Free Response - District Court of Arizona - Arizona

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SALLY HART, AZ Bar No. 013453 WILLIAM E. MORRIS INSTITUTE FOR JUSTICE 2033 E. Speedway Blvd., Suite 200 Tucson, AZ 85719 (520) 322-0126 [email protected] ELLEN SUE KATZ, AZ Bar. No. 012214 WILLIAM E. MORRIS INSTITUTE FOR JUSTICE 202 E. McDowell Rd., Suite 257 Phoenix, AZ 85004 (602) 252-3432 [email protected] JENNIFER L. NYE, AZ Bar No. 019230 ARIZONA CENTER FOR DISABILITY LAW 100 N. Stone Ave., Suite 305 Tucson, AZ 85701 (520) 327-9547 [email protected] JANE PERKINS NATIONAL HEALTHnd LAW PROGRAM 211 N. Columbia St., 2 Floor Chapel Hill, NC 27514 (919) 968-6308 [email protected] Attorneys for Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ) ) ) ) ) ) ) ) ) ) ) ) Plaintiffs, ) ) v. ) ) Anthony Rodgers, Director of the Arizona ) ) Health Care Cost Containment System; and Tommy Thompson, Secretary of the ) ) ) Sharon Newton-Nations; Manuela Gonzalez; Cheryl Bilbrey; Donald McCants; Hector Martinez; Anne Garrison; Dawn House; Dana Franklin; Edward Bonner; D.H.; Jack Baumhardt; Manuel Esparza; and Patricia Jones, on behalf of themselves and all others similarly situated,
Case 2:03-cv-02506-EHC Document 119 -1

No. CIV 03-2506 PHX EHC

PLAINTIFFS' RESPONSE IN OPPOSITION TO DEFENDANT MICHAEL LEAVITT'S NOTICE OF RECENT AUTHORITY

(Assigned to Hon. Earl H. Carroll)

Filed 06/25/2007

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United States Department of Health and Human Services, in their official capacities, Defendants.

) ) ) ) ) )

Plaintiffs submit this response in opposition to Defendant Michael Leavitt's Notice of Recent Authority. In support of this response, Plaintiffs state the following: 1. On March 10, 2005, this Court stayed this case at Defendant Tommy

Thompson's request. Defendant Thompson requested the stay because of the Spry v. Thompson case from Oregon that was on appeal to the Ninth Circuit. At the time of the stay, Plaintiffs and Defendant Thompson had filed motions for summary judgment. 2. On May 21, 2007, the Ninth Circuit ruled in the Spry case. On June 11,

2007, Defendant Leavitt submitted the Spry decision, claimed it was "dispositive of plaintiffs' contention that the Secretary acted outside his statutory authority by permitting the imposition of co-payments in violation of § 1396o and in excess of the limits established" by federal regulations, and asked the Court to grant the Secretary's motion for summary judgment claiming Spry resolved all issues in the case in the Secretary's

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favor. 3. 4. Plaintiffs dispute the claims made by Defendant Leavitt. As a preliminary matter, Plaintiffs note the Secretary has not requested this

Court lift the March 10, 2005, stay. Plaintiffs request that the stay not be lifted for the following reasons. 4. One of plaintiffs' counsel in Spry, attorney Jane Perkins, is also counsel for

Plaintiffs in this case. Plaintiffs' counsel in this case and in Spry believe the Spry decision conflicts with a prior decision of the Ninth Circuit, Portland Adventist Medical Center v. Thompson, 399 F.3d 1091 (9th Cir. 2005). 5. The plaintiffs in Spry are going to file a Petition for Rehearing by the

Ninth Circuit Court of Appeals. The mandate in Spry has not issued and will not issue
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until after the Petition for Rehearing is ruled upon. Therefore, the Spry decision is not a final decision. Fed. R. App. P. Rule 41(d) 6. In the Portland Adventist case, the Ninth Circuit rejected the Secretary's

argument that "expansion" populations' eligibility is tied only to the demonstration statute, Section 1315, (often referred to as Section 1115 of the Social Security Act or § 1115) and not the state plan under Title XIX: [W]hile the provision [§ 1115]gives the Secretary discretion in approving projects, the provision requires the Secretary to regard expenditures under § 1115 projects designed to assist low-income patients as Title XIX expenditures for the duration of such projects, and therefore to regard § 1115 expansion populations as receiving Medicaid assistance under a state plan approved under Title XIX. Id. at 1099 (emphasis in original) 7. The Court also rejected the Secretary's interpretation that Section 1115

created a separate "expenditure" authority. "Section 1115 does not establish a new, independent funding source." Id. at 1098. 8. Finally, the Portland Adventist Court stated its agreement that "the

statutory scheme is unambiguous and supports only the conclusion that expansion populations eligible under § 1115 receive medical assistance `under a state plan.'" Id. at 1096. 9. The Spry decision attempted to distinguish Portland Adventist by claiming

the Portland Adventist holding only referred to "expenditures" being regarded as eligible for Medicaid coverage and not the eligibility of the person on whose behalf the expenditures were incurred. As shown above, that is not correct. 10. Plaintiffs cite these sections from the Portland Adventist decision to show

the likelihood that the Petition for Rehearing will be granted to resolve the obvious conflicts between the two decisions.

