U.S. v. Mack, H-98-1488.
| Decision Date | 22 April 1999 |
| Docket Number | No. H-98-1488.,H-98-1488. |
| Citation | 48 F.Supp.2d 708 |
| Parties | UNITED STATES of America, Plaintiff, v. William Harold MACK, M.D., Defendant/ Third-Party Plaintiff, v. National Heritage Insurance Company and Texas Department of Health and Human Services, Third-Party Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Michelle Zingaro, Office of U.S. Attorney, Houston, TX, Joe Mirsky, Office of U.S. Attorney, Houston, TX, for United States of America, plaintiff.
Cornel A. Williams, Attorney at Law, Houston, TX, for William Harold Mack, MD, defendant.
Weston C. Loegering, Hughes & Luce, Dallas, TX, for National Heritage Insurance Co., defendant.
Deborah Anne Verbil, Office of Attorney General, Austin, TX, for Texas Health and Human Services Commission, movant.
Before the court1 are the following motions: (1) Defendant National Heritage Insurance Company's Rule 12(b)(1) & (6) Motion to Dismiss with Authorities and Motion to Strike Third-Party Plaintiff's Counter-Claim;2 (2) Third-Party Defendant Texas Health and Human Services Commission's Motion to Dismiss Pursuant to Rule (12)(b)(1), or, in the Alternative, Motion to Dismiss Pursuant to Rule 14;3 (3) Plaintiff's Opposed Motion for the Enlargement of Time, Pursuant to Rule 6(b)(2), Within Which to Produce Certain Records;4 (4) Third-Party Plaintiff's Motion for Extension of Time to Respond to Third Party Defendants' Motions to Dismiss;5 (5) Defendant William H. Mack, M.D.'s Motion to Overrule Plaintiff's Objections to Discovery and in the Alternative Motion to Compel Discovery;6 and (6) Defendant Third Party Plaintiff's Motion for Leave to Amend His Complaint and Add Parties.7
The court has considered the motions, all other relevant filings, and the applicable law. For the reasons set forth below, the third-party defendants' motions to dismiss (Docket Entry Number (DEN) 17 and 19) are GRANTED, the motion for an extension of time (DEN 25) is GRANTED, and all other motions (DEN 22, 27, and 38) are DENIED.
William Harold Mack, M.D. ("Dr. Mack"), a pediatrician and Texas resident, was a participant in the Medicaid-sponsored Early Periodic Screening, Diagnosis, and Treatment (EPSDT) program. The EPSDT program allows for doctors to perform routine testing on "at risk" children at the taxpayer's expense. The United States of America ("the government") brought this suit against Dr. Mack seeking monetary damages. The government alleges that while participating in the EPSDT program, Dr. Mack filed numerous fraudulent claims and otherwise did not follow proper EPSDT procedures.
The government's complaint was filed on May 13, 1998. Dr. Mack filed an answer on June 12, 1998. On September 25, 1998, Dr. Mack filed what he termed an amended answer and counterclaim. In actuality, the amended pleading did not assert a counterclaim against the government; rather, it asserted a third-party complaint against the National Heritage Insurance Company ("NHIC") and the Texas Department of Health and Human Services (the department's correct name is the Texas Health and Human Services Commission; accordingly, the court will refer to it as "the Commission").
NHIC's and the Commission's involvement in the facts underlying this case are as follows. The Commission oversees the Medicaid program in the state of Texas. The Commission has contracted with NHIC, a private company, to receive, process, and pay doctors' Medicaid claims in accordance with applicable statutes and regulations. Thus, Dr. Mack would bill the Medicaid services he allegedly performed to NHIC and would be paid with state funds held in trust by NHIC.
The gravamen of Dr. Mack's complaint against the Commission and NHIC is that they processed and paid the bills he submitted to them without comment. Dr. Mack argues the Commission and NHIC should have instead audited him, notified him of his billing "errors", counseled him, and brought an administrative action against him. If they had done so, Dr. Mack reasons, the government would not now be suing him for his allegedly fraudulent activities. Dr. Mack contends the failure of the third-party defendants to alert him of his billing "discrepancies" was an act of negligence, breach of contract, and breach of the duty of good faith and fair dealing. Dr. Mack also seeks declaratory relief and appears to brings a claim under 42 U.S.C. § 1983 arguing that the Commission's and NHIC's inaction deprived him of his due process rights under the Fourteenth Amendment.
