Minnesota R-80 Medical Transportation Coalition et al v. Piper et al

Filing 38

MEMORANDUM OPINION AND ORDER: Defendant Emily Johnson Piper's Motion to Dismiss (Doc. No. 15 ) is GRANTED. Defendant Don Wright's Motion to Dismiss (Doc. No. 20 ) is DENIED AS MOOT. Plaintiffs' Amended Complaint is DISMISSED WITHOUT PREJUDICE. (Written Opinion) Signed by Judge Donovan W. Frank on 8/29/2018. (las)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Minnesota R-80 Medical
Transportation Coalition, and
Minnesota Ambulance Association,

Civil No. 17-4539 (DWF/LIB)

Plaintiffs,
v.

MEMORANDUM
OPINION AND ORDER

Commissioner of the Minnesota Department
of Human Services, Emily Johnson Piper,
in her official capacity; and Secretary of the
United States Department of Health and
Human Services, Don Wright,
in his official capacity,
Defendants.

Anthony D. Johnson, Esq., Christopher J. Heinze, Esq., and Kirsten J. Libby, Esq., Libby
Law Office, P.A., counsel for Plaintiffs.
James H. Clark III, Assistant Attorney General, Minnesota Attorney General’s Office,
counsel for Defendant Emily Johnson Piper.
David W. Fuller, Assistant United States Attorney, United States Attorney’s Office,
counsel for Defendant Don Wright.

INTRODUCTION
This matter is before the Court on Motions to Dismiss brought by Defendants
Emily Johnson Piper, Commissioner of the Minnesota Department of Human Services,
and Don Wright, Secretary of the United States Department of Health and Human

Services. (Doc. Nos. 15, 20.) For the reasons set forth below, the Court grants the
Commissioner’s motion and dismisses this case.
BACKGROUND
I.

The Parties
Plaintiffs, Minnesota R-80 Medical Coalition (“R-80”) and Minnesota Ambulance

Association (“MAA”), are organizations whose members provide non-emergency
medical transportation (“NEMT”) to Medicaid recipients throughout the State of
Minnesota. (Doc. No. 14 (“Am. Compl.”) ¶¶ 1, 2, 14.) Plaintiffs assert claims against
Emily Johnson Piper (the “Commissioner”) in her official capacity as Commissioner of
the Minnesota Department of Human Services (“DHS”) and Don Wright (the
“Secretary”) in his official capacity as Secretary of the U.S. Department of Health and
Human Services (“HHS”). 1 (See id. ¶¶ 3, 7.) R-80’s organizational “purpose is to
advocate for its members by promoting and strengthening transportation medical services
by advancing policy and practice in the State of Minnesota.” (Id. ¶ 28.) Similarly,
“MAA is an organization with numerous medical transportation members that advocates
for its members by promoting and strengthening transportation medical services by
advancing policy and practice in the State of Minnesota.” (Id. ¶ 34.) Both Plaintiff
1

The parties’ briefing and the Court’s independent review of the U.S. Department
of Health and Human Services website indicates that Don Wright no longer serves as
Secretary of this agency. (See Doc. No. 17 at 2 n.2; Doc. No. 23 at 1 n.1; Doc. No. 25 at
1; see also U.S. Department of Health and Human Services, HHS Leadership,
https://www.hhs.gov/about/leadership/index.html (last visited Aug. 20, 2018).) Pursuant
to Federal Rule of Civil Procedure 25(d), Don Wright’s “successor is automatically
substituted as a party” in his absence. See Fed. R. Civ. P. 25(d). For simplicity, the
Court shall refer to this Defendant as “the Secretary” throughout this order.
2

organizations are members of the state’s NEMT Advisory Committee. (Id. ¶¶ 29, 37.) In
this capacity, Plaintiffs “advise[] [the Commissioner] on the administration of
nonemergency medical transportation covered under Medical Assistance [(“MA”)].” 2
(Id. ¶¶ 30, 39.)
II.

