Pediatric And Family Medical Foundation et al v. United States Department of Health And Human Services et al

NOTICE OF MOTION AND MOTION to Dismiss for Lack of Jurisdiction

C.D. Cal.May 8, 2017

DEFS.’ MOT. TO DISMISS COMPL. - i - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CHAD A. READLER Acting Assistant Attorney General Civil Division SHEILA LIEBER Deputy Director, Federal Programs Branch CHETAN A. PATIL Trial Attorney United States Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Ave., NW Washington, DC 20530 Tel.: (202) 305-4968; Fax: (202) 616-8470 Email: chetan.patil@usdoj.gov Attorneys for Defendants UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA PEDIATRIC & FAMILY MEDICAL FOUNDATION dba EISNER PEDIATRIC & FAMILY MEDICAL CENTER, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants. Case No.: 17-cv-00732 (SJO-AS) NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT FOR LACK OF SUBJECT MATTER JURISDICTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Date: June 19, 2017 Time: 10:00 a.m. Judge: Hon. S. James Otero Courtroom: 10C Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 1 of 25 Page ID #:162 DEFS.’ MOT. TO DISMISS COMPL. - ii - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS INTRODUCTION................................................................................................................ 1 BACKGROUND ................................................................................................................... 2 I. STATUTORY AND REGULATORY FRAMEWORK ............................... 2 II. FACTUAL BACKGROUND ............................................................................ 7 A. Parties .......................................................................................................... 7 B. Eisner’s Relationship with California Hospital Medical Center .......... 8 C. Eisner’s Prior Denials of Coverage ....................................................... 10 D. The Denial of Coverage in the Quinteros Litigation ............................. 11 LEGAL STANDARDS ...................................................................................................... 12 ARGUMENT ....................................................................................................................... 12 I. PLAINTIFFS DO NOT CHALLENGE ANY FINAL AGENCY ACTION .............................................................................................................. 13 CONCLUSION ................................................................................................................... 18 Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 2 of 25 Page ID #:163 DEFS.’ MOT. TO DISMISS COMPL. - iii - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES CASES PAGE(S) AT&T Co. v. EEOC, 270 F.3d 973 (D.C. Cir. 2001) ....................................................................................... 18 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .......................................................................................................... 7 Bennett v. Spear, 520 U.S. 154 (1994) ............................................................................................. 2, 13, 17 Celestine v. Mt. Vernon Neighborhood Health Ctr., 403 F.3d 76 (2d Cir. 2005) ............................................................................................. 14 Columbia Riverkeeper v. U.S. Coast Guard, 761 F.3d 1084 (9th Cir. 2014) ....................................................................................... 15 Dalton v. Specter, 511 U.S. 462 (1994) .................................................................................................. 16, 17 Ecology Ctr., Inc. v. U.S. Forest Serv., 192 F.3d 922 (9th Cir. 1999) ................................................................................... 17, 18 Flue-Cured Tobacco Coop. Stabilization Corp. v. EPA, 313 F.3d 852 (4th Cir. 2002) ......................................................................................... 17 Guerrero v. Clinton, 157 F.3d 1190 (9th Cir. 1998) ................................................................................. 13, 16 In re Wilshire Courtyard, 729 F.3d 1279 (9th Cir. 2013) ....................................................................................... 12 Indus. Customers of Nw. Utils. v. Bonneville Power Admin., 408 F.3d 638 (9th Cir. 2005) ......................................................................................... 13 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) ........................................................................................................ 12 Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 3 of 25 Page ID #:164 DEFS.’ MOT. TO DISMISS COMPL. - iv - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Lehman v. Nakshian, 453 U.S. 156 (1981) ................................................................................................2, 3, 13 Leite v. Crane Co., 749 F.3d 1117 (9th Cir. 2014) ....................................................................................... 12 Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004) ....................................................................................... 12 San Diego v. Whitman, 242 F.3d 1097 (9th Cir. 2001) ....................................................................................... 13 United States v. Nordic Vill., Inc., 503 U.S. 30 (1992) ............................................................................................................ 3 United States v. Ritchie, 342 F.3d 903 (9th Cir. 2003) ........................................................................................... 8 United States v. Testan, 424 U.S. 392 (1976) .................................................................................................... 3, 13 U.S. Army Corps of Eng’rs v. Hawkes Co., 136 S. Ct. 1807 (2016) .................................................................................................... 13 STATUTES & REGULATIONS 5 U.S.C. § 704 ...................................................................................................................... 12 28 U.S.C. § 1346 ................................................................................................................... 3 28 U.S.C. § 2671 ................................................................................................................... 3 28 U.S.C. § 2679 ................................................................................................................... 3 28 C.F.R. § 15.2................................................................................................................. 6, 7 28 C.F.R. § 15.4..................................................................................................................... 7 42 U.S.C. § 201, et seq. .......................................................................................................... 