Opposition Brief — Fogarty v. Evans (No. 07-980)
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(3) FILED
No. 07-980 MAR 28 2008
OFFICE OF THE CLERK
Su Whe SUPREME COURT, U.S.
Supreme Court of the Gnited States
Sd
MICHAEL FOGARTY AND TERRIE FRITZ,
Petitioners,
V.
ALFRED MILTON EVANS; SOUTHEASTERN
OKLAHOMA FAMILY SERVICES, INC.; RUSTLING
WINDS, INC.; MORNING STAR MENTAL HEALTH
SERVICES, INC.; DIVERSIFIED FAMILY SERVICES,
INC.; SERENITY SPRINGS MENTAL HEALTH
SERVICES, L.L.C.; JCH, INC.; NEAL THRIFT; NANCY
GRAVES-THRIFT; JOHN MAJORS; CYNTHIA MAJORS;
CHARLES PARKHURST; MARY PARKHURST; LEROY
WHEELER; AND JOEL HOLCOMB,
Respondents.
*
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
¢
BRIEF IN OPPOSITION TO
PETITION FOR A WRIT OF CERTIORARI
¢
MICHAEL L. CARR
Counsel of Record
HOLDEN, CARR & SKEENS
9 East 4th Street
200 Reunion Center
Tulsa, OK 74103
(918) 295-8888
STEVEN FE. HOLDEN REAGAN L. MADISON
HOLDEN, CARR & SKEENS HOLDEN, CARR & SKEENS
9 East 4th Street 9 East 4th Street
200 Reunion Center 200 Reunion Center
Tulsa, OK 74103 Tulsa, OK 74103
(918) 295-8888 (918) 295-8888
Counsel for Respondents
March 2008
COCKLE LAW BRIEF PRINTING CO. (800; 226 6964
OR CALL COLLECT (402) 342 2831
CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 29.6 of the Rules of the Su-
preme Court of the United States, Respondents
Alfred Milton Evans, Neal Thrift, Nancy Graves-
Thrift, John Majors, Cynthia Majors, Charles Park-
hurst, Mary Parkhurst, Leroy Wheeler, and Joel
Holcomb state that they are not stock-issuing corpo-
rations and that they have no parent corporations or
other corporate stockholders.
Respondents Southeastern Oklahoma Family
Services, Inc.; Rustling Winds, Inc.; Morning Star
Mental Health Services, Inc.; Diversified Family
Services, Inc.; and JCH, Inc. are Oklahoma corpora-
tions. The parent company of Rustling Winds, Inc. is
Tiinber Winds, Inc. No publicly-held corporation owns
any of Rustling Winds, Inc.’s stock. Diversified Fam-
ily Services, Inc.; JCH, Inc.; Morning Star Mental
Health Services, Inc.; and Southeastern Oklahoma
Family Services, Inc. do not have parent corporations,
and no publicly-held corporation owns ten percent
(10%) or more of their stock. Serenity Springs Mental
Health Services, L.L.C. is an Oklahoma limited
liability company and not a stock-issuing corporation.
il
TABLE OF CONTENTS
Page
CORPORATE DISCLOSURE STATEMENT....... i
TABLE OF AUTHORITIES ...................cc cece eeeeeee v
STATEMENT OF THE CASE................ccceesseeeeees 1
REASONS FOR DENYING THE WRIT.............. 2
I. This Court Should Deny The Petition For
A Writ Of Certiorari As To The Qualified
Immunity Issue Because The Issue Is
Moot, The Tenth Circuit’s Finding Of
Waiver Does Not Conflict With The Deci-
sions Of Other Circuits, And Petitioners
Are Not Entitled To The Protection Af-
forded By Qualified Immunity .................. 3
A. Whether Petitioners Should Have
Been Allowed To Assert Qualified
Immunity At The Second Trial Is
Moot, Because The District Court
Abused Its Discretion In Granting A
I, MN eek a ciuanociewinavad grveseul texans 3
B. The Tenth Circuit Correctly Found
That Petitioners Had Waived Their
Qualified Immunitv Defense For
Purposes Of The First Trial, And The
Tenth Circuit’s Finding Of Waiver
Does Not Conflict With The Decisions
Of Other Circuit Court ................00008. 5
ill
TABLE OF CONTENTS - Continued
Page
C. Even If The Tenth Circuit Erred In
Concluding That Petitioners Had
Waived Their Qualified Immunity De-
fense For Purposes Of The First
Trial, The Error Was Harmless Be-
cause Petitioners Are Not Entitled To
The Protection Afforded By Qualified
ROI uct ikaccravtuistnssicceaneunuseen iy
II. The Alleged Split Among The Circuit
Courts With Regard To The Proper Stan-
dard Of Review Of A Trial Court’s Grant
Of A New Trial Is Merely One Of Seman-
tics And Not Of Substance......................065 20
III. The Tenth Circuit Correctly Reinstated
The Punitive Damages Awards Against
Petitioners, Because The Amount Of The
Punitive Damages Awards Is Nearly
Three Times Less Than The Probable
Amount Of Compensatory Damages That
Will Be Awarded After Remittitur............. 30
Ree eI RPO Gs athens Lignan clacaehaguiecéemetodeasninealer@als 36
lv
APPENDIX TABLE OF CONTENTS
Page
Defendants’ Motion to Dismiss and Brief in
Support, Evans v. Fogarty (W.D. Okla. Apr. 4,
Is chai aiaucatnn seks ane cece acai cas App. 1
State Defendants’ Answer to Third Amended
Complaint, Evans v. Fogarty (W.D. Okla.
By URI erent nena ne a en App. 40
Order Granting Plaintiffs’ Motion for a Pre-
liminary Mandatory Injunction, Evans ov.
Fogarty (W.D. Okla. Feb. 12, 2001)............... App. 50
Order and Judgment Dismissing Defendants’
Interlocutory Appeal of the District Court’s
Order Denying Their Request to File a Third
Motion for Summary Judgment Based on
Qualified Immunity, Evans v. Fogarty (10th
Rie I I cer crisis tikecccacazeaaxscisoaniabbuania App. 75
Order Denying Defendants’ Request to File
Motions for Summary Judgment Based on
Qualified Immunity, Evans v. Fogarty (W.D.
Pes Rie le MII Races shchdcaits sincessnnccuceUarwiadneccones App. 82
Defendants’ Joint and Combined Motion for
Leave to File Motions for Summary Judg-
ment Based on Qualified Immunity, Evans v.
Fogarty (W.D. Okla. Nov. 12, 2003)............... App. 84
Defendants’ Answer, Evans v. Fogarty (W.D.
ois ONO See, IEE Biri ican con ncasisiconiatntcvasasuaibons App. 91
Vv
TABLE OF AUTHORITIES
Page
CASES
Ace v. Aetna Life Ins. Co., 139 F.3d 1241 (9th
SG II dildos atic ck caa tulad ice eit cea utan ale eam aatal 29
Alexander v. Fulton County, Ga., 207 F.3d 1303
OR NE I iicsiienissiahbncinsckncdnakaceanabinbanenenuennibaniion 15
Amorgianos v. Natl R.R. Passenger Corp., 303
Be Be ae Ge I esc c ha ccenpanessoatnrnncionniatensonanns 25
Apostol v. Gallion, 870 F.2d 1335 (7th Cir.
I Siig teccadicniteantishsuasunccisaaaycs nite ipkasdatdaadacianbaadamins 11
Auster Oil & Gas, Inc. v. Stream, 835 F.2d 597
I ENED sith sicsikncicictpnusccnaiiicaadoneimiinsabadiaideamenianam 8
Behrens v. Pelletier, 516 U.S. 299 (1996)................... 10
Bennett v. Hendrix, 423 F.3d 1247 (11th Cir.
BI cixiatstnltsieeiasniihotansonsccssnatescneeelicisasannaclauaebasbeateatuiaaiieuaniie 18
BMW of N. Am., Inc. v. Gore, 517 U.S. 559
II sic. cass nied dich tus accmuiohconnva anaeasmvaneiaiae maaan 30, 31
Calderon v. Witvoet, 999 F.2d 1101 (7th Cir.
BED sti ise igncen Suecieaneuncaueh taco dsdcandiicanadinncaeihidaanaasnanminaae 6
Carbo Ceramics, Inc. v. Keefe, 166 Fed. Appx.
714 (5th Cir. 2006) (not selected for publica-
tion in the Federal Reporter)........................008 26, 27
Crane v. Consol. Rail Corp., 731 F.2d 1042 (2d
Se TTY tdiasettnscnshetecinnlsicaipausdhaciapiakciinntinboionmsabiiannanaiianns 25
Creech v. Nguyen, 153 F.3d 719 (4th Cir. 1998)
IIT III 6 dc cannccinnnceianennsinewewunssexanianan’ 26
Denhof v. City of Grand Rapids, 494 F.3d 534
I I or eas waar cis redenensiabasencnanckes 27
vi
TABLE OF AUTHORITIES - Continued
Page
Eddy v. Virgin Islands Water & Power Auth.,
Be Be Be Ce Cy BIT) nvcsesccncssccsasncstssacressssesecss 7
English v. Dyke, 23 F.3d 1086 (6th Cir. 1994) ............. 7
Farquhar v. Jones, 141 Fed. Appx. 539 (9th Cir.
NEE cok dals ls ct eel cdi haiehe tal danieahanmieniabucatinienaddeieiasnaiies 7
Gasperini v. Ctr. for Humanities, Inc., 518 U.S.
RE Gatti ha sicuendisdntensd canbe sinipienavaiione 20, 21, 22, 27
Guzmdn-Rivera v. Rivera-Cruz, 98 F.3d 664
I IIc casos sancpaunancunimnnieiosknucenson 11, 12, 13
Harlow v. Fitzgerald, 457 U.S. 800 (1982) ............ a3 4?
Kelly v. City of Oakland, 198 F.3d 779 (9th Cir.
Niland decent daria aad aaa ube Nasuns 15
Langevine v. Dist. of Columbia, 106 F.3d 1018
a ao elias La teatna 29
Malandris v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 703 F.2d 1152 (10th Cir. 1981) ........... 32
Marshall v. Columbia Lea Reg'l Hosp., 474 F.3d
Fe CE el EES itinctsciiowineetnsninceycasannbsndicencccannann 16
Maul v. Constan, 928 F.2d 784 (7th Cir. 1991)............ 8
McGreevy v. Stroup, 413 F.3d 359 (3d Cir. 2005) ...... 18
Medcom Holding Co. v. Baxter Travenol Lab.,
Inc., 106 F.3d 1388 (7th Cir. 1997)................... 27, 28
Nagy v. Riblet Prod. Corp., 79 F.3d 572 (7th
ne at aii dae acunnacsdeessabapeiansessianiawnel 6
O’Connor v. Huard, 117 F.3d 12 (ist Cir.
I eg es 13, 14, 15
vil
TABLE OF AUTHORITIES - Continued
Page
Philip Morris USA v. Williams, 127 S. Ct. 1057
PF ac SINT Dididecssichccothunaataestacaliaseldcaaibtabeusuibiaiibnei decane etacnianide 31
Sales v. Grant, 224 F.3d 293 (4th Cir. 2000)................ 7
Skrtich v. Thornton, 280 F.3d 1295 (11th Cir.
EE Sc hicilicieicabiecnnsstakaeecblsduinscuaniplailaipuiaiciadtadieaiciuabadeisccbii 7
Spann v. Rainey, 987 F.2d 1110 (5th Cir. 1993)....14, 15
Stephenson v. Doe, 332 F.3d 68 (2d Cir. 2008)............. 7
United States v. Bertling, 510 F.3d 804 (8th Cir.
RC RS NS ACFE NP A TN ARTO Ne Eee eT 28
United States v. Hernandez, 433 F.3d 1328
GR TR RR in TO RL t eT ae Oe ON 5 Rea 29
United States v. Rivera Rangel, 396 F.3d 476
i te esi ccknk cs cocttpnconcckceennc pasty acenietbaciess 24, 25
United States v. Robinson, 430 F.3d 537 (2d
I ee eater as eee ae ra 25
Wilburn v. Maritrans GP Inc., 139 F.3d 350 (3d
ee he es 25, 26
Wulf v. City of Wichita, 883 F.2d 842 (10th Cir.
SI cocci tusicke uaa iuadeabise ami vesadeinattaminmne anal ndiahakenaes 33
CONSTITUTIONAL PROVISIONS
ere ee I Boog, cho crceenccnveceiaussaavanrsanesiods 2,18
U.S. Const. amend. VII.......................c000 20, 22, 23, 26
STATUTES
OKLA. STAT. ANN. tit. 51, § 162(A)(2).......0000000. ee. 1
Vili
TABLE OF AUTHORITIES - Continued
Page
OTHER
11 CHARLES A. WRIGHT, ARTHUR R. MILLER, &
Mary Kay KANE, FEDERAL PRACTICE AND PRO-
CEDURE §§ 2818-19 (2d ed. 1995) ............. ee. 22, 24
Michelle Migdal Gee, Annotation, What Stan-
‘ dards Govern Appellate Review of Trial
Court’s Conditional Ruling, Pursuant to Rule
50(c)(L) of Federal Rules of Civil Procedure
on Party’s Motion for New Trial, 52 A.L.R.
FED. 494 (originally published in 1981)........... 22, 23
1
STATEMENT OF THE CASE
Respondents adopt the facts as set forth in the
Tenth Circuit’s Order and Judgment filed August 22,
2007, Pet’r App. pp. la-53a, and as set forth in the
Tenth Circuit’s Order and Judgment filed January 26,
2005. See infra App. 78-81.
With regard to Petitioners’ Statement of the
Case, Respondents object to any and all facts suggest-
ing that Petitioners’ conduct toward Respondents was
based on a budgetary, as opposed to a retaliatory,
motive. Petitioners’ facts are slanted in their own
favor and are premised primarily on the District
Court’s grant of Petitioners’ motion for judgment as a
mz.er of law after the second jury trial. Petitioners
do not discuss, in detail, the findings of either jury or
the findings of the Tenth Circuit.
Additionally, Petitioners do not make this Court
aware of OKLA. StTaT. ANN. tit. 51, § 162(A\(2), which
impacts Petitioners’ personal liability for the compen-
satory damages awarded. That statute states, in
pertinent part:
A. The state or any political subdivision, subject
to procedural requirements imposed by this
section, other applicable statute, ordinance,
resolution, or written policy, shall:
2. Pay or cause to be paid any judgment
entered in the courts of the United
States, the State of Oklahoma or any
2
other state against any employee or po-
litical subdivision. ...
a.
vv
REASONS FOR DENYING THE WRIT
Petitioners are high-ranking state officials who
abused their positions and implemented a regime of
lawless conduct by retaliating against Respondents
for speaking publicly about the State of Oklahoma’s
Medicaid system. Respondents’ only means of vindi-
cating their First Amendment right to free speech are
damages. The Tenth Circuit’s opinion does not, as
Petitioners contend, unfairly impose liability on state
officials who were simply doing their job but, rather,
holds high-ranking state officials accountable for
their intentional abuse of power and deprivation of
Respondents’ First Amendment right to free speech.
The Tenth Circuit’s finding that Petitioners had
waived their qualified immunity defense does not
conflict with the decisions of other circuit courts and
is not in tension with the principles of qualified
immunity established by this Court.
The standard of review applied by the Tenth
Circuit to the District Court’s grant of a new trial is
not contrary to this Court’s decisions and does not
exacerbate an existing conflict among the courts of
appeals.
And finally, the Tenth Circuit’s reinstatement of
the punitive damages awards against Petitioners
3
after the first trial does not merit review, as a rea-
sonable relationship exists between the amount of
punitive damages that were awarded after the first
trial and the probable amount of compensatory
damages that will be awarded after remittitur.
I. This Court Should Deny The Petition For A
Writ Of Certiorari As To The Qualified Im-
munity Issue Because The Issue Is Moot,
The Tenth Circuit’s Finding Of Waiver Does
Not Conflict With The Decisions Of Other
Circuits, And Petitioners Are Not Entitled
To The Protection Afforded By Qualified
Immunity.
A. Whether Petitioners Should Have Been
Allowed To Assert Qualified Immunity
At The Second Trial Is Moot, Because
The District Court Abused Its Discre-
tion In Granting A Second Trial.
In their Petition for a Writ of Certiorari, Peti-
tioners try to blur the true issue on appeal to this
Court with regard to qualified immunity. Petitioners
did not argue to the Tenth Circuit that the District
Court had erred in prohibiting them from asserting
qualified immunity at the first trial, as Petitioners
had not even attempted to assert the defense at the
pre-trial/post-discovery phase, at the trial phase, or at
the post-trial phase of the first trial. Nor did Petition-
ers argue to the Tenth Circuit that the District Court
had erred in denying their motion to dismiss, in
which they had asserted qualified immunity at the
a
pleading phase of the first trial. The actual issue that
Petitioners presented to the Tenth Circuit was
whether the District Court had erred in not allowing
them to rely on the defense subsequent to the first
trial but prior to the second trial. The Tenth Circuit
abstained from answering that question, however,
because it found that the District Court had abused
its discretion in granting a second trial at all, thus
rendering moot the question of whether the District
Court had erred in denying Petitioners use of the
defense in advance of the second trial.
As explained more fully in Subsection (IT) below,
the Tenth Circuit correctly held that the District
Court had abused its discretion in granting a second
trial. For that reason, this Court need not now ad-
dress whether the District Court should have allowed
Petitioners to assert qualified immunity in advance of
the second trial, as the issue continues to be moot.
Because the Tenth Circuit reinstated the first jury
verdict, the real issue before this Court is whether
the Tenth Circuit erred in finding that Petitioners
had waived their qualified immunity defense for
purposes of the first trial.
The Tenth Circuit did not err in finding that
Petitioners had waived their qualified immunity
defense for purposes of the first trial. And, even if the
Tenth Circuit improperly overturned the District
Court’s grant of a new trial, the District Court did not
abuse its discretion in prohibiting Petitioners from
asserting qualified immunity in advance of the second
trial, because Petitioners’ failure to press qualified
5
immunity at the first trial effectuated waiver for
purposes of the second trial, as well.
