Petition — Florida Department of Health & Rehabilitative Services v. Florida Nursing Home Ass'n

Supreme Court brief1981

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Text

i a Ce

8 0 ~ by 3 D) Flies S.

IN THE OCT $ 1980

SUPREME COURT OF THE UNITED STATES

MICHAEL RODAK, JR., CLERK

OCTOBER TERM, 1980

NO.

FLORIDA DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES, and A. J.

TAYLOR, its Secretary,

Petitioners,

¥.

THE FLORIDA NURSING HOME ASSOCIATION,

et al.,

Responcents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

CULPEPPER, BEATTY & TURNEP.

Post Office Box 10261

500 Lewis State Bank Bldg.

Tallahassee, FL 32302

(904) 222-4945

| Counsel for Petitioners

M. STEPHEN TURNER

INDEX

Question Presented for Review.

Parties to the Proceeding. . .

Goinions Below . .« ¢ + s:<« « e

WUSERGLGCION & .« « 0 6/0: ©: 6 ©

Constitutional and Statutory

Provisions Involved. ... .-

Statement of the Case. .....

Reasons for Allowance of

The Writ - e wo * a — . ” oe *

ne a Ge ae ce eS

Certificate of Service ....

Appendix ..«+«.e«+ses¢ee-e

(renumbered pp 1-47)

CITATIONS

PAGE

A. J. Taylor v. Golden Isles

Convalescent Center, Inc.

Case 80-85, U.S. Supreme ct... 2

Alabama v. Pugh, 483 U.S. 783,

98 S.ct. , 57 L.Ed.2d

1115 (1978) oe ae i ee ee 32

Alabama Nursing Home Ass'n v.

Harris, O17 74 388 (5th

Cir. 1980) . J — * 7 7 * oa . . >. ° Ll,

Arnold v. Shumpert, 217 So.2d 116,

119-20 (Fla. 1968) OO Wha wae eee Wa tamer 18

‘ Dowd Box Co. v. spe

U.S.

7 L.Ed.2d 483, 487, 82

S.Ct. SaF GLOSS) cleo eee « « 42

Edelman v. Jordan, 415 U.S. 641,

é , 39 L.Ed.2d 662

(1974) o so ° * o — - 7 * * * ~ 7. 9,11

18,17

Farmers and Merchants Bank vs.

pedere I Rese 262 U.S.

Florida Health Care Ass'n v. Page

4, Leon Co. Circuit Ct. . 26

Ford Motor Co. v. Dept.

ay 323 U.S. T55- = 39

65 S.Ct. 247

(1945) 7. ° e . * * . * ca . * . * 18,

CITATIONS (cont.)

eee Northern Ins. Co. v.

-5. 47, 98

Cre. 1121, 64 §.Ct. 873

(1944). - . ° 2 ° . ° . ° o - 7°

Gulesiar v. Dade School Board,

O-« ae . o =

Hereeon v. State Bd. of Educ.,

Oe Ds < * 7 . 2 _

Harris v. McRae, g.8.

65 L.Ed.2d hal 794

- . ° ° ° ° . o ° °

Hoffman v. Pursue, Ltd.,

3-355, Cll, 43 L.Ed.2d

482, 496, 95 S. Ct. 1200 (1975).

ital Ass'n. of New York,

nc. V. Tola, 577 F.2d 790,

756 (2d Cir. 1978) — eis See ut oa

eng ve. Smith, 392 U.S. 309, 317,

-Ed. 1118, 1125, 88 S.Ct.

2128, note La oO Ry ee Or Ce ©

Manatee county v. Town of

“Gong Boat , 305 50.20

| d ae 1978). ~~ - . - .

Medicenters of America, Inc.

Pm SS EET, ~Ssupp. 305 is

eam Se 6 6 wee “e

Murray v. Wilson Distilling Co.,

>»: EBs BIR wEG.

742, 29 "$.ct. 458 (1909). «6 «

iii

PAGE

CITATIONS (cont.)

Nevada v. Hall, 440 U.S. 410,

Ed. 16, 99 S.Ct.

New York State Ass'n for

~~Retarded Children v. Kerry,

596 F.2d 27, 39 (id Cire t

xr. 1979).

Owens v. Roberts, Case No.

— = V-J=—=

1974) ° ° * ° ° ° . ° °

Palmer v. Ohio, 248 U.S. 32,

° » 29 8.Ct. 16

OR Ky Sang

Pan American P. Corp. v.

(M.D. Fla.

Superior Court, oS. 656,

eC 6 L.bd.2a 584, 589-

90, 81 S.Ct. 1303 (1961)

Pharmacists Soc. of Milwaukee

~ Cty. V. Dept. of Human Services,

15 FR

, 408-410

(E.D. Wisc. 1978) *- ee @«

Quern v. Jordan, 440 U.S.

54 ’ -Ed. 2d 358,

99 8.Ct. 1139 (1979): «

Spangler v. Florida State

Tepe BOE 106 So.2da

ae 8) 7 * e «© @«@

332,

362,

PAGE

. 16

CONSTITUTIONS and STATUTES

U.S. Constitution:

Amendment XI. « « «© © © © © « @

Florida Constitution:

Article X, Sec. 13. « « e « e »

Florida Constitution:

Section 409.055 . « «© e e e e e

45 C.F.R. sec. 205.100 (a) (2) (ii)

(1977) fe oe eee Ree ae oe Le ee oS

45 C.F.R. sec. 250.30(a) (3)

(iv) (1976) ° + ° . oe o * - 7 7 -

42 U.S.C. sec. 1396a(a) (13) (E)

sec. 249, P.L. 92-603 re a

42 U.S.C. sec. 1396(c). «. « « wo

28 U.S.C. sec. 1254(1). .« « « « «

28 U.S.C. sec. 1331 « « « © © @

P.L. 94-182, sec. lll. « »« « « «

Pole 947552 we ee ewe ee ee

OTHER AUTHORITIES

Anno., 50 L.Ed.2d 928, sec. 15

at PP. 954-56 Ee Do ee ae i ee ee ee

PAGE

QUESTION PRESENTED FOR REVIEW

Whether by agreeing to abide by

federal laws and regulations applicable

to the Medicaid program, Florida waived

its Eleventh Amendment immunity from

suit in federal court for retroactive

damages sought by Medicaid providers

because Florida complied with a federal

regulation later declared in violation

of federal statute.

PARTIES TO THE PROCEEDING

Petitioners are the State of

Florida Department of Health and

Rehabilitative Services and its

Secretary, A. J. Taylor, substituted

for William Page, Jr.

Respondents are the Florida Nursing

Home Association, individual nursing

homes located in the Southern District

of Hinbiae. and Patricia Roberts Harris,

as Secretary of the U.S. Department of

Health and Human Services, formerly the

Department of Health, Education and Wel-

fare (HEW).

OPINIONS BELOW

The Opinion of the Fifth Circuit

Court of Appeals is reported at 616 F.2d

1355 (5th Cir. 1980), and its text is

reproduced in Appendix I. The Order

denying Petition for Rehearing is repro-

duced in Appendix II.

For a listing of these individual

facilities, see Petition for Certiorari

in A. J. Taylor v. Golden Isles Con-

valescent Center, Inc., Case No. 80-85,

now pending in this Court, at pp. i-ii.

The Fifth Circuit Opinion dealt

with consolidated cases. The Golden

Isles case concerned jurisdiction and

venue in suits against states and is the

subject of Petition for Certiorari in

Case No. 80-85. This proceeding seeks

review of the Florida Nursing Home

Association case concerning Eleventh

Amendment immunity.

The opinion below reversed the

Order of the U.S. District Court for

the Southern District of Florida granting

summary judgment in favor of the State

on the claim by the nursing home

plaintiffs for retroactive benefits.

The District Court held such claim was

barred in federal court by the Eleventh

Amendment. The District Court's

Memorandum Opinion and Order is repro-

duced in Appendix III.

