Hospitality House, Inc v. Gilbert

298 F.3d 424, 53 Fed. R. Serv. 3d 140, 2002 U.S. App. LEXIS 14310
CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 16, 2002
Docket01-50759
StatusPublished
Cited by16 cases

This text of 298 F.3d 424 (Hospitality House, Inc v. Gilbert) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hospitality House, Inc v. Gilbert, 298 F.3d 424, 53 Fed. R. Serv. 3d 140, 2002 U.S. App. LEXIS 14310 (5th Cir. 2002).

Opinion

298 F.3d 424

HOSPITALITY HOUSE, INC; Stonebridge Health Center, Inc; Regency Village Care Center, Ltd; Medical Hospital of Buna, Inc; Ridgecrest Retirement Center, Ltd; Texas Alliance For Fair Nursing Home Reimbursement, Plaintiffs-Appellees.
v.
Don A. GILBERT, Commissioner of the Texas Health and Human Services Commission; Eric M. Bost, Commissioner of the Texas Department of Human Services; David Herndon, Chairman of the Board, Texas Department of Human Services; Elizabeth Seale, Member of the Board of the Texas Department of Human Services; John A. Cuellar, Member of the Board of the Texas Department of Human Services; Terry Durkin Wilkinson, Member of the Board of the Texas Department of Human Services; Carole Woodard, Member of the Board of the Texas Department of Human Services, Defendants-Appellants.

No. 01-50759.

United States Court of Appeals, Fifth Circuit.

July 16, 2002.

COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Creswell Dean Davis (argued), Mark Alan Keene, Davis & Davis, Austin, TX, for Plaintiffs-Appellees.

Julie Caruthers Parsley, Asst. Sol. Gen.(argued), Melanie P. Sarwal, Austin, TX, for Defendants-Appellants.

Frances Witty Hamermesh, Davis & Wilkerson, Austin, TX, for Amicus Curiae Texas Ass'n of Homes & Services for the Aging.

Gavin Joe Gadberry, Underwood, Wilson, Berry, Stein & Johnson, Amarillo, TX, for Amicus Curiae Texas Health Care Ass'n.

Appeal from the United States District Court for the Western District of Texas.

Before KING, Chief Judge, and GARWOOD and HIGGINBOTHAM, Circuit Judges.

KING, Chief Judge:

The Defendants-Appellants, officials of the Texas Health and Human Services Commission and the Texas Department of Human Services, appeal the district court's denial of their motion to dismiss in which they asserted Eleventh Amendment immunity from the district court's exercise of jurisdiction over an action brought by operators of nursing homes in Texas to enforce a settlement agreement. Because the district court does not have subject matter jurisdiction over the enforcement action, we do not reach the issue of Eleventh Amendment immunity. Instead, we vacate the district court's order denying the state health officials' motion to dismiss and remand this case to the district court with instructions to dismiss the nursing home operators' enforcement action against the state health officials for lack of subject matter jurisdiction.

I. BACKGROUND

The Defendants-Appellants in this case are various officials of the Texas Health and Human Services Commission and the Texas Department of Human Services (collectively the "state health officials"). The Plaintiffs-Appellees are five businesses that operate nursing homes in Texas and one non-profit corporation that advocates adequate and fair Medicaid reimbursement rates for nursing homes in Texas (collectively the "nursing home operators"). The nursing home operators initiated the instant case on February 28, 2001, when they filed suit in the district court to enforce a settlement agreement (the "Agreement") that was negotiated pursuant to a prior lawsuit brought by the Texas Health Care Association ("THCA") against the state health officials.1 Alleging that the state health officials had failed to comply with the Agreement, the nursing home operators sought declaratory and injunctive relief as intended beneficiaries of the Agreement (or as representatives of intended beneficiaries).

The Agreement arose from a lawsuit filed by the THCA in November 1996 to compel the state health officials to satisfy their obligations under the Boren Amendment, 42 U.S.C. § 1396a(a)(13)(A) (1994) (repealed 1997).2 The Boren Amendment required that the medical assistance plans submitted by states participating in the Medicaid program provide for reimbursement for "hospital services, nursing facility services, and services in an intermediate care facility for the mentally retarded" at rates "reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities." 42 U.S.C. § 1396a(a)(13)(A); see also Wilder v. Vir. Hosp. Ass'n, 496 U.S. 498, 524, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990) (holding that "[t]he Boren Amendment to the [Medicaid] Act creates a right, enforceable in a private cause of action pursuant to § 1983, to have the State adopt rates that it finds are reasonable and adequate rates to meet the costs of an efficient and economical health care provider").3 After negotiations, the THCA and the state health officials entered into the Agreement on January 27, 1997.

Under the Agreement, the state health officials were obligated, inter alia, (1) to adopt specified reimbursement rates for 1997, (2) "to evaluate the overall adequacy of [reimbursement] rates and ... the methodology [for rate determination]" with the goal of "achiev[ing] a rate that is reasonable and adequate to meet the costs that efficiently and economically operated providers must incur in order to provide care and services in conformity with applicable State and Federal laws, regulations and quality and safety standards," (3) to negotiate in good faith with the nursing home operators in an attempt to reach agreements on various issues related to Medicaid reimbursement rates, and (4) to submit recommended changes in the reimbursement procedure to the state legislature. In exchange, the THCA agreed "not to bring a Boren Amendment challenge to the 1997 rates adopted pursuant to this agreement," with the caveat that "[t]his covenant not to sue shall not preclude THCA from bringing any subsequent action to enforce the terms and covenants of this agreement." The Agreement further provided that the parties would move for dismissal of the case without prejudice "within three working days" after the Board of the Texas Department of Human Services adopted the 1997 rates specified in the Agreement.

Pursuant to the Agreement, the THCA and the state health officials filed an agreed motion to dismiss the case without prejudice on January 30, 1997. In this motion, the parties incorporated by reference the Agreement, which was attached as an exhibit. The district court granted the motion to dismiss, entering the following order:

Before the Court is the parties' Agreed Motion to Dismiss. Following consideration, the Court finds the Motion should be granted.

IT IS THEREFORE ORDERED that Civil Action No. A-96-CA-744-SS be and said action is hereby DISMISSED WITHOUT PREJUDICE.

Approximately four years after the district court dismissed the THCA's case against the state health officials, the nursing home operators filed the instant suit to enforce the Agreement in the same district court. The state health officials filed a motion to dismiss on the ground that they were entitled to Eleventh Amendment immunity. On July 13, 2001, the district court denied the state health officials' motion to dismiss, concluding that the court had "jurisdiction to construe and declare the terms of the settlement agreement ...

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Bluebook (online)
298 F.3d 424, 53 Fed. R. Serv. 3d 140, 2002 U.S. App. LEXIS 14310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hospitality-house-inc-v-gilbert-ca5-2002.