Korab et al v. Koller et al

Filing 144

ORDER ADOPTING FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS' MOTION FOR ATTORNEYS' FEES re: 140 . Signed by JUDGE J. MICHAEL SEABRIGHT on 8/20/2015. (afc)CERTIFICATE OF SERVICEParticipants registe red to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
TONY KORAB, TOJIO CLANTON,
KEBEN ENOCH, CASMIRA
AGUSTIN, ANTONIO IBANA,
AGAPITA MATEO, and RENATO
MATEO, each individually and on
behalf of those persons similarly
situated,

)
)
)
)
)
)
)
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Plaintiffs,
)
)
vs.
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RACHEL WONG, in her official
)
capacity as Director of the State of
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Hawaii, Department of Human Services, )
and Judy Mohr Peterson, in her official )
capacity as State of Hawaii, Department )
of Human Services, Med-QUEST
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Division Administrator,
)
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Defendants.
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________________________________ )

CIVIL NO. 10-00483 JMS/KSC
ORDER ADOPTING FINDINGS
AND RECOMMENDATION TO
DENY PLAINTIFFS’ MOTION
FOR ATTORNEYS’ FEES

ORDER ADOPTING FINDINGS AND RECOMMENDATION TO DENY
PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES
I. INTRODUCTION
Plaintiffs’ Motion for Attorneys’ Fees is troubling. Plaintiffs ask this
court to find that they are the prevailing parties and entitled to attorneys’ fees
based on a preliminary injunction this court entered in Plaintiffs’ favor, even
though that order was vacated by the Ninth Circuit and the matter was remanded

to this court and dismissed. In other words, Plaintiffs ask this court to award them
prevailing party status even thought they did not prevail, i.e., they lost.
Apparently recognizing that they failed to prevail, Plaintiffs assert the Ninth
Circuit’s order is a nullity, and that this court should simply ignore it. That is,
they take their non-prevailing status and ask this court to convert it to a prevailing
status because the Ninth Circuit lacked jurisdiction over the appeal. Needless to
say, the court rejects this argument and ADOPTS U.S. Magistrate Judge Kevin
S.C. Chang’s July 15, 2015 Findings and Recommendation to Deny Plaintiffs’
Motion for Attorneys’ Fees (“July 15 F&R”).
II. BACKGROUND
On April 5, 2010, Plaintiffs filed this class action asserting claims
against Rachel Wong,1 in her official capacity as Director of the State of Hawaii,
Department of Human Services (“DHS”), and Judy Mohr Peterson, in her official
capacity as State of Hawaii, DHS, Med-QUEST Division Administrator
(collectively “Defendants”), challenging DHS’s implementation of a health care
benefits program, Basic Health Hawaii (“BHH”), which Defendants created for

1

This action was originally brought against Lillian Koller, the then-Director of DHS,
and Kenneth Fink, the then-State of Hawaii, DHS, Med-QUEST Division Administrator. These
positions are now held by Rachel Wong and Judy Mohr Peterson, respectively. See Fed. R. Civ.
P. 25(d) (explaining that when a public officer is named in her official capacity, her “successor is
automatically substituted as a party”).
2

