agreement
part of its dismissal order from the court’s mere recognition or
approval of the settlement agreement. See id. at 381. We thus
conclude that to make a settlement agreement part of a dismissal
order by incorporation, Kokkonen requires a district court to
clearly indicate its intention within the dismissal order itself
by expressly incorporating the agreement’s terms.
Admittedly, the Kokkonen Court did not explicitly hold that
a district court’s order of dismissal must contain an express
statement incorporating a settlement agreement in order to vest
the court with ancillary jurisdiction to enforce the agreement.
However, the Court did suggest such a requirement by noting that
the dismissal order at issue in that case not only “did not
reserve jurisdiction in the District Court to enforce the
settlement agreement[, but also] did not so much as refer to the
settlement agreement.” 511 U.S. at 377. Furthermore, a number
of our sister circuits have similarly interpreted Kokkonen to
require that a dismissal order expressly indicate the district
court’s intention to make the terms of a settlement agreement
part of its dismissal order.
For example, in Miener v. Missouri Department of Mental
Health, 62 F.3d 1126 (8th Cir. 1995), the Eighth Circuit noted
12
that “although Kokkonen does not state how a district court may
incorporate a settlement agreement in a dismissal order, the case
does suggest the agreement must be ‘embod[ied]’ in the dismissal
order.” Id. at 1128 (quoting Kokkonen, 511 U.S. at 381)
(alteration in original). The Miener court thus concluded that a
“mere reference” in the dismissal order at issue “to the fact of
settlement does not incorporate the settlement agreement in the
dismissal order.” Id. (citing Hagestad v. Tragesser, 49 F.3d
1430, 1433 (9th Cir. 1995)). Similarly, in In re Phar-Mor, Inc.
Securities Litigation, 172 F.3d 270 (3d Cir. 1999), the Third
Circuit held that the district court’s inclusion of the phrase
“pursuant to the terms of the Settlement” in its dismissal order
did not make the settlement agreement part of the order as
contemplated by the Court in Kokkonen. Id. at 274-75. Rejecting
the argument that this phrase was ambiguous and that the court of
appeals should thus defer to the district court’s determination
that the agreement was incorporated into the order, the Third
Circuit reasoned that “under Kokkonen, unexpressed intent is
insufficient to confer subject matter jurisdiction.” Id. at 275.
Likewise, in Smyth v. Rivero, 282 F.3d 268 (4th Cir. 2002),
the Fourth Circuit held that under Kokkonen, “[t]he obligation to
comply with a settlement’s terms must be expressly made part of a
court’s order for jurisdiction to enforce the settlement after
dismissal of the action to exist.” Id. at 283 (citing Kokkonen,
511 U.S. at 381). The Smyth court thus found that the dismissal
13
order at issue did not provide the district court with ancillary
jurisdiction to enforce the settlement agreement because “the
court’s findings [in its dismissal order] are most properly read
as noting and reciting the agreement . . . as a component of its
analysis of the mootness of the case.” Id. at 284. According to
the Smyth court, “[n]othing in th[e dismissal] order suggests
that the terms of the parties’ agreement are ‘incorporated’ into
the order by a clear indication that they must be complied with
pursuant to the order itself, as opposed to the principles of
contractual obligation.” Id. Thus, the courts of appeals in
Miener, In re Phar-Mor, and Smyth all concluded that under
Kokkonen, a dismissal order’s mere reference to a settlement
agreement is not sufficient to vest a district court with
ancillary jurisdiction to enforce that agreement.
In the instant case, the district court’s dismissal order
does not even contain a reference to the Agreement. The district
court’s dismissal order, in its entirety, states only the
following:
Before the Court is the parties’ Agreed Motion to
Dismiss. Following consideration, the Court finds the
Motion should be granted.
IT IS THEREFORE ORDERED that Civil Action No. A-96-
CA-744-SS be and said action is hereby DISMISSED WITHOUT
PREJUDICE.
The nursing home operators contend that the dismissal order’s
reference to the agreed motion to dismiss achieves incorporation
of the Agreement under Kokkonen, reasoning that the dismissal
order refers to the agreed motion to dismiss, which, in turn,
14
expressly incorporates the Agreement.10 Accordingly, the nursing
home operators contend, the district court in effect expressly
incorporated the Agreement into the dismissal order by
referencing a document (the parties’ agreed motion to dismiss)
that expressly incorporated the Agreement.
In light of Kokkonen and its progeny, we conclude that a
district court’s reference in its dismissal order to an agreed
motion to dismiss does not indicate an intention to make a
settlement agreement attached to that motion to dismiss part of
the order. That the parties’ motion to dismiss expressly
incorporated the Agreement does not affect this conclusion.