B. The Tenth Circuit Correctly Found
That Petitioners Had Waived Their
Qualified Immunity Defense For Pur-
poses Of The First Trial, And The Tenth
Circuit’s Finding Of Waiver Does Not
Conflict With The Decisions Of Other
Circuit Courts.
By presenting a distorted version of the Tenth
Circuit’s finding and by providing incomplete ac-
counts of other circuit courts’ opinions, Petitioners
give the appearance that a circuit split exists with
regard to waiver of qualified immunity, hoping that
this Court will grant a writ of certiorari to resolve the
supposed conflict among the circuit courts. In actual-
ity, however, the issue on which the circuit courts are
supposedly split was not the basis of the Tenth Cir-
cuit’s finding of waiver.
Specifically, Petitioners argue that the Tenth
Circuit departed from the decisions of other circuit
courts when it found that Petitioners had waived
their qualified immunity defense for failure to include
it in the pretrial order. But, the Tenth Circuit did not
find that Petitioners had waived their qualified
immunity defense solely because they had failed to
include it in the pretrial order. Rather, the Tenth
Circuit found that Petitioners had waived the defense
because they had neglected to press it at every oppor-
tunity. They had “failed to assert qualified immunity
6
in their motions for summary judgment, the pretrial
order, or in their oral motions for [judgment as a
matter of law] at the close of the plaintiffs’ case.” Pet’r
App. pp. 16a-17a n.9. Therefore, any authority cited
by Petitioners as standing for the proposition that
qualified immunity is not waived if not included in
the pre-trial order (i.e., Calderon v. Witvoet, 999 F.2d
1101 (7th Cir. 1993); Nagy v. Riblet Prod. Corp., 79
F.3d 572 (7th Cir. 1996)), is wholly irrelevant in
determining whether the Tenth Circuit erred in
finding that Petitioners had waived their qualified
immunity defense. Moreover, even if the Tenth Cir-
cuit’s finding had been premised solely on Petitioners’
failure to include the defense in the pre-trial order,
Calderon and Nagy would lend no support to Peti-
tioners’ position, as those cases held that an affirma-
tive defense must generally be included in the pre-
trial order to be preserved but that an exception
exists when the district court has foreclosed the
defense from trial. As explained more fully below, the
District Court did not foreclose Petitioners’ qualified
immunity defense from the first trial.
At first blush, it appears that Petitioners are
arguing that failure to include qualified immunity in
the pretrial order should not result in waiver; how-
ever, a closer look reveals that Petitioners are, in fact,
arguing that qualified immunity lives forever and
that it may be pressed for the first time seven (7)
months after the conclusion of a jury trial. Petitioners’
position, however, is simply untenable, as even the
First and Fifth Circuits, which Petitioners cite as
7
allowing the defense to be raised at any time, hold
that, at some point, qualified immunity must be cut
off.
This Court has stated that qualified immunity is
an affirmative defense that must be raised by the
defendant. Harlow v. Fitzgerald, 457 U.S. 800, 815
(1982) (citing Gomez v. Toledo, 446 U.S. 635, 640
(1980)). As an affirmative defense, qualified immu-
nity may be waived if not properly raised. See Farqu-
har v. Jones, 141 Fed. Appx. 539, 540 (9th Cir. 2005)
(not published in the Federal Reporter) (holding
that qualified immunity had been waived when
raised for the first time in an objection to the
magistrate judge’s report); Stephenson v. Doe, 332
F.3d 68, 76 (2d Cir. 2003) (explaining that qualified
immunity can be waived by failure to raise it in a
timely fashion or by failure to raise it with sufficient
particularity); Eddy v. Virgin Islands Water & Power
Auth., 256 F.3d 204, 209-10 (3d Cir. 2001) (stating
that a district court has discretion to determine
whether the defendant diligently raised quali-
fied immunity); Skrtich v. Thornton, 280 F.3d 1295,
1306-07 (11th Cir. 2002) (“Qualified immunity is an
affirmative defense to personal liability, which must
be pled, and if it is not, it is deemed waived.”); Sales
v. Grant, 224 F.3d 293, 294-96 (4th Cir. 2000) (hold-
ing that the defendants, who had only cursorily
referenced qualified immunity in their answer,
could not pursue the defense for the first time on
remand for a new trial); English v. Dyke, 23 F.3d
1086, 1090 (6th Cir. 1994) (“(TJhe trial court has
8
discretion to find a waiver if a defendant fails to
assert the defense within time limits set by the
court or if the court otherwise finds that a de-
fendant has failed to exercise due diligence or
has asserted the defense for dilatory purposes.”)
(citation omitted); Maul v. Constan, 928 F.2d 784,
785-86 (7th Cir. 1991) (holding that the defen-
dants, who had asserted “good faith immunity”
in their answer, had not sufficiently preserved
the defense and could not urge it for the first
time in a post-trial motion); Auster Oil & Gas, Inc.
vu. Stream, 835 F.2d 597, 601 (5th Cir. 1988) (declin-
ing to review whether appellants were entitled
to qualified immunity, because they had not
“squarely posed” the issue until filing a motion
for new trial).
The point at which qualified immunity is deemed
waived may vary, depending on the deciding court
and the circumstances of the case. But, the fact that
qualified immunity may be waived is undisputed, and
as noted in the above parentheticals, district courts
have discretion in deeming the defense waived.
Respondents recognize that qualified immunity
may be asserted at various stages of litigation and
that failure to assert the defense at one stage does
not necessarily preclude the defendant from asserting
the defense at a later stage. However, a defendant
may not casually assert the defense at the beginning
of a lawsuit and then rely on that one assertion for
the duration of the case, which is exactly what Peti-
tioners are urging.
9
Petitioners asserted qualified immunity prior to
the first trial in a motion to dismiss, which the Dis-
trict Court denied, and then again in their answers.
See infra App. 15-23, 48, 97; Pet’r App. pp. 115a-18a.
Thereafter, Petitioners failed to press the defense.
They did not assert it in their motions for summary
judgment. They did not include it in the pre-trial
order. They did not submit it with their proposed jury
instructions. And, they did not raise it in their mo-
tions for judgment as a matter of law at trial. See
infra App. 77-81. In fact, Petitioners did not forcefully
press the defense again until seven (7) months after
the first trial, when they retained new counsel to
represent them at the second trial and requested
leave of court to file a motion for summary judgment
on the ground of qualified immunity, which request
the District Court denied. See infra App. 82, 84-88.
Petitioners now argue that they did not need to
press their qualified immunity defense subsequent to
the District Court’s denial of their motion to dismiss,
claiming that the denial was a final resolution of
Petitioners’ entitlement to the defense for the entire
duration of the litigation. Petitioners, however, may
not use the District Court’s denial of their motion to
dismiss at the pleading stage of the first trial as an
excuse for their failure to reassert the defense at later
stages of the litigation.
Whether a defendant is entitled to qualified
immunity is analyzed differently at the summary-
judgment phase than it is at the motion-to-dismiss
phase. “At that earlier stage, it is the defendant’s
10
conduct as alleged in the complaint that is scrutinized
for ‘objective legal reasonableness. On summary
judgment, however, the plaintiff can no longer rest on
the pleadings, ... and the court looks to the evidence
before it (in the light most favorable to the plain-
tiff)....” Behrens v. Pelletier, 516 U.S. 299, 309
(1996).
Simply because the District Court found that
Petitioners could not be dismissed from suit at the
pleading stage of the first trial, because Respondents
had sufficiently alleged a violation of a clearly estab-
lished constitutional right in their complaint, was no
guarantee that the District Court would find that the
evidence produced during discovery was sufficient to
support the violation alleged in Respondents’ com-
plaint. Therefore, if Petitioners had thought that the
evidence produced during discovery did not support
the violation alleged in Respondents’ complaint, then
Petitioners could, and should, have asserted qualified
immunity in a motion for summary judgment at the
pre-trial/post-discovery phase of the first trial. See id.
(“It is no more true that the defendant who has
unsuccessfully appealed denial of a motion to dismiss
has no need to appeal denial of a motion for summary
judgment, than it is that the defendant who has
unsuccessfully made a motion to dismiss has no need
to make a motion for summary judgment.”). Because
Petitioners did not assert qualified immunity in their
motions for summary judgment, they did not even
give the District Court the opportunity to evaluate
whether they were immune from facing the burden of
11
trial. Moreover, because they did not bother to press
the defense at trial, they did not give the District
Court the opportunity to evaluate whether they were
immune from liability.
Petitioners cite Guzmdn-Rivera v. Rivera-Cruz,
98 F.3d 664 (1st Cir. 1996) to support their position
that the Tenth Circuit erred in finding waiver. Guz-
man-Rivera, however, actually provided the basis of
the Tenth Circuit’s finding. Pet’r App. p. 17a n.9.
The defendants in Guzmdn-Rivera asserted
qualified immunity on the eve of trial. Although the
First Circuit held that the defendants had not waived
the defense for trial, it did hold that they had waived
it for the pre-trial/post-discovery phase, meaning the
defendants were not immune from suit, even if they
might later be found immune from liability.
The First Circuit expressed concern in Guzmdn-
Rivera with regard to a defendant’s intentional delay
in asserting qualified immunity for the purpose of
prejudicing the plaintiff. To help reduce such tactical
delay, the First Circuit encouraged district courts to
enter scheduling orders, stating:
Delay generated by claims of qualified im-
munity may work to the disadvantage of the
plaintiff. Witnesses may become unavailable,
memories may fade, attorneys fees accumu-
late, and deserving plaintiffs’ recovery is de-
layed. See Apostol v. Gallion, 870 F.2d 1335,
1338 (7th Cir. 1989) (“Defendants may seek
to stall because they gain from delay at
12
plaintiffs’ expense, an incentive yielding un-
justified appeals.”). Delay is also costly to the
court system, demanding more time and en-
ergy from the court and retarding the dispo-
sition of cases... .
In order to reduce the potential for abuse by
defendants, we believe that the defense of
qualified immunity may be deemed to have
been waived if it is not raised in a diligent
manner during the post-discovery, pre-trial
phase. To find otherwise is to invite strategic
use of the defense by defendants who stand
to benefit from delay. .. .
[Djistrict courts are encouraged to enter
scheduling orders to prevent dilatory tactics
on the part of defendants with qualified im-
munity defenses. Absent an abuse of discre-
tion, this court will enforce those scheduling
deadlines by affirming a finding of waiver
and awarding double costs.
Id. at 667-69.
Petitioners are not similar to the defendants in
Guzmdn-Rivera, because not only did Petitioners fail
to diligently press qualified immunity at the pre-
trial/post-discovery phase of the first trial, they also
failed to diligently press qualified immunity at the
trial itself and at the post-trial phase of the first trial.
Moreover, Petitioners did not appeal the District
Court's denial of their motion to dismiss premised on
qualified immunity. See infra App. 78. The first
time that Petitioners diligently reasserted their
qualified immunity defense was approximately seven
13
(7) months after the first trial, when they filed a
motion seeking leave of court to file a motion for
summary judgment based on qualified immunity. See
infra App. 84-88. Petitioners’ failure to press the
defense prior thereto is the very type of prejudicial
delay about which the First Circuit expressed concern
in Guzmdn-Rivera. And, even if the purpose of Peti-
tioners’ delay was not to intentionally prejudice
Respondents, prejudice would have resulted had the
Tenth Circuit allowed Petitioners to escape liability
for their misdeeds after a jury verdict. Petitioners’
delay in asserting the defense appears to be one last-
ditch attempt to escape liability after gambling and
losing on the jury’s verdict. As explained by the Tenth
Circuit in its opinion, however, qualified immunity “is
not a parachute to be deployed only when the plane
has run out of fuel.” Pet’r App. p. 17a n.9.
Petitioners also cite to O’Connor v. Huard, 117
F.3d 12 (1st Cir. 1997) to support their contention
that the Tenth Circuit erred in not considering the
substantive elements of their qualified immunity
defense on appeal. Like Guzmdan-Rivera, however,
O’Connor is distinguishable.
In O'Connor, also a First Circuit case, the defen-
dant waited to assert qualified immunity until filing
a motion notwithstanding the verdict. On appeal, the
First Circuit reviewed the district court’s denial of the
defendant’s motion. But, the First Circuit reviewed
the denial for plain error only, because it found that
the defendant had not properly preserved the defense
14
by raising it for the first time after the verdict. Jd. at
17.
The case Spann v. Rainey, 987 F.2d 1110 (5th Cir.
1993), also cited by Petitioners, is somewhat similar
to the instant case in that the Fifth Circuit had to
decide whether to review the district court’s denial of
the defendant’s motion for summary judgment based
on qualified immunity, which had not been filed until
after a new trial had been granted. The Fifth Circuit
ultimately decided to review the denial. But, it noted
that it was not deciding whether a defendant who has
not presented qualified immunity at the first trial
may present it at the second trial, because the Fifth
Circuit found that the defendant had sufficiently
presented qualified immunity at the first trial. Al-
though the defendant had not moved to dismiss on
the ground of qualified immunity in advance of the
first trial and had not specifically included qualified
immunity in the pre-trial order, he had (1) incorpo-
rated into the pre-trial order all of the defenses
asserted in his answer to the complaint, which in-
cluded qualified immunity; (2) argued immunity at
the close of plaintiff’s case and at the close of evi-
dence; and (3) included in the jury instructions ele-
ments for immunity.
Unlike the defendant in Spann, Petitioners did
not assert qualified immunity at the first trial.
Rather, they reasserted it seven (7) months after the
first trial. Thus, the Fifth Circuit’s decision to review
the district court’s denial of the defendant’s motion
for summary judgment in Spann lends no support to
15
Petitioners’ contention that the Tenth Circuit erred in
not considering the substantive elements of their
qualified immunity defense, as the defendant in
Spann had sufficiently preserved his qualified immu-
nity defense for appeal by asserting it at the first
trial.
Petitioners also cite Alexander v. Fulton County,
Ga., 207 F.3d 1303, 1320 & n.10 (11th Cir. 2000) and
Kelly v. City of Oakland, 198 F.3d 779, 784 (9th Cir.
1999) to support their contention that qualified
immunity may be reviewed on appeal even if it was
not raised at trial. Once again, however, Petitioners
mischaracterize the facts of the authority they cite.
Like the defendant in Spann, the defendant in
Alexander raised qualified immunity at rial, as she
raised it at the close of the plaintiff’s case. And in
Kelly, the defendants asked for a jury instruction
containing elements of qualified immunity and then
raised qualified immunity again by motion after the
verdict, which the district court denied on the ground
that the defendant had not asserted qualified immu-
nity in a motion prior to jury deliberation. Like the
First Circuit in O'Connor, 117 F.3d at 17, the Ninth
Circuit in Kelly found that the defendant had waited
too long to assert the defense. Although the Ninth
Circuit reviewed the district court’s denial, it did so
only for plain error and only in the interest of justice,
stating: “We have ... occasionally reviewed for plain
error even when no motion for judgment as a matter
of law was made.” The Ninth Circuit, in no way,
stated that a denial of qualified immunity must be
16
reviewed on appeal if not properly preserved, how-
ever.
As stated hereinabove, the stage at which quali-
fied immunity is deemed waived varies, depending on
the court and the circumstances of the case. Some
courts allow defendants to assert qualified immunity
for the first time very late into the proceedings, while
others deem the defense waived. The Tenth Circuit is
actually quite lenient. If the defendant has properly
raised qualified immunity in an answer, in a motion
to dismiss, or in a motion for summary judgment but
then does not reassert the defense until after trial,
the Tenth Circuit will still review the district court’s
denial of the defense. Marshall v. Columbia Lea Reg'l
Hosp., 474 F.3d 733, 739 (10th Cir. 2007) (“[A] post-
trial grant of immunity would still confer a benefit by
shielding [defendants] from any liability for the
monetary damages awarded by the jury.”) (citing
Acevedo-Garcia v. Monroig, 351 F.3d 547, 562 n.6 (1st
Cir. 2003)). It will just review the evidence in the
light “most hospitable” to the party that prevailed at
trial. /d. (citing Jacobucci v. Boulter, 193 F.3d 14, 23
(1st Cir. 1999)).
The Tenth Circuit did not review the substantive
elements of Petitioners’ qualified immunity defense
for purposes of the first trial, because although Peti-
tioners had raised the defense in their motions to
dismiss and in their answers, they had not reasserted
it at the first trial or during the post-trial phase of
the first trial. Reasserting it seven (7) months after
the first trial is simply too late. Despite Petitioners’
17
wishes, qualified immunity does not live forever.
Petitioners had numerous opportunities to assert the
defense: (1) they could have asserted it prior to the
first trial in a motion for summary judgment; (2) they
could have included it in the pre-trial order; (3) they
could have submitted it with their proposed jury
instructions; (4) they could have asserted it at the
first trial after the Respondents’ case-in-chief; (5) they
could have asserted it after presenting their own case
at the first trial; and (6) they could have asserted it in
a motion notwithstanding the verdict. Petitioners
failed to take advantage of all of these opportunities.
For that reason, the Tenth Circuit was not unreason-
able in deeming the defense waived for purposes of
the first trial, and the District Court did not abuse its
discretion in deeming the defense waived for purposes
of the second trial.
C. Even If The Tenth Circuit Erred In
Concluding That Petitioners Had
Waived Their Qualified Immunity De-
fense For Purposes Of The First Trial,
The Error Was Harmless Because Peti-
tioners Are Not Entitled To The Protec-
tion Afforded By Qualified Immunity.
Qualified immunity is just that — qualified. It
does not protect from civil damages government
officials performing discretionary functions whose
conduct violates a clearly established statutory or
constitutional rmght of which a reasonable person
would have known. Harlow, 457 U.S. at 818.
18
There is no doubt that Respondents were en-
gaged in protected First Amendment activity when
they were speaking publicly about the State of Okla-
homa’s Medicaid system, and Petitioners did not
dispute this fact on appeal to the Tenth Circuit. Pet’r
App. p. 18a. The First Amendment right to free
speech is a clearly established right. Bennett v.
