D.T.M. Ex Rel. McCartney v. Cansler

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-1441
D.T.M., a minor child, by his mother Penny McCartney; E.C.,
a minor child, by his mother Selena McMillan; K.T., a minor
child, by her father, Greg Tipton, individually and on
behalf of all others similarly situated,
Plaintiffs - Appellees,
v.
LANIER M. CANSLER, Secretary of North Carolina Department of
Health and Human Services, in his official capacity,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Greenville. Malcolm J. Howard,
Senior District Judge. (7:08-cv-00057-H)
Argued: May 13, 2010 Decided: June 11, 2010
Before TRAXLER, Chief Judge, WILKINSON, Circuit Judge, and
Samuel G. WILSON, United States District Judge for the Western
District of Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Ronald Moore Marquette, NORTH CAROLINA DEPARTMENT OF
JUSTICE, Raleigh, North Carolina, for Appellant. Douglas Stuart
Sea, LEGAL SERVICES OF SOUTHERN PIEDMONT, INC., Charlotte, North
Carolina, for Appellees. ON BRIEF: Roy Cooper, North Carolina
Attorney General, Belinda A. Smith, Special Deputy Attorney
General, Tracy J. Hayes, Assistant Attorney General, NORTH
CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for
Appellant. Jane Perkins, Sarah Jane Somers, NATIONAL HEALTH LAW
PROGRAM, Chapel Hill, North Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Lanier Cansler, the Secretary of the North Carolina
Department of Health and Human Services (“HHS”), appeals the
denial of his motion to dismiss this suit alleging that HHS has
reduced or terminated Medicaid benefits received by plaintiffs
and others in violation of the Due Process Clause and the
Medicaid Act. The Secretary primarily argues that he is
entitled to Eleventh Amendment immunity. Finding no error, we
affirm.
I.
Medicaid is a cooperative federal-state program that
assists states in providing medical services to the needy.
States need not participate in Medicaid, but once they choose to
do so, they must implement plans for providing medical
assistance that comply with detailed federal standards. See 42
U.S.C.A. § 1396a (West 2003 & Supp. 2009). As is relevant here,
state plans are required to “provide for granting an opportunity
for a fair hearing . . . to any individual whose claim for
medical assistance . . . is denied or is not acted upon with
reasonable promptness.” 42 U.S.C.A. § 1396a(a)(3). The state
plans also must contain reasonable standards for determining
individuals’ eligibility. See 42 U.S.C.A. § 1396a(a)(17). In
Medicaid parlance, “medical assistance” means payment of part or
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all of the cost of care and services or provision of the
services themselves. See 42 U.S.C. § 1396d(a), as amended by
the Patient Protection and Affordable Care Act, Pub. L. No. 111-
148, § 2304, 124 Stat. 119, 296 (Mar. 23, 2010). These services
generally include “health care, diagnostic services, treatment,
and other measures . . . to correct or ameliorate defects and
physical and mental illnesses” in children. 42 U.S.C.A. §
1396d(r)(5) (West Supp. 2009).
HHS is the state agency responsible for administering
Medicaid programs in North Carolina. See 42 U.S.C.A. §
1396a(a)(5). In approximately 2006, HHS contracted with
ValueOptions, Inc. (“VO”), to be HHS’s statewide agent to
administer behavioral health and developmental disability
services for North Carolina’s Medicaid program. The three
plaintiffs in this action are children who have been denied the
level of medical assistance that they requested. North Carolina
requires preauthorization for medical assistance of the type
Plaintiffs sought. See 42 C.F.R. § 440.230(d) (2008) (providing
that states “may place appropriate limits on a service based on
. . . utilization control procedures”). If a preauthorization
request is granted, Medicaid pays for the service for a certain
length of time—90 days for Community Support Services and one
year for the Community Alternatives Program for persons with
mental retardation/developmental disabilities. An applicant may
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appeal an adverse decision to the North Carolina Office of
Administrative Hearings (“OAH”), with or without first appealing
informally to the HHS hearing office. During the pendency of a
timely filed appeal, North Carolina authorizes the provision of
services at the existing level of care.
Plaintiffs brought this suit under 42 U.S.C.A. § 1983 (West
2003), alleging that HHS violated their rights under the
Medicaid Act and the Due Process Clause of the Fourteenth
Amendment by arbitrarily and capriciously denying their requests
for services, terminating or reducing their benefits without
providing timely and adequate written notice and a fair hearing,
and failing to ensure that their benefits continued while their
appeals were pending. Plaintiffs’ complaint requests
declaratory relief as well as an order enjoining the Secretary,
his agents, successors, and employees to
(a) continue to provide behavioral health and
developmental disability services to all persons who
have been receiving them, until Defendant corrects the
practices and procedures alleged herein;
(b) prospectively reinstate behavioral health and
developmental disability services previously provided
to the named Plaintiffs and members of the Plaintiff
class that were improperly reduced or terminated under
the illegal practices and procedures alleged herein;
[and]
(c) comply with the Due Process Clause of the
U.S. Constitution and the Medicaid Act.
J.A. 40.
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After filing suit, Plaintiffs filed a motion in the
district court to certify this suit as a class action. The
Secretary opposed class certification and moved to dismiss for
lack of subject-matter jurisdiction and for failure to state a
claim upon which relief can be granted. See Fed. R. Civ. P.
12(b)(1), (6). Regarding subject-matter jurisdiction, the
Secretary argued that he was entitled to Eleventh Amendment
immunity, that the Plaintiffs lacked standing, and that the
action had become moot. He also sought to dismiss because
abstention under Younger v. Harris, 401 U.S. 37 (1971), was
appropriate. The district court denied the motion to dismiss
and denied the class-certification motion without prejudice to
Plaintiffs’ right to refile the motion after further discovery.
