UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
New Hampshire Hospital Association et al.
v. Civil No. 17-cv-349-LM Opinion No. 2018 DNH 195 Alex M. Azar,1 Secretary, U.S. Department of Health and Human Services et al.
O R D E R
In November 2015, several New Hampshire hospitals2 and the
New Hampshire Hospital Association (“NHHA”), a non-profit trade
association, brought suit in this court against the Secretary of
Health and Human Services, the Centers for Medicare and Medicaid
Services (“CMS”), and the Administrator of CMS. See New
Hampshire Hosp. Ass’n v. Burwell, No. 15-cv-460-LM (D.N.H.
2015). Plaintiffs alleged in that suit that defendants set
forth certain “policy clarifications” regarding the method of
calculating supplemental payments to certain hospitals. They
alleged these policy clarifications were issued in responses to
1 Alex M. Azar became Secretary of the U.S. Department of Health and Human Services on January 29, 2018, replacing Thomas Price. See Fed. R. Civ. P. 25(d).
2 Plaintiff hospitals are Mary Hitchcock Memorial Hospital, LRGHealthcare, Speare Memorial Hospital, and Valley Regional Hospital, Inc. frequently asked questions posted on medicaid.gov, and that both
the policies themselves and the manner in which they were
promulgated contradict the plain language of the Medicaid Act
and violate the Administrative Procedure Act (“APA”). This
court granted plaintiffs’ motion for summary judgment, holding
that defendants’ enforcement of the policy clarifications set
forth in the responses to frequently asked questions violated
the APA. New Hampshire Hosp. Ass’n v. Burwell, No. 15-cv-460-
LM, 2017 WL 822094, at *8-14 (D.N.H. Mar. 2, 2017), aff’d sub
nom. New Hampshire Hosp. Ass’n v. Azar, 887 F.3d 62 (1st Cir.
2018). The court permanently enjoined defendants from enforcing
the policies in the responses to the frequently asked questions,
but took no position as to whether those policies could be
enforceable if set forth in a validly promulgated rule or
regulation. Id. at *12 n.16.
After the court issued its order, defendants published a
final rule regarding the calculation of the supplemental
payments. See Medicaid Program: Disproportionate Share Hospital
Payments—Treatment of Third Party Payers in Calculating
Uncompensated Care Costs, 82 Fed. Reg. 16114–02, 16117 (Apr. 3,
2017) (“Final Rule”). The Final Rule expressly included within
its text the policies that had been set forth in the responses
to the frequently asked questions.
2 Plaintiffs brought this suit, seeking declaratory and
injunctive relief to prevent defendants from enforcing the Final
Rule. Plaintiffs represented that they would suffer irreparable
harm once the Rule became effective, and the court set an
expedited briefing schedule for the parties’ cross-motions for
summary judgment so that it could rule on the motions prior to
the date the Final Rule went into effect.
On March 5, 2018, after the parties filed their briefing in
support of their cross-motions for summary judgment but before
oral argument, plaintiffs submitted a “Notice of Supplemental
Authority Invalidating the Final Rule.” Doc. no. 38. In that
notice, plaintiffs stated: “On March 2, 2018, the Court in
Children’s Hosp. Assoc. of Texas v. Price, No. 17-844 (D.C.
Cir.), which also has been considering the validity of the Final
Rule based on cross motions for summary judgment, issued an
order invalidating and vacating that rule.” Id. at 1.
Plaintiffs included with their notice a copy of the order in
Children’s Hospital Ass’n of Texas and noted that a memorandum
opinion explaining the order’s reasoning had not yet been
issued. Plaintiffs also stated: “By vacating the Final Rule,
the Order is dispositive of the issues pending before this
Court.” Id. at 2.