Hendrix, 423 F.3d 1247, 1255 (11th Cir. 2005);
McGreevy v. Stroup, 413 F.3d 359, 366-67 (3d Cir.
2005); Pet’r App. pp. 115a-18a.
Respondents presented a lot of evidence at trial
proving that Petitioners had retaliated against them
for speaking publicly about Oklahoma’s Medicaid
System. For example, Respondent Cynthia Majors
testified that Petitioner Fogarty had threatened that
if her husband, Respondent John Majors, continued
to lobby at the Capitol, “he could send someone down
to investigate [her] nursing home for fraudulent
billing.” Pet’r App. p. 36a. And, even before the first
trial, the District Court found that the evidence
presented by Respondents demonstrated “an uncanny
correlation” between Respondents’ exercise of free
speech rights and the administrative actions taken by
the Oklahoma Health Care Authority. See infra App.
59-63. The District Court also found that Respon-
dents were “likely to succeed in showing that the
[Petitioners] took certain retaliatory actions in re-
sponse to the exercise of First Amendment rights. .. .”
See infra App. 638. Then, two different juries con-
cluded that Petitioners had retaliated against Re-
spondents for speaking publicly about the State of
Oklahoma’s Medicaid system and that Petitioners’
19
conduct had not been for a budgetary purpose. Even
in the District Court’s February 23, 2005 order after
the second trial, the District Court denied Petitioner
Fogarty’s motion for judgment as a matter of law as to
all individual Respondents, except for Mary Parkhurst
and Joel Holcomb. And, if that is not enough to prove
that Petitioners’ violated Respondents’ First Amend-
ment right to free speech, the Tenth Circuit, after
reviewing all of the evidence on appeal, stated:
[W]e are satisfied that a reasonable juror
could conclude that Fritz and Fogarty acted
with “reckless or callous indifference,” if not
“evil motive or intent,” to the rights of the
[Respondents]. Hardeman |[v. City of Albu-
querque), 377 F.3d [1106,] 1121. Plaintiffs
met with persistent hostility from Fritz and
Fogarty, and were subject to a wide variety of
injuries in relation for their political activi-
ties. A reasonable juror could conclude, based
on the evidence before it, that Fogarty and
Fritz wanted to silence members of the Asso-
ciation, were embarrassed by their lobbying
efforts, and acted to starve them of Medicaid
funding in an effort to put them out of busi-
ness. This type of behavior is the sort that is
properly answered by punitive damages,
which act “to punish what has occurred and
to deter its repetition.” Youren v. Tintic Sch.
Dist., 343 F.3d 1296, 1309 (10th Cir. 2003).
Based on the foregoing, Petitioners certainly
violated a clearly established constitutional mght of
which any reasonable person would have known. No
reasonable person in Petitioners’ position would have
20
thought that it was legal to intentionally deny Medi-
caid reimbursement to deserving individuals simply
because they had engaged in public speech regarding
Oklahoma’s Medicaid system. Qualified immunity does
not protect government officials from civil damages for
such malicious conduct. Therefore, whether the Tenth
Circuit erred in finding waiver for purposes of the first
trial or whether the District Court abused its discretion
in finding waiver for purposes of the second trial is
completely irrelevant, because Petitioners would not
have been immune from liability in any event. As such,
this Court should deny the Petition for a Writ of Certio-
rari as to the qualified immunity issue.
II. The Alleged Split Among The Circuit
Courts With Regard To The Proper Stan-
dard Of Review Of A Trial Court’s Grant
Of A New Trial Is Merely One Of Seman-
tics And Not Of Substance.
Petitioners quote the following statement from
the United States Supreme Court case Gasperini v.
Ctr. for Humanities, Inc., 518 U.S. 415, 435 (1996) as
support for their contention that the Tenth Circuit
reviewed the District Court’s grant of a second trial
too stringently: “[Alppellate review for abuse of
discretion is reconcilable with the Seventh Amend-
ment as a control necessary and proper to the fair
administration of justice.” Petitioners have taken this
statement from Gasperini out of context, however, as
Gasperini concerned what standard of review, if any,
a federal appellate court should apply to a district
court’s dental of a motion for a new trial premised on
21
excessive damages. Thus, Petitioners’ argument that
Gasperini lowered the standard of review for the
grant of a new trial premised on insufficient evidence
is without merit. Furthermore, while Petitioners
primarily cite pre-Gasperini cases, in which a more
exacting scrutiny was applied, to bolster their argu-
ment that a more exacting scrutiny is a thing of the
past, the truth is that since Gasperini, the circuit
courts have continued to subject the grant of a new
trial to more exacting scrutiny, particularly when the
grant was premised on the ground that the evidence
did not support the jury’s verdict.
The precise issue presented in Gasperini was
whether federal appellate courts could apply a New
York state law that gave them the power “to review
the size of jury verdicts and to order new trials when
the jury’s award ‘deviate[d] materially from what
would [have] be[en] reasonable compensation.” Jd. at
418. Stated more simply, the issue was whether
appellate judges, who were not present at the trial,
possess the power to vacate a jury verdict on the
ground of excessiveness and to order a new trial when
the district judge, who was present at the trial,
declined to do so. On appeal to the United States
Supreme Court, this Court held that appellate judges
do possess such power, but only if the district judge
abused his discretion in denying a new trial.
The reason why the holding in Gasperini is
significant is because, at one time, it was the law that
the trial court’s denial of a motion for a new trial,
based on the ground that the verdict was against
the weight of the evidence or that the verdict was
22
excessive or inadequate, was not reviewable at all,
because such review was “deemed inconsonant with
the Seventh Amendment’s Reexamination Clause.”
Id. at 434; 11 CHARLES A. WRIGHT, ARTHUR R. MILLER,
& Mary Kay KANE, FEDERAL PRACTICE AND PROCEDURE
§ 2818, p. 197, § 2819, p. 200 (2d ed. 1995). The
holding in Gasperini finally put to rest all doubt that
appellate judges, who were not present at the trial,
have the power to set aside a jury verdict and to order
a new trial, despite the trial judge’s refusal to do so.
Id. at § 2819, p. 204. Thus, this Court’s statement
that “appellate review for abuse of discretion is
reconcilable with the Seventh Amendment as a
control necessary and proper to the fair administra-
tion of justice” simply means that appellate judges do
not violate the Reexamination Clause of the Seventh
Amendment when they review a district court’s
denial of a new trial.
Despite Petitioners’ assertion that Gasperini
should have governed the Tenth Circuit’s review of
the District Court’s grant of a new trial, “[dJifferent
considerations apply when the trial court has denied
[a] motion [for a new trial] than when it has granted it
and the problems must be considered separately.” Jd. at
§ 2819, p. 198-99 (emphasis added). See also Michelle
* The Seventh Amendment of the United States Constitu-
tion provides: “In Suits at common law, where the value in
controversy shal] exceed twenty dollars, the right of trial by jury
shall be preserved, and no fact tried by a jury, shall be otherwise
re-examined in any Court of the United States, than according
to the rules of the common law.”
23
Migdal Gee, Annotation, What Standards Govern
Appellate Review of Trial Court’s Conditional Ruling,
Pursuant to Rule 50(c)(1) of Federal Rules of Civil
Procedure on Party’s Motion for New Trial, 52 A.L.R.
Fep. 494 § 2 (originally published in 1981) (“It has
been recognized that closer appellate scrutiny is
required when a new trial has been granted ... than
when it has been denied ... , since in the latter
situation the trial judge has left standing the jury’
determination and, therefore, has in no way abridged
the parties’ right to a jury trial.”). “It has also gener-
ally been held that the degree of appellate scrutiny
depends on the reasons for the ruling. ... Where the
stated reason for granting a new trial was the weight
of the evidence ... , the appellate courts ... scruti-
nize{[ ] the ruling more closely....” Id. (emphasis
added). The reason why appellate courts scrutinize
the grant of a new trial that is premised on insuffi-
cient evidence more closely than they scrutinize the
dental of a new trial is because:
There is no Seventh Amendment problem...
if the appellate court reverses the trial
court’s grant of a new trial [on the ground
that the verdict was against the weight of
the evidence]. In this instance the appellate
court is not reexamining facts found by a
jury but is reinstating the jury’s findings as
against the contrary findings of the judge.
Appellate action in this context protects the
role of the jury, as envisioned by the Seventh
Amendment, rather than running contrary
to it.
24
11 FEDERAL PRACTICE AND PROCEDURE § 2819, p. 205
(emphasis added).
By quoting more-stringent-scrutiny language
from the opinions of certain circuit courts, Petitioners
try to give the appearance that a split exists among
the circuit courts with regard to the proper standard
of review for the grant of a new trial. However, the
circuit courts unanimously agree that the proper
standard of review is abuse of discretion. Simply
because some circuit courts examine the evidence
more closely than others does not mean that those
courts are not giving proper deference to the district
court’s decision or that a substantive circuit split
exists. At best, the split among the circuit courts is
one of semantics.
Petitioners cite no case law from the First Cir-
cuit, but as stated above, the articulated standard of
review in the First Circuit for the grant of a new trial
is abuse of discretion. United States v. Rivera Rangel,
396 F.3d 476, 485-86 (lst Cir. 2005). Although the
First Circuit does not use the same terminology that
the Tenth Circuit uses to define “abuse of discretion,”
the standard of review employed by the First Circuit
appears to be very much like the one employed by the
Tenth Circuit, because the First Circuit will find an
abuse of discretion if there was merely “ample” evi-
dence to support the jury’s verdict and if the jury’s
verdict was not “seriously erroneous.” Jd. at 486
(stating that “[t]here are ‘definite limits upon a
25
>»
district court’s right to upset a jury verdict’ ”) (citation
omitted).
Like the First Circuit, the Second Circuit ac-
knowledges “the need [for] particularly close appel-
late scrutiny where the trial judge grants a new trial
solely because the judge regards the verdict as
against the weight of the evidence.” See Crane uv.
Consol. Rail Corp., 731 F.2d 1042, 1048 (2d Cir.
1984). The Second Circuit even uses the same lan-
guage that the First Circuit used in Rivera Rangel to
describe the circumstances under which a trial judge
has authority to grant a new trial. See Amorgianos uv.
Natl R.R. Passenger Corp., 303 F.3d 256, 261 (2d Cir.
2002) (stating that a district court may grant a new
trial on the basis that the verdict was against the
weight of the evidence only if the jury reached a
“seriously erroneous” result or if allowing the verdict
to stand would result in a miscarriage of justice)
(citation omitted). See also United States v. Robinson,
430 F.3d 537, 543 (2d Cir. 2005) (stating that “the
court may not wholly usurp the jury’s role” and that
the trial judge may intrude upon the jury function
only where exceptional circumstances can be demon-
strated) (citation omitted).
Like the First and Second Circuits, the articu-
lated standard of review for the grant of a new trial
in the Third Circuit is abuse of discretion. Wilburn v.
Maritrans GP Inc., 139 F.3d 350, 363 (3d Cir. 1998)
(citation omitted). At the same time, however, the
Third Circuit exercises a “closer degree of scrutiny”
when the district court grants a motion for a new trial
26
on the ground that the verdict is against the weight of
the evidence, because the Third Circuit is cognizant
of the potential for a district court to substitute its
judgment for that of the jury. Jd. (citation omitted).
See also id. at 364 (“[T]his court has held that ‘new
trials because the verdict is against the weight of the
evidence are proper only when the record shows that
the jury’s verdict resulted in a miscarriage of justice
or where the verdict, on the record, cries out to be
overturned or shocks our conscience.’”) (citation
omitted).
Similarly, the Fourth Circuit’s articulated stan-
dard of review for the grant of a new trial is abuse of
discretion. Creech v. Nguyen, 153 F.3d 719, 1998 WL
486354, at *8 (4th Cir. 1998) (unpublished opinion)
(citation omitted). Yet, like the First, Second, and
Third Circuits, the Fourth Circuit exercises a “closer
degree of scrutiny and supervision” when reviewing
the grant of a new trial on the ground that the verdict
was against the weight of the evidence. Jd. “A closer
degree of scrutiny is warranted to protect the liti-
gant’s Seventh Amendment right to a jury trial.” Jd.
Petitioners list the Fifth Circuit as being one of
five circuit courts to apply a lower standard of federal
appellate review to the grant of a new trial. It is no
surprise, then, that the Fifth Circuit’s articulated
standard of review is abuse of discretion. Carbo
Ceramics, Inc. v. Keefe, 166 Fed. Appx. 714, 717, 2006
WL 197340, at *1 (5th Cir. 2006) (not selected for
publication in the Federal Reporter) (citation omit-
ted). Nevertheless, just like the First, Second, Third,
27
and Fourth Circuits, the Fifth Circuit scrutinizes the
grant of a new trial more closely than it scrutinizes
the denial of a new trial, and unless the Fifth Circuit
is able to independently satisfy itself that the jury
verdict was against the great weight of the evidence,
it will not affirm the grant of a new trial. /d.
As in the other circuits, abuse of discretion is the
articulated standard of review in the Sixth Circuit for
the grant of a new trial. Denhof v. City of Grand
Rapids, 494 F.3d 534, 543 (6th Cir. 2007). In practice,
however, the Sixth Circuit exercises a “closer degree
of scrutiny and supervision” when reviewing the
grant of a new trial premised on insufficient evidence
than it exercises when reviewing the grant of a new
trial premised on some other basis, such as “some
undesirable or pernicious influence obtruding into the
trial.” Id. (citations omitted). Therefore, unless the
jury’s verdict is unreasonable, the Sixth Circuit will
not affirm the grant of a new trial. 7d.
With regard to the Seventh Circuit, Petitioners
cite Medcom Holding Co. v. Baxter Travenol Lab.,
Inc., 106 F.3d 1388 (1997). In Medcom, the Seventh
Circuit stated that it had, at one time, applied a
“somewhat more exacting” standard of review than
ordinary abuse of discretion to the grant of a new
trial but that such practice is no longer necessary in
light of Gasperini. Id. at 1397. Despite that state-
ment, however, the Seventh Circuit went on to hold
in Medcom that the district court had abused its
discretion in vacating the first jury’s verdict and in
ordering a new trial. Jd. at 1405-06. What is more,
28
the justification given for its holding was that the
evidence was “sufficient” to support the verdict and
that the jury awards had “a reasonable basis.” Id. at
1402, 1405-06. “Sufficient” and “reasonable” suggest
that the Seventh Circuit does not, in practice, give
any more deference to the district court’s grant of a
new trial than the other circuit courts give. Therefore,
even though the Seventh Circuit claims that it no
longer applies a “somewhat more exacting” standard
of review to the grant of a new trial, in actuality&t
does.
Petitioners list the Eighth Circuit as being an-
other one of five circuit courts to apply a lower stan-
dard of federal appellate review to the grant of a new
trial. As in all of the other circuits, the articulated
standard of review in the Eighth Circuit is abuse of
discretion. United States v. Bertling, 510 F.3d 804,
807 (8th Cir. 2007) (citation omitted). Although the
Eighth Circuit does not speak in terms of “closer
scrutiny” or “more stringent scrutiny” with regard to
the grant of a new trial premised on insufficient
evidence, the Eighth Circuit has stated that
“(motions for new trials based on the weight of the
evidence are generally disfavored” and that “the
district court must grant a new trial ‘sparingly and
with caution.’” Jd. at 808. Thus, the Eighth Circuit
will overturn a district court’s decision to grant a new
trial if “the evidence in a particular case does not
‘preponderate [] heavily against the verdict, such
that it would be a miscarriage of justice to let the
verdict stand.’” Jd. at 808 (citation omitted).
29
Like the First Circuit, Petitioners cite no author-
ity from the Ninth Circuit with regard to the pr per
standard of appellate review for the grant of a new
trial premised on insufficient evidence. As in all of the
other circuits, though, the articulated standard of
review in the Ninth Circuit is abuse of discretion. Ace
v. Aetna Life Ins. Co., 1389 F.3d 1241, 1248 (9th Cir.
1998) (citations omitted). However, the Ninth Circuit
is one of several circuit courts that actually uses the
“stringent standard” language to describe the stan-
dard of review that is applied to the grant of a new
trial based on insufficient of evidence. Id.
The articulated standard of appellate review in
the Eleventh Circuit for the grant of a new trial
premised on insufficient evidence is also abuse of
discretion. United States v. Hernandez, 433 F.3d 1328,
1337 (11th Cir. 2005). And, like the Ninth Circuit, the
Eleventh Circuit speaks in terms of “close scrutiny.”
Id.
The District of Columbia Circuit is no different.
Like all of the circuit courts of appeals, the articu-
lated standard of review for the grant of a new trial is
abuse of discretion, and “a more searching inquiry” is
made when reviewing the district court’s grant of a
new trial, particularly when the grant was premised
on insufficient evidence. Langevine v. Dist. of Colum-
bia, 106 F.3d 1018, 1023 (D.C. Cir. 1997) (citations
omitted).
In the instant case, the Tenth Circuit expressly
stated that it reviews a trial judge’s decision on a
30
motion for new trial for abuse of discretion but that it
examines the grant of a new trial based on insuffi-
cient evidence more closely than it examines the
denial of a new trial to ensure that the district court
does not substitute its judgment for that of the jury.
Pet’r App. pp. 15a-16a.
In light of the foregoing authority, it could not be
any clearer that the Tenth Circuit applied the very
same standard of review that the other circuit courts
apply when reviewing the grant of a new trial based
on insufficient evidence. Although the terminology
used to describe the standard of review differs some-
what between circuits, the standard of review actu-
ally applied is the same. As such, this Court should
deny the Petition for a Writ of Certiorari with regard
to the standard-of-review issue.
Ill. The Tenth Circuit Correctly Reinstated
The Punitive Damages Awards Against
Petitioners, Because The Amount Of The
Punitive Damages Awards Is Nearly Three
Times Less Than The Probable Amount Of
Compensatory Damages That Will Be
Awarded After Remittitur.
