California Medical Transportation Association Inc v. Toby Douglas et al

Filing 60

MINUTES (IN CHAMBERS) by Judge Christina A. Snyder RE Defendant's Ex Parte Application for Clarification and/or Modification of Injunction and Request for Stay 57 . The Court hereby GRANTS the Director's ex parte application for clarification and/or modification of the Court's 1/10/2012 injunction order 42 . The Court DENIES the Director's ex parte application for a stay pending appeal. Court Reporter: Not Present. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 11-9830 CAS (MANx)

Title

CALIFORNIA MEDICAL TRANSPORTATION ASSOCIATION, INC
V. TOBY DOUGLAS, ET AL.

Present: The Honorable

Date

February 10, 2012

CHRISTINA A. SNYDER

CATHERINE JAENG
Deputy Clerk

Not Present
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

I.

(IN CHAMBERS:) DEFENDANT’S EX PARTE
APPLICATION FOR CLARIFICATION AND/OR
MODIFICATION OF INJUNCTION AND REQUEST FOR
STAY (Filed 02/06/12)

INTRODUCTION

On January 10, 2012, the Court issued an order granting preliminary injunction.
That order stated, in pertinent part:
Defendant Toby Douglas, Director of the California Department of Health Care
Services, his employees, his agents, and others acting in concert with him shall be,
and hereby are, enjoined and restrained from violating federal law by
implementing or otherwise applying the reduction on Medi-Cal reimbursement for
non-emergency medical transportation services on or after June 1, 2011, pursuant
to Assembly Bill 97 enacted by the California Legislature in March 2011, as
codified at California Welfare and Institutions Code § 14105.192, or to any other
degree reducing current Medi-Cal rates for NEMT services.
Dkt. No. 42 at 21–22.
The Director filed the instant ex parte application for clarification and/or
modification of injunction and request for stay on February 6, 2012. Plaintiffs opposed
the application on February 8, 2012. After considering the parties’ argument, the Court
finds and concludes as follows.
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 1 of 3

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 11-9830 CAS (MANx)

Title

CALIFORNIA MEDICAL TRANSPORTATION ASSOCIATION, INC
V. TOBY DOUGLAS, ET AL.

II.

Date

February 10, 2012

DISCUSSION
A.

The Director’s Application for Clarification and/or Modification of the
Injunction.

The Director argues that the injunction as presently constituted is overbroad
because it is not limited to rate reductions pursuant to AB 97, which is the sole legislation
cited in plaintiffs’ complaint and challenged through this lawsuit. According to the
Director, the injunction improperly includes language that could be construed as
preventing the Director from reducing rates on another basis that may otherwise be
permitted by law. Memorandum in Support of Ex Parte Application at 5.
In opposition, plaintiffs argue that it was improper for the Director to proceed on
an ex parte basis. Additionally, plaintiffs contend that the Director’s ex parte application
violates Federal Rule of Civil Procedure 59, the Court’s Local Rules, and applicable case
law. Opp’n at 1–2. Plaintiffs next argue that the relief granted in the preliminary
injunction was prayed for in the complaint and sought in the preliminary injunction. Id.
at 4–5. Finally, plaintiffs maintain that the Director’s Ex Parte application is
disingenuous because it is designed to permit the Director to institute rate reductions
without first seeking relief from the Court. Id. at 5–6.
The Court finds that the preliminary injunction issued on January 10, 2012, should
be modified to exclude the language: “or to any other degree reducing current Medi-Cal
rates for NEMT services.” In reaching this conclusion, the Court rejects plaintiffs’
contention that the Director is effectively seeking a reconsideration of the Court’s order
granting a preliminary injunction. Instead, the Director merely seeks modification of the
order concerning an issue not previously argued by the parties. As to the merits of the
Director’s application, the Court believes that the preliminary injunction as presently
constituted is indeed overbroad. Although the Director could seek to implement a rate
reduction in another manner that is also inconsistent with the Medicaid Act or otherwise
in violation of federal law, such a possibility does not satisfy Article III’s requirement
that a case or controversy be ripe for judicial review. If and when the Director announces
plans to reduce Medi-Cal reimbursement for Non-Emergency Medical Transportation
services, plaintiffs are free to bring suit to block such implementation.
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 2 of 3

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 11-9830 CAS (MANx)

Title

CALIFORNIA MEDICAL TRANSPORTATION ASSOCIATION, INC
V. TOBY DOUGLAS, ET AL.
B.

Date

February 10, 2012

The Director’s Application for a Stay

The Director requests that the Court stay its injunction during the pendency of an
appeal of this matter. According to the Director, a stay is appropriate because “serious
questions” exist that go to the viability of plaintiffs’ Supremacy Clause claim against the
Director and because the State’s fiscal situation has deteriorated since the Court issued its
injunction. Memorandum in Support of Ex Parte Application at 6–8.
The Court finds that a stay of its injunction is inappropriate at this time. In
deciding whether to issue a stay pending appeal, the Court considers “(1) whether the
stay applicant has made a strong showing that he is likely to succeed on the merits; (2)
whether the applicant will be irreparably injured absent a stay; (3) whether issuance of
the stay will substantially injure the other parties interested in the proceeding; and (4)
where the public interest lies.” See Golden Gate Rest. Ass’n v. City & County of S.F.,
512 F.3d 1112, 1115 (9th Cir. 2008) (citations omitted). The Court finds that the relevant
factors do not weigh in favor of granting the Director’s motion. Most importantly,
although the Court is cognizant of the State’s continuing fiscal difficulties, there is no
evidence that the Director will suffer irreparable injury absent a stay. By contrast, the
issuance of a stay would substantially injure plaintiffs because providers would continue
to lose considerable revenue that cannot be recouped and because Medi-cal beneficiaries
would suffer from reduced access to services. Accordingly, the Court denies the
Director’s request for a stay pending appeal.
III.

CONCLUSION

In accordance with the foregoing, the Court hereby GRANTS the Director’s ex
parte application for clarification and/or modification of the Court’s January 10, 2012
injunction order. The Court DENIES the Director’s ex parte application for a stay
pending appeal.
IT IS SO ORDERED.
00
Initials of Preparer

CV-90 (06/04)

CIVIL MINUTES - GENERAL

:

00

CMJ

Page 3 of 3