Navajo Health Found. Sage Mem'l Hosp., Inc. v. Burwell

• Decision Date: 31 August 2015
• Docket Number: No. CIV 14-0958 JB/GBW,CIV 14-0958 JB/GBW
• Parties: NAVAJO HEALTH FOUNDATION -- SAGE MEMORIAL HOSPITAL, INC., Plaintiff, v. SYLVIA MATHEWS BURWELL, Secretary of the United States Department of Health and Human Services; ROBERT MCSWAIN, Acting Director of Indian Health Services; JOHN HUBBARD, JR., Area Director, Navajo Area Indian Health Services; and FRANK DAYISH, Contracting Officer, Navajo Area Indian Health Services, Defendants.
• Court: U.S. District Court — District of New Mexico

NAVAJO HEALTH FOUNDATION -- SAGE MEMORIAL HOSPITAL, INC., Plaintiff, v. SYLVIA MATHEWS BURWELL,

Secretary of the United States Department of Health and Human Services;

ROBERT MCSWAIN,¹ Acting Director of Indian Health Services;

JOHN HUBBARD, JR., Area Director, Navajo Area Indian Health Services;

and FRANK DAYISH, Contracting Officer, Navajo Area Indian Health Services, Defendants.

No. CIV 14-0958 JB/GBW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

August 31, 2015

MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on the Plaintiff's Motion for Summary Judgment on its First Three Claims for Relief, with Memorandum of Supporting Points and Authorities, filed June 1, 2015 (Doc. 68)("Motion"). The Court held a hearing on July 31, 2015. The primary issues are: (i) whether the Court's conclusions of law in Navajo Health Foundation -- Sage Memorial Hospital, Inc. v. Burwell, No. CIV 14-0958 JB/GBW, 2015 WL 1906107 (D.N.M. April 9, 2015)(Browning, J.)("Sage"),² bind the Court at thesummary-judgment stage; (ii) whether the Court should grant summary judgment in favor of Plaintiff Navajo Health Foundation -- Sage Memorial Hospital, Inc. on Count I of the Second Amended Complaint, filed June 30, 2015 (Doc. 79)("SAC"), which asks the Court to deem approved the Renewal No. 1 and Amendment No. 1 to the Indian Self-Determination Act Contract Between Navajo Health Foundation/Sage Memorial Hospital, Inc. and the Secretary of the Department of Health and Human Services, filed January 13, 2015 (Doc. 21-3)("2013 Renewal"), and the Annual Funding Agreement Between Navajo Health Foundation -- Sage Memorial Hospital, Inc., and The Secretary of the Department of Health and Human Services Fiscal Year 2014, filed January 13, 2015 (Doc. 21-3)("2014 AFA"); (iii) whether the Court should grant summary judgment in favor of Sage Hospital on Count II of the SAC, which asks the Court to deem approved Renewal No. 1 and Amendment No. 1 to the Indian Self-Determination Act Contract Between Navajo Health Foundation/Sage Memorial Hospital, Inc. and the Secretary of the Department of Health and Human Services, filed January 13, 2015 (Doc. 21-10)("2014 Renewal"), and the Annual Funding Agreement Between Navajo Health Foundation -- Sage Memorial Hospital, Inc. and the Secretary of the Department of Health and Human Services, filed January 13, 2015 (Doc. 21-10)("2015 AFA"); and (iv) whether the Court should grant summary judgment in favor of Sage Hospital on Count III of the SAC, which asks the Court for an accounting of funds that the Defendants provided Sage Hospital from October 1, 2013, to the date of judgment. The conclusions of law in the Sage opinion do not bind the Court at the summary-judgment stage, and the Court is free to consider those issues anew. The Courtwill, however, grant summary judgment in favor of Sage Hospital on Counts I, II, and III, and determine Sage Hospital's damages on those counts at trial.³ Accordingly, the Court will grant the Motion.