The Commissioner’s Delegation of NEMT Administration
According to Plaintiffs, Minnesota law “requires [the Commissioner] and DHS to

‘implement a single administrative structure and delivery system for [NEMT].’” (Id. ¶ 63
(quoting Minn. Stat. § 256B.0625, subd. 18e); see also id. ¶¶ 74-76.) Plaintiffs contend
that “[t]his single administrative structure ensures that [NEMT] claims are being
administered consistently and in a uniform manner.” (Id. ¶ 77.) Plaintiffs also assert that
Minnesota law obligates DHS to “administer and reimburse [NEMT] providers for
services provided . . . unless and until [the Commissioner] has ‘developed, made
available, and funded the single administrative structure.’” (Id. ¶ 80 (quoting Minn. Stat.
§ 256B.0625, subd. 17(j)).) Specifically, Plaintiffs contend that local counties should be
permitted to administer and reimburse NEMT services “[o]nly once that single
administrative structure and delivery system is developed, available, and funded by [the
Commissioner] and DHS.” (Id. ¶ 83.) Plaintiffs allege that the Commissioner has
improperly failed to develop a statewide administrative system for coordinating NEMT
and has delegated responsibility for approving payments to Minnesota counties as well as

2

“Medical Assistance” is the state of Minnesota’s Medicaid program. (See Doc.
No. 14 (“Am. Compl.”) ¶ 5.)

3

a private brokerage firm located in Missouri known as Medical Transportation
Management, Inc. (“MTM”). 3 (See id. ¶¶ 87-90, 130, 132, 135-37, 150.) According to
Plaintiffs, the decision “to relegate all of DHS’ duties concerning the administration of
[NEMT] services to the 87 Minnesota counties” took place following a 5-4 vote at a
NEMT Advisory Committee meeting inappropriately convened in the absence of a
quorum and with the improper participation of DHS employees. (Id. ¶¶ 144-50.)
Plaintiffs also generally assert that the Commissioner unlawfully “restructured
reimbursement payments without advice and counsel from the Nonemergency Medical
Transportation Committee.” (Id. ¶ 232.)
Plaintiffs allege that a number of “inconsistencies” have resulted from the
delegation of oversight to Minnesota’s 87 counties. (Id. ¶ 92.) In particular, Plaintiffs
discuss “a number of varying protocols and administrative procedures for the
administration and reimbursement of [NEMT].” (Id. ¶ 94.) Examples include
differences in whether a county utilizes a web-based or paper-based claim submission
process, varying lengths of time to obtain reimbursement, and differing information
provided along with reimbursements. (See id. ¶¶ 95-99.) Plaintiffs allege that slower
reimbursement rates and varying reimbursement protocols impose an undue burden on

3

According to the Complaint, Medicaid covers seven separate “Modes” of
transportation, and only Modes 1-4 have thus far been delegated to Minnesota counties
for administration. (Id. ¶¶ 79, 92-93.) The allegations in the Complaint center primarily
on the delegation of Mode 4 administration to Minnesota counties. The distinctions
between the various modes, however, are irrelevant to the Court’s analysis of the pending
motions, and the Court omits reference to the specific modes at issue for simplicity
throughout this order.
4

NEMT providers. (Id. ¶ 100.) Thus, Plaintiffs explain, some NEMT providers have
discontinued providing certain services in counties with complicated and slow
reimbursement processes, leaving Medicaid “recipients in those counties with little to no
options for needed [NEMT] services.” (Id. ¶ 101.) Plaintiffs also allege various
inconsistences relating to “determinations of level of need for MA recipients,” the
“requirements for [NEMT] providers to be reimbursed for services provided,” and which
entity actually administers reimbursements in each county. (Id. ¶¶ 102-21.) Plaintiffs
particularly allege that the varying reimbursement requirements have placed an undue
burden on NEMT providers and Medicaid recipients. (Id. ¶ 117.) In addition, Plaintiffs
contend that the Commissioner’s delegation of administration over NEMT has created
confusion over which counties should be responsible for claims, resulting in some
“uncollectable claim[s] for services provided” and an undue burden on NEMT providers.
(Id. ¶¶ 122-28.)
In sum, Plaintiffs assert that “[b]ecause of the autonomy exercised by Minnesota’s
87 counties and MTM, [NEMT] claims under Medicaid are often not efficient and are
rarely uniform,” resulting in an undue burden on NEMT providers. (Id. ¶ 140.)
According to the Complaint, “Plaintiffs will continue to suffer ongoing damages if the 87
Minnesota counties are allowed to continue to serve as the single administrative agency”
with respect to NEMT services. (See id. ¶ 93.)
In conjunction with their brief in opposition to Defendants’ Motions to Dismiss,
Plaintiffs submitted the Affidavit of Jeffrey R. Nustad, the owner of an NEMT provider
and one of R-80’s members. (Doc. No. 26 (“Nustad Aff.”) ¶¶ 1-2; see also Am. Compl.
5

