FLADE v. CONNOLLY et al
OPINION filed. Signed by Judge Anne E. Thompson on 12/22/2016. (eaj)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DEC 23 2016
WILLIAM T. WALSH
Civ. No. 16-4407
ELIZABETH CONNOLLY, ACTING
COMMISSIONER, NEW JERSEY
DEPARTMENT OF HUMAN SERVICES;
and MEGHAN DAVEY, DIRECTOR, NEW
JERSEY DEPARTMENT OF HUMAN
SERVICES, DIVISION OF MEDICAL
ASSISTANCE AND HEALTH SERVICES,
This matter has come before the Court on the Second Motion for a Preliminary Injunction
brought by Plaintiff Eileen Flade ("Plaintiff'). (ECF No. 11 ). Defendants Elizabeth Connolly
and Meghan Dayey (''Defendants") oppose the motion. (ECF No. 12). -The Court has decided
the. motion_b'1;S~~ ~n. the written submissions of the_ parties and a hearing on the motion on
30, 2016. For the reasons stated herein, Plaintifrs motion will be denied.
BACKGROUNDMuch ofthefoleva.llt factual history is faid.out in this Court's Opinion dated September
23, 2016 _and incorporated by reference herein. ("September 23rd Opinion," ECF No. 9). On
August 2~ 2016, Plaintiff filed a motion for preliminary injunction ("First Motion"), seeking to
enjoin Defendants' from treating assets currently in her husband's estate as an "available
resource" to her for the purposes of determining Medicaid eligibility. (See ECF No. 6). On
August 24, 2016, Defendants' filed a cross-motion to dismiss Plaintiff's Complaint. (See ECF
No. 7). On September 23, 2016, this Court denied Plaintiff's motion for a preliminary injunction
and also denied Defendants' cross-motion to dismiss Plaintiffs complaint. (ECF No. 10).
Subsequently, Plaintiff filed a second motion for preliminary injunction. ("Second
Motion," ECF No. 11). Plaintiffs Second Motion alleges new facts not previously mentioned in
her first motion or her complaint. First, Plaintiff alleges that, after Plaintiff's initial application
for Medicaid benefits was denied on June 9, 2016, Plaintiff filed a second application for
Medicaid benefits on July 7, 2016. ("July 7th Application"). On September 26, 2016, Plaintiff
submitted a fair hearing request on her July 7th application to the State Office of Administrative
Law. (Def. Opp'n at 3, 5, ECF No. 12). Plaintiff alleges that Defendants have refused to act on
this application in violation of federal law. (Second Mot. at 9-10, ECF No. 11). However,
despite that allegation, Plaintiff informed the Court that she requested the state fair hearing
request be put on the inactive list for six months pending the resolution of this case. (ECF No.
14 at 6).
_Second, as previously ~iscussed, Plaintiff _likely faces a "penalty period'-' for making
uncompensated asset transfers during Medicaid's five-year lookback period. Plaintiff now
alleges that once she is found to be otherwise eiigible for Medicaid benefits, she would likely be
prohibited from receiving certain Medicaid benefits for a penalty period of approximately six
months. (Second rJ~t. -at g:._9, ECF No. 11 ). Plaintiff also alleges that while this likely penalty
period would prohibit her from receiving institutional level services that Medicaid provides, such
as the nursing home bill for room and board, it would not prohibit her from receiving ancillary
services, such as presctiptiort drugs, that New Jersey's Medicaid program provides. (ECF No. 14
Plaintiffs Second Motion seeks two forms of relief: (1) to preliminarily enjoin
Defendants' from treating assets currently in her husband's estate as an "available resource" to
her for the purposes of determining Medicaid eligibility (the same relief sought in Plaintiff's
First Motion); and (2) to preliminarily enjoin Defendants to start a penalty period for any
uncompensated transfers that Plaintiff or her spouse made during the applicable five-year
"lookback" period. (See ECF No. 11). Plaintiff's Second Motion is presently before the Court.
The grant or denial of a preliminary injunction is within the discretion of the Court. See
American Exp. Travel Related Services, Inc. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d Cir.
