Backer v. Shah, No. 14-1367 (2d Cir. 2015)
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Plaintiff filed suit, alleging that the DOH violated the Medicaid Act, 42 U.S.C. 1396 et seq., when it determined that guardianship fees approved by a state court could not be deducted
from plaintiff’s Medicaid-required contributions to her nursing home costs. The district court dismissed the complaint based on lack of standing or, in the alternative, plaintiff failed to state a claim upon which relief could be granted. The court concluded that plaintiff did have standing where her injury was incurring debts beyond her means to the nursing facility or to her guardian. The court concluded, however, that plaintiff's claim failed on the merits because DOH was not under any unambiguous and binding obligation to allow deduction of the guardianship fees from plaintiff's net available monthly income. Accordingly, the court affirmed the judgment.
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14-1367-cv Backer v. Shah 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2014 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 29 30 31 (Argued: October 23, 2014 Decided: June 3, 2015) Docket No. 14-1367-cv - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - MINDY BACKER, by her guardian and next friend Gay Lee Freedman, Plaintiff-Appellant, FANNIE MAE WILLIAMS, by her guardian and next friend United Guardianship Services, ANNIE L. KELLY, by her guardian and next friend United Guardianship Services, on behalf of themselves and all others similarly situated, Plaintiffs, v. NIRAV R. SHAH, M.D., M.P.H., in his capacity as the Commissioner of the New York State Department of Health, Defendant-Appellee. - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - B e f o r e: WINTER, WALKER, and CABRANES, Circuit Judges. Appeal from a dismissal of a complaint by the United States 32 District Court for the Eastern District of New York (Roslynn R. 33 Mauskopf, Judge), on the alternative grounds that appellant 34 lacked standing to bring, and failed to state, a claim that the 35 Medicaid Act allows her to deduct guardianship fees from her 36 Medicaid-required contributions to nursing home costs. 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 We hold that appellant has standing but failed to state a valid claim for relief. We therefore affirm. JOSEPH P. GARLAND (Michael Korsinsky, on the brief), Korsinsky & Klein, LLP, Brooklyn, NY, for Plaintiff-Appellant. BETHANY A. DAVIS NOLL, Assistant Solicitor General (Barbara D. Underwood, Solicitor General, Anisha S. Dasgupta, Deputy Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, New York, NY, for Defendant-Appellee. WINTER, Circuit Judge: Mindy Backer appeals from Judge Mauskopf’s Fed. R. Civ. P. 19 12(b)(1) and 12(b)(6) dismissal of her complaint alleging a 20 Section 1983 violation. 21 York State Department of Health (“DOH”) violated the Medicaid 22 Act, 42 U.S.C. § 1396 et seq., when DOH determined that 23 guardianship fees approved by a state court could not be deducted 24 from Backer’s Medicaid-required contributions to her nursing home 25 costs. 26 failed to state a valid Section 1983 claim. We conclude that Backer has standing but has nevertheless We therefore affirm. BACKGROUND 27 28 In that action, she claimed that the New Appellant is incapacitated and resides in a nursing home. 29 She receives Medicaid benefits. Medicaid covers part or all of 30 the costs of nursing home facility services for qualified 31 beneficiaries. 32 are required to contribute their available income to the cost of 42 U.S.C. § 1396d(a)(4)(A). 2 Such beneficiaries 1 their institutional care. See 42 U.S.C. § 1396a(q)(1)(A); see 2 also Wong v. Doar, 571 F.3d 247, 261 (2d Cir. 2009). 3 calculating a beneficiary’s “available income” for such expenses, 4 state Medicaid plans are required to deduct a “monthly personal 5 needs allowance.” 6 monthly allowance is $50. 7 amount of the beneficiary’s income that is left after the $50 8 deduction is styled the “net available monthly income” (“NAMI”) 9 and must be paid to the nursing home. 42 U.S.C. § 1396a(q)(1)(A). When In New York, that 18 N.Y.C.R.R. § 360-4.9(a)(1). The See Florence Nightingale 10 Nursing Home v. Perales, 782 F.2d 26, 27-28 (2d Cir. 1986); see 11 also 42 U.S.C. § 1396a(q)(1)(A). 12 Under New York law, an incapacitated person is entitled to 13 have a guardian appointed to “act on [her] behalf . . . in 14 providing for personal needs and/or for property management.” 15 N.Y. Mental Hygiene L. § 81.03(a). 16 appellant’s sister, Gay Lee Freedman, was appointed by the New 17 York Supreme Court to be appellant’s guardian. 