BRILL v. VELEZ et al

Filing 17

OPINION. Signed by Judge Noel L. Hillman on 1/28/2015. (drw)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ADA BRILL,
Plaintiff,
v.
JENNIFER VELEZ, COMMISSIONER,
NEW JERSEY DEPARTMENT OF
HUMAN SERVICES; and VALERIE
HARR, DIRECTOR, NEW JERSEY
DEPARTMENT OF HUMAN SERVICES,
DIVISION OF MEDICAL
ASSISTANCE AND HEALTH
SERVICES,
Defendants.

CIVIL NO. 1:13-cv-05643
(NLH/AMD)

OPINION

Appearances:
JANE M. FEARN-ZIMMER
ROTHKOFF LAW GROUP
911 KINGS HIGHWAY SOUTH
CHERRY HILL, NJ 08034
Attorney for plaintiff Ada Brill
JENNIFER LAUREN FINKEL
MOLLY ANN MOYNIHAN
STATE OF NEW JERSEY
OFFICE OF THE ATTORNEY GENERAL
R.J. HUGHES COMPLEX
25 MARKET STREET
P.O. BOX 112
TRENTON, NJ 08625
Attorney for defendants Jennifer Velez and Valerie Harr

HILLMAN, District Judge
Before the Court is Defendants’ Motion to Dismiss pursuant
to Fed. R. Civ. P. 12(b)(1). 1

Plaintiff commenced this action by

filing a Complaint pursuant to 42 U.S.C. § 1983, naming as
defendants Jennifer Velez and Valerie Harr, respectively the
Commissioner of the New Jersey Department of Human Services and
the Director of the Division of Medical Assistance and Health
Services.

The Complaint alleges violations of subchapter XIX of

the Social Security Act (“Federal Medicaid Act”), 42 U.S.C. §§
1396 to 1396w-5.
Previously, Defendants moved to dismiss Plaintiff’s
Complaint arguing that the case had become moot.
denied that motion.

The Court

Defendants have now renewed their motion to

dismiss based on developments since the resolution of their
prior motion.

For the reasons set forth below, the motion will

be granted in part and denied in part.

1

A motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(1) challenges the existence of a federal court’s subject
matter jurisdiction. Fed. R. Civ. P. 12(b)(1). “‘When subject
matter jurisdiction is challenged under Rule 12(b)(1), the
plaintiff must bear the burden of persuasion.’” Symczyk v.
Genesis HealthCare Corp., 656 F.3d 189, 191 n.4 (3d Cir. 2011)
(citing Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406,
1409 (3d Cir. 1991)).

2

DISCUSSION
By way of background, on March 22, 2012, Plaintiff applied
to the Camden County Board of Social Services (“Board”) for
long-term care benefits under New Jersey’s Medicaid program.
Due to the fact that Plaintiff had purchased an annuity the day
before she filed her application, Plaintiff’s caseworker sought
guidance from the State on the issue of whether Plaintiff must
incur a penalty waiting period before receiving benefits.
Approximately fifteen months after filing her application,
by letter dated June 21, 2013, Plaintiff learned she would be
subject to a penalty period if the Board found her to be
otherwise eligible for benefits.

The Penalty period was imposed

because the State deemed several asset transfers below fair
market value, including the annuity purchase.

The letter also

informed Plaintiff she had two weeks to rebut the State’s
findings by proving that the transfers were not made for the
purpose of becoming eligible for Medicaid.

Plaintiff’s counsel

submitted a letter to the Board explaining why the annuity
purchase should not count toward a penalty period, but to no
avail.
On July 29, 2013, Plaintiff received the Board’s
determination stating that she was eligible for benefits but
would be subject to a penalty period until November 17, 2013.
In response to the Board’s determination, Plaintiff filed this
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action seeking to enjoin Defendants from treating her annuity
purchase as an Impermissible Transfer and from applying a “de
facto policy of delaying determinations involving annuities.”
Plaintiff also requested costs, attorney’s fees, and “such other
relief as the court may deem just and equitable.”
By letter dated October 4, 2013, two weeks after Plaintiff
filed her Complaint, the Board reversed its previous
determination and informed Plaintiff that her annuity purchase
would not count towards her penalty period.

