Hawaii Coalition for Health v. Hawaii

• Decision Date: 04 September 2008
• Docket Number: Civil No. 08-00277 JMS/BMK.
• Citation: 576 F.Supp.2d 1114
• Parties: HAWAII COALITION FOR HEALTH, Plaintiff, v. State of HAWAII, Department of Human Services, and Lillian B. Koller, Director State of Hawaii, Department of Human Services, Defendants.
• Court: U.S. District Court — District of Hawaii

Page 1114

576 F.Supp.2d 1114

HAWAII COALITION FOR HEALTH, Plaintiff, v. State of HAWAII, Department of Human Services, and Lillian B. Koller, Director State of Hawaii, Department of Human Services, Defendants.

Civil No. 08-00277 JMS/BMK.

United States District Court, D. Hawaii.

September 4, 2008.

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Rafael G. Del Castillo, Jouxson-Meyers & Del Castillo LLLC, Wahiawa, HI, for Plaintiff.

Charles A. Miller, Covington & Burling LLP, Washington, DC, Elizabeth A. Stone, Heidi M. Rian, John F. Molay, Lee-Ann N.M. Brewer, Office of the Attorney General, Honolulu, HI, for Defendants.

ORDER: (1) GRANTING DEFENDANTS' MOTION TO DISMISS; AND (2) ORDERING PLAINTIFF TO SHOW CAUSE WHY IT SHOULD BE GRANTED LEAVE TO AMEND COMPLAINT

J. MICHAEL SEABRIGHT, District Judge.

I. INTRODUCTION

Plaintiff Hawaii Coalition for Health ("Plaintiff" or "HCFH"), a Hawaii nonprofit corporation formed to advocate for the rights of Hawaii's healthcare consumers, alleges that the State of Hawaii, Department of Human Services ("DHS") and Lillian B. Koller in her official capacity as Director, State of Hawaii, Department of Human Services (collectively "Defendants") have violated Federal Medicaid Law, the American with Disabilities Act (the "ADA"), and Hawaii's Patient's Bill of Rights and Responsibilities Act, Hawaii Revised Statutes ("HRS") Chapter 432E, by awarding two out-of-state managed care entities contracts to provide services to Hawaii's aged, blind, and disabled ("ABD") Medicaid beneficiaries.

Currently before the court is Defendants' Motion to Dismiss. Based on the following, the court GRANTS Defendants' Motion to Dismiss.

II. BACKGROUND

DHS operates a managed care program for Medicaid-eligible children and families known as QUEST pursuant to 42 U.S.C. § 1315. DHS sought to extend QUEST through the QUEST Expanded Access ("QExA") program to cover eligible ABD individuals. To that end, on October 10, 2007, DHS issued a Request for Proposals ("RFP") entitled "QUEST Expanded Access (QExA) Managed Care Plans to Cover Eligible Individuals Who Are Aged, Blind, or Disabled." Compl. ¶ 26. This RFP explained that DHS seeks to transfer all services for the ABD population to two managed care entities, who will "provide required service coordination, outreach, improved access, and enhanced quality healthcare services. . . ." Id. On February 1, 2008, DHS selected Ohana Health Plan, Inc. ("Ohana Health") and Evercare, and issued contracts to them with an effective date of February 15, 2008, and services to begin on November 1, 2008.¹ Id. ¶ 28.

On June 10, 2008, Plaintiff filed its Complaint, asserting that Defendants' award of the QExA program to Ohana Health and Evercare violates Federal Medicaid law, the ADA and HRS Chapter 432E. Specifically, Count I-brought pursuant to 42 U.S.C. § 1983—alleges the following violations-of Federal Medicaid law: (1) violation of 42 U.S.C. § 1396u-2(a)(1)(A)(ii) by restricting the RFP award to two entities, id. ¶ 27; (2) violation of 42 U.S.C. § 1396u-2(b)(5) for failing to receive proper assurances that the provider networks have sufficient capacity, id. ¶ 44; (3) violation of 42 U.S.C. § 1396a(a)(10) for failure to provide required medical services to the ABD population, id. ¶ 43; and (4) violation of 42 U.S.C. § 1396u-2(a)(2)(A) by requiring individuals under the age of 19 to enroll in this program. Id. ¶ 43. Count II alleges that Defendants have discriminated against the disabled by implementing a program that will not assure access to medical services or guarantee provider availability to this group. Id. ¶¶ 68-71; see also id. ¶¶ 46-52 (describing provisions of the Social Security Act setting forth standards for equal access and quality of managed care programs). Finally, Count III alleges a violation of HRS Chapter 432E on the basis that Defendants cannot demonstrate they can provide access to sufficient numbers and types of providers to ensure that all covered services will be accessible without unreasonable delay. Id. ¶¶ 53-55, 72-76. As a result of these alleged violations, Plaintiff seeks an injunction prohibiting the implementation of the QExA program as currently contemplated, and mandating a comprehensive, effective plan that ensures continuity and access to services and care needed by ABD individuals. Id. ¶ 62.