2012). The primary purpose of preliminary injunctive relief is "maintenance of the status quo
until a decision on the merits of a case is rendered." Acierno v. New Castle County, 40 F.3d 645,
647 (3d Cir.. 1994). The decision to issue a preliminary injunction order is governed by a fourfactor test, wherein Plaintiff must demonstrate:
· -. (1) that [she-is]-teasonably likely to prevail eventually in the litigation and (2) that
[she· is] likely kf suffer irreparable injury without relief. If these two threshold
showings· are.made the District Court then considers, to the extent relevant, (3)
whether an injunction would hann the [defendants] more than denying relief would
harm the.plaintiffl] and (4) whether granting relief would.serve the public interest.
K.A. ex reL Ayers v~ Pocono Mountain Sch. Dist., 710 F.3d 99, 105 (3d Cir. 2013) (quoting
Tenafly EruvAss'n v. Borough of Tenafly, 309 F.3d 144, 157 (3d Cir-. 2002)).
A preliminary injunction is an "extraordinary remedy, which should be granted only in
limited circumstances," Instant Air Freight Co. v. C. F~ Air Freight, Inc., 882 F.2d 797, 800 (3d Cir. 1989), and'is·"never awarded as of right." Groupe SEB USA, Inc. v. Euro-ProOperating,
LLC, 774 F.3d 192, 197 (3d Cir. 2014) (quoting Winter v. Natural Res. Def Council, Inc., 555
U.S. 7, 24 (2008)).
The first factor in a preliminary injunction analysis is whether Plaintiff is reasonably
likely to prevail in the litigation. K.A. ex rel. Ayers, 710 F.3d at 105. In this Court's September
23rd Opinion, the Court found that Plaintiff has a reasonable likelihood of success on the merits
of her claim. (September 23rd Opinion at 4-5, ECF No. 9). While the parties have not presented
new arguments on this factor, the Court has re-examined this factor and is no longer persuaded
that Plaintiff has demonstrated a likelihood of success of the merits. Federal law provides that
the resources of an "institutionalized spouse" are determined at the time of application for
benefits. 42 U.S.C.A. § 1396r-5(c). In New Jersey, resource eligibility for Medicaid benefits is
determined as of the first moment of the first day of each month in the month of application,
(N.J.A.C. 10:71-4.l(e)(l)), or ''the first moment of the first day of the month of application for
Medicaid" (N.J.A.C. 10:71-4.8(a)(2)). In this case, Plaintiff was considered an "institutionalized
spouse," and thereforethe resources available to her are to be determined at the time of
-·~· · application for benefits or the first day of that month. Plaintiff applied for Medicaid benefits on
April 12, 2016, and therefore-the resources available to her are to be determined on April 12 or
, April I, 2016. At that time, Plaintiffs late husband was still living. (Second Mot. at 2---3, ECF
· No. 11 ). As a result, the Court is persuaded that Defendants properly counted the resources held
_by her husband as resources available to Plaintiff in assessing her application.
Plaintiffs late husband's subsequerttpassing on April 29, 2016 could potentially change
how those assets are treated in a subsequent application; such as the July 7th application.
However, by Plaintiffs own admission, the July 7th application "has nothing whatsoever to do
with the basis for the denial of the application that is.before this Court." (ECF No. 14 at 6). To
the contrary, Plaintiffs Complaint, which was filed on July 20th, does not mention the July 7th
application. Plaintiffs Complaint only alleges that Defendants violated federal law by treating
her late husband's assets as available to Plaintiff in evaluating her April 12, 2016 application.
The Court is not persuaded that Plaintiff has carried its burden of demonstrating a likelihood of
success on the merits of this claim. Therefore, this factor weighs against granting an injunction.
The second factor is whether Plaintiff is likely to suffer irreparable harm without relief.
See K.A. ex rel. Ayers, 710 F.3d at 105. "The irreparable harm requirement is met if a plaintiff
demonstrates a significant risk that he or she will experience harm that cannot be adequately
compensated after the fact by monetary damages." Adams v. Freedom Forge Corp., 204 F .3d
475 (3d Cir. 2000). This Court has previously found that the serious risk of discharge from a
nursing facility for non-payment of fees satisfies the irreparable harm requirement. Sorber v.
