United States District Court, Northern District of Illinois, E.D
June 27, 1984
ALMOND PHARMACY, INC., PLAINTIFF,
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
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
2. Almond's claim for monetary damages is essentially a claim
against the State of Illinois and is therefore barred by the
For the reasons stated in this memorandum opinion and order,
the motion to dismiss is granted.
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
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
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)
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.
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.
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.