Monez v. Reinertson

• Decision Date: 20 April 2006
• Docket Number: No. 04CA2043.,04CA2043.
• Citation: 140 P.3d 242
• Parties: Marjorie MONEZ and Mary Garcia, Plaintiffs-Appellants, v. Karen REINERTSON, in her official capacity as the Executive Director of the Colorado Department of Health Care Policy and Financing; Michael S. Williams, as Chief Judge of the Division of Administrative Hearings; and Colorado Department of Health Care Policy and Financing, Defendants-Appellees.
• Court: Colorado Court of Appeals

Page 242

140 P.3d 242

Marjorie MONEZ and Mary Garcia, Plaintiffs-Appellants, v. Karen REINERTSON, in her official capacity as the Executive Director of the Colorado Department of Health Care Policy and Financing; Michael S. Williams, as Chief Judge of the Division of Administrative Hearings; and Colorado Department of Health Care Policy and Financing, Defendants-Appellees.

No. 04CA2043.

Colorado Court of Appeals, Div. V.

April 20, 2006.

Solem, Mack & Steinhoff, P.C., R. Eric Solem, Lawrence C. Matten, Englewood, Colorado, for Plaintiffs-Appellants.

John W. Suthers, Attorney General, Anne Baudino Holton, Assistant Attorney General, Lisa Brenner Friemann, Assistant Attorney General, John D. Baird, Assistant Attorney General, Denver, Colorado, for Defendants-Appellees.

Colorado Legal Services, Inc., Joel R. Hayes, Jr., Denver, Colorado, for Amici Curiae A.A.R.P.; Colorado Legal Services, Inc.; ARC of Colorado; and ARC of Denver, Inc.

WEBB, J.

In this Medicaid benefits case, plaintiffs, Marjorie Monez and Mary Garcia, appeal the trial court's judgment granting the motions to dismiss of defendants, the Colorado Department of Health Care Policy and Financing (Department); Karen Reinterson, the executive director of the Department; and Michael S. Williams, chief judge of the division of administrative hearings. We reverse and remand.

According to the complaint, plaintiffs were approved for Home and Community Based Services for the Elderly, Blind, and Disabled (HCBS), a Medicaid program administered by the Department under § 26-4-601, et seq., C.R.S.2005. In 2003, the Colorado Medical Services Board adopted a new screening instrument to determine eligibility for HCBS benefits. Based on reevaluations using the new instrument, plaintiffs were determined to be ineligible for benefits. Plaintiffs appealed this determination to an administrative law judge (ALJ), during which appeal they continued to receive benefits.

Prior to any hearing before an ALJ, plaintiffs filed this action under 42 U.S.C. § 1983. The trial court found that all plaintiffs' claims were based on 42 U.S.C. § 1396a(a)(3), held that § 1396a(a)(3) does not provide a private right of action, and concluded that it lacked subject matter jurisdiction because plaintiffs had failed to "exhaust their administrative remedies prior to filing suit for district court review of a final agency decision."

I. Scope of Review

In dismissing plaintiffs' claims, here the trial court cited both C.R.C.P. 12(b)(1) and 12(b)(5).

When presented with a C.R.C.P. 12(b)(1) dismissal for lack of subject matter jurisdiction, we review the trial court's factual determinations under a clear error standard and its legal conclusions under a de novo standard. Egle v. City & County of Denver, 93 P.3d 609 (Colo.App.2004); Bazemore v. Colo. State Lottery Div., 64 P.3d 876 (Colo.App.2002). Here, the dismissal turns on statutory interpretation, which we review de novo. Vigil v. Franklin, 103 P.3d 322 (Colo.2004).

A motion to dismiss for failure to state a claim under C.R.C.P. 12(b)(5) must be decided solely on the face of the complaint, with all factual allegations being accepted as true and the court drawing all reasonable inferences therefrom in favor of the plaintiff. Medina v. State, 35 P.3d 443 (Colo.2001).

Thus, we apply a C.R.C.P. 12(b)(1) standard to determine whether the trial court lacks jurisdiction and a C.R.C.P. 12(b)(5) standard to determine whether plaintiffs stated a claim on which relief may be granted.

II. Private Right of Action

Plaintiffs first contend the trial court erred in determining that 42 U.S.C. § 1396a(a)(3) does not provide a private right of action which can be asserted under 42 U.S.C. § 1983. We agree.

Section 1983 creates a cause of action against anyone who, acting under color of state law, deprives a person of any "rights, privileges, or immunities secured by the Constitution and laws."

Yet, not all federal law violations are actionable under § 1983. To seek redress through § 1983, a plaintiff "must assert the violation of a federal right, not merely a violation of federal law." Blessing v. Freestone, 520 U.S. 329, 340, 117 S.Ct. 1353, 1359, 137 L.Ed.2d 569 (1997).

In legislation such as the Medicaid Act, which is enacted pursuant to congressional spending power, "the typical remedy for state noncompliance with federally imposed conditions is not a private cause of action for noncompliance but rather action by the Federal Government to terminate funds to the State." Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 28, 101 S.Ct. 1531, 1545, 67 L.Ed.2d 694 (1981). In some statutes, however, Congress has unambiguously conferred rights that may be vindicated by individual suits brought under § 1983. Gonzaga Univ. v. Doe, 536 U.S. 273, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002); Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990).

