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ALMOND PHARMACY, INC. v. MANKOWITZ

United States District Court, Northern District of Illinois, E.D


June 27, 1984

ALMOND PHARMACY, INC., PLAINTIFF,
v.
CARL MANKOWITZ, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

Almond Pharmacy ("Almond") sues Acting Director of the Illinois Department of Public Aid ("Department") Carl Mankowitz, Chief of Department's Bureau of Program Integrity Dennis Williams and Administrator of Department's Medical Assistance Program Betsy Skloot, each in his or her official and individual capacity. Almond's two-count Complaint asserts this Court's jurisdiction under Title XIX of the Social Security Act (the "Act"), 42 U.S.C. § 1396a ("Section 1396a"):

    1. Count I seeks damages and injunctive relief for
  defendants' failure to pay for goods Almond supplied under
  the Medical Assistance Program.

    2. Count II seeks the same damages under an intentional tort
  theory.

Defendants now move to dismiss this action on twofold Fed.R.Civ.P. ("Rule") 12(b)(1) grounds:

    1. Section 1396a does not provide an independent
  jurisdictional basis.

    2. Almond's claim for monetary damages is essentially a claim
  against the State of Illinois and is therefore barred by the
  Eleventh Amendment.

For the reasons stated in this memorandum opinion and order, the motion to dismiss is granted.

Facts*fn2

Almond sold and dispensed drugs and drug-related products to recipients receiving assistance under Department's Medical Assistance Program pursuant to the Act. During 1982 Almond submitted to Department for payment weekly statements of account for items Almond dispensed to such recipients. Department made payments to Almond on a regular basis. Since July 1983 the Department has refused to pay Almond for prescriptions and orders provided under the Medical Assistance Program.

Subject Matter Jurisdiction

Because Section 1396a affords no private right of action in federal court, Almond's exclusive federal remedy (if any) must be a claim under 42 U.S.C. § 1983 ("Section 1983"). Taylor v. St. Clair, 685F.2d 982, 988 (5th Cir. 1982). See Maine v. Thiboutot, 448 U.S. 1, 6-8, 100 S.Ct. 2502, 2505-2506, 65 L.Ed.2d 555 (1980); see also Edelman v. Jordan, 415 U.S. 651, 674-77, 94 S.Ct. 1347, 1361-63, 39 L.Ed.2d 662 (1974) and Oregon Environmental Council v. Kunzman, 714 F.2d 901, 903-04 (9th Cir. 1983). Thus as now advanced Almond's claims must be dismissed for lack of subject matter jurisdiction.

Were that jurisdictional flaw curable by a mere pleading amendment, this Court would of course (mindful of the liberal standards of Rule 15) ordinarily dismiss with leave to replead within a short time. But things are not so simple here, and this opinion therefore ventures into what might be viewed the normally forbidden territory of the advisory opinion.

Suppose Almond were to refile its Complaint by invoking Section 1983. That section does not override the States' Eleventh Amendment protection. Quern v. Jordan, 440 U.S. 332, 342-45, 99 S.Ct. 1139, 1145-47, 59 L.Ed.2d 358 (1979). Thus for Almond to proceed on its damages claim at all, it must name state officials as the defendants, as it has done here. But the Eleventh Amendment also bars recovery of money damages from state officials if that money would be paid from the state treasury. Edelman, 415 U.S. at 663, 94 S.Ct. at 1355 and cases cited. And that is plainly the main thrust of Almond's Complaint, which seeks recovery of monies owed on past-due accounts.

Consequently Almond's claim for damages, barred as it is by the Eleventh Amendment, cannot be salvaged by recasting the form of its pleading. Nonetheless, to the extent Almond also seeks injunctive relief against state officials to require them to comply with federal law (though not state law) in the future, the Eleventh Amendment would not bar such a claim. Pennhurst State School and Hospital v. Halderman, ___ U.S. ___, 104 S.Ct. 900, 909, 79 L.Ed.2d 67 (1984). Under the circumstances that subject also merits brief (though not definitive) discussion.

Any potential Section 1983 action for injunctive relief against defendants is just that — potential. Though Section 1983 provides a vehicle for enforcement of a federal statutory right, see Maine v. Thiboutot, 448 U.S. at 4, 100 S.Ct. at 2504, the question still remains whether Section 1396a(a)(37) confers on health care providers a federal right to force Department to administer its Medical Assistance Program in accord with the federal statute. True enough our Court of Appeals has accorded welfare recipients such a right, Smith v. Miller, 665 F.2d 172, 178-79 (7th Cir. 1981). There is also some authority indicating recipients and health care providers are similarly situated for enforcement purposes. Massachusetts General Hospital v. Sargent, 397 F. Supp. 1056, 1059 (D.Mass. 1975). But it is scarcely axiomatic that health care providers also necessarily have a federal enforcement right under the statute (as distinct from having a claim against Department, enforceable in the state court system, for any alleged violation of the plan validly adopted under the statute).*fn3 As the Court of Appeals for the Sixth Circuit has said in Green v. Cashman, 605 F.2d 945, 946 (6th Cir. 1979):

  We do not find in the statute authorizing Medicare and Medicaid
  any legislative intention

  to provide financial assistance to providers of care for their
  own benefit. Rather, the statute is designed to aid the
  patients and clients of such facilities.

Conclusion

Defendants' motion to dismiss for lack of subject matter jurisdiction is granted. Because Almond plainly cannot obtain here the principal relief it asks (monetary recovery) even by repleading, and because its potential for prospective declaratory injunctive relief is clouded at best, this Court will not presume a desire to replead.*fn4 If a repleading is in fact tendered, it will be time enough to consider its merits in federal terms. If not, the current dismissal on subject matter jurisdictional grounds is without prejudice to any state remedies Almond may have.


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