¶ 23.) According to Nustad, DHS’s delegation of NEMT administration “has had a
substantial impact on [his] business” in light of counties’ inability to efficiently and
knowledgeably manage claims for reimbursement. (See id. ¶ 5.) Nustad also asserts that
the delegation of administration has led him to conclude that “my company can no longer
reasonably provide [NEMT] services” in two specific counties. (Id. ¶ 8.) Nustad avers
that “[m]y colleagues in the NEMT industry have had similar experiences and have
stopped servicing [NEMT] recipients in certain counties,” negatively impacting Medicaid
recipients’ access to transportation services. (Id. ¶ 11.)
III.

Misappropriation of Funds and Threatened Fraud Investigations
Plaintiffs also allege that DHS reimbursed NEMT providers for several months

after those duties were delegated to counties and thereafter recouped reimbursements
DHS had approved. (Am. Compl. ¶¶ 152-63.) Plaintiffs further allege that DHS directed
counties that they could decline to reimburse the NEMT providers for these
previously-approved services and threatened fraud investigations against providers who
sought to recover their recouped funds. (Id. ¶¶ 161, 164.) Thus, Plaintiffs assert that
“[d]espite [providers] being entitled to reimbursement, DHS has recouped these monies
from the [NEMT] service providers and retained them illegally, violating state and
federal law.” (Id. ¶ 163.) Plaintiffs contend that DHS retains possession of the
misappropriated funds and that the Commissioner “should be required to follow the law
such that no further misappropriations occur.” (Id. ¶¶ 166-67.) Relatedly, Plaintiffs
assert that DHS has threatened to initiate fraud investigations against NEMT providers

6

who choose to discontinue providing NEMT services in counties which have refused to
provide reimbursement for the recouped funds. (Id. ¶¶ 168-70.)
IV.

Plaintiffs’ Amended Complaint
Plaintiffs allege that DHS’s actions constitute violations of Minnesota law and

federal Medicaid law as outlined in the State’s approved Medicaid State Plan. Plaintiffs
also allege that the HHS Secretary has unlawfully failed to require DHS to operate its
Medicaid program in compliance with federal law. With respect to a number of their
claims, Plaintiffs generally assert that Defendants’ alleged illegal conduct “constitutes a
public wrong injurious to Plaintiffs, all MA recipients, other medical institutions and
medical providers in Minnesota, and the public at large.” (Id. ¶¶ 180-82, 195-197, 206,
214.) Plaintiffs also allege that they “will continue to suffer ongoing damages” as a result
of the State Plan’s noncompliance with federal law. (Id. ¶¶ 183, 198.)
Specifically, Plaintiffs’ Amended Complaint asserts the following fourteen claims:
(I) Writ of Mandamus for failing to ensure that Minnesota’s State Plan complies with 42
U.S.C. § 1396a(a)(19) and 42 U.S.C. § 1396a(a)(30) (against the Secretary); (II) Writ of
Mandamus for failing to ensure that Minnesota’s State Plan complies with 42 U.S.C.
§ 1396a(a)(19) and 42 U.S.C. § 1396a(a)(30) (against the Commissioner); (III) Writ of
Mandamus for failing to comply with Minn. Stat. § 256B.0625, subd. 18(e); (IV) Writ of
Mandamus for permitting counties to administer NEMT prior to creating a single
administrative structure as required under Minn. Stat. § 256B.0625, subd. 17(j);
(V) Declaratory Judgment that Minnesota’s State Plan or its administration fails to
comply with 42 U.S.C. § 1396a(a)(19) and 42 U.S.C. § 1396a(a)(30) (against the
7

