Sulphur Manor, Inc. v. Burwell et al

Filing 37

ORDER by Judge Ronald A. White denying motion for injunction pending appeal ( 27 Motion for Preliminary Injunction ) (lal, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
SULPHUR MANOR, INC. d/b/a
CALLAWAY NURSING HOME,

)
)
)
Plaintiff,
)
)
v.
)
)
SYLVIA BURWELL, in her official capacity )
as Secretary of Health and Human Services, )
United States Department of Health and
)
Human Services; and
)
NICO GOMEZ, in his official capacity
)
as Chief Executive Officer, Oklahoma
)
Health Care Authority,
)
)
Defendants.
)

Case No. CIV-15-250-RAW

ORDER
Before the court is the motion of the plaintiff for injunction pending appeal. On July 8,
2015, this court entered a temporary restraining order (#11) against the defendants pending
determination of jurisdiction. On July 20, 2015, the court entered an order (#24) granting the
motion of defendant Burwell to dismiss for lack of subject matter jurisdiction. Plaintiff has
appealed that order and has filed the present motion, seeking relief pursuant to Rule 62(c)
F.R.Cv.P. The court denies the motion.1
First, although there is authority to the contrary, this court finds persuasive the view
that “[a]s this Court previously found that it lacks subject matter jurisdiction over this action,

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Plaintiff has not requested filing a reply brief. The court has elected to rule in the absence of a
reply, in any event. The court would permit and consider a reply brief if there were a factual issue (such as
whether plaintiff’s residents are in “immediate jeopardy”) that could be determinative. The court’s ruling
is not based on the “immediate jeopardy” issue, however, but based upon existing case law.

the Court finds that it lacks the authority to issue the requested injunctive relief during the
pendency of Plaintiff’s appeal.” Bayou Shores SNF, LLC v. Burwell, 2014 WL 4101761, *5
(M.D.Fla.2014). This view is also supporting by authority, which is cited in the district
court’s opinion.
Assuming arguendo this court has jurisdiction, the court must consider the following
four-factor test: (1) whether the stay applicant has made a strong showing that it is likely to
succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3)
whether issuance of the stay will substantially injure the other parties interested in the
proceeding; and (4) where the pubic interest lies. Nken v. Holder, 556 U.S. 418, 434 (2009).
The first two factors are “the most critical.” Id. The third and fourth factors merge when the
Government is the opposing party. Id. at 435.2
For the reasons stated in the court’s order dismissing this action, the court is unable
to conclude that plaintiff has made a strong showing that it is likely to succeed on the merits
of its appeal. Simply because the Tenth Circuit has not expressly ruled on certain issues
raised by plaintiff does not mean this factor is satisfied. Although the Tenth Circuit may
disagree should plaintiff seek a stay pursuant to Rule 8 of the Federal Rules of Appellate

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Traditionally, the Tenth Circuit has held that the first factor is “somewhat relaxed” if a movant is
able to establish that the “three harm factors” tip decidedly in its favor, and is satisfied by showing questions
going to the merits so serious, substantial, difficult, and doubtful as to make the issue ripe for litigation and
deserving of more deliberate investigation. See FTC v. Mainstream Mktg. Servs., Inc., 345 F.3d 850, 852-53
(10th Cir.2003). Recently, the court observed: “We are not persuaded, however, that this relaxed standard
is consistent with Supreme Court precedent.” Warner v. Gross, 776 F.3d 721, 728 n.5 (10th Cir.2015).

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Procedure, this court finds that the jurisdictional issues raised are resolved by statute and
existing case law.
Plaintiff has asserted irreparable harm in (1) the loss of Medicare and Medicaid
payments will force plaintiff to close; (2) the forced closure will cause transfer trauma to its
residents; and (3) the forced closure will affect staff and the local economy. The court agrees
with defendant Burwell that “[Plaintiff] has standing to assert only the first category of
alleged harm.” (#34 at 9). It is also true that “[Plaintiff] provides no evidence of its financial
condition, the state of its reserves, or whether its owner operates other facilities that could
pool resources.” (Id. at 9-10). Again, if this factual issue were dispositive, the court would
direct plaintiff to file a reply brief addressing it. This court has found that it lacks jurisdiction
to grant the relief requested, and is simply addressing the four-factor test in the interest of
thoroughness.
As stated, with respect to the balance of equities and the public interest, these two
factors merge into one inquiry – whether an injunction is in the public interest – where, as
here, the government is the opposing party. See Drakes Bay Oyster Co. v. Jewell, 747 F.3d
1073, 1092 (9th Cir.2013). The court concludes granting plaintiff’s motion is not in the
public interest. There is a significant risk that the government would be unable to recover
overpayments made during the duration of the appeal. Also, there is a public interest in

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ensuring compliance with Medicare and Medicaid requirements and enforcing discipline
against non-compliance.3
It is the order of the court that the motion for injunction pending appeal (#27) is
hereby denied.
ORDERED THIS 29th DAY OF JULY, 2015.

Dated this 29th day of July, 2015.

J4h4i0

3

Defendants made a finding of “immediate jeopardy” to plaintiff’s residents subsequent to the initial
notice of termination. Plaintiff has submitted an affidavit challenging the factual basis for the finding (#331). Also, the fact that this finding was made after plaintiff had commenced litigation leads plaintiff to
suggest possible retaliation. The court is not relying upon the “immediate jeopardy” finding for purposes
of the present ruling as its resolution is not necessary.

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