However, instead of

recalculating the penalty period without the annuity, the Board
rescinded Plaintiff’s eligibility determination, changed her
application status to “pending,” and requested additional
information.

As of the date of the Court’s prior Opinion on

June 27, 2014, Plaintiff still had not received benefits or a
revised eligibility determination.
Even though Defendants argued that the October 4, 2013
letter mooted her claims against them, the Court rejected their
argument.

The Court found that Defendants did not identify any

facts that would assure the Court it could not reasonably expect
Defendants to revert back to their original position after
dismissal, and without more, the sole fact that the State
voluntarily ceased the challenged conduct could not provide the
requisite assurance.

The Court also found that Plaintiff had

waited over sixteen months for an eligibility determination that
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should have been made within forty-five days, and that if
sufficiently proven, the Court could remedy this claim with an
injunction against further violation of the reasonable
promptness requirement.
Defendants have now renewed their motion to dismiss based
on mootness, and they point to new developments since the filing
of Plaintiff’s Complaint and the filing of Defendants’ prior
motion to dismiss that they contend should assuage the Court’s
concerns that supported the denial of their first motion.

On

December 3, 2013, the Board issued a Medicaid eligibility
decision to Plaintiff, and she has been receiving benefits since
that time.

The Board’s December 2013 decision honored its

October 2013 promise that it would not treat Plaintiff’s annuity
purchase as an impermissible transfer. 2
Defendants further point out that there has been no delay
in Plaintiff’s receipt of benefits, as her effective eligibility
date was June 1, 2012, and the transfer penalty period ended on
December 20, 2013.

The decision concerning the effective date

of eligibility and the imposition of other transfer penalties
are not the basis for Plaintiff’s claims in this case, which

2

On December 3, 2013, the Board found Plaintiff eligible for
benefits effective June 1, 2012. The Board imposed a transfer
penalty period of eighteen months and twenty days based on
uncompensated transfers Plaintiff made prior to her application.
These transfers did not include the annuity purchase.
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concerns the annuity.

In supplementation of their motion,

Defendants have submitted the August 18, 2014 final agency
decision by the Director of the Division of Medical Assistance
and Health Services for the State of New Jersey, which upheld
and adopted the initial decision.

Defendants posit that any

issues Plaintiff has with this decision can be appealed to the
New Jersey Superior Court, Appellate Division.
When Plaintiff filed her opposition to Defendants’ renewed
motion to dismiss, Plaintiff objected to the motion on two
bases.

First, Plaintiff considered Defendants’ renewed motion

to dismiss to effectively be an improper motion for
reconsideration of the Court’s decision on their first motion to
dismiss.

Second, Plaintiff argued that because she was still

waiting for a definitive eligibility decision from the Board,
the reasoning of the Court’s prior ruling was still applicable.
Plaintiff also argued that she might still be entitled to
damages and attorney’s fees.
Because the Board has addressed the claims in Plaintiff’s
complaint concerning the impropriety of treating Plaintiff’s
annuity purchase as an impermissible transfer, and because a
final agency decision has been issued, the Court agrees with
Defendants that Plaintiff’s claims for injunctive relief are now
moot.

Even though the Court recognizes that the administrative

process can be frustratingly slow, particularly when a county
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agency must work in tandem with a state agency while following
federal guidelines, and that dilatoriness is of amplified
concern when dealing with skilled nursing care for advanced-aged
Medicaid applicants, it is evident that Plaintiff has received
the relief sought in her complaint.

Plaintiff began receiving

Medicaid benefits in December 2013, which, despite the year and
a half long process, is the date she became eligible to receive
benefits after the conclusion of the transfer penalty period
that was imposed without consideration of the annuity.
At this point, there is no expectation that the violations
alleged by Plaintiff will recur, the events since the filing of
Plaintiff’s complaint have “completely and irrevocably
eradicated the effects of the alleged violation.”

