Asante v. Cal. Dep't of Health Care Servs.

• Decision Date: 01 August 2018
• Docket Number: Case No. 14-cv-03226-EMC
• Citation: 330 F.Supp.3d 1198
• Parties: ASANTE, et al., Plaintiffs, v. CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES, et al., Defendants.
• Court: U.S. District Court — Northern District of California

330 F.Supp.3d 1198

ASANTE, et al., Plaintiffs,

v.CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES, et al., Defendants.

Case No. 14-cv-03226-EMC

United States District Court, N.D. California.

Signed August 1, 2018

Dean L. Johnson, Dean L. Johnson, Inc., Carlsbad, CA, Michael Steven Sorgen, Law Offices of Michael S. Sorgen, Berkeley, CA, Thomas J. Weiss, Law Offices of Thomas J., Los Angeles, CA, for Plaintiffs.

Jennifer C. Addams, Susan M. Carson, Joshua Nathan Sondheimer, California Department of Justice Office of the Attorney General, San Francisco, CA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR ENTRY OF JUDGMENT

Docket No. 181

EDWARD M. CHEN, United States District JudgeThe parties disagree whether anything remains to be litigated in this case following the Ninth Circuit's reversal of this Court's prior grant of summary judgment in favor of Plaintiffs under the interstate commerce clause. Plaintiffs insist that, following their loss of the commerce clause claim, they may now pursue a theory challenging Defendants' conduct under the Fourteenth Amendment's Equal Protection Clause. Defendants argue that Plaintiffs have waived that theory. For the reasons explained below, the Court agrees. Accordingly, Defendants' motion is GRANTED .

I. PROCEDURAL HISTORY

Plaintiffs' initial complaint alleged six causes of action, including for violations of the dormant Commerce Clause, equal protection under the federal and state constitutions, Medicaid statutes and regulations, and for declaratory, injunctive, and other equitable relief. See Docket No. 1-2 at 12. After pressing the Court to bifurcate liability and prospective relief from the question of retrospective damages, Plaintiffs moved for summary judgment only on their Commerce Clause and 42 U.S.C. § 1396a(a)(13)(A) claims.¹ See Docket No. 39 at 15-20. They did not move for summary judgment on their equal protection claim. Id. Although as pled in the complaint, violation of Section 1396a(a)(13)(A) also violated equal protection, see Compl. ¶ 42 and note 1, supra , Plaintiffs' motion for summary judgment relied exclusively on statutory grounds. See Docket No. 39 at 17-20. Plaintiffs did not advance any argument under the equal protection clause.

After Plaintiffs' motion, Defendants cross-moved for summary judgment on all of Plaintiffs' causes of action, including the equal protection claim. See Docket No. 51 at 18-20. Plaintiffs opposed Defendants' motion, arguing in part that the alleged conduct violated the equal protection clause. See Docket No. 52 at 19-20. However, Plaintiffs' argument on the claim was brief: it consisted of a single page with a conclusory argument that Defendants' claim of administrative necessity could not satisfy rational basis review for the same reasons it could not survive scrutiny under the commerce clause (id. ), which subjects discriminatory laws to a "virtually per se rule of invalidity." Chemical West Mgmt., Inc. v. Hunt , 504 U.S. 334, 344 n.6, 112 S.Ct. 2009, 119 L.Ed.2d 121 (1992) (quotation omitted).

In their subsequently filed brief in opposition to Plaintiffs' motion for summary judgment, Defendants argued that Plaintiffs abandoned their equal protection claim because Plaintiffs had not affirmatively moved for summary judgment thereon. See Docket No. 56 at 9. Plaintiffs did not challenge that assertion in their reply brief. See Docket No. 58. They left the claim of abandonment of the equal protection claim unanswered.

Defendants' reply brief in support of their own cross-motion re-iterated that Plaintiffs had abandoned the equal protection claim by failing to affirmatively move on it, and by noting that Plaintiffs' opposition to Defendants' motion for summary judgment on that claim merely reiterated their argument under the commerce clause without discussing the necessary elements of an equal protection claim. See Docket No. 59 at 12-15.

At the October 15, 2015 hearing on the cross-motions, Plaintiffs did not rebut the abandonment assertion or argue in favor of an equal protection claim. See Docket No. 89.

The Court granted Plaintiffs' motion for partial summary judgment; it found that Defendants had violated the commerce clause. See Docket No. 65 at 43. It also partially granted Defendants' motion for summary judgment under § 1396a(a)(13)(A). Id. at 44. The judgment was partial insofar as Plaintiffs had only sought judgment on liability, not damages. The Court did note that it "need not reach Plaintiffs' Equal Protection claims." Id. at 43. Since Plaintiffs had not moved for judgment on their equal protection claim, the Court was referring to disposition of Defendants' cross-motion for summary judgment on that issue.

