Cedars-Sinai Medical Center v. Shalala, 96-55892.
| Decision Date | 18 May 1999 |
| Docket Number | No. 96-55892.,96-55892. |
| Citation | 177 F.3d 1126 |
| Parties | CEDARS-SINAI MEDICAL CENTER; University of California San Francisco Medical Center; University of California Los Angeles Medical Center; University of California San Diego Medical Center; Adventist Health System/Sunbelt, Inc., dba Florida Hospital Medical Center; Allegheny General Hospital; Galen of Arizona, Inc., dba Healthwest Regional Medical Center; Holy Cross Hospital; John Hopkins Hospital; Loma Linda University Medical Center Hospital; Medlantic Healthcare Group,. Inc., a not-for-profit corporation dba Washington Hospital Center; Miami Beach Healthcare Group, Ltd., dba Miami Heart Institute; Montefiore Medical Center; Mount Sinai Hospital; Society of the New York Hospital; Northwestern Memorial Hospital; Presbyterian University Hospital; St. Francis Hospital; Saint Joseph's Hospital of Atlanta, Inc.; St. Luke's Medical Center; St. Thomas Hospital; Sinai Samaritan Medical Center; West Florida Regional Medical Center, Inc., dba West Florida Regional Center; University of Maryland Medical System Corporation; Yale-New Haven Hospital, Inc.; Regents of the University of California, a constitutional corporation under Article 9, Section 9 of the California Constitution, by and on behalf of the University of California San Francisco Medical Center, the University of California Los Angeles Medical Center, the University of California San Diego Medical Center, Plaintiffs-Appellees, and Scripps Health Systems, dba Scripps Memorial Hospital-La Jolla, dba Green Hospital of Scripps Clinic; Qui Tam Relator, Intervenors, v. Donna E. SHALALA, Secretary of the United States Department of Health and Human Services, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
COPYRIGHT MATERIAL OMITTED
Christine N. Kohl, United States Department of Justice, Washington, D.C., for the defendant-appellant.
Donald R. Warren, Monaghan & Warren, San Diego, California, for the intervenor-appellant.
Carol M. McCarthy and Leonard C. Homer, Ober, Kaler, Grimes & Shriver, Baltimore, Maryland, for the plaintiffs-appellees.
Before: BROWNING, SCHROEDER, Circuit Judges, and RESTANI, U.S. Court of International Trade Judge.*
Argued Telephonically and Submitted December 3, 1998.
Underlying this appeal is a challenge by Cedars-Sinai Medical Center and twenty-four other hospitals to a policy announced by the Department of Health and Human Services ("HHS") in an amendment to its Medicare Manual. The new policy removed Medicare coverage of investigational medical devices and procedures that had not been approved for marketing by the Food and Drug Administration. The Hospitals claim the policy, now superceded by regulation, was not originally issued in accordance with the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 551 et seq. Because the policy was promulgated in 1986 and this case was not filed until 1995, the issue before us is whether it is barred by the six-year statute of limitations for suits against the United States. See 28 U.S.C. § 2401(a).
We have seen this case before. The government originally appealed from the district court's decision on the merits that the policy was not validly promulgated. We remanded for the district court to consider whether the government had waived the statute of limitations defense, and if not, to consider in the first instance whether the statute was violated. See Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765 (9th Cir.1997) ("Cedars-Sinai I").
On remand the district court held that the defense was not waived because although the government raised it in the reply brief to its motion to dismiss, the Hospitals had an opportunity to respond. The court then held that the Hospitals' claim is time-barred. This time the Hospitals appeal, and we affirm.
