Planned Parenthood Southeast, Inc. v. Bentley et al

Filing 63

OPINION. Signed by Honorable Judge Myron H. Thompson on 10/28/2015. (wcl, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

PLANNED PARENTHOOD
SOUTHEAST, INC.; and
JANE DOE,
Plaintiffs,
v.
ROBERT BENTLEY, Governor
of Alabama, in his
official capacity; and
STEPHANIE McGEE AZAR,
Acting Commissioner,
Alabama Medicaid Agency,
in her official capacity,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

CIVIL ACTION NO.
2:15cv620-MHT
(WO)

OPINION
Before the court is a challenge to a decision by
the

Governor

Medicaid

of

provider

Southeast,

Inc.

Alabama

to

agreement
(‘PPSE’),

terminate
with

the

Planned

which

funds

State’s

Parenthood
services

unrelated to abortion, including routine gynecological
exams,

pregnancy

counseling,

cervical-cancer screenings.

and

breast-

and

The plaintiffs are PPSE

and Jane Doe, a PPSE patient and Medicaid recipient,

suing individually and on behalf of a putative class of
similarly situated Medicaid-recipient patients of PPSE.
The

defendants

Acting

are

the

Commissioner

of

Governor
the

of

Alabama

Alabama
Medicaid

and

the

Agency;

both are sued in their official capacities.
The plaintiffs filed this lawsuit to challenge the
termination of PPSE’s provider agreement as unlawful
under

the

‘free-choice-of-provider’

provision

of

the

Medicaid Act, which states in relevant part that “any
individual

eligible

for

medical

assistance ... may

obtain such assistance from any institution, agency,
community pharmacy, or person, qualified to perform the
service
provide

or

services

[her]

§ 1396a(a)(23).

required ... who

such

services.”

undertakes
42

to

U.S.C.

PPSE also claims that the termination

violates its rights under the First Amendment and the
Due

Process

and

Equal

Fourteenth Amendment.

Protection

Clauses

of

the

PPSE and Doe bring all of their

claims under 42 U.S.C. § 1983.

2

Jurisdiction is proper

under

28

U.S.C.

§§ 1331

(federal

question)

and

1343

(civil rights).
This matter is currently before the court on PPSE
and Doe’s motion for entry of a preliminary injunction.
The

motion

will

be

granted

on

the

basis

of

Doe’s

Medicaid Act claim.

I. LEGAL STANDARD
To

demonstrate

that

a

preliminary

injunction

is

warranted, a plaintiff must show that “(1) there is a
substantial likelihood that he ultimately will prevail
on

the

merits

of

the

claim;

(2)

he

will

suffer

irreparable injury unless the injunction issues; (3)
the threatened injury to the movant outweighs whatever
damage the proposed injunction may cause the opposing
party; and (4) the public interest will not be harmed
if the injunction should issue.”

Cate v. Oldham, 707

F.2d 1176, 1185 (11th Cir. 1983).

The plaintiff bears

the

each

burden

of

persuasion

as

3

to

of

the

four

required showings.

McDonald’s Corp. v. Robertson, 147

F.3d 1301, 1306 (11th Cir. 1998).

II. BACKGROUND
A. State Medicaid Program
The

federal

Congress

to

Medicaid

provide

individuals,

program

low-income

pregnant

women,

affordable medical care.
partnership

between

States.

Subject

federal

the

to

types

established

families,
and

by

disabled

children

with

The program operates as a

the

government

assistance,

was

federal

guidelines

government

and

the

established

by

the

regarding

eligibility

for

of

covered,

the

services

and

costs of those services, States receive federal funds.
See 42 U.S.C. § 1396a.
discretion

in

Although States are afforded

administering

the

program,

they

are

required to submit their plans for federal approval.
See

42

contract

C.F.R.

§ 430.10.

between

the

The

plan

participating

operates
State

and

as

a

the

federal government, and the Department of Health and

4

Human Services may withhold federal funds if the State
fails

to

”comply

substantially”

approved and adopted.

with

the

plan

as

42 C.F.R. § 430.35.

As a state participant, Alabama maintains such a
plan

with

maintains

the

federal

“provider

government.
agreements”

The
with

State

also

health-care

providers, which impose on providers state and federal
regulatory requirements governing the filing of claims.
When a provider renders covered services to a Medicaid
recipient,

the

State

pays

that

provider

directly.

Family-planning services are covered under the Medicaid
Act and under the Alabama plan.1

1. Except in rare cases, Medicaid monies are not
used to provide abortions in Alabama.
The Hyde
Amendment,
a
rider
attached
to
congressional
appropriations bills since 1976, prohibits the use of
federal funds to pay for abortions.
Although it was
initially an all-out ban, the Amendment has evolved to
exempt cases in which the life of the mother would be
endangered by carrying the fetus to term, as well as
cases of rape and incest. See, e.g., Pub. L. No. 11376, §§ 506-07, 128 Stat. 5, 409 (2014) ("Consolidated
Appropriations Act").
However, States are free to fund abortions for
Medicaid recipients from their own coffers.
Alabama
(continued…)
5

PPSE
affiliated

is

a

with

regional
Planned

non-profit
Parenthood

corporation

Foundation

of

America (‘PPFA’); it operates health centers in Mobile
and

Birmingham.

Through

family-planning
including

and

physical

these

centers,

it

preventive-health

exams,

contraceptive

provides
services,

counseling,

contraception, breast- and cervical-cancer screenings,
treatment

for

pregnancy

counseling.

abortions.
from

the

sexually

transmitted
Both

infections,

offices

also

and

provide

As an affiliate of PPFA, PPSE is distinct
national

organization;

PPSE

maintains

an

independent board and exercises exclusive control over
its daily affairs.

Although PPSE is not supervised by

PPFA, it must comply with certain standards adopted by
PPFA in order to operate under the “Planned Parenthood”
name.

does not do so.
See Ala. Admin. Code 560-X-6-.09(1)
("Payment is available for abortions as provided under
federal law.
In the event the abortion does not meet
the requirements of federal law, and the recipient
elects to have the abortion, the provider may bill the
recipient for the abortion.").
6

Until the termination of the provider agreement,2
both

of

PPSE’s

offices

participated

in

the

State’s

Medicaid program and, therefore, were able to provide
the aforementioned services for free or at reduced cost
to Medicaid recipients in the State.

PPSE provided

services to Medicaid recipients one to two times per
week.

Over the past two fiscal years, PPSE received

approximately

$ 5,600

in

state

Medicaid

funds.

All

parties agree that PPSE receives no Medicaid funding
for abortion services.

B. Videos Regarding Fetal-Tissue Donation
Beginning
August,

the

in

mid-July

Center

2015

for

and

Medical

ending

in

Progress,

early
an

anti-abortion group, released a series of controversial
videos on fetal-tissue donation programs operated by

2. The State of Alabama technically maintained a
separate, yet identical, provider agreement for each
PPSE facility; however, the agreement itself was
between the State and PPSE.
For clarity, the court
will refer to these identical agreements as one
provider agreement in this opinion.
7

certain abortion clinics.

These programs permit women

who elect to have abortions to donate fetal tissue for
medical

research

purposes.

At

the

PPFA-affiliated

clinics that provide these services, the fetal tissue
is

collected

procurement

by

providers.

companies

collect

tissue

and

parties

partner

transmit

In

do

not

dispute

with
to

some
the

instances,

providers

researchers.

that

no

to
The

employee

or

representative of PPSE is depicted in these videos and
that

PPSE

does

not

participate

in

fetal-tissue donation, and never has.
The videos feature individuals affiliated with the
Center for Medical Progress posing as employees of a
fake

tissue-procurement

participate

in

conversations

a

with

company.

series
employees

PPFA-affiliated

clinics.

all--discuss

purported

First,

the

impression

two
videos

that

are

the

These

of
of

covertly
PPFA

The

depicted

8

at

intended
PPFA

filmed

and

various

videos--nine

practices

clearly

individuals

issue
to

in
here.

give

affiliates

the

profit

from the ‘sale’ of fetal tissue.

Second, the videos

attempt to give the impression that providers at the
affiliates

that

participate

in

fetal-tissue-donation

programs alter abortion procedures in order to obtain
intact--and therefore more ‘valuable’--specimens.
Following

the

representatives

release

criticized

of

the

the

videos,

tactics

PPFA

of

the

filmmakers and argued that the videos falsely portray
the

practices

of

those

affiliates

that

engage

in

fetal-tissue donation.

PPFA contends that much of what

was

videos’

omitted

from

the

recorded

conversations

with staff reflects that PPFA affiliates recover only
their costs, and do not profit from their fetal-tissuedonation programs.

An independent analysis of several

of the videos, submitted by the plaintiffs, concludes
that

the

released

videos

were

“heavily

edited”

therefore lack any legal “evidentiary value.”

and

Pls.’

