Allen et al v. Logisicare Solutions LLC et al

Filing 34

ORDER AND REASONS: For the reasons set forth above, IT IS ORDERED that Defendant LogistiCare and Defendant First Transit's 11 , 27 Motions to Dismiss are GRANTED. Signed by Judge Ivan L.R. Lemelle on 8/16/2017. (mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
KATHY ALLEN, ET AL

CIVIL ACTION

VERSUS

NO. 17-365

LOGISICARE SOLUTIONS, LLC, ET AL

SECTION “B”(4)

ORDER AND REASONS
Before the court are “LogistiCare Solutions LLC’s Motion to
Dismiss for Lack of Subject Matter Jurisdiction” (Rec. Doc. 11),
“Plaintiffs’ Opposition to Motion to Dismiss” (Rec. Doc. 19),
“LogistiCare Solutions LLC’s Reply Memorandum in Support of Motion
to Dismiss for Lack of Subject Matter Jurisdiction” (Rec. Doc.
25),

“Defendant

Alternatively,

First
for

Transit,

More

Inc.’s

Definite

Motion

Statement”

to

Dismiss

(Rec.

Doc.

or,
27),

“Plaintiffs’ Opposition to First Transit’s Motion to Dismiss or,
Alternatively, for More Definite Statement” (Rec. Doc. 29) and
“First Transit, Inc.’s Reply Memorandum in Support of Motion to
Dismiss or, Alternatively, for More Definite Statement” (Rec. Doc.
33), For the reasons set forth below, IT IS ORDERED that the
Defendants’ Motions to Dismiss are GRANTED.
FACTS AND PROCEDURAL HISTORY
Plaintiffs
Solutions,
Transit”)

LLC
and

filed

the

instant

(“LogistiCare”),
Southeastrans,

suit

Frist

Inc.

against

Transit,

(Rec.

Doc.

LogistiCare
Inc.

1).

(“First

Defendants

Logisticare and First Transit have filed Motions to Dismiss.
1

LogistiCare

and

First

Transit

are

brokers

of

Medicaid

transportation in Louisiana (Rec. Doc. 1). The complaint names
twenty-three

(23)

individual

plaintiffs

and

twenty-two

(22)

Business Entity plaintiffs (Rec. Docs. 1 and 24). Plaintiffs allege
that

Defendants

LogistiCare

and

First

Transit

breached

their

contracts when they used discretion over transportation routes in
their roles as brokers facilitating transportation services to
Medicaid beneficiaries (Rec. Doc. 1). Plaintiffs allege that in
particular the Defendants breached their contracts by (1) not
assigning trips properly to Plaintiffs; (2) retributively taking
away

trips

from

Plaintiffs

after

they

complained

about

the

Defendants business practices; and (3) ignoring the freedom of
choice

of

patients’

rights

when

selecting

transportation

providers.
FACTUAL AND LEGAL FINDINGS
A. Defendant LogistiCare’s Motion to Dismiss
Under Federal Rule of Civil Procedure 12 (b)(1) a district
court must dismiss a case if it lacks subject matter jurisdiction
over a Plaintiff’s claim. Ramming v. United States, 281 F.3d 158,
161 (5th Cir. 2001). The Court must grant a motion to dismiss for
lack of subject matter jurisdiction when it lacks the statutory or
constitutional power to adjudicate the case. See Home Builders
Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th
Cir. 1998). The party who invokes federal court jurisdiction bears
2

the burden of showing that jurisdiction is proper. Dow Agrosciences
LLC v. Bates, 332 F.3d 323, 326 (5th Cir. 2003).
“In ruling on a motion to dismiss for lack of subject matter
jurisdiction, a court may evaluate (1) the complaint alone, (2)
the complaint supplemented by undisputed facts plus the court’s
resolution of disputed facts, or (3) the complaint supplemented by
undisputed facts plus the court's resolution of disputed facts.”
Den Norske Stats v. HereMac Vof, 241 F.3d 420, 424; BarreraMontenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996).
Defendant LogistiCare contends that the individual Plaintiffs
do not have standing to bring a lawsuit against it. As this Court
has explained “standing is an absolute requirement for federal
jurisdiction, and without standing a plaintiff's claim may not
proceed.” Mayes v. PTP Invs., LLC, Case No.:13-5474, 2014 U.S.
Dist. LEXIS 70369, at*2 (E.D. La. May 21, 2014). Defendant provides
evidence that LogistiCare does not contract with individuals, but
only corporate entities (Rec. Doc. 11-1). Plaintiffs cite one
declaration

from

a

sole

proprietor

that

contracted

with

LogistiCare (Rec. Doc. 19-1). However this declaration does not
demonstrate

that

Plaintiffs

can

establish

privity

with

LogistiCare. There is no indication that the individuals listed in
Plaintiffs’ complaint have contractual privity with LogistiCare.
Given that this relationship is the basis for subject matter
jurisdiction, it is Plaintiffs burden to demonstrate the existence
3

of

this

privity.