On March 7, 2018, plaintiffs submitted a “Notice of
Supplemental Authority Vacating the Final Rule,” doc. no. 39, to
3 which they attached a copy of the March 6, 2018 memorandum
opinion in Children’s Hospital Ass’n of Texas. That opinion
described the basis for the court’s March 2, 2018 order. See
Children’s Hosp. Ass’n of Texas v. Azar, No. CV 17-844 (EGS),
2018 WL 1178024 (D.D.C. Mar. 6, 2018) (Sullivan, J.). In this
notice, plaintiffs stated that they “believe that the vacatur of
the Final Rule is dispositive of the issues pending before this
On March 19, 2018, the parties submitted a status report
concerning the impact of the Children’s Hospital decision. See
doc. no. 40. In the status report, the parties stated that they
agree that the Children’s Hospital Ass’n of Texas ruling has the effect of vacating the [Final Rule] in a way that prevents its application anywhere, including with respect to the plaintiffs in this case. The defendants have indicated that they intend to act accordingly and will not enforce the rule as long as the Children’s Hospital Ass’n of Texas decision remains operative in its current form.
Id. at ¶ 2. The parties also stated:
Nevertheless, the parties agree that the Children’s Hospital Ass’n of Texas ruling does not affect this Court’s jurisdiction to independently rule on the validity of the [Final Rule] in this case. The plaintiffs in this case are not parties to the judgment in Children’s Hospital Ass’n of Texas, and the Government is considering whether to appeal the Children’s Hospital Ass’n of Texas ruling. Given the possibility of an appeal in Children’s Hospital Ass’n of Texas, the plaintiffs also do not wish to voluntarily dismiss this case.
Id. at ¶ 3.
4 On March 28, 2018, in response to the parties’ status
report, the court issued a procedural order. See doc. no. 42.
In that order, the court stated:
Judge Sullivan’s ruling in Children’s Hospital Ass’n of Texas vacating the Rule at issue in this case appears to render the parties’ dispute moot. See, e.g., D.H.L. Assocs., Inc. v. O’Gorman, 199 F.3d 50, 54 (1st Cir. 1999) (holding that the court lacked jurisdiction to enjoin the enforcement of ordinances that were no longer in effect). That is particularly true in light of defendants’ statement in the parties’ joint status report that the ruling prevents application of the Rule and they will not enforce it so long as the Children’s Hospital Ass’n of Texas decision remains operative in its current form. Therefore, it does not appear that a favorable ruling from this court would redress any actual injury suffered by plaintiffs.
Id. at 3-4. The court also stated: “any party asserting that
this court continues to have jurisdiction over this case shall
file a brief showing cause why this case should not be dismissed
in light of the Children’s Hospital Ass’n of Texas decision.”
Id. at 4.
On April 2, 2018, defendants filed a response to the
court’s procedural order, asserting that that the Children’s
Hospital “order does not make this case moot because the
Government is considering whether to appeal [that] ruling, and
the vacated rule could be reinstated on appeal.” Doc. no. 43 at
1. The government has since appealed the Children’s Hospital
ruling, and the appeal remains pending.
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
New Hampshire Hospital Association et al.
v. Civil No. 17-cv-349-LM Opinion No. 2018 DNH 195 Alex M. Azar,1 Secretary, U.S. Department of Health and Human Services et al.
O R D E R
In November 2015, several New Hampshire hospitals2 and the
New Hampshire Hospital Association (“NHHA”), a non-profit trade
association, brought suit in this court against the Secretary of
Health and Human Services, the Centers for Medicare and Medicaid
Services (“CMS”), and the Administrator of CMS. See New
Hampshire Hosp. Ass’n v. Burwell, No. 15-cv-460-LM (D.N.H.
2015). Plaintiffs alleged in that suit that defendants set
forth certain “policy clarifications” regarding the method of
calculating supplemental payments to certain hospitals. They
alleged these policy clarifications were issued in responses to
1 Alex M. Azar became Secretary of the U.S. Department of Health and Human Services on January 29, 2018, replacing Thomas Price. See Fed. R. Civ. P. 25(d).
