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Kimberly Wright-Gray, Individually and On Behalf of All Others v. Julie Hamos

February 2, 2012

KIMBERLY WRIGHT-GRAY, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
PLAINTIFF,
v.
JULIE HAMOS, IN HER OFFICIAL CAPACITY AS DIRECTOR OF THE ILLINOIS DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES, DEFENDANT.



The opinion of the court was delivered by: Judge Edmond E. Chang

MEMORANDUM OPINION AND ORDER

Plaintiff Kimberly Wright-Gray, as a putative class representative, has sued Julie Hamos,*fn1 in her official capacity as Director of the Illinois Department of Healthcare and Family Services.*fn2 Wright-Gray seeks to enjoin the Department from continuing to assert liens that she claims violate federal Medicaid law, 42 U.S.C. § 1396p. Wright-Gray has filed a motion for class certification [R. 57], and the parties also have filed cross-motions for summary judgment [R. 92, 96]. For the reasons discussed below, the Court concludes that the case must be dismissed for lack of Article III jurisdiction because Wright-Gray's claim for injunctive relief is moot (indeed, she never had standing to assert it). To the extent that the Department's summary-judgment motion seeks the jurisdiction-based dismissal, the motion is granted. In light of the dismissal, the formal rulings on the class-certification motion and the summary judgment motions on the merits are that they are denied as moot. But the Court explains, as alternative grounds for entering judgment for the Department, how it would have ruled on those motions.

I.

In deciding the parties' cross-motions for summary judgment, the Court views the evidence in the light most favorable to the respective non-moving party. Wright-Gray began working for the Cook County Forest Preserve District in 2002. R. 93, Def.'s Stmt. of Facts (DSOF) ¶ 3. In 2005 and 2007, Wright-Gray was injured on the job. Id. ¶¶ 7-8. After each injury, Wright-Gray filed a case with the Illinois Workers' Compensation Commission. Id. ¶¶ 12-13. As a Medicaid recipient, Wright-Gray received medical care for her work-related injuries from physicians and other providers who were enrolled in Medicaid. Id. ¶ 21; R. 98, Pl.'s Stmt. of Facts (PSOF) ¶¶ 2-3. These providers billed and received payment from Illinois' Medicaid program, which is administered by the Illinois Department of Healthcare and Family Services. DSOF ¶ 16; PSOF ¶ 2. Through the Medicaid program, the Department paid several of Wright-Gray's medical claims. DSOF ¶ 21.

In December 2005, the Department*fn3 sent a document titled "Subrogation Notice" to the Forest Preserve, notifying the Forest Preserve that the Department "has become subrogated to Kimberly Wright's right of action to recover medical expenses." Id. ¶ 18. This Notice is sent to third-party employers in situations where a Medicaid recipient has filed a workers' compensation claim and the Department has paid medical bills related to the claim. PSOF ¶ 20. The substance of the Subrogation Notice has not changed in over seventeen years. Id. ¶ 21. The attachment to the Subrogation Notice states: "The Department is not attempting to place a lien on any settlement the injured person may receive." DSOF ¶ 19. Wright-Gray's workers' compensation attorney, Lawrence Mack, also received a copy of the Department's Subrogation Notice. Id. ¶ 20. Indeed, the Department relies on the Medicaid recipient's workers' compensation attorney to inform the Department whether his client's settlement includes medical costs. PSOF ¶ 22. In this case, Mack reviewed Wright-Gray's medical claims to determine which ones paid by Medicaid were related to the work injuries she sustained in 2005 and 2007. DSOF ¶ 25. Between June and December 2008, Mack and the Department communicated about the medical claims Mack had identified as being properly related to Wright-Gray's workers' compensation cases. Id. ¶¶ 26-31. Ultimately, the parties agreed that the Department should receive $538.82 for the medical expenses it paid on Wright-Gray's behalf. Id. ¶ 31.

Wright-Gray settled both of her workers' compensation cases against the Forest Preserve. Id. ¶ 33. In April 2009, pursuant to the settlement agreement, the Forest Preserve issued a check for $8,500 payable to Wright-Gray and her attorney, Mack. Id. ¶ 35. The following month Mack sent a letter to the Department; along with the letter was a check, which the letter described as a "check for $538.82 in satisfaction of your disputed subrogation interest in this matter." Id. ¶ 38.

