Stewart v. Bernstein

• Decision Date: 03 September 1985
• Docket Number: No. 84-2352,84-2352
• Citation: 769 F.2d 1088
• Parties: , Medicare&Medicaid Gu 34,878 Stella Beatrice STEWART, Plaintiff-Appellant, v. Robert BERNSTEIN, in his official capacity as Commissioner of the Texas Health Department, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1088

769 F.2d 1088

10 Soc.Sec.Rep.Ser. 354, Medicare&Medicaid Gu 34,878

Stella Beatrice STEWART, Plaintiff-Appellant, v. Robert BERNSTEIN, in his official capacity as Commissioner

of the Texas Health Department, et al.,

Defendants-Appellees.

No. 84-2352.

United States Court of Appeals, Fifth Circuit.

Sept. 3, 1985.

East Texas Legal Services, Brenda Gale Willett, Nacogdoches, Tex., for plaintiff-appellant.

Bob Wortham, U.S. Atty., Beaumont, Tex., Steven M. Mason, Tyler, Tex., for Heckler.

Michael H. Patterson, San Antonio, Tex., Jim Mattox, Atty. Gen., Austin, Tex., for Bernstein, et al.

Stephen Greenberg, Sheila Asher, Austin, Tex., for Vaughn, et al.

Appeal from the United States District Court for the Eastern District of Texas.

Before GOLDBERG, TATE and JOLLY, Circuit Judges.

GOLDBERG, Circuit Judge:

Appellant Stella Stewart is a Medicaid recipient who, from May of 1979 to November of 1980, resided at the Kilgore Nursing Center (KNC), a private nursing home located in Texas. On November 18, 1980, the administrator of KNC, Steve Vaughn, notified appellant by letter that she would have to leave the facility within three days. Ms. Stewart maintains that on the third day, she was involuntarily taken from the Center and deposited at the Henderson Memorial Hospital, where no one had arranged in advance for her admission. When appellant's husband and daughter later returned to the Center seeking information about the transfer, they discovered that appellant's room had been rented out to another resident, her belongings removed.

This appeal arises from appellant's class action suit filed in federal court pursuant to title XIX of the Social Security Act ("Medicaid Act"), 42 U.S.C. Secs. 1396-1396q, the Civil Rights Act of 1871, 42 U.S.C. Sec. 1983, and a number of pendent state law theories. Stewart sought damages and declaratory and injunctive relief against the H.H. Holding Co., Inc., d/b/a Kilgore Nursing Center, Steve Vaughn, and the Commissioners of the Texas Department of Human Resources and the Texas Department of Health, alleging that she had been involuntarily discharged from the Center in violation of her federal equal protection, due process, and statutory rights. ¹ In particular, she alleged that the private defendants had discharged her on impermissible grounds as set forth in the federal Medicaid regulations, 42 C.F.R. Secs. 405.1101-.1137, 442.300-.346, and that the state agencies had facilitated her discharge by failing to promulgate regulations requiring private nursing homes such as KNC to comply with the Medicaid Act and its implementing regulations. Appellant's chief goal is to obtain state regulations prohibiting private nursing homes from discharging or transferring residents for any reason without at least five days' notice and an opportunity for a hearing prior to the discharge or transfer.

In a series of written orders, the district court dismissed each of appellant's federal claims under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. The court eventually dismissed appellant's pendent state claims as well, though without prejudice to her right to refile these claims in state court. We affirm.

I

Medicaid is a program whereby participating states work with the federal government to provide medical assistance to qualified recipients. As we previously described the system,

Participating states receive a proportional reimbursement from the federal government for expenses incurred in providing medical services for eligible medicaid patients. In order to participate in the Medicaid program, a state must submit a plan to the Secretary of [Health and Human Services (HHS) ] for approval, and the plan must comply with all requirements of 42 U.S.C. Sec. 1396a. The state must also provide for a system under which the single state agency responsible for the program shall be responsible for fulfillment of hearing provisions. Once a state plan is approved, the state agency responsible for the program is authorized to contract with public and private institutions for the rendering of medical services to eligible recipients.

Taylor v. St. Clair, 685 F.2d 982, 985 (5th Cir.1982) (citations and footnote omitted).

Texas has a federally approved state Medicaid plan, which is administered by the Texas Department of Human Resources (TDHR). Under the state plan, individuals reside in either "skilled nursing facilities" or "intermediate care facilities." By contract with TDHR, the Texas Department of Health receives and investigates the complaints of Medicaid recipients concerning their nursing home care.