2 Plaintiff hospitals are Mary Hitchcock Memorial Hospital, LRGHealthcare, Speare Memorial Hospital, and Valley Regional Hospital, Inc. frequently asked questions posted on medicaid.gov, and that both
the policies themselves and the manner in which they were
promulgated contradict the plain language of the Medicaid Act
and violate the Administrative Procedure Act (“APA”). This
court granted plaintiffs’ motion for summary judgment, holding
that defendants’ enforcement of the policy clarifications set
forth in the responses to frequently asked questions violated
the APA. New Hampshire Hosp. Ass’n v. Burwell, No. 15-cv-460-
LM, 2017 WL 822094, at *8-14 (D.N.H. Mar. 2, 2017), aff’d sub
nom. New Hampshire Hosp. Ass’n v. Azar, 887 F.3d 62 (1st Cir.
2018). The court permanently enjoined defendants from enforcing
the policies in the responses to the frequently asked questions,
but took no position as to whether those policies could be
enforceable if set forth in a validly promulgated rule or
regulation. Id. at *12 n.16.
After the court issued its order, defendants published a
final rule regarding the calculation of the supplemental
payments. See Medicaid Program: Disproportionate Share Hospital
Payments—Treatment of Third Party Payers in Calculating
Uncompensated Care Costs, 82 Fed. Reg. 16114–02, 16117 (Apr. 3,
2017) (“Final Rule”). The Final Rule expressly included within
its text the policies that had been set forth in the responses
to the frequently asked questions.
2 Plaintiffs brought this suit, seeking declaratory and
injunctive relief to prevent defendants from enforcing the Final
Rule. Plaintiffs represented that they would suffer irreparable
harm once the Rule became effective, and the court set an
expedited briefing schedule for the parties’ cross-motions for
summary judgment so that it could rule on the motions prior to
the date the Final Rule went into effect.
On March 5, 2018, after the parties filed their briefing in
support of their cross-motions for summary judgment but before
oral argument, plaintiffs submitted a “Notice of Supplemental
Authority Invalidating the Final Rule.” Doc. no. 38. In that
notice, plaintiffs stated: “On March 2, 2018, the Court in
Children’s Hosp. Assoc. of Texas v. Price, No. 17-844 (D.C.
Cir.), which also has been considering the validity of the Final
Rule based on cross motions for summary judgment, issued an
order invalidating and vacating that rule.” Id. at 1.
Plaintiffs included with their notice a copy of the order in
Children’s Hospital Ass’n of Texas and noted that a memorandum
opinion explaining the order’s reasoning had not yet been
issued. Plaintiffs also stated: “By vacating the Final Rule,
the Order is dispositive of the issues pending before this
Court.” Id. at 2.
On March 7, 2018, plaintiffs submitted a “Notice of
Supplemental Authority Vacating the Final Rule,” doc. no. 39, to
3 which they attached a copy of the March 6, 2018 memorandum
opinion in Children’s Hospital Ass’n of Texas. That opinion
described the basis for the court’s March 2, 2018 order. See
Children’s Hosp. Ass’n of Texas v. Azar, No. CV 17-844 (EGS),
2018 WL 1178024 (D.D.C. Mar. 6, 2018) (Sullivan, J.). In this
notice, plaintiffs stated that they “believe that the vacatur of
the Final Rule is dispositive of the issues pending before this
On March 19, 2018, the parties submitted a status report
concerning the impact of the Children’s Hospital decision. See
doc. no. 40. In the status report, the parties stated that they
agree that the Children’s Hospital Ass’n of Texas ruling has the effect of vacating the [Final Rule] in a way that prevents its application anywhere, including with respect to the plaintiffs in this case. The defendants have indicated that they intend to act accordingly and will not enforce the rule as long as the Children’s Hospital Ass’n of Texas decision remains operative in its current form.
Id. at ¶ 2. The parties also stated:
Nevertheless, the parties agree that the Children’s Hospital Ass’n of Texas ruling does not affect this Court’s jurisdiction to independently rule on the validity of the [Final Rule] in this case. The plaintiffs in this case are not parties to the judgment in Children’s Hospital Ass’n of Texas, and the Government is considering whether to appeal the Children’s Hospital Ass’n of Texas ruling. Given the possibility of an appeal in Children’s Hospital Ass’n of Texas, the plaintiffs also do not wish to voluntarily dismiss this case.
Id. at ¶ 3.