3 42 U.S.C. § 233(c) ......................................................................................................... passim 42 U.S.C. § 233(g) ......................................................................................................... passim 42 U.S.C. § 233(g)-(n) ........................................................................................................... 1 42 U.S.C. § 233(h) ................................................................................................................. 4 42 U.S.C. § 254b ............................................................................................................... 3, 7 42 C.F.R. § 6.2 ....................................................................................................................... 7 42 C.F.R. § 6.6(a)-(d) ............................................................................................................ 5 42 C.F.R. § 6.6(c) .................................................................................................................. 5 Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 4 of 25 Page ID #:165 DEFS.’ MOT. TO DISMISS COMPL. - v - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 42 C.F.R. § 6.6(e) .................................................................................................................. 5 LEGISLATIVE MATERIALS H.R. Rep. No. 104-398 (1995) ............................................................................................ 3 Final Rule, Federally Supported Health Ctrs. Assistance Act of 1992, 60 Fed. Reg. 22,530 (May 8, 1995) ........................................................................... 6, 14 Notice Regarding the Federally Supported Health Ctrs. Assistance Act of 1992, 60 Fed. Reg. 49,417 (Sept. 25, 1995) .............................................................................. 4 Federally Supported Health Ctrs. Assistance Act of 1995, Pub. L. No. 104-73, 109 Stat. 777, 777-81 (1995) ........................................................ 4 Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 5 of 25 Page ID #:166 DEFS.’ MOT. TO DISMISS COMPL. - vi - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT PLEASE TAKE NOTICE that on June 19, 2017, at 10:00 a.m., or as soon thereafter as the matter may be heard, Defendants the United States Department of Health and Human Services and Thomas E. Price, M.D., Secretary of the Department of Health and Human Services1 (collectively “Defendants”) will, and hereby do, move the Court to dismiss Plaintiffs’ Complaint in its entirety, pursuant to Fed. R. Civ. P. 12(b)(1). The hearing shall take place in the courtroom of the Honorable S. James Otero, United States District Judge, located in Courtroom 10C of the United States Courthouse, 350 W. 1st Street, Los Angeles, CA 90012. This motion is based on this notice of motion and motion, the attached memorandum of points and authorities, the records in this action, and such other argument as may be presented at the time of hearing. Pursuant to Local Rule7-3, counsel for the parties discussed the instant motion over multiple conversations on May 1, 2017 and May 2, 2017. As counsel for Defendants is located in Washington, DC and counsel for Plaintiffs is located in Long Beach, CA, the discussions between counsel occurred telephonically and electronically. The parties were not able to reach an agreement that would obviate the need for this motion. All parties are available to appear at the noticed date and time to be heard regarding this motion. The parties have further agreed that Plaintiffs’ Opposition to Defendants’ Motion to Dismiss shall be filed no later than May 22, 2017, and Defendants’ Reply shall be filed no later than June 5, 2017. 1 Pursuant to Fed. R. Civ. P. 25(d), Thomas E. Price, M.D. is being substituted as the successor to Norris Cochran as Secretary of the Department of Health and Human Services. Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 6 of 25 Page ID #:167 DEFS.’ MOT. TO DISMISS COMPL. - vii - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: May 8, 2017 Respectfully submitted, CHAD A. READLER Acting Assistant Attorney General SHEILA LIEBER Deputy Director, Federal Programs Branch /s/ Chetan A. Patil______ CHETAN A. PATIL Trial Attorney United States Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Ave., NW Washington, DC 20530 Tel.: (202) 305-4968; Fax: (202) 616-8470 Email: chetan.patil@usdoj.gov Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 7 of 25 Page ID #:168 DEFS.’ MOT. TO DISMISS COMPL. - 1 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION Plaintiffs Pediatric & Family Medical Foundation dba Eisner Pediatric & Family Medical Center, Ian Brent Tilley, M.D., Ruth Mielke, and Mary Elizabeth Claassen (collectively, “Plaintiffs”) have brought this suit under the Administrative Procedure Act (“APA”), alleging that they were erroneously denied immunity under the Federal Tort Claims Act (“FTCA”) in connection with a medical malpractice lawsuit filed against them. Plaintiffs’ Complaint should be dismissed because they have not alleged a final agency action giving rise to APA review. Plaintiffs’ lawsuit arises out of the Federally Supported Health Centers Assistance Act (“FSHCAA”), as amended at 42 U.S.C. § 233(g)-(n). The FSHCAA provides that under certain circumstances, FTCA coverage may be extended to federally qualified health centers (“FQHCs”) and their employees, officers, and certain contractors. The FSHCAA requires that, before FTCA coverage can apply, an FQHC “and any officer, governing board member, or employee of such an entity” and certain contractors of such an entity must “be deemed to be an employee of the Public Health Service” (“PHS”) by the Secretary of the Department of Health and Human Services (“HHS”) while providing certain approved services. However, this deeming determination is only a prerequisite for FTCA coverage. As relevant here, FTCA coverage for a particular lawsuit under the FSHCAA requires the Attorney General or his designee to certify that the alleged acts or omissions giving rise to the lawsuit occurred within the scope of the FQHC’s deemed project as approved by HHS and within the scope of the employment of an individual FQHC employee or officer (or contract for services for eligible contractors). If covered by the FTCA, an FQHC and its employees, officers, and contractors are immune from suit, and the United States will remove the action (if filed in state court) and substitute itself as the defendant. Plaintiffs, an FQHC and three of its employees who were providing labor and Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 8 of 25 Page ID #:169 DEFS.’ MOT. TO DISMISS COMPL. - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 delivery services at a nearby hospital, were sued for medical malpractice in California Superior Court and requested FTCA coverage in connection with that lawsuit. In a letter sent to Plaintiffs, HHS informed Plaintiffs that they were not entitled to FTCA coverage for the state court action because the alleged malpractice occurred pursuant to a contractual arrangement between Plaintiffs and a local hospital, which did not qualify for coverage under the FSHCAA or the operative regulations. Under that arrangement, Plaintiffs functioned as independent private contractors of the hospital. The United States Attorney for the Central District of California agreed that certification of FTCA coverage was not warranted, and accordingly filed a notice with the state court informing it that Plaintiffs’ request had been denied and that the United States would not remove the action or substitute itself as the defendant. Plaintiffs now bring suit against HHS challenging HHS’s letter informing them that they were not entitled to FTCA coverage under the APA. However, APA review extends only to “final agency actions,” and the Supreme Court has recognized that an action is final only if it is “one by which rights or obligations have been determined, or from which legal consequences will flow.” Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (citation omitted). Here, the legal consequences Plaintiffs complain of—i.e., the denial of FTCA immunity and refusal of the United States to remove the case and substitute itself as the defendant—did not flow from HHS’s letter but from the notice filed by the United States Attorney. Because the authority to certify FTCA coverage for a particular lawsuit is vested in the Attorney General or his designee, the United States Attorney, HHS’s letter had no legal effect and served only as a mere recommendation to the Attorney General. For this reason, the HHS letter was not final, and this Court lacks jurisdiction over Plaintiffs’ suit. BACKGROUND I. STATUTORY AND REGULATORY FRAMEWORK The United States, as a sovereign entity, “is immune from suit save as it consents to be sued . . . and the terms of its consent to be sued in any court define the Court’s Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 9 of 25 Page ID #:170 DEFS.’ MOT. TO DISMISS COMPL. - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 jurisdiction to entertain the suit.” Lehman v. Nakshian, 453 U.S. 156, 160 (1981) (quoting United States v. Testan, 424 U.S. 392, 399 (1976)). The FTCA, 28 U.S.C. §§ 1346, 2671, et seq., represents a limited waiver of federal sovereign immunity, under which, subject to certain exceptions, the United States may be held liable for the tortious conduct of its employees to the same extent as a private party. See United States v. Nordic Vill., Inc., 503 U.S. 30, 33 (1992). A tort suit against an FQHC or its employees for personal injury or death arising from medical malpractice shall be removed to federal court and the United States substituted as defendant if the Attorney General certifies that the tortfeasor was, at the time of the events in question, an employee of the PHS acting within the scope of his employment. 42 U.S.C. § 233(c) (removal and substitution provision for employees of federally funded health care facilities). The United States makes primary health care services available to medically underserved populations throughout the United States under several federally funded programs, one of which is the Community Health Center program. 42 U.S.C. § 254b. The FSHCAA makes FQHCs, their employees, officers, and certain individual contractors eligible for medical malpractice coverage under the FTCA to the same extent as commissioned officers and employees of the Public Health Service (“PHS”). See generally Public Health Service Act (“PHSA”), id. § 201, et seq. Where such an FQHC or individual is covered by the FTCA, the exclusive remedy for damages for personal injury or death resulting from the performance of medical or related functions within the scope of office or employment is an FTCA action against the United States. See id. § 233(a), (g); see also 28 U.S.C. §§ 1346, 2672. In extending FTCA coverage to eligible FQHCs and individuals, Congress intended to ensure that FQHCs used their federal funds on critical primary care services to underserved communities and areas, rather than expending taxpayer funds on medical malpractice premiums. See H.R. Rep. No. 104-398 at 5-6, reprinted at 1995 U.S.C.C.A.N. 767, 769 (1995); see also U.S. Dep’t of Health & Human Servs., Health Res. & Servs. Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 10 of 25 Page ID #:171 DEFS.’ MOT. TO DISMISS COMPL. - 4 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Administration, Federal Tort Claims Act Health Center Policy Manual at 4 (updated July 21, 2014), available at https://bphc.hrsa.gov/policiesregulations/policies/ftcahcpolicymanualpdf.pdf. (the “Policy Manual”). In 1995, Congress amended the FSHCAA, see Pub. L. No. 104-73, 109 Stat. 777-781 (1995), and delegated to the Secretary of HHS the authority to determine whether an FQHC and “any officer, governing board member, or employee of such an entity, and any contractor of such an entity who is a physician or other licensed or certified health care practitioner . . . shall be deemed to be an employee” of the PHS for purposes of § 233 and the FTCA. See 42 U.S.C § 233(g)(1). In order to be deemed, an FQHC must submit an application to the Secretary of HHS verifying that it satisfies the requirements of the statute. See id. § 233(g)(1)(D); id. § 233(h) (setting forth criteria for deeming determination).2 Current HHS policy requires FQHCs to submit deeming applications annually. Policy Manual at 17. HHS is required to make a determination on a deeming application within 30 days of receipt of the application. Id. § 233(g)(1)(E). HHS’s determination that an FQHC is deemed an employee of the PHS is “final and binding upon the Secretary [of HHS] and the Attorney General and other parties to any civil action or proceeding.” Id. § 233(g)(1)(F). Individual FQHC employees, officers, and eligible contractors do not submit their own applications, and instead are deemed by operation of a deeming determination with respect to the FQHC itself. See Policy Manual at 6. Though the deeming determination is a prerequisite for FTCA immunity, it does not in and of itself confer FTCA immunity on any defendant for any particular 2 The authority to deem entities PHS employees has been delegated to the Bureau of Primary Health Care, Health Resources and Services Administration (“HRSA”). HRSA is an agency of HHS and is responsible for administering aspects of the FSHCAA. See Notice Regarding the Federally Supported Health Centers Assistance Act of 1992, 60 Fed. Reg. 49,417, 49,417 (Sept. 25, 1995). Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 11 of 25 Page ID #:172 DEFS.’ MOT. TO DISMISS COMPL. - 5 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 lawsuit. An FQHC and its employees, officers, and contractors are covered by the FTCA only in connection with the performance of “covered activities.” See Policy Manual at 4. With respect to services provided to FQHC patients, “covered activities” must occur during the deemed eligibility period for the FQHC; relate to the performance of medical, surgical, dental, or related functions; occur within the scope of the FQHC’s federal grant project as approved by HHS; and occur within the scope of an individual’s employment. 