JURISDICTION |

The Opinion the Fifth Circuit Court

of Appeals sought to be reviewed was en-

tered on May 6, 1980. Timely petition

for rehearing was denied on July 22, 1980.

This Court's jurisdiction is invoked un-

der 28 U.S.C. §1254(1).

CONSTITUTIONAL AND STATUTORY

~~ PROVISIONS INVOLVED

United States Constitution, Amendment XI:

The judicial power of the United

States shall not be construed to extend

to any suit in law or equity, commenced

or prosecuted against one of the states

by citizens of another state or by cit-

izens or subjects of any foreign state.

42 U.S.C. sec. 1396a(a) (13) (E);: Sec. 249,

P my 4 527-603:

Sec. 1396a. State plans for medical

assistance--Contents

(a) A State plan for medical assis-

ance must--

(13) provide--

(E) effective July 1, 1976, for

payment of the skilled nursing

facility and intermediate care

facility services provided under

the plan on a reasonable cost re-

lated basis, as determined in accor-

dance witlk methods and standards

which shall be developed by the

State on the basis of cost-finding

methods approved and verified by

the Secretary.

45 C.F.R. sec. 250.30 (a) (3) (iv) (1976):

The State plan shall set forth the

methods and standards used by the State

to determine reasonable cost-related pay-

ment rates, and shall set payment rates

on the basis of such methods and stan-

dards, to be effective no later than

January 1, 1978.

Article X, Section 13, Florida Constitu-

tion:

Suits against the state.--

Provision may be made by general

law for bringing suit against the state

as to all liabilities now existing or

hereafter originating.

Section 409.055, Florida Statutes (1977):

The department...shall have the

power to contract and be contracted with,

to sue and be sued in actions ex con-

tractu but not in torts, * * *

STATEMENT OF THE CASE

This case originated in the United

‘States District Court for the Southern

District of Florida under federal ques-

tion jurisdiction, 28 U.S.C. sec. 133l.

Florida nursing homes challenged the

validity of a federal Yegulation con-

cerning the time requirement for states

participating in the Medicaid program

to implement a reasonable cost-related

plan for reimbursement of providers of

nursing home services to welfare recip-

ients.

Public Law 92-603, sec. 249, 42

U.S.C. sec. 1396a(a) (13) (E), effective

July 1, 1976, requires participating

states to reimburse nursing home pro-

-”

viders on a "reasonably cost-related"

basis. However, the Department of

Health, Education and Welfare, by regu-

lation codified as 45 C.F.R. sec.

250.30(A) (3) (iv) (1976), set January 1,

1978 as the ettéctive date of the stat-

ute because HEW had been slow in prom-

ulgating regulations and did not wish to

penalize the states because of its ase

On October 18, 1977, the District

Court found the HEW regulation inconsis-

tent with congressional mandate and

ordered Florida to submit a new plan

to HEW for approval and to reimburse

under such approved (new) plan prospec-

tively from the date of adjudication of

invalidity.

See Memorandum Opinion of District

Court for Southern District of Florida,

dated October 1, 1977, reported at 442

F.Supp. 201 (S.D. Fla. 1977) and repro-

duced at Appendix IV.

On July 7, 1978 the District Court

denied the motions of the nursing homes

to require Florida to implement its new

plan back to July 1, 1976. The District

Court held this was a claim for retro-

active damages for which federal court

jurisdiction was barred by the Eleventh

Amendment and this Court's ruling in

Edelman v. Jordan, 415 U.S. 651 (1974).

The District Court entered summary judg-

ment in favor of the State and dismissed

all claims by the nursing homes for retro-

active benefits.

The Fifth Circuit Court of Appeals

reversed this judgment in favor of the

State. The Fifth Circuit agreed that

the nursing homes were seeking payment

of state funds as a result of a past

breach of legal duty, which was a claim

for retroactive damages barred by the

Eleventh Amendment unless consented to

by the State. However, the Fifth Circuit

held that Florida had waived its con-

stitutional immunity against being sued

6m this claim in federal court because

as part of the standard provider agree-

ment, Florida and Medicaid pro siders

mutually agreed to abide by all state

and federal laws, regulations and guide-

idee.

On September 16, 1978, after HEW

had approved a new cost-related plan,

the District Court ordered that payment

be made under the new plan from

October 1, 1977, reserving for trial the

The language appears in the sixth

typewritten paragraph of a form agree-

ment, containing two legal-sized pages

in single space print. The paragraph

reads verbatim:

"Both the provider and the sin-

gle state agency hereby agree

to recognize and abide by all

state and federal laws, regula-

tions, and guidelines applicable

to participation in and admin-

istration of, the Title XIX

Medicaid Program."

question of whether the new plan met the

statutory criteria of reasonably cost-

related. (Appendix V)

Recently, on July 29, 1980, the

District Court remanded the new plan

back to HEW for reconsideration because

HEW's previous review was deemed insuffi-

cient under criteria recently announced

by the Fifth Circuit in Alabama Nursing

Home Ass'n. v. Harris, 617 F.2d 388 (5th

Cir. 1980). (Appendix VT)

REASONS FOR ALLOWANCE

OF THE WRIT

The opinion below effectively |

nullifies this Court's iandmark decision

of Edelman v. Jordan, 415 U.S. 65l,

39 L.Ed.2d 662, 94 S.Ct. 1347 (1974).

This Court held in Edelman "that

retroactive welfare benefits awarded by

a Federal District Court to plaintiffs,

by reason of wrongful denial of benefits

by state officials prior to entry of the

court's order determining the wrongful-

ness of their actions, violated the

Eleventh Amendment." Quern v. Jordan,

440 U.S. 332, 333-34, 59 L.Ed.2d 358, 362,

99 S.Ct. 1139 (1979).

Edelman specifically recognized:

1) that Eleventh Amendment immunity

extended to past violations of federal

law related to a cooperative federal-

state program under the Social Security

Act comparable to the Medicaid program;

2) that a state's agreement to administer

such program in compliance with federal

law did not constitute consent for it to

be sued for retroactive damages in federal

court; and 3) that a state's consent to

waive its FRleventh Amendment immunity

must be clear and express:

"The Court of Appeals held

that as a matter of federal

law Illinois had 'construc-

tively consented' to this

suit by participating in

the federal AABD program and

agreeing to administer fed-

eral and state funds in

compliance with federal law.

Constructive consent is not

a doctrine commonly associated

with the surrender of con-

stitutional rights, and we see

no place for it here. In

deciding whether a State

has waived its constitutional

protection under the Eleventh

Amendment, we will find

waiver only where stated

"by the most express language

or by such overwhelming im-

plications from the text

as [will] leave no room for

any other reasonable construc-

tion.’ Murray v. Wilson

Distilling Co., 213 U.S. 151,

L?L¢ 5S UokGe T2y a9 8.Ct.

458 (1909). We see no rea-

son to retreat from the

Court's statement in Great

Northern Insurance Co. v.

Read, 322 U.S., at 54,

88 L.Ed. 1121 (footnote

omitted) :

'(Wlhen we are deal-

ing with the sovereign

exemption from judicial

interference in the

vital field of finan-

cial administration a

clear declaration of

the state’s intention

to submit its fiscal

problems to other

courts than those of

its own creation must

be found. '

The mere fact that a State

participates in a program

through which the Federal

Government provides assist-

ance for the operation by

the State of a system of

public aid is not sufficient

to establish consent on the

part of the State to be sued

in the federal courts.* * *

The only language in the

Social Security Act which pur-

ported to provide a federal

sanction against a State which

did not comply with federal

requirements for the distri-

bution of federal monies was

found in former 42 U.S.C.

sec. 1384 [42 U.S.C.S. sec.

1384] (now replaced by sub-

stantially similar provisions

in 42 U.S.C. sec.804), which

provided for termination of

future allocations of federal

funds when a participating

State failed to conform

with federal law. This

provision by its terms did

not authorize suit against

anyone, and standing alone,

fell far short of a waiver

by a participating State

of its Eleventh Amendment

immunity." Id., 415 U.S.

at 673-74; 39 L.Ed.2d 678-

79. f[e.s.]