18 order stated that the income appellant deposited in her 19 guardianship account would be considered unavailable income for 20 purposes of calculation of her NAMI. 21 Comm'r of State of New York Dep't of Health, 988 N.Y.S.2d 522 22 (Sup. Ct. 2014). 23 however, DOH determined that appellant could not deduct the 24 guardianship fees and was required to contribute approximately Pursuant to that law, The guardianship See Matter of Freedman v. In a separate administrative proceeding, 3 1 $1,800 per month in NAMI toward her nursing home costs. 2 That ruling left her without funds to pay the guardianship fees. 3 See id. Relying on the terms of the guardianship order, Freedman 4 challenged DOH’s decision in state court, but the court upheld 5 DOH’s decision on the ground that it had a rational basis. 6 The court also noted that New York’s Medicaid regulations did not 7 authorize the deduction of guardianship fees and expenses from 8 the amount required to be contributed toward nursing home costs. 9 Id. 10 Id. While her state court challenge was pending, Freedman filed 11 the present action, including a putative class action, in the 12 Eastern District. 13 injunctive relief pursuant to 42 U.S.C. § 1983, alleging that DOH 14 violated the Medicaid Act, 42 U.S.C. §§ 1396a(a)(19), 15 1396a(q)(1), 1396d, by refusing to deduct guardianship expenses 16 from required Medicaid contributions. 17 “being damaged because of the failure of DOH to permit the 18 deduction of the guardianship fees from her available assets.” 19 The complaint sought declaratory and Backer alleged she was DOH successfully moved to dismiss the action. The district 20 court held that appellant lacked constitutional standing to bring 21 the claim, noting that the complaint “failed to allege any injury 22 ‘fairly traceable’ to defendant’s conduct or the provisions of 23 the Medicaid Act. 24 incur[red] as a result of not paying the NAMI [were] a result of Any financial liabilities plaintiff[] [has] 4 1 an independent economic choice to pay [the] guardian[] instead.” 2 Williams ex rel. United Guardianship Servs. v. Shah, No. 3 12-CV-3953 (RRM) (RML), 2014 WL 1311154, at *5 (E.D.N.Y. Mar. 30, 4 2014). 5 had standing, dismissal was still warranted because she failed to 6 state a claim upon which relief could be granted. The court held in the alternative that even if appellant Id. at *6. DISCUSSION 7 8 9 We review de novo a district court’s grant of a motion to 10 dismiss (i) for lack of standing, and (ii) for failure to state a 11 claim upon which relief can be granted. 12 F.3d 82, 90 (2d Cir. 2013). 13 a) 14 Rothstein v. UBS AG, 708 Standing Before reaching the merits, we must first determine whether 15 appellant had standing to bring her claim. 16 Hutton, Inc. v. Wagoner, 944 F.2d 114, 117 (2d Cir. 1991). 17 have standing, a complainant must show: 18 particularized invasion of a legally protected interest; (ii) a 19 causal connection between the invasion and the alleged injury; 20 and (iii) a likelihood that the injury will be redressed by a 21 favorable decision. 22 555, 560-61 (1992). 23 See Shearson Lehman To (i) a concrete and See Lujan v. Defenders of Wildlife, 504 U.S. The district court held that appellant lacked standing 24 because her alleged injury was “solely attributable” to her own 25 action in paying her guardian instead of her nursing home costs. 5 1 Williams, 2014 WL 1311154, at *3-4 (quoting Engwiller v. Pine 2 Plains Cent. Sch. Dist., 110 F. Supp. 2d 236, 246-47 (S.D.N.Y. 3 2000)). 4 We disagree. DOH determined that appellant was obligated to make NAMI 5 payments for the costs of her nursing home residency before 6 paying the guardianship fees. 7 appellant to have insufficient funds to pay her guardianship 8 obligations. 9 for the nursing facility charges or for guardianship services. This determination caused She was thus exposed to potential liability either 10 An injury is “self-inflicted” so as to defeat standing only 11 if “the injury is so completely due to the plaintiff’s own fault 12 as to break the causal chain.” 13 402 (2d Cir. 2000) (quoting 13 Charles A. Wright, Arthur R. 14 Miller, & Edward H. Cooper, Federal Practice and Procedure § 15 3531.5, at 457 (2d ed. 1984)). 16 sought relief from the state courts from the guardianship 17 expenses, see N.Y. Mental Hyg. Law § 81.28, but the possibility, 18 or even probability, of obtaining such relief does not eliminate 19 the difficult position appellant was put in by DOH’s ruling. 20 long as the defendants have engaged in conduct that may have 21 contributed to causing the injury, it would be better to 22 recognize standing.” 