On June 30, 2008, Defendant filed a Motion to Dismiss. On July 18, 2008, Plaintiff filed an Opposition, and Defendants filed a Reply on July 21, 2008. A hearing was held on July 28, 2008. During and after the hearing, the court raised several issues for supplemental briefing, including whether: (1) Plaintiff has statutory standing to bring a claim pursuant to 42 U.S.C. § 1983 for violation of the Federal Medicaid statutes recited in the Complaint;² (2) Plaintiffs claim premised on violation of 42 U.S.C. § 1396u-2(a)(1)(A)(ii) is ripe; and (3) HRS § 423E-3 allows for a private cause of action against Defendants. See Doc. No. 39. Defendants filed their Supplemental Brief on August 8, 2008, Plaintiff filed their Supplemental Brief on August 20, 2008, and Defendants filed their Supplemental Reply on August 22, 2008.

III. STANDARDS OF REVIEW

A. Motion to Dismiss Pursuant to Rule 12(b)(6)³

Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss a claim for "failure to state a claim upon which relief can be granted[.]" When reviewing a Rule 12(b)(6) motion, a court takes the factual allegations in the complaint as true and construes them in the light most favorable to the plaintiff. Erickson v. Pardus, ___ U.S. ___, ___, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007); Lee v. City of L.A., 250 F.3d 668, 679 (9th Cir.2001). "A district court should grant a motion to dismiss if plaintiffs have not pled `enough facts to state a claim to relief that is plausible on its face.'" Williams ex rel. Tabiu v. Gerber Prods. Co., 523 F.3d 934, 938 (9th Cir.2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, ___, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007)). "`Factual allegations must be enough to raise a right to relief above the speculative level.'" Id. (quoting Bell Atlantic, 127 S.Ct. at 1965).

B. Ripeness

"The question of ripeness, like other challenges to a court's subject matter jurisdiction, is treated as a motion to dismiss under Rule 12(b)(1)," and thus, "[i]t is the burden of the complainant to allege facts demonstrating the appropriateness of invoking judicial resolution of the dispute." 15 Moore's Federal Practice § 101.73[1] (2005); see also Gemtel Corp. v. Cmty. Redevelopment Agency, 23 F.3d 1542, 1544 n. 1 (9th Cir.1994) (noting that ripeness is properly challenged under Rule 12(b)(1)).

IV. ANALYSIS

A. Count I: Violation of Federal Medicaid Law

Defendants argue that the court should dismiss Count I because Plaintiffs allegations—that Defendants improperly restricted the RFP award to two entities, did not receive proper assurances that the selected entities had complete provider networks at the time of contract, and will require individuals under the age of 19 to enroll in this program—fail to state a claim upon which relief can be granted. Defendants further argue that Plaintiffs allegation that the contracting entities will be unable to provide required medical services to the ABD population is not ripe for review. Based on the following, the court finds that Plaintiffs claim premised on violation of Federal Medicaid law must be dismissed.

1. Statutory Standing to Raise Claims Premised on Violations of Federal Medicaid Law

None of the statutes that Plaintiff relies on provides for direct actions, and Plaintiff instead relies upon 42 U.S.C. § 1983 to bring its claims. Section 1983 creates a cause of action against any person "who, under color of any statute, ordinance, regulation, custom, or usage, of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws" of the United States.. "The Supreme Court has held that only violations of rights, not laws, give rise to § 1983 actions." Save Our Valley v. Sound Transit, 335 F.3d 932, 936 (9th Cir.2003) (citing Gonzaga Univ. v. Doe, 536 U.S. 273, 285, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002); Blessing v. Freestone, 520 U.S. 329, 340, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997)). In determining that a statute creates a right enforceable under § 1983, the court must find that:

(1) "Congress . . . intended that the provision in question benefit the plaintiff'; (2) the plaintiff has "demonstrate[d] that the right assertedly protected by the statute is not so `vague and amorphous' that its enforcement would strain judicial competence"; and (3) "the statute . . . unambiguously impose[s] a binding obligation on the States," such that "the provision giving rise to the asserted right . . . [is] couched in mandatory, rather than precatory terms."

Ball v. Rodgers, 492 F.3d 1094, 1104 (9th Cir.2007) (quoting Blessing, 520 U.S. at 340, 117 S.Ct. 1353).

Under the first prong, "it is rights, not the broader or vaguer `benefits' or `interests,' that may be enforced under the authority of [§ 1983.]" Gonzaga, 536 U.S. at 283, 122 S.Ct. 2268. In determining whether Congress intended to create a federal right, the court may find evidence of intent to create an enforceable right "in a statute's language as well as in its overarching structure." Ball, 492 F.3d at 1105 (citing Gonzaga, 536 U.S. at 286, 122 S.Ct. 2268). Specifically, the statute must be "`phrased in terms of the persons benefitted . . . . with an unmistakable focus on the benefitted class.'" Id. (quoting Gonzaga, 536 U.S. at 284, 122 S.Ct. 2268) (other citation and quotation signals omitted). Some phrases, such as "No person shall . . .", may clearly establish an individual right, and "statutory language less direct . . . must be supported by other indicia so...