Contrary to Edelman, the opinion

below holds that a state may be sued in

federal court for retroactive damages

growing out of its participation in a

welfare program because the administering

state agency agreed to abide by federal

law. In effect, the opinion below

approves concepts of constructive consent

and implied waiver which this Court

explicitly rejected in Edelman.

A state may not waive its

Eleventh Amendment immunity by inference,

and the State of Florida does not

expressly consent to be sued in Federal

Court because a state agency which can

be sued in state court agrees to abide

by federal law.

This Court hz.s consistently held

that a state statute consenting to suit

against the state constitutes consent to

be sued ‘n state court,not federal cau

A statute waiving a state's common law

immunity against suit in its own courts is

immaterial to consideration of whether the

state waives its immunity from suit in

federal court under the Eleventh Amendment.

See authorities discussed in Anno.,

50 L.Ed.2d 928, sec. 15 at pp. 954-56.

Also see Medicenters of America, Inc. v.

Virginia, 373 F.Supp. 305 (E.D. Va. 1574),

and Pharmacists Soc. of Milwaukee Cty. v.

Dept. of Human Services, 79 FRD 405, 408-

710 (E.D. Wisc. 1978), applying these

authorities to bar federal court damage

suits related to the medicaid program.

See Nevada vs. Hall, 449 U.S.410 ,

59 L.Ed.2d 416, 99 S.Ct. 1182, 1186-

88 (1979), holding that a state's sover-

eign immunity from suit in its own courts

does not provide a basis for a claim of

immunity in another sovereign's court.

The basis for a state's immunity from

suit in federal court is the Eleventh

Amendment to the U.S. Constitution, and

a state must waive the immunity given

under that Amendment to be sued in

federal court. 16

Indeed, Edelman v. Jordan, supra,

addresses this very point in footnote 19,

415 U.S. at 678, stating that whether

Illinois had abolished its common law

sovereign immunity in its state courts

was not determinative of whether it had

relinquished its Eleventh Amendment

immunity in the federal courts.

Moreover, the State of Florida has

not waived its Eleventh Amendment immunity

by statute as required under Florida law.

The state agency's agreement is immaterial

to consideration of whether Florida has

consented to suit in federal court

since no overriding federal law or

policy pertaining to the medicaid

program mandates such consent by agree-

ment. Under decisions of this Court,

where no overriding federal law or

policy exists, state law determines

-y

whether the state has consented to suit

in federal sciaiht

Florida's Constitution (Art. X,

sec. 13) requires that consent to suit

against the state as to any liability

be given by general law. By virtue of

this provision, no part of the state's

immunity may be waived except by general

law (statute) that is clear and

unequivocal, and waiver may not occur

by special act. In Ford Motor Co. v.

Dept. of Treasury, 323 U.S. 459, 89

L.Ed. 389, 65 S.Ct. 347 (1945), this

Palmer v. Ohio, 248 U.S. 32, 63 L.Ed.

108, 39 S.Ct. 16 (1918); Ford Motor Co. v.

Dept. of Treasury, 323 U.S. 459, 89 L.Ed.

389, 5 eGes (1945).

ton v. State Bd. of Educ., 105

So. eeeiry angler v. Florida State

Turnpi ke Auth.» = ao-7a 421 (Fla. 1558);

aoe ee hu RiepsEt, 217 So.2d 116, 119-20

Manaece a v. Town of

bbe Bainrys | Boat bee °

tong

Court examined a similar provision of

the Indiana Constitution and held that

Indiana required statutory waiver of

its Eleventh Amendment immunity and

that its executive branch was not

authorized to consent to suit in federal

court in particular cases:

"We interpret this pro-

vision as indicating a

policy prohibiting state

consent to suit in one

particular case in the

absence of a general con-

sent to suit in all sim-

ilar causes of action.

Since the state legislature

may waive state immunity

only by general law, it is

not to be presumed in the

absence of clear language

to the contrary, that they

conferred on administrative

or executive officers dis-

cretionary power to grant

or withhold consent in indi-

vidual cases." 323 U.S. at

468.

No statute in Florida consents

to suit against the state in federal

court, and the state agency may not

contract away the state's Eleventh

Amendment immunity, even if it had

attempted to do so in this Ey

Eleventh Amendment immunity may not be

waived by the state agency for a

particular class of persons in a

particular kind of case. Either

Florida has waived its Eleventh

Amendment immunity by appropriate

statute, or it has not.

Finally, even if the state agency

could waive the state's immunity as to

particular cases, its agreement to abide

by federal law is not consent to suit

against the state in federal court and

Whether the state agency could

waive Eleventh Amendment immunity under

Florida law by instituting suit in

federal court or by failing to raise

its immunity as a defense is not germane

to the issues in this case.

is not a clear waiver of Eleventh

Amendment immunity, for the following

reasons:

1. The Eleventh Amendment is part

of federal law. A constitutional right

cannot be waived by agreeing to abide

by federal law which confers that right.

Constitutional rights are not foregone

by an affirmation of their existence.

If this be the law, then medicaid

providers, who also agree to abide by

federal law, thereby waive their

constitutional right against self-

incrimination regarding their participa-

tion in the program. And welfare

recipients whose application acknowledges

compliance with federal law thereby

waive their constitutional right to

due process. And so on.

2. Agreement to be bound by federal

law is not the equivalent of consent to

a damage suit in federal court for breach

of federal law duty. State judges are

required by Article VI of the United

States Constitution to follow federal

law. This Court presumes state courts

will properly adjudicate claims arising

under federal bgt involving questions

of federal law.

Hoffman v. Pursue, Ltd., 420 U.S.

592, 611, 43 L.Ed.2d 482, 496, 95 S.Ct.

1200 (1975); Dowd Box Co. v. Courtney,

368 U.S. 502, 508, 7 LeEd.20 483, 487,

62 S.Ct. 519 (3962).

Pan American P. corr: v. Superior

Court, 366 U.S. ’ -64, 6 L. - d

584, 589-90, 81 S.Ct. 1303 (1961).

3. The state agency's agreement

to abide by federal law is an acknow-

ledgment of the obligation already

imposed by operation of law. States

electing to participate in the

Medicaid program must comply with the

requirements of Title XIX of the Social

Security ee and their plans must

conform with the hic cael of federal

law and regulations. States are also

required to enter provider agreements

Harris v. McRae, U.S. , 65

L.Ed.2d 704, 794, 799 (1980).

See King v. Smith, 392 U.S. 309,

317, 20 L.Bd.20 Lilo, 1125, 88 S.Ct.

2128, note 12. Unless HEW (HHS)

approves the plan, federal funds will

not be made available 42 U.S.C. 1396;

and if the state fails to comply with

the plan, HHS may terminate federal

payments. 42 U.S.C. sec. 1396(c).

These provisions are comparable to

those in the AFDC and AABD programs

discussed in King v. Smith and

Edelman v. Jordan, supra.

that set out the relationship and

responsibilities of the ee ie

Since the state's agreement to abide

by federal law as part of the plan does

not consent to suit in federal court

(Edelman, supra), a state agency's

recognition of that obligation in a

provider agreement required to carry

out the plan has no greater consequence.

All applicable federal requirements

necessarily are part of the provider

agreement.

See 45 CFR sec. 205.100 (a) (2) (ii)

(1977).

See Farmers and Merchants Bank vs.

Federal Reserve Bank, 202 U.S. 049, 67

L.Ed. 1145, 1104 (per Justice Brandeis):

"Laws which existed at the time and place

of the making of a contract...form a

part of it, as fully as if they had been

expressly referred to or incurred in

its terms."

-»

| - |

The practical effect of the

opinion below is that any time a state

agency expresses its intent to abide by

federal law, the State waives its

Eleventh Amendment immunity. Since the

State must comply with federal law as a

condition to participation in the Medicaid

program, this expression is inevitable

and might occur in a state regulation,

in correspondence, or in a handbook

about the program. It is no longer

necessary for a state statute to waive

Eleventh Amendment immunity, and the

requirements of state law regarding

waiver of immunity may be completely

ignored.