Two of the motions before the court, DEN 22 and 27, pertain to discovery matters. In DEN 22, the government asks that it be given more time to produce voluminous records requested by Dr. Mack. The motion, which was filed on November 27, 1998, states the government needs 12 weeks to produce the records. Twelve weeks have already passed. In DEN 27, Dr. Mack asks that the government be compelled to produce what appear to be the same records that are the subject of the government's request for an extension of time. Both of these motions were filed prior to the December 21, 1998, scheduling conference where discovery issues were addressed. The motions appear to be moot and are therefore DENIED as such. To the extent the subject matter of these two motions is still in dispute, the parties may contact the court's case manager, Linda Gonzales, within 5 days of the entry of this order to schedule a hearing to discuss any remaining issues.
Dr. Mack asks that he be given a one-week extension to file his response to the third-party defendants' motions to dismiss. The motion is unopposed and Dr. Mack's response was filed within the one-week period. The court GRANTS the motion.
Under the court's scheduling order, the parties had until February 26, 1999, to move to amend their pleadings. Dr. Mack filed such a motion on that date. The motion consists of only a few sentences and is not accompanied by the proposed amended pleading. Dr. Mack's motion states that he wishes to amend his complaint to add new parties, but it does not identify who those parties are. The motion also vaguely explains that Dr. Mack is "currently exploring" the option of "revis[ing] the paragraphs regarding complaints against" NHIC and the Commission. In effect, Dr. Mack asks the court to do nothing less than grant him a license to file an amended complaint at his leisure, irrespective of the court's scheduling order.
Whether or not a motion for leave to amend should be granted is within this court's sound discretion. Overseas Inns S.A.P.A. v. United States, 911 F.2d 1146, 1150 (5th Cir.1990). In exercising this discretion, the court is to consider factors such as undue delay, dilatory motive, bad faith, repeated failure to cure defects in amendments previously allowed, futility, and undue prejudice to the other parties. Id. Almost all of these factors counsel against granting Dr. Mack leave to amend. Not only has Dr. Mack failed to provide the court with a copy of his proposed amendment, he has utterly failed to explain how he wishes to amend his complaint, why he was unable to timely file the proposed amendment, and why any amendment would not be futile. The court set a deadline of February 26, 1999, to amend pleadings. Dr. Mack asks this court to vitiate this order by allowing him to ponder ad infinitum whether he will amend or not. It would be highly prejudicial to third-party defendants to allow Dr. Mack to escape the control of the scheduling order in this fashion. This is especially true in light of the fact both third-party defendants have motions to dismiss which are now ripe for adjudication. Dr. Mack's motion is DENIED.8
Both NHIC and the Commission contend that Dr. Mack's federal and state-law claims against them are barred by the doctrine of sovereign immunity. The court agrees.
The Eleventh Amendment provides:
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
The Eleventh Amendment is read to bar suit in federal court by citizens of a state against their own state. Darlak v. Bobear, 814 F.2d 1055, 1059 (5th Cir.1987). The term "state" encompasses state agencies and departments. Richardson v. Southern University, 118 F.3d 450, 452 (5th Cir.1997). Before deciding whether NHIC and the Commission are extensions of the State of Texas entitled to invoke immunity, the court first sets forth the parameters of the immunity the State of Texas may invoke.
There are two means by which a state can forfeit its Eleventh Amendment immunity: (1) an intentional negation of immunity by an act of Congress; or (2) a waiver or consent to be sued by the state. Neuwirth v. Louisiana State Bd. of Dentistry, 845 F.2d 553, 555 (5th Cir.1988). If neither of these circumstances is present, a federal court is prohibited from awarding "legal or equitable relief against the state." Id.; Texas Hosp. Ass'n v. National Heritage Ins. Co., 802 F.Supp. 1507, 1511 (W.D.Tex.1992) ().9
Congress did not abrogate the states' Eleventh Amendment immunity by enacting § 1983. Richardson, 118 F.3d at 453. Likewise, the State of Texas has not consented to be sued in federal court. While the Texas Tort Claims Act does allow an individual to bring certain claims against the State, such claims must be brought in state court. TEX.CIV.PRAC. & REM. CODE ANN. § 101.102 (Vernon 1997); Sherwinski v. Peterson, 98 F.3d 849, 851 n. 9 (5th Cir.1996). Accordingly, Dr. Mack's claims against any...
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