Consejo De Salud Playa Ponce v. Rullan

• Decision Date: 13 January 2009
• Docket Number: No. 06-1260 (GAG),,No. 06-1524 (GAG).,06-1260 (GAG),,06-1524 (GAG).
• Citation: 593 F.Supp.2d 386
• Parties: CONSEJO DE SALUD PLAYA PONCE, et al., Plaintiffs v. Johnny RULLAN, Secretary of Health of the Commonwealth of Puerto Rico, Defendant.
• Court: U.S. District Court — District of Puerto Rico

593 F.Supp.2d 386

CONSEJO DE SALUD PLAYA PONCE, et al., Plaintiffs v. Johnny RULLAN, Secretary of Health of the Commonwealth of Puerto Rico, Defendant.

Civil No. 06-1260 (GAG),

Civil No. 06-1524 (GAG).

United States District Court, D. Puerto Rico.

January 13, 2009.

Agustin Diaz-Garcia, Ignacio Fernandez-De-Lahongr, PHV James L. Feldesman, PHV Robert A. Graham, San Juan, PR, for Plaintiffs.

Arlene R. Perez-Borrero, Eduardo A. Vera-Ramirez, Joy C. Vilardi Rizzuto, Patricia Lorenzi, Carlos Del-Valle-Cruz, Luis A. Rodriguez-Munoz, Luis F. Zayas-Marxuach, San Juan, PR, for Defendant.

OPINION AND ORDER

GUSTAVO A. GELPI, District Judge.

On November 18, 2008 the court held an evidentiary hearing¹ to determine whether the three Federally Qualified Health Center (FQHC) plaintiffs in this case met all four requisites for a preliminary injunction. This would entail ordering the Secretary of Health to issue prospective Medicaid "wraparound" payments to plaintiffs pursuant to 42 U.S.C. § 1396 a(bb). The court shall discuss its findings as to the four factors seriatim.

Likelihood of Success on the Merits

In its Opinion and Order of June 4, 2008, Consejo de Salud Playa Ponce v. Pérez Perdomo, 556 F.Supp.2d 76 (D.P.R.2008) (Docket No. 99), Order of October 2, 2008 (Docket No. 134), and Amended Opinion and Order of January 7, 2009 (Docket No. 178), the court previously found that plaintiffs had established a likelihood of success on the merits inasmuch as the Commonwealth is unequivocally required under federal law to fully comply with the mandates of the Medicaid "wraparound" statute, just as any state. See also Concilio Integral de Salud de Loiza, Inc. v. Pérez Perdomo, 551 F.3d 10, ___, 2008 WL 5206398, at *1 (1st Cir.2008) (noting that the Commonwealth, through its Secretary of Health, has for many years now not fulfilled this legal obligation, except under the duress of injunctive orders).

Irreparable Harm

The plaintiffs at the evidentiary hearing presented evidence to the effect that they have not received wraparound payments since the commencement of this case. Tr. at 101-102, 108.² Two centers, Migrant and Gurabo, for example, have been able thus far to survive financially, however, have sustained a loss of approximately $300,000.00. Tr. at 129, 136. Their economic situation continues to worsen to the point that, if not remedied, they will be forced to take drastic steps soon. Ultimately, the centers may be forced to close their doors. Tr. at 15, 137. This certainly constitutes irreparable harm. See Río Grande Community Health Center, Inc. v. Rullán, 397 F.3d 56, 76 (1st Cir.2005) (holding that it is not unreasonable to conclude that the lack of wraparound payments is a key cause of FQHC's financial woes).

Effect of an Injunction to the Commonwealth

Compliance with federal law will certainly have a significant impact on the Commonwealth's fisc.³ The Health Department's limited state annual budget of $306,000,000.00 (Docket No. 183) is insufficient for it to continuously comply with multiple wraparound obligations.⁴ Tr. at 175, 183-185, 193. Continued court-ordered wraparound payments will thus inevitably result in the Health Department having to close several facilities and lay off employees who regulate health and safety in the Commonwealth. Tr. at 193.

Effect of an Injunction to the Public

An injunction will allow the FQHCs to continue operating and, thus, providing medical services to indigent, disabled, blind, and aged individuals who participate in the Medicaid program. If an injunction is not ordered, the centers will not be able to provide as many services (Tr. at 15), and eventually will be forced to shut their doors. The public will then have to seek those medical services elsewhere. The Commonwealth Secretary posits that if a FQHC closes, the attending public can be relocated immediately. Tr. at 201. Even if so, however, this will result in a change of not only the center, but also the doctors and other treating health professionals, who may have been successfully treating individuals for a considerable period.

More important, the issuance of an injunction will have the effect of upholding the Commonwealth's continued compliance with Medicaid law—thus fostering an important federal public health policy.

Balancing of all the factors

A weighing of all the factors heavily tilts the scale in favor of plaintiffs, therefore warranting the issuance of an injunction. To decisively weigh the effect of an injunction on the Commonwealth over all other factors would only sanction the continued non-compliance with federal law. See Concilio Integral de Salud de Loiza, Inc. v. Pérez Perdomo, 551 F.3d 10, ___, 2008 WL 5206398, at *7 (1st Cir.2008) (holding that the calculation methodology provisions of § 1396 a(bb) are enforceable under Section 1983).

