Municipio Autonomo de Ponce et al v. U.S. Office of Management and Budget et al

Filing 53

OPINION AND ORDER denying 52 Defendants' Motion for Reconsideration. See Opinion and Order for details. Signed by Judge Jose A. Fuste on 9/16/2014. (CP)

UNITED STATES DISTRICT COURT
DISTRICT OF PUERTO RICO

1
2
3
4

MUNICIPIO AUTONOMO DE PONCE et
al.,
Civil No. 3:14-cv-01502 (JAF)
Plaintiff,
v.
UNITED
STATES
OFFICE
OF
MANAGEMENT AND BUDGET, et al.,
Defendant.
5
6

OPINION AND ORDER

7

Plaintiffs,1 including the Municipio Autónomo de Ponce (“Ponce”), sued

8

Defendants, 2 including the United States Office of Management and Budget (“OMB”),

9

the United States Department of Health and Human Services (“HHS”), and the United

10

States Health Resources and Services Administration (“HRSA”), when their funding was

11

discontinued under the Ryan White CARE (Comprehensive AIDS Resources

12

Emergency) Act.

13

Transitional Grant Area (“TGA”)4 were drawn in an arbitrary and capricious manner,

1

3

Plaintiffs alleged that the geographic boundaries for the Ponce

Plaintiffs include the Municipio Autónomo de Ponce (“Ponce”), Centro Deambulantes Cristo Pobre, Inc., Hogar
Crea Posada La Esperanza, Lucha Contra el SIDA, Inc., Iniciativa Comunitaria, Inc., Itcia Hernández Laboy, Jorge
Ortiz Torres, and José Alvarez Medina. (Docket No. 1.)
2
Defendants include the United States Office of Management and Budget (“OMB”); Brian Deese, Acting Director
of OMB; United States Department of Health and Human Services (“HHS”); Sylvia Mathews Burnwell, Secretary
of HHS; United States Health Resources and Services Administration (“HRSA”); and Mary K. Wakefield,
Administrator of HRSA.
3
The Ryan White legislation (Public Law 101-381) provides “emergency assistance to localities that are
disproportionately affected by the Human Immunodeficiency Virus epidemic.” 42 U.S.C. § 300ff.
4
Part A of the Ryan White legislation provides funding to eligible metropolitan areas (“EMAs”). 42 U.S.C. § 300ff
-11. If a metropolitan area does not have enough cases to qualify as an EMA, it can qualify as a “transitional area”
(also known as a transitional grant area, or “TGA”). The Office of Management and Budget separately draws
boundary lines called Metropolitan Statistical Areas (“MSAs”) for statistical collection purposes. (Docket No. 42-2
at 18.) These MSAs were largely adopted as the boundaries for the Ryan White legislation. (Docket No. 42-2 at
18.)

Civil No. 3:14-cv-01502 (JAF)

-2-

1

leading to improper revocation of funding. (Docket No. 1.) Plaintiffs asked that we

2

order HHS/HRSA to cease its use of the current Ponce boundaries, consider the correctly

3

delineated boundaries, stay the closing of the Ponce TGA, and secure and grant the 2014

4

funds to the Ponce TGA. (Docket No. 1 at 5.) At a Show Cause Hearing, the parties

5

consented to have the matter resolved on paper. (Docket No. 12.)

6

On August 12, 2014, we issued an opinion, order, and judgment. We found in

7

favor of Plaintiffs, declaring that the Ponce TGA boundaries were unlawful as they now

8

stand. We denied prospective funding relief for Fiscal Year 2014, however, finding that

9

that issue was moot. (Docket Nos. 48, 49.)

10

On November 8, 2014, Defendants filed a motion for reconsideration pursuant to

11

Federal Rule of Civil Procedure 59(e). (Docket No. 52.) Rule 59(e) states that the

12

motion to alter or amend judgment must be filed within twenty-eight days of the entry of

13

judgment. Fed. R. Civ. P. 59(e). Defendants met this timeline. (Docket No. 52.) In

14

their motion, Defendants argue that we should have afforded deference to agency

15

expertise because they were statutorily required to use MSA definitions.

16

alternative, they argue that the boundaries were a reasonable exercise of HHS’ discretion

17

and were not arbitrary. Finally, Defendants argue that the statute of limitations under the

18

Administrative Procedure Act (“APA”) bars the suit. (Docket No. 52 at 2-3.) For the

19

following reasons, we are not persuaded by Defendants’ arguments.

20
21
22

In the

Civil No. 3:14-cv-01502 (JAF)

-3-

1

I.