Petitioners’ argument that the Tenth Circuit
erred in reinstating the punitive damages awards
while remitting or remanding most of the compensa-
tory damages is extremely weak. Respondents recog-
nize that “|t)he Due Process Clause of the Fourteenth
Amendment prohibits a State from imposing a
‘grossly excessive’ punishment on a tortfeasor.” BMW
31
of N. Am., Inc. v. Gore, 517 U.S. 559, 562 (U.S. 1996)
(citing TXO Pred. Corp. v. Alliance Resources Corp.,
509 U.S. 443 (U.S. 1993)). Respondents further
recognize that the ratio of the punitive damages
award to the actual harm inflicted on the plaintiff is a
factor to consider in determining whether a punitive
damages award violates the Due Process Clause.
BMW of N. Am., Inc., 517 U.S. at 581. Even further,
Respondents recognize that setting a punitive dam-
ages award at “two, three, or four times the size of
compensatory damages, while ‘not binding,’ is ‘in-
structive,’ and that ‘s]ingle-digit multipliers are more
likely to comport with due process.’” Philip Morris
USA v. Williams, 127 S. Ct. 1057, 1061-62 (U.S. 2007)
(citing State Farm Mut. Auto. Ins. Co. v. Campbell,
538 U.S. 408, 425 (2003)). However, the punitive
damages awarded in the instant case are not even
remotely close to violating the single-digit multiplier
rule, as the punitive damages award of $900,000 is
nearly three (3) times Jess than the probable individ-
ual damages that will be awarded after remittitur.
And, although corporate damages have yet to be
determined, Petitioners’ liability to the corporate
Respondents has been determined, so the corporate
Respondents are certain to be awarded some com-
pensatory damages, which will further increase the
compensatory damages award over the mere
$900,000 punitive damages award.
The first jury awarded Respondent Alfred Milton
Evans $300,000 in compensatory damages against
Fogarty and $150,000 in compensatory damages
32
against Fritz. The Tenth Circuit reinstated both of
those awards, holding that a combined award of
$450,000 did not shock the judicial conscience.
With regard to Respondents John Majors, Joel
Holcomb, Neal Thrift, Nancy Thrift, and Charles
Parkhurst, the first jury awarded compensatory
damages against Petitioners as follows:
Award Against Award Against
Fogarty Fritz
John Majors $825,000 $375,000
Joel Holcomb $780,000 $390,000
Neal Thrift $900,000 $450,000
Nancy Thrift $900,000 $450,000
Charles Parkhurst $600,000 $300,000
TOTAL $4,005,000 $1,965,000
The Tenth Circuit held that these awards were ap-
propriate for remittitur. Although the Tenth Circuit
did not dictate the amount by which these awards
should be reduced, it noted that the reduction in
Malandris v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 703 F.2d 1152 (10th Cir. 1981) was two-thirds.
Thus, reducing each of these five (5) Respondents’
awards by two-thirds, Respondents will recover the
following amounts after remittitur:
33
Award Against Award Against
Fogarty Fritz
John Majors $275,000 $125,000
Joel Holcomb $260,000 $130,000
Neal Thrift $300,000 $150,000
Nancy Thrift $300,000 $150,000
Charles Parkhurst $200,000 $100,000
TOTAL $1,335,000 $655,000
Hence, even after remittitur, these five (5) Respon-
dents will still receive a combined total of $1,990,000
($1,335,000 + $655,000) in compensatory damages.
With regard to Respondent Leroy Wheeler, the
first jury awarded $177,000 in compensatory dam-
ages against Fogarty and $88,500 in compensatory
damages against Fritz. The Tenth Circuit remanded
the verdict and directed the trial court to enter a
remittitur order of $1.00 in nominal damages against
Fogarty and $1.00 in nominal damages against Fritz,
for a total damages award of $2.00.
The first jury awarded Respondent Cynthia
Majors $300,000 in compensatory damages against
Fogarty and $150,000 in compensatory damages
against Fritz. The Tenth Circuit recommended that
Cynthia Majors’ damages be reduced to $50,000, as
was done to the plaintiff’s emotional damages in Wulf
v. City of Wichita, 883 F.2d 842, 875 (10th Cir. 1989).
With regard to Respondent Mary Parkhurst, the
first jury awarded $600,000 in compensatory damages
34
against Fogarty and $300,000 in compensatory dam-
ages against Fritz. The Tenth Circuit did not suggest
the amount of remittitur for Ms. Parkhurst’s award
but stated that it may counsel a reduction greater
than two-thirds. Thus, assuming that the District
Court reduces her award by an amount between
three-fourths and four-fifths, Ms. Parkhurst will
likely receive a total award of approximately
$200,000.
Based upon the foregoing, the total individual
damages — after remittitur — will most likely be
somewhere in the neighborhood of $2,690,002
($450,000 + 1,990,000 + $2.00 + $50,000 + $200,000).
A $900,000 punitive damages award is almost three
(3) times less than the amount of probable total
individual damages that will be awarded after remit-
titur. And, although the corporate damages have yet
to be determined, Petitioners’ liability to the corpo-
rate Respondents has been determined and, there-
fore, the total compensatory damages for both the
corporate Respondents and the individual Respon-
dents will be even greater than $2,690,002, further
widening the gap between the total compensatory
damages awarded to Respondents and the mere
$900,000 punitive damages awarded against Peti-
tioners. Thus, Petitioners’ argument that the Tenth
Circuit should have remanded the punitive damages
award to ensure that a reasonable relationship ulti-
mately exists between the compensatory damages
award and the punitive damages award is extremely
weak.
35
Petitioners try to gain this Court’s sympathy by
stating that neither the State of Oklahoma nor insur-
ance will pay the punitive damages awarded against
them. However, Petitioners’ own conduct necessitated
punitive damages, and while the second jury awarded
fewer punitive damages than the first jury did, the
fact that two different juries, as well as the Tenth
Circuit, have found Petitioners’ conduct deserving of
punitive damages is indicative of the reprehensibility
of Petitioners’ conduct.
Petitioners’ having to pay the cost of acting with
reckless or callous indifference, or with evil motive or
intent, to the Respondents’ rights to free speech does
not arouse much sympathy from Respondents and
should not arouse much sympathy from this Court,
either. During the course of this seven-year litigation,
Petitioners have avoided serving their punishment,
and Respondents have gone without retribution. It is
time for Petitioners to finally realize the magnitude of
their actions, which can only be accomplished by
payment of the first jury’s punitive damages award.
As such, this Court should deny the Petition for a
Writ of Certiorari as to the punitive damages issue.
¢
36
CONCLUSION
The Petition for a Writ of Certiorari should be
denied.
Respectfully submitted,
MICHAEL L. CARR
Counsel of Record
HOLDEN, CARR & SKEENS
9 East 4th Street
200 Reunion Center
Tulsa, OK 74103
(918) 295-8888
STEVEN E. HOLDEN REAGAN L. MADISON
HOLDEN, CARR & SKEENS HOLDEN, CARR & SKEENS
9 East 4th Street 9 East 4th Street
200 Reunion Center 200 Reunion Center
Tulsa, OK 74103 Tulsa, OK 74103
(918) 295-8888 (918) 295-8888
Counsel for Respondents
March 2008
App. 1
No. CIV-01-252-W
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
(1) ALFRED MILTON EVANS, et al.,
Plaintiff,
vs.
(1) MIKE FOGARTY, et al.,
Defendants.
DEFENDANTS’ MOTION TO DISMISS
AND BRIEF IN SUPPORT
(Filed Apr. 4, 2001)
GREG S. ELDRIDGE, OBA #14950*
ASSISTANT ATTORNEY GENERAL
LITIGATION SECTION
4545 N. Lincoln Blvd., Suite 260
Oklahoma City, OK 73105
(405) 521-4274
FAX (405) 528-1867
and
HOWARD J. POLLOTTA
GENERAL COUNSEL
OKLAHOMA HEALTH CARE AUTHORITY
P.O. DRAWER 18497
OKLAHOMA CITY, OK 73154-0497
ATTORNEYS FOR DEFENDANTS
April 4, 2001 *Attorney of Record
App. 2
INDEX
STATEMENT OF THE CASE...................ccessceesees
CONCLUSION........: OTR rere Ce Ne OREO IDIOT TOOTS
PROPOSITION I
THE ELEVENTH AMENDMENT PRE-
VENTS THIS COURT FROM EXERCISING
JURISDICTION OVER STATE OFFICIALS
IN THEIR OFFICIAL CAPACITY WHEN
THE PLAINTIFF IS SEEKING RELIEF
OTHER THAN PROSPECTIVE INJUNC-
PROPOSITION II
THE PLAINTIFF’S COMPLAINT SHOULD
BE DISMISSED REGARDING COUNTS I,
II, IV AGAINST DEFENDANTS FOGARTY,
FRITZ, BROWN AND ALL OHCA BOARD
MEMBERS BECAUSE THE ALLEGATIONS
IN THE COMPLAINT LACK ANY ALLEGA-
TION OF PERSONAL PARTICIPATION
AND LACK ANY SPECIFICITY REGARD-
ING RETALIATION FOR PLAINTIFFS
EVAN’S ALLEGED STATEMENT ..........c00000
App. 3
PROPOSITION Iil
DEFENDANTS FOGARTY, FRITZ,
MITCHELL AND BROWN ARE ENTITLED
TO QUALIFIED IMMUNITY IN THEIR IN-
DIVIDUAL CAPACITIES ON PLAINTIFFS’
FIRST AMENDMENT CLAIMG........ « ©
A. Presumption in favor of Qualified
Neen ie bin kasaveaninnapsenaeunan 8
ane 8
C. How “clear” must the law be to be
“Clearly established?” ....................00008 9
D. State of the “clearly established” law
relating to the First Amendment pro-
tections of a government contractor.... 9
E. Summary Judgment and Qualified
ES 12
PROPOSITION IV
THE COURT SHOULD ABSTAIN FROM
DECIDING PLAINTIFF’S CLASS
CLAIMS BASED UPON THE BURFORD
ABSTENTION DOCTRINE..........cccccccsseesssees 12
PROPOSITION V
THE COURT SHOULD DISMISS COUNT
lil BECAUSE THERE IS NO CONSTITU-
TIONAL PROPERTY INTEREST THAT
WOULD NECESSITATE DUE PROCESS
RIGHTS TO PLAINTIPFES. ..........cccccccsescceseees 16
App. 4
PROPOSITION VI
THE COURT SHOULD DISMISS PLAIN-
TIFF’S CLAIMS IN COUNT V BECAUSE
PLAINTIFFS DO NOT STATE A CLAIM
UPON WHICH RELIEF CAN BE
GRANTEE cccocccccoscesseccocsocecccccscoccssocccscocccooccooses 18
PROPOSITION VII
PLAINTIFF CLAIMS IN VII SHOULD BE
DISMISSED BECAUSE BASED UPON
THE MEDICAID REQUIREMENTS OF
AMOUNT, SCOPE AND DURATION NO
VIOLATION OF LAW CAN OCCUR AS-
SUMING THE ALLEGATIONS IN THE
COMPLAINT ARE TRUE ..................ccsececeesees 19
PROPOSITION VIII
PLAINTIFF’S CLAIM UNDER COUNT
VIII FOR A VIOLATION OF 42 U.S.C.
§ 6009 SHOULD BE DISMISSED BE-
CAUSE THIS LAW HAS BEEN RE-
iF MERPERINEED acerasencncssssescncnseancscooccscssnscccssaccossonsssesse 21
PROPOSITION IX
THE CLASS PLAINTIFFS’ FREEDOM OF
ASSOCIATION CLAIM IS WITHOUT
App. 5
PROPOSITION X
THE CLASS PLAINTIFFS’ CLAIM FOR
REASONABLE ACCESS AND ADEQUATE
QUALITY IS WITHOUT MERIT................06 22
Cases Cited
Alfaro Motors, Inc. v. Ward, 814 F.2d 883 (2nd
RN ME I hi Arai hcic aaicer nce rina tiated hati va esitcdlneseaniecindanl 4
Anderson v. Creighton, 483 U.S. 635, 107 S. Ct.
ee ey 5 8,9
Applewhite v. U.S. Air Force, 995 F.2d 997
AIG TIE selina dass sssseuidecddicnstictnpnmtrannsbiniectimiieninbaninninse 8
Barr v. Abrams, 810 F.2d 358 (2nd Cir. 1987)............. 4
Bethphage Lutheran Service, Inc. v. Weicker,
966 F.2d 1239 (2nd Cir. 1902Z)........0.0<secorsssesonscesssooes 13
Board of County Com’rs, Wabaunsee County,
Kan v. Umbehr, 116 8S. Ct. 2342, 518 US.
668, 135 L. Ed. 2d 843 (1996)........ccceceeeeeee- 9,10, 11
Branch v. Tunnell, 14 F.3d 449 (9th Cir. 1994)........ 4,6
Brandon v. Holt, 469 U.S. 464, 105 S. Ct. 873,
Se ete i Se I onccccs casccicsetinn tks niccnnenavonsnninanne 2
Breidenbach v. Bolish, 126 F.3d 1288 (10th Cir.
III F csctsnciexMacsanaatdhialendedabenadouaihanmeadeiataeaacotslancsaakaaes 8
Burford v. Sun Oil Co., 319 U.S. 315, 63 S. Ct.
1098, 87 L. Ed. 1424 (1943).........00000... 13, 14, 15, 16
Colon v. Coughlin, 58 F.3d 865 (2nd Cir. 1995)........... 4
Davis v. Scherer, 468 U.S. 183, 104 S. Ct. 3012,
Oe eke Ses EE I 6 RRs ccsnsscienntneeonsassancinccosoanencnenaed 8
DeSario v. Thomas, 139 F.3d 80 (2nd Cir.1998) ....... 21
App. 6
Freeman v. City of Santa Anna, 68 F.3d 1180
(ORR Cie, BONG asi siicnctecsansintinkacicuemeaneen 22
Geriatrics, Inc. v. Harris, 640 F.2d 262 (10th
COR, BID) wcsissiscvarcticreramencienmeee 15, 16, 17, 18
Harlow v. Fitzgerald, 457 U.S. 800, 102 S. Ct.
ZI21, TS Ly. Ek. Bed SOC (AGBD) wc csrsnsncsssccnsesssecesaces 4,12
Hern v. Beye, 57 F.3d 906 (10th Cir. 1995) .......... 20, 21
Hidahl v. Gilpin County DSS, 938 F.2d 1150
CEs Col RIED eissivinccnenccsidiatnienceiaaccteneneene 9
Hunter v. Bryant, 502 U.S. 224, 116 L. Ed. 2d
GO CIDE) casnniccsinisistavianceissmiaeaeaaaea aa 6, 7
Jantz v. Muct, 976 F.2d 623 (10th Cir. 1992)............... 9
Kelly Care, LTD. V O’Rourke, 751 F. Supp. 1154
(B.D. NY, TD) cisicciccasansasatne eee 17
Kentucky v. Graham, 473 U.S. 159, 105 S. Ct.
2008, 87 1. Tk. Bek 108 CIGD visieesisstecctscaen 2
Ledet v. Fischer, 638 F. Supp. 1288 (M.D. La.
BIG asa vvcsisnsecsuinnvicsownsanidennenciaaednanmanena ae eee 21
Lee v. County of Los Angeles, 240 F.3d 754 (9th
Cae, DGD vss vaccnexsnesevssisecn amas 4,6
Maggio v. Sipple, 211 F.3d 1346 (C.A. 11 (Fla.)
GRE) nsnissidinatadsiassunaablesmas aoa eee 11
Medina v. City and County of Denver, 960 F.2d
1GRS (10C Che. LOGE) viskcctcctccnicanaeee 8,9
Monell v. Department of Social Services of the
City of New York, 436 U.S. 658, 98 S. Ct.
2018, SG L.. Tie. SE GEE CEG TS) vcvccsessaserivicestiasiomeanns 4
Nichols v. Department of Corrections, 631 P.2d
TH CORD. TOBE) vevessiescicasioneaciaseen eae 2
App. 7
O’Bannon v. Town Court Nursing Center, 447
U.S. 773, 65 L.ED. 2d 506, 518, 100 S. Ct.
SUUIEET CRIED scunsstacnononsadscesveicunneesedeuduinusbadsimnmaiecunaliins 18
Osteopathic Hospital Founders Association,
Inc. v. Splinter, 955 F.Supp. 1351 (N.D.
STIL: REPUTE <cciecnsecundenscnsunsunvicsasidassiisaiabanebeduniaanl 14
Pennhurst State School & Hospital v. Halder-
man, 451 U.S. 1, 101 S. Ct. 1531, 67 L. Ed. 2d
TEE TURD’ icniicedduacebiadupdenatéinaeusadlaecsmaamenanaeae 21
Pennhurst State School v. Halderman, 465 U.S.
89, 104 S. Ct. 900, 79 L. Ed. 2d 67 (1984)................ 2
Pickering v. Board of Ed. of Township High
School District 205, Will Co., Ill., 88 S. Ct.
1731, 391 U.S. 563, 20 L. Ed. 2d 811 (1968)...... 9,10
Post v. City of Fort Lauderdale, 7 F.3d 1552
ER UER Me GOIUED Ksicdcticcsnivsdcccnsconsdancusesucnasedemuaenasaaian 7
Sawyer v. County of Creek, 908 F.2d 663 (10th
TIL GRIND ucccncokosuessidnnciindissamanaiiblassaimanmamamnamine aaa 8,9
Umbehr v. McClure, 44 F.3d 876 (10th Cir.
SITE nsendenneeheonaveseusedicunianibigialecbacnmet natn 9,10, 11
Will v. Michigan Department of State Police,
491 U.S. 58, 109 S. Ct. 2304, 105 L. Ed. 2d 45
TEED ssnsasinscnsinasiieenenalaieieiamiinnindichasenemaamaaanaal 2,3
Ex Parte Young, 209 U.S. 123, 28 S. Ct. 441, 52
is ERs. Fe CRIED Nereis cenecconnecndnéuakeasndinmeseeisennmaeaelaan 3
Statutes and Other Authorities Cited
EP NGE A. UF OID sncccocaceceseuceetcceastesasseuusecnaiinaden 14, 18,19
Oe UBC. & LBBB ...ccccccccnccccccconccccccoconscosasscsssuccbucens ae
BU. Be sec tsnsicsitdinislaininitinnienenemeaeneiad 21
42 U.S.C. § 6009, Repealed by Pub. L. 106-402
SP SE Gil vnnidhbicnediisinsictdadeictassentnanceunameseimebalianas 18, 21
GE Go ee ee wrth ctriikcncnstsinnssniontannatins 14, 20
0 Gis oe Pe cocdisencansntnctcnsnntndtenctinsianiiseinaiiabpantimasgnan 2
i Gn, CI. Be easiness niectneaidenssaiceeinitneseneniantones 5
63 Okla. Stat. § 5052(D) (Supp. 2000)....................00. 14
Oklahoma Administrative Code, § 317:2-1-2....... 14, 15
IN THE UNITED STATES
DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
(1) ALFRED MILTON )
EVANS, et al., )
Plaintiff.
