DEAL v. VELEZ et al, No. 1:2014cv06444 - Document 56 (D.N.J. 2017)
Court Description: OPINION. Signed by Judge Joseph H. Rodriguez on 3/20/2017. (tf,)
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DEAL v. VELEZ et al Doc. 56 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW J ERSEY CAMDEN VICINAGE PATRICE DEAL, EXECUTRIX OF THE : ESTATE OF GRACE DEAL, DECEASED, : Plaintiff, v. : J ENNIFER VELEZ, et al., Hon. J oseph H. Rodriguez Civil Action No. 14-6444 OPINION : Defendants. : This m atter is before the Court on Defendants’ m otion to dism iss the Am ended Complaint for lack of jurisdiction. The Court has reviewed the subm issions and decides the matter based on the briefs pursuant to Fed. R. Civ. P. 78(b). For the reasons stated here, Defendants’ m otion will be granted in part and denied in part. Background This case arises out of a series of applications for assisted living benefits m ade by or on behalf of decedent Grace Deal, which were originally denied by the State of New J ersey in conjunction with the Burlington County Board of Social Services. 1 (Am . Com pl. at ¶¶ 10 -13, 17.) Although Defendants are J ennifer Velez, form er Com m issioner of New J ersey Department of Hum an Services, Meghan Davey, Director of New J ersey DHS Division of Medical Assistance and Health Services (“DMAHS”), Charles Sanfilippo, Director of Burlington County Board of Social Services 1 1 Dockets.Justia.com the State eventually granted Deal’s application, Plaintiff Patrice Deal, Executrix of the Estate of Grace Deal, asserts that Defendants wrongly determ ined that Grace Deal was not eligible for the Medicaid Waiver Program to cover assisted living services of $ 63,411.28 for the period from J uly 1, 20 14 to February 28, 20 15. (Am. Com pl. at ¶¶ 13, 69, Ex. C.) Grace Deal applied for Medicaid benefits through the Global Options Assisted Living Medicaid Waiver (“GO”) Program , the only Medicaid funded program in New J ersey that covered benefits received for assisted living facilities, on J anuary 6, 20 14. (Am . Com pl. ¶10 .) On March 4, 20 14, BCBOSS, the county welfare agency, denied Deal eligibility for the GO Program because on December 13, 20 13 she had entered into a Consent Order reducing the am ount of m onthly spousal support to which she was entitled pursuant to a March 17, 20 10 settlem ent agreement which accom panied her Lim ited Divorce from Bed and Board from $ 20 55 to $ 1,50 0 . (Am. Com pl. ¶¶ 47-50 ; Ehrenkrantz Cert. Ex. A, B, C.) BCBOSS presum ed that Deal’s request for the Order decreasing her m onthly support was im properly m otivated to obtain Medicaid, which had a $ 2,163 m onthly (“BCBOSS”), and Ronald Yulick, Adult Medicaid Supervisor, Burlington County Board of Social Services (collectively “the State” or “Defendants”). Velez and Davey advanced the m otion presently before the Court [Docket Entry 51], which the County Defendants joined in by letter [Docket Entry 52]. 2 incom e lim it 2 , contrary to N.J . Adm in. Code 10 :71-4.10 (b)3, which prohibits disposal of assets at less than fair m arket value for five years prior to application for benefits. (Am. Com pl. ¶¶10 , 52; Ehrenkrantz Cert. Ex. C.) Plaintiff tim ely filed an adm inistrative appeal on March 12, 20 14. (Am . Com pl. ¶ 53.) On J une 20 , 20 14, following a state adm inistrative hearing, the adm inistrative law judge issued an initial decision affirm ing the denial of Deal’s eligibility. (Am. Com pl. ¶¶ 53-55; Ehrenkrantz Cert. Ex. D.) On August 1, 20 14, the DMAHS issued a final agency decision affirm ing the adm inistrative law judge’s decision denying Deal GO Program eligibility. (Am. Com pl. ¶¶ 56; Ehrenkrantz Cert. Ex. E.) Plaintiff did not appeal that decision to the Superior Court of New J ersey, Appellate Division. Rather, on October 17, 20 14, Plaintiff filed the Com plaint in this case. In J uly 20 14, DMAHS phased out the GO Program and instituted the Managed Long Term Care Services and Supports (“MLTSS”) Waiver Program as a new way to help individuals live in the com m unity for as long as possible with services and supports. 