2

Analysis

3

1. Statute of Limitations

4

Defendants argue that any “challenge to HHS’ use of the OMB’s MSA delineation

5

is time barred pursuant to the Administrative Procedure Act (APA).” (Docket No. 52 at

6

19.) Defendants cite to 28 U.S.C. § 2401, which provides that civil actions against the

7

United States “shall be barred unless the complaint is filed within six years after the right

8

of action first accrues.” 28 U.S.C. § 2401. It is true that the OMB MSAs have been used

9

throughout the history of the Ryan White program; that Ponce was re-labelled a TGA

10

when that category was created in 2006; and that Ponce was advised in 2009 that it was

11

in danger of losing its funding grant after three years. (Docket No. 52 at 19.)

12
13

However, it is well established that a dispute must become ripe before it can be
brought to a federal court, including disputes over administrative decisions. The
basic rationale is to prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract disagreements over
administrative policies, and also to protect the agencies from judicial
interference until an administrative decision has been formalized and its
effects felt in a concrete way by the challenging parties.

14
15
16
17
18
19
20

Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49 (1967). We must “evaluate both

21

the fitness of the issues for judicial decision and the hardship to the parties of withholding

22

court consideration.” Id. at 149. Because the second prong – the hardship of withholding

23

consideration – has been covered in our previous opinion, we deal only with the first

24

prong – fitness for judicial review. (See Docket No. 48 at 11-12.)

Civil No. 3:14-cv-01502 (JAF)

-4-

1

To be ripe, the regulations’ impact on petitioners must be “sufficiently direct and

2

immediate as to render the issue appropriate for judicial review.” Id. at 152. This occurs

3

“where the impact of the administrative action could be said to be felt immediately by

4

those subject to it in conducting their day-to-day affairs….[and] in which primary

5

conduct is affected.” Toilet Goods Ass’n, Inc. v. Gardner, 387 U.S. 158, 164 (1967).

6

Agency action is fit for review once “the scope of the controversy has been reduced to

7

more manageable proportions, and its factual components fleshed out, by some concrete

8

action applying the regulation to the claimant’s situation in a fashion that harms or

9

threatens to harm him.”

Lujan v. National Wildlife Federation, 497 U.S. 871, 891

10

(1990)(which lists the only major exception as “a substantive rule which as a practical

11

matter requires the plaintiff to adjust his conduct immediately”). The phrase “harms or

12

threatens to harm” is fleshed out later in the opinion, which states that the challenged

13

agency action must have an “actual or immediately threatened effect.” Id. at 894.

14

In this case, Ponce continued to receive funding through the Ryan White

15

legislation despite several legislative changes and ratifications. (See Docket No. 48.)

In

16

2009, HHS informed Ponce that it might lose its funding after three more years,

17

depending on future circumstances.

18

“immediately threatened effect.” See Lujan, 497 U.S. at 894. It was not until October

19

12, 2012, that HHS informed the mayor of Ponce that her area would not qualify for

20

funding after Fiscal Year 2013. (Docket No. 27-3 at 1.) At that time, the Resident

21

Commissioner of Puerto Rico and the mayor of Ponce took action. (Docket No. 48 at 6-

22

7.) That was the first immediately threatened harmful action, and therefore it was on that

However, a plaintiff must suffer from an

Civil No. 3:14-cv-01502 (JAF)

-5-

1

date that the right of action accrued. Therefore, the statute of limitations began October

2

12, 2012 and runs until October 12, 2018, well beyond the time this lawsuit was filed.

3

2. Use of OMB definitions

4

Defendants argue that the “statute requires HHS to use OMB’s definitions of a

5

Metropolitan Statistical Area when determining eligibility for Ryan White HIV/AIDS

6

Program assistance.” (Docket No. 52 at 5.) They also argue there were “mandates by

7

Congress to use the OMB definitions.” (Docket No. 52 at 5.)

8

contention at length in our prior opinion, and found no evidence that HHS was required

9

to use OMB’s definitions. (Docket No. 48 at 8-9.) Further, we remind Defendants of

10

their own argument that “[n]on-statistical programs, such as the Ryan White HIV/AIDS

11

Program, are not legally obliged to utilize OMB’s delineations and are not bound by said

12

delineated statistical areas.” (Docket No. 11 at 2.)

13

We discussed this

3. Agency discretion

14

Defendants argue that using MSA delineations to determine the metropolitan area

15

boundaries is a “permissible construction of the statute, and thus, is a reasonable exercise

16

of the agency’s discretion in carrying out the statute.” (Docket No. 52 at 15.) Defendants

17

state that we cannot substitute our view for that of the agency. (Docket No. 52 at 17.)