FACTUAL BACKGROUND

"Sage is a Navajo tribal organization[⁴] for purposes of contracting with the Indian Health Service ('IHS')[⁵] under the ISDEA[⁶] that operates a health care facility in Ganado,Arizona, within the exterior boundaries of the Navajo Reservation." Motion ¶ 1, at 3⁷ (setting forth this fact). See Defendants' Response to Plaintiff's Motion for Summary Judgment on its First Three Claims for Relief ¶ 1, at 2, filed July 6, 2015 (Doc. 80)("Response")(not disputing this fact); First Amended Complaint ¶ 6, at 4, filed November 24, 2014 (Doc. 5)("FAC")(setting forth this fact); id. ¶ 19, at 9-10 (setting forth this fact); Answer ¶ 6, at 2, filed February 19, 2015 (Doc. 45)("Answer")(admitting this fact)⁸; id. ¶ 19, at 3 (admitting this fact). "IHS is an agency within the United States Department of Health and Human Services ('HHS') and isresponsible for providing federal health services to American Indians and Alaska Natives." Motion ¶ 2, at 4 (setting forth this fact). See Response ¶ 2, at 2 (not disputing this fact); About IHS, filed December 29, 2014 (Doc. 17-1). "Defendant [Sylvia Mathews ]Burwell is the Secretary of HHS and has ultimate responsibility for carrying out all the functions, authorities, and duties of HHS including contracting on behalf of the United States with Indian tribal organizations under the ISDEA to provide health care to Native Americans." Motion ¶ 3, at 4 (setting forth this fact). See Response ¶ 3, at 2 (not disputing this fact); FAC ¶ 7, at 4 (setting forth this fact); Answer ¶ 7, at 2 (admitting this fact).

Defendant [Robert] McSwain, substituted for Defendant [Yvette] Roubideaux under Fed. R. Civ. P. 25(d), is the Acting Director of the IHS and has the overall responsibility for carrying out all the functions, authorities, and duties of the IHS within HHS regarding contracting with Indian tribal organizations under the ISDEA to provide health care to Native Americans.

Motion ¶ 4, at 4 (setting forth this fact). See Response ¶ 4, at 2 (not disputing this fact); FAC ¶ 8, at 4 (setting forth this fact); Answer ¶ 8, at 2 (admitting this fact).

Defendant [John] Hubbard is the Area Director of the Navajo Area IHS ("NAIHS") and has the responsibility for carrying out all the functions, authorities, and duties of the IHS within the Navajo Nation, including such functions, authorities, and duties delegated to him regarding contracting with Indian tribal organizations under the ISDEA.

Motion ¶ 5, at 4 (setting forth this fact). See Response ¶ 5, at 2 (not disputing this fact); FAC ¶ 9, at 4 (setting forth this fact); Answer ¶ 9, at 2 (admitting this fact). "Defendant [Frank] Dayish is the Contracting Officer for the NAIHS and is responsible for ISDEA contracts and funding agreements for IHS programs, functions, services, and activities ('PFSAs') undertaken by ISDEA contractors within the Navajo Area IHS, including Sage." Motion ¶ 6, at 5 (setting forth this fact). See Response ¶ 6, at 2 (not disputing this fact); FAC ¶ 10, at 4-5 (setting forth this fact); Answer ¶ 10, at 2 (admitting this fact). "Dayish has the authority to sign ISDEAcontracts and funding agreements with Sage for such IHS programs and to award funds pursuant to those agreements." Motion ¶ 6, at 5 (setting forth this fact). See Response ¶ 6, at 2 (not disputing this fact); FAC ¶ 10, at 4-5 (setting forth this fact); Answer ¶ 10, at 2 (admitting this fact).

1. Sage Hospital's ISDEA Contract with the IHS.

"Effective in 2009[,] Sage contracted with IHS under the ISDEA." Motion ¶ 7, at 5 (setting forth this fact). See Response ¶ 7, at 2 (not disputing this fact); FAC ¶ 19, at 9-10 (setting forth this fact); Answer ¶ 19, at 3 (admitting this fact).