42 U.S.C. § 1315(b). Beginning J uly 1, 20 14, participants in Global Options and three other waiver program s — At the tim e, Deal also received $ 487.90 per month in Social Security. (Ehrenkrantz Cert. Ex. D.) As such, BCBOSS determ ined that Deal’s m onthly incom e was $ 2542.90 . (Ehrenkrantz Cert. Ex. D.) 2 3 AIDS Com m unity Care Alternatives Program (ACCAP), Com m unity Resources for People with Disabilities (CRPD) and Traum atic Brain Injury (TBI) — were autom atically enrolled in the MLTSS program through a Medicaid m anaged care organization (MCO). Relevant to this case is that under the MLTSS Waiver Program, as of December 1, 20 14, Medicaid coverage was expanded beyond nursing facilities to assisted living and hom e care; an individual who was not on the program and had m onthly incom e exceeding the cap could establish a Qualified Incom e Trust (“QIT”) QIT in order to be approved for Medicaid because income deposited into the QIT is disregarded in determ ining incom e eligibility. 42 U.S.C. § 1396p(d)(4)(B). Defendants’ attorney advised Plaintiff’s attorney during a December 23, 20 14 phone call that Plaintiff should file a new Medicaid application for assisted living benefits. (Am . Com pl. ¶¶ 10 1-0 2.) Deal filed a second Medicaid application J anuary 20 , 20 15 and set up a Qualified Income Trust the next day. (Am. Com pl. ¶¶ 12, 10 3-0 4, Ex. D.) She alleges that in processing this second application, Defendants required Deal to obtain judicial m odification of her m onthly spousal support payment back to $ 20 55, which she did effective by court Order dated J une 5, 20 15. (Am . 4 Com pl. ¶¶ 60 -63, Ex. A; Ehrenkrantz Cert. Ex. I, L, O.) Deal passed away J une 28, 20 15. (Am. Com pl. ¶ 64.) On J uly 22, 20 15, DMAHS determ ined that Deal was eligible for the Medicaid waiver program as of J une 1, 20 15, and based on undue hardship while seeking legal action to reverse the “transfer of assets,” granted her eligibility effective March 1, 20 15. (Am. Com pl. ¶¶ 65-66, Ex. B.) Plaintiff asserts violations of Deal’s statutory rights as granted by the Federal Medicaid Act, enforceable under 42 U.S.C. § 1983. See Am . Compl. at ¶¶ 74, 77, 80 , 83, 10 8. The Amended Com plaint asserts claim s for: (1) failure to establish an appropriate date of eligibility (J uly 1, 20 14 3) in operation of a Medicaid Assisted Living Waiver in violation of 42 U.S.C. § 1396a(a)(34); (2) denial of due process in operation of the Medicaid AL Waiver in violation of 42 U.S.C. § 1396a(a)(3) by failing to notify Deal that she was denied coverage for the tim e between the effective date of eligibility (J uly 1, 20 14) and the date in which she was enrolled; (3) failure to provide Plaintiff contends she was eligible under the GO Waiver Program for Medicaid benefits when she first applied, and states “Had she been living in a nursing facility on J anuary 1, 20 14, and subsequently, Defendants would have begun Medicaid coverage for nursing facility services effective J uly 1, 20 14” when the MLTSS Waiver Program was approved. (Am . Com pl. ¶¶ 4, 22, 31, 71.) In opposing the m otion to dism iss, however, Plaintiff argues that she is entitled to coverage from Decem ber 1, 20 14 through February 28, 20 15, in what appears to be an attem pt to obtain three m onths of retroactive Medicaid benefits. 3 5 m edical assistance with reasonable prom ptness in operation of the Medicaid AL Waiver in violation of 42 U.S.C. § 1396a(a)(8); (4) denial of due process in operation of the Medicaid AL Waiver by failing to give full faith and credit to the Decem ber 13, 20 13 Superior Court Order reducing Plaintiff’s spousal support; and (5) declaratory relief directing Defendants to properly process Deal’s Medicaid application and determ ine her to be eligible for Medicaid effective J uly 1, 20 14. Defendants argue that they are entitled to sovereign and/ or qualified im m unity under the Eleventh Am endm ent. Defendants further argue that Plaintiff’s claim s for relief are m oot in that Deal was granted Medicaid Waiver Program eligibility. Discussion Applicable Standards A m otion to dism iss for lack of subject m atter jurisdiction under Fed. R. Civ. P. 12(b)(1) m ust be granted if the court lacks subject m atter jurisdiction to hear a claim . In re Schering Plough Corp. Intron/ Tem odar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 20 12). When a defendant files a motion under Rule 12(b)(1), the plaintiff bears the burden of establishing subject m atter jurisdiction for the sake of rem aining in federal court. Gould Elec., Inc. v. United States, 220 F.3d 169, 178 (3d Cir. 6 20 0 0 ). The Court applies this standard to the issue of im munity. See Young v. United States, 152 F. Supp. 3d 337, 344 (D.N.J . 