If the Eleventh Amendment is properly

respected, respondent nursing homes can

seek recourse against Florida by suit

in state court, and they now have an

action pending in state court to recover

the same retroactive benefits being

sought in this Seas Under Florida

law, equitable principles will control

whether retroactive benefits are

awarded for the period prior to court-

ordered clarification of the state's

duty under federal law.

Florida Health Care Ass'n v. Page,

Case No. 79-2504, Circuit Court for

Leon County, Florida.

See Gulesiar v. Dade County School

Board, 281 So.2d 325 (Fla. CLEP

Congress has recognized the propriety

of requiring Medicaid providers to seek

recourse elsewhere than federal court.

On the same day as it was to go into

effect, Congress repealed a statute

requiring states in the medicaid program

to waive their federal court immunity as

to hospital provider suits. Hospital

Ass'n. of New York, Inc. v. Toia, 577

F.2d 790, 796 (2d Cir. 1978) explains

that repeal of this mandatory waiver

eliminated the ability of hospital pro-

viders to seek redress in federal court.

But it was emphasized that this was only

one form of remedy and that hospital pro-

viders still had recourse to state courts

and HEW administrative proceedings.

b Be

See P.L. 94-182, sec. 111 and P.L.

94-552. Apparently, the mandatory

waiver was passed initially in response

to Edelman v. Jordan, supra.

There are literally thousands of

federal statutes, regulations and

guidelines which states administering

the various welfare programs can violate

in good faith. The opinion below could

have an immense budgetary impact on the

states if federal courts are insensitive

to their fiscal problems.

The nursing home industry is

attacking the validity of current

reimbursement plans around the country

because federal executives failed to

properly implement federal statutes.

Millions and millions of dollars are

potentially involved, even if the

attacks are restricted to the issues

raised in this case.

For states which followed the

January 1978 federal time regulation,

there is the potential cost of imple-

menting current plans back to July l,

1976. And for states whose current

Plans will have to be re-reviewed

because HEW review standards were

insufficient under Alabama Nursing Home

Ass'n v. Harris, 617 F.2d 388 (5th Cir.

1980), there is the potential cost of

implementing revised plans developed

under current standards back to July l,

1976.

Finally, the opinion below results

in an anomalous distinction between

persons to whom the State owes a duty

to comply with federal law. Welfare

recipients in Florida cannot sue the

State for retroactive benefits in

federal court, but service providers

are allowed access to federal court

for that purpose.

The respondent nursing homes in

related Case No. 80-85 triumph this as

the important issue in the case. They

indicate by letter to the Court dated

August 15, 1980, that this Petition

would address "...the extremely

important and crucial issue of

retroactive Eleventh Amendment

immunity as regards private business

service providers."

Florida submits that health care

providers have no special exemption

See Owen v. Roberts, Case No. 73-

423-Civ-J-S (M.D. Fla. 1974) (3-judge

panel), applying Edelman v. Jordan,

supra, to deny retroactive benefits in

a suit by welfare recipients against

Petitioner to declare certain state

eligibility regulations in conflict

with federal law.

from the Eleventh Amendment. Whether

recipients or providers are involved,

Florida is entitled to have its own

courts decide whether damages should

be awarded against it for breach of

legal duty not clarified by court order.

The opinion below cites New York

State Ass'n for Retarded Children v.

Kerry, 596 F.2d 27, 39 (2a Cir. 1979),

as Tedicatane basis for federal juris-

diction. That case dealt with prospec-

tive damages awarded to enforce compliance

with a federal court order which the

state failed to follow. Retroactive

damages were not involved.

CONCLUSION

The opinion below clearly departs

from controlling precedent of this

Court and creates serious potential

consequences for states participating

in the Medicaid program. Summary

disposition should be made on the merits

to reinstate the judgment of the District

Court. See Supreme Court Rule 23.1 and

Alabama v. Pugh, 483 U.S. 783, 98 S.Ct.

3057, 57 L.Ed.2d 1115 (1978).

Respectfully submitted,

CULPEPPER, BEATTY & TURNER

Post Office Box 10261

600 Lewis State Bank Bldg.

Tallahassee, FL 32302

(904) 222-4945

Counsel for Petitioner

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 2nd

day of October , 1980, three copies of

the Petition for Writ of Certiorari to

the United States Court of Appeals for

the Fifth Circuit were mailed, postage

prepaid, to ELLIOTT SHAW, ESQUIRE,

Suite 611, New World Tower, 100 N.

Biscayne Blvd., Miami, FL 33132;

A. THOMAS MIHOK, ESQUIRE, 5458 Wood-

crest Drive, North, Orlando, FL 32807;

and THE SOLICITOR GENERAL, Department

of Justice, Washington, D.C. 20530.

CULPEPPER, BEATTY & TURNER

Post Office Box 10261

600 Lewis State Bank Bldg.

Tallahassee, FL 32302

Counsel for Petitioner

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1980

CASE NO.

FLORIDA DEPARTMENT OF HEALTH

and REHABILITATIVE SERVICES, et al.,

Petitioners,

Vv.

THE FLORIDA NURSING HOME ASSOCIATION, et al.,

Respondents.

APPENDIX

APPENDIX NO.

IiIr

INDEX TO APPENDIX

ITEM DESCRIPTION

Decision of Fifth Circuit

Court of Appeals dated

May 6, 1980.

Order of Fifth Circuit

Court of Appeals Denying

Rehearing, dated July 22,

1980.

Order of District Court

for Southern District of

Florida dated July 7,

1978 (granting judgment

in favor of the State

on all questions regard-

ing Plaintiff's entitle-

ment to retroactive

benefits).

Memorandum Opinion and

Order of District Court

for Southern District of

Florida dated October 18,

1977.

Order of District Court

of Southern District of

Florida dated September

16, 1978.

Order of District Court

for Southern District

of Florida dated July

28, 1980.

APPENDIX I

| IN THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Nos. 78-2745, 77-3467

FLORIDA NURSING HOME ASSOCIATION, et al.,

Plaintiff-Appellants,

WILLIAM PAGE, JR., et al.,

Defendants-Appellees.

GOLDEN ISLES CONVALESCENT CENTER, INC.,

et al.,

Plaintiffs-Appellants,

PATRICIA ROBERTS HARRIS, etc., et al.,

Defendants-Avpellees..

Appeal from the United States District

Court for the Southern District

of Florida

May 6, 1980

Before AINSWORTE and HENDERSON, Circuit Judges,

HUNTER, District Judge.

°,*%

AINSWORTH, Circuit Judge;

These consolidated appeals arise from

separate orders of the United States

District Court for the Southern District

of Florida. The orders resulted from

partial adjudications in two suits brought

by several Florida nursing homes against

the Florida Department of Health na

Rehabilitative Services (DHRS) and its

secretary and the secretary and regional

director of Health, Education and Welfare

(HEW) concerning plaintiffs’ rights to

receive payments on a "reasonable cost-

related basis" for services rendered under

the Medicaid program of the Social Security

Act (the Act). 42 U.S.C. § 1396 et seg.

Both suits sought to have a regulation

issued by HEW, 45 C.F.R. § 250.3(a) (3) (iv)

(1976), declared invalid. This regulation

establishes January 1, 1978 as the date by

which states participating in the Medicaid

rogram were required to implement a plan

to reimburse providers of services on a

reasonable cost-related basis. Section

249 of the Social Security Act, 42 U.S.C.

§ 1396a(a) (13) (E), bowever, fixes July l,

1976 0 the effective date for implement-

ing such a plan for reimbursement.