In this appeal, the Hospitals first contend that the government waived the statute of limitations defense by not raising it in a responsive pleading pursuant to Fed. R. Civ. Pro. 8(c). Yet, affirmative defenses like the statute of limitations may also be raised in motions to dismiss filed before the first responsive pleading. See e.g. Bacon v. City of Los Angeles, 843 F.2d 372 (9th Cir.1988); Wright & Miller, Civil Practice and Procedure, § 1357 n.58. The issue then becomes whether the government waived its defense by waiting to bring it up until its reply to the opposition to its motion to dismiss. The Hospitals were able to file a sur-reply in response to the government's position. Although the Hospitals contend that the opportunity was deficient because their response had to be rushed and short, the district court's conclusion that they had adequate opportunity to respond and were not prejudiced by the government's conduct is not clearly erroneous.1
The Hospitals' principal contention on appeal is that their claim complied with the six-year statute of limitations in 28 U.S.C. § 2401(a) for judicial review of agency regulations under the APA. Under well-settled circuit authority, a cause of action challenging procedural errors in the promulgation of regulations accrues on the issuance of the rule. See Wind River Mining Corp. v. United States, 946 F.2d 710, 713 (9th Cir.1991); Shiny Rock Mining Corp. v. United States, 906 F.2d 1362, 1364-66 (9th Cir.1990); Sierra Club v. Penfold, 857 F.2d 1307, 1315 (9th Cir. 1988). In Shiny Rock, for example, we held that a challenge to mining regulations accrued when the regulations were promulgated and not when the plaintiffs' mining application was denied many years later.
Even though their claim, like the claim in Shiny Rock, is that the agency followed the wrong procedures in announcing the new rule, the Hospitals contend that their cause of action did not accrue until 1994, when HHS began denying their claims for payment for the use of the investigatory devices or procedures. Were the Hospitals maintaining a cause of action under the Medicare Act for specific claims allegedly wrongfully denied by the government, they could legitimately contend that they were not injured until the particular denial had occurred. See 42 U.S.C. § 405(g) (). Here, however, it is clear that the cause of action arises under the Administrative Procedure Act to challenge the manner in which the policy was announced. As such, the cause accrued at the time of that announcement. As we explained in Shiny Rock, such a rule is necessary so that regulations are not indefinitely subject to challenge in court. Accepting the Hospitals' argument and allowing suit whenever a regulation was administered by a federal agency "would virtually nullify the statute of limitations for challenges to agency orders." Shiny Rock, 906 F.2d at 1362.
The Hospitals also attempt to distinguish Shiny Rock and related cases, all of which arose in the mining context, on the ground that the plaintiff miners in those cases had more reason to know about the announcement of new mining regulations than the Hospitals had to know of the amendment to the Medicare Manual at issue here. This distinction is unpersuasive. If anything, the promulgation of the policy in the Medicare...
To continue reading
Request your trial
-
Yale-New Haven Hosp., Inc. v. Thompson
...v. Shalala, 939 F.Supp. 1457 (C.D.Cal.1996), aff'd in part and remanded in part, 125 F.3d 765 (9th Cir.1997), appeal after remand, 177 F.3d 1126 (9th Cir.1999). Alternatively, HHS argues that the complaint fails to set forth a claim upon which relief may be granted. For the reasons set fort......
-
Yale-New Haven Hosp. v. Leavitt
...court dismissed the hospitals' claims for non-compliance with the requisite statute-of-limitations, see Cedars-Sinai Med. Ctr. v. Shalala, 177 F.3d 1126, 1128 (9th Cir.1999). The allegations in the qui tam action prodded the Secretary to seek information from Yale about Medicare claims subm......
-
Amina v. WMC Fin. Co.
...on the face of a complaint, ... a defendant can raise that defense in a motion to dismiss.") (citing Cedars–Sinai Med. Ctr. v. Shalala , 177 F.3d 1126, 1128–29 (9th Cir. 1999) ).15 The conclusory statements in the 97–page Complaint (inclusive of exhibits), fail to comply with the pleading r......
-
Alabama v. Shalala
...procedural errors in the promulgation of a regulation accrues on the issuance of the regulation.24 Cedars-Sinai Med. Ctr. v. Shalala, 177 F.3d 1126, 1129 (9th Cir. 1999); Pennsylvania Dep't of Public Welfare v. United States Dep't of Health & Human Servs., 101 F.3d 939, 944-45 (3d Cir.1996)......