20 15). A m otion to dism iss pursuant to Federal Rule of Civil Procedure 12(b)(1) m ay involve either a facial challenge to subject m atter jurisdiction or a factual challenge to the jurisdictional allegations. Gould Elec., 220 F.3d at 176. If the defendant’s attack is facial—i.e., “asserting that the com plaint, on its face, does not allege sufficient grounds to establish subject m atter jurisdiction”—a court m ust accept all allegations in the com plaint as true. Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 20 0 6). Alternatively, a defendant m ay “challenge a federal court’s jurisdiction by factually attacking the plaintiff's jurisdictional allegations as set forth in the com plaint.” Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977). A factual challenge attacks the existence of a court’s subject m atter jurisdiction apart from any of the pleadings and, when considering such a challenge, a presum ption of truthfulness does not attach to a plaintiff's allegations.” Id.; see also Martinez v. U.S. Post Office, 875 F. Supp. 10 67, 10 70 (D.N.J . 1995). Alternatively, Federal Rule of Civil Procedure 12(b)(6) allows a party to m ove for dism issal of a claim based on “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A com plaint should 7 be dism issed pursuant to Rule 12(b)(6) if the alleged facts, taken as true, fail to state a claim . Fed. R. Civ. P. 12(b)(6). When deciding a m otion to dism iss pursuant to Rule 12(b)(6), ordinarily only the allegations in the com plaint, m atters of public record, orders, and exhibits attached to the com plaint, are taken into consideration. 4 See Chester County Interm ediate Unit v. Pa. Blue Shield, 896 F.2d 80 8, 812 (3d Cir. 1990 ). It is not necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977). The question before the Court is not whether the plaintiff will ultim ately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (20 0 7). Instead, the Court simply asks whether the plaintiff has articulated “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (20 0 7). “A claim has facial plausibility 5 when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the Although a district court m ay not consider m atters extraneous to the pleadings, a document integral to or explicitly relied upon in the com plaint m ay be considered without converting the m otion to dism iss into one for sum m ary judgment.” U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 20 0 2) (internal quotation m arks and citations om itted) (em phasis deleted). 4“ This plausibility standard requires m ore than a m ere possibility that unlawful conduct has occurred. “When a com plaint pleads facts that are ‘m erely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlem ent to relief.’’” Id. 5 8 defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (citing Twom bly, 550 U.S. at 556). “Where there are wellpleaded factual allegations, a court should assum e their veracity and then determ ine whether they plausibly give rise to an entitlem ent to relief.” Iqbal, 556 U.S. at 679. The Court need not accept “‘unsupported conclusions and unwarranted inferences,’” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 20 0 7) (citation om itted), however, and “[l]egal conclusions m ade in the guise of factual allegations . . . are given no presum ption of truthfulness.” Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 60 7, 60 9 (D.N.J . 