Ex. G, Reply Br. Mot. Prelim. Inj. 2, doc. no. 36-1.
The
immediate

release

of

backlash

the

videos

against

9

PPFA

led

to

and

strong
the

and

clinics

affiliated with it.

Both PPSE and other affiliates

report an increase in death threats and incidents of
harassment.
first

Only two days after the release of the

video,

investigation
State.

the
into

Similar

politicians

in

Governor

of

Indiana

PPFA-affiliated
investigations

clinics
were

Massachusetts,

Pennsylvania, and Georgia.

ordered
in

launched

South

an
that
by

Dakota,

Louisiana, Arkansas, Utah,

Texas, and New Hampshire also responded with efforts to
terminate

affiliated

clinics

from

their

Medicaid

programs.

C. Termination of PPSE’s Provider Agreement
On August 6, 2015, the Governor of Alabama sent a
letter to PPSE to notify it that its provider agreement
was being terminated.

The letter did not provide a

reason for the termination and advised PPSE that the
termination would go into effect 15 days later.

The

Governor states in his briefing in this court that his
decision to terminate was based on his viewing one of

10

the videos released by the Center for Medical Progress.
The plaintiffs cite a statement the Governor made to
the media, in which he contends that comments made in
the video he viewed displayed a lack of respect for
human life.

The Governor states that he had no plan to

terminate PPSE’s provider agreement before viewing this
video.

Further,

it is undisputed that, prior to the

receipt of this letter, PPSE had not been made aware of
any investigation into its medical or administrative
practices by the Alabama Medicaid Agency.

III. DISCUSSION
To

determine

whether

issuance

of

a

preliminary

injunction is warranted, the court will first evaluate
the plaintiffs’ likelihood of success on the merits of
their claims, then consider the threat of irreparable
injury, and, finally, discuss whether the balance of
harms and the public interest weigh in favor of or
against an injunction.

Because Doe has made a showing

on

claim

her

Medicaid

Act

11

adequate

to

warrant

a

preliminary injunction, the court does not reach PPSE’s
constitutional claims.

A. Likelihood of Success on the Merits
1. Private Enforcement of the
Free-Choice-of-Provider Right
In order to prevail on the merits, the plaintiffs
must,

as

Governor

threshold

under

relief

a

their

and

the

matter,
stated

Acting

free-choice-of-provider

be

cause

entitled
of

Commissioner

provision

is

to

pursue

action.
argue
not

that

The
the

enforceable

under 42 U.S.C. § 1983, by either Medicaid providers or
by recipients.
least

with

This court finds to the contrary, at

respect

to

Doe,

who

is

a

recipient

of

Medicaid benefits.3

3. Because the court finds that Doe has a privateenforcement right, the court need not decide whether
PPSE also has such a right, on behalf of its recipientpatients or on its own behalf. See Silver v. Baggiano,
804 F.2d 1211, 1217 (11th Cir. 1986) (declining to
resolve
whether
§ 1396a(a)(23)
creates
a
right
enforceable by a provider since “Medicaid recipients do
have enforceable rights under § 1396a(a)(23), and an
actual recipient has made a motion to intervene in this
(continued…)
12

The

federal

Courts

of

Appeals

to

consider

the

issue, as well as other federal district courts, have
reached the same conclusion: § 1396a(a)(23) creates a
private

right

enforceable

under

§ 1983.

Planned

Parenthood Ariz. Inc. v. Betlach, 727 F.3d 960, 965-68
(9th Cir. 2013), cert. denied, 134 S. Ct. 1283 (2014);
Planned

Parenthood

of

Ind.,

Inc.

v.

Comm’r

of

Ind.

State Dep’t of Health, 699 F.3d 962, 972-77 (7th Cir.
2012),

cert.

denied,

133

S.

Ct.

2736

(2013),

cert.

denied, 133 S. Ct. 2738; Harris v. Olszewski, 442 F.3d
456,

460-65

Parenthood

(6th
Gulf

Cir.

2006);

Coast,

Inc.

see
v.

also

Planned

Kliebert,

No.

3:15-cv-565, 2015 WL 6122984, at *18-19 (E.D. La. Oct.
18, 2015) (deGravelles, J.); Planned Parenthood Ark. &
E. Okla. v. Selig, No. 4:15-cv-566, slip op. at 11-14
(E.D. Ark. Oct. 2, 2015) (Baker, J.); Women’s Hosp.
Found. v. Townsend, No. 07-711, 2008 WL 2743284, at *8
case”); see also Nutritional Support Servs., L.P. v.
Miller, 826 F. Supp. 467, 468-70 (N.D. Ga. 1993)
(Carnes, J.) (concluding that providers--the only
plaintiffs--had no enforcement right under the freechoice-of-provider provision).
13

(M.D. La. July 10, 2008) (Brady, J.).

Although the

Eleventh Circuit Court of Appeals has not explicitly
held that the free-choice-of-provider provision creates
a private right enforceable under § 1983, it suggested
as much in Silver v. Baggiano, 804 F.2d 1211, 1216-18
(11th Cir. 1986) (noting, in remanding for the district
court

to

provider

consider
had

in

such

a

the

first

right,

instance

that

the

whether

district

a

court

might not need to reach each issue, because “Medicaid
recipients

do

have

§ 1396a(a)(23),

and

enforceable

an

actual

rights

recipient

has

under
made

a

motion to intervene in this case”), abrogated on other
grounds by Lapides v. Bd. of Regents of Univ. Sys. of
Ga., 535 U.S. 613, 618 (2002).
These

courts

articulated

by

applied

the

Supreme

the

three-step

Court

in

test

Blessing

v.

Freestone, 520 U.S. 329 (1997), for determining whether
a statutory provision can be enforced under § 1983: (1)
“Congress
question

must

have

benefit

the

intended

that

plaintiff”;

14

the

(2)

provision

“the

in

plaintiff

must demonstrate that the right assertedly protected by
the statute is not so vague and amorphous that its
enforcement would strain judicial competence”; and (3)
“the

statute

must

unambiguously

impose

a

binding

obligation on the States.” Id. at 340-41 (citations and
internal quotation marks omitted).
With respect to the first factor, they explained
that, in guaranteeing the free choice of provider to
“any individual eligible for medical assistance,” the
free-choice-of-provider provision employs “individually
focused terminology” that “unambiguously confer[s]” an
“individual

entitlement.”

Harris,

442

F.3d

at

461

(citations omitted); see also Planned Parenthood Ariz.,
727 F.3d at 966-67 (citing Ball v. Rodgers, 492 F.3d
1094, 1108 (9th Cir. 2007) (“While express use of the
term ‘individuals’ (or ‘persons’ or similar terms) is
not essential to finding a right for § 1983 purposes,
usually such use is sufficient for that purpose.”));
Planned
language

Parenthood
does

not

of

Ind.,

simply

15

699

F.3d

set

an

at

974

aggregate

(“This
plan

requirement, but instead establishes a personal right
to which all Medicaid patients are entitled.”).

The

Supreme Court, too, has explained as much.

O’Bannon v.

Town

785

Court

(“[The

Nursing

Ctr.,

447

U.S.

free-choice-of-provider

recipients
qualified

the

right

providers

to

(1980)

provision]

choose

without

773,

among

government

a

gives

range

of

interference.”

(emphasis omitted)).
As
ruled

for
on

the

second

this

issue

free-choice-of-provider
falls

comfortably

factor,

have

right

within

interpretive competence.”

the

courts
held

that
that

is

“administrable

the

judiciary’s

have
the
and
core

Planned Parenthood of Ind.,

699 F.3d at 974; see id. (“Planned Parenthood argues
that

a

state

infringes

the

free-choice-of-provider

right when it excludes a provider from its Medicaid
program for a reason other than the provider’s fitness
to render the medical services required.
is

the

proper

interpretation

of

Whether this

§ 1396a(a)(23)

is

a

legal question fully capable of judicial resolution.”);

16

see

also

Planned

Parenthood

Ariz.,

727

F.3d

at

967

(“[W]hether the doctor is qualified ... may require []
factual development or expert input, but still falls
well

within

requirement

the

range

could

be

of

judicial

established,

competence.
for

example,

The
by

a

combination of evidence as to the medical licenses the
doctor holds and evidence as to the licenses necessary
under state law to perform family planning services.”);
Townsend, 2008 WL 2743284, at *8 (“[T]he plain language
of the provision is sufficiently clear to allow for
judicial enforcement.”).
The

free-choice-of-provider

provision

also

meets

the third Blessing requirement, because it is “couched
in mandatory, rather than precatory,” language: a State
“must”

provide

recipients

the

freedom

of

choice.