In the first suit, brought by Golden

Isles Convalescent Center, Inc. and other

licensed nursing homes in Dade and Broward

Counties, Florida (referred to collectively

as Golden Isles), the district court upon

plaintiffs’ motion for summary judgment held

the administrative regulation invalid as

inconsistent with the congressional mandate

provided for in the Act. In partially

granting Golden Isles’ motion for summary

judgment, the court held that plaintiffs

were entitled to payment from the state on

a reasonable cost-related basis prospectively

from the date of its ruling, October 18,

1977. It also ordered Florida DHRS to submit

a plan effective October 18 and approved by

How in compliance with the Act's mandate for

providing a cost-related reimbursement plan.

The court reserved ruling on the question of

plaintiffs’ entitlement to reimbursement

retroactively from July 1, 1976, the date

set out in the statute. In its order the

court also ruled that its exercise of juris-

diction and venue were proper, despite ob-

jections by defendants that exclusive. juris-

Giction lies in the United States Supreme

Court and that venue was proper only in the

Northern District of Florida, the location

of the main offices of the DHRS. Defendant

Florida DHRS appealed the court's order.

The issues raised by appellant constitute

the substance of the first appeal before us,

which appeal will be referred to as the

Golden Isles case (No. 77-3467).

In the second suit, the court also

granted a partial summary judgment in favor

of plaintiffs, Florida Nursing Home Associa-

tion and its nursing home members (collect-

ively referred to as Florida Nursing Home).

In its order the court incorporated its |

opinion in the Golden Isles case invalidating

the HEW regulation and requiring the state to

" peinburse plaintiffs on a reasonable cost-

related basis from October 18, 1977 |

prospectively. Once again, a ruling on

plaintiffs' right to retroactive relief was

reserved by the district court until it

considered. written memoranda submitted by

the parties. No appeal was taken by

defendants from this order.

While Florida's appeal from the partial

summary judgment in the Golden Isles case

was still pending in this court, the —

district court consolidated for trial the

Golden Isles and Florida Nursing Home

cases for a determination whether the

current approved plan submitted by Florida

DHRS complies with the applicable Social

Security statute. In its order the court

also entered judgment in favor of defendant

- Plorida DHRS denying plaintiffs Golden Isles

and Florida Nursing Home retroactive reim-

bursement from the state on a reasonable

cost-related basis for services rendered

prior to October 18, 1977. Plaintiffs

appealed the court's ruling regarding their

right to retroactive payments. The issue

of plaintiffs-appellants' entitlement to

reimbursement from the state on a reasonable

cost-related basis prior to October 18, 1977

constitutes the substance of the second

appeal to be addressed by us, which we will

refer to as the Florida Nursing Home case.

(No. 78-2745) .

Gdlden Isles Case’ (No. 77-3467)

In its appeal of the court's partial

granting of’ Golden Isles’ motion for sum-

Mary judgment, appellant Florida DHRS

asserts the district court erred in four

respects. We disagree and affirm the

court's ruling.

[1] Appellant first contends that the

district court was without jurisdiction to

hear this controversy because cristina’ and

exclusive jurisdiction lies in the United

States Supreme Court. Florida argues that

since this action constitutes a controversy

between a state and its own citizens under

axtiste III, section 2, clause 2 of the

United States Constitution, the Supreme

Court has original and exclusive jurisdiction.

Appellant's contention is erroneous.

It is well established that the United

States Constitution grants neither original

nor exclusive jurisdiction to the United

States Supreme Court over controversies

between a state and its own citizens. C.

Wright, Law of Federal Courts 557 (3d ed.

1976). The first paragraph of section 2 of

article III of the constitution provides in

pertinent part:

The judicial Power shall extend ee

to Controversies to which the United

States shall be a Party;—to contro-

versies between two or more States;—

between a State and Citizens of another

State;—between citizens of different

States ..-..

The second clause, which appellant relies

on here, states:

In all Cases .. . in which a State

' shall be a Party, the supreme Court

shall have original Jurisdiction. In

all other Cases before mentioned the

supreme Court shall have appellate

jurisdiction ‘oes

In interpreting these provisions, the

Supreme Court several years ago in

California v. Southern Pacific Co., 157 U.S.

229, 258, 15 S.Ct. 591, 602, 39 L.Ed. 683

(1895), made it clear that the language of

clause 2 "{ijJn all Cases... - in which a

State shall be [a] Party," means in all the

cases enumerated in clause 1 of article III,

section 2. Nowhere in clause 1 is there

mention of a controversy between a state

and its own citizens. As the Supreme Court

fixmly stated: "By the Constitution stg

this court has exclusive jurisdiction of all

controversies of a civil nature where a

state is a party, but not of controversies

between a state and its own citizens ...."

Id. at 258, 15 S.Ct. at 602. See Texas v.

Interstate Commerce Commission, 258 U.S.

158, 163, 42 S.Ct. 261, 263, 66 L.Ed. 531

(1922); Minnesota v. Northern Securities Co.,

184 U.S. 199, 245-46, 22 S.Ct. 308, 325-26,

pa eeeme 2 «. ©

46 L.Ed. 499 (1902).

This rule has been codified in the

statutory provision which describes the

original jurisdiction of the Supreme Court.

See 28 U.S.C. § 1251. Although section

1251(b) (3) provides for the Supreme Court's

original, but not exclusive, jurisdiction

of all actions by a state against the citi-

zens of another state, there is no provision

for controversies between a state and its

own citizens.

Golden Isles brought this suit alleging

violations by Florida of 42 U.S.C. § 1396a.

The district court's ruling that it had jur-

isdiction over this action pursuant to 28

U.S.C. § 1331(a), which provides for the

district court's jurisdiction of all actions

arising under the laws of the United States

wherein the amount in controversy exceeds

$10,000, was thus proper.

Ss,

Appellant Florida DHRS next contends

that venue was proper only in the Northern

District of Florida where the principal

offices of DHRS and its secretary are

located. It asserts that when a state

officer or agency is sued for the purpose

of compelling official action, venue lies

only in the district wherein the agency and

its executive officers maintain their official

residences. Our review of the statute and

the important considerations underlying the

choice of a proper forum lead us to conclude

that appellant's assertion that venue is im-

proper in the Southern District of Florida is

erroneous..

Venue is governed by the federal venue

statute, 28 U.S.C. § 1391(b), which provides:

A civil action wherein jurisdiction is

not founded solely on diversity of citi-

zenship may be brought only in the ju-

dicial district where all defendants

reside, or in which the claim arose,

except as otherwise provided by law. |

The general rule in suits against public

officials is that a defendant's residence

Zor venue purpose is the district wherein

he performs his official duties. 1 Moore's

Federal Practice 40.142[5.-1-2], at 1396

(2d ed. 1979). See, e. g., Butterworth v.

Eill, 114 U-sS. 128, 132, 5 S.Ct. 796, 798,

29 L.Ed. 119 (1885); O'Neill v. Battisti,

472 F.2d 789, 791 (6th Cir. 1972), cert.

denied sub nom. Heitzler v. O'Neill, 411 U.S.

964, 98 S.Ct. 2142, 36 L.Ed.2d 685 (1973).

A number of the cases applying this principle.

have involved federal officials or agencies and

have found only one official residence. See,

e.g., Ernst v. Secretary of the Interior, 244

P.2d 344, 17 Alaska 133 (9th Cir. 1957);

Trueman Fertilizer Co. v. Larson, 196 F.2d

910 (5th Cir. 1952); Hartke v. Federal Aviation

Administration, 369 F.Supp. 471 (E.D.N.Y¥.1973).

It has been held, however, that a state

agency or official does not necessarily have

a single residence. See Buffalo Teachers

Federation, Inc. v. Helsby, 426 F.Supp. 828

(S.D.N.Y¥.1976). In Buffalo Teachers

Federation the court noted that in suits

against federal agencies, the federal govern-

ment would be faced with serious difficulties

if it were forced to answer complaints in a

multitude of forums and forum shopping would

be greatly encouraged if nine could be

brought in any district where a subordinate

departmental officer resides. Such problems,

however, "are significantly less serious in

the context of a suit against a state govern-

mental entity or official." Id. at 829.