Wright-Gray now claims that the Department's subrogation letter was an improper "lien" on her workers' compensation settlement in violation of federal Medicaid law. R. 1 (Compl.) ¶¶ 1-3. She filed the instant putative class action in July 2009. See id. Wright-Gray is still employed by the Forest Preserve. DSOF ¶ 5. She has medical insurance through Cook County, but also continues to receive Medicaid. Id. ¶¶ 6-7.

Wright-Gray seeks to certify a class of "[a]ll Illinois citizens who have received, or may receive in the future, Medicaid benefits, for medical care or services related to injuries sustained at work, who have received, or may in the future receive, a subrogation lien/notice letter from The Illinois Department of Healthcare and Family Services." R. 58 (Pl.'s Class Cert. Br.) at 2. The Department opposes class certification in this case [R. 66], and also filed a motion for summary judgment on the merits [R. 82]. Wright-Gray filed a cross-motion for summary judgment. R. 92.

II.

The threshold question is whether Wright-Gray's claim for injunctive relief is moot. Evers v. Astrue, 536 F.3d 651, 662 (7th Cir. 2008). The Department argues that it is because her worker's compensation claims were settled, and because she currently has medical insurance. R. 94 (Def.'s Br.) at 2-5. Article III of the Constitution limits the federal courts to adjudicating actual "cases or controversies." U.S. Const. art. III, § 2; Damasco v. Clearwire Corp., 662 F.3d 891, 894 (7th Cir. 2011). Thus, "cases that do not involve actual, ongoing controversies are moot and must be dismissed for lack of jurisdiction." Wis. Right to Life, Inc. v. Schober, 366 F.3d 485, 490-91 (7th Cir. 2004).

Ensuring that a case is not moot is really a way of ensuring that the requirement of standing is met throughout the litigation. The question of standing focuses "on whether the party invoking jurisdiction had the requisite stake in the outcome when the suit was filed," and is an essential part of the case or controversy requirement of Article III. Davis v. FEC, 554 U.S. 724, 734 (2008) (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180 (2000)). Mootness, on the other hand, has been referred to as "a subset of the standing doctrine." Laskowski v. Spellings, 546 F.3d 822, 824 (7th Cir. 2008). "Mootness is 'the doctrine of standing set in a time frame: The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness).'" Laskowski, 546 F.3d at 824 (quoting Friends of the Earth, 528 U.S. at 189)). When a party loses standing during the litigation due to intervening events, "the inquiry is . . . one of mootness.'" Parvati Corp. v. City of Oak Forest, 630 F.3d 512, 516 (7th Cir. 2010).

At this stage of the litigation, the Department does not challenge Wright-Gray's standing and instead confines its argument to the issue of mootness. Def.'s Br. at 2-5. The Department argues that this case is moot because even if Wright-Gray prevailed on the merits, her legal rights would not be affected. Wright-Gray responds that her case is not moot because there is a possibility that she will be injured on the job again in the future and receive the same allegedly unlawful Subrogation Notice from the Department. R. 109 (Pl.'s Resp. Br.) at 3. Here, the undisputed facts demonstrate that Wright-Gray's request for injunctive relief in Count 5 -- the only claim remaining in this case -- is moot as a matter of law.

First, it is undisputed that, before filing this lawsuit, Wright-Gray agreed that the Department had an interest in her right of action to recover medical expenses related to the injuries she sustained at work. Wright-Gray, through her attorney, communicated with the Department about her medical claims, and ultimately agreed to send the Department a check for $538.82 as satisfaction of the Department's disputed subrogation interest. The money was paid, and the check was cashed. Once Wright-Gray voluntarily made the agreed-upon payment to the Department, the alleged "lien" (if there actually was one) against her was extinguished. It is also undisputed that, as of September 13, 2010, Wright-Gray did not have any cases pending before the Illinois Workers' Compensation Commission. DSOF ¶ 39. And there is no evidence in the record that Wright-Gray has a case pending today.