Harris, 442 F.3d at 461 (quoting Blessing, 520 U.S. at
341); see also Planned Parthood Ariz., 727 F.3d at 967
(calling
Parenthood

this
of

conclusion

“indubitabl[e]”);

Ind.,

F.3d

699

at

974

Planned

(“[Section]

1396a(a)(23) is plainly couched in mandatory terms.”);

17

Townsend, 2008 WL 2743284, at *8 (“[T]he language is
mandatory ... .”).
Thus,

courts

have

free-choice-of-provider

right

enforceable” under § 1983.
536

U.S.

273,

presumption

of

284

found

that

is

the

“presumptively

See Gonzaga Univ. v. Doe,

(2002).

Under

enforceability

could

Gonzaga,
be

this

overcome

if

Congress had foreclosed § 1983 lawsuits by recipients,
either

expressly

or

“impliedly,

by

creating

a

comprehensive enforcement scheme that is incompatible
with”

private

lawsuits.

Id.

Blessing, 520 U.S. at 341).
Appeals

to

Congress

consider

had

not

the

at

n.4

(quoting

But the three Courts of

question

expressly

private-enforcement actions.

284

or

all

concluded

impliedly

that

foreclosed

Planned Parenthood Ariz.,

727 F.3d at 968; Planned Parenthood of Ind., 699 F.3d
at 975-76; Harris, 442 F.3d at 462.
This

court

is

persuaded

consistent holdings are correct.
and

state

law

provide

for

18

an

that

these

remarkably

The fact that federal
administrative

appeals

process

does

not

prompt

a

different

conclusion.

Exhaustion of administrative remedies available under
state

law--by

either

Doe

or

PPSE--was

not

required

before Doe could file suit in federal court.
points

out,

circuit

the

to

exhaustion

Eleventh

consider
is

Medicaid Act.

not

Circuit,

the

issue,

required

like

has

for

As she

every

other

concluded

claims

that

under

the

See Alacare, Inc. North v. Baggiano, 785

F.2d 963, 965-67 (11th Cir. 1986) (“The evidence of a
congressional

preference

requirement

in

inevident ... .”
Regents,

457

for

imposing

Medicaid
(applying

U.S.

496

cases
Patsy

(1982));

v.
see

an

exhaustion

is
Fla.
also

simply
Bd.
Romano

of
v.

Greenstein, 721 F.3d 373, 376 (5th Cir. 2013); Roach v.
Morse, 440 F.3d 53, 58 (2d Cir. 2006); Houghton ex rel.
Houghton v. Reinertson, 382 F.3d 1162, 1167 n.3 (10th
Cir. 2004); Talbot v. Lucy Corr. Nursing Home, 118 F.3d
215, 220 (4th Cir. 1997).
Further, it is relevant that the letter sent by the
Governor was--as the court determines below--based on

19

an

at-will

termination

clause

in

PPSE’s

agreement, and not any for-cause ground.

provider

Because the

termination letter lacked any substantive basis for the
termination

of

the

provider

agreement,

it

is

questionable whether meaningful review could have been
sought

through

defendants'

the

argument

administrative
that

the

process.

plaintiffs

The

could

have

uncovered through the administrative appeal process the
for-cause

reason

the

defendants

offer is unpersuasive.

now

retrospectively

Their argument ignores the fact

that the Governor did implicitly identify a basis for
terminating the agreement, which was his contractual
authority to terminate it at will, at any time, without
giving any other reason.
action

strikes

the

This basis for administrative
court

as

a

fundamentally

unappealable one, impervious to evidentiary rebuttal.
Even if every factual allegation leveled against PPSE
were

disproven,

the

agency--believing

that

it

was

empowered to terminate a provider agreement without any

20

basis whatsoever in the conduct of the provider--would
hold a trump card.
The defendants argue that a recent decision by the
Supreme

Court,

Armstrong

v.

Exceptional

Child

Ctr.,

Inc., 135 S. Ct. 1378 (2015), warrants reconsideration
of the above precedents establishing that recipients
have

enforceable

rights

under

the

free-choice-of-provider provision.

However, Armstrong

does

doubt

not

cast

significant

on

this

now-well-established proposition.
Armstrong involved a challenge by providers to a
different

provision

of

the

Medicaid

Act,

42

U.S.C.

§ 1396a(a)(30)(A) (the ‘equal-access’ provision), which
requires

state

procedures
payment

plans

relating

for,

plan ... as

care
may

to

to
and

be

“provide

the

such

utilization

services

necessary

methods
of,

available
to

and

and

the

under

the

safeguard

against

unnecessary utilization of such care and services and
to assure that payments are consistent with efficiency,
economy,

and

quality

of

care

21

and

are

sufficient

to

enlist enough providers so that care and services are
available under the plan at least to the extent that
such care and services are available to the general
population in the geographic area ... .”
1382.

135 S. Ct. at

The equal-access provision, the Court observed,

“lacks the sort of rights-creating language needed to
imply a private right of action,” id. at 1387--that is,
just

the

sort

of

free-choice-of-provider

language

provision

does

that
contain.

the
See

also Townsend, 2008 WL 2743284, at *8 (drawing the same
contrast between § 1396a(a)(23) and § 1396a(a)(30)(A));
Planned Parenthood Gulf Coast, 2015 WL 6122984, at *18
(recognizing that the equal-access provision “lacks the
rights-creating

and

individual-focused

language

so

prominent in [the free-choice-of-provider provision]”).
The Armstrong Court concluded that two aspects of
the

equal-access

provision,

considered

together,

“establish[ed] Congress’s intent to foreclose equitable
relief.”

135 S. Ct. at 1385 (citation and internal

quotation marks omitted).

Only one of these factors

22

applies with any force to the free-choice-of-provider
provision:
provided

that

for

a

the

remedy

State’s

Congress

failure

to

affirmatively

comply

with

the

provisions of the Medicaid Act was the withholding of
funds by the Secretary of Health and Human Services.
Id. (citing 42 U.S.C. § 1396c).
the

Court

made

clear

that

Critically, however,

“[t]he

provision

for

the

Secretary’s enforcement by withholding funds might not,
by

itself,

relief.”4

preclude

the

availability

of

equitable

Id. (citing Va. Office for Prot. & Advocacy

v. Stewart, 131 S. Ct. 1632, 1639 n.3 (2011) (“The fact
that the Federal Government can exercise oversight of a
federal spending program and even withhold or withdraw
4. This enforcement provision applies to a number
of other substantive provisions of the Medicaid Act,
many of which have been repeatedly held to be privately
enforceable under § 1983. See, e.g., Bontrager v. Ind.
Family & Soc. Servs. Admin., 697 F.3d 604, 606-07 (7th
Cir. 2012) (§ 1396a(a)(10)); Doe v. Kidd, 501 F.3d 348,
355-57 (4th Cir. 2007) (§ 1396a(a)(8)); S.D. ex rel.
Dickson v. Hood, 391 F.3d 581, 602-07 (5th Cir.
2004)(§ 1396a(a)(10));
Sabree
ex
rel.
Sabree
v.
Richman,
367
F.3d
180,
182-93
(3d
Cir.
2004)
(§§ 1396a(a)(8), 1396a(a)(10), 1396a(a)(15)); Gean v.
Hathaway,
330
F.3d
758,
772-73
(6th
Cir.
2003)(§ 1396a(a)(3)).
23

funds ... does

not

demonstrate

that

Congress

has

displayed an intent not to provide the more complete
and

more

immediate

relief

that

would

otherwise

be

available under Ex parte Young[, 209 U.S. 123 (1908)].”
(citation

and

internal

quotation

marks

omitted))).

Rather, the Court held, “the express provision of an
administrative

remedy,”

“when

combined

with

the

judicially unadministrable nature” of the equal-access
provision,

demonstrated

precluded.

that

private

enforcement

was

Armstrong, 135 S. Ct. at 1385 (emphasis

added).
The equal-access provision at issue in Armstrong
and the free-choice-of-provider provision at issue here
could hardly be more different with respect to judicial
administrability.
requirement
equal-access
Id.

“It

broader

is

and

difficult
less

provision’s

to

specific

“judgment-laden

imagine
than”

a
the

standard.”

By contrast, the free-choice-of-provider provision

articulates
enforcement.”

“concrete

and

objective

standards

for

Planned Parenthood Ariz., 727 F.3d at
24

967 (citation omitted).

For example, to adjudicate a

claim under the equal-access provision, a court might
be required to determine whether a particular procedure
was

“necessary

to

safeguard

against

unnecessary

utilization” of covered care--a near-impossible task.
42 U.S.C. § 1396a(a)(30)(A).

To decide a claim under

the

free-choice-of-provider

provision,

not

demand

obtain

that

health-systems

the

court

administration;

a

however,

does

crash-course

determining

that

in
a

provider is “qualified to perform [a] service ... and
undertakes to provide [] such service[]” is well within
a

court’s

competence.

Id.

If,

as

the

defendants

contend, States had free rein to define ‘qualified’ in
whatever ways they wished, deciding a claim under the
free-choice-of-provider
more

difficult,

However,

the

and

court

provision
perhaps

rejects

might

indeed

‘judgment-laden’
this

expansive

be

a

task.

reading;

“qualified to perform the service or services required”
means

just

“competency

what
and

the

plain

language

professional

standing

25

says:
as

a

having
medical

provider generally.”