42 C.F.R. § 6.6(a)-(d). The scope of an FQHC’s project is comprised of “[f]ive core elements”: (i) the “service sites,” or locations where the FQHC “provides primary health care services to a defined service area or target population;” (ii) the particular primary care services approved for federal funding; (iii) the FQHC’s primary health care providers; (iv) the “service area,” or “area in which the majority of the [FQHC’s] patients reside;” and (v) the “target population,” or medically underserved population within the service area. HRSA Policy Information Notice (“PIN”) 2008-01 at 4-16 (Jan. 13, 2009), available at https://bphc.hrsa.gov/programrequirements/pdf/pin2008-01.pdf. FTCA coverage extends only to the services, service sites, and other activities defined in a FQHC’s grant application and any subsequent change in scope request that has been approved by HHS. Policy Manual at 8. HHS also permits an FQHC to seek a “particularized determination of coverage” to assess whether any alternative activities or arrangements are sufficiently related to grant-supported activities to qualify as covered activities. 42 C.F.R. § 6.6(e)(4). With respect to individuals, HHS has interpreted covered activities to require that actions or omissions occur “within the approved scope of the project” of the FQHC, “within the requirements of the [individual’s] job description,” and “during the provision of services to the covered entity’s patients” and, in defined limited circumstances, “to non-health center patients.” Policy Manual at 7. “If a covered individual is providing services which are not on behalf of the covered entity, such as on a volunteer basis or on behalf of a third-party . . . acts and omissions which are Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 12 of 25 Page ID #:173 DEFS.’ MOT. TO DISMISS COMPL. - 6 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 related to such services are not covered.” 42 C.F.R. § 6.6(c). Since FTCA coverage may not extend to all of an FQHC’s activities, HHS advises deemed FQHCs to obtain “gap coverage,” or private insurance for all activities not subject to FTCA coverage. Policy Manual at 18. Because establishing that actions or omissions are “covered activities” is a fact- dependent inquiry, determining an FQHC’s or its employees, officer, or eligible contractors’ entitlement to FTCA coverage for any particular lawsuit can only be done upon the filing of a lawsuit. Final Rule, Federally Supported Health Centers Assistance Act of 1992, 60 Fed. Reg. 22,530, 22,531 (May 8, 1995) (“It is not feasible to determine in advance of an actual claim whether all of the activities of a provider are covered under FTCA, since the individual is covered only for activities within the scope of employment with the health center and activities within the scope of the approved Federal grant project.”). Whether FTCA coverage applies in any given case “will depend upon the determination or certification (as appropriate) by the Attorney General that the individual or entity is covered by [the FSHCAA] and was acting within the scope of employment, in accordance with normal Department of Justice procedures.” 60 Fed. Reg. at 22,531; see also 42 U.S.C. § 233(a) (FTCA coverage extends to deemed employee “acting within the scope of his office or employment” in performance of medical functions); Id. § 233(c) (providing for removal of state court lawsuit and substitution of the United States as the defendant “[u]pon a certification by the Attorney General that the defendant was acting in the scope of his employment at the time of the incident out of which the suit arose”). As such, when a lawsuit is filed against a deemed entity or its employees, officers, or contractors (collectively, “health center defendant(s)”), the health center defendant must “promptly deliver” to HHS “all process and pleadings served on” the defendant. 28 C.F.R. § 15.2(b). HHS then provides that information to the United States Attorney for the district in which the action is brought. Id. The FSHCAA Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 13 of 25 Page ID #:174 DEFS.’ MOT. TO DISMISS COMPL. - 7 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contemplates that the Attorney General or his designee3 may then certify that a health center defendant is entitled to FTCA coverage at “any time before trial.” 42 U.S.C. § 233(c). Upon a certification by the Attorney General, an action filed in state court is removed to federal court and the United States is substituted as the defendant in place of the health center defendant. Id.; see also id. § 233(a). Alternatively, the Attorney General may appear within 15 days of notification of the filing of the case in state court and “advise such court as to whether the Secretary has determined under [§ 233(g) and (h)] that such entity . . . [or] employee . . . is deemed to be an employee of the [PHS] for purposes of this section with respect to the actions or omissions that are the subject of such civil action or proceeding.” Id. § 233(l )(1). A certification of coverage by the Attorney General under subsection (l )(1) satisfies the provisions of § 233(c) and also results in removal and substitution. Id. If the Attorney General fails to appear within 15 days, the health center defendant itself may remove the case to federal court for “a hearing, and . . . a determination, as to the appropriate forum or procedure for the assertion of the claim for damages described in subsection (a) of this section.” Id. § 233(l )(2). II. FACTUAL BACKGROUND A. Parties Plaintiff Eisner is a non-profit corporation that operates a community health center in the State of California.4 Compl. ¶ 12. Eisner receives federal funding under § 330 of the PHSA, 42 U.S.C. § 254b. Id. During the relevant period of time, Eisner 3 42 C.F.R. § 6.2 provides that this authority extends to “any other officer or employee of the Department of Justice to whom the authority involved has been delegated.” The Attorney General has delegated his authority to make scope of employment determinations to the United States Attorney for the district in which the action is brought. 28 C.F.R. § 15.4(b). 4 The factual recitation relies upon the allegations of the Complaint, which are assumed to be true on a motion to dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 589 (2007). Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 14 of 25 Page ID #:175 DEFS.’ MOT. TO DISMISS COMPL. - 8 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 was a deemed PHS employee. Id. ¶ 44. Plaintiff Ian Brent Tilley is a medical doctor licensed by the State of California. Id. ¶ 13. Plaintiffs Ruth Mielke and Mary Elizabeth Claassen are certified nurse midwives licensed to practice in the State of California. Id. All three allegedly signed employment contracts with Eisner. Id. B. Eisner’s Relationship with California Hospital Medical Center On January 31, 2007, Eisner acquired assets held by the Women’s Health Center (“CFC”), a licensed community clinic operating at California Hospital Medical Center (“CHMC”). Compl. Ex. B Recital D.5 As part of the acquisition, Eisner hired the medical professionals previously employed at CFC, and took over responsibility for the provision of services formerly performed at and by CFC. Id. Recital D; id. § 5.1; id. Sch. 2.3; see also Compl. Ex. C. Effective March 1, 2007, Eisner entered into a contract (the “Coverage Agreement”) with CHMC, a hospital providing “general acute care” services, including, in relevant part, “antepartum, labor and delivery, postpartum and emergency services and other obstetrical and gynecological services.” Compl. ¶ 20; Compl. Ex. B Recital A. The Coverage Agreement required Eisner to designate certain of its physicians and certified nurse midwives to provide on-call services at CHMC “twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days per year in twelve hour shifts.” Id. Recital E; id. Sch. 2.1. Under this continuous staffing arrangement, Eisner professionals covered “[a]ll labor, delivery and other services” not only to Eisner patients, but also to patients from other community clinics or physicians, “[u]nassigned OB/GYN patients who present for 5 Plaintiffs attach several exhibits to their Complaint. The Court may consider documents attached to the Complaint “without converting [Defendants’ ] motion to dismiss into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903, 907–08 (9th Cir. 2003). Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 15 of 25 Page ID #:176 DEFS.’ MOT. TO DISMISS COMPL. - 9 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 treatment to [CHMC’s] emergency room,” and “[a]ll OB/GYN trauma patients.” Compl. ¶ 20; Compl. Ex. B, Sch. 2.1. Although the medical professionals providing services to CHMC under the continuous staffing arrangement may have been nominal Eisner employees, the Coverage Agreement specified that Eisner “is and shall at all times be an independent contractor with respect to [CHMC] in the performance of its obligations.” Compl. Ex. B § 4.1(a). As such, CHMC retained substantial control over the provision of OB/GYN services by the Eisner professionals. CHMC determined the level of staffing necessary under the Coverage Agreement, Compl. Ex. B § 2.1(a), and CHMC’s rules and bylaws governed the Eisner professionals’ conduct in the performance of their duties. See id. §§ 2.5, 2.7-.9, 4.8. The Agreement also made clear that the continuous staffing arrangement was agreed to for CHMC’s benefit. Compl. Ex. B § 5.1 (“[CHMC] recognizes the importance of having the [Eisner] Professionals available to continue providing services to the community . . . .”); id. Recital E (explaining that purpose of continuous staffing arrangement was “to ensure adequate and continued coverage for” CHMC’s OB/GYN department). Moreover, in “recognition” of Eisner’s hiring of the medical professionals who were previously employed at CFC as part of the asset purchase agreement, the Agreement also obligated CHMC to pay Eisner a “subsidy,” purportedly in order to “minimize potential losses to” Eisner. Id. § 5.1. In connection with the asset purchase agreement, Eisner submitted to HHS a change in scope request, seeking to add CHMC as a new service site and to add the provision of various obstetrics and gynecological services at CFC to its scope of project. Compl. ¶ 21; Compl. Ex. C. On February 5, 2008, HHS issued a Notice of Grant Award (“NGA”) approving a change in scope on February 5, 2008. Compl. ¶ 22. The NGA added CHMC as a new service site and added three new services to Eisner’s scope of project—high risk prenatal care, prenatal care, and family planning. See Compl. Ex. D. However, the NGA did not explicitly address Eisner’s continuous Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 16 of 25 Page ID #:177 DEFS.’ MOT. TO DISMISS COMPL. - 10 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 staffing arrangement with CHMC or indicate that labor and delivery services or other non-primary care services provided by Eisner physicians at CHMC pursuant to that arrangement fell within the scope of the approved project. Id. C. Eisner’s Prior Denials of Coverage Prior to the filing of the state court action underlying this case, Eisner requested and was denied FTCA coverage in connection with two malpractice suits that arose from Eisner’s continuous staffing arrangement with CHMC. In 2012, Eisner sought FTCA coverage for three physicians (including Plaintiff Tilley) in connection with a state court lawsuit, Dotson v. California Hospital Medical Center, et al. Compl. ¶¶ 28-29; Compl. Ex. H. In a letter dated May 23, 2012, HHS advised Eisner that these professionals did not satisfy the criteria for FTCA coverage for two reasons. Compl. Ex. H. First, HHS noted that the plaintiff in Dotson was not an Eisner patient and that the services rendered to her did not meet any of the limited circumstances in which services to non-FQHC patients may be covered by the FTCA. Compl. ¶ 30; Compl. Ex. H at 2-3. Second, HHS explained that the acts and omissions giving rise to the Dotson lawsuit involved the supervision of medical residents, which was not within the scope of Eisner’s project. Compl. Ex. H at 3. Eisner subsequently requested reconsideration, arguing that the Dotson plaintiff became an Eisner patient when she was admitted at CHMC because the February 2008 NGA listed CHMC as a new service site. Compl. Ex. I at 3. HHS explained, however, that the new service site reflected in the NGA could not be construed as the entire CHMC, but instead, had to be construed as only CFC. Id. at 3. As HHS explained, “service site” is defined as a “location where a grantee ‘provides primary health care services’” and must be controlled by an FQHC’s governing board. Id. at 3 n.6. CHMC’s inpatient OB/GYN department satisfied neither requirement because it provides “acute, secondary care” and is “owned, operated, and controlled by a non- deemed entity.” Id. at 3. Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 17 of 25 Page ID #:178 DEFS.’ MOT. TO DISMISS COMPL. - 11 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Similarly, in 2014, Eisner sought FTCA coverage for a physician in connection with another state court lawsuit, Cruz v. Bita Farhadian, et al. Compl. ¶¶ 28, 32. Once again, HHS advised Eisner that the physician would not be covered under the FTCA because (i) the plaintiff was not an Eisner patient prior to her admittance at CHMC, and the entire CHMC could not be considered a service site, and (ii) the Cruz plaintiff’s treatment did not meet the limited circumstances for FTCA coverage of treatment of non-patients. Compl. ¶ 33; Compl. Ex. J at 3-4. D. The Denial of Coverage in the Quinteros Litigation On or about June 8, 2015, Carolina Quinteros presented for labor and delivery at CHMC. See Compl. Ex. A ¶ 11. Ms. Quinteros allegedly had received prenatal care from Eisner physicians at CFC. Compl. ¶ 24. Ms. Quinteros and her daughter were injured during labor and delivery at CHMC, and on February 1, 2016, she filed an action in California Superior Court on behalf of herself and as guardian ad litem for her daughter against Plaintiffs and others alleging negligence in the provision of her medical care at CHMC. See Quinteros v. Cal. Hosp. Med. Ctr., No. BC608973 (Cal. Super. Ct. Feb. 1, 2016). Plaintiffs advised HHS of the litigation and requested FTCA coverage. Compl. ¶ 23. In a letter dated November 21, 2016 (the “Denial Letter”), HHS advised Plaintiffs that they were not entitled to coverage under the FTCA. Compl. ¶ 25. The letter explained that, although Ms. Quinteros may have received care from Eisner employees at CFC, her injuries arose from services provided by Plaintiffs pursuant to the continuous staffing arrangement between Eisner and CHMC. Compl. Ex. E at 2. While providing services pursuant to the continuous staffing arrangement, Eisner and the individual Plaintiffs “function[ed] as . . . independent contractor[s]” of CHMC. Id. The continuous staffing arrangement “does not fit within the FTCA coverage standards set forth in 42 C.F.R. § 6.6,” and thus Plaintiffs’ treatment of Ms. Quinteros pursuant to that arrangement was not covered by the FTCA. Id. On November 22, 2016, the United States Attorney for the Central District of Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 18 of 25 Page ID #:179 DEFS.’ MOT. TO DISMISS COMPL. - 12 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 California filed a notice with the California Superior Court in the Quinteros action advising the court that Plaintiffs “are not deemed to be employees of the Public Health Services for purposes of 42 U.S.C. § 233 with respect to the actions or omissions that are the subject of this proceeding” and that, as a result, the United States would not “participat[e] in this proceeding or remov[e] this case to federal court.” Compl. Ex. K. This action followed. LEGAL STANDARDS “Federal courts are courts of limited jurisdiction [and] possess only that power authorized by the Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Under Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss a complaint on the basis that the court lacks subject matter jurisdiction over the claims asserted. “The burden of establishing subject matter jurisdiction rests on the party asserting that the court has jurisdiction.” In re Wilshire Courtyard, 729 F.3d 1279, 1284 (9th Cir. 2013). A motion for lack of subject matter jurisdiction under Rule 12(b)(1) may be “facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (citations omitted). In a facial motion, the movant “accepts the truth of the plaintiff’s allegations but asserts that they are insufficient on their face to invoke federal jurisdiction.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (citation omitted). ARGUMENT Plaintiffs’ Complaint asserts a single claim against HHS, alleging that HHS’s Denial Letter is “arbitrary[,] capricious, and unlawful” under the APA. Compl. ¶ 51 (citing 5 U.S.C. § 706(2)(A)). Plaintiffs cannot seek APA review of the Denial Letter because that letter does not constitute “final agency action,” 5 U.S.C. § 704, as it did not conclusively determine Plaintiffs’ non-entitlement to FTCA coverage in connection with the Quinteros action. Rather, HHS’s Denial Letter served as a mere recommendation to the Attorney General and his designee, the United States Attorney for the Central District of California, in whom the ultimate authority to Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 19 of 25 Page ID #:180 DEFS.’ MOT. TO DISMISS COMPL. - 13 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 decide FTCA coverage is vested. Because Plaintiffs have sought review only of HHS’s recommendation, this Court lacks jurisdiction to review their claim. I. PLAINTIFFS DO NOT CHALLENGE ANY FINAL AGENCY ACTION The United States, as a sovereign entity, “is immune from suit save as it consents to be sued.” Lehman, 453 U.S. at 160 (quoting Testan, 424 U.S. at 399). Plaintiffs rely on the APA as the waiver of immunity for their claim. Other than “agency action made reviewable by statute,” APA review extends only to “final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. § 704; see also San Diego v. Whitman, 242 F.3d 1097, 1102 (9th Cir. 2001) (district court lacks subject matter jurisdiction to review non-final agency action). Generally, “two conditions . . . must be satisfied for agency action to be ‘final’ . . . . : First, the action must mark the consummation of the agency’s decisionmaking process—it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.” U.S. Army Corps of Eng’rs v. Hawkes Co., 136 S. Ct. 1807, 1813 (2016) (quoting Bennett, 520 U.S. at 177-78); see also Indus. Customers of Nw. Utils. v. Bonneville Power Admin., 408 F.3d 638, 646 (9th Cir. 2005) (“[T]he core question is whether the agency has completed its decisionmaking process, and whether the result of that process is one that will directly affect the parties.” (quoting Franklin v. Massachusetts, 505 U.S. 788, 797 (1992))). For an agency action to be final, it must “impose an obligation, deny a right or fix some legal relationship.” San Diego, 242 F.3d at 1102; see also Guerrero v. Clinton, 157 F.3d 1190, 1195 (9th Cir. 1998) (agency action not final where “it triggers no legal consequences and determines no rights or obligations”). HHS’s Denial Letter is not a final agency action because it, by itself, had no legal consequences for Plaintiffs. FTCA coverage in connection with a particular Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 20 of 25 Page ID #:181 DEFS.’ MOT. TO DISMISS COMPL. - 14 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 malpractice lawsuit entitles a health center defendant to immunity from suit and results in the removal of the action to federal court (if filed in state court) and the substitution of the United States as the sole defendant. See 42 U.S.C. § 233(a) (FTCA remedy “shall be exclusive” for action against “any commissioned officer or employee of the Public Health Service while acting within the scope of his office or employment”); 233(c) (providing for removal and substitution). None of the legal consequences Plaintiffs complain of here—the denial of immunity, removal, and substitution in connection with the Quinteros litigation—flowed from HHS’s Denial Letter. Rather, these consequences flowed from the notice filed in the California Superior Court by the United States Attorney for the Central District of California— an action which is not challenged in this lawsuit. Under the statutory framework of 42 U.S.C. § 233, HHS’s determination as to FTCA coverage constitutes a mere recommendation to the Attorney General, in whom the authority to determine entitlement to FTCA coverage is primarily vested.6 Section 233 creates two “[a]lternative[]” methods by which the Attorney General can certify that a health center defendant is entitled to FTCA coverage: § 233(c) or § 233(l )(1). See Celestine v. Mt. Vernon Neighborhood Health Ctr., 403 F.3d 76, 81-82 (2d Cir. 2005). It is the ultimate decision of the Attorney General to certify FTCA coverage that results in removal and substitution. See Final Rule, 60 Fed. Reg. at 22,531 (stating that the “applicability of [the FSHCAA] and 42 U.S.C. 233(a) to a particular claim or case will depend upon the determination or certification (as appropriate) by the Attorney General that the individual or entity is covered [by the FSHCAA] and was acting within the scope of employment”). 