Wright-Gray fails to demonstrate how enjoining the Department from continuing to disseminate Subrogation Notices to Medicaid recipients would remedy an injury she suffers. Such an order would not affect Wright-Gray's legal rights. Indeed, the Court concludes that Wright-Gray did not have standing at the start of this case to pursue the claim for injunctive relief. A plaintiff must demonstrate standing for each claim she seeks to press and for each form of relief that is sought. DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006). Although Wright-Gray's complaint alleges an actual injury that is directly traceable to the Department's alleged unlawful practice of asserting liens on workers' compensation awards, Wright-Gray must also show that "it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, 528 U.S. at 180-81. It is true that Wright-Gray initially sought damages in addition to injunctive relief (to repeat, injunctive relief is the sole remaining claim), but the fact that she had standing to pursue monetary relief does not mean that she had blanket standing to bring the action as a whole.

Of course, at the pleading stage, questions regarding proof of a plaintiff's standing are often premature. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (at pleading stage, "general factual allegations of injury . . . may suffice," but thereafter standing "must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at successive stages of litigation"). However, when asking for injunctive relief, the plaintiff is required to allege a real and immediate threat that the alleged harm will occur. City of Los Angeles v. Lyons, 461 U.S. 95, 102 (1983). Here, Wright-Gray's complaint does not contain sufficient facts to confer standing with respect to the injunctive relief requested in Count 5. Although Wright-Gray alleged that the Department had "improperly taken" a portion of her workers' compensation award, "past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief." Lyons, 461 U.S. at 102. In short, granting the requested injunction would not have affected Wright-Gray's rights at the time she filed the complaint and, after discovery and at the summary-judgment stage, this remains true.

Wright-Gray cannot base her claim on her anticipation that she will receive a Subrogation Notice from the Department in the future. As the Department points out, the possibility that Wright-Gray might get injured on the job, file a workers' compensation action, and receive medical treatment from a Medicaid-enrolled provider is speculative. R. 113 (Def.'s Reply) at 4. And Wright-Gray does not have a case pending before the Illinois Workers' Compensation Commission. Rather, her lawsuit is based on the alleged lien placed on the settlement she received for the 2005 and 2007 workers' compensation cases. Wright-Gray settled the dispute over the payment of medical expenses by the Department, forgoing her opportunity to sue and challenge the alleged lien. In addition, Wright-Gray's insurance coverage has changed. Wright-Gray now has primary medical insurance through her employer, the Cook County Forest Preserve. R. 108-1 (Pl.'s Aff.) ¶¶ 3-4. Her secondary medical insurance is through Medicaid. Id. ¶ 5.

The Supreme Court has "repeatedly recognized that what is required for litigation to continue is essentially identical to what is required for litigation to begin: There must be a justiciable case or controversy as required by Article III. 'Simply stated, a case is moot when the issues presented are no longer "live" or the parties lack a legally cognizable interest in the outcome.'" Friends of the Earth, 528 U.S. at 721 (quoting Powell v. McCormack, 395 U.S. 486, 496 (1969)). The theoretical possibility that Wright-Gray might again receive a Subrogation Notice from the Department is not enough to keep her claim for prospective injunctive relief alive. Nor is her argument that an injunction would redress the complained-of conduct because it would allow her "and all future beneficiaries of healthcare benefits to be assured that Illinois' governmental bodies will follow applicable laws" persuasive. See Pl.'s Resp. Br. at 6. Although this case has been litigated for years, resulting in sunk costs to the judicial system (and the parties), courts do not have a license to retain jurisdiction over a case in which one or both of the parties plainly lack an interest. See Friends of the Earth, 528 U.S. at 192. For all of these reasons, Wright-Gray does not have an actual stake in the outcome of this lawsuit, and her claim for injunctive relief must be dismissed as moot.

Moreover, Wright-Gray's claim does not meet either of the exceptions to the mootness doctrine: cases involving "voluntary cessation," and cases that are "capable of repetition yet evading review." Walsh v. U.S. Dep't of Veterans Affairs, 400 F.3d 535, 537 (7th Cir. 2005). Although Wright-Gray argues that, unless enjoined by the Court, she will be subject to repeated violations of the law in the event she is injured at work again, she does not appear to be invoking the latter exception to mootness. See Pl.'s Resp. Br. at 3. Indeed, the "capable of repetition yet evading review" exception only applies where "(1) the challenged action is in its duration too short to be fully litigated prior to cessation or expiration, and (2) there is a reasonable expectation that the same complaining party will be subject to the same action again." Wis. Right to Life State Political Action Comm. v. Barland, 664 F.3d 139, 149 (7th Cir. 2011). Here, it is undisputed that the ...


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