In the state context, there is little threat

of inconvenience or even forum shopping, at

least sufficient “to warrant a blanket rule

that there may never be more than a single

residence.™ Id. In Buffalo Teachers

Federation the-court determined that although

the state agency involved had its central

headquarters in the Northern District of

New York, venue was not lacking in the

Southern District: where the suit was brought.

The agency involved maintained a field office

in the Southern District and a significant

portion of its business was conducted from

that office. :

| Here, Florida DHRS, though headquartered

in the Northern District of Florida, maintains

a large office in the Southern District and

much of its business is transacted from that

office. ‘Purthermore, the venue statute makes

it clear that the residence of defendants does

not provide the only basis for venue. Venue

is also proper in the district where the claim

arose. Though the legislative history of

section 1391(b) fails to suggest what the

draftsmen thought about the question of where

—s —

a claim arises, 1 Moore's Federal Practice

40.142[5.-2], at 1423 (24 ed. 1979), when

the statute was amended to extend venue to a

district "in which the etnies arose," the

purpose was'to “facilitate the disposition

: of . . . Claims by providing a more convenient

forum to the litigants and witnesses involved.”

H.R.Rep.No. 1393, 89th Cong., 2d Sess 2 (1966).

Thus, "where the claim arose” should be "ascer-

tained by advertence to events having operative

significance in the case, and a comnon-sense

appraisal of the implications of those events

for accessibility to we enenees and records."

Lamont v. Haig, 590 P. 2d 1124, 1134 (D. C.Cir.1978) |

This is not to suggest that only a “single

district can satisfy the statutory standard

with respect to any given claim. Often, the

factors deemed determinative might well indi-

cate the suitability of several forums. See,

e.g., Commercial Lighting Products, Inc. v.

. United States District Court, 537.F.2d 1078,.

1080 (9th Cir. 1976); Tefal, S.A. v. Products

International Co., 529 F.2d 495, 496-97 (3d

Cir. 1976); Gardner Engineering Corp. v.

Page Engineering Co., 484 F.2d 27, 32-33 (8th

Cir. 1973). In any case, the court should

not oppose the plaintiffs' choice of venue if

the activities that transpired in the district

where suit is brought were not insubstantial

and the forum is a convenient one balancing

the equities and fairness to each party.

Lamont v. Haig, supra, 590 F.2d at 1134 n. 62; _—

Weil v. New York State Department of trans- -

portation, 400 F.Supp. 1364, 1365 (S.D.N.Y.

1975).

Applying this standard, then, it is

clear that venue properly lies in this matter

in the Southern District of Florida. Not _

only does appellant maintain a large office:

there but the payments which Golden Isles is--. -

seeking were allegedly due it within the

Southern District where Golden Isles and the

other plaintiffs-appellees are seated. This

is sufficient in the circumstances of this

case to justify the placing of venue in the

Southern District of Florida.

Tit.

Appellant's third contention is that the

Eleventh Amendment to the United States

Constitution bars the district court's direc-

tive that the Florida disdain wolead® a plan

for reimbursing Golden Isles in accordance

with the requirements of the Medicaid statute.

Appellant argues that the court's order con-

stitutes a prohibited ruling against the state

itself, binding the state in contravention of

the Eleventh Amendment to a particular course

of conduct. Florida's argument is without

merit.

The Supreme Court held in Edelman v.

Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d

662 (1974), that a federal court decree

mandating that a state officer or agency

administering a federal entitlements program

comply with the requirements of the federal

act creating the program is not void by vir-

tue of the Eleventh Amendment, even though

the state official will inenast ve be

recuired to spend money from the state

treasury to carry out the court's order.

Id. at 667-68; 94 S.Ct. at 1357-58. See

Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, |

52 L.Ed. 714 (1908). This is a well-

established principle and has been applied

consistently by courts in cases involving

matters similar to that confronting us here.

See Rothstein v. Wyman, 467 F.2d 226, 236

Qd@ Cir. 1972), cert. denied. 411 U.S. 921,

93 S.Ct. 1552, 36 L.Ed.2d 315 (1973);

Hempstead General Hospital v. Whalen, 474

F.Supp. 398, 406 (E.D.N.¥.1979); Alabama

Nursing Home Association v. Califano, 433

F.Supp. 1325, 1330-31 (M.D.Ala.1977);

Pharmacists Society of Milwaukee County,

Inc. v. Department of Health and Social

Services, 79 F.R.D. 405, 408 (E.D.Wis.1978).

Here, the district court's order does

no more than require Florida DHRS, pro-

spectively from the date of its order, to

comply with the Social Security Act's mandate

that it reimburse providers of skilled

nursing services on a reasonable cost-

related basis. Judicial enforcement of the

statute's requirements is therefore appro-

priate, see Rosado v. Wyman, 397 U.S. 397,

90 S.Ct. 1207, 25 L.Ed.2d 442 (1970), and

the Eleventh Amendment is no bar where by

its terms the court's decree is prospective

in nature. Edelman, supra, 415 U.S. at 667-

68, 94 S.Ct. at 1358.

IV. |

Appellant's final contention is that

the court improperly granted in part Golden

Isles’ motion for summary judgment since

there exists a material issue of fact as to

whether the state's current Medicaid plan

meets the requirements of section 249 of the

Social Security Act. Florida's contention

misperceives the court's ruling.

| In its order the district court did not

rule that the wade Florida Medicaid plan ..

was not in conformity with the Act's require-

ment that the agency reimburse providers of

services on a reasonable cost-related basis.

Rather, the court's order merely directed HEW,

in accordance with section 249, to determine

whether the current Florida plan is in con-

formity with the statute. If HEW's determi- ~

nation was adverse to the state, Florida ~ sas"

BHRS was directed to submit a conforming plan-

to be approved by HEW. Once HEW approved

the plan, the final determination whether

the plan meets the requirements of section

249 was reserved for trial. Thus, the

court's order was not dispositive of any

factual dispute.

The district court did not err, there-

fore, in partially granting Golden Isles'

motion for summary judgment as there were

only issues of law presented and plaintiffs

were entitled to judgment as a matter of

law. See Fed.R.Civ.P. 56(c); Nunez v.

Superior Oil Co., 572 F.2d 1119, 1123 (5th

Cir. 1978).

Accordingly, this judgment is

AFFIRMED. -

Florida Nursing Home Case

(No. 78-2745)

In this consolidated case, appellants

Florida Nursing Home and Golden Isles appeal

from the court's order denying their claim

for veimbursement on a reasonable cost-

related basis for qurelon senvices provided

by appellants prior to October 18, 1977, the

date of the court's entry of a partial sum-

mary judgment in the Golden Isles litigation.

This appeal presents one basic issue: whether

the Eleventh Amendment to the United States

Constitution operates as a bar to the retro-

active relief sought by appellants. We find

| that under the circumstances of this case, . _.

Florida has waived its Eleventh Amendment

immunity by consenting to be sued in federal.

court under the terms of its contracts with

appellants.

Under the Eleventh Amendment an unconsent- .-.

ing state is immune from suits brought in

federal court by her own citizens. Hans v..

Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed.2d

842 (1890); Parden v. Terminal Railway, 377

U.S.'184, 84 S.Ct. 1207, 12 L.Ed.2d 233 (1964). .

It is well established that suits brought

against an agency of the state are in fact

suits against the state and covered by the

Eleventh Amendment. Ford Motor Co. v.

Department of Treasury, 323 U.S. 459, 462,

65 S.Ct. 347, 350, 89 L.Ed. 389 (1945);

Employees v. Department of Public Health

and Welfare, 411 U.S. 279, 93 S.Ct. 1614,

36 L.Ed.2d 251 (1973). Defendant-appellee

Florida Department of Health and

Rehabilitative Services is an agency of the

Florida state government created by the

Legislature. See Fla.Stat.Ann. § 409.016

et seq. (West 1973 & Supp.1979). The relief

sought by appellants is reimbursment from

the state agency on a reasonable cost-

related basis as required by section 249 of

the Social Security Act for nursing services

rendered from July l, 1976, the effective

date of the Act. As noted earlier, the

district court's order denied such relief

for any services provided prior to October

18, 1977, the date of the court's ruling.

