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Case Name Douglas v. Independent Living Center of Southern California PB-CA-0016
Docket / Court 08-cv-3315 ( C.D. Cal. )
State/Territory California
Case Type(s) Public Benefits / Government Services
Case Summary
In 2008 and 2009, the California Legislature passed three statutes modifying the State's Medicaid plan. Under the Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (The Medicaid Act), such modifications must be approved by the federal Department of Health and Human Services Centers for ... read more >
In 2008 and 2009, the California Legislature passed three statutes modifying the State's Medicaid plan. Under the Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (The Medicaid Act), such modifications must be approved by the federal Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) prior to being put in place. In September and December 2008, California submitted amendment proposals to CMS that incorporated most of the rate reductions the Legislature had already included in the three statutes. Before CMS had completed its review of the amendments, this suit and several others seeking injunctions to prevent the rate reductions were filed.

The Independent Living Center of Southern California (a disability advocacy group), two branches of the Gray Panthers (a healthcare and anti-ageism advocacy organization), individual Medicaid benefit recipients, and several pharmacies and pharmacists (collectively, "the Petitioners") filed this suit as a petition for writ of mandamus to compel the State of California not to implement the reductions to its Medicaid program ("Medi-Cal"). The case was originally filed in the Los Angeles County Superior Court on April 22, 2008, but was removed to federal U.S. District Court for the Central District of California on May 19, 2008. The Defendants had requested the removal to federal court; the removal was granted because the case involved questions of federal law.

According to the Plaintiffs' Petition for Mandamus, prior to the rate reduction, California Medicaid rates for physicians were 61% or less of what Medicare paid for the same services. The Plaintiffs claimed that "as a result of the low Medi-Cal rates, only 55% of primary care physicians and less than 50% of specialists [were] willing to participate in the Medi-Cal program." They argued that a ten percent reduction in the fee-for-service rate would reduce physician participation to even lower levels. The Plaintiffs alleged that the rate reductions violated the Medicaid Act, because they had not been approved by CMS and because the State had failed to study the potential effects of the rate reductions on the quality of and level of access to care available to Medi-Cal recipients. Plaintiffs argued that California had not shown that, were the rate reductions to go into effect, the State would be able to enlist enough providers as to make Medi-Cal services sufficiently available to benefit recipients, as required by 42 U. S. C. §1396a(a)(30)(A). The plaintiffs alleged that because these rate reductions violated the Medicaid Act, they were therefore preempted by federal law because of the Supremacy Clause of the U.S. Constitution. The plaintiffs sought declaratory and injunctive relief, asking the court to find the rate reduction was a violation of federal law and to prevent its enforcement. They also alleged that the rate reduction was prohibited by the Americans with Disabilities Act.

On May 30, 2008, the Petitioners filed a motion for a preliminary injunction which would prevent the rate reductions from coming into effect until further review by the Court. On June 25th, the Court (Judge Christina A. Snyder) denied this motion, finding that the Petitioner's case had no likelihood of succeeding because the Medicaid Act did not expressly create an individual right that could be the basis of a cause of action and therefore the Petitioners probably did not have standing to bring their suit. Independent Living Center of Southern California v. Shewry, 2008 WL 4298223 (C.D. Cal. 2008). The Petitioners appealed this decision to the Ninth Circuit Court of Appeals, which vacated the lower court's decision on July 11, 2008, finding that the Supremacy Clause could serve as the basis for their action. Independent Living Center of Southern California v. Shewry, 543 F.3d 1047 (9th Cir. 2008).

In light of the Ninth Circuit's order, on August 18, 2008 Judge Snyder granted in part and denied in part the Petitioners' motion for a preliminary injunction, finding that their Supremacy Clause case was likely to succeed on its merits. The Court therefore issued a preliminary injunction against the implementation of the Medi-Cal fee-for-service rate reductions for physicians, dentists, pharmacies, adult day health care centers, clinics, and health systems for services provided on or after July 1, 2008. Independent Living Center of Southern California v. Shewry, 2008 WL 3891211 (C.D. Cal. 2008). On August 27, 2008, the Court issued an order modifying this injunction, so that it did not retroactively apply to the period between July 1 and August 18, 2008. On November 17, 2008, the Judge Snyder granted the Petitioners' motion for a preliminary injunction against the rate reductions for non-emergency medical transportation services and for in-home health services. On July 9, 2009, the Ninth Circuit (Judge Milan D. Smith, Jr.) affirmed the ruling establishing the injunction, and reversed the modification. Independent Living Center of Southern California v. Maxwell-Jolly, 572 F.3d 644 (9th Cir. 2009).