The Court then ordered the parties to file supplemental briefs regarding whether Plaintiffs were entitled to retroactive monetary relief. Plaintiffs' supplemental brief surprisingly argued that their complaint "contains no federal causes of action and seeks no remedies under federal law," and that "[i]nstead, it contains only state law causes of action and seeks only remedies provided for under California law." Docket No. 70 at 1. Plaintiffs argued that they were entitled to monetary relief under California Code of Civil Procedure § 1085, and expressly argued that the Court should not decide the question of retroactive relief pursuant to 42 U.S.C. § 1983. Id. In its order regarding retroactive damages, the Court observed that "Plaintiffs expressly waived federal claims, stating that the state complaint contains only state law causes of action and seeks only remedies provided for under California law. " Docket No. 82 at 4 (emphasis added); see also id. ("Plaintiffs expressly now disavow any federal causes of action...."). The Court ultimately held that § 1085 did not permit recovery of retroactive damages. Id. at 10.

Plaintiffs then appealed the Court's order regarding retroactive damages. See Docket No. 83. However, because the appeal was premature (there was not yet a final judgment), the Ninth Circuit granted Plaintiffs' motion for voluntary dismissal of the appeal. See Docket No. 99.

Based on Plaintiffs' disavowal of any federal cause of action and the Court's holding that § 1085 did not afford Plaintiffs a basis for relief, Defendants sought leave to file a motion for reconsideration of the Court's summary judgment in favor of Plaintiffs on the commerce clause claim, arguing that the order was not supported by any cause of action in light of the Court's holding regarding § 1085 and Plaintiffs' disavowal of a federal cause of action. See Docket No. 92. The Court granted Defendants leave to file for reconsideration. See Docket No. 110. In response, Plaintiffs sought leave to amend their complaint to state a cause of action under 42 U.S.C. § 1983 in order to save their judgment on the commerce clause. See Docket No. 111. The proposed amended complaint repeated the same six causes of action initially pled in state court, but added a seventh cause of action titled "federal claims" seeking relief under 42 U.S.C. § 1983 and 1988 based on violations of the interstate commerce clause, equal protection clause, and federal Medicare laws. See Docket No. 113 ¶ 57.

Technically, the amended complaint re-asserts an equal protection claim. However, in requesting leave to amend, Plaintiffs explained that their proposed amended complaint "merely makes clear what this Court and the defendants were already assuming during the prior summary judgment process, which is that the plaintiffs are asserting a claim for relief under 42 U.S.C. Section 1983.... [I]t is the defendants that necessitated the amendment to plaintiffs' Complaint by challenging through their motion for reconsideration this Court's December 21, 2015 partial summary judgment Order. Had the defendants never filed that motion for reconsideration which questioned the correctness of this Court's December 21, 2015, Order, plaintiffs' proposed amendment would have been unnecessary and redundant." Docket No. 116 at 3-4. In other words, there was no reason for the Court or Defendants to believe that the amended complaint was intended to preserve an equal protection claim; rather, it was expressly presented by Plaintiffs as necessary only to reassert a federal cause of action in support of relief under the commerce clause, a clarification needed after Plaintiffs' disavowed any federal claim. With that understanding, the Court granted Plaintiffs' motion for leave to file an amended complaint. Docket No. 121 at 5. Hence, notwithstanding the amended complaint, Plaintiffs have never pursued in earnest an equal protection claim.

Further supporting the conclusion that Plaintiffs did not intend to actively litigate the equal protection claim, at the September 22, 2016 hearing concerning their motion for leave to amend the complaint, Plaintiffs "request[ed] that based on the Court's rulings to date [the Court] enter a final judgment so the case [can] move forward." Docket No. 142 at 37:10-12; id. at 37:18-19 ("We would just prefer that a final judgment be entered."). At Plaintiffs' request, on October 12, 2016, the Court entered final judgment, incorporating its summary judgment order as well as the subsequent orders granting Plaintiffs leave to amend and partially granting Defendants' motion for reconsideration. See Docket No. 126. That final judgment as requested by Plaintiffs contained no adjudication of any equal protection claim.

Plaintiffs thereafter moved for attorneys' fees pursuant to 42 U.S.C. § 1988 and Fed. R. Civ. P. 54(d). See Docket Nos. 127 and 128. The Court granted the request. See Docket No. 159.

Meanwhile, Plaintiffs appealed from final judgment with respect to the Court's retroactivity ruling, see Docket No. 129, and Defendants appealed with respect to the Court's commerce clause ruling, see Docket No. 141, and the award of attorneys' fees and costs.

In their opening brief on appeal, Plaintiffs asserted that "the Ninth Circuit has jurisdiction over the Hospitals' appeal...