Planned Parenthood of Ariz., 727

F.3d at 967-69; Planned Parenthood of Ind., 699 F.3d at
978 (“If the states are free to set any qualifications
they want--no matter how unrelated to the provider’s
fitness

to

treat

Medicaid

free-choice-of-provider

patients--then

requirement

could

be

the
easily

undermined by simply labeling any exclusionary rule as
a

‘qualification.’

This

would

open

a

significant

loophole for restricting patient choice, contradicting
the broad access to medical care that § 1396a(a)(23) is
meant to preserve.”).
Doe,

as

a

recipient

of

Medicaid

benefits

and

a

patient of PPSE, has pleaded a viable cause of action.
She is entitled to bring an enforcement action under
§ 1983 to vindicate her right to receive care from any
qualified

(and

willing)

provider

under

the

free-choice-of-provider provision.
This conclusion is particularly well-supported by
the

statute

in

the

context

services at issue here.

of

the

family-planning

Although the Medicaid Act does

26

permit States to limit a recipient’s free choice of
provider in certain ways when she is enrolled in a
managed-care plan,5 the statute is clear that the State
still “shall not restrict the choice of the qualified
person from whom the individual may receive services
under

section

1396d(a)(4)(C)

of

this

title,”

which

pertains to “family planning services and supplies.”
42

U.S.C.

§ 1396a(a)(23)(B).

Congress

saw

fit

to

identify family planning as the area of medical care
with

respect

to

which

a

recipient’s

provider was most critical.

free

choice

of

It is not hard to imagine

why--just as business owners do, healthcare providers
and

Medicaid

recipients

have

widely

varying

“honest

conviction[s]” about the appropriateness of different
family-planning methods.

See Burwell v. Hobby Lobby

Stores, Inc., 134 S. Ct. 2751, 2779 (2014) (citation
omitted).

Congress presumably intended to ensure that

women who receive Medicaid benefits would be able to

5. Neither party has suggested that Doe is enrolled
in such a plan.
27

receive

care

from

a

provider

whose

perspectives

on

family planning were aligned with her own.
One final point bears discussing.
the

Acting

Commissioner

The Governor and

argue

that

no

free-choice-of-provider claim can be brought, whether
by a provider or a recipient, when the State terminates
an

individual

provider

agreement

pursuant

§ 1396a(p)(1) (the ‘exclusion’ provision).
they

emphasize

in

their

brief,

to

This is,

because

such

terminations are an exception to the requirement that
States must give recipients a free choice of qualified
providers.6

The

court

understands

this

argument

as

6. For the first time at oral argument, the
defendants hinted at a different argument--that in
terminating PPSE under the exclusion provision, they
have “effectively” rendered it (or recognized it to be)
unqualified for purposes of the free-choice-of-provider
provision. Tr. Hr’g Mot. Prelim. Inj. 26, doc. no. 44.
However, the defendants cannot have it both ways.
If they rely on the exclusion provision as an exception
to the free-choice-of-provider provision, they are
necessarily conceding that an exception is necessary
because the rule applies; that is, because PPSE cannot
be terminated as unqualified.
Then, the court must
determine (as it does, below) whether Doe has a right
(continued…)
28

follows:

The

terminate
reasons

a

exclusion
provider

other

‘qualified.’

agreement

than
When

provision

that
a

permits
for

the

State

at

States
least

provider

terminates

a

to

some

is

not

qualified

provider for one of these reasons, the argument goes, a
recipient is not entitled to choose to receive covered
care from that provider, despite the fact that it is
qualified.

This is true, but of little help to the

defendants’ case.

There plainly are some reasons that

a State may terminate a provider agreement under the
exclusion

provision

unqualified.
reasons

wholly

other

(Whether

a

unrelated

than
State
to

the
may

the

provider
do

so

purposes

being

based

on

of

the

to challenge PPSE’s termination under the exclusion
provision, and whether the termination was proper under
the terms of that provision.
If instead defendants were to contend that they
terminated PPSE because it was unqualified, the court
would have to consider whether Doe could challenge the
termination on those grounds, and whether the State is
free to determine, without giving any reason related to
the services it provides, that PPSE is unqualified. As
the 6th, 7th, and 9th Circuits have held, the answers
to these questions are clearly “yes” and “no.”
29

Medicaid Act will be discussed below.)
providers

who

have

been

properly

Additionally,

excluded

from

a

State’s Medicaid program under the exclusion provision
do fall within an “exception[]” to a recipient’s right
to choose any qualified provider.

Planned Parenthood

Ariz., 727 F.3d at 973. But here, Doe does not argue
that the free-choice-of-provider provision entitles her
to choose a provider that was rightfully excluded for,
say,

claim

fraud

under

42

U.S.C.

§ 1320a-7a(a)

(a

ground for exclusion by a State under the exclusion
provision),
provide

yet

her

is

care;

nonetheless
that

fully

grievance

qualified
would

not

to
be

actionable under the free-choice-of-provider provision.
Rather,

Doe

alleges

that

her

qualified

provider

of

choice, PPSE, was wrongfully removed from the pool of
providers

among

whom

she

has

a

right

to

choose.

Indeed, Doe argues not only that there exists no basis
in fact for PPSE’s termination, but also that PPSE was
excluded on a basis which, as a matter of law, falls
outside the exclusion-provision exception.

30

If
right

a

State

to

could

select

a

defeat

a

particular

Medicaid

recipient’s

qualified

healthcare

provider merely by terminating its agreement with that
provider

on

an

unlawful

totally eviscerated.
Commissioner

were

terminations

of

challenged

by

basis,

the

right

would

be

If the Governor and the Acting
correct

provider

that

agreements

recipients

free-choice-of-provider

allegedly
could

pursuant

provision,

that

unlawful
not
to

be
the

provision’s

“individual entitlement,” the “personal right” it gives
recipients, would be an empty one.7

Planned Parenthood

7. O’Bannon is not to the contrary.
In O’Bannon,
the
Court
held
that
the
free-choice-of-provider
provision did not give residents of a nursing home a
due-process right to a pre-deprivation hearing when the
State, after an audit, determined that their nursing
home no longer met specific federal “statutory and
regulatory standards for skilled nursing facilities”
and terminated its Medicaid provider agreement.
447
U.S. at 775-76, 785.
O’Bannon is inapposite here for
two reasons.
First, as the Seventh Circuit put it,
“[t]his is not a due-process case. Planned Parenthood
and its patient[] are not suing for violation of their
procedural rights; they are making a substantive claim
that [the termination of the provider agreement]
violates
[the
free-choice-of-provider
provision].”
Planned Parenthood of Ind., 699 F.3d at 977. Even more
(continued…)
31

of

Ind.,

699

(citation
States’

F.3d

at

omitted).

Statement

of

974;
See

Harris,
also

Interest

442

Pls.’
in

F.3d

Ex.

Planned

S,

at

461

United

Parenthood

Gulf Coast, Inc. v. Kliebert 7 n.3, doc. no. 7-1 (“[The
free-choice-of-provider provision] is violated whenever
a beneficiary is denied her right to receive covered
Medicaid services from ‘any’ qualified provider of her
choice willing to provide the services; it does not
matter

whether

Medicaid

that

program

on

provider
an

was

excluded

individualized

or

from

the

class-wide

basis.”).

2. At-Will Termination
basically, as discussed in greater detail below, PPSE’s
termination letter included no basis for the decision
that could even plausibly be construed as relating to
its “competency and professional standing as a medical
provider generally.”
Planned Parenthood Ariz., 727
F.3d at 969.
O’Bannon held that a Medicaid recipient
has no due-process right to a hearing before his
unqualified nursing home’s agreement is terminated; it
does not stand for the proposition that any time a
State terminates a Medicaid provider agreement, for any
reason or for no reason at all, that decision is
insulated from substantive review at the behest of
recipients.
32

Although the parties in this case have presented
significant evidence regarding the motivation for and
validity of the Governor’s decision to terminate PPSE’s
provider agreement, the court need not delve into it.
This

is

because

the

termination

letter

sent

by

the

Governor was clearly based on the at-will termination
provision in PPSE’s provider agreement.
The letter sent by the Governor to PPSE did not
provide a substantive reason or statutory basis for the
termination

of

its

provider

agreement.

Rather,

it

simply stated that “[p]ursuant to the Alabama Medicaid
Agency

Provider

Agreement

under

section

IV.

Term,

Amendment, and Termination, the Agency is exercising
its ability to terminate the existing agreement(s) with
Planned Parenthood Southeast, Inc. with fifteen (15)
days written notice.
agreement(s)

with

The termination of the provider

Planned

Parenthood

Southeast,

Inc.

will be effective fifteen (15) days after receipt of
this letter.”

