Tulare Local Health Care District et al v. California Department of Health Care Services et al

Filing 20

ORDER by Judge Samuel Conti denying 4 Motion to Remand (sclc1, COURT STAFF) (Filed on 9/9/2015)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

For the Northern District of California

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TULARE LOCAL HEALTH CARE
) Case No. 3:15-cv-02711-SC
DISTRICT, a California local
)
health care district, dba TULARE ) ORDER DENYING PETITIONERS'
REGIONAL MEDICAL CENTER, et al., ) MOTION TO REMAND
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Petitioners,
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v.
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CALIFORNIA DEPARTMENT OF HEALTH )
CARE SERVICES, et al.,
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Respondents.
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)

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Now before the Court is Petitioners Tulare Local Health Care

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District, et al.'s ("Tulare") motion to remand.

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("Mot.").

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suitable for disposition without oral argument pursuant to Civil

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Local Rule 7-1(b).

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motion is DENIED.

ECF No. 4

The motion is fully briefed,1 and the Court finds it

For the reasons set forth below, Petitioners'

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I. BACKGROUND

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Respondent California Department of Health Care Services

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("DHCS") administers Medi-Cal, a federally-subsidized program that

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ECF Nos. 14 ("Opp'n"), 15 ("Reply"), 18 ("Resp. Suppl. Br."), 19
("Pet. Suppl. Br.").

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provides medical services to California's "aged" and those "who

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lack sufficient annual income to meet the costs of health care."

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Cal. Welf. & Inst. Code § 14000.

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Medi-Cal, the state must present the federal government with its

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Medicaid "plan" which, among other things, determines the rates at

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which the state will reimburse providers of health services.

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42 U.S.C. §§ 1396-1, 1396a(a) (2012).

United States District Court

For the Northern District of California

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To receive federal funding for

See

Petitioners are seventeen hospitals that provide services to
persons covered by Medi-Cal.

On May 14, 2015, they filed suit

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against DHCS in California Superior Court.

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action, Petitioners seek a writ of mandate to enforce 42 U.S.C. §

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1396a(a)(30)(A) ("Section (30)(A)") which requires state plans to

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"assure that payments are consistent with efficiency, economy, and

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quality of care and are sufficient to enlist enough providers so

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that care and services are available under the plan at least to the

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extent that such care and services are available to the general

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population in the geographic area."

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violated Section (30)(A) from July 1, 2008 to April 3, 2011 by

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allegedly reimbursing providers at rates lower than Section (30)(A)

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permits.

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"contract" hospitals differently than "noncontract" hospitals in

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the reimbursement rates provided for in the Medicaid State plan,

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violating the Equal Protection Clauses of the Fourteenth Amendment

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of the United States Constitution and Article I, Section 7 of the

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California Constitution.

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declaratory relief that the rate cuts are invalid and unlawful.

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In their first cause of

The petition alleges that DHCS

The second cause of action alleges that DHCS treated

The third cause of action seeks

Petitioners seek an order "(a) declaring the . . . rate cuts
to be void and invalid; (b) compelling the Department not to apply

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said rate cuts and to reverse any such rate cuts that have been

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applied; and (c) commanding the Department to disgorge and pay the

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Petitioners the amounts wrongfully withheld from them, plus

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interest."

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and prospective Medi-Cal reimbursement reversing in full the

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effects of the illegal rate cuts" and "compensatory damages" and

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"attorneys' fees."

United States District Court

For the Northern District of California

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ECF No. 1 ("Pet.") at 20.

They also seek "Retroactive

Id.

On June 17, 2015, Respondents removed this action to the
United States District Court for the Northern District of

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California on the grounds that this Court maintains original

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jurisdiction over claims arising under the laws of the United

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States.

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back to state court.

On June 22, 2015, Petitioners filed a motion to remand

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II. LEGAL STANDARD
"A motion to remand is the proper procedure for challenging

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removal."

Moore–Thomas v. Alaska Airlines, Inc., 553 F.3d 1241,

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1244 (9th Cir. 2009).

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subject matter jurisdiction or for any defect in the removal

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procedure.

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strictly construed against removal."

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Loans Servicing, LP, 533 F.3d 1031, 1034 (9th Cir. 2008).

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presumption against removal means that the defendant always has the

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burden of establishing that removal is proper."

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F.3d at 1244.

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removal favor remanding the case.

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F.2d 564, 566 (9th Cir. 1992).

Remand may be ordered either for lack of

See 28 U.S.C. § 1447(c).

"[R]emoval statutes are
Luther v. Countrywide Home
"The

Moore–Thomas, 553

As such, any doubts regarding the propriety of the
See Gaus v. Miles, Inc., 980

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III. DISCUSSION
The federal removal statute provides, in pertinent part, that

courts of the United States have original jurisdiction, may be

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removed by the defendant or the defendants, to the district court

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of the United States for the district and division embracing the

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place where such action is pending."

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United States District Court

"any civil action brought in a State court of which the district

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For the Northern District of California

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district courts "have original jurisdiction of all civil actions

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arising under the Constitution, laws, or treaties of the United

Federal

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States."

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confers jurisdiction to hear "[o]nly those cases in which a well-

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pleaded complaint establishes either that [1] federal law creates

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the cause of action or that [2] the plaintiff's right to relief

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necessarily depends on resolution of a substantial question of

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federal law."

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55 (9th Cir. 2009).

