STATE OF KAN. EX REL. v. Shalala

Decision Date19 July 1994
Docket NumberNo. 93-4162-SAC.,93-4162-SAC.
PartiesThe STATE of KANSAS ex rel. SECRETARY OF SOCIAL AND REHABILITATION SERVICES, Plaintiff, v. Donna SHALALA, as Secretary of the United States Department of Health and Human Services, Defendant.
CourtU.S. District Court — District of Kansas

Robert R. Hiller, Jr., Social & Rehabilitation Services, Topeka, KS, for plaintiff.

C. Geraldine Umphenour, Office of General Counsel, Dept. of Health & Human Services, Kansas City, MO, D. Brad Bailey, Office of U.S. Atty., Topeka, KS, Frank V. Smith, III, Dept. of Health & Human Services, Office of General Counsel, Kansas City, MO, for defendant.

MEMORANDUM AND ORDER

CROW, District Judge.

On July 28, 1993, the State of Kansas, ex rel., Secretary of Social and Rehabilitation, filed a complaint in this case against Donna Shalala, Secretary of the United States Department of Health and Human Services. The complaint seeks $6,123,973 owed for five fiscal quarters beginning April 1, 1988, and ending June 30, 1989, under the Aid to Families with Dependent Children-Foster Care and Adoption Assistance program (AFDCFC), "as required by the Social Security Act, 4 42 U.S.C. §§ 603 and 674, and implementing federal regulations, 45 C.F.R. §§ 201.5 and 201.15." The plaintiff essentially challenges a July 30, 1992, Department of Health and Human Services Departmental Appeals Board decision affirming the Administration for Children and Families (ACF)'s disallowance of Kansas' claim for $6,132,973. The Department Appeals Board rejected "all of Kansas' contentions that a retroactive effective date is either applicable or ought to be applicable."

The plaintiff contends that although it has submitted all of the required documentation to prove that it is entitled to reimbursement, the defendant has wrongfully denied its claims. The plaintiff claims that it has absorbed this loss which has displaced funds that could have otherwise been used for other welfare program expenditures. "In effect, the Defendant's actions have shifted a substantial portion of federal welfare costs associated with foster care to the State of Kansas, in apparent violation of federal law." The plaintiff essentially seeks review of the Secretary's decision under the Administrative Procedure Act (APA), 5 U.S.C. § 553, et seq.

On September 15, 1993, the Secretary filed a motion to dismiss, to which the plaintiff responded.

On November 2, 1993, the magistrate judge issued an order permitting discovery limited to the issues "related to the plaintiff's notice of its claim for retroactivity." See Dk. 12. On December 30, 1994, apparently in response to the plaintiff's notice of first interrogatories (see Dk. 14) and the plaintiff's request for certain depositions, the defendant filed a motion for a protective order precluding discovery under Fed.R.Civ.P. 26(c). In the memorandum in support of that motion, the defendant argues that the plaintiff has failed to demonstrate that discovery is justified in this case. Specifically, the defendant argues that under the APA, review is, subject to certain narrow exceptions, limited to the administrative record. The defendant contends that the plaintiff has failed to demonstrate that any of the exceptions to the general rule exist, and therefore discovery is inappropriate as the court should limit the scope of its review to the administrative record.

On January 10, 1994, the plaintiff filed a response to the defendant's motion for a protective order. In that response, the plaintiff argues that the magistrate judge had ordered discovery to commence and therefore the defendant's motion was not well-taken. Apparently later that same day, the plaintiff filed a supplemental memorandum in opposition to the defendant's motion for a protective order. In that memorandum, the plaintiff argues, essentially without any authority, that discovery is appropriate in this case. The plaintiff also argues that discovery will not be unduly burdensome and therefore the defendant's motion for a protective order should be denied.

On January 14, 1994, the defendant filed a reply to the plaintiff's response. In that reply, the defendant argues that it has always contended that discovery in this case is not appropriate and that the magistrate judge entered the November 30, 1993, order contemplating that the defendant would file a motion for a protective order at the time the plaintiff initiated requests for discovery. The defendant also argues that the plaintiff failed to demonstrate that discovery in this case is warranted.

On February 9, 1994, this court issued a memorandum and order denying the defendant's motion to dismiss (Dk. 8). See State of Kansas v. Shalala, No. 93-4162-SAC, 1994 WL 80866, 1994 U.S.Dist. LEXIS 2827 (D.Kan. Feb. 9, 1994). In that memorandum and order, the court, inter alia, denied the defendant's motion to dismiss based upon the argument that the plaintiff had failed to file its appeal to this court from the July 30, 1992, decision of the Secretary in a timely fashion.