Pls.’ Ex. 1, doc. no. 1-1.

33

Section IV of the provider agreement sets forth two
different methods of termination.
an

at-will

termination

First, it sets forth

provision:

“Either

party

may

terminate this Agreement by providing the other party
with fifteen (15) days written notice.”
at 24, doc. no. 28-16.

Defs.’ Ex. 16,

Second, it sets forth a for-

cause termination provision: “MEDICAID may immediately
terminate the Agreement for cause if the Provider is
excluded from the Medicare or Medicaid programs for any
reason,

loses

its

licenses

or

certificates,

becomes

ineligible for participation in the Medicaid program,
fails to comply with the provisions of this Agreement,
or if the Provider is or may be placing the health and
safety of recipients at risk.”

Id. at 5.

Along with the failure to articulate any specific
cause

for

the

termination,

the

15-day

delay

clearly

indicates that the Governor and the Acting Commissioner
terminated

PPSE’s

provider

agreement

not

under

the

for-cause termination provision, but instead under the
at-will

termination

provision.

34

This

assessment

is

corroborated by the fact that the letter sent to PPSE
would have been inadequate to effectuate a for-cause
termination, because it failed to provide the notice
required

by

federal

law.8

“In

order

to

exclude

a

provider under [the exclusion provision], a state must
give the provider to be excluded notice of the state’s
intent to exclude, 42 C.F.R. § 1002.212 ... .”

Planned

Parenthood Ariz., Inc. v. Betlach, 899 F. Supp. 2d 868,
882

(D.

Ariz.

§ 1002.212

2012)

requires

(Wake,

States

to

J.).
give

Specifically,
providers

whose

agreements are terminated “notification consistent with
subpart E of part 1001 of this chapter,” which in turn
requires that such notice include “the basis of the
exclusion.”

42 C.F.R. § 1001.2002(c).

Although the

Governor made public statements via Twitter regarding
8. This failure to provide adequate notice of a
for-cause ground for termination illustrates vividly
why PPSE’s failure to pursue an administrative appeal
has no bearing on the outcome of this case.
The
purpose of giving a provider notice of the reason for
termination of its agreement is obvious: so that it can
submit evidence and argument to meaningfully contest
the agency’s determination.
When no reason has been
articulated, an appeal becomes a sham.
35

his decision to terminate PPSE’s provider agreement,
‘tweets’ are plainly not an acceptable form of notice.
Hence,

the

narrow

question

before

the

court

is

whether the Medicaid Act allows a State to terminate a
provider agreement based on no reason other than the
existence

of

a

contractual

at-will

provision like the one in PPSE’s.

termination

The answer to that

narrow question is “no.”
The Governor and the Acting Commissioner argue that
Alabama

is

agreements

empowered
on

any

to

terminate

basis

Medicaid

recognized

under

provider

state

law

(including, as relevant in this case, state contract
law).

This authorization, they suggest, comes from the

first clause of the exclusion provision, which states:
“In

addition

exclude

any

participating

to

any

other

individual
under

or

the

authority,
entity
State

for
plan

a

State

purposes
under

may
of
this

subchapter for any reason for which the Secretary could
exclude the individual or entity from participation in
[Medicare under the for-cause bases listed in] section

36

1320a-7, 1320a-7a, or 1395cc(b)(2) of this title.”

42

U.S.C. § 1396a(p)(1) (emphasis added).
However,
does

not

this

give

clause

States

of

carte

the

exclusion

blanche;

the

provision
defendants

“read[] the phrase for more than it’s worth.”
Parenthood of Ind., 699 F.3d at 979.

Planned

It is true that

States have the “authority to suspend or to exclude
providers from state health care programs for reasons
other than those upon which the Secretary of [Health
and Human Services] has authority to act.”

Guzman v.

Shewry, 552 F.3d 941, 949 (9th Cir. 2009).

But this

authority is not unbounded.

As the Seventh and Ninth

Circuits have concluded, the exclusion provision is a
“standard

savings

clause

[which]

‘signals

only

that

what follows is a non-exclusive list’ and ‘does not
imply that the states have an unlimited authority to
exclude providers for any reason whatsoever.’”

Planned

Parenthood

Planned

Ariz.,

727

F.3d

at

972

Parenthood of Ind., 699 F.3d at 979).

(citing

“[T]he Medicaid

Act itself must provide that ‘other’ authority, just as

37

it supplies the ‘authority’ covered by the rest of the
subsection.

Were

it

otherwise--were

states

free

to

exclude providers as they see fit--then the bulk of
§ 1396a(p)(1)

itself

would

be

unnecessary,

as

‘authority’ it supplies would be superfluous.”

the

Planned

Parenthood Ariz., 727 F.3d at 972.
The Governor and the Acting Commissioner’s broad
reading of the exclusion provision is therefore “not
plausible.”
at

882.

Planned Parenthood Ariz., 899 F. Supp. 2d

“If

a

provision]

state

to

non-arbitrary
exceptions,

could

rely

on

[the

exclude ... providers

reason,

which

then

the

carefully

set

exclusion
for

remainder
forth

any

of

the

circumstances

under which the Secretary and states have authority to
exclude

providers,

interpretation
statutory

would

be

undermines

interpretation

unnecessary.
the

that

cardinal
no

Such
rule

provision

[of

an
of
a

statute] should be construed to be entirely redundant.”
Id. at 882-83 (citation and internal quotation marks
omitted)

(discussing,

as

38

an

example,

42

U.S.C.

§ 1396n(b)(4), which allows the Secretary of Health and
Human

Services

to

waive

the

free-choice-of-provider

requirement, but only when a State limits choice based
on standards that “are consistent with access, quality,
and efficient and economic provision of covered care
and services”).
The Governor and the Acting Commissioner also cite
the regulation implementing the exclusion provision and
the provision’s legislative history in support of their
claim.

42 C.F.R. § 1002.2 states: “Nothing contained

in this part should be construed to limit a State’s own
authority

to

exclude

an

individual

or

entity

from

Medicaid for any reason or period authorized by State
law.”

However, a close reading reveals that “[t]hat

provision is only a limitation on interpretation of the
referenced ‘part’ of the regulations--Title 42, Chapter
V, Subchapter B, Part 1002--which does not encompass
the

free-choice-of-provider

requirement.”

Parenthood Ariz., 727 F.3d at 972 n.8.

Planned

Although the

legislative history of the provision includes a note

39

stating that it “is not intended to preclude a State
from establishing, under State law, any other bases for
excluding

individuals

or

entities

from

its

Medicaid

program,” S. Rep. No. 100-109, at 20 (1987), reprinted
in 1987 U.S.C.C.A.N. 682, 700, this note makes clear
only

that

a

exclusion,

State

not

may

what

limits

discretion in doing so.
suggests

those

establish

other

exist

on

bases
a

for

State’s

The legislative history itself

limits,

in

explaining

that

the

“overarching purpose of [the exclusion provision] is to
grant

authority

provider’s

to

exclude

quality

of

a

provider

based

services ... .”

on

the

Planned

Parenthood Ariz., 899 F. Supp. 2d at 882-83 (citing S.
Rep.

No.

100-109

(1987),

at

1-2,

reprinted

in

1987

U.S.C.C.A.N. 682, 700).
If

a

State

were

free

to

terminate

a

provider

agreement for any reason with a basis in state law,
recipients’

free-choice-of-provider

rights

would

be

“greatly weakened,” and “subject to state policies and
politics

having

nothing

to

40

do

with

the

Medicaid

program.”

Id.

An at-will termination clause might (or

might not) defeat a provider's right to challenge such
a

decision

on

appeal,

but

it

has

no

effect

on

a

recipient's rights; after all, "Jane Doe[] [is] not [a]
part[y] to the agreement[] cited." Planned Parenthood
Ark. & E. Okla., slip op. at 25.
Because

the

enumerated

statutory

bases

for

excluding providers cross-referenced in the exclusion
provision involve “various forms of malfeasance such as
fraud, drug crimes, and failure to disclose necessary
information to regulators,” Planned Parenthood of Ind.,
699 F.3d at 979, the provision’s ‘any other authority’
clause, when “[r]ead in context, ... reaffirm[s] state
authority to exclude individual providers pursuant to
analogous state law provisions relating to fraud and
misconduct,”

but

does

not

give

States

license

to

terminate provider agreements “on grounds unrelated to
medical

competency

or

legal

and

ethical

Planned Parenthood Ariz., 727 F.3d at 972.

41

propriety.”

The

state-law

ground

terminated

PPSE’s

termination

clause--falls

on

provider

which

the

Governor

agreement--the

well

outside

the

at-will
range

of

grounds germane to the purposes of the Medicaid Act.
See

also

Interest

Pls.’
in

Ex.

S,

Planned

United

Parenthood

States’
Gulf

Statement

Coast,

Inc.

of
v.