Secretary); (VI) Declaratory Judgment that Minnesota’s State Plan or its administration
fails to comply with 42 U.S.C. § 1396a(a)(19) and 42 U.S.C. § 1396a(a)(30) (against the
Commissioner); (VII) Declaratory Judgment that the Commissioner has violated
42 C.F.R. § 447.204; (VIII) Declaratory Judgment that the Commissioner has violated
Minn. Stat. § 256B.0625, subd. 18(e); (IX) Declaratory Judgment that the Commissioner
has violated Minn. Stat. § 256B.0625, subd. 17(j); (X) Violation of Minn. Stat. § 62J.536
for permitting counties to use non-electronic reimbursement systems for NEMT; (XI)
Writ of Mandamus for failing to comply with Minn. Stat. § 256B.04, subd. 14(c);
(XII) Declaratory Judgment that the Commissioner has violated Minn. Stat. § 256B.04,
subd. 14(c); (XIII) Mishandling and Misappropriation of Medicaid Funds;
(XIV) Minnesota Equal Access to Justice Act relief awarding Plaintiffs’ costs and fees.
(Id. ¶¶ 172-282.) Counts I and V are asserted against the Secretary, and the remaining
counts are asserted against the Commissioner. (See id.)
Plaintiffs seek multiple forms of relief including various writs of mandamus,
declaratory judgment, damages exceeding $75,000 and “prospective ongoing damages,”
costs and attorney fees. (See id. at Prayer for Relief.) Specifically, Plaintiffs seek writs
of mandamus compelling the Secretary and the Commissioner to ensure that Minnesota’s
Medicaid State Plan complies with federal law as well as writs of mandamus compelling
the Commissioner’s compliance with Minnesota laws governing the single administrative
NEMT structure. (Id. at Prayer for Relief ¶¶ 1-4.) Both Defendants move to dismiss the
claims against them. (Doc. Nos. 15, 20.)

8

DISCUSSION
I.

Legal Standard
A motion to dismiss under Rule 12(b)(1) challenges the Court’s subject matter

jurisdiction. Fed. R. Civ. P. 12(b)(1). To survive a motion under Rule 12(b)(1), the party
asserting jurisdiction has the burden of proof. V S Ltd. P’ship v. Dep’t of Hous. & Urban
Dev., 235 F.3d 1109, 1112 (8th Cir. 2000). “Subject-matter jurisdiction is a threshold
requirement which must be assured in every federal case.” Kronholm v. Fed. Deposit Ins.
Corp., 915 F.2d 1171, 1174 (8th Cir. 1990).
A Rule 12(b)(1) motion may challenge a plaintiff’s complaint either on its face or
on the factual truthfulness of its averments. Osborn v. United States, 918 F.2d 724, 729
n.6 (8th Cir. 1990). When a defendant brings a facial challenge—that is, even if the
allegations were true, they lack an essential element for jurisdiction—a court reviews the
pleadings alone and assumes the allegations are true. Titus v. Sullivan, 4 F.3d 590, 593
(8th Cir. 1993); accord Osborn, 918 F.2d at 729 n.6. In a factual challenge to
jurisdiction, the court may consider matters outside the pleadings and weigh the accuracy
of the allegations. Titus, 4 F.3d at 593; accord Osborn, 918 F.2d at 729 n.6.
In deciding a motion to dismiss under Rule 12(b)(6), a court assumes all facts in
the complaint to be true and construes all reasonable inferences from those facts in the
light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th
Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory
allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th
Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v.
9

City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court deciding a motion to
dismiss may consider the complaint, matters of public record, orders, materials embraced
by the complaint, and exhibits attached to the complaint. See Porous Media Corp. v. Pall
Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).
To survive a motion to dismiss, a complaint must contain “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). Although a complaint need not contain “detailed factual allegations,” it must
contain facts with enough specificity “to raise a right to relief above the speculative
level.” Id. at 555. As the Supreme Court reiterated, “[t]hreadbare recitals of the elements
of a cause of action, supported by mere conclusory statements,” will not pass muster
under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S.
at 555). In sum, this standard “calls for enough fact[s] to raise a reasonable expectation
that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.
II.

