New Hampshire Hospital Association et al v. US Department of Health and Human Services, Secretary et al

Filing 48

///ORDER denying without prejudice 31 Motion for Summary Judgment; denying without prejudice 33 Motion for Summary Judgment. Clerk shall enter judgment and close the case. So Ordered by Judge Landya B. McCafferty.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

New Hampshire Hospital
Association et al.
v.

Civil No. 17-cv-349-LM
Opinion No. 2018 DNH 195

Alex M. Azar,1 Secretary,
U.S. Department of Health
and Human Services et al.

O R D E R
In November 2015, several New Hampshire hospitals2 and the
New Hampshire Hospital Association (“NHHA”), a non-profit trade
association, brought suit in this court against the Secretary of
Health and Human Services, the Centers for Medicare and Medicaid
Services (“CMS”), and the Administrator of CMS.

See New

Hampshire Hosp. Ass’n v. Burwell, No. 15-cv-460-LM (D.N.H.
2015).

Plaintiffs alleged in that suit that defendants set

forth certain “policy clarifications” regarding the method of
calculating supplemental payments to certain hospitals.

They

alleged these policy clarifications were issued in responses to

Alex M. Azar became Secretary of the U.S. Department of
Health and Human Services on January 29, 2018, replacing Thomas
Price. See Fed. R. Civ. P. 25(d).
1

Plaintiff hospitals are Mary Hitchcock Memorial Hospital,
LRGHealthcare, Speare Memorial Hospital, and Valley Regional
Hospital, Inc.
2

frequently asked questions posted on medicaid.gov, and that both
the policies themselves and the manner in which they were
promulgated contradict the plain language of the Medicaid Act
and violate the Administrative Procedure Act (“APA”).

This

court granted plaintiffs’ motion for summary judgment, holding
that defendants’ enforcement of the policy clarifications set
forth in the responses to frequently asked questions violated
the APA.

New Hampshire Hosp. Ass’n v. Burwell, No. 15-cv-460-

LM, 2017 WL 822094, at *8-14 (D.N.H. Mar. 2, 2017), aff’d sub
nom. New Hampshire Hosp. Ass’n v. Azar, 887 F.3d 62 (1st Cir.
2018).

The court permanently enjoined defendants from enforcing

the policies in the responses to the frequently asked questions,
but took no position as to whether those policies could be
enforceable if set forth in a validly promulgated rule or
regulation.

Id. at *12 n.16.

After the court issued its order, defendants published a
final rule regarding the calculation of the supplemental
payments.

See Medicaid Program: Disproportionate Share Hospital

Payments—Treatment of Third Party Payers in Calculating
Uncompensated Care Costs, 82 Fed. Reg. 16114–02, 16117 (Apr. 3,
2017) (“Final Rule”).

The Final Rule expressly included within

its text the policies that had been set forth in the responses
to the frequently asked questions.

2

Plaintiffs brought this suit, seeking declaratory and
injunctive relief to prevent defendants from enforcing the Final
Rule.

Plaintiffs represented that they would suffer irreparable

harm once the Rule became effective, and the court set an
expedited briefing schedule for the parties’ cross-motions for
summary judgment so that it could rule on the motions prior to
the date the Final Rule went into effect.
On March 5, 2018, after the parties filed their briefing in
support of their cross-motions for summary judgment but before
oral argument, plaintiffs submitted a “Notice of Supplemental
Authority Invalidating the Final Rule.”

Doc. no. 38.

In that

notice, plaintiffs stated: “On March 2, 2018, the Court in
Children’s Hosp. Assoc. of Texas v. Price, No. 17-844 (D.C.
Cir.), which also has been considering the validity of the Final
Rule based on cross motions for summary judgment, issued an
order invalidating and vacating that rule.”

Id. at 1.

Plaintiffs included with their notice a copy of the order in
Children’s Hospital Ass’n of Texas and noted that a memorandum
opinion explaining the order’s reasoning had not yet been
issued.

Plaintiffs also stated:

“By vacating the Final Rule,

the Order is dispositive of the issues pending before this
Court.”

Id. at 2.

On March 7, 2018, plaintiffs submitted a “Notice of
Supplemental Authority Vacating the Final Rule,” doc. no. 39, to
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which they attached a copy of the March 6, 2018 memorandum
opinion in Children’s Hospital Ass’n of Texas.

That opinion

described the basis for the court’s March 2, 2018 order.

See

Children’s Hosp. Ass’n of Texas v. Azar, No. CV 17-844 (EGS),
2018 WL 1178024 (D.D.C. Mar. 6, 2018) (Sullivan, J.).

In this

notice, plaintiffs stated that they “believe that the vacatur of
the Final Rule is dispositive of the issues pending before this
Court.”

Id. at 2.

On March 19, 2018, the parties submitted a status report
concerning the impact of the Children’s Hospital decision.
doc. no. 40.