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Document 119 -3

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11.

Moreover, there are other pending claims in this case that are not affected

by Spry. First, Plaintiffs claim that Defendants imposed the challenged copayments in the Medical Expense Deduction program on some "medically needy" persons within the definition of the Medicaid Act. Plaintiffs' Complaint, ¶¶ 44-45; Plaintiffs' Memorandum in Opposition to Defendant Thompson's Motion for Summary Judgment and in Support of Plaintiffs' Motion for Summary Judgment, pp. 9, ("Plaintiffs' Memorandum"); Plaintiffs' Reply to Defendants' Response to Plaintiffs' Motion for Summary Judgment, pp. 6-7 ("Plaintiffs' Reply"). Although Defendant Leavitt disputes that this claim

covers the "medically needy," Defendant Rodgers admitted this fact. See Defendant Rodgers' Separate Statement of Facts in Opposition to Plaintiffs' Motion for Summary Judgment, ¶ 20. Second, Plaintiffs claim the notices Defendant Rodgers gave the class concerning the challenged copayments failed to comply with due process requirements. Plaintiffs' Complaint, ¶ 54; Plaintiffs' Fourth Claim for Relief; Plaintiffs' Memorandum, pp. 34-38; Plaintiffs' Reply, pp. 7-10. Third, Plaintiffs challenged Defendants'

imposition of the $5 copayments for the non-emergency use of the emergency room for traditional Medicaid groups in Arizona Administrative Code, R9-22-711(D). Plaintiffs' Complaint, ¶ 52; Plaintiffs' Memorandum, pp. 33-34. Fourth, Plaintiffs' Complaint

includes a claim that the federal Secretary is violating U.S.C. § 3515b, which prohibits the Secretary from funding any experimental program which may present a danger to the well-being of a participant in the program without obtaining written informed consent of each participant. Plaintiffs' Complaint ¶ 38; Plaintiff's Second Claim for Relief;

Plaintiffs' Memorandum, pp. 32-33. For all these reasons, it would be premature to lift the stay. Even if this Court were to lift the stay, Plaintiffs request that this Court allow the parties to file supplemental briefs on the application of the Portland Adventist and Spry cases to this case and the remaining issues not covered by these two cases. Wherefore, Plaintiffs request that this Court:

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A.

Continue the stay in this case until after the Ninth Circuit rules on the Petition for Rehearing in Spry;

B.

In the alternative, if the Court lifts the stay, allow the parties to file supplemental briefs on whether the Spry decision is dispositive of any claims in this case before ruling on the Plaintiffs' and Defendant Leavitt's Motions for Summary Judgment; and

C.

Grant such further relief as is just.

Respectfully submitted this 25th day of June 2007. ARIZONA CENTER FOR DISABILITY LAW WILLIAM E. MORRIS INSTITUTE FOR JUSTICE NATIONAL HEALTH LAW PROGRAM By /s/ Ellen Katz Ellen Katz William E. Morris Institute for Justice 202 East McDowell, Suite 257 Phoenix, Arizona 85004 Attorneys for Plaintiffs

ORIGINAL of the foregoing electronically filed with the Clerk of the Court this 25th day of June 2007. COPY of the foregoing emailed via Electronic Case Filing System this 25th day of June 2007 to: Logan Johnston Johnston Law Office PLC One North First Street, Suite 250 Phoenix, Arizona 85004-2359 Attorney for Defendant Rodgers

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COPY of the foregoing mailed this 25th day of June 2007, to: Honorable Earl H. Carroll United States Senior District Judge United States District Court District of Arizona Sandra Day O'Connor U. S. Courthouse 401 West Washington Street, SPC 56, Suite 621 Phoenix, Arizona 85003-2156 and by Fax to: Diane Kelleher U. S. Department of Justice Federal Programs Branch Civil Division ­ Room 7318 20 Massachusetts Avenue, N.W. Washington, D.C. 20001 Attorney for Defendant Thompson

By /s/ Gaynell Carpenter

Case 2:03-cv-02506-EHC

Document 119 -6

Filed 06/25/2007

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