Standing
“[A] plaintiff seeking relief in federal court must first demonstrate that he has

standing to do so, including that he has ‘a personal stake in the outcome,’ distinct from a
‘generally available grievance about government.’” Gill v. Whitford, 138 S. Ct. 1916,
1923 (2018) (citations omitted). The purpose of this requirement is to ensure that courts
“do not engage in policymaking properly left to elected representatives.” Id. (citation
omitted). To demonstrate standing to invoke federal court jurisdiction under Article III
of the Constitution, a plaintiff must establish: “that he ‘(1) suffered an injury in fact,
(2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely
10

to be redressed by a favorable judicial decision.’” Id. at 1929 (quoting Spokeo, Inc. v.
Robins, 136 S. Ct. 1540, 1547 (2016)).
The Supreme Court recently affirmed that “injury in fact” is “[f]oremost among
these requirements.” Id. The injury in fact element requires a plaintiff to “show that he
or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and
particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Spokeo,
136 S. Ct. at 1548 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). Where
a plaintiff seeks injunctive relief, he must adequately establish the threat of such an
injury. Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). A “concrete” injury is
one that “actually exist[s],” although it may be intangible. Spokeo, 136 S. Ct. at 1548-49.
While “Congress may elevate to the status of legally cognizable injuries concrete,
de facto injuries that were previously inadequate in law,” a plaintiff does not
automatically establish an injury in fact “whenever a statute grants a person a statutory
right and purports to authorize that person to sue to vindicate that right.” Id. at 1549
(quoting Lujan, 504 U.S. at 578 (quotations marks and brackets omitted)). “Where . . . a
case is at the pleading stage, the plaintiff must ‘clearly . . . allege facts demonstrating’
each element,” and it is the plaintiff’s burden to establish standing. Id. at 1547.
“Even in the absence of injury to itself, an association may have standing solely as
the representative of its members.” Warth v. Seldin, 422 U.S. 490, 511 (1975). “The
association must allege that its members, or any one of them, are suffering immediate or
threatened injury as a result of the challenged action of the sort that would make out a
justiciable case had the members themselves brought suit.” Id. For an organization to
11

establish standing to sue on behalf of its membership, it must establish that “(a) its
members would otherwise have standing to sue in their own right; (b) the interests it
seeks to protect are germane to the organization’s purpose; and (c) neither the claim
asserted nor the relief requested requires the participation of individual members in the
lawsuit.” Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977).
“[G]eneral and conclusory legal allegations” absent any “facts about how the defendants’
actions have harmed or will harm the [organization]” or a particular member do not
support standing. Ouachita Watch League v. U.S. Forest Serv., 858 F.3d 539, 543 (8th
Cir. 2017).
Typically, an organization seeking to establish standing on behalf of its
membership must demonstrate that one or more of its members have personally suffered
or will face harm through specific averments or proof. See Summers, 555 U.S. at 498-99.
However, an organization need not identify a specific member who will suffer harm
“where all the members of the organization are affected by the challenged activity.” Id.;
see also Ouachita, 858 F.3d at 543-44. Where the members’ “status and interests are . . .
diverse and the possibilities of conflict . . . obvious,” the organization may not be “an
appropriate vehicle to litigate the claims of its members.” See Associated Gen.
Contractors of N.D. v. Otter Tail Power Co., 611 F.2d 684, 691 (8th Cir. 1979).
Similarly, associational standing may be improper where the association asserts
“damages claims [which] are not common to the entire membership, nor shared by all in
equal degree.” Warth, 422 U.S. at 515.