Velez, 2009 WL 3491154, at *4 (D.N.J. Oct. 23, 2009).
In this case, Plaintiff argues that she. is at serious risk of discharge from her current
nursing facility for non-payment of fees. (Second Mot. at 11, ECF No. 11 ). In deciding
Plaintiffs First Motion, the Court found that this was not sufficient to qualify as irreparable harm
.due to the likelihood that the penalty period would be imposed, and would disqualify her from . ·
the immediate receipt of Medicaid benefits. (September 23rd Opinion at 5, ECF No. 9).
Plaintiff, however, alleg~~_anew fact in her Second Motion. Based on the undisputed; .
uncoll:ipertsated ass.et trail~fersdisclosed .by Plaintiff in her initial application for Medicaid .
benefits, the penalty period likely:to be-imposed on her would be 181 days or approximately si~·months_.-
·(Secon~ Mot. at ~~9;ECRNo~·ll). Therefore, if Plaintiff~prevails in this litigation and:·_·
is found to have quali~ed _for benefits as of May 1, 2016, the penalty period that this Court
discussed in deciding Plaintiff's First Motion would likely be 181 days. Therefore, the penalty
period would have run from May 1, 2016 through approximately October 28, 2016.
A final determination as to Plaintiffs eligibility for the receipt of Medicaid benefits has
not yet been made by this Court However, as a result of Plaintiff's new allegations, the Court is
persuaded that if Plaintiff were to ultimately prevail in this litigation, she would likely be
otherwise eligible to receive benefits today. Plaintiff alleges that she currently faces a likelihood
of irreparable harm because there is a serious risk that she will be discharged from her nursing
care facility due to non-payment of bills. This Court is persuaded that this satisfies the
likelihood of irreparable harm factor, and therefore, the second factor weighs in favor of granting
a preliminary injunction.
The third factor is whether an injunction would harm the defendant more than denying
relief would harm the plaintiff. See K.A. ex rel. Ayers, 710 F.3d at 105. The Court's analysis of
this factor is affected by the level ofharm likely to be suffered by Plaintiff. Defendant may be
required to expend a substantial sum of money if a preliminary injunction were granted. The
Court is mindful of this potential harm, but the Court finds that the likely irreparable harm
Plaintiff may suffer outweighs the potential harm to Defendants in this case. Therefore, this
factor weighs in favor of granting a preliminary injunction.
The fourth factor is thepublfo interest.cK;A.::ex rel. Ayers, 710 F.3d at 105. This factor is
particularly relevant here because if the Court were to grant a preliminary injunction, Defendants
: could be required to· use public funds to provide- Medicaid benefits to an individual prior to a
.- · -.
final determination that the individual is eligible· for.such: benefits. In this case, the Court is not
·. ·, persuaded that Plaintiff has in good.faith pursued all-avenues of relief available to her. Plaintiff
· -has yet fo claim the elective share of her late husband's estate that she is entitled to under New
l l at·4}~.'"Additionally, Plaintiffdid not submit a fair hearing request to the
·Office of Administrative :Law on her first application for Medicaid benefits as she was permitted
to do. Lastly; while Plaintiff has submitted a fair hearing request on the July 7th application,
Plaintiff has-requested that her fair hearing request be·put on the inactive list pending the
resolution of this lawsuit. (ECF No. 14 at 6).
Given that the issuance of a preliminary injunction is an "extraordinary remedy," Instant
Air Freight Co., 882 F.2d at 800, and is ''never awarded as of right," Groupe SEB USA, Inc., 774
F .3d at 197, the Court is not persuaded that it would be in the public interest to enjoin
Defendants to use public funds to immediately provide Plaintiff with Medicaid benefits prior to a
final determination by this Court as to her eligibility for such benefits. As a result, the Court
finds that the public interest favors denying a preliminary injunction here.
The Court is not persuaded that Plaintiff here has demonstrated that she is entitled to the
issuance of a preliminary injunction. Therefore, Plaintiff's second motion for a preliminary
injunction will be denied. An appropriate order will follow.
ANNE E. THOMPSO:USfil
__ : · : : - · .
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