In Blessing v. Freestone, supra, the Supreme Court set out a three-part test for determining whether a statute confers a federal right enforceable under § 1983:

• Congress must have intended that the provision benefit the plaintiff;

• the right must not be so vague and amorphous that its enforcement would strain judicial competence; and

• the statute must unambiguously impose a binding obligation on the States.

In Gonzaga University v. Doe, supra, 536 U.S. at 283, 122 S.Ct. at 2275, the Supreme Court clarified the Blessing requirements:

We now reject the notion that our cases permit anything short of an unambiguously conferred right to support a cause of action brought under § 1983. Section 1983 provides a remedy only for the deprivation of "rights, privileges, or immunities secured by the Constitution and laws" of the United States. Accordingly, it is rights, not the broader or vaguer "benefits" or "interests," that may be enforced under the authority of that section.

Further, even where a right has been conferred unambiguously, a private action under § 1983 may be defeated by showing that Congress, either expressly or by providing a comprehensive remedial scheme, intended to preclude individual suits. Blessing v. Freestone, supra.

The federal law at issue here, 42 U.S.C. § 1396a(a)(3), provides:

A State plan for medical assistance must . . . provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical assistance under the plan is denied or is not acted upon within reasonable promptness.

Since Gonzaga, many lower federal courts have held that § 1396a(a)(3) and other subsections of § 1396a(a) confer a private right litigable under § 1983. See Watson v. Weeks, 436 F.3d 1152 (9th Cir. 2006)(§ 1396a(a)(10)); Sabree v. Richman, 367 F.3d 180 (3d Cir.2004)(§ 1396a(a)(8) & (a)(10)); S.D. v. Hood, 391 F.3d 581 (5th Cir.2004)(§ 1396a(a)(10)); Gean v. Hattaway, 330 F.3d 758 (6th Cir.2003)(§ 1396a(a)(3)); Bryson v. Shumway, 308 F.3d 79 (1st Cir. 2002)(§ 1396a(a)(8)); Westside Mothers v. Haveman, 289 F.3d 852 (6th Cir. 2002)(§ 1396a(a)(8)); Doe 1-13 v. Chiles, 136 F.3d 709 (11th Cir.1998)(§ 1396a(a)(8)); Okla. Chapter of Am. Acad. of Pediatrics v. Fogarty, 366 F.Supp.2d 1050 (N.D.Okla. 2005)(§ 1396a(a)(8)); Martin v. Taft, 222 F.Supp.2d 940 (S.D.Ohio 2002) (§ 1396a(a)(8)); Sobky v. Smoley, 855 F.Supp. 1123 (E.D.Cal.1994)(§ 1396a(a)(8)). But see Sanders v. Kan. Dep't of Soc. & Rehabilitation Servs., 317 F.Supp.2d 1233 (D.Kan.2004)(no private right of action under § 1396a(a)(8)); M.A.C. v. Betit, 284 F.Supp.2d 1298 (D.Utah 2003)(same).

While we must follow the United States Supreme Court's interpretation of federal law, we are not bound by decisions of lower federal courts. Hill v. Thomas, 973 P.2d 1246 (Colo.1999), aff'd, 530 U.S. 703, 120 S.Ct. 2480, 147 L.Ed.2d 597 (2000). Nonetheless, we may look to these decisions for guidance on federal law and follow the analysis that we find persuasive. See Cmty. Hosp. v. Fail, 969 P.2d 667 (Colo.1998).

With this body of federal cases in mind, we turn to the three-part Blessing test.

A.

Gonzaga University v. Doe, supra, requires a plaintiff to show that Congress unambiguously intended to create an individual right, not merely a violation of federal law or the denial of a benefit or interest, to satisfy the first prong of Blessing,

To confer rights, Congress must use "`rights-creating' language." Gonzaga Univ. v. Doe, supra, 536 U.S. at 287, 122 S.Ct. at 2277. Such language must clearly impart an "individual entitlement" and have an "unmistakable focus on the benefited class." Gonzaga Univ. v. Doe, supra, 536 U.S. at 287, 122 S.Ct at 2277 (quoting Cannon v. Univ. of Chicago, 441 U.S. 677, 691, 99 S.Ct. 1946, 1955, 60 L.Ed.2d 560 (1979)).

In contrast, when a statute "focuse[s] on `the aggregate services provided by the State,' rather than `the needs of any particular person,' it confer[s] no individual rights and thus [cannot] be enforced by § 1983." Gonzaga Univ. v. Doe, supra, 536 U.S. at 282, 122 S.Ct. at 2274 (quoting Blessing, supra, 520 U.S. at 343, 117 S.Ct. at 1361).

As an example of "individually focused" and "rights-creating" language, the Supreme Court in Gonzaga discussed Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, and Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681, both of which use the wording "[n]o person . . . shall . . . be subjected to discrimination." The Court compared this language to provisions of the Family Educational Rights and Privacy Act (FERPA), ("[n]o funds shall be made available" to any "educational agency or institution" that has a prohibited "policy or practice"), which it held "speak only in terms of institutional policy and practice, not individual instances of disclosure." Gonzaga Univ v. Doe, supra, 536 U.S. at 288, 122 S.Ct. at 2278. Hence, the Court concluded that the FERPA did not meet the first prong of Blessing.

Here, 42 U.S.C. § 1396a(a)(3) says that a state plan for medical assistance "must provide" a...