Kliebert 2, doc. no. 7-1 (“[States] cannot evade the
statutory

mandate

provision]

simple

expedient

of

termination

provisions

into

provider

would

not

‘free-choice-of-provider’

the

‘at-will’

Medicaid

otherwise

[the

through

incorporating
their

of

agreements.

only

strip

the

To

conclude

Medicaid

Act’s

free-choice-of-provider provision of all meaning, but
also
give

would

contravene

Medicaid

covered

clear

beneficiaries

services

from

any

congressional
the

right

qualified

intent

to

to

receive

and

willing

provider.”).
In sum, Doe is likely to prevail on the merits of
her Medicaid Act claim.

42

3. For-Cause Termination
Had this termination been for cause, it would have
been necessary for the court to consider whether the
reasons of which PPSE would have been given notice were
sufficient to support the termination of its provider
agreement.

Because

Commissioner

have

the

Governor

and

retrospectively

the

(and

Acting

belatedly)

articulated a for-cause ground that they believe would
support such an action, the court turns now, briefly,
to whether, on the record before the court, they would
have

been

justified

in

terminating

the

agreement

on

that basis.
In

their

brief

opposing

the

motion

for

a

preliminary injunction, the defendants identified the
following

ground

“entity

for

that

excluding

the

furnished ... services

PPSE:

[State]
to

that

it

is

an

determines ... has

patients ... of

a

quality

which fails to meet professionally recognized standards
of

health

care.”

42

U.S.C.

§ 1320a-7(b)(6)(B).

Specifically, they assert that statements in a video

43

purporting

to

describe

the

practices

of

some

PPFA

affiliates with respect to fetal-tissue donation run
afoul

of

“safeguards”

Medical Association.

prescribed

by

the

American

See Am. Med. Assoc. Code on Med.

Ethics, Op. 2.161 (last updated June 1996) (doc. no.
28-7).

According to the defendants, this video gave

the Governor reason to be concerned that (1) “decisions
regarding

the

technique

used

to

induce

abortion”

by

practitioners at some PPFA affiliates were being based
in part on a desire to obtain intact tissue samples and
therefore not exclusively on “concern for the safety of
the

pregnant

woman,”

and

(2)

that

“fetal

tissue

is

[being] provided in exchange for financial remuneration
above

that

expenses.”

which

is

necessary

to

cover

reasonable

Id.

If there was any indication--allegation, even--that
PPSE had itself provided substandard care in these or
any

other

respect

to

ways,
the

various

questions

applicability

regarding the quality of care.

44

of

would

arise

with

§ 1320a-7(b)(6)(B)
The court would be

compelled to examine a number of issues: the amount of
evidence

required

to

terminate

for

failure

to

meet

professionally recognized standards of healthcare, the
type of evidence such a showing would require, whether
abortion procedures had actually been altered in such a
way

as

to

pose

any

additional

risks

to

women,

and

whether providers had actually received remuneration in
excess of reasonable expenses.
However, the court has not assessed the strength of
the ‘evidence’ in the videos because it is beside the
point.

PPSE

states

that

it

fetal-tissue donation at all.
this

effect,

point.

and

Rather,

specifically,

the

does

argue

(alleged)

engage

in

It offers evidence to

defendants

they

not

do

not

that

the

ethical

contest

the

practices--

violations--of

separately incorporated organizations in other regions
with which PPSE is affiliated are properly attributed
to PPSE.

The court disagrees.

First,
provision

when

considered

(§ 1396a(p)(1))

and

45

together,

the

exclusion

§ 1320a-7(b)(6)(B),

the

for-cause ground cited by the defendants, make clear
that the “entity” that “a State may exclude” must be
the same “entity that the [State] determines ... has
furnished ... services to patients ... of a quality
which fails to meet professionally recognized standards
of

health

provision

care.”

This

authorizes

is

the

because

State

to

the

exclusion

exclude

“any

...

entity” if the Secretary of Health and Human Services
“could

exclude

1320a-7 ... .”
principle

of

the

...

entity

(emphasis
legislative

under

added).
drafting

...

It
that

is
the

section
a

basic

definite

article (“the”) is used in place of “such” to mean “the
previously mentioned.”

See Lawrence E. Filson & Sandra

L. Strokoff, The Legislative Drafter’s Desk Reference
228

(2d

ed.).

It

is

evident

from

the

termination

letter that the ‘entity’ the State has “exclude[d]” is
PPSE--the entity with which it entered into, and then
terminated, a provider agreement.

See § 1396a(p)(3)

(defining the term “exclude” to mean “the refusal to
enter into or renew a participation agreement or the

46

termination

of

such

an

agreement”).

Therefore,

the

termination is authorized by the provision the State
cites only to the extent that this entity--PPSE--has
furnished substandard care.
Second,
context

of

when
other

§ 1320a-7(b)(6)(B)
enumerated

is

read

for-cause

in

the

termination

grounds, it is apparent that it was intended to apply
to only services furnished by the provider itself, and
not to any services furnished by affiliates.

Another

provision does permit the exclusion of an entity based
on

affiliation,

person--who

must

but
have

only
been

when

the

sanctioned

affiliated
under

the

Medicaid Act--has an ownership or control interest in
the

entity

or

is

an

officer,

managing employee of the entity.
7(b)(8).
strongly

Congress’s
suggests

that

inclusion

director,

agent,

or

42 U.S.C. § 1320aof

that

§ 1320a-7(b)(6)(B)

provision
was

not

intended to allow for the termination of one entity’s
agreement on the basis of the infractions of another
party in the absence of ownership, control, management,
47

or

an

agency

relationship.9

The

defendants

do

not

claim, and the evidence does not suggest, that PPSE has
such

a

close

connection

with

depicted in the video.
Ark.

&

E.

Okla.,

"contention

slip

that

any

of

the

affiliates

See also Planned Parenthood
op.

at

(rejecting

the

Parenthood

Planned

27-28

Federation

of

America and its affiliates function as a unified whole,
and

thus,

that

the

acts

of

one

affiliate

may

be

attributed to all other affiliates").
The Governor and the Acting Commissioner also seek
to place the policies of PPFA at issue, arguing that
because

PPSE

has

“agree[d]

to

certain

standards

and

policies which are contained in the by-laws of PPFA[,]”
Planned

Parenthood

Fed’n

of

Am.,

Inc.

v.

Problem

Pregnancy of Worcester, Inc., 498 N.E.2d 1044, 1048-49
9. Section 1320a-7(b)(8), unlike most of the other
permissive for-cause exclusion grounds enumerated in
§ 1320a-7(b), applies to only those entities controlled
by
a
sanctioned
“individual”--not
“individual
or
entity.” However, this strengthens rather than weakens
the conclusion that Congress did not intend to allow
for exclusion in cases where an entity is controlled in
part by a sanctioned entity.
Had the drafters of the
statute intended to do so, they knew how.
48

(Mass.

1986),

PPFA’s

involvement

in

the

allegedly

unethical practices of other affiliates is attributable
to

PPSE

and

constitutes

§ 1320a-7(b)(6)(B).
argument

if

the

cause

This

PPFA

policy

that

requiring

fetal-tissue
better

donation,

preserve

had

had

be

all

intact

a

and

affiliates

alter

it

under

persuasive

claimed--much

adopted

abortion

less

enforced
engage

procedures

specimens,

compensation in excess of costs.
no such thing.

exclude

might

defendants

demonstrated--that

to

and

a
in
to

accept

But they have argued

Even construing the defendants’ factual

allegations generously--and setting aside the question
of evidentiary support--they suggest at most that PPFA
has

supported

the

decisions

engage in these practices.
PPFA

requires

donation
practices.

at

affiliates
all,

much

of

some

affiliates

to

There is no evidence that
to

less

engage
in

in

fetal-tissue

unethical

donation

What PPFA permits other affiliates to do

49

therefore has no bearing on PPSE, which, to reiterate,
has elected not to engage in fetal-tissue donation.10

10. The defendants reference a letter from the
president of PPFA to Congress, which they argue
“underscores the unity of the organization.”
Defs.’
Br. in Opp’n 37, doc. no. 29 (citing Defs.’ Ex. 8, at
3, doc. no. 28-8). But the letter does not help their
case; it makes clear that PPFA has “policies and
practices that guide the affiliates that offer tissue
donation services.” Id. These policies and practices
are inapplicable to PPSE, which does not.
Nor does the odd assortment of cases cited in the
defendants’ brief, all of which deal with corporate
relationships not applicable here, aid their cause.
None of these decisions stands for the proposition that
one corporation can be held responsible for the
policies of an umbrella organization regarding a
practice that other affiliated corporations engage in.
In re Phenylpropanolamine (PPC) Prods. Liab. Litig.,
344 F. Supp. 2d 686, 691-92 (W.D. Wash. 2003)
(Rothstein, J.), discusses whether a court can obtain
personal jurisdiction over a parent corporation based
on
the
subsidiary
corporation’s
forum
contacts.
Moreover, In re Phenylpropanolamine itself states that
the contacts of a subsidiary will not be imputed to the
parent simply because of the parent’s “articulation of
general policies and procedures.”
Id. (citing United
States v. Bestfoods, 524 U.S. 51, 72 (1998). Bowoto v.
Chevron Texaco Corp., 312 F. Supp. 2d 1229, 1237 (N.D.
Cal. 2004) (Illston, J.), which concerns piercing of
the corporate veil for tort-liability purposes, is
likewise concerned with attribution of a subsidiary’s
acts to the parent corporation.
In the present case,
there is nothing in the record to show that PPSE and
PPFA bear a subsidiary-parent relationship.
See
(continued…)
50