Th2 effect of an award granting Golden Isles

and Florida Nursing Home their requested

relief will require the payment of state

funds as a result of a past breach of a

legal duty on the part of the state. ‘Since

this relief is retroactive in nature, if not

consented to by the state, plaintiffs’ ) -

action in federal court is barred by the

Eleventh Amendment. Edelman, supra, 415 U.S.

at 668, 94 S.Ct. at 1358. Thus, the sole

issue reduces itself to a determination

whether the State of Florida has consented

to this action and effected a waiver of its

sovereign immunity under the Eleventh So pie

&mendment. , : ;

For the purposes of this suit, the Florida

Department of Health and Rehabilitative Services :

is governed by Fla.Stat.Ann. § 402.34 (West

Supp.1979). This section provides in

pertinent part:

The department is a body corporate

« « ee It shall have the power to

contract and be contracted with, to

sue and be sued in actions ex contractu

but not in torts, and to have and to

possess corporate powers for all pur-

poses necessary to administer this

chapter. ...

By creating this department with authority

to sue and be sued the State of Florida has

expressly waived its sovereign immunity.

This language, standing alone, however, does

not constitute a waiver by the state of its

constitttional immunity under the Eleventh

Amendment from suit in federal court. See

Smith v. Reeves, 178 U.S. 436, 441, 20 S.Ct.

919, 921, 44 L.Ed. 1140 (1900); Scott v.

Boaré of Supervisors, 336 F.2d 557, 558 (5th |

Cir. 1964).

Nevertheless, the state has done more

here than merely waive its general immunity

°-'.

from suit in its own state courts. .Pursuant .

' to its corporate powers as outlined in section

402.34, Florida DHRS drafted and executed a

contract with each appellant which outlines

the precise’ obligations of the agency and

the provider of services and which each pro-

vider signed as a prerequisite to its par-

ticipation in the Medicaid program. The

sixth paragraph of the agreement which

Florida entered into with appellants states:

Both the provider and the Single State

Agency hereby agree to recognize and

abide by all State and Federal Laws, Kener

Regulations, and Guidelines applic-

able to participation in and admin-

istration of, the Title xIX Medicaid

Program.

By contracting with appellants to be bound

by all federal laws applicable to the ae

Medicaid program, the state has expressly

waived its Eleventh Amendment immunity and

consented to suit in federal court regarding-----.

any action by providers alleging a breach -- -:-:

of these laws.

While it is true that waiver of

immunity under the Eleventh Amendment is

not to be lightly inferred, Edelman, supra,

415 U.S. at 673, 94 S.Ct. at 1361, the

"overwhelming implication,” id. 94 S.Ct.

at 1361, of the state's agreement with

appellants is that it constitutes a waiver

of Florida's constitutional immunity by

requiring the DHRS to recognize and abide

by all federal laws in participating in the

Medicaid program. To bar federal court

jurisdiction in this case could operate to

immunize state officers and the agency from

their contractual duty to adhere to federal

statutory requirements. See generally New

York. State Association for Retarded

‘Children v. Carey. 596 F.2d 27, 39 (2d Cir.

1979). A contrary holding in the circum-

stances of this case, where appellants

—

Golden Isles and Florida Nursing Home have .

provided nursing services in accordance

with their contractual and statutory obli-

gations since July 1, 1976, would achieve

an inequitable result. Accordingly, we

reverse this judgment of the court.

AFFIRMED, as to Golden Isles Case

(No. 77-3467).

REVERSED, as to Florida Nursing Home

Case (No. 78-2745).

APPENDIX II

IN THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Nos. 78-2745, 77-3467

FLORIDA NURSING HOME ASSOCIATION, et al.,

Plaintiff-Appellants,

WILLIAM PAGE, JR., et al.,

De fendants~Appellees.

GOLDEN ISLES CONVALESCENT CENTER, INC.,

et al.,

Plaintiffs-Appellants,

PATRICIA ROBERTS HARRIS, etc., et al.,

De fendants~Appellees.

ON PETITION FOR REHEARING AND

PETITION FOR REHEARING EN BANC

(Opinion May 16, 1980, 5 Cir., 1980,

F.2d )

(July 22, 1980)

Before AINSWORTH and HENDERSON, Circuit

Judges, and HUNTER, District Judge.

>»

PER CURIAM:

The Petition for Rehearing of

defendant-appellee Florida Department of

Health and Rehabilitative Services is

DENIED and no member of this panel nor

Judge in regular active service on the

Court having requested that the Court

be polled on rehearing en banc, (Rule 35

Federal Rules of Appellate Procedure;

Local Fifth Circuit Rule 16) its Petition

for Rehearing En Banc is DENIED.

ENTERED FOR THE COURT:

/s/ Robert A. Ainsworth, Jr. .

United States Circuit Judge.

APPENDIX III

IN THE UNITED STATES DISTRICT

COURT IN AND FOR THE SOUTHERN

DISTRICT OF FLORIDA

NO: 76-1810-CIV-WMH

77-559-CIV-WMH

GOLDEN ISLES CONVALESCENT

CENTER, INC., et al.,

Plaintiff,

VS.

JOSEPH A. CALIFANO, JR.,

etc., et al.,

Defendants.

FLORIDA NURSING HOME ASSOC,

et al.,

Plaintiff,

vs.

WILLIAM J. PAGE, JR., et

al.,

Defendants.

THIS CAUSE having come on to be

heard upon pending motions and for status

conference, it is

ORDERED AND AJUDGED that this cause

and the case of Florida Nursing Home v.

-»

77>

Page, #77-559-CIV-WMH, be consolidated

for trial insofar as the issues as to

"reasonable cost related basis" are con-

cerned.

” * *

As to the plaintiffs' petition, ore

tenus, to review the Court's order on the

retroactivity recovery claims, the Court

being advised of an ambiguity in this

Court's order denying the retroactive

relief dated February 13, 1978 in the

Golden Isles case, #76-1810-CIV-WMH, now

consolidated for trial with the Florida

Nursing Home, as stated above, and hav-

ing considered additional argument on

the question of retroactive relief, it is

ORDERED AND ADJUDGED that judgment

be and it is hereby entered in favor of

the state defendants and against the

plaintiffs' entitlement to retroactive

benefits prior to October 18, 1977, on

the basis that such claims are barred

by the llth Amendment. See Edelman v.

Jordan, 415 U.S. 651 (1974).

DONE AND ORDERED in Chambers at

Miami, Dade County, Florida this 7th

day of July, 1978.

/s/ William M. Hoeveler

U.S. DISTRICT JUDGE

APPENDIX IV

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF FLORIDA

NO. 76-1810-Civ-WMH

GOLDEN ISLES CONVALESCENT CENTER, INC.,

d/b/a HALLANDALE REHABILITATION

CENTER, et al.,

Plaintiffs,

vs.

JOSEPH A. CALIFANO, JR., individually,

and as Secretary of Health, Education

and Welfare, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER GRANTING

PARTIAL SUMMARY JUDGMENT

October 18, 1977

Before HOEVELER, United States District Judge

HOEVELER, District Judge:

Certain nursing home operations located

in this District have brought suit against

the State Department of Health and

Rehabilitative Services, the Federal

Department of Health, Education and Welfare,

and their respective executive officers to

require implementation of Public Law 92-603,

Sec. 249, 42 U.S.C. Sec. 1396a(13) (E), here-

inafter Sec. 249).

Jurisdiction is invoked pursuant to

ae U.S.C. Sea. i331. Venue, though ob-

jected to by the State defendants, lies in

this district.

At the present time, the plaintiffs’

Motion for Summary Judgment is before this

Court. As will be set out more fully in

this opinion, the Court is unable to adjudi-

cate the whole case upon the present state

of the pleadings and will therefore treat

Plaintiffs’ Motion as one brought under

Rule 56(d), Federal Rules of Civil Procedure.