Bates,

332

F.3d

at

326.

Plaintiffs

do

not

demonstrate this in their opposition or present an alternative
source of subject matter jurisdiction.

Furthermore, the corporate

entities that Plaintiffs added to their complaint do not bestow
standing upon the individually named Plaintiffs (Rec. Doc. 24).
Under Louisiana law only a corporation, not its members, may sue
to recover any damages it has sustained.

Skannal v. Bamburg, 33

So. 3d 227, 240 (La.App. 2 Cir. 01/27/10). Plaintiffs in their
opposition do not provide any citations that will allow them to
establish standing for their individual Plaintiffs (Rec. Doc. 19).
Plaintiffs ask this Court to deny the motion because this Court
should not look at the merits when evaluating a Rule 12 (b)(1)
motion (Rec. Doc. 19). Establishing subject matter jurisdiction is
a threshold question for this Court and does not rely on a merit
based analysis. Ramming v. United States, 281 F.3d at 161. This
Court finds that Defendant’s Motion to Dismiss is appropriate and
all claims by individual plaintiffs should be dismissed.
B. Defendant First Transit’s Motion to Dismiss
As an initial matter, the Courts analysis regarding lack of
standing for the individual Plaintiffs against LogistiCare is
instructive for First Transit’s 12 (b)(1) contentions. This Court
lacks

subject

matter

jurisdiction

over

individual

Plaintiffs

La’Dette’s and Angel’s claims against First Transit because there
is no contractual privity between these two Plaintiffs and First
4

Transit (Rec. Doc. 27-5). Plaintiffs do not proffer any evidence
or cite any authority that establishes subject matter jurisdiction
under these circumstances. The individual Plaintiffs La’Dette and
Angel and their claims should be dismissed.
The remaining portion of First Transit’s motion falls under
Rule 12 (b)(6). Rule 12(b)(6) of the Federal Rules of Civil
Procedure allows a party to move for dismissal of a complaint for
failure to state a claim upon which relief can be granted. Such a
motion is rarely granted because it is viewed with disfavor. See
Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir.1997)
(quoting Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards,
Inc., 677 F.2d 1045, 1050 (5th Cir. 1982)).
When reviewing a motion to dismiss, courts must accept all
well-pleaded

facts

as

true

and

view

them

in

the

light

most

favorable to the non-moving party. Baker v. Putnal, 75 F.3d 190,
196 (5th Cir. 1996). However, “[f]actual allegations must be enough
to raise a right to relief above the speculative level.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007). “To survive a motion
to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on
its

face.”

Gonzales

2009)(quoting

v.

Ashcroft

Kay,
v.

577
Iqbal,

F.3d
129

600,

603

S.Ct.

(5th
1937,

Cir.
1949

(2009))(internal quotation marks omitted). The Supreme Court in
Iqbal explained that Twombly promulgated a “two-pronged approach”
5

to determine whether a complaint states a plausible claim for
relief. Iqbal, 129 S.Ct. at 1950. First, courts must identify those
pleadings that, “because they are no more than conclusions, are
not entitled to the assumption of truth.” Id. Legal conclusions
“must

be

supported

by

factual

allegations.”

Id.

