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May v. Azar

United States District Court, M.D. Alabama, Northern Division

November 4, 2019

JEAN C. MAY, by and through Isaac W. May, her next friend and attorney-in-fact, et al. Plaintiff,
v.
STEPHANIE AZAR, in her official capacity as Commissioner of the Alabama Medicaid Agency, Defendant.

          MEMORANDUM OPINION AND ORDER

          TERRY F. MOORER UNITED STATES DISTRICT JUDGE

         Pending before the Court is Defendant Stephanie Azar's Motion to Dismiss or, in the Alternative Motion to Stay or, in the Alternative Motion for a More Definite Statement. Doc. 6, filed November 6, 2018. Pursuant to Fed.R.Civ.P. 12(b)(1) and (b)(6), Defendant Azar requests the Court dismiss Plaintiff Jean C. May's Complaint for injunctive and declaratory relief; or in the alternative, requests the Court stay this matter pursuant to the Colorado River abstention doctrine while related proceedings that are on appeal before the Alabama Court of Civil Appeals conclude; or in the alternative, requests the Court order a more definite statement pursuant to Fed.R.Civ.P. 12(e). Id. at 1. Having considered the motion and relevant law, the Court finds the motion to dismiss is due to be GRANTED in part and DENIED in part.

         I. PARTIES

         Herein, the Court will refer to the parties to this action as follows: Plaintiff Jean C. May will be referred to as “Jean May, ” Plaintiff Isaac W. May will be referred to as “Isaac May, ” and they will be collectively referred to as “Plaintiffs” or the “Mays.” Defendant Stephanie Azar will be referred to as either “Defendant” or the “Commissioner, ” and the Alabama Medicaid Agency will be referred to as the “AMA.”

         II. JURISDICTION AND VENUE

         The district court has subject matter jurisdiction over the claims in this action pursuant to 28 U.S.C. § 1331 (federal question) as Plaintiffs bring claims pursuant to 42 U.S.C. § 1983 for violations of the Medicaid Act and violation of 42 U.S.C. § 1396a(a)(8).

         The district court has personal jurisdiction over the claims in this action because Jean May and Isaac May, Jean's husband, next friend, and attorney-in-fact, are alleged to be citizens of Montgomery County, Alabama, and Stephanie Azar is the Commissioner of the Alabama Medicaid Agency, and are within the Court's district. Daimler AG v. Bauman, 571 U.S. 117, 137, 134 S.Ct. 746, 760, 187 L.Ed.2d 624 (2014) (“‘For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.' [Goodyear Dunlop Tires Operations, S.A. v. Brown, ] 564 U.S. [915, ] 924, 131 S.Ct. 2846, 2854, 180 L.Ed.2d 796, 806 (citing [Lea] Brilmayer et al., A General Look at General Jurisdiction, 66 Tex. L. Rev. 721, 728 (1988)). With respect to a corporation, the place of incorporation and principal place of business are ‘paradig[m] . . . bases for general jurisdiction.' Id. at 735; see also [Mary] Twitchell, The Myth of General Jurisdiction, 101 Harv. L. Rev. [610, ] 633.”).

         Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b)(1) because the events that are described in the Complaint occurred in this district.

         The parties do not contest either personal jurisdiction or venue. Defendant contests subject matter jurisdiction because she brings her instant motion pursuant to Fed.R.Civ.P. 12(b)(1), but as the Court has already discussed, the Court has subject matter jurisdiction over this matter and Defendant does not distinguish in her motion between Fed.R.Civ.P. 12(b)(1) and (b)(6).

         III. FACTUAL AND PROCEDURAL BACKGROUND

         At all relevant times, Jean May was married to Isaac May. Doc. 1 ¶ 12. On January 13, 2016, Jean May was admitted to a nursing home, John Knox Manor. Id. ¶ 11. The Mays paid out of pocket for Jean May to be admitted to the nursing home. Id. ¶ 13. After the Mays “spent-down” their resources to what they understood to be the required limit for Medicaid, a Medicaid application was filed for Jean May on February 28, 2017. Id. ¶ 14. Issac May, along with his son and daughter-in-law, assisted Jean May with the Medicaid benefits process. Id. ¶ 15. On March 2, 2017, Medicaid supplied Isaac May with a pre-filled “Agreement to Sell” form in regard to a junkyard that is jointly owned by the Mays. Id. ¶ 32. The “Agreement to Sell” form states, “If this agreement is made by and with respect to an individual who is not filing for or receiving benefits but whose resources effect the eligibility of another individual for benefits, this agreement is required by regulations (20 C.F.R. §§ 416.1240, 416.1202, 416.1203).” Id. After Isaac May received the “Agreement to Sell” form, he completed it and returned it signed on March 20, 2017. Id. ¶ 35. On June 9, 2017, Medicaid denied Jean May's application for “failure to provide information.” Id. ¶ 17.

