STEELE BY STEELE v. Magnant

• Decision Date: 10 June 1992
• Docket Number: No. S90-00485.,S90-00485.
• Citation: 796 F. Supp. 1143
• Parties: Harriette A. STEELE, by her next friend Raymond S. STEELE, individually and as Raymond S. Steele, individually and as representative of a class of similarly situated persons, Plaintiffs, v. Suzanne L. MAGNANT, in her capacity as Administrator of the Indiana Department of Public Welfare and Louis W. Sullivan, in his capacity as Secretary of the United States Department of Health and Human Services, and all other persons working at their direction or in concert with them, Defendants.
• Court: U.S. District Court — Northern District of Indiana

796 F. Supp. 1143

Harriette A. STEELE, by her next friend Raymond S. STEELE, individually and as Raymond S. Steele, individually and as representative of a class of similarly situated persons, Plaintiffs, v. Suzanne L. MAGNANT, in her capacity as Administrator of the Indiana Department of Public Welfare and Louis W. Sullivan, in his capacity as Secretary of the United States Department of Health and Human Services, and all other persons working at their direction or in concert with them, Defendants.

No. S90-00485.

United States District Court, N.D. Indiana, South Bend Division.

June 10, 1992.

Kent Hull, 105 E. Jefferson, South Bend, Ind., for plaintiffs.

Leneigha L. Downs, Indianapolis, Ind. and Clifford D. Johnson, Asst. U.S. Atty., South Bend, Ind., for defendants.

MEMORANDUM AND ORDER ON DEFENDANT LOUIS W. SULLIVAN'S MOTION TO DISMISS

ALLEN SHARP, Chief Judge.

This cause is now before the court on the defendant Louis W. Sullivan's (hereinafter "Secretary") Motion to Dismiss filed together with his Answer on December 6, 1990. The Secretary filed this Memorandum of Law in Support of his Motion to Dismiss and in Opposition to Plaintiff's Motion for Partial Summary Judgment on April 17, 1991. The court heard oral argument regarding this matter on January 10, 1992 and ordered supplemental briefing at that time. On February 14, 1992 the plaintiffs filed their Memorandum of Law Addressing Jurisdiction of the Court Over and Propriety of Their Claim Against the Secretary of the United States Department of Health and Human Services. The Secretary submitted Supplemental Points and Authorities Regarding Lack of Subject Matter Jurisdiction Under §§ 1331 and 1361 on March 2, 1992 to which the plaintiffs filed a reply on March 10, 1992. On April 7, 1992 the plaintiffs submitted Supplemental Authority Addressing Jurisdiction of the Court Over and Propriety of Their Claim Against the Secretary of the United States Department of Health and Human Services. The Secretary, again, submitted additional authority on April 14, 1992.

The Secretary argues that this court lacks both federal question jurisdiction pursuant to 28 U.S.C. § 1331 and mandamus jurisdiction pursuant to 28 U.S.C. § 1361. The court having fully informed itself on the issues presented now GRANTS the Secretary's Motion to Dismiss¹; the plaintiff's Motion for Summary Judgment against the Secretary is DENIED.

I. Dismissal

Dismissal of a complaint is appropriate only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)). See also, Dresser Industries v. Pyrrhus AG, 936 F.2d 921, 933 (7th Cir. 1991). When the court of appeals for this circuit reviews the granting of a motion to dismiss, the well-pleaded factual allegations of the complaint are taken as true. See Rothner v. City of Chicago, 929 F.2d 297, 302 (7th Cir.1991); Janowsky v. United States, 913 F.2d 393, 395 (7th Cir.1990). Further, when the court of appeals reviews the complaint, it is required to accept only factual allegations; "it is not required to accept legal conclusions that may be alleged or that may be drawn from the pleaded facts." Milwaukee v. Saxbe, 546 F.2d 693, 704 (7th Cir.1976); see also, Reichenberger v. Pritchard, 660 F.2d 280, 282 (7th Cir.1981).

If a motion to dismiss is filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (Fed.R.Civ.P.) and materials outside the motion to dismiss are presented to and not excluded by the court, then the motion to dismiss may be treated as a motion for summary judgment pursuant to Rule 56, Fed.R.Civ.P. See, First Interstate Bank, N.A. v. Chapman & Cutler, 837 F.2d 775, 776-777 (7th Cir.1988); Cange & Stotler and Co., Inc., 826 F.2d 581, 583 (7th Cir.1987); and Winslow v. Walters, 815 F.2d 1114, 1116 (7th Cir.1987). Thus, if a party moves for dismissal upon the pleadings alone, it will be considered a Rule 12(b)(6) motion for dismissal. However, if a party files a Rule 12(b)(6) motion for dismissal and the court relies on materials outside the pleadings, it will be considered a Rule 56 motion for summary judgment.