6 In addition to certification by the Attorney General, the FSHCAA also provides a mechanism for a health center defendant to prove its entitlement to FTCA coverage if the Attorney General does not appear within 15 days of notification of the filing of the underlying malpractice suit in state court. Id. § 233(l )(2). HHS’s determination as to FTCA coverage does not limit a health center defendant’s ability to seek FTCA coverage through the § 233(l )(2) removal procedure. Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 21 of 25 Page ID #:182 DEFS.’ MOT. TO DISMISS COMPL. - 15 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Moreover, HHS’s determination does not limit or control the Attorney General’s authority to certify or decline to certify FTCA coverage. Section 233(c) permits the Attorney General to certify entitlement to coverage at “any time before trial,” regardless of whether HHS’s has determined that FTCA coverage should apply. See Columbia Riverkeeper v. U.S. Coast Guard, 761 F.3d 1084, 1095 (9th Cir. 2014) (holding that Coast Guard letter of recommendation regarding siting of liquefied natural gas terminal was not final agency action where Coast Guard approval was not “a necessary prerequisite for siting an LNG facility”). Section 233(l )(1)—the provision relied on by the United States Attorney here—does, on the other hand, envision that HHS can play a role in the Attorney General’s coverage determination pursuant to that provision. While not a model of clarity, § 233(l )(1) should not be read to suggest that HHS’s determination as to FTCA coverage for a particular lawsuit, is anything more than a recommendation to the Attorney General regarding certification. Subsection (l )(1) states that, where the malpractice action is pending in state court, the Attorney General is to appear within 15 days of notification and “advise such court as to whether the Secretary has determined under subsections (g) and (h), that such [health center defendant] is deemed to be an employee of the [PHS] with respect to the actions or omissions that are the subject of such civil action or proceeding.” 42 U.S.C. § 233(l )(1). It further provides that “[s]uch advice shall be deemed to satisfy the provisions of subsection (c).” Id. Subsections (g) and (h) explicitly govern the procedures and criteria by which an FQHC may be deemed an employee of the PHS—i.e., the preliminary determination made within 30 days of receipt of an application that an FQHC satisfies the statutory requirements of being deemed an employee of the PHS. The FSHCAA vests the authority to make the deeming determination in the Secretary of HHS. See id. § 233(g)(1)(E)-(F). However, the deeming determination is, as discussed above, distinct from a determination of FTCA coverage for a particular lawsuit. See supra Pt. I. HHS’s deeming determination Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 22 of 25 Page ID #:183 DEFS.’ MOT. TO DISMISS COMPL. - 16 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 does not determine whether any alleged act or omission giving rise to a lawsuit occurred within the scope of the FQHC’s project and within the scope of an individual’s employment. See supra Pt. I. Moreover, even if § 233(l )(1) could be read to provide for HHS’s assessment of a health center defendant’s entitlement to FTCA coverage for a particular lawsuit, § 233 demonstrates that Congress did not intend that HHS’s decision would bind the Attorney General. Section 233 leaves the Attorney General broad authority to disregard any HHS determination as to FTCA coverage. Section 233(l )(2) provides that a health center defendant can remove an action in state court whenever the Attorney General fails to appear within 15 days of notification of the filing of the underlying malpractice action in state court. By its terms, then, the statute envisions that the Attorney General may simply disregard an affirmative coverage determination by HHS by taking no action on it and permitting a health center defendant to remove the action for a determination by the court on the issue of FTCA immunity. Similarly, the Attorney General can always disregard an adverse coverage determination by HHS because he may simply certify FTCA coverage at any time before trial. 42 U.S.C. § 233(c). Because the Attorney General has “no obligation to consider, let alone act upon” HHS’s determination as to FTCA coverage, that determination is not final. Guerrero, 157 F.3d at 1194. In this manner, an HHS’s determination as to FTCA coverage resembles the agency recommendations at issue in Dalton v. Specter, 511 U.S. 462 (1994). There, the Supreme Court addressed the availability of APA review of reports prepared pursuant to the Defense Base Closure and Realignment Act of 1990. 511 U.S. 462 (1994). The Act set out an “elaborate selection process” for affected bases. Id. at 464. In pertinent part, the Secretary of Defense was required to prepare recommendations for base closure and realignments, which would then be submitted to an independent Commission. Id. at 465. The Commission in turn would prepare a report with its own recommendations, which would then be submitted to the President. Id. Upon Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 23 of 25 Page ID #:184 DEFS.’ MOT. TO DISMISS COMPL. - 17 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 receipt, the President was required to decide “whether to approve or disapprove, in their entirety, the Commission’s recommendations,” and then, if approved, submit a certification of approval to Congress. Id. The plaintiffs challenged the closure of a naval shipyard by seeking APA review of the Secretary and Commissions’ reports. Id. at 465. The Court held that the Secretary’s and the Commission’s reports were not reviewable under the APA because they were not final agency actions. Id. at 469. These reports by themselves “‘carr[ied] no direct consequences’ for base closings,” and only would “directly affect” the military bases if acted upon by the President. Id. (quoting Franklin, 505 U.S. at 797-98). Even though the President was required to either “accept or reject the entire package offered by the Commission” and had no authority to “pick and choose among bases” himself, the Court held that the “crucial” consideration under the APA was that the President, and not the Commission, took “‘the final action that affects’ the military installations.” Id. at 470 (quoting Franklin, 505 U.S. at 799); see also Flue-Cured Tobacco Coop. Stabilization Corp. v. EPA, 