Hence, on the record before the court, Doe would be
likely to succeed on her claim that the Governor and
the Acting Commissioner had no cause to exclude PPSE
from

the

State’s

Medicaid

program

under

§ 1320a-

7(b)(6)(B).
B. Irreparable Injury
On

her

Medicaid

Act

claim,

Doe

argues

that

faces irreparable injury without an injunction.
has

made

irreparable

a

showing
injury

of

a

substantial

sufficient

preliminary-injunction standard.

to

threat

satisfy

she
She
of
the

Because she has made

Bestfoods, 524 U.S. at 61 (explaining that “parent
corporation[s] [are] so-called because of control of
ownership of another corporation’s stock”).
BrowningFerris Indus. of Cal., Inc., No. 32-RC-109684, 2015 WL
5047768, at *1-2 (N.L.R.B. Aug. 27, 2015), is no more
on point, in that it involves the statutorily derived
and therefore inapplicable “standard for assessing
joint-employer
status
under
the
National
Labor
Relations Act.” Finally, the trademark cases cited in
the defendants’ brief merely stand for the proposition
that affiliates who share a mark with a national
organization will generally have consistent policies
and standards.

51

such

a

showing,

it

is

unnecessary

to

consider

any

irreparable harm to PPSE.11
The plaintiffs rely on Doe’s inability to continue
receiving

medical

care

at

PPSE,

specifically

at

the

Birmingham clinic, where she goes every three months
for a Depo-Provera shot.

Doe states that she “strongly

11. Because Doe has shown virtually certain success
on the merits of her Medicaid Act claim, her required
showing as to irreparable injury may be lessened. The
former Fifth Circuit used a “sliding scale” standard
when
evaluating
whether
to
issue
a
temporary
restraining order or preliminary injunction. See Siff
v. State Democratic Executive Comm., 500 F.2d 1307,
1309 (5th Cir. 1974) (explaining that “a sliding scale
must be applied in considering the probability of
plaintiffs’ winning on the merits and plaintiffs’
irreparable injury in the absence of interlocutory
relief”); see also State of Tex. v. Seatrain Int'l,
S.A., 518 F.2d 175, 180 (5th Cir. 1975) (“[N]one of the
four prerequisites has a fixed quantitative value.
Rather, a sliding scale is utilized, which takes into
account the intensity of each in a given calculus.”).
The Eleventh Circuit has adopted as precedent all
decisions of the former Fifth Circuit rendered prior to
October 1, 1981, and all Former Fifth Circuit Unit B
and non-unit decisions rendered after October 1, 1981.
See Stein v. Reynolds Secur., Inc., 667 F.2d 33, 34
(11th Cir. 1982); Bonner v. City of Prichard, 661 F.2d
1206, 1207 (11th Cir. 1981) (en banc).
While the
Eleventh Circuit has not explicitly referred to this
sliding-scale standard, even a more rigid requirement
that movants meet a certain threshold as to each prong
of the test--does not demand a different result.

52

prefer[s]” receiving care from PPSE, as opposed to from
a private doctor.

Pls.’ Ex. 1, Declaration of Jane Doe

2, doc. no. 31-1.

She further states that she would

try to locate another provider if she could not obtain
covered care there, but does not know where she would
go.

She is due to receive another contraceptive shot

this

month.

PPSE

represents

that,

due

to

the

termination, it is being forced to turn away Medicaid
patients.

If

Doe

attempted

to

return

to

PPSE

to

receive her shot, she would be turned away.
The Governor and the Acting Commissioner argue that
Doe

can

entirely

elsewhere.
of

numerous

PPSE’s

mitigate

any

harm

by

seeking

care

In particular, they point to the existence
Medicaid

Birmingham

providers

clinic.

As

within

five

the

Seventh

miles

of

Circuit

recognized in Planned Parenthood of Indiana, however,
“[t]his argument misses the mark.”

699 F.3d at 981.

In that case, the court affirmed the district court’s
issuance of a preliminary injunction on the plaintiffs’
Medicaid Act claim, reasoning that the fact “[t]hat a

53

range

of

beside

qualified

the

providers

point.

[The

remains

available

is

‘free-choice-of-provider’

provision] gives Medicaid patients the right to receive
medical assistance from the provider of their choice
without
Although

state
Doe

interference ... .”
can

seek

Id.

at

family-planning

981.

services

elsewhere, this does not diminish the injury that will
result from her inability to see the provider of her
choice.

See Planned Parenthood Ark. & E. Okla., slip

op. at 22 (concluding, in a similar case, that “denial
of ... freedom

of

choice

is

more

likely

than

not

exactly the injury Congress sought to avoid when it
enacted
That

Doe

[the
will

free-choice-of-provider
be

forced

to

seek

out

provision]”).
a

replacement

provider within such a short span of time--and may even
face

a

difficult

long
to

wait

for

adhere

to

an

appointment,

her

current

making

it

Depo-Provera

regimen--makes this harm especially imminent.
Further, there is no adequate remedy at law for
this injury.

The Supreme Court has stated that the

54

lack of any legal remedy is a central consideration in
the

irreparable-injury

Murray,

415

injunction,

U.S.
Doe

61,
would

analysis.
88-89
be

See

(1974).

forced

Sampson
Without

to

stop

v.
the

seeking

services from a provider with whom she is comfortable,
and she might well not be able to identify another
provider with whom she could forge such a relationship.
Such an injury is clearly not susceptible to monetary
relief.

Doe has therefore demonstrated that she faces

a substantial threat of irreparable injury absent the
issuance of an injunction.

C. Other Preliminary-Injunction Considerations
The

balance

of

harms

and

the

public

interest

likewise favor issuance of a preliminary injunction.
As discussed above, Doe will face significant harm if
an injunction does not issue.

The Governor and the

Acting Commissioner rely on the videos’ claims that the
fetal-tissue donation programs of some PPFA affiliates
breach ethical standards to argue that the continued

55

funding of PPSE through taxpayer dollars would itself
cause an injury to the State.

This argument is not

persuasive because the defendants do not dispute the
plaintiffs’

assertions--or

record--that

PPSE

donation.

does

the

not

evidence

engage

in

in

the

fetal-tissue

The practices purported to be portrayed by

the videos, therefore, cannot possibly cause any harm
to the State or to Alabama taxpayers.
The defendants also assert that the issuance of an
injunction

would

undermine

respect

agreement.

The defendants offer no legal support for
regardless,

such

an

the

the

decision

argument;

terminate

due

Governor‘s

this

to

the

provider

injury

cannot

outweigh the injury to Doe discussed above.
Moreover, the issuance of an injunction is in the
public interest.

In particular, an injunction would

reinforce Doe’s right to seek family-planning services
from

the

explicitly

qualified
and

provider

emphatically

law.

56

of

her

protected

choice--a
under

right

federal

In

sum,

requirements

the

plaintiffs

for

the

have

issuance

satisfied

of

a

the

preliminary

injunction on Doe’s Medicaid Act claim.

IV. SCOPE OF RELIEF
Because Doe has satisfied her burden to show that
entry

of

a

court

now

preliminary
turns

injunction.

to

injunction

the

is

appropriate

Specifically,

the

warranted,
scope

court

must

of

the
that

consider

whether to order the State to resume Medicaid payments
to

PPSE

to

defendants

cover

the

contend

cost

is

of

Doe’s

care

appropriate,

see

alone--as
Planned

Parenthood Ark. & E. Okla., slip op. at 17 (“[I]n the
absence

of

class

certification,

the

preliminary

injunction may properly cover only named plaintiffs.”
(citation

omitted)),

or

to

reinstate

the

State’s

provider agreement with PPSE such that PPSE would be
reimbursed

for

care

provided

to

recipient--as PPSE urges the court to do.

57

any

Medicaid

Based on the evidence currently in the record and
the

representations

on-the-record
court

of

telephonic

finds

that,

the

parties

hearing

at

on

least

during

this

at

an

issue,

the

present,

the

reinstatement of the provider agreement is necessary to
guarantee meaningful relief to Doe.