II.
On appeal, the Secretary argues that the district court
erred in not dismissing the suit based on Eleventh Amendment
immunity. * We disagree.
A district court order denying a motion to dismiss on the
ground of Eleventh Amendment immunity is immediately appealable.
*
The Secretary also maintains that the Plaintiffs lacked
standing when they initiated this suit, and, alternatively, that
the suit has become moot since it was filed. We decline to
address those issues at this time. See Antrican v. Odom, 290
F.3d 178, 191 (4th Cir. 2002).
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See Antrican v. Odom, 290 F.3d 178, 184 (4th Cir. 2002). We
review such an order de novo. See CSX Transp., Inc. v. Bd. of
Pub. Works, 138 F.3d 537, 541 (4th Cir. 1998).
Although the Eleventh Amendment generally bars individual
suits against non-consenting states and state officers, an
exception exists under the doctrine of Ex parte Young, 209 U.S.
123 (1908), for official capacity suits requesting prospective
relief to achieve the officials’ compliance with federal law.
See Litman v. George Mason Univ., 186 F.3d 544, 549-50 (4th Cir.
1999). In such a case, a federal court may enjoin a state
officer from engaging in future conduct in violation of federal
law. See Antrican, 290 F.3d at 184. In determining whether the
Ex parte Young exception applies, “a court need only conduct a
‘straightforward inquiry into whether the complaint alleges an
ongoing violation of federal law and seeks relief properly
characterized as prospective.’” Verizon Md. Inc. v. Pub. Serv.
Comm’n, 535 U.S. 635, 645 (2002) (alteration omitted).
The Secretary asserts three arguments against application
of Ex parte Young: that Plaintiffs seek a compensatory,
monetary remedy against the state rather than prospective relief
against him; that Plaintiffs have not alleged an ongoing
violation of federal law; and that the Secretary is not an
appropriate party. We will address these arguments seriatim.
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A.
In arguing that Plaintiffs do not seek prospective relief,
the Secretary focuses on one part of the relief requested in the
amended complaint, that being Plaintiffs’ request to enjoin him,
his agents, successors, and employees to prospectively reinstate
services to the named Plaintiffs. However, the request for
prospective reinstatement of benefits is precisely the type of
relief that we recognized in Kimble v. Solomon, 599 F.2d 599,
605 (4th Cir. 1979), that plaintiffs may seek consistent with
the Eleventh Amendment when they allege a state Medicaid
agency’s reduction of their benefits violated federal law. The
Secretary argues that the facts alleged in the complaint do not
legally entitle Plaintiffs to prospective reinstatement of
benefits since the benefits allegedly denied were for a discrete
period in the past. However, even assuming arguendo that the
Secretary is correct on this point, the fact that Plaintiffs
cannot prove entitlement to the prospective relief they seek
does not mean that the relief they seek is not prospective. See
Verizon, 535 U.S. at 646 (“[T]he inquiry into whether suit lies
under Ex parte Young does not include an analysis of the merits
of the claim.”). And, in any event, even if the prospective
reinstatement of benefits—the remedy on which the Secretary has
focused—were not a prospective remedy, injunctive relief from
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the continuation of HHS’s allegedly illegal practices would be,
and the Ex parte Young exception would apply.
B.
The Secretary’s second argument, that Plaintiffs have not
alleged an ongoing violation of federal law, is also a merits-
based argument dressed in Eleventh Amendment clothing. The
Secretary argues that to determine whether Plaintiffs allege an
ongoing violation for Ex parte Young purposes, “this Court must
determine what pre-deprivation and post-deprivation process is
provided and whether it is constitutionally adequate.” Brief of
Appellant, at 45. However, to fall within the Ex parte Young
exception, it is sufficient for Plaintiffs’ suit to allege an
ongoing violation of federal law; actually proving such an
ongoing violation is unnecessary. See Verizon, 535 U.S. at 646;
Burlington N. & Santa Fe Ry. Co. v. Vaughn, 509 F.3d 1085, 1092
(9th Cir. 2007); Deposit Ins. Agency v. Superintendent of Banks
(In re Deposit Ins. Agency), 482 F.3d 612, 621 (2d Cir. 2007);
McCarthy v. Hawkins, 381 F.3d 407, 415-17 (5th Cir. 2004).
C.
The Secretary finally maintains that his status as the
official responsible for administering North Carolina’s Medicaid
program is not a sufficient connection to the complained-of
actions to justify applying the Ex parte Young exception to him.
We disagree.
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The complaint makes clear that it is challenging the
practices of the public agency. The Secretary, as the person
responsible for assuring that the agency’s decisions comply with
federal law, was properly named as the defendant. See Ogden v.
United States, 758 F.2d 1168, 1177 (7th Cir. 1985) (“[W]here
injunctive, as opposed to monetary relief is sought, no ‘direct
and personal’ involvement is required in order to hold high-
level officials responsible for the actions of subordinates and
to subject them to the equitable jurisdiction of the court.”).
And, the Ex parte Young exception was therefore properly applied
to him. See Antrican, 290 F.3d at 188-89 (holding Ex parte
Young exception was properly applied to state officials
overseeing the North Carolina Medicaid program in suit alleging
wrongful denial of Medicaid services).
III.
In sum, because we conclude that the district court
properly ruled that the Secretary was not entitled to Eleventh
Amendment immunity, we affirm.
AFFIRMED
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