18

However, we reiterate our early order. The burden is on the agency to show “a rational

19

exercise of deliberative decisionmaking,” consideration of all pertinent facts in a detailed

20

and reasoned manner, and the absence of unexplained discrimination. (Docket No. 48 at

21

14-16) (quoting Assoc. Fisheries of Maine, Inc. v. Daley, 127 F.3d 104, 111 (1st Cir.

22

1997)). Defendants have repeatedly failed to do so.

Civil No. 3:14-cv-01502 (JAF)
1

-6-

4. Peripheral Issues

2

Defendants argue that our ruling “considered issues not presented by the parties by

3

drawing comparisons between the way the OMB defines the metropolitan areas in New

4

England states and the way metropolitan areas are defined in Puerto Rico.” (Docket No.

5

52 at 17.) To determine whether Defendants drew boundaries in a way that was arbitrary

6

and capricious, we needed to look at the definition of those boundaries. The official

7

definition states that OMB MSAs were used for all areas except the New England states.

8

(Docket No. 42-2 at 18.) That definition cannot be outside the scope of this case.

9

In their motion to reconsider, Defendants write that the New England states are “a

10

long-standing exception […] and this exception is based on rational, historical differences

11

[….] and one based on eminently reasonable grounds.” As we have already stated,

12

arbitrary and capricious review requires an explanation of otherwise unexplained

13

discrimination. (Docket No. 48 at 16.) We find that Defendants have not provided any

14

substantive explanation for this discrimination.

15

At the end of their motion, Defendants also ask for reconsideration because

16

“[t]here is no evidence in the record of this case that the economic integration alleged by

17

the Plaintiffs to exist in 2014, existed in 1993.” (Docket No. 52 at 20.) As we stated in

18

our previous order, there is likewise no evidence that it did not exist. (Docket No. 48 at

19

11). Stating that they failed to gather information does not help Defendants show that

20

they made a reasoned decision after considering all factors.

21
22

Civil No. 3:14-cv-01502 (JAF)

-7-

5. Standards

1
2

Defendants argue that our holding “makes it impossible to apply an objective set

3

of standards nationwide, forcing the Agency to issue case-by-case determinations of

4

appropriate boundary areas for prospective grantees.” (Docket No. 52 at 18.) Defendants

5

write that the “Ponce MSA is defined in the same way as every other MSA.” (Docket

6

No. 52 at 18.) First, we have established that metropolitan areas in the New England

7

states are not drawn in the same way as the Ponce MSA. (Docket No. 48 at 9.) Second,

8

this does not adequately explain the rationale even for adopting OMB boundaries outside

9

New England.

10

As discussed in our earlier opinion, Defendants do not explain how the Ponce

11

region was decimated, effectively creating a non-explained, implausible situation where

12

in Puerto Rico, San Juan is the only funded region. The island is several hours across by

13

private car.5 The HIV death rate is nearly four times higher than the U.S. national rate.

14

(Docket No. 48 at 12.)

15

themselves. However, as we stated in our previous opinion, “this failure to make rational

16

deliberative decisions regarding Puerto Rico is unjust and unacceptable in a democracy,

17

and it has grave consequences for the 3.6 million residents of Puerto Rico.” (Docket No.

18

48 at 17.)
5

6

Defendants still appear to believe that they need not explain

Search for “Puerto Rico” in Google Maps, http://maps.google.com (follow “Get Directions” hyperlink; then search
“A” for “Fajardo” and search “B” for “Aguada” to view one route).
6
ABC News recently reported that “the island has one of the highest HIV/AIDS infection rates in the U.S.”
Alexander Hotz & Kristopher Rios, Puerto Rico has One of the Highest HIV/AIDS Rates in the U.S., ABCNEWS
(Jul. 15, 2013), http://abcnews.go.com/ABC_Univision/News/isla-de-desencanto-puerto-ricos-public-healthcrisis/story?id=19672575. We additionally point to HRSA’s own data from 2011, stating that 18, 129 adults and
adolescents in Puerto Rico have HIV/ AIDS, and that in 2011, 888 persons in Puerto Rico were first diagnosed with
HIV infection. HEALTH RES. & SERVS. ADMIN., 2011 State Profiles: Ryan White HIV/AIDS Program,
http://hab.hrsa.gov/stateprofiles/HIV-AIDS-Epidemic.aspx#section1 (last visited Sep. 15, 2014).

Civil No. 3:14-cv-01502 (JAF)

-8-

1

II.

2

Conclusion

3
4

For the foregoing reasons, we DENY Defendant’s motion for reconsideration
(Docket No. 52).

5

IT IS SO ORDERED.

6

San Juan, Puerto Rico, this 16th day of September, 2014.

7
8
9

S/José Antonio Fusté
JOSE ANTONIO FUSTE
U. S. DISTRICT JUDGE