Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Eastpointe Human Services v. North Carolina Department of Health And Human Services

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

June 29, 2017

EASTPOINTE HUMAN SERVICES, Plaintiff,
v.
NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, NASH COUNTY, TRILLIUM HEALTH RESOURCES, MANDY K. COHEN, in her official capacity as Secretary of the North Carolina Department of Health and Human Services, and RICHARD O. BRAJER, in his individual and former official capacity as Secretary of the North Carolina Department of Health and Human Services, Defendants.

          ORDER

          LOUISE W. FLANAGAN United States District Judge.

         This matter is before the court on defendants' separate motions to dismiss for lack of jurisdiction. (DE 26, 30, and 31). Also pending before the court is plaintiff's motion for temporary restraining order (“TRO”). (DE 6). In this posture, the issues raised are ripe for ruling. For the reasons that follow, defendants' motions to dismiss are granted and plaintiff's motion for TRO is denied as moot.

         BACKGROUND

         Plaintiff initiated this action on June 8, 2017, against defendants Trillium Health Resources (“Trillium”), Nash County, North Carolina Department of Health and Human Services (“NCDHHS”), Mandy K. Cohen, in her official capacity as Secretary of the NCDHHS, and Richard O. Brajer, in his individual and former official capacity as Secretary of the NCDHHS, alleging both North Carolina state and federal claims, all arising from defendants' involvement in the proposed disengagement of Nash County from plaintiff's catchment area. Plaintiff asserts state law claims against defendants for civil conspiracy and violation of the North Carolina Constitution. Plaintiff also asserts state law claims against defendant Nash County for breach of contract and breach of implied covenant of good faith and fair dealings and claims against defendants Brajer and Trillium for tortious interference with contract. In addition, plaintiff asserts claims against defendants for violation of 42 C.F.R. § 438.62, violation of Article I, Section 10 (the “Contracts Clause”), and violation of the Due Process Clause of the Fifth and Fourteenth Amendments to the United States Constitution.[1] Plaintiff seeks declaratory judgment and monetary damages. At the time of filing of complaint, plaintiff also filed the instant ex parte motion for temporary restraining order, seeking to enjoin defendants (save defendant Brajer), from proceeding with Nash County's disengagement.

         On June 9, 2017, defendants NCDHHS and Cohen responded preliminarily in opposition to plaintiff's motion, contending that the court lacks jurisdiction over the matter as required by 28 U.S.C. § 1331. Defendant Trillium responded in a fully formed opposition memorandum to plaintiff's motion on June 12, 2017, contending that plaintiff is not entitled to injunctive relief because it cannot demonstrate success on the merits.

         On June 13, 2017, the court held telephonic administrative conference.[2] At conference, the court discussed pending issues, including jurisdictional issues raised by defendants NCDHHS and Cohen, as well as issues surrounding plaintiff's motion for TRO, and set expedited briefing schedule as follows: 1) Defendants' motions to dismiss regarding jurisdictional issues due by June 15, 2017, with plaintiff's response thereto due by June 19, 2017, and any reply due by June 21, 2017; and 2) the North Carolina defendants' response to plaintiff's motion for TRO due June 20, 2017, with any reply by plaintiff due June 23, 2017. In accordance with the court's schedule, defendants filed the instant motions to dismiss, to which plaintiff has responded and defendants replied, concluding briefing on defendants' motions on June 21, 2017. On June 20, 2017, defendants responded in opposition to plaintiff's motion for TRO, which all parties acknowledged at conference should be treated as a motion for preliminary injunction.

         In the midst of the court's briefing schedule, on June 20, 2017, defendant NCDHHS allegedly sent plaintiff a contract, which purports to exclude Nash County from its catchment area. Defendant requested by email dated June 20, 2017, sent at 6:02 p.m. by Lynn Fowler, a contract specialist for defendant NCDHHS to Sarah Stroud, on behalf of plaintiff, that the contract be executed and returned no later than June 23, 2017. On June 22, 2017, plaintiff filed an motion for emergency relief, seeking to preserve the status quo pending resolution of plaintiff's request for injunctive relief. By order dated June 26, 2017, the court dismissed plaintiff's motion for emergency relief as moot, reserving ruling on plaintiff's request for fees, pending disposition of the instant action.