V. ) Case No. CIV-01-252-W
(1) MIKE FOGARTY, et ?
al., |
Defendants. )
DEFENDANTS’ MOTION TO DISMISS
AND BRIEF IN SUPPORT
COME NOW the Defendants and respectfully
request this Court to dismiss Plaintiffs’ First
Amended Complaint. Defendants submit the follow-
ing brief in support of this request.
App. 9
BRIEF IN SUPPORT
STATEMENT OF THE CASE
Plaintiffs bring this action pursuant to 42 U.S.C.
§ 1983. The Plaintiffs claim their federal constitu-
tional and statutory rights have been violated by the
Defendants. Plaintiffs ask for injunctive, declaratory
and monetary relief.
PROPOSITION I
THE ELEVENTH AMENDMENT PREVENTS
THIS COURT FROM EXERCISING JURIS-
DICTION OVER STATE OFFICIALS IN THEIR
OFFICIAL CAPACITY WHEN THE PLAINTIFF
IS SEEKING RELIEF OTHER THAN PRO-
SPECTIVE INJUNCTIVE RELIEF.
Plaintiffs have brought suit against all of the
Defendants in their official capacities. It is well
settled that a suit against a person in his or her
official capacity is, in fact, a suit against the entity
itself. As the Supreme Court stated:
Personal-capacity suits seek to impose per-
sonal liability upon a government official for
actions he takes under color of state law. ...
Official-capacity suits, in contrast, “generally
represent only another way of pleading an
action against an entity of which an officer is
an agent.”.... As long as the government
entity receives notice and an opportunity to
respond, an official-capacity suit is, in all re-
spects other than name, to be treated as a
suit against the entity.
App. 10
Kentucky v. Graham, 473 U.S. 159, 105 S.Ct. 3099, 87
L.Ed.2d 114 (1985). A judgment in a § 1983 action
against an official “in his official capacity” imposes
liability against the entity that he represents. Bran-
don v. Holt, 469 U.S. 464, 105 S.Ct. 873, 83 L.Ed.2d
878 (1985). Because an official capacity suit is, in fact,
a suit against the entity, a plaintiff cannot recover
money damages in such a suit. “Ie Court has held
that, absent waiver by the State or valid congres-
sional override, the Eleventh Arsendment bars a
damages action against a State 1 federal court.”
Kentucky v. Graham, 473 U.S. 159, 105 S.Ct. 3099,
3102, 87 L.Ed.2d 114 (1985). See also, Pennhurst
State School v. Halderman, 465 U.S. 89, 104 S.Ct.
900, 79 L.Ed.2d 67, 78-79 (1984). Here, there has
been no waiver by the State of Oklahoma, Nichols v.
Department of Corrections, 631 P.2d 746 (Okla. 1981),
see also 51 O.S. §§ 151, et seq, and no congressional
override. The Eleventh Amendment bars damages
against the Defendants in their official capacities.
There is a further bar to damages against Defen-
dants in their official capacities. When acting in those
capacities, Defendants are not “persons” within the
meaning of § 1983. The Supreme Court made that
perfectly clear when it wrote: “we hold that neither a
State nor its officials acting in their official capacities
are “persons” under § 1983.” Will v. Michigan De-
partment of State Police, 491 U.S. 58, 109 S. Ct. 2304,
105 L.Ed.2d 45 (1989), the Supreme Court left no
doubt that an official acting in his official capacity is
not a person under § 1983 and is immune from suit
App. 11
by operation of the Eleventh Amendment. The Court
held that:
A state official who is sued in his or her offi-
cial capacity for nonprospective relief is not a
“person” under § 1983, because (1) a state is
not a “person” under § 1983, and (2) a § 1983
suit for nonprospective relief against a state
official in his or her official capacity is not a
suit against the official, but rather is a suit
against the official’s office and, as such, is no
different from a suit against a state itself.
Id., 105 L.Ed.2d at 58.
Generally, a State and its agencies are entitled to
immunity under the Eleventh Amendment for actions
brought in federal courts, whether the action seeks
damages or equitable relief. However, there is an-
other exception to this rule. A party may sue pursu-
ant to Ex Parte Young, 209 U.S. 123, 28S. Ct. 441, 52
L.Ed. 714 (1908). The Ex Parte Young doctrine holds
that the Eleventh Amendment generally does not bar
a suit against a state official in federal court which
seeks only prospective equitable relief for violations of
federal law. In the present case, Plaintiffs seeks [sic]
injunctive, declaratory and monetary relief from
Defendants. The Eleventh Amendment and the
decision in Will both bar Plaintiffs’ claims to the
extent Plaintiffs seeks [sic] relief other that [sic]
prospective injunctive relief. Accordingly, Defendants
are entitled to denial of Plaintiffs’ requested relief.
App. 12
PROPOSITION II
THE PLAINTIFF’S COMPLAINT SHOULD BE
DISMISSED REGARDING COUNTS I, Il & IV
AGAINST DEFENDANTS FOGARTY, FRITZ,
BROWN, AND ALL OHCA BOARD MEMBERS
BECAUSE THE ALLEGATIONS IN THE COM-
PLAINT LACK ANY ALLEGATION OF PER-
SONAL PARTICIPATION AND LACK ANY
SPECIFICITY REGARDING RETALIATION
FOR PLAINTIFFS EVAN’S ALLEGED STATE-
MENTS.
In civil rights matters complaints must contain
specific allegations of fact, which indicate a depriva-
tion of constitutional rights. Alfaro Motors, Inc. v.
Ward, 814 F.2d 883, 887 (2nd Cir. 1987). Allegations
which contain general conclusions that shock a per-
son, but omit specific allegations are not sufficient.
Barr v. Abrams, 810 F.2d 358, 363 (2nd Cir. 1987).
Moreover, it is clear that a civil rights complaint must
allege personal participation by the Defendants to
gain monetary relief. Colon v. Coughlin, 58 F.3d 865,
873 (2nd Cir. 1995). Allegations of respondent [sic]
superior in section 1983 cases are not sufficient to
survive a 12 (b) (6) motion. Monell v. Dept. of Social
Services of the City of New York, 436 U.S. 658, 690-695,
98 S. Ct. 2018, 2035-2039, 56 L. Ed. 2d 611 (1978). A
heightened pleading requirement is required how-
ever, when officials are sued in their individual
capacities. Lee v. County of Los Angeles, 240 F.3d 754
(9th Cir. 2001). See also Branch v. Tunnell, 14 F.3d
449, 450 (9th Cir. 1994). This heightened pleading
App. 13
requirement is especially important when knowledge,
intent, and qualified immunity are possible defenses.
Id.
The Plaintiffs seek monetary damages from the
Defendants in this case. See Relief Requested on page
23 of the Amended Complaint, subsections E and F.
In paragraphs 18 to 31 of the Complaint Plaintiffs
describe Defendants. Defendant Fogarty is described
as CEO of OHCA. Defendant Fritz is described as the
Director of Behavioral Health for OHCA. Defendant
Mitchell is described as the State Medicaid Director.
Defendant Brown is described as the Legislative
Liaison for OHCA. All OHCA Board members are
described. But for Plaintiffs’ allegation that Defen-
dant Mitchell “is responsible for the termination of
the Plaintiffs’ Medicaid provider agreement” there is
nothing but conclusory allegations in the Amended
Complaint.
For example, in paragraph 22 Plaintiff [sic] state,
“Each of these Defendants has taken steps under
color of their official title to exercise the authority
vested in them by the State of Oklahoma for purposes
beyond the bounds of their official duties”. In para-
graphs 43 to 57 labeled “General Factual Allegations”
the Plaintiffs state that “Defendants took this action”,
(paragraph 48), “Defendants notified” (paragraph 48),
“as a result of the actions of Defendants” (paragraph
49) “affiliation ... was discovered by Defendants”
(paragraph 51), “a swarm of auditors from HCA
descended” (paragraph 52), the Defendants were
terminating the Plaintiff’s provider agreement” (para-
graph 55) “The Defendants and the Board members
App. 14
consistently deny reimbursement” (paragraph 56)
and finally “the Defendants action will necessarily
result in the denial of adequate physical facilities”
(paragraph 57).
In not one paragraph of these general allegations
nor any allegation in the Counts later provided by
Plaintiffs, do the Plaintiff [sic] identify which Defen-
dant allegedly retaliated against the Plaintiffs. The
Plaintiffs do not state what knowledge each Defen-
dant had of his public speech. Plaintiff does not allege
that any Defendant had intent to retaliate against
Plaintiff Evans, Plaintiff SOFS, or recipient Plain-
tiffs. In fact, in paragraph 51 Plaintiffs allege (and
this allegation must be taken as true) that Evans
assumed a role with SOFS as a contract consultant
rather than as an owner “to avoid retaliation. '
Given the fact that monetary damages are re-
quested, and that Plaintiffs sue officials of the State
in their individual capacities, and that these officials
have a defense of qualified immunity in this case,
Plaintiffs’ allegations in the Amended Complaint do
not arise to more than conclusory allegations. While
the allegations may shock a reasonable person who
reads them, nothing in the Amended Complaint other
than the allegation that the Medicaid Director termi-
nated a contract shows any retaliatory intent or
knowledge of Mr. Fogarty, Ms. Fritz or Ms. Brown or
* The inference here is that Plaintiff Evans sought to hide
who he was so officials would not retaliate.
App. 15
any Board member. Moreover, given the fact that
legally the OHCA Board has no statutory operational
responsibilities (Contrast 63 Okla. Stat. § 5007 with
5008) Plaintiffs’ allegations that the Board retaliated
must be plead for the Defendants to defend the case.
Plaintiffs’ Complaint fails to specifically plead
personal participation on behalf of the Defendants.
Plaintiffs merely plead general allegations. Accord-
ingly, Plaintiffs’ Complaint does meet the require-
ments necessary to survive a 12(b\(6) motion to
dismiss
PROPOSITION III
DEFENDANTS FOGARTY, FRITZ, MITCHELL
AND BROWN ARE ENTITLED TO QUALIFIED
IMMUNITY, IN THEIR INDIVIDUAL CAPACI-
TIES ON PLAINTIFFS’ FIRST AMENDMENT
CLAIMS.
There is within the jurisprudence of this country
a qualified immunity which shields a public official
from lawsuits. The immunity finds its basis in a balanc-
ing of the interests of the public.” The immunity is an
* As the United States Court of Appeals for the Eleventh
circuit has stated:
Suits against government officials for damages
against them individually are costly not only for the
defendants, but for society as a whole. The social costs
include the expenses of litigation, the diversion of offi-
cial energy from pressing public issues, and the deter-
rence of able citizens from acceptance of public office.
(Continued on following page)
App. 16
“immunity from suit rather than a mere defense to
liability.” Hunter v. Bryant, 502 U.S. 224, 116 L.Ed.2d
589, 595 (1991) (emphasis supplied). As this is an
immunity from suit, the United States Supreme
Court has repeatedly stressed the importance of
resolving immunity questions at the earliest possible
stage in litigation. Id.
Qualified immunity, according to the United
States Supreme Court, holds that government offi-
cials performing discretionary functions are shielded
from liability for civil damages insofar as their con-
duct does not violate “clearly established” statutory or
constitutional rights of which a reasonable person
would have known. Harlow v. Fitzgerald, 457 U.S.
800, 818, 102 S. Ct. 2727, 73 L.Ed.2d 396 (1982). As a
result;
[t]he qualified immunity standard gives am-
ple room for mistaken judgments by protect-
ing all but the plainly incompetent or those
who knowingly violate the law. The accom-
modation for reasonable error exists because
officials should not err always on the side of
caution because they fear being sued.
Qualified immunity recognizes that where an official’s
duties legitimately require action in which clearly es-
tablished rights are not implicated, the public interest
may be better served by action taken with independ-
ence and without fear of consequences.
Post v. City of Fort Lauderdale, 7 F.3d 1552, 1556 (11th Cir
1993) (internal citations omitted).
App. 17
Hunter v. Bryant, 502 U.S. __, 116 L.Ed.2d 589, 596
(1991).
The procedure for analyzing a defense of qualified
immunity is as follows:
Once the defendant raises a qualified immu-
nity defense, the plaintiff assumes the bur-
den of showing that the defendant violated
the clearly established law. To overcome the
qualified immunity defense, the Plaintiff
must identify a clearly established statutory
or constitutional right of which a reasonable
person would have known, and then allege
facts to show that the defendant’s conduct
violated that right.
Breidenbach v. Bolish, 126 F.3d 1288, 1291 (10th Cir.
1997)
A. Presumption in favor of Qualified Immu-
nity.
There exists a presumption of qualified immunity in
favor of the Defendants. Even defendants who violate
constitutional rights enjoy a qualified immunity that
protects them from a suit for damages unless it is
further demonstrated that their conduct was unrea-
sonable under the applicable standard. Davis uv.
Scherer, 468 U.S. 183, 190, 104 S.Ct. 3012, 82 L.Ed.2d
139, 147 (1984).
App. 18
B. Plaintiffs Burden.
Once the defendant raises qualified immunity,
the plaintiff must come forward with additional
allegations. Sawyer v. County of Creek, 908 F.2d 663,
665 (10th Cir. 1990). The Tenth Circuit has stated
that a plaintiff cannot meet his burden to demon-
strate that the right in question was clearly estab-
lished by “merely identifying a clearly established
right and then alleging that the defendant has vio-
lated it. The contours of the right must be sufficiently
clear that a reasonable official would understand
what he is doing violates that right.” Jd. at 666. “Once
a qualified immunity defense has been raised ... , the
plaintiff is held to a heightened standard of pleading.”
Id. at 667. See also, Breidenbach v. Bolish, supra at
1292.
The burden is on the Plaintiff to both plead and
prove that federal rights were clearly established and
that a violation of those clearly established rights
occurred. Applewhite v. U.S. Air Force, 995 F.2d 997,
1000-01 (10th Cir. 1993). The “clearly established”
standard is difficult for a plaintiff to meet. Medina v.
City and County of Denver, 960 F.2d 1493, 1498-99
(10th Cir. 1992). “Clearly established” is predicated
on a finding that “in light of pre-existing law the
unlawfulness is apparent.” Anderson v. Creighton,
483 U.S. 635, 640, 107 S. Ct. 3034, 97 L. Ed. 2d 523
(1987). Plaintiff must show that a reasonable person
would have understood that his actions violated
clearly established federal rights. Jantz v. Muci, 976
F.2d 623, 627 (10th Cir. 1992). Failure to convince the
App. 19
court that the law was clearly established calls for
the dismissal of the complaint with prejudice, Sawyer,
supra, at 667; or entry of judgment for the defen-
dants. Hidahl v. Gilpin County DSS, 938 F.2d 1150,
1155 (10th Cir. 1991).
C. How “clear” must the law be to be “Clearly
established?”
In determining whether the law is clearly estab-
lished, the 10th Circuit has stated that: for the law to
be clearly established, there must be a Supreme
Court or Tenth Circuit decision on point, or the
clearly established weight of authority from other
courts must have found the law to be as the plaintiff
maintains.” Medina v. City and County of Denver, 960
F.2d 1493, 1498 (10th Cir. 1992) (citation omitted).
D. State of the “clearly established” law relat-
ing to the First Amendment protections of
a government contractor.
In the case of Board of County Com’rs, Wabaun-
see County, Kan v. Umbehr, 116 S.Ct. 2342, 518 U.S.
668, 135 L.Ed.2d 843 (1996), the Supreme Court
addressed the issue of the level of First Amendment
protection a government contractor may claim. The
Court ruled that government contractors are entitled
to First Amendment protections, subject to applica-
tion of the balancing test set out in Pickering v. Board
of Ed. of Township High School Dist. 205, Will Co.,
App. 20
Ill., 88 S.Ct. 1731, 391 U.S. 563, 20 L.Ed.2d
811(1968). However, the Umbehr Court refused to
establish a bright line rule for establishing a govern-
ment contractors First Amendment protections.
In the Pickering case the Court held that a
government employee has First Amendment protec-
tions when speaking about the governmental em-
ployer. However, the Pickering Court did not establish
a bright line rule that all speech of a gove "nmental
employee is protected. The Court established a bal-
ancing test that requires the reviewing court to weigh
the interests of the employee against the interest of
the government. In Pickering the Court stated;
[Wje do not deem it either appropriate or
feasible to attempt to lay down a general
standard against which all statements may
be judged.... However, in the course of
evaluating the conflicting claims of First
Amendment protection ..., we shall indicate
some of the general lines along which an
analysis of the controlling interests should
”
run.
Pickering at 1735.
The Supreme Court in Pickering clearly estab-
lished that government employees have First
Amendment Protection sometimes, but the Court was
not sure exactly when those times are, so it estab-
lished a test for the reviewing courts to utilize on a
case by case basis.
App. 21
The Umbehr Court adopted the “general lines” of
the Pickering Court and said that this will be the test
for evaluating a government contractors First Amend-
ment Protections. The Umbehr Court stated;.
We therefore see no reason to believe that
proper application of the Pickering balancing
test cannot accommodate the differences be-
tween employees and independent contrac-
tors. There is ample reason to believe that
such a nuanced approach, which recognizes
the variety of interests that may arise in in-
dependent contractor cases, is superior to a
bright-line rule distinguishing independent
contractors from employees.
Umbehr at 2349.