         Jean May's attorney requested an informal conference with Medicaid after Jean May's Medicaid application was denied. Id. ¶ 18. The conference was held on June 29, 2017, after which Medicaid continued to process Jean May's Medicaid application. Id. However, as of June 29, 2017, Medicaid had not issued a “spousal assessment” for the Mays. Id. ¶ 19. For Medicaid eligibility purposes, a spousal assessment determines the total combined resources of an applicant and her community spouse and states Medicaid's calculation of how much of those joint assets may be preserved for the community spouse, pursuant to the applicable spousal improverishment rules. Id. ¶ 20. The spousal assessmenet is required under 42 U.S.C. § 1396r-5(c)(1)(B). Id. ¶ 21.

         On June 30, 2017, Jean May's attorney emailed Medicaid to inquire about the status of the spousal assessment and submitted a “re-application” to preserve the maximum benefits for Jean May in the event the first denial stood. Id. ¶ 22. On July 5, 2017, Medicaid issued the first spousal assessment. Id. ¶ 23. On the same date, Medicaid notified Jean May's attorney a second denial of Jean May's Medicaid application because of “excess resources” would issue. Id. ¶ 24.

         Jean May's attorney again requested an informal conference with Medicaid to discuss the spousal assessment. Id. ¶ 25. The conference was held on July 7, 2017, with the Medicaid District Office Manager and the case worker who was assigned the relevant file. Id. As a result of the conference, the Montgomery District Office Manager requested an “interpretation request” from the Medicaid central office. Id. ¶ 26. On August 4, 2017, Medicaid issued a second denial letter, in which Jean May was denied Medicaid benefits for excess resources. Id. ¶ 30. Medicaid's position in the second denial letter was Jean May was ineligible due to excess resources because her husband, Isaac May, owned an undivided one-half interest in a junkyard, which was listed for sale since March 2, 2016. Id. ¶ 31. It is Medicaid's position that the “bona fide effort to sell” exclusion[1] is not available to a married applicant and that was the reason Jean May's Medicaid application was denied.

         Jean May appealed the second denial of her Medicaid application and an administrative fair hearing was conducted on October 13, 2017, before an Administrative Law Judge (the “ALJ”) as the designee of the Commissioner of the AMA. Id. ¶ 40. On December 14, 2017, the ALJ issued her Recommendation to the Commissioner of the AMA, in which she recommended both of the decisions to deny Jean May's Medicaid application be reversed. Id. ¶ 41. On January 12, 2018, the Commissioner accepted the ALJ's recommendation as to the denial of Jean May's Medicaid application for “failure to provide information.” Id. ¶ 42. However, the Commissioner declined to accept the ALJ's recommendation as to the second denial of Jean May's Medicaid application. Id. ¶ 43.

         On January 29, 2018, pursuant to the Alabama Administrative Procedures Act, a petition for judicial review of the Commissioner's decision was filed with the Circuit Court of Montgomery County, Alabama. Id. ¶ 44. On August 30, 2018, the circuit court issued an order in which it reversed the ALJ's decision. Id. ¶ 45. The circuit court's order was appealed to the Alabama Court of Civil Appeals on September 27, 2018. Id.

         On October 15, 2018, Jean May, by and through Isaac May, her next friend and attorney-in-fact, and Isaac May, individually, filed this instant action against the AMA Commissioner, in her official capacity. Id. The Mays bring against the Commissioner two claims: (1) a claim for violation of 42 U.S.C. § 1983 because the Mays allege they were deprived of rights that are secured to them by the Medicaid Act, 42 U.S.C. §§ 1396-1396w; 42 C.F.R. § Part 435; the Social Security Act, 42 U.S.C. §§ 1381-1385; and 20 C.F.R. Part 416 and (2) a claim for violation of 42 U.S.C. § 1396a(a)(8) because the Mays claim the Commissioner failed to furnish Medicaid assistance to Jean May with “reasonable promptness.” Id. ¶¶ 90-101.