Kokkonnen requires that the dismissal order contain a provision
incorporating the Agreement. While the Kokkonen Court did
consider the content of the parties’ stipulation of dismissal as
well as the dismissal order, unlike the instant case, the parties
in Kokkonen drafted the stipulation and order as one document and
submitted it to the court for its signature. See 511 U.S. at
376-77. Where, as here, the district court drafts and signs its
own dismissal order granting an agreed motion to dismiss (rather
than signing a “stipulation and order of dismissal” submitted by
the parties), Kokkonen requires a provision within that order
10
See supra, note 7.
15
expressly incorporating the agreement’s terms as the order’s
terms.11
Further, even assuming a district court could effect
incorporation of a settlement agreement by incorporating a motion
to dismiss that in turn incorporates the agreement, that is not
what the district court did in this case. Rather, the district
court stated only that “[b]efore the Court is the parties’ Agreed
Motion to Dismiss.” This statement merely recognizes that the
dismissal is based on the motion and, at most, recognizes the
fact of the Agreement attached thereto —— not any intention on
the part of the district court to incorporate the Agreement into
11
For the same reason, the nursing home operators’
incorporation argument based on a provision contained in the
Agreement —— specifically, that the “THCA is not preclude[d]
. . . from bringing any subsequent action to enforce the terms
and covenants of this agreement” —— is unpersuasive.
The THCA and a similar organization, as amici for the
nursing home operators, likewise make an argument based on the
possibility of future litigation relating to the dismissed suit.
In particular, the amici contend that the district court’s
dismissal of the case without prejudice indicates its intent to
retain jurisdiction to enforce the Agreement. The amici reason
that, unlike a dismissal with prejudice, “[a] dismissal without
prejudice allows parties to bring subsequent actions concerning
the case.” They further maintain that the district court’s
dismissal without prejudice distinguishes the instant case from
Kokkonen, which involved a dismissal with prejudice. That
distinction has no relevance, however. Even where a dismissal
was without prejudice, a district court still must have an
independent basis of jurisdiction to hear any future actions
relating to the dismissed case. Furthermore, we note that the
fact that the dismissal at issue in Kokkonen was with prejudice
was irrelevant to the Court’s determination that the district
court was without jurisdiction to enforce the settlement
agreement. Indeed, the Court proceeded on the assumption that
the district court would have had jurisdiction to enforce the
settlement agreement if that court had made the agreement part of
its order.
16
its order or to retain jurisdiction to enforce the Agreement.
Under Kokkonen, such a statement is insufficient to make
enforcement of the Agreement equivalent to enforcement of the
district court’s order, and thus cannot confer ancillary
jurisdiction. See 511 U.S. at 381 (“The judge’s mere awareness
and approval of the terms of the settlement agreement do not
suffice to make them part of his order.”); cf. id. at 376
(holding that the district court was without jurisdiction to
enforce a settlement agreement even though the substance of the
agreement was read into the record).
Thus, the district court does not have subject matter
jurisdiction to enforce the Agreement based on that court’s order
dismissing the prior suit that gave rise to the Agreement. Given
that the nursing home operators have not asserted another
independent basis of federal jurisdiction, any action to enforce
the Agreement is “for state courts.” Kokkonen, 511 U.S. at
382.12
12
In their complaint initiating the instant case, in
addition to seeking enforcement of the Agreement, the nursing
home operators invoked 42 U.S.C. § 1983, asserting that the state
health officials violated the nursing home operators’
“constitutional and statutory rights . . . by reason of [the
state health officials’] arbitrary and capricious failure to
comply with the terms of the [Agreement].” However, in response
to the state health officials’ motion to dismiss the § 1983 claim
on the ground that the nursing home operators had failed to
allege the violation of a federal right, the nursing home
operators insisted that “this is not a lawsuit wherein any of the
plaintiffs are asserting violations of federal ‘rights’ with
regard to the administration of the State’s Medicaid program.”
Rather, the nursing home operators maintained, “[t]his is,
primarily, a contract case.” They reasserted this
17
IV. CONCLUSION
For the foregoing reasons, we VACATE the district court’s
order denying the state health officials’ motion to dismiss and
REMAND this case to the district court with instructions to
dismiss the nursing home operators’ enforcement action against
the state health officials for lack of subject matter
jurisdiction. Costs shall be borne by the Plaintiffs-Appellees.
characterization of their suit during oral argument before the
district court on the state health officials’ motion to dismiss,
stating that “this is not a [§] 1983 case.” Accordingly, in its
order denying the state health officials’ motion to dismiss, the
district court found that “the issue [in the case] is simply
holding the defendants to the settlement agreement that resulted
from the 1996 litigation.” Thus, by their clear representations
to the district court that they were not alleging any violations
of federal rights, the nursing home operators abandoned any
§ 1983 claim that they may have attempted to assert in their
initial complaint.
18