On March 26, 2010, Judge Snyder granted a motion to allow several outside groups to join the case as intervenor plaintiffs, who raised issues similar to those of the original Petitioners against the Defendant Independent Living Center of Southern California v. Shewry, 2010 WL 1235762 (C.D. Cal. 2010).

On February 10, 2010, the defendants petitioned the United States Supreme Court to review the decision of the Ninth Circuit holding that the Supremacy Clause of the U.S. Constitution could serve as a basis for a cause of action in this case. The Supreme Court granted certiorari review on January 18, 2011, consolidating this case with four others that raised the same issue, 131 S.Ct. 992 (2011). These four cases were California Pharmacists Association v. Maxwell-Jolly (Clearinghouse case code PB-CA-0020), Managed Pharmacy Care v. Maxwell-Jolly (PB-CA-0019), Dominguez v. Schwarzenegger (DR-CA-0031), and Santa Rosa Memorial Hospital v. Shewry (Docket #: 3:08-cv-05173-SC). On June 1, 2011, Judge Snyder issued an order removing this action from the list of active District Court cases pending the decision of the Supreme Court.

Oral argument before the Supreme Court took place on October 3, 2011. After oral argument, while the cases were pending in the Supreme Court, CMS approved California's amendments to its Medicaid plan. In light of this, on February 22, 2012, the Supreme Court declined to issue a ruling on whether the Supremacy Clause could serve as a basis for a private suit to enforce Title XIX against a state. Instead, the Supreme Court vacated the Ninth Circuit Court's decision and remanded the case to the Ninth Circuit for reconsideration, with instructions to take into account CMS's approval of the amendments. Douglas v. Independent Living Center of Southern California, 132 S. Ct. 1204 (U.S. 2012).

On April 12, 2012, the Petitioners moved to have the stay lifted in the District Court. The Court denied this motion because issues that would be determinative of the outcome of the case were still awaiting adjudication at the Ninth Circuit Court. Independent Living Center of Southern California v. Douglas, 2012 WL 1622346 (C.D. Cal. 2012).

As of the time of this writing, July 2013, this case and three of the four cases that had been consolidated before the Supreme Court are in joint settlement mediation in the Ninth Circuit Court of Appeals.