         On November 6, 2018, Defendant filed her Motion to Dismiss or, in the Alternative Motion to Stay or, in the Alternative Motion for a More Definite Statement. Doc. 6. Plaintiffs timely responded in opposition, to which Defendant replied. Docs. 13-14. The Court finds oral argument unnecessary for resolution at this time. Therefore, the motion is fully briefed and ripe for adjudication.

         On July 31, 2019, the Court entered an Order for the parties to file a joint status report to inform the Court about the status of the related matter that was before the Alabama Court of Civil Appeals. Doc. 17. According to the parties' joint status report, the appeals court issued its opinion on Jean May's appeal on August 2, 2019, in which it upheld the circuit court's decision to deny Jean May's application for Medicaid benefits. Doc. 18-1.

         IV. STANDARD OF REVIEW

         A. Fed.R.Civ.P. 12(b)(1)

         A Fed.R.Civ.P. 12(b)(1) motion directly challenges the district court's subject matter jurisdiction. McElmurray v. Consol. Gov't of Augusta-Richmond Cty., 501 F.3d 1244, 1251 (11th Cir. 2007); Gilmore v. Day, 125 F.Supp.2d 468, 470 (M.D. Ala. 2000). The burden of proof for a Fed.R.Civ.P. 12(b)(1) motion is on the party averring jurisdiction. Gilmore, 125 F.Supp.2d at 471 (citing Thomson v. Gaskill, 315 U.S. 442, 446, 62 S.Ct. 673, 86 L.Ed. 951 (1942)). A motion to dismiss for lack of subject matter jurisdiction may occur either facially or factually. Makro v. Capital of Am., Inc. v. UBS AG, 543 F.3d 1254, 1258 (11th Cir. 2008) (citing Morrison v. Amway Corp., 323 F.3d 920, 925 n.5 (11th Cir. 2003)); Stalley v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (citing McElmurray, 501 F.3d at 1251).

         A “facial attack” is based solely on the pleadings and requires the court to assess whether the plaintiff has alleged a sufficient basis for subject matter jurisdiction. Stalley, 524 F.3d at 1232-33; Morrison, 323 F.3d at 925 n.5; Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990). “On a facial attack, a plaintiff is afforded safeguards similar to those provided in opposing a [Fed. R. Civ. P.] 12(b)(6) motion -- the court must consider the allegations of the complaint to be true.” Lawrence, 919 F.2d at 1529 (citing Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981)); see also Houston v. Marod Supermarkets, 733 F.3d 1323, 1335 (11th Cir. 2013) (evaluating whether the plaintiff “has sufficiently alleged a basis of subject matter jurisdiction” in the complaint and employing standards similar to those that govern a Fed.R.Civ.P. 12(b)(6) review). The Court is “not required to accept mere conclusory allegations as true, nor are we required to accept as true allegations in the complaint that are contrary to factual details presented in the exhibits.” Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1205-06 (11th Cir. 2007). “[W]hen the exhibits contradict the general and conclusory allegations of the pleading, the exhibits govern.” Id. at 1206. When discussing exhibits on a facial attack, the Court may consider exhibits that are attached to the complaint as well as those attached to a motion to dismiss. Lawrence v. United States, 597 Fed.Appx. 599, 602 (11th Cir. 2015). Exhibits attached to the complaint are considered part of the complaint for all purposes. Id. Further, exhibits attached to a motion to dismiss may be considered for a facial attack if the documents are central to the plaintiff's claim and their authenticity is not disputed. Id.

         On the other hand, a “factual attack” challenges “subject matter jurisdiction in fact, irrespective of the pleadings.” Morrison, 323 F.3d at 925. On a Fed.R.Civ.P. 12(b)(1) factual attack, the court “may proceed as it never could under 12(b)(6) or Fed.R.Civ.P. 56. Lawrence, 919 F.2d at 1529. Further, in resolving a factual attack, the court “may consider extrinsic evidence such as testimony and affidavits.” Makro, 543 F.3d at 1258 (quoting Morrison, 323 F.3d at 925 n.5); accord Stalley, 524 F.3d at 1233; Miccosukee Tribe of Indians of Fla. v. U.S., E.P.A., 105 F.3d 599, 603 (11th Cir. 1997) [hereinafter Miccosukee Tribe]. “[A] trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case without presuming the truthfulness of the plaintiff's allegations.” Makro, 543 F.3d at 1528 (citation and internal quotation marks omitted); see also Willett v. United States, 24 F.Supp.3d 1167, 1173 (M.D. Ala. 2014) ...


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