To make this perfectly clear. It has been clearly
established by the United States Supreme Court, that
when evaluating a government contractors First
Amendment protections that the reviewing court is to
utilize a nuanced approach with no bright line rule
that recognizes the variety of interests that may arise
in independent contractor cases, however there is not
a general standard against which all statements may
be judged.
The Tenth Circuit ruled that the defendants were
entitled to qualified immunity in their individual
capacities due to the uncertainty of the law in the
area of a government contractor’s First Amendment
protections. Umbehr v. McClure, 44 F.3d 876 (10th
App. 22
Cir. 1995).° This decision was made before the nu-
anced approach of Board of County Com’rs, Wabaun-
see County, Kan v. Umbehr, 116 S.Ct. 2342, 518 U.S.
668, 135 L.Ed.2d 843 (1996) was established. How-
ever, the law in the area of a government contractor’s
First Amendment protection is still very unclear.
Just last year the Eleventh Circuit granted
qualified immunity to government employees, sued in
their individual capacity, by a government employee,
that claimed her First Amendment rights had been
violated. The Court stated:
Because the analysis of First Amendment re-
taliation claims under the Pickering-Connick
test “involve[s] legal determinations that are
intensely fact-specific and do not lend them-
selves to clear, bright-line rules ... a defen-
dant in a First Amendment suit will only
rarely be on notice that his actions are
unlawful.”
Maggio v. Sipple, 211 F.3d 1346, 1354 (11th Cir. 2000)
citing Martin v. Baugh, 141 F.3d 1417, 1420 (llth
Cir.1998).
The United States Supreme Court and the fed-
eral courts of appeal struggle when evaluating First
Amendment claims by government employees and
’ This is the case that was appealed in Board of County
Com'rs, Wabaunsee County, Kan v. Umbehr, 116 S.Ct. 2342, 518
U.S. 668, 135 L.Ed.2d 843 (1996), however the issue of qualified
immunity was not appealed. See Umbehr at 2346.
App. 23
government contractors. If the justices in the highest
courts in the land have difficulty determining this
issue it is reasonable to assume that employees of the
Oklahoma Health Care Authority will have difficulty.
It has not been clearly established that Plaintiffs are
entitled to First Amendment protections.
E. Motion to Dismiss and Qualified Immunity.
The only thing that is clear in the present case is
that the Defendants are entitled to qualified immu-
nity. The United States Supreme Court cannot de-
termine with certainty when a government contractor
is entitled to First Amendment protections. Defen-
dants, Fogarty, Fritz, Mitchell and Brown are
shielded from liability for civil damages because their
conduct did not violate “clearly established” statutory
or constitutional rights of which a reasonable person
would have known. Harlow v. Fitzgerald, 457 U.S.
800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982).
Accordingly, Defendants Fogarty, Fritz, Mitchell and
Brown are entitled to qualified immunity.
PROPOSITION IV
THE COURT SHOULD ABSTAIN FROM DE-
CIDING PLAINTIFF’S CLASS CLAIMS BASED
UPON THE BURFORD ABSTENTION DOC-
TRINE.
In Counts II, VI, VII, and VIII, the Plaintiffs
bring class claims against the Defendants. See Para-
graph 38 of Amended Complaint. More specifically, in
App. 24
Count II the Plaintiffs allege a violation of their First
Amendment Rights (a disruption of services, para. 67
of Amended Complaint); in Count VI the Plaintiffs
allege that they are denied reasonable access to and
adequate quality of care (the denial of reimbursement
and arbitrary and capricious termination of contract
of SOFS, para. 87 of Amended Complaint); in Count
VIi they allege a violation of amount, scope and
duration (significantly disrupted services ... deemed
to be medically necessary, para. 95 of Amended Com-
plaint); and in Count VIII they claim a violation of
the Developmental Disabilities Assistance Act (termi-
nation of treatment by certain clinicians and lack of
other treatment, para. 103 of Amended Complaint).
In all these claims the Plaintiff Class asserts that the
disruption or elimination of medically necessary
services or inadequate reimbursement at SOFS will
damage them.
In the case of Burford v. Sun Oil Co., 319 USS.
315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), the United
States Supreme Court considered an appeal from the
Fifth Circuit Court of Appeals regarding an adminis-
trative order from the Railroad Commission. In this
case, the Railroad Commission had issued a permit to
drill four (4) oil wells on the east Texas field. The
jurisdiction of the Court was based upon diversity of
citizenship and the challenge to the Order was based
upon alleged due process improprieties in the issu-
ance of the Order. The Supreme Court assumed
jurisdiction was proper but decided as a matter of
sound equitable discretion to abstain from deciding
App. 25
the case. The Court’s reasoning was that the com-
plexities of Texas’ oil and gas law dictated that the
federal court abstain from deciding the case. More-
over, the Court found Texas had a well-organized
system of regulation and review. The review process
was legislated to prevent multiple courts from decid-
ing oil and gas issues.
The theoretical underpinnings of the Burford
doctrine has been described in the case of Bethphage
Lutheran Service, Inc. v. Weicker, 965 F.2d 1239, 1243
(2nd Cir. 1992) as follows:
The Supreme Court has characterized Bur-
ford abstention as appropriate where the ex-
ercise of federal review of the question in a
case and in similar cases would be disruptive
of state efforts to establish a coherent policy
with respect to a matter of substantial public
concern. We have held that the aim of Bur-
ford abstention is to “avoid resolving difficult
state law issues involving important public
policies or avoid interfering with state efforts
to maintain a coherent policy in an area of
comprehensive regulation or administra-
tion,” (“[A]bstention pursuant to Burford is
designed to avoid federal court interference
with specialized ongoing state regulatory
schemes... ”).
The Burford doctrine underpinnings has [sic] been
recognized as applicable in the Medicaid program in
the case of Osteopathic Hospital Founders Assn., Inc.
vu. Splinter, 955 F. Supp. 1351 (N.D. Okla. 1996). In
this case the United States District Court for the
App. 26
Northern District of Oklahoma held that the Burford
abstention doctrine applied to a Medicaid reim-
bursement case in which the Plaintiff hospital sought
injunctive relief in higher reimbursement rates from
the Oklahoma Health Care Authority. The Osteo-
pathic Hospital court considered four questions to
determine the applicability of the Burford doctrine:
(1) did the Medicaid regulations provide a compre-
hensive statutory framework to formulate policy and
decide cases; (2) was there a state scheme of regula-
tion that should be properly interpreted by a state
agency; (3) was the subject matter in Medicaid an
area of legitimate state interest; and (4) was the issue
one of complex and difficult state law.
In the present case this Court should find that
the Burford abstention doctrine applies to dismiss the
claims of the class members. First, a complex statu-
tory framework in Medicaid currently exists for
clients who have services denied, services suspended,
or are denied services because of medical necessity
decisions. This regulatory scheme is broadly defined
by federal law and carried out by the Defendants
through the Oklahoma Administrative Procedures
Act. Under 42 U.S.C. § 13896A(a) (3) and 42 C.FR.
§ 431.210 evidentiary hearings must be conducted for
those whose services are denied or suspended. See also
OAC (Oklahoma Administrative Code) § 317:2-1-2.*
* Under OHCA’s administrative rules, if the case involves a
recipient then a “Program Panel” of agency experts hears the
case before an evidentiary hearing is held. OAC 317: 2-1-2.2.
App. 27
After an administrative hearing, review under state
law exists with the Chief Executive Officer of the
Oklahoma Health Care Authority and the state
district court. 63 Okla.Stat. § 5052(D) (Supp. 2000).
Under this complex process there are three levels of
agency administrative review (the Program Panel,
the ALJ and the CEO) as well as state district court
review. Under the second factor for abstention to
apply, the Court should find that the agency should
be given the authority to interpret its regulations in
the Medicaid program. As for adequacy of rates, the
Osteopathic case specifically noted the state’s need to
control reimbursement and the problem with divisive
reimbursement rates possibly caused by federal court
judgments. More importantly here, questions sur-
rounding the medical necessity of services and the
adequacy of services, quality of services and the
denial of services are best left to the judgment of the
state agency. The uniformity of these decisions is
imperative for the Medicaid agency to properly ad-
minister the State Plan. With respect to the third
factor in applying the Burford doctrine, the Court
should find that the state remedy is available to each
recipient named by the Plaintiff and the remedy is
afforded each recipient. Finally, regarding the fourth
prong of the test to apply the Burford doctrine, the
Court should find the question regarding what care is
medically necessary and whether there is disruption
of services due to the termination of one service
provider are complex questions which require the
application of Medicaid law. As the Court is aware by
the pleadings, each of the recipients has a different
App. 28
disease, a different treatment course and a different
set of both pharmacological needs, as well as therapy
needs. Each of these cases is best left to state officials
who can devote its administrative process to develop
the facts to entertain the complaints of the Plaintiffs.
Based on the complexity of the federal law in this
case and state remedy afforded each recipient, this
Court should dismiss the claims of the class because
of the Burford abstention doctrine.
PROPOSITION V
THE COURT SHOULD DISMISS COUNT III
BECAUSE THERE IS NO CONSTITUTIONAL
PROPERTY INTEREST THAT WOULD NECES-
SITATE DUE PROCESS RIGHTS TO PLAIN-
TIFFS.
In Count III of the Amended Complaint Plaintiff
asserts that “Plaintiff had a clearly established
property interest in the facilities operated by SOFS
and in the continued operation of business at those
facilities. This includes the continued receipt of
Medicaid reimbursement.” See Amended Complaint,
para. 68. Plaintiff also asserts that this right was
taken without due process, and without any rational
basis. See Amended Complaint para. 73.
The contract between the Health Care Authority
and SOFS involves no constitutionally protected
property interest in the Medicaid program. |
App. 29
The law in this area of Medicaid is clear and
longstanding. In the case of Geriatrics, Inc. v. Harris,
640 F.2d 262 (10th Cir. 1981) (cert. denied 454 U:S.
832, 70 L.Ed. 2d 109, 102 S.Ct. 129) the United
States Court of Appeals for the Tenth Circuit consid-
ered a case in which the Colorado Medicaid agency
decided not to renew a Medicaid contract to a nursing
home. The claim of the plaintiff in the case was that
the State of Colorado could not fail to renew the
contract without a hearing and due process. The
allegations of the Plaintiffs in this case are very
similar to the allegations in the Amended Complaint
in this case. The Tenth Circuit stated,
Eventide assets that it had an expectation of
continued participation in the Medicaid Pro-
gram and this was a “property interest” to be
protected under due process. Also, that it had
more than a unilateral claim or mere expec-
tance.
Geriatrics, Inc. 640 F.2d at 265.
In finding no property interest protectable under
the United States Constitution, or federal Medicaid
statutes, the Court stated:
Eventide is not the intended beneficiary of
the Medicaid program. Instead, the purpose
underlying the funding program is to extend
financial benefits to the patients eligible to
receive their medical care at government ex-
pense. Eventide argues also that termination
of benefits would force the Home to close and
that it therefore has a significant financial
App. 30
interest to retain its certification. The
Home’s financial need for government as-
sisted patients is incidental to the purpose
and design of the program. Eventide’s oper-
ating license has not been resided and it may
still operate as a nursing home and render
care to private-pay patients. The unfortunate
reality that it will probably encounter diffi-
culty operating at capacity is not of constitu-
tional significance.
Geriatrics, Inc. v. Harris, 640 F.2d 262, 265 (10th Cir.
1981).
Similarly, in the case of Kelly Care, LTD. v.
O’Rourke, 751 F.Supp. 1154 (S.D. N.Y. 1990) (aff’d at
930 F.2d 170, cert. denied 502 U.S. 907, 116 L.ED. 2d
244, 112 S.Ct. 300) The State of New York cancelled
the contract with the provider, giving the provider
notice for a non-cause termination for personal care
services to Medicaid recipients. The Plaintiffs sued
the state and alleged that its due process rights were
violated and requested injunctive relief under consti-
tutional and federal law. The Plaintiffs also alleged
that a constitutional liberty interest was raised by
the mere implication that the termination of a con-
tract had negative implications. The Court rejected
both arguments finding no property or liberty interest
claim.
While it is unclear what plaintiffs in the
Amended complaint have this due process interest,
like Plaintiff SOFS and Plaintiff Evans, no Medicaid
recipient has any protectable life, liberty, or property
App. 31
interest in receiving services from a particular pro-
vider after being transferred from one Medicaid
provider to another. O’Bannon v. Town Court Nursing
Center, 447 U.S. 773, 785, 65 L.ED. 2d 506, 518, 100
S. Ct. 2467 (1980).
In the present case, the Court should dismiss
Count III from the Amended Complaint against all
Defendants. Plaintiffs have no protectable property or
liberty claim in the contract with OHCA.
PROPOSITION VI
THE COURT SHOULD DISMISS PLAINTIFF’S
CLAIMS IN COUNT V BECAUSE PLAINTIFFS
DO NOT STATE A CLAIM UPON WHICH RE-
LIEF CAN BE GRANTED.
In Count V of the Amended Complaint Plaintiffs
continue to allege that Defendants violated 42 U.S.C.
§ 1396 A (a)(13) with regard to adequate reimburse-
ment. Plaintiffs simply assert that Defendants cir-
cumvented and ignored the “proper method” to set
reimbursement rates. Further, the Plaintiff’s claim
reimbursement has been denied them during their
course of business.
Nowhere in the Amended Complaint does Plain-
tiff state what basis in law the reimbursement rates
were set improperly, or how reimbursement has been
denied. If the Court were to accept Plaintiff’s allega-
tions as true, no violations of law would occur. First,
42 U.S.C. § 1396 A (a)(13) was repealed in 1997. See
Section 4711 of (a) of Pub. L. 105-33 (1997). See also
App. 32
Page 12 of the Court’s Order dated February 12,
2001. Despite the Court’s finding the Plaintiff contin-
ues to assert the claim.
Second, the current version of 42 U.S.C.
§ 1396 A (a) (13) does not protect Plaintiff’s business.
It provides,
for a public process for determination of
rates of payment under the plan for hospital
services, nursing facility services, and ser-
vices of intermediate care facilities for the
mentally retarded. . .
Plaintiff is not a hospital, a nursing facility or an
intermediate care facility for the mentally retarded.
See paragraphs 6,7, and 8, Amended Complaint.
Because this statute does not afford Plaintiffs any
protection and the Plaintiff has failed to identify any
other state or federal law which dictates how Plaintiff
is protected by the setting of rates, the claims in
Count V should be dismissed.
PROPOSITION VII
PLAINTIFF CLAIMS IN VII SHOULD BE DIS-
MISSED BECAUSE BASED UPON THE MEDI-
CAID REQUIREMENTS OF AMOUNT, SCOPE
AND DURATION NO VIOLATION OF LAW
CAN OCCUR ASSUMING THE ALLEGATIONS
IN THE COMPLAINT ARE TRUE.
The Plaintiff in paragraphs 43 to paragraph 57
allege that in retaliation of Mr. Evan’s First Amend-
ment rights, OHCA cancelled the contracts of two (2)
App. 33
behavioral health facilities. Based upon this single
set of facts, in paragraphs 92 to 99 Plaintiffs assert
that “amount, scope, and duration” of services has
been violated. More specifically, Plaintiffs allege that,
“the termination of the SOFS Medicaid provider
agreement will significantly and drastically reduce
the availability of mental health and behavioral
health services in Southeastern Oklahoma.” Also,
Plaintiffs allege that “Defendants actions have dis-
rupted services or will lead to grossly unequal ser-
vices.” Based upon the Amended Complaint all of
Plaintiff’s charges are based upon SOFS’ termination
as a provider.
Under the Medicaid Act the requirement of
amount, scope and duration is found at 42 U.S.C.
§ 1396 A(a) (10) (B). This statute provides that the
medical assistance made available to any individual
described in subparagraph (A) (those who are cate-
gorically or medically needy) “shall not be less in
amount, duration, or scope than the medical assis-
tance made available to any other such individ-
ual....” The federal regulation underlying this
federal law requirement provides:
The plan must specify the amount, duration,
and scope of each service that it provides
for —
(1) The categorically needy; and
(2) Each covered group of medically needy.
App. 34
Each service must be sufficient in amount,
duration, and scope to reasonably achieve its
purpose
The Medicaid Agency may not arbitrarily
deny or reduce the amount, duration, or
scope of a required service under §§ 440,210
and 440,220 to an otherwise eligible recipi-
ent solely because of the diagnosis, type of
illness, or condition.
The agency may place appropriate limits on
a service based on such criteria as medical
necessity or on utilization control procedures.
The Plaintiff’s claim should be dismissed on this
claim because the sole claim of the Plaintiff is the
absence of SOFS’s participation in the program
somehow violates the amount, scope and duration
requirement. The requirement of amount, scope, and
duration in the Medicaid program involves a re-
quirement of services in the “State Plan”. Both the
requirement of statute and the regulation begins
with, “the Stete Plan or the plan must”. The State
Plan is the agency’s blueprint for the services it
covers. See 42 CFR § 431.40 and 431.50. There is not
a single allegation in the Amended Complaint, in all
103 paragraphs regarding the State Plan and how it
denies any recipient services. Assuming allegations in
the Complaint are true, nothing in the state plan
denies any recipient any service. Furthermore, every
case Defendant’s counsel could find construing the
amount, scope, and duration requirement involves
the systemic denial of a certain service to a recipient
App. 35
not a denial of one provider’s contract. For example,
in Hern v. Beye, 57 F.3d 906 (10th Cir. 1995) the
Tenth Circuit Court of Appeals considered the State
of Colorado’s systemic restriction of abortion services.
In DeSario v. Thomas, 139 F.3d 80 (2nd Cir.1998) the
Second Circuit considered Connecticut’s systemic use
of a list to allow or disallow durable medical equip-
ment services. In Ledet v. Fischer, 638 F. Supp1288
(M.D. La. 1986) the Court considered the State of
Louisiana’s plan which limited services to one pair of
glasses after cataract surgery. In none of these cases,
or any case construing this section of the law is
amount, scope or duration violated by the absence of
one or two contractors in the Medicaid Program.
Based upon all of the allegations in Count VII of the
Amended Complaint Plaintiffs have not stated a
claim upon which relief can be granted.