Alex Colbert-Taylor - 07/23/2013


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Issues and Causes of Action
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Issues
Benefit Source
Medicaid
Content of Injunction
Preliminary relief granted
Defendant-type
Hospital/Health Department
Jurisdiction-wide
Disability
disability, unspecified
General
Funding
Government Services (specify)
Payment for care
Public benefits (includes, e.g., in-state tuition, govt. jobs)
Plaintiff Type
Private Plaintiff
Causes of Action Title XIX of the Social Security (Medicaid) Act, 42 U.S.C §1396
Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12111 et seq.
Defendant(s) The State of California
Plaintiff Description a coalition of health care rights advocacy groups, pharmacies and pharmacists who participate in California's Medicaid program, Medi-Cal, and individual recipients of Medi-Cal
Indexed Lawyer Organizations None on record
Class action status sought No
Class action status granted No
Prevailing Party Plaintiff
Public Int. Lawyer Yes
Nature of Relief Injunction / Injunctive-like Private Settlement
Source of Relief Litigation
Form of Settlement
Order Duration 2008 - n/a
Case Closing Year n/a
Case Ongoing Yes
Case Listing PB-CA-0021 : California Medical Association v. Shewry (C.D. Cal.)
PB-CA-0017 : California Association For Health Services At Home v. Shewry (C.D. Cal.)
PB-CA-0018 : California Medical Transportation Association, Inc. v. Shewry (C.D. Cal.)
PB-CA-0019 : Managed Pharmacy Care v. Maxwell-Jolly (C.D. Cal.)
PB-CA-0020 : California Pharmacists Association v. Maxwell-Jolly (C.D. Cal.)
PB-CA-0022 : California Hospital Association v. Maxwell-Jolly (C.D. Cal.)
PB-CA-0023 : Sierra Medical Services Alliance v. Maxwell-Jolly (C.D. Cal.)
PB-CA-0024 : National Association of Chain Drug Stores v. Schwarzenegger (C.D. Cal.)
PB-CA-0025 : California Hospital Association v. Maxwell-Jolly (C.D. Cal.)
PB-CA-0026 : Development Services Network v. Maxwell-Jolly (C.D. Cal.)
PB-CA-0027 : California Association of Health Facilities v. Maxwell-Jolly; Development Services Network v. Maxwell-Jolly (C.D. Cal.)
PB-CA-0028 : California Pharmacists Association v. Maxwell-Jolly (C.D. Cal.)
DR-CA-0031 : Dominguez v. Schwarzenegger (N.D. Cal.)
Docket(s)
09-958 (U.S. Supreme Court) 03/26/2012
PB-CA-0016-9001 PDF | Detail
Supreme Court website
2:08-cv-03315 (C.D. Cal.) 05/22/2012
PB-CA-0016-9000 PDF | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Verified First Amended Petition for Writ of Mandamus 05/12/2008
PB-CA-0016-0009 PDF | Detail
Document Source: Bloomberg Law
Respondents' Notice of Removal of Action Under 42 U.S.C. § 1441(b) 05/19/2008
PB-CA-0016-0010 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Denying Petitioners' Motion for a Preliminary Injunction 06/25/2008 (2008 WL 4298223 / 2008 U.S.Dist.LEXIS 120364) (C.D. Cal.)
PB-CA-0016-0002 PDF | WESTLAW| LEXIS | Detail
Document Source: PACER [Public Access to Court Electronic Records]
[Ninth Circuit] Order [Vacating the District Court's Order of June 25, 2008, and Remanding for Further Proceedings] 07/11/2008 (543 F.3d 1047)
PB-CA-0016-0011 PDF | WESTLAW| LEXIS | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Granting in Part and Denying in Part Petitioners' Motion for Preliminary Injunction 08/18/2008 (2008 WL 3891211 / 2008 U.S.Dist.LEXIS 77525) (C.D. Cal.)
PB-CA-0016-0004 PDF | WESTLAW| LEXIS | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Modifying Preliminary Injunction 08/27/2008 (C.D. Cal.)
PB-CA-0016-0012 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Complaint in Intervention 09/15/2008
PB-CA-0016-0013 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
[Ninth Circuit] Opinion [Reversing the District Court's Order of June 25, 2008] 09/17/2008 (543 F.3d 1050)
PB-CA-0016-0014 PDF | WESTLAW| LEXIS | Detail
Document Source: U.S. Court of Appeals website
Order [Granting] Respondent's Ex Parte Application for Order Staying the Action 11/03/2008 (C.D. Cal.)
PB-CA-0016-0015 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Granting Petitioners' Third Motion for Preliminary Injunction 11/17/2008 (C.D. Cal.)
PB-CA-0016-0016 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
[Ninth Circuit] Opinion [Affirming in Part and Reversing in Part the District Court's Order of August 18, 2008] 07/09/2009 (572 F.3d 644)
PB-CA-0016-0005 PDF | WESTLAW| LEXIS | Detail
[Ninth Circuit] Memorandum [Affirming the District Court's Order of November 11, 2008] 08/07/2009 (342 Fed.Appx. 306)
PB-CA-0016-0017 PDF | WESTLAW| LEXIS | Detail
Document Source: U.S. Court of Appeals website