In the status report, the parties stated that they

agree that the Children’s Hospital Ass’n of Texas
ruling has the effect of vacating the [Final Rule] in
a way that prevents its application anywhere,
including with respect to the plaintiffs in this case.
The defendants have indicated that they intend to act
accordingly and will not enforce the rule as long as
the Children’s Hospital Ass’n of Texas decision
remains operative in its current form.
Id. at ¶ 2.

See

The parties also stated:

Nevertheless, the parties agree that the Children’s
Hospital Ass’n of Texas ruling does not affect this
Court’s jurisdiction to independently rule on the
validity of the [Final Rule] in this case. The
plaintiffs in this case are not parties to the
judgment in Children’s Hospital Ass’n of Texas, and
the Government is considering whether to appeal the
Children’s Hospital Ass’n of Texas ruling. Given the
possibility of an appeal in Children’s Hospital Ass’n
of Texas, the plaintiffs also do not wish to
voluntarily dismiss this case.
Id. at ¶ 3.

4

On March 28, 2018, in response to the parties’ status
report, the court issued a procedural order.

See doc. no. 42.

In that order, the court stated:
Judge Sullivan’s ruling in Children’s Hospital Ass’n
of Texas vacating the Rule at issue in this case
appears to render the parties’ dispute moot. See,
e.g., D.H.L. Assocs., Inc. v. O’Gorman, 199 F.3d 50,
54 (1st Cir. 1999) (holding that the court lacked
jurisdiction to enjoin the enforcement of ordinances
that were no longer in effect). That is particularly
true in light of defendants’ statement in the parties’
joint status report that the ruling prevents
application of the Rule and they will not enforce it
so long as the Children’s Hospital Ass’n of Texas
decision remains operative in its current form.
Therefore, it does not appear that a favorable ruling
from this court would redress any actual injury
suffered by plaintiffs.
Id. at 3-4.

The court also stated: “any party asserting that

this court continues to have jurisdiction over this case shall
file a brief showing cause why this case should not be dismissed
in light of the Children’s Hospital Ass’n of Texas decision.”
Id. at 4.
On April 2, 2018, defendants filed a response to the
court’s procedural order, asserting that that the Children’s
Hospital “order does not make this case moot because the
Government is considering whether to appeal [that] ruling, and
the vacated rule could be reinstated on appeal.”
1.

Doc. no. 43 at

The government has since appealed the Children’s Hospital

ruling, and the appeal remains pending.

5

On April 6, 2018, plaintiffs filed a response to the
court’s order, in which they state that they “agree that Judge
Sullivan’s ruling in Children’s Hospital renders the parties’
dispute moot because the Final Rule has been vacated.”
44 at 2 (citing cases).

Doc. no.

Plaintiffs noted that circumstances

could change if defendants successfully appealed the Children’s
Hospital ruling, and requested that the court administratively
stay the matter.
“Under Article III of the Constitution, federal courts may
adjudicate only actual, ongoing cases or controversies.”

Lewis

v. Cont’l Bank Corp., 494 U.S. 472, 477 (1990) (internal
citations omitted).

“To satisfy the Article III case or

controversy requirement, a litigant must have suffered some
actual injury that can be redressed by a favorable judicial
decision.”
(1983).

Iron Arrow Honor Soc’y v. Heckler, 464 U.S. 67, 70

“If events have transpired to render a court opinion

merely advisory, Article III considerations require dismissal of
the case.”

Mangual v. Rotger-Sabat, 317 F.3d 45, 60 (1st Cir.

2003).
As the court stated in its procedural order, the ruling in
Children’s Hospital vacating the Final Rule renders the parties’
dispute moot, particularly in light of defendants’ statement
that the ruling prevents application of the Final Rule and they
will not enforce it so long as the ruling remains operative in
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its current form.

Although defendants have appealed that

ruling, at this stage, and particularly in light of defendants’
representations, any decision by this court would be merely
advisory.
For that reason, the court denies without prejudice the
parties’ cross-motions for summary judgment.

To the extent the

Children’s Hospital ruling is reversed on appeal, plaintiffs may
file a new action seeking expedited relief.

See 13C Charles

Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure § 3553.2.1 (3d ed. 2008) (“Mootness may
be denied because the decision is subject to reopening or
appeal, at least if there is a realistic prospect of reopening,
although the prospect may instead be met by finding mootness,
perhaps on terms that contemplate revival if the decision is in
fact reopened.”); see also Nationwide Mut. Ins. Co. v. Burke,
897 F.2d 734, 739-40 (4th Cir. 1990) (ordering dismissal of
district court action on mootness grounds without prejudice to
plaintiffs filing a new action if the relevant judgment were
reversed on appeal).

CONCLUSION
For the foregoing reasons, plaintiffs’ motion for summary
judgment (doc. no. 31) and defendants’ cross-motion for summary
judgment (doc. no. 33) are denied without prejudice and the case
7

is dismissed.

The clerk of court shall enter judgment

accordingly and close the case.
SO ORDERED.

__________________________
Landya B. McCafferty
United States District Judge
September 25, 2018
cc:

Counsel of Record.

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