Phillips v.

Pa. Higher Educ. Assistance Agency, 657 F.2d 554, 569 (3d Cir.
1981).

Thus, Plaintiff’s complaint with regard to her request

for injunctive relief presents no justiciable controversy.
Accordingly, despite the delay, 3 the Court finds that the Court
lacks subject matter jurisdiction over Plaintiff’s claim for

3

The Federal Medicaid Act requires states to process
applications and provide benefits with “reasonable promptness.”
42 U.S.C.A. § 1396a(a)(3), (8). Moreover, even though the
federal regulations contemplate that “unusual circumstances,”
such as “when there is an administrative or other emergency
beyond the agency’s control,” may justify a delay in processing
an individual’s Medicaid application, see 42 C.F.R. 435.912(e),
the proscribed standard for the determinations of eligibility,
except those based on disability, is forty-five days, 42 C.F.R.
435.912(c)(3). We note, whatever the circumstances that
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injunctive relief because it is now moot.

Defendants’ motion to

dismiss will, therefore, be granted on that claim.
Even though Defendants ultimately provided Plaintiff with
the relief she was seeking – namely, the determination that her
annuity was not an impermissible transfer – Plaintiff argues
that she is still entitled to damages and attorney’s fees and
costs.

With regard to damages, because the complaint does not

specifically seek damages, Plaintiff does not specify what they
are, and it is unclear what they would be in that the annuity
determination is no longer a factor in the ineligibility
calculus, it is clear that Plaintiff is not entitled to damages.
The issue of attorney’s fees and costs is a closer call.
Plaintiff filed suit, pursuant to 42 U.S.C. § 1983, against
Defendants to enjoin them from delaying the decision to
reconsider her Medicaid application based on Defendants’
incorrect view of Plaintiff’s annuity.

Although the Court

cannot definitively find at this time that it was a result of
Plaintiff filing a federal lawsuit, Defendants provided
Plaintiff with the relief she sought soon after she filed suit.
This raises the issue, not briefed by the parties, as to
whether under these circumstances – a defendant changes its

surrounded the processing of Plaintiff’s Medicaid application, a
sixteen month processing period does not appear to demonstrate
“reasonable promptness.”
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position and voluntarily provides complete relief on an asserted
claim prior to a judgment or other judicial ruling - Plaintiff
could be considered a “prevailing party” in this litigation.
Such status could entitle Plaintiff to attorney’s fees and costs
of prosecuting this action. See 42 U.S.C. § 1988 (“In any action
or proceeding to enforce a provision of section[ ] ... 1983 ...
of this title, the court, in its discretion, may allow the
prevailing party, other than the United States, a reasonable
attorney's fee as part of the costs.”); See e.g., National
Amusements Inc. v. Borough of Palmyra, 716 F.3d 57, 64 (3d Cir.
2013) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983))
(“Parties are considered ‘prevailing parties’ if ‘they succeed
on any significant issue in litigation which achieves some of
the benefit the parties sought in bringing suit.’”); id.
(explaining that temporary relief may support § 1988 fees, even
if the prevailing party does not obtain a final judgment in its
favor) (citing People Against Police Violence v. City of
Pittsburgh, 520 F.3d 226, 231 (3d Cir. 2008) (upholding award of
attorney's fees where organizer of rally obtained preliminary
injunction, but new legislation mooted case before final
judgment)).

Moreover, at least as for that issue, the case is

not moot.
The Court will therefore grant Defendant’s motion to
dismiss with regard to the substance of Plaintiff’s claims, but
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the Court will deny the motion with regard to Plaintiff’s
request for attorney’s fees and costs, and direct Defendants to
show cause as to why Plaintiff is not entitled to attorney’s
fees and costs as a “prevailing party” under 42 U.S.C §§ 1983,
1988.
An appropriate Order will be entered.

Date: January 28, 2015
At Camden, New Jersey

_ s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

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