Order [Denying Petitioners'] Motion to Enforce Preliminary Injunction and, Also, to Stay and Preliminarily Enjoin Implementation of Payment Cuts 11/02/2009 (C.D. Cal.)
PB-CA-0016-0018 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
[Ninth Circuit] Order [Denying Respondents' Motion to Vacate] 12/21/2009 (590 F.3d 725)
PB-CA-0016-0019 PDF | WESTLAW| LEXIS | Detail
Document Source: U.S. Court of Appeals website
Order Amending [the District] Court’s August 18, 2008 Order Pursuant to the Ninth Circuit Court of Appeals Mandate Issued December 21, 2009 01/22/2010 (C.D. Cal.)
PB-CA-0016-0020 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Denying Respondents' Motion to Stay the [District] Court's January 22, 2010 Order Amending the August 18, 2008 Injunction 02/25/2010 (C.D. Cal.)
PB-CA-0016-0021 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Complaint in Intervention 03/26/2010
PB-CA-0016-0022 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Opinion 03/26/2010 (2010 WL 1235762) (C.D. Cal.)
PB-CA-0016-0028 PDF | WESTLAW | Detail
Document Source: Westlaw
Order Terminating the [Stay of the Case] 05/27/2010 (C.D. Cal.)
PB-CA-0016-0023 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
[Petitioners'] Motion for Summary Judgment [and] Memorandum of Points and Authorities [in Support] 05/28/2010
PB-CA-0016-0024 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
[Order Granting] Respondent's Ex Parte Application for Stay of the Trial Court Proceedings [Pending Disposition of the Petition of Certiorari in the Supreme Court] 06/17/2010 (C.D. Cal.)
PB-CA-0016-0025 PDF | Detail
Document Source: PACER [Public Access to Court Electronic Records]
[Supreme Court] Opinion [Vacating the Ninth Circuit's Judgments of July 9 and August 7, 2009, and Remanding for Further Proceedings] 02/22/2012 (132 S.Ct. 1204 / 182 L.Ed.2d 101)
PB-CA-0016-0026 PDF | WESTLAW| LEXIS | Detail
Document Source: Westlaw
[Order Denying] Petitioners' Motion to Lift Stay and Restore Case to Active Status 05/08/2012 (2012 WL 1622346 / 2012 U.S.Dist.LEXIS 65210) (C.D. Cal.)
PB-CA-0016-0027 PDF | WESTLAW| LEXIS | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Berzon, Marsha S (Ninth Circuit)
PB-CA-0016-0011 | PB-CA-0016-0014
Breyer, Stephen Gerald (First Circuit, Supreme Court)
PB-CA-0016-0026
Fletcher, William A. (Ninth Circuit)
PB-CA-0016-0017 | PB-CA-0016-0019
Nagle, Margaret A. (N.D. Cal.) [Magistrate]
PB-CA-0016-9000
Reinhardt, Stephen Roy (Ninth Circuit)
PB-CA-0016-0011 | PB-CA-0016-0017 | PB-CA-0016-0019
Roberts, John Glover Jr. (D.C. Circuit, Supreme Court)
PB-CA-0016-0026
Smith, Milan D. Jr. (Ninth Circuit)
PB-CA-0016-0005 | PB-CA-0016-0011 | PB-CA-0016-0017 | PB-CA-0016-0019
Snyder, Christina A. (C.D. Cal.)
PB-CA-0016-0002 | PB-CA-0016-0004 | PB-CA-0016-0012 | PB-CA-0016-0015 | PB-CA-0016-0016 | PB-CA-0016-0018 | PB-CA-0016-0020 | PB-CA-0016-0021 | PB-CA-0016-0023 | PB-CA-0016-0025 | PB-CA-0016-0027 | PB-CA-0016-0028 | PB-CA-0016-9000
Monitors/Masters None on record
Plaintiff's Lawyers Berzon, Stephen P. (California)
PB-CA-0016-9001
Bookman, Lloyd A. (California)
PB-CA-0016-0013 | PB-CA-0016-0022 | PB-CA-0016-0024 | PB-CA-0016-9000
Cannizzo, Craig J. (California)
PB-CA-0016-0013 | PB-CA-0016-0022 | PB-CA-0016-0024 | PB-CA-0016-9000
Carman, Lynn S. (California)
PB-CA-0016-0009 | PB-CA-0016-9000 | PB-CA-0016-9001
Friedman, Stanley Lester (California)
PB-CA-0016-0009 | PB-CA-0016-9000
Gross, Byron J. (California)
PB-CA-0016-0013 | PB-CA-0016-0022 | PB-CA-0016-0024 | PB-CA-0016-9000
Keville, Jordan B. (California)
PB-CA-0016-0013 | PB-CA-0016-0022 | PB-CA-0016-0024 | PB-CA-0016-9000
Maynard, Deanne (District of Columbia)
PB-CA-0016-9001
Phillips, Carter G (District of Columbia)
PB-CA-0016-9001
Sze, Felicia Y. (California)
PB-CA-0016-0013 | PB-CA-0016-0022 | PB-CA-0016-0024 | PB-CA-0016-9000
Defendant's Lawyers Brown, Gregory David (California)
PB-CA-0016-0010
Cribbs, Gregory Martin (California)
PB-CA-0016-9000
Dhadwal, S. Andrew (California)
PB-CA-0016-9000
Kim, Jennifer M. (California)
PB-CA-0016-0010 | PB-CA-0016-9000
Linton, Elizabeth Ann (California)
PB-CA-0016-9000
Matsumoto, Phillip J. (California)
PB-CA-0016-0010 | PB-CA-0016-9000
Newman, Tara L. (California)
PB-CA-0016-0010 | PB-CA-0016-9000
Schwartz, Karin S. (California)
PB-CA-0016-9001
Snuggs, Carmen (California)
PB-CA-0016-9000
Ugaz, Sarah (California)
PB-CA-0016-0010 | PB-CA-0016-9000
Venegas, John F. (California)
PB-CA-0016-9000
Waldow, Richard T. (California)
PB-CA-0016-0010
Other Lawyers Canan, Stacy (District of Columbia)
PB-CA-0016-9000
Jones, Barbara Anne (California)
PB-CA-0016-9000

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The Clearinghouse has been generously supported by the National Science Foundation.