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Berger v. Cochran

United States District Court, E.D. North Carolina, Western Division

January 27, 2017

PHIL BERGER, in his official capacity as President Pro Tempore of the North Carolina Senate; and TIM MOORE, in his official capacity as Speaker of the North Carolina House of Representatives, Plaintiffs,
v.
NORRIS COCHRAN, in his official capacity as Acting Secretary of the United States Department of Health and Human Services; THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; PATRICK CONWAY, in his official capacity as Acting Administrator for the Centers for Medicare and Medicaid Services; THE CENTERS FOR MEDICARE AND MEDICAID SERVICES; RENARD MURRAY, in his official capacity as Regional Administrator for the Office of the Assistant Secretary for Health, U.S. Department of Health and Human Services, Region IV; DEMPSEY BENTON, in his official capacity as Interim Secretary of the North Carolina Department of Health and Human Services, Region IV; and THE NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES; Defendants.

          ORDER

          LOUISE W.FLANAGAN United States District Judge

         This matter, [1] the subject of a temporary restraining order entered by the court January 14, 2017, comes now before the court on plaintiffs' motion for preliminary injunction (DE 6), and defendants' emergency motions to dissolve or vacate the court's temporary restraining order.[2] (DE 10, 12). Also before the court is a joint motion to stay litigation (DE 33) filed January 25, 2017, by plaintiffs and defendants the United States Department of Health and Human Services; Patrick Conway; the Centers for Medicare and Medicaid Services, and defendants Norris Cochran and Renard Murray in their official capacities (collectively “the federal defendants”). Defendants the North Carolina Department of Health and Human Services and Dempsey Benton in his official capacity (collectively “the state defendants”) alerted the court yesterday to their position on the motion to stay.

         BACKGROUND

         Plaintiffs seek declaratory and injunctive relief alleging imminent violations of the Social Security Act, the Administrative Procedure Act, the Guarantee Clause of the United States Constitution, and the Tenth Amendment to the United States Constitution. Plaintiffs allege that where the state defendants plan to submit, and the federal defendants plan to approve, an immediately binding amendment to North Carolina's Medicaid policy (“state plan amendment”), defendants' actions threaten to violate federal law.

         Plaintiffs requested and were allowed an emergency temporary restraining order against defendants, prohibiting them from taking further action regarding the proposed state plan amendment. Simultaneously, plaintiffs moved the court to enter preliminary injunction to prevent the same action pending full resolution of the case.

         In support of its motion for preliminary injunction, plaintiffs contend they are entitled to preliminary relief where defendants have not first sought approval from the North Carolina General Assembly (“General Assembly”) to submit the proposed state plan amendment as deemed required under law.

         The federal defendants initially contended, prior to change in administration, under the auspices then of Sylvia Burwell, in her official capacity as Secretary of the United States Department of Health and Human Services, and Andrew Slavitt, in his official capacity as Acting Administrator for the Centers for Medicare and Medicaid Services, that plaintiffs lack standing to bring this action, the federal defendants' actions are not final for purposes of the Administrative Procedure Act, plaintiffs lack a cause of action under the Social Security Act, plaintiffs' constitutional claims are meritless, plaintiffs do not face irreparable injury, and the balance of equities weighs against injunctive relief.

         The state defendants echoed in their filings the federal defendants' arguments and, in addition, contend that the temporary restraining order, due to expire tomorrow unless extended, should be dissolved because the 11th Amendment bars plaintiffs' claims, abstention doctrines require dismissal or stay, the case is unripe for adjudication, and plaintiffs failed to comply with the requirements of Federal Rule of Civil Procedure 65(b)(1) in seeking the restraining order.

         In the joint motion filed by plaintiffs and the federal defendants, including now instead of Sylvia Burwell, who no longer is serving the administration, Norris Cochran, Acting Secretary of the United States Department of Health and Human Services; and now instead of Andrew Slavitt, who no longer is serving the administration, Patrick Conway, Acting Administrator for the Centers for Medicare and Medicaid Services, [3] the federal defendants assert they will take no action on any proposal received from the state defendants for a period of 89 days from date of receipt other than to review and to request any additional information deemed necessary to complete a review.

         After 60 days have elapsed, which time is sought to evaluate under the new administration the issues in this case, a joint notice will be filed alerting that if there is deemed a “live dispute” between the parties, a new date will be proposed for the federal defendants to file their response to plaintiffs' motion for preliminary injunction otherwise due so the court will be in a position to rule on plaintiffs' motion, then fully briefed, before the deadline the federal defendants propose for taking action on any proposal submitted by the state defendants.

         Interpreting the joint motion to include some recognition that the temporary restraining order should expire by its own terms tomorrow, January 28, 2017, the state defendants offer in their response to plaintiffs' and the federal defendants' joint motion, they have, of course, no objection to expiration of that order. Secure with the federal defendants' agreement not to act on any plan until after the 89th day on which it was received and by which time briefing on plaintiffs' motion will be fully formed, the state defendants presume plaintiffs no longer seek relief preventing them from submitting a proposed state plan amendment to the federal defendants. On this understanding, the state defendants withdraw their emergency motion and deem plaintiffs temporarily to have abandoned their motion for preliminary injunction. The state defendants presage that “promptly” they will be filing in response to the complaint, in accord with any schedule set by this court, a motion to dismiss plaintiffs' claims against them.

         DISCUSSION

         While the thrust of the joint motion to stay is directed towards timing of the federal defendants' response to plaintiffs' motion for preliminary injunction, as pointed out by the state defendants, there is a procedural obligation, too, by defendants timely to respond to the complaint by answer and/or motion.[4] The court reads into the joint motion that there is agreement by plaintiffs to a delay by defendants in responding to complaint and that, in fact, plaintiffs and the federal defendants agree to a stay of all action for at least 60 days. The state defendants want very soon, however, to file anticipated motion to dismiss, it appears.

         It would also seem that the federal defendants implicitly agree to withdraw their emergency motion. At the very least, their determination not to act on any proposed state plan amendment until after the 89th day after its receipt ameliorates stated ...


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