Inclusion, Inc. et al v. Armstrong et al

Filing 49

MEMORANDUM DECISION AND ORDER denying 40 Motion for Reconsideration ; granting 43 Motion for Entry of Judgment; denying as moot 44 Motion to Expedite. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (krb)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

INCLUSION, INC.; EXCEPTIONAL
CHILD CENTER, INC.; LIVING
INDEPENDENTLY FOR EVERYONE,
INC.; TOMORROW’S HOPE
SATELLITE SERVICES, INC.; WDB,
INC.,
Plaintiffs,

Case No. 1:09-cv-00634-BLW

MEMORANDUM DECISION AND
ORDER

v.
RICHARD ARMSTRONG, and LESLIE
CLEMENT, in their official capacities,
Defendants.
Before the Court is Defendants’ Motion for Reconsideration (Dkt. 40), Plaintiffs’
Motion for Entry of Judgment (Dkt. 43) and Plaintiffs’ Motion to Expedite (Dkt. 44).
Having considered the parties’ briefing and being familiar with the record, the Court will
deny reconsideration and enter judgment, thus rendering moot the Motion to Expedite.
BACKGROUND
Plaintiffs are five Idaho corporations providing “residential habilitation” services
to Medicaid eligible individuals in supported living settings in the state of Idaho. Stip.
Facts, Dkt. 28 at 2-3. Residential habilitation services help Medicaid participants to
reside in the community by providing skills training, assistance with decision-making,
socialization, mobility, and activities of daily living (e.g. eating, bathing). Id.
Defendants are Richard Armstrong – Director of Idaho’s Department of Health and
MEMORANDUM DECISION AND ORDER - 1

Welfare (IDHW), and Leslie Clement – an IDHW Deputy Director and former IDHW
Division of Medicaid Administrator. Id. at 2.
Plaintiffs filed this action seeking to enjoin changes to IDHW’s reimbursement
rates for service providers – such as Plaintiffs – arguing that the proposed rate changes
violated state and federal law. The parties agreed the matter could be decided on
stipulated facts, without need for a trial. After reviewing the Stipulated Facts and
considering the parties’ arguments, this Court granted summary judgment to Plaintiffs
and against Defendants. Memorandum Decision & Order, Dkt. 39. Defendants now
seek reconsideration of that decision, and Plaintiffs move for entry of judgment.
LEGAL STANDARD
A motion to reconsider an interlocutory ruling requires an analysis of two
important principles: (1) error must be corrected, and (2) judicial efficiency demands
forward progress. The former principle has led courts to hold that a denial of a motion to
dismiss or for summary judgment may be reconsidered at any time before final judgment.
Preaseau v. Prudential Insurance Co., 591 F.2d 74, 79-80 (9th Cir. 1979). While even
an interlocutory decision becomes the “law of the case,” it is not necessarily carved in
stone.
Justice Oliver Wendell Holmes concluded that the “law of the case” doctrine
“merely expresses the practice of courts generally to refuse to reopen what has been
decided, not a limit to their power.” Messinger v. Anderson, 225 U.S. 436, 444 (1912).
“The only sensible thing for a trial court to do is to set itself right as soon as possible

MEMORANDUM DECISION AND ORDER - 2

when convinced that the law of the case is erroneous. There is no need to await
reversal.” In re Airport Car Rental Antitrust Litigation, 521 F.Supp. 568, 572 (N.D.Cal.
1981)(Schwartzer, J.). However, the need to be right must co-exist with the need for
forward progress. A court’s opinions “are not intended as mere first drafts, subject to
revision and reconsideration at a litigant's pleasure.” Quaker Alloy Casting Co. v. Gulfco
Indus., Inc., 123 F.R.D. 282, 288 (N.D.Ill.1988).
Reconsideration of a court’s prior ruling under Federal Rule of Civil Procedure
59(e) is appropriate “if (1) the district court is presented with newly discovered evidence,
(2) the district court committed clear error or made an initial decision that was manifestly
unjust, or (3) there is an intervening change in controlling law.” S.E.C. v. Platforms
Wireless Int’l Corp., 617 F.3d 1072, 1100 (9th Cir. 2010) (citation omitted). Defendants
here seek reconsideration under all three bases.
ANALYSIS
1.

New Evidence
Defendants first argue that the Court should reconsider its decision based on newly

discovered evidence: two errors in the parties’ Stipulations of Fact, discovered after the
stipulations were submitted to the Court; and previously unavailable data regarding bids
by service providers for an emergency placement services contract. According to
Defendants, the number of participants receiving supported living services, as stipulated