23 quotation marks omitted). 24 debts beyond her means to the nursing facility or to her guardian St. Pierre v. Dyer, 208 F.3d 394, To be sure, appellant might have “So St. Pierre, 208 F.3d at 402 (internal Appellant’s injury –- i.e., incurring 6 1 -- was not “solely” attributable to her own actions, but rather 2 was caused in part by DOH’s determination. 3 Therefore, we hold that appellant had standing to bring the 4 action. 5 b) 6 Section 1983 We now turn to the merits of appellant’s Section 1983 claim. 7 To obtain redress through Section 1983, “a plaintiff must assert 8 the violation of a federal right, not merely a violation of 9 federal law.” Blessing v. Freestone, 520 U.S. 329, 340 (1997); 10 accord NextG Networks of NY, Inc. v. City of New York, 513 F.3d 11 49, 52 (2d Cir. 2008). 12 factors when determining whether a particular statutory provision 13 gives rise to a federal right.” 14 “First, Congress must have intended that the provision in 15 question benefit the plaintiff.” 16 not be “so vague and amorphous that its enforcement would strain 17 judicial competence.” 18 omitted). 19 binding obligation on the States.” 20 Courts “traditionally look[] at three Blessing, 520 U.S. at 340. Id. Second, the statute must Id. at 340-41 (internal quotation marks Finally, “the statute must unambiguously impose a Id. at 341. “Section 1983 is only a grant of a right of action; the 21 substantive right giving rise to the action must come from 22 another source.” 23 119 (2d Cir. 1995). 24 1983 claim is 42 U.S.C. § 1396a(a)(19), which requires state Singer v. Fulton Cnty. Sheriff, 63 F.3d 110, One alleged source of appellant’s Section 7 1 Medicaid plans to “provide such safeguards as may be necessary to 2 assure that eligibility for care and services under the plan will 3 be determined . . . in a manner consistent with simplicity of 4 administration and the best interests of the recipients.” 5 have yet to address the issue, but various other circuits have 6 held that Section 1396a(a)(19) is too vague and amorphous to 7 create a Section 1983 private right of action. 8 Bruggeman v. Blagojevich, 324 F.3d 906, 911 (7th Cir. 2003) 9 (“[T]he ‘best interests’ provision . . . is insufficiently We See, e.g., 10 definite to be justiciable, and in addition cannot be interpreted 11 to create a private right of action[.]”); Harris v. James, 127 12 F.3d 993, 1010 (11th Cir. 1997) (collecting cases); Cook v. 13 Hairston, No. 90-3437, 1991 WL 253302, at *5 (6th Cir. Nov. 26, 14 1991). 15 We agree with these courts. Section 1396a(a)(19)’s direction to provide safeguards so 16 that the determination of Medicaid eligibility will be consistent 17 with both “simplicity of administration” and “the best interests 18 of . . . recipients” provides no workable standard for judicial 19 decision making. 20 circumstances inconsistent, requiring an experimental balancing 21 of perceived costs and benefits in a vast number of forseen and 22 unforseen situations. 23 to enforce such terms would truly strain judicial competence to a 24 breaking point. The terms used are amorphous and in some Recognition of a private right of action 8 1 The only other source of a Section 1983 claim relied upon by 2 appellant is 42 U.S.C. § 1396a(q)(1)(A), which requires state 3 Medicaid plans to deduct a “monthly personal needs allowance -- 4 (i) which is reasonable in amount for clothing and other personal 5 needs of the individual (or couple) while in an institution, and 6 (ii) which is not less [than $30 for an institutionalized 7 individual].” 8 9 Id.; see also id. § 1396a(q)(2). The language of this provision indicates that it is limited to payment for comfort items, such as clothes, that are “not 10 supplied by [an individual’s] institution.” 11 at 150 (1971), reprinted in 1972 U.S.C.C.A.N. 4989, 5136. 12 Indeed, the paltry minimum sum allowed for such comfort items 13 could not have been designed to encompass potentially high 14 guardianship fees. 15 allowance is “modest” because “in Congress’s judgment, most 16 subsistence needs are met by the institution”) (internal 17 quotation marks omitted). 18 and binding obligation, Blessing, 520 U.S. at 341, to allow 19 deduction of the guardianship fees from appellant’s NAMI. 20 21 24 See Wong, 571 F.3d at 261 (noting that the DOH was thus not under any unambiguous Appellant therefore has not stated a Section 1983 claim based on either Section 1396a(q)(19) or 1396a(q)(1)(A). CONCLUSION 22 23 H.R. Rep. No. 92-231 For the reasons stated, we affirm the dismissal pursuant to Rule 12(b)(6). 9
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