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Doctors Nursing and Rehabilitation Center, LLC v. Norwood

United States District Court, N.D. Illinois, Eastern Division

June 7, 2017

Doctors Nursing and Rehabilitation Center, LLC, et al., Plaintiffs,
v.
Felicia F. Norwood, in her official capacity as the Director of the Illinois Department of Healthcare and Family Services, Defendant, and related Cases.

          MEMORANDUM OPINION AND ORDER

          Elaine E. Bucklo United States District Judge.

         In these related cases, several healthcare providers and their patients in the State of Illinois seek declaratory and injunctive relief against the Director of the Illinois Department of Healthcare and Family Services (“HFS”), Felicia Norwood, in her official capacity. Plaintiffs allege that the defendant has failed to process Medicaid applications and provide Medicaid benefits with reasonable promptness to residents of long-term care facilities in violation of Title XIX of the Social Security Act (the “Medicaid Act”) and its implementing regulations, the Americans with Disabilities Act (“ADA”), the Rehabilitation Act, and the Fourteenth Amendment. Before me is defendant's motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted [Case. No. 1:16-cv-9837, ECF No. 36]. For the reasons set forth below, I deny defendant's motion.

         I.

         Plaintiffs in these seven related cases are Illinois healthcare providers and certain elderly and disabled patients they serve. The healthcare provider plaintiffs are Illinois healthcare companies owning and/or operating nursing home facilities throughout the state of Illinois. These facilities provide twenty-four hour, long-term nursing care to elderly patients and patients with disabilities, some of whom are Medicaid applicants or beneficiaries.

         The patient plaintiffs are residents at the healthcare provider plaintiffs' long-term nursing care facilities. The patient plaintiffs fall into two groups: (1) those who are awaiting Medicaid eligibility determinations and (2) those who, despite receiving approval, are still awaiting Medicaid benefits.

         The healthcare provider plaintiffs purport to serve as the patient plaintiffs' “authorized representatives” for the purposes of pursuing Medicaid benefits pursuant to 42 C.F.R. § 435.923. The patient plaintiffs also bring suit on their own behalves.

         Defendant is Felicia Norwood, the Director of the Illinois Department of Healthcare and Family Services, who is sued in her official capacity. HFS is a state agency charged with operating Illinois's Medicaid program. Two of the complaints also separately list HFS as a defendant.[1]

         Plaintiffs allege that defendant Norwood has failed to provide medical care services to eligible Illinois residents as required by the Medicaid Act. Specifically, plaintiffs charge that defendant has failed to process plaintiffs' Medicaid applications, render eligibility determinations, and provide benefits with reasonable promptness. They allege that HFS has exceeded the forty-five days or ninety days that the Medicaid regulations permit to determine applicant eligibility. Plaintiffs further allege that defendant has failed to provide benefits to the patient plaintiffs who have had their Medicaid applications approved. HFS's inaction on these matters, plaintiffs allege, violates 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a)(4)(A), and 1396a(a)(8). Additionally, plaintiffs assert that these inactions constitute violations of the ADA, Section 504 of the Rehabilitation Act, and the Equal Protection Clause of the Fourteenth Amendment. Plaintiffs seek injunctive and declaratory relief to ensure the defendant's future compliance with the Medicaid statute.

         II.

         Defendant moves to dismiss the seven complaints against her because, she argues, this court lacks subject matter jurisdiction to hear the cases and plaintiffs fail to state claims upon which relief may be granted. When considering motions to dismiss for failure to state a claim or lack of subject matter jurisdiction, I “take as true all well-pleaded factual allegations in the complaint and make all plausible inferences from those allegations in the plaintiffs' favor.” Disability Rights Wisconsin, Inc. v. Walworth Cty. Bd. of Supervisors, 522 F.3d 796, 799 (7th Cir. 2008); see Scanlan v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012) (applying the same standard to Rule 12(b)(1) motions). To survive a motion to dismiss under Rule 12(b)(6), a complaint must provide factual allegations that, if taken as true, “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Similarly, a complaint will survive a facial challenge to jurisdiction brought under a Rule 12(b)(1) motion to dismiss if it “has sufficiently alleged a basis of subject matter jurisdiction.” Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009).

         A. Lack of Subject Matter Jurisdiction

         Defendant contends that all seven complaints should be dismissed for lack of subject matter jurisdiction. In her motion to dismiss, defendant initially challenged this court's jurisdiction to hear these cases on Article III standing and Eleventh Amendment grounds. Defendant subsequently dropped her Article III challenge in her reply brief, and I will therefore not address it here. Def.'s Reply at 3 [ECF No. 45]. The defendant does continue to challenge the institutional plaintiffs' authority to sue on behalf of the patient plaintiffs, but, because the patients themselves are plaintiffs asserting a cognizable injury, this issue does not implicate my subject matter jurisdiction and is better understood as a challenge arising under Rule 12(b)(6), as discussed below. See Whelan v. Abell, 953 F.2d 663, 672 (D.C. Cir. 1992).

         Defendant's remaining jurisdictional argument concerns the Eleventh Amendment. Defendant contends that plaintiffs' claims- with the exception of those brought under the Rehabilitation Act-are barred by the Eleventh Amendment and the doctrine of state sovereign immunity because plaintiffs seek an order compelling payments for services already rendered. Plaintiffs counter that they seek only prospective injunctive and declaratory relief to ensure defendant's future compliance with federal law.

         The Eleventh Amendment states that federal jurisdiction shall not extend to suits against a state by a citizen of another state or foreign country. U.S. Const. amend. XI. In addition to what it explicitly guarantees, the Eleventh Amendment also incorporates the doctrine of sovereign immunity. See Hans v. Louisiana, 134 U.S. 1, 13-14 (1890). Thus, the Amendment “guarantees that ‘an unconsenting State is immune from suits brought in federal courts by her own citizens as well as by citizens of another State.'” Bd. of Regents v. Phoenix Int'l Software, Inc., 653 F.3d 448, 457 (7th Cir. 2011) (quoting Edelman v. Jordan, 415 U.S. 651, 662-63 (1974)).

         The Eleventh Amendment's bar on citizens suing their state, however, is not complete. There are several common exceptions that allow plaintiffs to pursue claims against a state or its agents. One such exception was first articulated in Ex Parte Young, 209 U.S. 123 (1908). There, the Supreme Court held that the Eleventh Amendment does not preclude claims against state officials for prospective, injunctive relief to stop ongoing violations of federal law. Ex Parte Young, 209 U.S. at 159-60. While a federal court cannot order a state to pay retrospective damages, it can require a state officer to ...


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