Plaintiffs are providers of skilled

nursing facility services to the State of

Florida which participates in the Medicaid

Program with the Federal Government. Under

the program, payments are made by the desig-

nated State agency to qualified benefici-

aries, including Plaintiffs. These payments

come from State and Federal. sources and are

made in accordance with vemuiactinn approved

by the Secretary of Health, Education and

Welfare.

This dispute centers around the regula-

tions issued by HEW (45 C.F.R. Sec. 250.30

(a) (3) (iv)) requiring the State participants

to provide reimbursements "on a reasonable

cost related basis” to skilled nursing home

facilities. The regulation sets an effect-

ive date of January 1, 1978. However,

Section 249 sets an effective date of July l,

1976. HEW contends that it was slow in

promulgating regulations and that it did

not wish to -eenanaentel State Aideeenige ge

for its own delay.

Since this case was commenced, the

opinion of Judge Frank M. Johnson, Jr., in

Alabama Nursing Home Association v. Califano,

433 F. Supp. 1325 (M.D. Ala. 1977) has been

filed. Many of the same arguments brought

before this Court by plaintiffs and defend-

ants were addressed by Judge Johnson in some

detail.

This Court is in substantial agreement

with Judge Johnson that the portion of 45

C.F.R. Sec. 250.30(a) (3) (iv) setting an

effective date of January 1, 1978, ‘for imple-

mentation of Section 249 is inconsistent with

the Congressional mandate. Therefore, the

regulation is invalid insofar as it sets an

effective date other than July 1, 1976.

The State of Florida has a present

ability to calculate nursing home reimburse-

ment rates on a cost related basis within the

meaning .of Section 249.. The deposition. of

Hugo Jordan, Reimbursement Supervisor,

Nursing Home Program,’ State Department,

Florida Department of HRS establishes that

the State has the necessary data to promul-

gate a plan conforming to Section 249 on

cost related basis effective immediately.

There is some dispute as to whether or not

the present plan conforms to Section 249,

but the mandate of Congress clearly calls

on the Secretary of HEW to make this

determination administratively.

Accordingly, the Department of HEW is

hereby directed to determine whether the

plan of the State of Florida is in present

conformity’ with the requirements of Section.

249. The Department must determine whether

the current Florida plan provides for reim-

bursement on a reasonable cost related

basis to skilled nursing care providers.

-- .

The Department is cirected to advise this

Court of its determination within ten (10)

days of the date of this Order. If the

>present plan (as is strongly urged by

Plaintifis) is not conforming, in the opin-

ion of the Secretary, the State defendants

are cirected to submit a plan for approval

to the Secretary no later than thirty (30)

days =ronm the date of this Order. Addi-

tionally, any plan submitted to the

Depar=ment of H=W for approval by the State

must make provision for the reimbursement

+o dlainti=fs on a reasonalble cost related

basis for services rendered from the date of

this Irder proszectively. The Department

of SEW is prohidited ané enjoined from

acororine any: State dlan nut providing for

<ke reimbursement cf these plaintiffs on a

s~eascuadble cost related basis as of the date

of =kis Oréer.

The question of plaintiffs’ entitlement

to retroactive relief will be reserved at this

time. Plaintiffs are. directed to submit memo-

randa on this point no later than November 4,

1977. Defendants shall submit opposing memo-

randa by November 18, 1977. No further memo-

randa in response shall be allowed except

upon leave of Court.

DONE AND ORDERED this 18th day of

October, 1977, at Miami, Florida.

/s/ William M. Hoeveler

UNITED STATES DISTRICT

JUDGE

—

APPENDIX V

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

FLORIDA NURSING HOME ASSOCIATION,

et al.,

WILLIAM J. PAGE, JR., Individually

and as Secretary of the DEPARTMENT

OF HEALTH AND REHABILITATIVE SER-

VICES OF THE STATE OF FLORIDA, et

al.

CASE NO. 77-559=-CIV-WMH

GOLDEN ISLES CONVALESCENT CENTER,

INC., et al.,

JOSEPH A. CALIFANO, JR., et al.

CASE NO. 76-1810-CIV-WMH

' ORDER

AND NOW, this 16th day of Septem-

ber, 1978, upon consideration of plain-

tiffs, Florida Nursing Home Association,

et al.'s Motion to Compel Defendants,

William J. Page, Jr., Secretary of

Department of Health and Rehabilitative

Services, to Reimburse the Plaintiff

Nursing Home Pursuant to the Current

Approved Title XIX State Plan Retro-

active to October 18, 1977 Forthwith

and Thereafter to Make Final Settlement

Pursuant to a Title XIX State Plan That

is in Compliance with the Social Security

Law, it is hereby

ORDERED AND DECREED that the State

of Florida, Department of Health and

Rehabilitative Services shall:

(1) By using the methods of reim-

bursement under the currently approved

plan, recompute the amount of reimburse-

ment due plaintiff nursing homes for ser-

vices performed pursuant to the State

of Florida, Title XIX, Medicaid plan

retroactive to October 1, 1977.

(2) Within thirty (30) days of

the date hereof issue to each Home full

payment of any amounts determined to

be the difference between what each

Home did receive and what each Home would

have received alii the currently appro-

ved plan.

(3) Continue to reimburse the

plaintiff nursing homes for Title XIX,

Medicaid services performed at rates of

reimbursement not less than those estab-

lished under the currently approved plan

with further voluntary increased rates

of reimbursement of further order of

the Court.

(4) That the matter be placed on

the Fall 1978 trial list so that a full

hearing will be held to determine

whether the current State of Florida,

Title XIX, Medicaid plan reimburses

plaintiff nursing homes on a reasonable

cost-related basis as required by 42

U.S.C. Sec. 1396a (a) (13) (E).

BY THE COURT:

/s/ William M. Hoeveler

U.S Ded .

APPENDIX VI ©

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

FLORIDA NURSING HOME ASSOCIATION,

et al.,

Plaintiffs,

Vv.

WILLIAM J. PAGE, JR. et al.,

Defendants.

No. 77-559-Civ-WMH

GOLDEN ISLES CONVALESCENT CENTER,

INC., et al.,

Plaintiffs,

Vv.

JOSEPH A. CALIFANO, JR., et al.,

Defendants.

asd hciba ntihveribearaame

ORDER

THIS CAUSE is before the Court for

status conference and review in light

of the decision of the Court of Appeals

for the Fifth Circuit in Alabama Nursing

Home Ass'n. v. Harris, 617 F.2d 388

(5th Cir. 1980). Having heard the argu-

ments of counsel and being otherwise

duly advised in the premises, it is

ORDERED AND ADJUDGED as follows:

l. The trial of this cause and all

pending discovery matters are hereby

stayed until further order of this Court.

* * *

4. The Florida Long Term Care

Reimbursement Plan is hereby referred

to the Department of Health and Human

Services (HHS) for compliance with its

regulatory duties as set forth in the

Alabama decision, supra.

a. This Court retains juris-

diction of this cause to ensure that

the federal Defendants comply with this

order and with the decision of the

Court of Appeals.

-s

b. This order is without pre-

judice to Plaintiffs" right to challenge

the payment rates on remand should the

Department, in the proper exercise of

its agency duties, determine that the

Florida Plan meets federal standards.

c. HHS shall have one hundred

thirty-five (135) days from the date of

this order within which to fully comply

with this order and with the decision

of the Fifth Circuit. Extensions will

be considered only upon a showing of

extreme hardship and unforeseeable change

in circumstances, as the time now allot-

ted, in addition to that which has al-

ready elapsed since the decision, is

more than sufficient.

5. Both State and federal Defen-

dants shall file with the Court status

reports indicating the progress being

made toward compliance with this order.

The first status reports shall be filed

thirty (30) days from the date of this

order, and thereafter reports shall be

filed at 30-day intervals until comple-

tion of the actions required by this

order.

DONE AND ORDERED in Chambers at

Miami, Dade County, Florida this 28th

day of July, 1980.

/s/ William M. Hoeveler

UDGE

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