PROPOSITION VIII
PLAINTIFF’S CLAIM UNDER COUNT VIII
FOR A VIOLATION OF 42 U.S.C. § 6009
SHOULD BE DISMISSED BECAUSE THIS
LAW HAS BEEN REPEALED.
In paragraphs 100 to 103 of the Amended Com-
plaint the Plaintiffs allege that 42 U.S.C. § 6009 was
violated by Plaintiff’s ability to no longer receive
services at SOFS. As the Court pointed out in its
order of February 12, 2001, 42 U.S.C. § 6009 was
repealed by Public law No. 106-402 § 1401 (a). Even
prior to the repeal of this law, the United States
Supreme Court ruled that the Bill of Rights did not
App. 36
confer any substantive rights to treatment for dis-
abled persons and that Congress had unconstitution-
ally attempted to exert its power under the spending
clause by enacting the law. Pennhurst State School &
Hospital v. Halderman, 451 U.S. 1, 18, 101 S.Ct.
1531, 67 L.Ed. 2d 694, 708 (1981). For these reasons,
the claims in Count VIII should be dismissed.
PROPOSITION Ix
THE CLASS PLAINTIFFS’ FREEDOM OF
ASSOCIATION CLAIM IS WITHOUT MERIT.
Count II of Plaintiffs’ Complaint proposes that
the alleged retaliation by the Defendants violates the
class Plaintiffs’ First Amendment right of freedom of
association. The question is, freedom to associate
with whom? The class Plaintiffs do not assemble as a
group for purposes of associating to advocate mental
health rights. The class Plaintiffs individually seek
treatment for behavioral health issues. Likewise, the
class Plaintiffs do not associate with SOFS as a group
for the purpose of exchanging ideas. Plaintiffs go to
SOFS for treatment. The First Amendment protects
certain intimate human relationships as well as the
right to associate for the purpose of engaging in those
expressive activities otherwise protected by the
Constitution. Freeman v. City of Santa Anna, 68 F.3d
1180, 1188 (9th Cir. 1995).
The class Plaintiffs have not been deprived of an
associational right guaranteed by the Constitution.
App. 37
Accordingly, Count II of Plaintiffs’ Complaint should
be dismissed.
PROPOSITION X
THE CLASS PLAINTIFFS’ CLAIM FOR REA-
SONABLE ACCESS AND ADEQUATE QUALITY
IS WITHOUT MERIT.
The class Plaintiffs allege, at Count VI of the
Complaint, that they have been denied access to
Medicaid services and certain levels of quality in
care. At paragraph 87 of the Complaint Plaintiffs
claim that the denial of services was caused by the
“denial of reasonable and adequate reimbursement to
healthcare providers and the arbitrary and capricious
termination of SOFS’ Medicaid provider agreement.”
See paragraph 87 of Plaintiffs’ Complaint. These facts
to not give rise to a cause of action. SOFS’ Medicaid
provider agreement has not been terminated. In
addition, Plaintiffs argument as to denial of reason-
able and adequate reimbursement is the same argu-
ment mad [sic] at Count V of Plaintiffs’ Complaint.
Defendant has briefed the reasons why County [sic] V
of Plaintiffs’ Complaint should be dismissed at Propo-
sition VI of this brief. The same argument applies to
Plaintiffs’ reasonable and adequate reimbursement
argument in Count VI of the Complaint. Accordingly,
Count VI of Plaintiffs’ Complaint should be dis-
missed.
App. 38
CONCLUSION
Wherefore based on the foregoing arguments and
authorities Defendants respectfully request this
Court to dismiss Plaintiff’s Complaint and award
Defendants a reasonable attorney’s fee; plus any
other relief this Court deems just and proper.
Respectfully submitted,
/s/ Greg S. Eldridge
GREG S. ELDRIDGE, OBA #14950
ASSISTANT ATTORNEY GENERAL
LITIGATION SECTION
4545 North Lincoln Blvd., Ste. 260
Oklahoma City, OK 73105-3498
(405) 521-4274 FAX 528-1867
and
HOWARD J. POLLOTTA
GENERAL COUNSEL
OKLAHOMA HEALTH CARE
AUTHORITY
P.O. DRAWER 18497
OKLAHOMA CITY, OK 73154-0497
ATTORNEYS FOR DEFENDANTS
CERTIFICATE OF MAILING
On this 4th day of April, 2001, a true and correct
copy of the foregoing was filed and mailed, postage
prepaid, to:
App. 39
Michael S. Ashworth
Steven E. Holden
Bruce A. McKenna
Stephen J. Capron
9 Fast Fourth Street, Suite 200
Tulsa, OK 74103
Steven A. Novick
Attorney at Law
1717 South Cheyenne Center
Tulsa, OK 74119-4611
/s/ Greg S. Eldridge
GREG S. ELDRIDGE
App. 40
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
(1) ALFRED MILTON
EVANS, an individual,
and (2) SOUTHEASTERN
OKLAHOMA FAMILY
SERVICES. INC.,
a corporation,
Plaintiffs,
) Case No.
vs. ) CIV-01-252-HE
(1) MIKE FOGARTY, in his ) (Consolidated
individual capacity, as well) Case Number)
as in his official capacity
as Chief Executive Officer
for the Oklahoma Health
Care Authority, (2) TERRI
FRITZ, in her individual
capacity, as well as in
her official capacity as
Director of Behavioral
Health for the Oklahoma
Health Care Authority,
(3) DR. LYNN MITCHELL,
in her individual capacity,
as well as in her official
capacity as State Medicaid
Director for the Oklahoma ?
Health Care Authority,
(4) DANA BROWN, in her
individual capacity, as well )
as in her official capacity )
as Legislative Liaison from )
the Oklahoma Health Care )
Neel Ne Ne Nee es ee”
Nee Nee eee eee Nee Ne es”
App. 41
Authority, (5) JANA LEA
WEBB, in her individual
capacity, as well as in
her official supervisory
capacity on behalf of
the Oklahoma Health
Care Authority, (6) T.J.
BRICKNER, JR., in his
official capacity as Vice-
Chairman of the Oklahoma )
Health Care Authority, )
(7) RONALD ROUNDS, O.D.,)
in his official capacity as a )
member of the Oklahoma )
Health Care Authority )
Board of Directors, )
(8) WAYNE HOFFMAN, )
in his official capacity as_ )
a member of the Oklahoma )
)
)
)
)
)
Nee Nee Nee ee Nee ee Nee ee ee”
Health Care Authority
Board of Directors,
(9) JERRY HUMBLE,
in his official capacity as
a member of the Oklahoma
Health Care Authority )
Board of Directors, )
(10) CHARLES ED McFALL,)
in his official capacity as_)
Chairman of the Oklahoma )
Health Care Authority )
Board of Directors, )
(11) GEORGE MILLER, )
in his official capacity as_)
a member of the Oklahoma )
Health Care Authority )
App. 42
Board of Directors, )
(12) LYLE ROGGOW, )
in his official capacity as_)
a member of the Oklahoma )
Health Care Authority )
Board of Directors, and )
OKLAHOMA FOUNDATION)
FOR MEDICAL QUALITY, )
INC.,
Defendants.
and
(1) RUSTLING WINDS,
INC., an Oklahoma corpo-
ration, (2) TEN-KILLER
BEHAVIORAL SERVICES,
INC., an Oklahoma corpo-
ration, (3) MORNING
STAR MENTAL HEALTH
SERVICES, INC., an
Oklahoma corporation,
(4) DIVERSIFIED FAMILY
SERVICES, INC., an
Oklahoma corporation,
(5) SERENITY SPRINGS
MENTAL HEALTH SER-
VICES, L.L.C., an Okla-
homa limited Liability
company, (6) JCH INCOR-
PORATED, an Oklahoma
corporation, (7) NORTH-
EAST OKLAHOMA, INC.,
an Oklahoma corporation,
(8) DAVETTA McINTOSH,
an individual, (9) NEAL
i a ee ae oe a a a a a a ee a a a a a a a a ee ee
App. 43
THRIFT, an individual,
(10) NANCY GRAVES-
THRIFT, an individual,
(11) JOHN MAJORS,
an individual, (12) CINDY
MAJORS, an individual,
(13) CHARLES PARK-
HURST, an individual,
(14) MARY PARKHURST,
an individual, (15) LEROY
WHEELER, an individual,
(16) EDNA KEATON, an
individual, and (17) JOEL
HOLCOMB, an individual,
Plaintiffs,
Vv. ) Case No.
(1) MIKE FOGARTY, in his ) CIV-01-557-HE
individual capacity, as well
as in his official capacity
as Chief Executive Officer
for the Oklahoma Health
Care Authority, (2) TERRI
FRITZ, in her individual
capacity, as well as in
her official capacity as
Director of Behavicral
Health for the Oklahoma
Health Care Authority,
(3) DR. LYNN MITCHELL,
in her individual capacity,
as well as in her official
capacity as State Medicaid )
Director for the Oklahoma )
Health Care Authority, )
New Ne Ne Ne eee eee eee ee ee” “ee”
Nee Nee eee eee ees ee”
App. 44
(4) DANA BROWN, inher )
individual capacity, as well )
as in her official capacity )
as Legislative Liaison from )
the Oklahoma Health Care )
Authority, (5) JANA LEA
WEBB, in her individual
capacity, as well as in
her official supervisory
capacity on behalf of
the Oklahoma Health
Care Authority, (6) T..J.
BRICKNER, JR.., in his
official capacity as Vice-
Chairman of the Oklahoma )
Health Care Authority, )
(7) RONALD ROUNDS, O.D.,)
in his official capacity as a )
member of the Oklahoma _)
Health Care Authority )
Board of Directors, )
(8) WAYNE HOFFMAN, )
in his official capacity as _)
a member of the Oklahoma )
)
)
)
)
=
Newel Ne Nee eee” “ee”
Health Care Authority
Board of Directors,
(9) JERRY HUMBLE,
in his official capacity as
a member of the Oklahoma )
Health Care Authority )
Board of Directors, )
(10) CHARLES ED McFALL,)
in his official capacity as_)
Chairman of the Oklahoma )
Health Care Authority )
Board of Directors, )
(11) GEORGE MILLER, )
in his official capacity as_)
a member of the Oklahoma )
Health Care Authority )
Board of Directors, )
(12) LYLE ROGGOW, )
in his official capacity as_ )
a member of the Oklahoma )
Health Care Authority )
Board of Directors, and )
OKLAHOMA FOUNDATION )
FOR MEDICAL QUALITY, )
INC., )
Defendants.
STATE DEFENDANTS’
ANSWER TO THIRD AMENDED COMPLAINT
(Filed Jul. 17, 2002)
1. Defendants Mike Fogarty, Terri Fritz, Dr. Lynn
Mitchell, Dana Brown, Jana Lea Webb, T.dJ.
Brickner, Jr., Ronald Rounds, O.D., Wayne Hoff-
man, Jerry Humble, Charles Ed McFall, Wayne
Hoffman, George Miller, and Lyle Roggow (State
Defendants hereafter) deny each and every alle-
gation in Plaintiffs’ Third Amended Complaint
(Complaint) except as_ specifically admitted
herein.
2. State Defendants admit this action is brought
pursuant to 42 USC § 1983 but deny the remain-
ing allegations in Complaint q 1.
10.
App. 46
State Defendants admit Complaint {q 3, 4, 5, 7,
9,10, 11, 15, 16, 17, 18, 19, 20, 21, 22, 24, and 31.
State Defendants are without knowledge or
information sufficient to admit or deny Com-
plaint {{ 6, 33, 34, 38, and 39 and therefore deny
the same.
Complaint 4 8 requires no response
State Defendants admit Dana Brown is an Okla-
homa resident employed by the Oklahoma
Health Care Authority (OHCA) as a Governmen-
tal Relations Director but deny the remaining al-
legations in Complaint 4 12.
State Defendants admit Jana Lea Webb is
an Oklahoma resident employed by OHCA as
Supervisor of the Surveillance Utilization and
Review Subsystem but deny the remaining alle-
gations in Complaint { 13.
State Defendants admit this action is brought
against Fogarty, Fritz, Mitchell, Brown and Webb
in their individual and official capacities and that
they acted under color of state law but deny the
remaining allegations in Complaint { 14.
The Oklahoma Foundation for Medical Quality,
Inc. (OFMQ) has been dismissed from this action;
therefore, State Defendants deny Complaint
q 23.
Complaint 74 28, 29, 30, and 66 are statements
of law to which no response is required.
1l.
12.
13.
14.
15.
App. 47
State Defendants admit Plaintiff Milton Evans
lobbied the Oklahoma Legislature but are with-
out sufficient knowledge or information to admit
or deny the remaining allegations in Complaint
{ 35 and therefore deny the same.
State Defendants admit the Medicaid contract of
Texoma Mental Health Services, Inc., was not
renewed beyond thirty days but deny the remain-
ing allegations in Complaint 36.
State Defendants admit OHCA notified Plaintiff
Southeastern Oklahoma Family Services, Inc.,
that its Medicaid contract would be terminated
pursuant to the contract’s without cause termina-
tion procedures. State Defendants deny the re-
maining allegations in Complaint { 43.
Defendants Fogarty, Mitchell, Fritz, Brown and
_ Webb deny they denied reimbursement of any
kind to Plaintiffs. Defendants Brickner, Rounds,
Hoffman, Humble, McFall, Miller, Roggow admit
that acting as the OHCA Board of Directors they
do not reimburse private providers of behavioral
health services at a greater rate than Community
Mental Health Centers. State Defendants deny
the remaining allegations in Complaint q 44.
State Defendants admit private providers of
behavioral health services are paid only for those
services approved for Medicaid recipients prior to
the giving of services. State Defendants deny the
remaining allegations in Complaint ¥ 56.
App. 48
AFFIRMATIVE DEFENSES
Plaintiffs fail to state a cause of action for which
relief may be granted.
State Defendants have immunity from liability
for the actions alleged.
The actions are barred by the statute of limita-
tions.
Damages are not available from the State Defen-
dants named in their official capacities because
they are not persons.
Damages from the State Defendants named in
their individual capacities are limited by 42 USC
§ 198 1a.
The actions are barred by the doctrine of estop-
pel.
Respectfully Submitted,
/s/ Andrew Tevington
Howard J. Pallotta, OB #11147
General Counsel
Andrew Tevington, OBA #11545
Deputy General Counsel
Oklahoma Health Care Authority
P.O. Drawer 18497
4545 N. Lincoln Blvd., Suite 124
Oklahoma City, OK 73105
(405) 522-7431 Fax (405) 522-7472
Attorney for State Defendants
App. 49
CERTIFICATE OF MAILING
On this 17th day of July, 2002, the undersigned
caused the above and foregoing document to be placed
in the U.S. Mail, postage prepaid, and addressed to:
Steven E. Holden
Michael S. Ashworth
Stephen J. Capron
Holcen & McKenna
200 Reunion Center
9 East Fourth Street
Tulsa, Oklahoma 74103
Kevin Gordon
Timilia S. Rother
Charles Godwin
1800 Mid-America Tower
20 North Broadway
Oklahoma City, Oklahoma 73102
/s/ Andrew Tevington
Andrew Tevington
App. 50
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT
OF OKLAHOMA
ALFRED MILTON EVANS, an
individual, and SOUTHEASTERN
OKLAHOMA FAMILY SER-
VICES, INC., a corporation,
and
)
)
)
)
)
DOTTIE R., an individual, )
TOMMY W., an individual, )
RHONDA C., an individual, )
OLIVE D.., as an individual
and as legal guardian to
ELIZABETH E., BRIAN E. and )
DOUGLAS E., as well as all )
those similarly situated, )
ae )
Plaintiffs, ) Case No.
' CIV-01-252-W
)
)
)
)
}
)
)
)
)
)
)
)
)
)
)
)
Vs.
MIKE FOGARTY, in his individual
capacity, as well as in his official
capacity as Chief Executive Officer
for the Oklahoma Health Care
Authority, TERRI FRITZ, in her
individual capacity, as well as in
her official capacity as Director of
Behavioral Health for the Okla-
homa Health Care Authority, DR.
LYNN MITCHELL, in his individ-
ual capacity, as well as in his
official capacity as State Medicaid
Director for the Oklahoma Health
Care Authority, DANA BROWN,
App. 51
in her individual capacity, as well
as in her official capacity as Legis-
lative Liaison from the Oklahoma
Health Care Authority, T.J.
BRICKNER, JR. in his official
capacity as Vice-Chairman of the
Oklahoma Health Care Authority,
RONALD ROUNDS, O.D., in his
official capacity as a member of the
Oklahoma Health Care Authority
Board of Directors, WAYNE
HOFFMAN, in his official capacity
as a member of the Oklahoma
Health Care Authority Board of
Directors, JERRY HUMBLE, in
his official capacity as member
of the Oklahoma Health Care
Authority Board of Directors,
CHARLES ED McFALL, in his
official capacity as Chairman of
the Oklahoma Health Care
Authority Board of Directors,
GEORGE MILLER, in his official
capacity as member of the
Oklahoma Health Care Authority
Board of Directors, and LYLE
ROGGOW, in his official capacity
as member of the Oklahoma
Health Care Authority
Board of Directors,
ee ee ee i a a a a a a ee, Ae Le, ee, ee, Le 4444, 4 444
Defendants.
App. 52
ORDER
(Filed Feb. 12, 2001)
I. Introduction
Before the Court is Plaintiffs’ Application for
Temporary Restraining Order and Temporary Injunc-
tion filed on February 6, 2001. Defendants oppose the
motion and filed a response brief on February 8,
2001. The Court heid a hearing on the motion for
temporary restraining order on February 8-9, 2001.
All parties to the suit were represented by counsel at
the hearing.
The plaintiffs in this case are of two types. It
appears the primary plaintiffs (“plaintiffs”) in this
matter are Alfred M. Evans and Southeastern Okla-
homa Family Services, Inc. (““SOFS”). SOFS is a
provider of mental health care in southeastern Okla-
homa. The secondary plaintiffs (“class”) appear to be
patients of SOFS that would be harmed if defendants’
alleged conduct continues.