On January 31, 1994, the defendant filed a motion for summary judgment (Dk. 20) and this case comes before the court upon that motion. In the memorandum in support of her motion for summary judgment, the defendant sets forth a discussion of the nature of the action as well as a review of the statutory and regulatory background. In compliance with D.Kan.Rule 206, the defendant sets forth several pages of uncontroverted facts. The defendant discusses the appropriate standard of review and then proceeds to make the following arguments:

1. The State did not request DCA Division of Allocation to approve a retroactive effective date for the CAP amendment;
2. The State failed to appeal the alleged denial of a requested retroactive effective date for the CAP amendment;
3. ACF properly reject the State's attempt to adjust its claims by retroactive application of its new RMS methodology;
4. The State failed to show that refusing to give retroactive effect to the CAP amendment created an inequity or that the CAP approved for the period had a material defect.
5. Any inequity resulted from the State's own mismanagement and lack of diligence in amending its CAP.
6. The event triggering the need for a cap amendment was the State's discretionary decision to institute a change in methodology.
7. The State's retroactive claims are not authorized by the CAP regulations.

The defendant dedicates over twenty pages of her memorandum to a discussion on these issues.

In its response to the defendant's motion for summary judgment, the plaintiff states:

Prior to responding to the 12 paragraphs which comprise the defendant's allegedly uncontroverted facts in the defendant's memorandum (on pages 9 through 16), the plaintiff would point out that it has never received any answers to its interrogatories which were served on defendant in November of 1993.
As of this date, the defendant's motion for a protective order (filed December 30, 1993) is still pending. Plaintiff has filed two memoranda in opposition to the defendant's motion for a protective order.
Inasmuch as defendant has not replied to plaintiff's interrogatories, and discovery is far from complete, it is inconceivable that defendant could argue in good faith that there are no genuine issues as to any material facts.

The plaintiff then proceeds to respond to the defendant's statement of uncontroverted facts. However, none of the plaintiff's responses demonstrate that a genuine issue of material fact precluding summary judgment exists.

In a subsequent section titled "Controverted Facts," the plaintiff sets forth 39 separately numbered paragraphs.1 Each paragraph is phrased in the interrogative. While some of these paragraphs posit factual questions,2 many of the paragraphs simply raise legal issues or otherwise challenge the legal conclusions asserted in the defendant's brief.

In a section of the brief titled "Argument and Authority," the plaintiff further elaborates on the basic proposition that the defendant has erroneously refused to pay the funds to which it is entitled. The plaintiff claims that it has suffered a tremendous inequity due to the defendant's action and that the court should compel the defendant to pay the amounts it deserves. In the conclusion to the plaintiff's brief, it states:

It is not the intent of plaintiff to fully brief all of the issues in this case when defendant has purposely failed to respond to plaintiff's initial interrogatories and numerous factual issues (cited above) are thus clearly at issue in this stage of the litigation.
Plaintiff respectfully requests that the Court order defendant to answer plaintiff's interrogatories and that another rescheduling or pretrial conference be held in order to determine what further discovery, if any, may be needed as a result of defendant's intentional failure to answer plaintiff's interrogatories.

Plaintiff's brief at 20.

In her reply brief, the defendant reasserts her contention that discovery in this case is not appropriate. The defendant argues that nothing presented by the plaintiff demonstrates that the administrative record is incomplete, and that any omissions in the record are due to the plaintiff's own failure to submit those documents prior to the time the Secretary issued her decision. The defendant contends that the plaintiff's brief raises new issues not presented below and therefore are not properly before the court. The defendant contends that many of the issues raised by the plaintiff border on the frivolous and that the questions posited are merely "an attempt to cloud the issue before the court and to create issues of fact where none exist."

In short, the defendant contends that the plaintiff does not demonstrate that a genuine issue of material fact exists and that her decision was not arbitrary, capricious or contrary to the law.

Standard of Review3

"The APA provides that `a person...

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1 cases
  • State of Kan. v. Shalala, 93-4162-SAC.
    • United States
    • U.S. District Court — District of Kansas
    • 20 Marzo 1995
    ...as Secretary of the United States Department of Health and Human Services, motion for summary judgment. See State of Kansas, ex rel. v. Shalala, 859 F.Supp. 484 (D.Kan.1994). On page 490, n. 5, of that memorandum and order it In any event, the court will consider a timely motion to alter an......

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