Accordingly, the court shall order the Commonwealth to comply with federal law by issuing prospective "wraparound" payments to plaintiff FQHCs. As the court stated in its recent order (Docket No. 179), it will appoint a Special Master to assist in the intricate task of calculating the precise amounts due in the most expedited manner possible. The court shall not enter the preliminary injunction at this time, but rather will await until the prospective amounts due to plaintiffs are determined.

Constitutionality of the Medicaid Wraparound Scheme under a Spending Clause Analysis

The Insular Cases Doctrine Revisited

The Commonwealth argues that the Medicaid "wraparound" scheme, as applied to Puerto Rico, violates the Constitution's Spending Clause, U.S. Const., Art. I § 8, cl. 1. It contends that if ordered to comply with the wraparound statute, the federal government must, in turn, be required to adequately fund Puerto Rico's Medicaid program. The court agrees. While the wraparound statute itself is a valid exercise of Congressional power, the Medicaid cap, which along with it applies to Puerto Rico, nonetheless, violates the Spending Clause.

The court, in its Opinion and Order of November 10, 2008, as amended, (Docket No. 155), Consejo de Salud Playa de Ponce v. Rullán, 586 F.Supp.2d 22 (D.P.R. 2008), analyzed the issue of whether the Spending Clause indeed applies to Puerto Rico. The court noted that Puerto Rico, throughout its 110 year history under the U.S. flag, had evolved into an incorporated territory due to a series of increasingly significant Congressional actions. The court also noted that the First Circuit has applied the Spending Clause in instances where the Commonwealth accepts federal funds and consequently waives its Eleventh Amendment immunity to suit in federal court. E.g., Nieves-Márques v. Puerto Rico, 353 F.3d 108, 128 (1st Cir.2003).

The Commonwealth points to Justice Harlan's dissent in Downes v. Bidwell to the effect that "the Constitution follows the flag," therefore, argues that the court's incorporation analysis is unnecessary. See Supplemental Brief of Commonwealth Attorney General Roberto J. Sánchez-Ramos, Docket No. 175 at 14, 29-38.⁵ Justice Harlan's portentous dissent, while arguably stating what the "supreme law of the land" ought to be, unfortunately is not the "law of the land," unless and until adopted by the present Supreme Court. The court fully concurs with Justice Harlan's dissent (Attachment A hereto), however, is unable to overrule Supreme Court precedent, as already explained in its November 10, 2008 Opinion and Order (Docket No. 155), 586 F.Supp.2d at ___, 2008 WL 4850946, at *17 (D.P.R.2008). However, the court hereby makes some additional observations regarding the doctrine of incorporation which plainly demonstrate just how juridically illogical and impracticable the same is.

The Treaty of Paris mandates that Congress (and not the Supreme Court) shall determine the civil rights and political status of the then acquired territories and their inhabitants. The Treaty as such never speaks about incorporation/unincorporation, a concept that was introduced via judicial fiat by the Supreme Court in the Insular Cases decided between 1901-1905. In these opinions, the Court held that Alaska and Hawaii were incorporated while other United States territories were not. In the case of Hawaii, which was annexed in 1898, the Court inferred that the actual incorporation did not take place until two years later in 1900, when Congress "formally incorporated" the territory by establishing a territorial government via organic act. See Territory of Hawaii v. Mankichi, 190 U.S. 197, 210-11, 218, 23 S.Ct. 787, 47 L.Ed. 1016 (1903). In the case of Alaska, the Court likewise inferred that the 1867 treaty with Russia incorporated the territory to the United States, even though there was no express declaration by Congress to do so. See Rassmussen v. United States, 197 U.S. 516, 25 S.Ct. 514, 49 L.Ed. 862 (1905).

Subsequently in Balzac v. Porto Rico, 258 U.S. 298, 311, 42 S.Ct. 343, 66 L.Ed. 627 (1922), the Supreme Court expanded its judicial fiat to hold that the incorporation of a territory is an important step leading to statehood. The Court further explained that incorporation is a step that must be taken by Congress deliberately, with a clear declaration of purpose, and not left a matter of mere inference and construction. This clearly contradicted the Court's very own precedent in Rassmussen and Mankichi, wherein the incorporation of Alaska and Hawaii was inferred from Congressional acts.⁶ Though declared incorporated territories, statehood for Alaska and Hawaii did not come until 1959,⁷ and it did not come automatically. In the case of Alaska, three plebiscites were held prior to its admission to the Union, the final one sponsored by Congress. See Public Law 85-58, July 7, 1958, 72 Stat. 2933. In Hawaii, two statehood plebiscites were likewise held, the latter also being Congressionally sponsored. See Public Law 86-3, March 18, 1959, 73 Stat. 4. Thus, as a prerequisite to admission, Congress in both territories held a final...