         STATEMENT OF FACTS

         The facts alleged in the complaint may be summarized as follows. Defendant NCDHHS is the single state agency designated to administer and supervise the administration of the state's Medicaid program under Title XIX of the Social Security Act. 42 U.S.C. § 1396(a)(5); N.C. Gen. Stat. § 108A-54. Within the NCDHHS, the Division of Medical Assistance (“DMA”) is responsible for the day-to-day administration of the Medicaid program. The DMA contracts with area authorities to operate capitated Prepaid Inpatient Health Plans (“PIHPs”) for Medicaid enrollees.

         Plaintiff is a multi-county Local Management Entity/Managed Care Organization (“LME/MCO”), established pursuant to Chapter 122C of the North Carolina General Statutes. As an LME/MCO, plaintiff is responsible for managing the provision of Medicaid-funded mental health, developmental disability, and substance abuse benefits to residents in the following twelve counties: Bladen, Columbus, Duplin, Edgecombe, Greene, Lenoir, Nash, Robeson, Sampson, Scotland, Wayne and Wilson (together plaintiff's “catchment area”). Plaintiff operates pursuant to two Medicaid waivers in the Social Security Act, [3] and contracts with the DMA to operate a PIHP for Medicaid enrolles residing within its catchment area. Defendant Trillium is an LME/MCO responsible for managing the provision of Medicaid-funded mental health, developmental disability, and substance abuse benefits to Medicaid enrolles residing within a 24 county catchment area. Like plaintiff, defendant Trillium operates under 1915(b) and 1915(c) waivers.

         As relevant here, sometime in 2011, the North Carolina General Assembly enacted House Bill 916, which mandated statewide expansion of certain Medicaid programs. 2011 N.C. Sess. Laws 264. Under the bill, LMEs that did not meet certain requirements by July 1, 2013, would have their management responsibilities reassigned to other LMEs. In order to meet all requirements, the bill allowed LMEs to merge through interlocal agreements.

         In response to the bill, on June 7, 2012, plaintiff entered a Plan of Merger (“Merger Agreement”) with Edgecombe-Nash Mental Health, Developmental Disabilities and Substance Abuse Services d/b/a the Beacon Center (“Beacon Center”), Southeastern Regional Mental Health, Developmental Disabilities and Substance Abuse Services (“Southeastern”), and the counties of Bladen, Columbus, Duplin, Edgecombe, Greene, Lenior, Nash, Robeson, Sampson, Scotland, Wayne and Wilson. (DE 1-9). The Merger Agreement, effective July 1, 2012, designated plaintiff as the single surviving LME/MCO for the combined twelve county catchment area.

         The Merger Agreement requires all assets, fund balances, current real estate leases, personal property, and equipment leases of the merging entities to be transferred to plaintiff, the surviving entity. At the time of the Merger Agreement, the parties, including Nash County, agreed to use best efforts to “continue the level of funding currently budgeted, and to fund increases where the [Board of County] Commissioners deem appropriate in order to effectively provide mental health, developmental disability, and substance abuse services through [plaintiff].” (DE 1-9 ¶ 14). The Merger Agreement also requires plaintiff to “comply with all statutory and regulatory requirements applicable to multi-county LMEs, including but not limited to . . . the provisions of Chapter 122C of the North Carolina General Statutes, . . . as they exist as of the [m]erger [d]ate or may be amended in the future.” (Id. ¶ 17). The Merger Agreement does not provide a termination provision. Each County Chair on the Board of County Commissioners executed the Merger Agreement, thereby binding its respective county to terms therein.

         In June 2013, the North Carolina General Assembly appended N.C. Gen. Stat. § 122C-115 to include the following subparagraph:

         (a3) A county that wishes to disengage from a local management entity/managed care organization and realign with another multicounty area authority operating under the 1815(b)/(c) Medicaid Waiver may do so with the approval of the Secretary. The Secretary shall adopt rules to establish a ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.