12

The Commissioner argues that Plaintiffs lack standing to assert their claims,
mandating dismissal of this case. First, the Commissioner contends that Plaintiffs fail to
allege any direct, concrete, or particularized injury to support standing on their own
behalf. According to the Commissioner, “Plaintiffs provide no argument . . . to show that
any of the Commissioner’s alleged conduct has had any impact on Plaintiffs’ operations,
let alone caused Plaintiffs any financial harm or invaded any of Plaintiffs’ legally
protected interests.” (Doc. No. 30 at 2.) Second, the Commissioner asserts that Plaintiffs
fail to establish associational standing to sue on behalf of their members. In particular,
the Commissioner contends that Plaintiffs’ claims seeking monetary relief would require
the participation of the organizations’ individual members because Plaintiffs have not
demonstrated that all of their members have suffered equal damages. Furthermore, the
Commissioner argues, “Plaintiffs plead no facts to show that the injunctive relief they
seek will benefit all of their members, let alone that all of their members have a uniform
interest in moving the administration of non-emergency medical transportation services
from the individual counties to [DHS].” (Id. at 3.)
Plaintiffs dispute both of these arguments. First, Plaintiffs allege that they have
standing because they were injured following an NEMT Advisory Committee meeting in
which attendees voted to delegate DHS’s NEMT administration duties to the counties.
Plaintiffs also assert that the Commissioner’s breaches of state and federal law and the
resulting inconsistent administration of NEMT have caused them further injury. Second,
concerning associational standing, Plaintiffs argue that they also have standing to sue on
behalf of their membership. In particular, Plaintiffs point to the Eighth Circuit’s decision
13

in Arkansas Medical Society v. Reynolds, 6 F.3d 519 (8th Cir. 1993), which they contend
found standing in analogous circumstances. Plaintiffs dispute the Commissioner’s
argument that they are seeking damages in the form of previously recouped payments.
Rather, Plaintiffs argue, “[t]he money damages sought are those that Plaintiffs and their
members will continue to suffer if Defendant Piper continues to violate the law.” (Doc.
No. 25 at 9.) Nevertheless, Plaintiffs emphasize that their suit primarily focuses on
prospective relief instead of monetary damages.
The Court concludes that Plaintiffs’ Amended Complaint is subject to dismissal
because Plaintiffs have failed to establish standing on their own behalf or associational
standing on behalf of their members. With respect to Plaintiffs’ own standing, even
construing the Amended Complaint’s allegations in a favorable light, Plaintiffs have not
met their burden because they have not alleged the requisite injury-in-fact element with
sufficient specificity. Plaintiffs’ alleged harms relating to their participation at the
attempted NEMT Advisory Committee meeting are conclusory, and Plaintiffs have not
pointed to specific facts to illustrate how any improprieties regarding the meeting resulted
in concrete and particularized harm to their organizations. Plaintiffs also fail to clearly
allege how the inconsistent administration of NEMT has resulted in harm to either R-80
or MAA as organizations, separate from any harm that may be felt by their individual
members.
Turning to associational standing, the Court similarly finds Plaintiffs’ Amended
Complaint insufficient to invoke the Court’s jurisdiction. With respect to the injunctive
relief they seek, Plaintiffs’ allegations lack the necessary facts to demonstrate that
14

Plaintiffs’ members have suffered concrete harm to a legally protected interest. At most,
Plaintiffs’ allegations support that the inconsistent administration of NEMT throughout
Minnesota has led some of Plaintiffs’ members to make the business decision to
discontinue services in particular counties, that some members have experienced delays
in reimbursement for services provided, and that confusion over the responsible county
has left some claims uncollected. These economic harms, however, are supported by
only conclusory allegations and generalized claims. 4 It is also questionable whether these
alleged harms have a sufficiently direct connection to the Commissioner’s alleged
conduct to support the causation and redressability elements of standing.
Furthermore, Plaintiffs have failed to demonstrate that their members’ alleged
damages (whether for past harm or future harm yet to be incurred), are sufficiently
cohesive such that associational standing is appropriate to vindicate their rights. 5

4

While the Affidavit of Jeffrey Nustad provides some more specific factual support
for the economic harm faced by NEMT providers, Nustad merely offers the general
allegation that the Commissioner’s conduct “has had a substantial impact on [his]
business,” and that he has discontinued services in two counties. (Doc. No. 26 (“Nustad
Aff.”) ¶¶ 5, 8.) This fails, however, to clearly establish concrete harm to support
standing. Nustad does not aver, for example, that he has not been reimbursed for services
provided or that his company has incurred particular costs as a result of the inconsistent
administration of NEMT throughout the state. Furthermore, even if any of Nustad’s
allegations would be sufficient to support standing on behalf of R-80, the record does not
contain anything to demonstrate that Nustad’s company is also a member of MAA. His
affidavit, therefore, only impacts the standing analysis with respect to R-80.
5