In this case the Secretary has premised at least a portion of his argument for dismissal upon this court's Order on Motion for Partial Summary Judgment entered July 22, 1991 which permanently enjoined the State defendant from reducing the hours of home-based services to Medicaid recipients without providing legally sufficient notice and an opportunity to be heard in accordance with the regulations at 42 C.F.R. §§ 431.206, 431.210, and 431.230. The Secretary noted in his arguments supporting his motion for dismissal that with the entry of permanent injunction, the plaintiffs have obtained all relief sought. (See, The Federal Defendant's Submission of Supplemental Points and Authorities Regarding Lack of Subject Matter Jurisdiction Under §§ 1331 and 1361 filed March 2, 1992 at p. 1.) As this causes the court to look outside the pleadings alone in deciding this motion, the court will regard the motion as one for Summary Judgment pursuant to Fed.R.Civ.P. 56.

II. Summary Judgment

Summary judgment is proper if the pleadings, depositions, answers to interrogatories and admissions on file, together with any affidavits, show that there exist no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; accord Juarez v. Ameritech Mobile Communications, 957 F.2d 317, 320 (7th Cir.1992). A material question of fact is a question which will be outcome-determinative of an issue in that case. Wainwright Bank v. Railroadmens Federal Sav., 806 F.2d 146 (7th Cir.1986).

The most recent, thorough discussions of Rule 56 by the Supreme Court of the United States can be found in a trilogy of cases decided in 1986. See Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)²; and Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Celotex addressed the initial burdens of the parties under Rule 56, and Anderson addressed the standards under which the record is to be analyzed within the structure of Rule 56.

After Celotex, it is clear that a non-moving party may not rest on its pleadings to avoid summary judgment. Celotex, 477 U.S. at 325-26, 106 S.Ct. at 2553-54. See also Lujan v. National Wildlife Federation, 497 U.S. 871, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); and Zayre Corp. v. S.M. & R. Co., 882 F.2d 1145 (7th Cir.1989). "The days are gone, if they ever existed, when the nonmoving party could sit back and simply poke holes in the moving party's summary judgment motion." Fitzpatrick v. Catholic Bishop of Chicago, 916 F.2d 1254, 1256 (7th Cir.1990). The initial burden is on the moving party to demonstrate "with or without supporting affidavits" the absence of a genuine issue of material fact, and that judgment as a matter of law should be granted in the moving party's favor. Celotex, 477 U.S. at 324, 106 S.Ct. at 2552 (quoting Rule 56). Once the moving party has met the initial burden, the opposing party must "go beyond the pleadings" and "designate `specific facts showing that there is a genuine material issue for trial.'" Id. Furthermore, in Anderson, the Court held that what facts are material in a specific case shall be determined by the substantive law controlling that case or issue. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. In addition, the court went on to interpret Rule 56 as requiring that the courts analyze summary judgment motions utilizing the standard of proof relevant to that case or issue. Id. at 252-55, 106 S.Ct. at 2512-14.

For academic insight into Celotex and Anderson, see Childress, A New Era for Summary Judgments: Recent Shifts at the Supreme Court, 116 F.R.D. 183, 194 (1987), where the author states:

the recent Supreme Court cases likely require that summary judgment be more readily granted.... This emerging trend signals a new era for summary judgment, one in which the old presumptions are giving way to a policy of balancing and efficiency, and the mechanism is more appropriate to double as a sufficiency motion—allowing some sort of trial itself on the paper record.

More recently Childress has written that Celotex and Anderson clarify that Rule 56 motions

should not be hesitantly granted when appropriate.... Any litigant dealing with summary judgment must be aware of this new trend, the Court's cases, their application in each circuit, and the direction they portend. Pretrial practice is a new ballgame.

Childress, A Standards of Review Primer: Federal Civil Appeals, 125 F.R.D. 319, 343 (1989).

Recent object lessons applying these ideas are found in Karazanos v. Navistar Intern. Transp. Corp., 948 F.2d 332, 335 (7th Cir.1991); Old Republic Ins. Co. v. Federal Crop Ins. Corp., 947 F.2d 269, 273-274 (7th Cir.1991); and Un. Ass'n of Black Landscapers v. City of Milwaukee, 916 F.2d 1261, 1265 (7th Cir.1990).

III. The Medicaid Program — Statutory and Regulatory Scheme

The Medicaid program is codified as Title XIX of the Social Security Act ("Title XIX"). 42 U.S.C. § 1396, et seq. The federal government and participating states jointly finance the Medicaid program. See, 42 U.S.C. §§ 1396 and 1396a. Participation by a state is voluntary, but to receive federal funds states must submit and follow a plan which complies with Title XIX and the federal regulations. Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 498, 110 S.Ct. 2510, 2513, 110 L.Ed.2d 455 (1990); Lett v. Magnant, 965 F.2d 251, 252 (7th Cir.1992). The plan must be approved by the Secretary. 42 U.S.C. § 1396. Upon approval of its State plan, a State becomes entitled to...