The 2009 contract included the following PFSAs: (1) Inpatient Services, (2) General Ambulatory and Special[]ty Care Services, (3) Emergency Department, (4) Emergency Medical Transport, (5) Dental Clinic, (6) Podiatry Clinic, (7) Optometry Clinic, (8) Behavioral Health Services, (9) Radiology, (10) Pharmacy, (11) Laboratory, (12) Physical Therapy, (13) Public Health Nursing, (14) Employee Health Services, (15) Health Education, (16) Transportation Services, (17) School Based Services, (18) Diabetes Program, and (19) Traditional Medicine.

Motion ¶ 8, at 5 (setting forth this fact). See Response ¶ 8, at 2 (not disputing this fact); FAC ¶ 20, at 10 (setting forth this fact); Answer ¶ 20, at 3 (admitting this fact). "Sage and IHS extended the 2009 Contract without interruption for successive years, through September 30, 2013." Motion ¶ 9, at 5 (setting forth this fact). See Response ¶ 9, at 2 (not disputing this fact); FAC ¶ 21, at 10 (setting forth this fact); Answer ¶ 21, at 3 (admitting this fact); Indian Self-Determination Contract Between Navajo Health Foundation/Sage Memorial Hospital and the Secretary of the Department of Health and Human Services, filed January 13, 2015 (Doc. 21-1)("2010 Contract"); Annual Funding Agreement Between Navajo Health Foundation/Sage Memorial Hospital and the Secretary of the Department of Health and Human Services Fiscal Year 2013, filed January 13, 2015 (Doc. 21-2)("2013 AFA"); Declaration of Christi El-Meligi ¶ 4, at 1 (dated May 28, 2015), filed June 1, 2015 (Doc. 68-1)("El-Meligi 2d Decl.").

"Sage proposed a three-year ISDEA contract renewal and [Annual Funding Agreement ('AFA')] for fiscal year ('FY') 2014 to IHS by letter dated August 22, 2013." Motion ¶ 11, at 6 (setting forth this fact). See Response ¶ 11, at 2 (not disputing this fact); FAC ¶ 21, at 11-12 (setting forth this fact); Answer ¶ 21, at 3 (admitting this fact); Letter from Ahmad R. Razaghi, Chief Executive Officer of Navajo Health Foundation -- Sage Memorial Hospital, Inc., to Alva Tom, Acting Director of the Office of Indian Self-Determination at the Navajo Area Indian Health Service (dated Aug. 22, 2013), filed January 13, 2015 (Doc. 21-3)("Aug. 22, 2013, Ltr."); 2013 Renewal; 2014 AFA; El-Meligi 2d Decl. ¶ 4, at 1.⁹ "Sage proposed [funding] for FY 2014of $20,738,846 . . . ." Motion ¶ 15, at 6 (setting forth unmodified version of this fact). See Aug. 22, 2013, Ltr. at 3.¹⁰ "IHS did not approve or disapprove Sage's proposed three-year contractrenewal under the ISDEA [until September 26, 2014]. IHS opted instead to provide Sage funding on a monthly basis during the conduct of an IHS Performance Monitoring Review ('Review') and a forensic audit ('Audit') conducted by Moss Adams LLP." Motion ¶ 16, at 7 (setting forth unmodified version of this fact). See FAC ¶ 22, at 11 (setting forth this fact); Answer ¶ 22, at 3 (admitting this fact).¹¹

"As of September 19, 2014, IHS and Sage had extended the FY 2011-2013 ISDEA contract and FY 2013 AFA through September 30, 2014." Motion ¶ 17, at 7. See Response ¶ 17, at 3 (not disputing this fact); El-Meligi 2d Decl. ¶ 5, at 2; Letter from Floyd Thompson, Executive Officer of the Navajo Area Indian Health Service to Ahmad Razaghi, Chief ExecutiveOfficer of Navajo Health Foundation -- Sage Memorial...