In seeking to hold the state defendants liable for her transfer out of KNC, appellant must establish that she was deprived of a federal constitutional or statutory right under color of state law. E.g., Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 156-57, 98 S.Ct. 1729, 1733, 56 L.Ed.2d 185 (1978); Frazier v. Board of Trustees, 765 F.2d 1278, 1282-83 (5th Cir.1985). It is clear, however, that a state cannot be held responsible for the decisions of a private nursing home to discharge or transfer a patient. Blum v. Yaretsky, 457 U.S. 991, 1012, 102 S.Ct. 2777, 2789, 73 L.Ed.2d 534 (1982); Taylor, 685 F.2d at 987-88; cf. O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 787, 100 S.Ct. 2467, 2476, 65 L.Ed.2d 506 (1980) (state's decertification of private nursing facility has only "indirect and incidental" impact on residents). Since appellant cannot meet the under-color-of-law requirement of section 1983, her claim against the state defendants must fail.

Appellant attempts to avoid this result by asserting that the state lacks regulations sufficient to protect Medicaid recipients from having their federal statutory and regulatory "rights" ² infringed. In appellant's words,

Plaintiff does not seek to hold the state defendants responsible for the nursing home's eviction of Stella Stewart, but does seek to hold them responsible for failure to have policies and procedures for protecting the specific rights set out in the federal regulations for the benefit of transferred nursing home patients. [TDHR] has abdicated its responsibility for enforcing those portions of the Medicaid regulations designated as "Patients' Rights" and has neglected to monitor compliance.

Brief for Appellant at 18. Since in Blum the Supreme Court expressly pretermitted the issue of state noncompliance with specific federal or state regulations, 457 U.S. at 1003, 1012 n. 22, 102 S.Ct. at 2785, 2790 n. 22, appellant contends that the state's regulatory omissions can render it liable in this case. ³

The theory is creative but flawed. While the federal Medicaid regulations do provide that patients be given "reasonable advance notice to ensure orderly transfer or discharge," 42 C.F.R. Sec. 405.1121(k)(4), our holding that there was no state action in Taylor covered a plaintiff class comprising "all Medicaid patients who have been or are being or will in the future be terminated from nursing home service without the benefit of prior written notice and an evidentiary hearing to determine whether just cause exists under the Patient's Bill of Rights [42 C.F.R. Sec. 405.1121] for such termination." 685 F.2d at 984. In Taylor, as here, the private nursing home's decision to discharge the plaintiff allegedly violated the federal notice and hearing requirements. See id. at 985, 987 n. 13. We nevertheless held that section 1983's state action requirement of private conduct "fairly attributable" to the state foreclosed the position that the state's regulatory action or inaction subjected it to civil rights liability. Id. at 987-88; see Blum, 457 U.S. at 1002-03, 102 S.Ct. at 2784-85; Frazier, at 1283-85. As the district court properly noted in this case, appellant effectively relinquishes her claim by "not seek[ing] to hold the state defendants responsible for the nursing home's eviction of Stella Stewart." Brief for Appellant at 18. Since it is a wrongful eviction of which appellant complains, anything less than state responsibility for that action is insufficient to state a claim for relief under section 1983.

Appellant faces another predicament in her claim against the state appellees: article III standing. A plaintiff must " 'show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,' Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99 [99 S.Ct. 1601, 1607, 60 L.Ed.2d 66] (1979), and that the injury 'fairly can be traced to the challenged action' and 'is likely to be redressed by a favorable decision,' Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 38, 41 [96 S.Ct. 1917, 1924, 1925, 48 L.Ed.2d 450] (1976)." Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 758, 70 L.Ed.2d 700 (1982). In the present case, appellant argues that the state appellees are not "responsible for the ... eviction," but that they are instead "responsible for failure to have policies and procedures" effectuating patients' federal regulatory rights. At the same time, however, she recognizes that any relief that might issue against the state appellees mandating new policies and procedures would not necessarily prevent similar conduct by private nursing homes in the future. As the district court observed,

Plaintiffs' argument ... does not allege that the state defendants caused in any way her eviction from KNC. It does not allege that the state defendants failed to perform any existing duty, or that [they] failed to enforce any existing laws or regulations that they were authorized to enforce. Furthermore, plaintiffs concede that, even if this court ordered the state defendants to adopt all the procedures plaintiffs propose, future illegal discharges would still occur if the private nursing home ignored those procedures, just as, it is alleged, KNC...