“Threadbare

recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 1949.
Upon identifying the well-pleaded factual allegations, courts
“assume their veracity and then determine whether they plausibly
give rise to an entitlement of relief.” Id. at 1950. A claim has
facial plausibility when the plaintiff pleads factual content that
allows

the

court

to

draw

the

reasonable

inference

that

the

defendant is liable for the misconduct alleged.” Id. at 1949. This
is a “context-specific task that requires the reviewing court to
draw

on

its

plaintiffs

judicial

must

experience

“nudge[]

their

and
claims

common

sense.”

across

the

Id.

line

The
from

conceivable to plausible.” Twombly, 550 U.S. at 570.
First

Transit

argues

that

the

plain

language

of

the

subcontracts preclude the claims of the added business entity
Plaintiffs. “Although courts generally are not permitted to review
material

outside

of

the

pleadings

when

deciding

a Rule

12(b)(6) motion, the Fifth Circuit has recognized an exception: a
court may consider documents attached to a Rule 12(b)(6) motion as
part of the pleadings if they are referred to in the complaint and
6

are central to the plaintiff's claims.” Favors v. Office of Risk
Mgmt., Case No.: 14-1786, 2015 U.S. Dist. LEXIS 24222, at*6 (E.D.
La. Feb. 27, 2015). Here, the subcontracts are appropriate to
consider because their terms will determine whether or not the
Business Entity Plaintiffs can raise legally cognizable claims for
breach of contract.
The Business Entity Plaintiffs breach of contract claims are
premised on allegations that Defendants unlawfully used their
discretion when assigning and executing transportation routes.
(Rec. Doc. 1). However, the Service Planning and Referral process
of the subcontract that all Business Entity Plaintiffs have agreed
to states:
First Transit shall not be obligated or committed to purchase any
specific amount of service(s) from the Provider. First Transit
will assign rides to providers as it deems appropriate, in its
discretion, to promote the goals of LHC [Louisiana Healthcare
Connections Health Plan] and the interests of Eligible Clients. To
this end, First Transit reserves the right to discontinue
assignments to or services from any provider and to reassign rides
to other providers within the provider network. (Rec. Doc. 27-3).
Plaintiffs

cannot

bring

a

claim

against

Defendant

First

Transit for using its discretion regarding transportation routes
if their subcontract provided Defendant with this authority. “A
provision of a contract, which is clear and unambiguous and not
subject

to

more

than

one

interpretation,

is

not

open

to

construction, even if giving effect to its literal terms will work
a hardship on one of the parties. Chemical Constr. Corp. v.

7

Continental Engineering, Ltd., 407 F.2d 989, 991 (5th Cir. 1969).
Here, the contract is not ambiguous as to what party has discretion
over transportation routes. Plaintiff argues that despite these
clear and unambiguous terms, these were contracts of adhesion and
that First Transit forced them into these agreements. There is no
indication that these subcontracts are contracts of adhesion.
The Louisiana Supreme Court has stated “a contract is one of
adhesion when either its form, print, or unequal terms call into
question

the

consent

of

the

non-drafting

party

and

it

is

demonstrated that the contract is unenforceable, due to lack of
consent or error, which vitiates consent. Accordingly, even if a
contract is standard in form and printed in small font, if it does
not call into question the non-drafting party's consent and if it
is not demonstrated that the non-drafting party did not consent or
his consent is vitiated by error, the contract is not a contract
of adhesion.” Aguillard v. Auction Mgmt. Corp., 908 So. 2d 1, 1011 (La. 2005). The controlling provision regarding transportation
route discretion was not printed in small font or unclearly or
ambiguously written. Plaintiffs attempt to invalidate contractual
terms that render their breach of contract claims without merit is
not persuasive.
Furthermore, Business Entity Plaintiffs claim that they have
a right against First Transit under 42 U.S.C. 1396(a) and “allege
that

when

transportation

is

provided
8

as

an

optional

medical

service, it must be provided with the ‘free choice’ rights of
recipients, meaning that the recipient client can obtain services
from any qualified Medicaid provider chosen by the client.” (Rec.
Doc. 1). However, Courts have held that Medicaid recipients do not
have

a

right

under

42

U.S.C.

1396(a)

to

choose

specific

transportation for medical care. Harris v. James, 127 F.3d 993,
1011-1012 (11th Cir. 1997). Similarly there is no such right for
the

Business

Entity

Plaintiffs,

who

merely

are

providers

of

transportation to Medicaid recipients. Plaintiffs fail to cite any
authority that ascribes them such rights under 42 U.S.C. 1396(a).
The Business Entity Plaintiffs breach of contract claims and 42
U.S.C. 1396(a) claims should be dismissed against Defendant First
Transit.
For the reasons set forth above, IT IS ORDERED that
Defendant LogistiCare and Defendant First Transit’s Motions to
Dismiss are GRANTED.

New Orleans, Louisiana, this 16th day of August, 2017.

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

9