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jurisdiction is governed by the 'well-pleaded complaint rule,'

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which provides that federal jurisdiction exists only when a federal

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question is presented on the face of plaintiff's properly pleaded

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complaint."

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(1987).

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Id. § 1331.

28 U.S.C. § 1441(a).

The "arising under" qualification of § 1331

Armstrong v. N. Mariana Islands, 576 F.3d 950, 954–
"The presence or absence of federal-question

Caterpillar, Inc. v. Williams, 482 U.S. 386, 392

Here, there can be no question that Plaintiffs' state court

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complaint raises a number of issues of federal law, including the

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adequacy of Medi-Cal reimbursements under Section (30)(A) and the

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Equal Protection Clause of the Fourteenth Amendment.

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that the federal claims are raised by way of a cause of action

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created by state law, namely, a writ of mandate under California

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Civil Procedure Code section 1085.

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It is true

As the Supreme Court has

causes of action, its case might still arise under the laws of the

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United States if a well-pleaded complaint established that its

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right to relief under state law requires resolution of a

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substantial question of federal law."

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of Surgeons, 522 U.S. 156, 164 (1997) (quoting Franchise Tax Bd. of

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State of Cal. v. Constr. Laborers Vacation Trust for S. California,

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United States District Court

explained, however, "even though state law creates [a party's]

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For the Northern District of California

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463 U.S. 1, 13 (1983)).

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within this rule.

City of Chi. v. Int'l Coll.

Plaintiffs' claims unquestionably fit

See, e.g., Medina v. SEIU-United Healthcare

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Workers W., No. C 13-00858 SBA, 2013 WL 3157923, at *2-*3 (N.D.

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Cal. June 20, 2013) (upholding on federal question grounds the

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removal of a California mandamus action that sought to enforce

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federal law).2
Petitioners argue they do not have standing to bring their

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Section (30)(A) claims in federal court because of the Supreme

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Court's decision in Armstrong v. Exceptional Child Ctr., Inc., 135

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S. Ct. 1378 (2015).

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not have subject matter jurisdiction and removal from state court

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was improper.

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(30)(A) does not confer a private right of action and the sole

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remedy provided by Congress for a State's failure to comply with

Without standing, they argue, this Court does

In Armstrong, the Supreme Court held that Section

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The original complaint in Medina sought a writ of mandate to
enforce state law. The court, however, found that the state law
was preempted by federal law -- namely, the Labor Management
Relations Act ("LMRA") -- such that the writ of mandate actually
sought to enforce federal law. Thus, because the action turned on
the court's interpretation and application of the LMRA, the court
held that removal was proper. See Medina, 2013 WL 3157923, at *2*3. For our purposes, Medina illustrates that a federal district
court has subject matter jurisdiction over actions seeking a writ
of mandate where, as here, the writ of mandate seeks to enforce
federal law.

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Section (30)(A) is the withholding of Medicaid funds by the

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Secretary of Health and Human Services.

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to Petitioners' assertion, the Court never even mentioned standing.

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See also Armstrong v. Exceptional Child Center, Inc., No. 12-35382,

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2015 WL 3540552, at *1 (9th Cir. June 5, 2015) (declining on remand

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to dismiss for lack of standing and dismissing instead for failure

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to state a claim upon which relief can be granted).

United States District Court

For the Northern District of California

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See id. at 1385.

Contrary

Standing contains three elements: injury-in-fact, a causal
relationship between the injury and the conduct complained of, and

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a likelihood that the injury will be redressed by a favorable

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decision ("redressability").

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504 U.S. 555, 560 (1992).

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standing for want of redressability.

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in this case would result in a judicial declaration that the rate

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cuts at issue are invalid and void and an order requiring DHCS to

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pay the Petitioners the difference.

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words, would fully redress Petitioners' alleged injury.

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See Lujan v. Defenders of Wildlife,

Petitioners argue that they lack
Not so.

A favorable decision

A favorable decision, in other

It appears that Petitioners are actually arguing that a

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favorable decision is unlikely in light of Armstrong.

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Redressability, however, has to do with the likelihood that the

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injury will be redressed if a favorable decision is rendered, not

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the likelihood that a favorable decision will be rendered.

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Warth v. Seldin, 422 U.S. 490 (1975) (dismissing plaintiffs' case

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for lack of standing because the requested relief -- an

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invalidation of zoning ordinances -- was unlikely to redress the

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alleged injury -- a lack of affordable housing).

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if Petitioners lacked standing to assert their Section (30)(A)

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claim, they neglect the fact that they have also alleged a claim

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Cf.

Regardless, even

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under the Equal Protection Clause of the Fourteenth Amendment.
Petitioners also argue that the Eleventh Amendment deprives

on this case, however, as it only immunizes the State from suits by

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its citizens filed in federal court and offers no immunity to a

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defendant that voluntarily seeks out federal jurisdiction through

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removal.

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United States District Court

this Court of jurisdiction.

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For the Northern District of California

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The Eleventh Amendment has no bearing

535 U.S. 613, 620 (2002) (holding that a state waives its Eleventh

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Amendment immunity from suit in federal court when it voluntarily

See Lapides v. Bd. of Regents of the Univ. Sys. of Ga.,

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invokes federal jurisdiction by removing a case from state court to

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federal court).

Petitioners' argument is therefore without merit.

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IV. CONCLUSION
For the forgoing reasons, Petitioners' motion to remand is
DENIED.

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IT IS SO ORDERED.

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Dated: September __, 2015

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UNITED STATES DISTRICT JUDGE

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