313 F.3d 852, 860-61 (4th Cir. 2002) (“[E]ven when agency action significantly impacts the choices available to the final decisionmaker, this distinction does not transform the challenged action into reviewable agency action under the APA.”). So too here. The “final action” that denied Plaintiffs FTCA immunity in connection with the Quinteros matter was taken by the United States Attorney, and not by HHS. HHS’s Denial Letter carried with it “no direct consequences” for Plaintiffs because the Attorney General retained “absolute discretion to accept or reject” HHS’s recommendation. Bennett, 520 U.S. at 178. It was only once the United States Attorney agreed with HHS’s determination that Plaintiffs suffered any legal consequences arising from a denial of FTCA coverage. Because HHS’s determination had no binding effect on the Attorney General’s discretion, it must be viewed as a mere recommendation to the Attorney General, which cannot be challenged as a final agency action under the APA. See Ecology Ctr., Inc. v. U.S. Forest Serv., 192 F.3d 922, Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 24 of 25 Page ID #:185 DEFS.’ MOT. TO DISMISS COMPL. - 18 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 925 (9th Cir. 1999) (“[C]ourts have recognized that agency recommendations are not reviewable as final agency actions . . . .”); see also AT&T Co. v. EEOC, 270 F.3d 973, 975 (D.C. Cir. 2001) (holding that agency action was non-final where “agency merely expresses its view of what the law requires of a party, even if that view is adverse to the party”). Accordingly, this Court lacks jurisdiction over Plaintiffs’ Complaint. Defendants recognize that the final agency action here—the notice filed by the United States Attorney—does not set forth the rationale for the Attorney General’s denial of FTCA coverage, and instead presents the determination of HHS. Defendants understand that the Attorney General or the United States Attorney will soon be providing a supplemental decision that explains the basis for the Attorney General’s decision. CONCLUSION For the foregoing reason, this Court should grant Defendants’ motion to dismiss Plaintiffs’ Complaint for lack of subject matter jurisdiction. Dated: May 8, 2017 Respectfully submitted, CHAD A. READLER Acting Assistant Attorney General SHEILA LIEBER Deputy Director, Federal Programs Branch /s/ Chetan A. Patil CHETAN A. PATIL Trial Attorney United States Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Ave., NW Washington, DC 20530 Tel.: (202) 305-4968; Fax: (202) 616-8470 Email: chetan.patil@usdoj.gov Case 2:17-cv-00732-SJO-AS Document 14 Filed 05/08/17 Page 25 of 25 Page ID #:186 LOCAL RULE 7-3 DECL. OF CHETAN A. PATIL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CHAD A. READLER Acting Assistant Attorney General Civil Division SHEILA LIEBER Deputy Director, Federal Programs Branch CHETAN A. PATIL Trial Attorney United States Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Ave., NW Washington, DC 20530 Tel.: (202) 305-4968; Fax: (202) 616-8470 Email: chetan.patil@usdoj.gov Attorneys for Defendants UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA PEDIATRIC & FAMILY MEDICAL FOUNDATION dba EISNER PEDIATRIC & FAMILY MEDICAL CENTER, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants. Case No.: 17-cv-00732 (SJO-AS) DECLARATION OF CHETAN A. PATIL PURSUANT TO LOCAL RULE 7-3 IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS COMPLAINT Date: June 19, 2017 Time: 10:00 a.m. Judge: Hon. S. James Otero Courtroom: 10C Case 2:17-cv-00732-SJO-AS Document 14-1 Filed 05/08/17 Page 1 of 3 Page ID #:187 LOCAL RULE 7-3 DECL. OF CHETAN A. PATIL - 1 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I, CHETAN A. PATIL, declare under 28 U.S.C. § 1746 as follows: 1. I am a Trial Attorney with the United States Department of Justice, Civil Division. I am counsel of record for Defendants United States Department of Health and Human Services and Thomas E. Price, M.D., Secretary of the Department of Health and Human Services (collectively, “Defendants”). I submit this declaration in in support of Defendants’ Motion to Dismiss the Complaint accordance with paragraph 23a of Judge Otero’s Standing Order. 2. On May 1, 2017, I spoke on the telephone with Kaytee V. Costa, counsel for Plaintiffs Pediatric & Family Medical Foundation dba Eisner Pediatric & Family Medical Center, Ian Brent Tilley, M.D., Ruth Mielke, and Mary Elizabeth Claassen (collectively "Plaintiffs"). During this conversation, I explained to Ms. Costa that Defendants intended to file a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) on the grounds that the Court lacks subject matter jurisdiction over Plaintiffs’ Complaint. Specifically, Ms. Costa and I discussed Defendants’ argument that Plaintiffs cannot seek review under the Administrative Procedure Act (“APA”) of the November 21, 2016 letter from the Department of Health and Human Services advising Plaintiffs that they were not entitled to coverage under the Federal Tort Claims Act (the “Denial Letter”) because the Denial Letter is not “final agency action” under 5 U.S.C. § 704. 3. On May 1, 2017, Ms. Costa corresponded with me via email identifying the bases for Plaintiffs’ argument that the Denial Letter constituted a final agency action, including citations to legal authority. 4. On May 2, 2017, I spoke again with Ms. Costa and further discussed the grounds for Defendants’ argument that this Court lacks jurisdiction over Plaintiffs’ Complaint. 5. Ms. Costa and I were unable to reach agreement on any issue to avoid this motion. Case 2:17-cv-00732-SJO-AS Document 14-1 Filed 05/08/17 Page 2 of 3 Page ID #:188 LOCAL RULE 7-3 DECL. OF CHETAN A. PATIL - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6. As my place of business is in Washington, DC, my conversations with Ms. Costa occurred telephonically and electronically. I declare under penalty of perjury that the foregoing is true and correct. Executed on May 8, 2017 at Washington, DC /s/ Chetan A. Patil CHETAN A. PATIL Trial Attorney United States Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Ave., NW Washington, DC 20530 Tel.: (202) 305-4968; Fax: (202) 616-8470 Email: chetan.patil@usdoj.gov Case 2:17-cv-00732-SJO-AS Document 14-1 Filed 05/08/17 Page 3 of 3 Page ID #:189 [PROPOSED] ORDER - 1 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA PEDIATRIC & FAMILY MEDICAL FOUNDATION dba EISNER PEDIATRIC & FAMILY MEDICAL CENTER, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants. Case No.: 17-cv-00732 (SJO-AS) [PROPOSED] ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS COMPLAINT FOR LACK OF JURISDICTION ORDER After considering the papers submitted and the argument of counsel, IT IS HEREBY ORDERED THAT: Defendants’ motion to dismiss the Complaint for lack of subject matter jurisdiction is granted, and the Complaint is dismissed with prejudice. IT IS SO ORDERED. Dated: ___________________ Hon. S. James Otero United States District Judge Case 2:17-cv-00732-SJO-AS Document 14-2 Filed 05/08/17 Page 1 of 1 Page ID #:190