MEMORANDUM DECISION AND ORDER - 3

by the parties, reflects a clerical error, and should have been much lower.1 Defendants
state that the stipulated rate for intense support services – $496.56 – is also incorrect, and
should have been $413.82. Pugatch Dec., Dkt. 40-3 ¶ 4. Defendants do not discuss how
either error warrants reconsideration, except to note that the Court’s decision “rests in
part on” the incorrect data. Def. Br., Dkt. 40-1 at 4. Defendants further argue that bids
for an emergency placement services contract, unavailable before December 2011, also
support reconsideration.
The Court finds that the proffered new evidence fails to support reconsideration
for three reasons. First, the errors in the parties’ stipulated facts are not new; Defendants
have not shown, nor do they argue, that the evidence was unavailable or could not have
been discovered at the time the parties submitted stipulated facts to the Court. C.f.
Lainez-Ortiz v. INS, 96 F.3d 393, 400 (9th Cir. 1996)(requiring newly discovered
evidence to have been previously unavailable, in order to warrant reopening
proceedings). As to the bids for the emergency placement services contract, the Court
finds such evidence immaterial to the costs and reimbursement rates for residential
habilitation service providers.
Second, although Defendants cite a declaration from Sheila Pugatch (IDHW’s
Principal Financial Specialist), to support that the two stipulations are in error, there is no

1

The Stipulated Facts note “[t]here are 6,202 participants receiving supported living services;” although
no year is cited, the next sentence provides, “[a]s of the end of calendar year 2010 Plaintiffs submitted
claims for supported living services for the following number of participants . . ..” Stip. Facts, Dkt. 28 at
7. Defendants now assert that there were 717 participants using supported living services as of September
30, 2011. Pugatch Dec., Dkt. 40-3 ¶ 3.

MEMORANDUM DECISION AND ORDER - 4

indication that Plaintiffs agree. Absent further proceedings or a stipulation by Plaintiffs,
Defendants’ “new evidence” is simply an unresolved issue of fact.2
Third, even if the parties had stipulated to the evidence now offered by
Defendants, the Court’s decision would be no different. It is undisputed that
reimbursement rates for the relevant service providers have remained unchanged since
2006. Stip. Facts, Dkt. 28 at 6. It is also undisputed that between 2006 and 2009,
provider cost studies were done at the IDHW’s request. Id. Most significantly, the
parties agree that the rates have not been changed because the state legislature failed to
appropriate funds to pay for the increases suggested by the cost studies. Id. The Court
granted summary judgment to Plaintiffs because, as shown by these agreed facts, the
current reimbursement rates fail to take into account actual provider costs.
The corrected number of participants would have no effect on the Court’s analysis.
The corrected figure for intense support services, although lower than the stipulated
figure, is still well above – and thus unaccounted for in – the current rate. The Court will
therefore deny reconsideration on the basis of newly discovered evidence.
2.

Clear Error
Defendants’ second basis for reconsideration is that the Court clearly erred in its

analysis of Orthopaedic Hospital v. Belshe, 103 F.3d 1491 (9th Cir. 1997). Defendants’
arguments are little more than an effort to take a second bite at the apple. Defendants

2

Defendants ask that the stipulated facts be corrected in the record, but such request is properly the
subject of a separate motion to which Plaintiffs would be entitled to respond. The Court here will address
the request for reconsideration only.

MEMORANDUM DECISION AND ORDER - 5

attempt to distinguish Belshe – all but ignored in Defendants’ summary judgment briefing
– on its facts. The Court thoroughly examined and discussed Belshe in rendering its
decision for Plaintiffs. The Court stands by that analysis now. Defendants having failed
to show clear error, the Court will deny reconsideration on that basis.
3.

Change In Controlling Law
Defendants asked the Court to delay judgment until after the Supreme Court

issued its decision in Douglas v. Indep. Living Ctr., – S.Ct. – , 2012 WL 555204 (2012).
That case was decided on February 22, 2012, thus the request to postpone judgment is
moot. As Plaintiffs correctly observe, the Supreme Court’s decision in Douglas did not
alter Belshe, or this Court’s decision here. Given the procedural posture in Douglas, the
Supreme Court remanded to the Ninth Circuit to address whether a plaintiff may bring a
Supremacy Clause challenge where the allegedly non-compliant state law has been
approved by the federal Centers for Medicare & Medicaid Services. The action before
this Court does not challenge a state statute, let alone a state statute approved by the
designated federal agency. Instead, it challenges the IDHW’s compliance with state and
federal law. There being no relevant change in controlling law, the Court will deny
reconsideration on that basis as well.
4.

Entry of Judgment
The Supreme Court having decided Douglas, there is no basis to delay entry of

judgment here. Plaintiffs submitted a proposed judgment. Other than to request that the
Court delay entry, Defendants have not objected nor otherwise responded with an

MEMORANDUM DECISION AND ORDER - 6

alternate proposal. The Court finds Plaintiffs’ proposed form appropriate and in
accordance with the Court’s Memorandum Decision and Order (Dkt. 39), and will thus
enter judgment consistent with Plaintiffs’ proposal, to be filed concurrently herewith.
ORDER
IT IS ORDERED THAT:
1.

Defendants’ Motion for Reconsideration (Dkt. 40) is DENIED.

2.

Plaintiffs’ Motion for Entry of Judgment (Dkt. 43) is GRANTED.

Judgment will be entered separately.
3.

Plaintiffs’ Motion to Expedite (Dkt. 44) is DENIED as MOOT.

DATED: April 12, 2012

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM DECISION AND ORDER - 7