non-pregnant citizens, age nineteen or older, of countries with Compacts of Free
Association (“COFA”) with the United States who are lawfully residing in Hawaii
(“COFA Residents”), and non-pregnant immigrants, age nineteen or older, who
have been United States residents for less than five years (“New Residents”).
Plaintiffs are COFA Residents and New Residents who brought this action on
behalf of themselves and others similarly situated, asserting that BHH violates
(1) the Equal Protection Clause of the Fourteenth Amendment because it provides
less health benefits than the State of Hawaii’s (the “State”) Medicaid program
offered to citizens and certain qualified aliens, and (2) the ADA because BHH is
not administered in the most integrated setting appropriate to meet their medical
needs.
On December 10, 2010, the court granted Plaintiffs’ Motion for
Preliminary Injunction seeking relief as to COFA Residents as to the Equal
Protection claim, finding that BHH is subject to strict scrutiny. See Korab v.
Koller, 2010 WL 5158883 (D. Haw. Dec. 13, 2010). On appeal, the Ninth Circuit
vacated and remanded, determining that BHH is subject to rational basis review.
See Korab v. Fink, --- F.3d ----, 2014 WL 10190093, at *11 (9th Cir. Apr. 1, 2014)
cert. denied sub nom. Korab v. McManaman, 135 S. Ct. 472 (2014). After the
remand, Defendants adopted emergency rules suspending BHH, and the State
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ultimately repealed BHH and adopted new administrative rules establishing a
different program.
On remand, the parties generally agreed that this action should be
dismissed, yet disagreed on the basis for dismissal of the Equal Protection claim
and whether such claim should be dismissed with or without practice. Both parties
filed motions, which on March 5, 2015 the court granted to the extent the parties
agreed the ADA claim should be dismissed with prejudice, and denied as to the
Equal Protection claim. See Doc. No. 122. On April 28, 2015, the parties
stipulated to dismissal of the Equal Protection claim without prejudice, Doc. No.
133, and judgment was entered that same day. Doc. No. 134.
III. STANDARD OF REVIEW
When a party objects to a magistrate judge’s findings or
recommendations, the district court must review de novo those portions to which
the objections are made and “may accept, reject, or modify, in whole or in part, the
findings or recommendations made by the magistrate judge.” 28 U.S.C.
§ 636(b)(1); see also United States v. Raddatz, 447 U.S. 667, 673 (1980); United
States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“[T]he
district judge must review the magistrate judge’s findings and recommendations
de novo if objection is made, but not otherwise.”).
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Under a de novo standard, this court reviews “the matter anew, the
same as if it had not been heard before, and as if no decision previously had been
rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006); United
States v. Silverman, 861 F.2d 571, 576 (9th Cir. 1988). The district court need not
hold a de novo hearing; however, it is the court’s obligation to arrive at its own
independent conclusion about those portions of the magistrate judge’s findings or
recommendation to which a party objects. United States v. Remsing, 874 F.2d
614, 618 (9th Cir. 1989).
IV. DISCUSSION
Plaintiffs ask this court to award them prevailing party status based
on this court’s preliminary injunction entered in their favor, even though the Ninth
Circuit vacated the preliminary injunction on the merits. Specifically, Plaintiffs
argue that the Ninth Circuit lacked jurisdiction over Defendants’ appeal of the
preliminary injunction because while it was pending, the Affordable Care Act’s
(“ACA”) requirement that individuals maintain health insurance with minimum
essential coverage went into effect. Plaintiffs reason that BHH did not meet this
minimum essential coverage and therefore became illegal, making the issues
before the Ninth Circuit moot.
The July 15 F&R outlined in detail the legal framework for
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determining prevailing party status, and applied it to find that Plaintiffs are not the
prevailing party. The court adopts this sound reasoning here, and need not
reiterate it.
Instead, the court highlights that Plaintiffs ignore that (1) they never
made this argument to the Ninth Circuit, (2) no court has ever found BHH invalid;
and (3) Plaintiffs never asserted the claim that BHH is invalid due to the ACA.
Indeed, rather than timely raise their mootness argument, Plaintiffs argued the
merits of the preliminary injunction to the Ninth Circuit (and never filed a Rule
28(j) letter addressing mootness) and then contested its determination on the
merits, seeking a rehearing en banc and filing a petition for certioriari (both of
which were denied). It is only now -- where they have lost on appeal and
exhausted the appeals process -- that Plaintiffs seek yet another way to rewrite the
outcome of this case. Needless to say, Plaintiffs’ argument is absurd -- the Ninth
Circuit found that it had jurisdiction where it issued a lengthy decision vacating
the preliminary injunction on the merits, this court will not and cannot question
the Ninth Circuit’s jurisdiction on such decision,2 and Plaintiffs cannot now bring
a new claim attacking the validity of BHH, which in any event has been repealed.

2

And in any event, Plaintiffs’ jurisdiction argument appears to have no basis where BHH
was not repealed until 2015, see Doc. No. 136-1, at 5 n.4, suggesting that a live controversy did
in fact exist before the Ninth Circuit.
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At some point, Plaintiffs must come to terms with the fact that they
are on the losing side of the preliminary injunction determination. Any further
argument to the contrary is a waste of the court’s and the parties’ resources.
V. CONCLUSION
Based on the above, the court ADOPTS U.S. Magistrate Judge Kevin
S.C. Chang’s July 15, 2015 Findings and Recommendation to Deny Plaintiffs’
Motion for Attorneys’ Fees.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, August 20, 2015.

/s/ J. Michael Seabright
J. Michael Seabright
United States District Judge

Korab et al. v. Wong et al., Civ. No. 10-00483 JMS/KSC, Order Adopting Findings and
Recommendation to Deny Plaintiffs’ Motion for Attorneys’ Fees

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