20 0 6) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v. Barella, 489 F.3d 170 , 177 (3d Cir. 20 0 7) (quoting Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 20 0 5) (“[A] court need not credit either ‘bald assertions’ or ‘legal conclusions’ in a com plaint when deciding a m otion to dism iss.”)). Accord Iqbal, 556 U.S. at 678-80 (finding that pleadings that are no m ore than conclusions are not entitled to the assum ption of truth). Further, although “detailed factual allegations” are not necessary, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlem ent to relief’ requires m ore than labels and conclusions, and a form ulaic recitation of a cause of action’s elem ents will not do.” Twom bly, 550 U.S. at 555 (internal 9 citations om itted). See also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by m ere conclusory statements, do not suffice.”). Thus, a m otion to dism iss should be granted unless the plaintiff’s factual allegations are “enough to raise a right to relief above the speculative level on the assum ption that all of the com plaint’s allegations are true (even if doubtful in fact).” Twom bly, 550 U.S. at 556. “[W]here the well-pleaded facts do not perm it the court to infer m ore than the m ere possibility of m isconduct, the com plaint has alleged-but it has not ‘shown’‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679. Am enability to Suit as “Persons” under § 1983 The United States Supreme Court has held that “neither a State nor its officials acting under their official capacities are ‘persons’ am enable to suit under § 1983.” Will v. Michigan Dep’t of State Police, 491 U.S. 58, 71 (1989). As such, an em ployee of the State nam ed as a defendant in a civil rights action m ay be held liable for dam ages only if that person has personal involvement in the alleged wrongs and is sued in their personal capacity. See Hafer v. Melo, 50 2 U.S. 21, 31 (1991) (“state officials, sued in their individual capacities, are ‘persons’ within the m eaning of § 1983”). “Local government bodies and their officials, by contrast, are regarded as 10 ‘persons’ am enable to suit under § 1983.” Estate of Lagano v. Bergen Cty. Prosecutor’s Office, 769 F.3d 850 , 854 (3d Cir. 20 14) (citing Monell v. Department of Social Servs., 436 U.S. 658, 690 (1978)). Eleventh Am endment Sovereign Im m unity The Eleventh Am endm ent incorporates a general principle of sovereign im m unity that bars citizens from bringing suits for dam ages against any State in federal court. Pennhurst State Sch. & Hosp. v. Halderm an, 465 U.S. 89, 10 0 -0 1 (1984). Sovereign im m unity extends to State agencies and State officers, “as long as the state is the real party in interest.” Fitchik v. N.J . Transit Rail Operations, 873 F.2d 655, 659 (3d Cir. 1989). It does not extend to counties and m unicipalities. Mt. Healthy City Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977); Bolden v. Southeastern Pa. Transp. Auth., 953 F.2d 80 7, 813-14 (3d Cir. 1991) (“[A]lthough political subdivisions of a state, such as counties and m unicipalities, fall within the term ‘State’ as used in the Fourteenth Am endm ent, political subdivisions are not ‘State[s]’ under the Eleventh Am endment.”). Im m unity for Injunctive Relief On the other hand, “a state official in his or her official capacity, when sued for injunctive relief, would be a person under § 1983 because officialcapacity actions for prospective relief are not treated as actions against the 11 State.” Will, 491 U.S. at 71 n.10 . In addition, “the availability of prospective relief of the sort awarded in Ex parte Young gives life to the Suprem acy Clause” and is therefore not barred by the Eleventh Am endm ent. Green v. Mansour, 474 U.S. 64, 68 (1985). That is, “a federal court m ay, without violating the Eleventh Am endm ent, issue a prospective injunction against a state officer to end a continuing violation of federal law.” Price v. Medicaid Director, 838 F.3d 739, 746-47 (6th Cir. 20 16) (citing Ex parte Young, 20 9 U.S. 123. 