The Supreme Court

has recognized the general principle that injunctive
relief should not be “more burdensome to the defendant
than

necessary

to

to ... plaintiffs.”

provide

Califano

complete

v.

Yamasaki,

relief
442

U.S.

682, 702 (1979); see also Lion Health Servs., Inc. v.
Sebelius, 635 F.3d 693, 703 (5th Cir. 2011) (citing
Yamasaki for this rule).
would

an

provider

injunction
agreement

Hence, the question is this:

that
afford

does
Doe

urgent--relief she requires.

not
the

reinstate

the

meaningful--and

The answer is apparently

“no.”
The

Acting

Commissioner,

who

is

charged

with

administering the state’s Medicaid plan, has indicated
that the Alabama Medicaid Agency has sought but not yet

58

identified a logistical means of allowing PPSE to file
for and receive Medicaid reimbursements for Doe’s care
while its provider agreement remains, for purposes of
all

other

recipients,

nonexistent.

See

Official

Tr.

October 14, 2015 Telephone Conference Proceedings 11,
doc. no. 57.

As of now, then, enabling PPSE to file

reimbursement requests for Doe’s care will require the
agency to reauthorize PPSE in its reimbursement system
with respect to all recipients. Since the defendants
have not been able to explain to the court how, as a
practical matter, limited relief is feasible, and have
stated that it is not immediately feasible, the court
is presented with no concrete way in which to tailor
the

injunction

more

narrowly

while

still

providing

the

provider

meaningful, immediate relief to Doe.
Moreover,
agreement

is

the
no

reinstatement

“more

burdensome

of
than

necessary”

to

ensure that Doe’s provider of choice, PPSE, is actually
reimbursed for her care (and thus that she is actually
able

to

obtain

that

care).

59

Practically

speaking,

compliance with an injunction limited to Doe will, the
State says, be no less burdensome than compliance with
an

injunction

“identical

that

relief

covers
[is]

all

recipients.

inevitable

to

Because

remedy

the

individual plaintiff’s rights,” Zepeda v. I.N.S., 753
F.2d 719, 729 n.1 (9th Cir. 1983) (opinion of Wallace,
J.) (describing the crux of the holding of Bailey v.
Patterson, 323 F.2d 201 (5th Cir. 1963)), the court
will enter the injunction requested by the plaintiffs,
at least until such time as the defendants can assure
the court of their ability to reimburse PPSE for Doe’s
care without reinstating the provider agreement.12
In

so

doing,

the

court

notes

that,

since

the

hearing on the motion for a preliminary injunction, Doe

12. Aside from the logistical barriers that would
prevent Doe from receiving care under a grant of relief
that did not in practice extend to all recipients, the
plaintiffs have suggested that the State could not
resume Medicaid payments to PPSE only as to Doe without
running afoul of federal Medicaid law, state law, or
both.
Because such a remedy is, as of now,
functionally indistinct from a broader injunction, it
is unnecessary to consider whether limited relief would
be permissible under the applicable legal regimes.
60

has

filed

a

motion

to

certify

a

class

of

Medicaid

recipients who wish to receive care from PPSE (doc. no.
54).

This

motion,

if

granted,

would

obviate

the

question whether relief should be tailored, if it even
can be practically, to cover only Doe.

See, e.g.,

Hollon v. Mathis Indep. Sch. Dist., 491 F.2d 92, 93
(5th Cir. 1974) (recognizing that, had a class been
certified, injunctive relief restraining enforcement of
a

regulation

applied

as

to

appropriate);

to

all

named

individuals,

plaintiff,

Soto-Lopez

v.

rather

would

N.Y.

City

than

have
Civil

as

been
Service

Comm’n, 840 F.2d 162, 168 (2d Cir. 1988) (explaining
that

“relief

where

a

of

general

plaintiff

application”

class

has

been

is

appropriate

certified,

and

considering whether such relief was available absent a
class).
an

Because certification of a class would provide

additional

basis

for

injunctive

relief

which

benefits recipients other than Doe, the court will set

61

an expedited briefing schedule on Doe’s motion in a
separate order.13
Finally, the parties both agree that the questions
answered here--that the termination of PPSE's provider
agreement

was

at-will,

and

that

such

at-will

terminations are not valid under the Medicaid Act--are
essentially
additional

pure

questions

evidence

would

significant for two reasons.

of
be

law

to

which

relevant.

no

This

is

First, although the court

is presently granting only a motion for a preliminary
injunction,
evidence

there

will

is

alter

no
its

possibility
conclusion

that
at

the

additional
permanent

injunction and declaratory relief stage, so the caution
that should normally accompany a preliminary injunction
that

might

be

vacated

once

additional

considered is not required here.

evidence

is

See Bresgal v. Brock,

13. Additionally, based on the current record, the
court is of the belief that the plaintiffs are likely
to prevail on their motion for class certification. In
making this observation, the court recognizes that it
has not heard all of the evidence and, accordingly,
does not predict the eventual outcome of the motion.
62

843 F.2d 1163, 1169 (9th Cir. 1987) (recognizing that,
at the preliminary injunction stage, the fact that a
court had not “ruled on substantive issues in the case,
but had only determined that the plaintiff had a ‘fair
chance’ of prevailing on the merits” counseled against
a grant of broad relief).

Relatedly, because the only

attribute of Doe relevant to the court's resolution of
this

claim

covered

by

is

one

the

that

she

shares

injunction--namely,

with

all
she

that

those
is

a

Medicaid recipient who wishes to receive covered care
from

PPSE--there

is

no

possibility

that

additional

evidence would reveal that the injunction would be any
less

appropriately

entered

with

respect

to

recipient not presently a party to the case.

another

Cf. Soto-

Lopez, 840 F.2d at 168 (“When a state statute has been
ruled unconstitutional, state actors have an obligation
to desist from enforcing that statute. Thus, when it
has

been

held

otherwise
members

of

unconstitutional

qualified
a

persons

certain

group,

63

on

to

deny

the

the

benefits

to

ground

they

are

officials

have

the

obligation to cease denying benefits not just to the
named

plaintiffs

but

also

to

all

other

qualified

members of the group.” (citation omitted)).
A

recent

Eleventh

court’s approach.

Circuit

case

supports

this

In Garrido v. Dudek, 731 F.3d 1152

(11th Cir. 2013), the court reviewed a district court’s
entry of a permanent injunction striking down a state
agency’s

rule

that

a

particular

form

of

autism

treatment was experimental and therefore not covered
under the Medicaid Act.
The

court

district

vacated
court’s

and

Garrido, 731 F.3d, at 1159.
remanded

injunction

the

portion

requiring

the

of

the

state

to

provide a blanket authorization of the treatment for
all

Medicaid

recipients

with

autism

because,

as

the

district court had itself discussed at some length, a
determination

whether

the

treatment

was

indeed

medically necessary had to be made for each individual
recipient;

the

court

could

properly

make

this

determination only with respect to the named plaintiffs
before

it.

Id.

at

1159-61.

64

In

other

words,

the

appellate court vacated the portion of the injunction
that purported to guarantee treatment to others about
whom

no

individualized

determination

had

been

made.

Here, by contrast, all Medicaid recipient-patients at
PPSE

are,

for

the

purposes

of

this

narrow

legal

question, indistinguishable.
The

appellate

court

upheld

the

portion

of

the

Garrido injunction analogous to the injunction being
entered here--the portion that enjoined the State from
enforcing

the

generally.
Supp.

2d

rule

that

mandated

denial

of

coverage

See K.G. ex rel. Garrido v. Dudek, 864 F.
1314,

(“Defendant

1328

is

(S.D.

enjoined

Fla.
from

2012)

(Lenard,

enforcing

J.)

Florida

Behavioral Health Rule 2–1–4 as it relates to autism,
Autism

Spectrum

Disorder,

Analysis treatment.”).

and

Applied

Behavioral

Though the court held that it

was inappropriate to grant relief ordering coverage of
treatment
enforcement

in
of

all
a

cases,
rule

determinations--relief

an

that

that

65

injunction

prevented

directly

against

case-by-case

benefitted

far

more recipients than the three named plaintiffs--was
nevertheless proper.

It is proper here as well.
* * *

In summary, Doe is very likely to succeed on her
claim

that

provider

the

Governor’s

agreement

violated

termination
the

reasons for this are simple.

Medicaid

of

PPSE’s

Act.

The

The Act requires States

to provide a reason for such terminations.

Here, as is

plain from the Governor’s letter, the State provided
none.

Finally, even the post-hoc reasons cited by the

defendants in briefing before this court are plainly
inapplicable to PPSE.

On these bases, Doe’s success on

the merits of her Medicaid claim is near-certain.
An

appropriate

preliminary

injunction

will

be

entered, requiring that, for the benefit of Doe, the
State reinstate its Medicaid provider agreement with
PPSE.
DONE, this the 28th day of October, 2015.
/s/ Myron H. Thompson____
UNITED STATES DISTRICT JUDGE