University of Michigan Law School
Civil Rights Litigation Clearinghouse
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Case Name California Hospital Association v. Maxwell-Jolly PB-CA-0025
Docket / Court 2:09-cv-08642 ( C.D. Cal. )
State/Territory California
Case Type(s) Public Benefits / Government Services
Case Summary
This suit was filed on November 23, 2009 in the United States District Court for the Central District of California by the California Hospital Association (CHA), against the Director of the California Department of Health Care Services in his official capacity. The plaintiff sought injunctive ... read more >
This suit was filed on November 23, 2009 in the United States District Court for the Central District of California by the California Hospital Association (CHA), against the Director of the California Department of Health Care Services in his official capacity. The plaintiff sought injunctive relief preventing the state from implementing reductions to the reimbursement rates paid for hospital services under Medi-Cal, the state's Medicaid program. In 2008 and 2009, the California Legislature passed several acts 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. As the result of litigation in related suits, at the time this suit was filed, preliminary injunctions were already in place preventing the defendant from implementing several of these rate reductions. See related cases.

The plaintiff in the instant case sought new injunctions preventing the reductions established by California Assembly Bill X4 5 (AB 5), passed on July 28, 2009. Unlike the state's earlier efforts to reduce its reimbursement rates, AB 5 was not a flat percentage reduction. In contrast to the plan submitted to and approved by CMS, which provided for annual updates, AB 5 limited the reimbursement of certain classes of hospital services and locked the reimbursement rates for hospital services to the rates paid in the 2008-09 year. The plaintiff argued this was a violation of the Medicaid Act.

The plaintiff brought the suit under the Supremacy Clause of the United States Constitution, arguing that the state's failure to submit a plan to amend its Medicaid program to CMS for approval prior to implementing the reductions made them unlawful and therefore preempted by the federally approved plan. The plaintiff also brought a claim under 42 U.S.C. § 1983, alleging violation of its members' civil rights. The plaintiff sought preliminary and permanent injunctions preventing the AB 5 rate reductions and a declaratory judgment holding the reductions unlawful.

On January 11, 2010, the plaintiff filed a motion for a preliminary injunction enjoining the enforcement of the contested effects of AB 5, which the Court (Judge Christina A. Snyder) granted on February 24, 2010. The defendant appealed this decision to the Ninth Circuit Court of Appeals on March 26, 2010; shortly thereafter it requested a stay of appellate proceedings because of a pending request for certiorari review by the Supreme Court in Douglas v. Independent Living Center of Southern California, a related case (Clearinghouse code PB-CA-0016). The Supreme Court accepted that case for review on the question of whether the Supremacy Clause could serve as a cause of action in this class of cases, and so on June 1, 2011, Judge Snyder issued an order removing this case from the District Court's active case list pending the outcome of Douglas. She ordered that the parties file quarterly joint status reports until the case was either reactivated or voluntarily dismissed.

The case was also stayed at the Appellate Court pending the decision of the Supreme Court in Douglas. CMS approved most of the California Medicaid plan amendments while Douglas was still awaiting adjudication. 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 the Medicaid Act against a state. Instead, the Supreme Court vacated the Ninth Circuit Court's decision in Douglas and remanded that case to the Ninth Circuit for reconsideration. Douglas v. Independent Living Center of Southern California, 132 S. Ct. 1204 (U.S. 2012).

After the Supreme Court decision, the instant case as well as Douglas and several other cases entered joint settlement mediation in the Ninth Circuit. As of the time of this writing, July 2013, it appears that these cases are heading toward a settlement.

The parties have continued to file joint quarterly reports to the District Court.

Alex Colbert-Taylor - 07/24/2013


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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
General
Funding
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
42 U.S.C. § 1983
Defendant(s) State of California
Plaintiff Description California Hospital Association
Indexed Lawyer Organizations None on record
Class action status sought No
Class action status granted No
Prevailing Party None Yet / None
Public Int. Lawyer No
Nature of Relief Preliminary injunction / Temp. restraining order
None yet
Preliminary injunction / Temp. restraining order
Source of Relief Litigation
None yet
Form of Settlement None on record
Order Duration 2010 - n/a
Case Closing Year n/a
Case Ongoing Yes
Case Listing 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-0016 : Independent Living Center of Southern California v. Maxwell-Jolly (C.D. Cal.)
Docket(s)
2:09-cv-08642 (C.D. Cal.) 01/18/2013
PB-CA-0025-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Complaint for Injunctive and Declaratory Relief 11/23/2009
PB-CA-0025-0001.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Civil Minutes - General [Denying Defendant's Motion for a more Definite Statement] 02/22/2010 (C.D. Cal.)
PB-CA-0025-0002.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Civil Minutes - General [Denying Defendant's Motion to Stay] 02/22/2010 (C.D. Cal.)
PB-CA-0025-0003.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Granting Plaintiff's Motion for Preliminary Injunction 02/24/2010 (C.D. Cal.)
PB-CA-0025-0004.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Civil Minutes - General [Granting Defendant’s Motion to Modify Ruling on Motion for Preliminary Injunction] 04/05/2010 (C.D. Cal.)
PB-CA-0025-0005.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Nagle, Margaret A. (C.D. Cal.) [Magistrate]
PB-CA-0025-9000
Snyder, Christina A. (C.D. Cal.)
PB-CA-0025-0002 | PB-CA-0025-0003 | PB-CA-0025-0004 | PB-CA-0025-0005 | PB-CA-0025-9000
Monitors/Masters None on record
Plaintiff's Lawyers Bookman, Lloyd A. (California)
PB-CA-0025-9000
Keville, Jordan B. (California)
PB-CA-0025-0001 | PB-CA-0025-9000
Defendant's Lawyers Ray, Brenda Ann (California)
PB-CA-0025-9000
Tillman, Lisa Anne (California)
PB-CA-0025-9000
Other Lawyers None on record

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