4 On March 28, 2018, in response to the parties’ status
report, the court issued a procedural order. See doc. no. 42.
In that order, the court stated:
Judge Sullivan’s ruling in Children’s Hospital Ass’n of Texas vacating the Rule at issue in this case appears to render the parties’ dispute moot. See, e.g., D.H.L. Assocs., Inc. v. O’Gorman, 199 F.3d 50, 54 (1st Cir. 1999) (holding that the court lacked jurisdiction to enjoin the enforcement of ordinances that were no longer in effect). That is particularly true in light of defendants’ statement in the parties’ joint status report that the ruling prevents application of the Rule and they will not enforce it so long as the Children’s Hospital Ass’n of Texas decision remains operative in its current form. Therefore, it does not appear that a favorable ruling from this court would redress any actual injury suffered by plaintiffs.
Id. at 3-4. The court also stated: “any party asserting that
this court continues to have jurisdiction over this case shall
file a brief showing cause why this case should not be dismissed
in light of the Children’s Hospital Ass’n of Texas decision.”
Id. at 4.
On April 2, 2018, defendants filed a response to the
court’s procedural order, asserting that that the Children’s
Hospital “order does not make this case moot because the
Government is considering whether to appeal [that] ruling, and
the vacated rule could be reinstated on appeal.” Doc. no. 43 at
1. The government has since appealed the Children’s Hospital
ruling, and the appeal remains pending.
5 On April 6, 2018, plaintiffs filed a response to the
court’s order, in which they state that they “agree that Judge
Sullivan’s ruling in Children’s Hospital renders the parties’
dispute moot because the Final Rule has been vacated.” Doc. no.
44 at 2 (citing cases). Plaintiffs noted that circumstances
could change if defendants successfully appealed the Children’s
Hospital ruling, and requested that the court administratively
stay the matter.
“Under Article III of the Constitution, federal courts may
adjudicate only actual, ongoing cases or controversies.” Lewis
v. Cont’l Bank Corp., 494 U.S. 472, 477 (1990) (internal
citations omitted). “To satisfy the Article III case or
controversy requirement, a litigant must have suffered some
actual injury that can be redressed by a favorable judicial
decision.” Iron Arrow Honor Soc’y v. Heckler, 464 U.S. 67, 70
(1983). “If events have transpired to render a court opinion
merely advisory, Article III considerations require dismissal of
the case.” Mangual v. Rotger-Sabat, 317 F.3d 45, 60 (1st Cir.
2003).
As the court stated in its procedural order, the ruling in
Children’s Hospital vacating the Final Rule renders the parties’
dispute moot, particularly in light of defendants’ statement
that the ruling prevents application of the Final Rule and they
will not enforce it so long as the ruling remains operative in
6 its current form. Although defendants have appealed that
ruling, at this stage, and particularly in light of defendants’
representations, any decision by this court would be merely
advisory.
For that reason, the court denies without prejudice the
parties’ cross-motions for summary judgment. To the extent the
Children’s Hospital ruling is reversed on appeal, plaintiffs may
file a new action seeking expedited relief. See 13C Charles
Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure § 3553.2.1 (3d ed. 2008) (“Mootness may
be denied because the decision is subject to reopening or
appeal, at least if there is a realistic prospect of reopening,
although the prospect may instead be met by finding mootness,
perhaps on terms that contemplate revival if the decision is in
fact reopened.”); see also Nationwide Mut. Ins. Co. v. Burke,
897 F.2d 734, 739-40 (4th Cir. 1990) (ordering dismissal of
district court action on mootness grounds without prejudice to
plaintiffs filing a new action if the relevant judgment were
reversed on appeal).
CONCLUSION
For the foregoing reasons, plaintiffs’ motion for summary
judgment (doc. no. 31) and defendants’ cross-motion for summary
judgment (doc. no. 33) are denied without prejudice and the case
7 is dismissed. The clerk of court shall enter judgment
accordingly and close the case.
SO ORDERED.
__________________________ Landya B. McCafferty United States District Judge
September 25, 2018
cc: Counsel of Record.