The Court notes that it does not find Plaintiffs’ reliance on Arkansas Medical
Society v. Reynolds, 6 F.3d 519 (8th Cir. 1993), to be persuasive on the standing issue. In
Reynolds, the Eighth Circuit found that professional associations had standing to assert
the Medicaid Act claims of their provider members. See id. at 528. With respect to
whether the individual members would have standing, the court merely stated that
(Footnote Continued on Next Page)
15

Specifically, Plaintiffs’ allegations with respect to improperly recouped reimbursements
and threatened fraud investigations are necessarily limited to only certain providers who
have suffered these particular harms.
For the foregoing reasons, the Court determines that Plaintiffs lack standing and
this Court therefore lacks jurisdiction to consider their claims. Thus, the Court shall grant
the Commissioner’s Motion to Dismiss and dismiss Plaintiffs’ Amended Complaint in its
entirety. Although the Secretary did not separately raise a standing challenge in his
Motion to Dismiss, the Court lacks jurisdiction to address the merits of his separate
arguments for dismissal, and the dismissal of Plaintiffs’ Amended Complaint renders his
arguments for dismissal moot. 6

(Footnote Continued From Previous Page)
“Medicaid . . . providers individually have standing to contest the Medicaid laws.” Id.
(citing Wilder v. Va. Hosp. Ass’n, 496 U.S. 498, 509 (1990)). The authority supporting
this general proposition, however, has been significantly undermined by more recent
cases decided by the Supreme Court and the Eighth Circuit. See Does v. Gillespie, 867
F.3d 1034, 1039-40 (8th Cir. 2017) (discussing Armstrong v. Exceptional Child Ctr., Inc.,
135 S. Ct. 1378 (2015), and Gonzaga Univ. v. Doe, 536 U.S. 273 (2002)). The Reynolds
decision also preceded the Supreme Court’s clarification in Spokeo that “Article III
standing requires a concrete injury even in the context of a statutory violation.” Spokeo,
Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016).
6

Notably, even if the Court determined that it had standing, it appears that
Plaintiffs’ claims are nonetheless subject to dismissal for additional reasons.
Specifically, the Eleventh Amendment precludes this Court from adjudicating
official-capacity claims against the Commissioner seeking damages or arising under
Minnesota law (Counts III, IV, VIII, IX, X, XI, XII, XIII, XIV). See Minn. Pharmacists
Ass’n v. Pawlenty, 690 F. Supp. 2d 809, 815 (D. Minn. 2010) (citing Ex Parte Young, 209
U.S. 123 (1908), and Pennhurst State Sch. & Hosp., 465 U.S. 89, 105-06 (1984)). In
addition, Plaintiffs’ Medicaid Act claims lack merit based on the lack of a private right of
action under 42 U.S.C. § 1983 to enforce the Medicaid provisions at issue. (Counts I, II,
V, VI, and VII). See id. at 818-24 (finding no private right of action under 42 U.S.C.
(Footnote Continued on Next Page)
16

ORDER
Based on the files, records, and proceedings herein, and for the reasons stated
above, IT IS HEREBY ORDERED that:
1.

Defendant Emily Johnson Piper’s Motion to Dismiss (Doc. No. [15]) is

GRANTED.
2.

Defendant Don Wright’s Motion to Dismiss (Doc. No. [20]) is DENIED

AS MOOT.
3.

Plaintiffs’ Amended Complaint is DISMISSED WITHOUT

PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: August 29, 2018

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

(Footnote Continued From Previous Page)
§ 1396a(a)(30)); Jordano By & Through Jordano v. Steffen, 787 F. Supp. 886, 891-93
(D. Minn. 1992) (concluding 42 U.S.C. § 1396a(a)(19) does not create an enforceable
right); see also Alexander v. Sandoval, 532 U.S. 275, 291 (2001) (holding that regulations
may not create a private right of action not otherwise created by statute).
17