159 (190 8)). As such, “in suits concerning a state’s paym ent of public benefits under federal law, a federal court m ay enjoin the state’s officers to comply with federal law by awarding those benefits in a certain way going forward—even if the court m ay not order those officers to pay out public benefits wrongly withheld in the past.” Id. at 747 (citing Edelm an v. J ordan, 415 U.S. 651, 667-68 (1974)). “[A]n ancillary effect on the state treasury is a perm issible and often an inevitable consequence of the principle announced in Ex parte Young.” Edelm an, 415 U.S. at 668. To the contrary, a retroactive award of m onetary relief against the State is “m easured in term s of a m onetary loss resulting from a past breach of a legal duty on the part of the defendant state officials,” id., and would be prohibited by the Eleventh Am endment. 12 “In determ ining whether the doctrine of Ex parte Young avoids an Eleventh Am endment bar to suit, a court need only conduct a ‘straightforward inquiry into whether [the] com plaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.’” Verizon Md. Inc. v. Public Serv. Com m’n of Md., 535 U.S. 635, 645 (20 0 2) (quoting Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 296 (1997) (O'Connor, J ., concurring in part and concurring in the judgm ent)). Analysis Insofar as Velez and Davey have been sued in their official capacities for dam ages, the claim s against them, all brought under § 1983, m ust be dism issed because they are not amenable to suit. Additionally, Plaintiff has not alleged an ongoing violation of federal law that injunctive relief would abate, and granting Plaintiff’s relief would not prevent a threatened future violation of federal law. Rather, Plaintiff seeks injunctive relief that would direct Defendants to give effect to Deal’s December 20 13 m odified support Order, rather than considering it a transfer of assets within the five-year look back period, in order to adjust Deal’s Medicaid Waiver Program eligibility to cover assisted living services of $ 63,411.28 for the period from J uly 1, 20 14 to February 28, 20 15. The Court cannot find that to be 13 prospective relief. As such, Plaintiff’s claim s for injunctive relief against the Velez and Davey in their official capacities m ust be dism issed. Further, the Am ended Com plaint contains no indication that either Velez or Davey has been sued in her individual capacity and there is no factual basis to infer that either had personal involvement in denying Plaintiff’s eligibility for Medicaid benefits. Vicarious liability is inapplicable to § 1983 suits. Ashcroft v. Iqbal, 556 U.S. 662, 676 (20 0 9). Accordingly, Velez and Davey will be dism issed from the suit. While the County Defendants have joined in the State’s motion, they cannot avail them selves of the argum ent that they are not am enable to suit under § 1983. Additionally, application of the Eleventh Amendm ent to the County Defendants would involve factual issues that cannot be resolved from the face of the Com plaint. See Mortensen, 549 F.2d at 891. Such issues include (1) whether paym ent of any judgment against the County Defendants would com e from the State treasury, (2) the status of the BCBOSS office under State law, and (3) the County Defendants’ degree of autonom y. See Fitchik, 873 F.2d at 659. Accordingly, the Eleventh Am endm ent argument advanced by Velez and Davey is inapplicable to the Burlington County Defendants, Sanfilippo and Yulick. 14 Regarding the argum ent that Plaintiff’s claim s are m oot, the Court does not find that Plaintiff received the relief she sought when she was found eligible for benefits effective March 1, 20 15. Therefore, the Am ended Com plaint will not be dism issed on the ground that the m atter is m oot. Further, Plaintiff has stated a claim regarding delays she faced in having Deal’s applications processed; Defendants’ argum ent that any such delay was Plaintiff’s fault is inappropriate on a m otion to dism iss. Conclusion For these reasons, the State Defendants’ m otion to dism iss will be granted; Velez and Davey will be dism issed from the case. The County Defendants’ joinder in the m otion does not warrant their dism issal. An appropriate Order will be entered. Dated: March 20 , 20 17 / s/ J oseph H. Rodriguez J OSEPH H. RODRIGUEZ U.S.D.J . 15
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