The defendant is, in essence, the Oklahoma
Health Care Authority (“HCA”). Plaintiffs are suing
certain HCA’s officers (in their individual and official
capacities) and the board of directors (in their official
capacities only). The HCA is responsible for the
disbursement of Medicaid funds to state-run, or state-
contracted, Medicaid facilities.
Plaintiffs claim they have been subject to arbi-
trary and capricious actions by the defendants. Spe-
cifically, plaintiffs claim that due to Evans and
App. 53
SOFS’s open criticism of the current Medicaid sys-
tem, SOFS has been subject to actions such as:
1. the use of abusive auditing tactics;
2. restriction of SOFS’s cash flow trough [sic]
arbitrary denials of reimbursement;
3. the exertion of improper influence over Medi-
caid reimbursement plans;
4. arbitrary delays in providing undisputedly
appropriate reimbursements, and
5. denial of reasonable and adequate reim-
bursement rates.
As a result of these actions, plaintiffs assert six
causes of action. Plaintiffs claim defendants’ actions
1) violate their First Amendment rights, 2) violate
their due process rights, 3) violate the Boren
Amendment guarantees of reasonable and adequate
reimbursements under the Medicaid program, 4)
violate the Boren Amendment guarantees of reason-
able access to and adequate quality of Medicaid
services, 5) violate the Medicaid Act’s guarantee of
medical services that are of sufficient amount, dura-
tion, and scope, and 5) violate 42 U.S.C. § 6009 guar-
antees of appropriate treatment, services, and
habilitation for disabled persons.
Defendants deny the allegations and submit that
their actions have been neither arbitrary, nor capri-
cious. They contend that the actions were legiti-
mately taken to enforce state and federal regulations
App. 54
and to ensure the well-being of the mentally ill popu-
lation in southeastern Oklahoma.
II. Background
The dispute between the parties arises from the
complex relationship between the parties to this suit.
Plaintiff Alfred M. Evans previously owned Texoma
Mental Health Services (“Texoma”), a Medicaid
mental health provider in southeastern Oklahoma.
Mr. Evans, is a vocal critic of Oklahoma’s current
system of Medicaid funding. He has lobbied various
government officials, including the Governor and
various state legislators, to provide greater funding
for private medical care providers in the state. As a
result of his and others’ efforts, the State appropri-
ated additional funding for state supported, privat-
ized medical care. According to plaintiffs, due to
Evans’ crusade for Medicaid reform in Oklahoma,
defendants terminated the State’s Medicaid contract
with Texoma.
Defendants deny that Texoma’s contract was
terminated as a result of Evans’ political activities.
Rather, defendants contend, Texoma’s contract was
cancelled as a result of substantial billing irregulari-
ties that were uncovered through the HCA auditing
process.
Without Medicaid reimbursement funds, Texoma
entered into bankruptcy. In an effort to continue ser-
vices, Evans started SOFS, a new non-profit mental
health company. In order to keep his involvement with
App. 55
SOFS from the defendants, Evans is not directly
affiiated with SOFS but rather works as a consult-
ant.
SOF began operations in the summer of 2000.
Within a few months of Texoma’s bankruptcy filing,
substantially all of Texoma’s personnel and client
base transferred to SOFS. SOFS offered medical
services throughout southeastern Oklahoma with
offices in Hugo, Durant, and Ardmore. SOFS serves
approximately 740 mentally ill individuals in a 10
county area.
The HCA conducted an audit of SOFS’s Hugo
facility on October 19, 2000. During that audit,
certain records were inspected and cataloged. While
complete findings were not issued at that time, the
auditors notified SOFS officials that various viola-
tions were taking place.
Evans continued his efforts on behalf of Medicaid
reform by filing an Oklahoma Open Records Act
request on November 22, 2000. In it, Evans sought
detailed information on the RCA’s spending and
administrative practices. Two business days later, on
November 28, 2000, SOFS’s Ardmore facility was the
~ subject of an audit conducted by the HCA. Once again
complete findings were not made on site, but the
auditors noted various violations of HCA policy.
Plaintiffs claim, however, that the exit interview with
the HCA auditors was very positive and complimentary.
The auditors apparently made “commendations” and
were helpful in devising solutions to the apparent
App. 56
deficiencies. On December 4, 2000, the HCA sent a
letter to Evans informing him that his Oklahoma
Open Records Act request would be expensive, and
that Evans would be responsible for bearing the cost.
The letter also gave Evans an opportunity to with-
draw his request. Evans declined and informed the
HCA of his intention to proceed with the request on
December 19, 2000.
The HCA released the full results of the Hugo
audit on December 14, 2000, the results of the Ard-
more audit followed on the same day Evans renewed
his records act request — December 19, 2000. Both
audits revealed deficiencies in SOFS’s performance
and the State sought recoupment of funds in both
cases. In each report, SOFS was notified both of its
right to appeal, the findings, and of the proper proce-
dure for pursuing an appeal.
Having received no response to his open records
request by the end of December, Evans again sought
the information in early January, 2001. At that time,
discussions with the HCA revealed an apparent mis-
communication; Evans was informed that his re-
newed request had not been received but that it was
now going forward. On January 8, 2001, the HCA.
notified SOFS of its cancellation of SOFS’s Medicaid
contracts; while the letter mentioned “serious defi-
ciencies” in SOFS’s performance, the HCA chose to
terminate the contract without cause. Immediately
following the termination letter, the HCA notified
SOFS that it was being placed on “or review” status.
This “on review” status apparently requires SOFS to
App. 57
submit all its billing manually rather than through
the electronic system normally used.
Negotiations between the parties continued and
on January 19, 2001, after a meeting with state
representative Randal Erwin, the HCA chose to
temporarily suspend the termination of SOFS’s
Medicaid contracts. Currently, the Medicaid contracts
are continuing, but SOFS is required to manually
submit all of its billings.
Ilt. Legal Standards
Plaintiffs’ motion for a temporary restraining
order seeks to maintain what they call the “anti-
status quo.” In essence, plaintiffs seek to have this
Court order the defendants to reinstate plaintiffs’
automatic billing privileges and keep the contract
termination in abeyance until after a full hearing on
the merits of this case.
When the party opposing a motion for a tempo-
rary restraining order actually receives notices of the
application, the procedure that is followed does not
functionally differ from that on an application for a
preliminary injunction. 7'LX Acquisition Corp. uv.
Telex Corp., 679 F.Supp. 1022, 1028 (W.D. Okla.
1987); see also WRIGHT, MILLER & KANE, FEDERAL
PRACTICE AND PROCEDURE: Civil 2d §2951. When the
opposizg party has an opportunity to be heard at the
TRO hearing, the court may properly treat the motion
as one for a preliminary injunction. Levas & Levas v.
Village of Antioch, Illinois, 684 F.2d 446, 448 (7th Cir.
App. 58
1982). When all parties have notice and appear at a
hearing, the higher showing contemplated by the
TRO provisions of FED.R.CIv.P. 65(b) is not necessary.
Id.
In order to merit a preliminary injunction, plain-
tiffs must establish that: (1) they have a substantial
likelihood of prevailing on the merits; (2) they will
suffer irreparable injury if they are denied the injunc-
tion; (3) its threatened injury outweighs the injury
that the opposing party will suffer under the injunc-
tion; and (4) an injunction would not be adverse to
the public interest. Autoskill, Inc. v. Natl Educ.
Support Sys., Inc., 994 F.2d 1476, 1487 (10th Cir.)
(citation omitted), cert. denied, 510 U.S. 916 (1993).
Plaintiffs must make a heightened showing
because they request the Court to command defen-
dants to alter the status quo by returning plaintiffs to
an automatic billing system. When plaintiffs seek
such a preliminary mandatory injunction, they must
meet a higher standard than if they were simply
trying to maintain the status quo. Malkentzos uv.
DeBuwno, 102, F.3d 50, 54 (2nd Cir. 1996). Because of
the heightened requirement for affirmative action,
plaintiffs must demonstrate that the preliminary
mandatory injunction weighs heavily in their favor.
App. 59
IV. Analysis
Likelihood of Prevailing on the Merits
Plaintiffs bring six causes of action in the present
suit. Specifically, plaintiffs assert that defendants’
retributive actions 1) constitute a prior restraint on
speech in violation of the First Amendment, 2) violate
plaintiffs’ due process rights by breeching [sic] the
implied covenant of good faith in the Medicaid con-
tracts, 3) violate the rights to reasonable and ade-
quate reimbursement for services afforded by the
Boren Amendment, 42 U.S.C. § 1396(a)(a)(13)(A), 4)
violate the right of reasonable access to medical care
for patients under the Boren amendment, 5) violate
patients’ rights to adequate amount, duration, and
scope of care afforded by the Medicaid Act’s imple-
menting regulations, 42 C.F.R. § 440.230, and 6)
violate patients’ rights to appropriate treatment,
services, and habilitation for disabilities pursuant to
42 U.S.C. § 6009. Plaintiffs bears [sic] the burden of
proving they are likely to succeed on these claims.
First Amendment Claim
In the view of the Court, the plaintiffs have
shown a substantial likelihood of success on the
merits of their First Amendment Claim. The core of
plaintiffs’ claim is that defendants have retaliated
against them because of Evans’ lobbying and other
political activities. Retaliation for the exercise of First
Amendment rights is an accepted cause of action. See
Board of County Commissioners, Wabaunsee County,
App. 60
Kansas v. Umbehr, 518 U.S. 668 (1996). In the pre-
sent case, the evidence presented during the hearing
demonstrates an uncanny correlation, between Evans’
exercise of free speech rights and administrative
actions taken by the HCA.
When Evans opposed the HCA by lobbying the
legislature for additional funding his predecessor
company, Texoma, lost its Medicaid contract. When
Evans submitted an Oklahoma Open Record Act
request to the HCA, the HCA instituted an audit of
SOFS’s Ardmore facility two business days later.
While some discrepancies were found, the overall
tone or the audit was positive; Dr. Baumberger testi-
fied that the auditors were complimentary and gave
numerous commendations to the SOFS staff.
To further add to the series of coinciaences, the
HCA contacted Evans and gave him an opportunity to
withdraw his open records act request a few days
after the audit. In addition, on December 19, 2000,
the day Evans renewed his request for information,
the HCA released the audit report that harshly
criticized SOFS’s Ardmore facility even though the
auditors had been very complimentary during their
exit interview.
The series of coincidences continued into January
2001. The HCA claims to have misplaced Evans’
information request. Evans again renewed his re-
quest on January 3, 2001 and on January 8, 2001,
SOFS received notice that the HCA was terminating
App. 61
all of SOFS’s Medicaid contracts. This letter was
followed by notice that SOFS was being put on an “on
review” status mandating manual billing procedures
on January 10, 2001. |
In an attempt to negotiate a compromise with the
HCA, plaintiffs again met with HCA officials on
January 19, 2001. This time, the meeting was in the
presence of State Representative Randall Erwin. At
this Meeting, the evidence appears to show that the
HCA’s legislative liaison, Dana Brown, made dispar-
aging remarks regarding Evans and SOFS. Testi-
mony from both Dr. Baumberger and Mr. Evans
shows that HCA was aware of Evans’ involvement
with SOFS and Texoma. Ms. Brown’s comments
indicated that she believed Evans to be “playing
games” with the HCA and that it would not be toler-
ated. Plaintiffs contend the timing correlation
between Evans’ political actions and HCA adminis-
trative actions shows that HCA was retaliating
against Evans and SOFS. Their claim is further
bolstered by the evidence showing Ms. Brown held a
very negative view of Mr. Evans and the companies
he was associated with.
The defendants claim the timing of these events
is purely coincidental. They presented evidence to
show that the audit system is semi-independent
of the HCA. Jana Webb, the supervisor of the Sur-
veillance Utilization and Review System (SURS),
testified at the hearing that SURS is completely
responsible for auditing Medicaid providers. She
also testified that she had no knowledge of Evans’
App. 62
information request and that she instituted the SOFS
audits of her own accord. She further testified that
she made the recommendation to terminate the SOFS
contracts and to place them on an “on review” status
based solely upon her audit findings.
Defendants do not deny that Ms. Webb should
have been notified if Mr. Evans’ information request
was being properly processed. Since the information
request specifically sought information from Ms.
Webb’s department, she should have been informed of
Evans’ information request. Defendants also do not
deny that the complaints that supposedly caused Ms.
Webb to instigate the SOFS audits were made by
persons fired from SOFS. Defendants merely claim
the information in the complaints was proven credi-
ble when the audits revealed missing files.
SOFS is a relatively new corporation. Plaintiffs
admit that some record keeping errors have occurred
as the business has begun to grow and mature.
However, rather than give plaintiffs adequate oppor-
tunity to correct the faulty procedures revealed
during the audits, defendants terminated the Medi-
caid contracts less than one month after the audit
reports were complete; they did not even leave
enough time for the appeals process to be completed.’
' After discussions with plaintiffs, the defendants have
placed the contract termination in abeyance pending completion
of the administrative appeal process.
App. 63
The Court believes the plaintiffs have shown that
they are likely to succeed in showing that the defen-
dants took certain retaliatory administrative actions
in response to the exercise of First Amendment rights
by Mr. Evans.
Due Process Claim
The Court believes that plaintiffs have shown a
substantial likelihood of success on the merits with
regard to their due process claim as well. From the
discussion above, it appears that the HCA may have
acted in bad faith in terminating SOFS’s Medicaid
contracts. Every commercial contract contains an
implied covenant of good faith and fair dealing. 12A
Okl1.St.Ann. § 1-203. Because the plaintiffs have
shown a substantial likelihood of success in showing
defendants’ bad faith, the Court finds there to be a
substantial likelihood of success on plaintiffs’ due
process contract claim.
Statutory Claims
Plaintiffs assert four statutory claims based upon
two statutes and one regulation. They claim rights
guaranteed in the Boren Amendment, 42 U.S.C.
§ 1396(a)(a)(13)(A), the Medicaid Act’s implementing
regulations, 42 C.F.R. § 440.230, and the Medicaid
Act itself, 42 U.S.C. § 6009, are all violated by defen-
dants actions.
App. 64
The Court finds that while some of plaintiffs
claims in this regard may not be successful, they have
shown a likelihood of success on the remainder of
their claims. The Court notes that the Boren
Amendment, 42 U.S.C. § 1396(a)(a)(13)(A) (1996), as
relied upon by the plaintiffs was repealed in 1997 and
replaced with a procedure for ensuring adequate
input into the reimbursement rate determination
process. 42 U.S.C. § 1396(a)(aX13)(A) (2000). The
statute as cited by plaintiffs no longer guarantees a
right of reasonable access to medical facilities.’ Be-
cause their claims regarding adequate reimburse-
ment and reasonable access to facilities are based on
a partially repealed statute, the Court finds that,
while plaintiffs may in fact prevail on these claims,
they have not shown a substantial likelihood of
success on the merits.
However, plaintiffs do make compelling argu-
ments with respect to their other statutory claims.
The rights guaranteed by 42 C.F.R. §440.230 and 42
U.S.C. § 6009*° appear to be infringed by defendants
* Plaintiffs presumably intend to pursue their claim to a
“reasonable reimbursement” based upon the new language of 42
U.S.C. § 1396(aXaX13).
* Plaintiffs have notified the Court that while the language
guaranteeing the right to reasonable access to medical services
has been removed from 42 U.S.C. § 1396(aXa\(13), it appears in
42 U.S.C. § 1396(aaX10\B). The Court presumes plaintiffs
intend to proceed under this statute.
“ The Court notes that 42 U.S.C. § 6009 was repealed by Act
of October 30, 2000, Pub. L. No. 106-402 § 401. However, the
(Continued on following page)
App. 65
actions. While there is some dispute as to the effects
of terminating SOFS as a medical service provider,
the Court believes defendants actions in terminating
SOFS as a provider, without ensuring the availability
of adequate replacement medical facilities (see ir-
reparable harm analysis below), demonstrate a
substantial likelihood of success with respect to some
of plaintiffs’ statutory claims.
Plaintiffs’ Irreparable Injury
Plaintiffs claim a variety of irreparable harms
will befall them if this Court refuses to issue a man-
datory injunction. Plaintiffs claim that failure to
issue an injunction will result in an unconstitutional
prior restraint of free speech. They also claim that
SOFS will be forced out of business, and that the
patients currently served by SOFS will either go
untreated or will receive inadequate care.
Harm to Evans
Prior restraints give rise to a heavy presumption
of unconstitutionality. Bantam Books, Inc. v. Sulli-
van, 372 U.S. 58 (1963). Plaintiffs have shown that
they feel threatened by defendants’ actions and that
there is a substantial likelihood that their speech has
been effectively chilled. Defendants simply deny any
rights previously codified in 42 U.S.C. § 6009 are substantially
reinstated in Pub. L. No. 106-402 § 109. The Court presumes the
plaintiffs wish to bring their action undcr this section.
App. 66
connection between Evans’ political speech and their
actions; therefore, they deny that any First Amend-
ment right is at issue. If defendants’ actions are
chilling plaintiffs’ speech, there is no doubt that
plaintiffs will suffer irreparable harm if an injunction
does not issue.
Harm to SOFS
Plaintiffs also claim that SOFS will be forced out
of business should the Court decline to issue an
injunction. Plaintiffs have provided evidence that, in
their line of business, most organizations operate on a
shoestring budget. Should their cash flow be dis-
rupted for any length of time, they will not be able to
continue operations. By placing SOFS on the “on
review” manual billing system, the evidence shows
that defendants have effectively slowed SOFS’s cash
flow to a trickle. The “on review” manual billing
system requires that, for each medical procedure
billed to the State, the plaintiffs must attach docu-
mentation proving that the procedure was, in fact,
performed. While this system may seem benign, the
evidence presented during the hearing shows that
being placed on the “on review” system is a death
sentence for virtually all providers placed on it. While
defendants readily admit that numerous providers
have been placed on “on review” status over the
years, they are more reluctant to admit that no
corporate medical provider placed on the list has ever
App. 67
gotten off of it; they have all gone out of business.°
The reasons that the manual system is a “death
sentence” appear to be numerous. In order to even
submit the billings to the state, clinicians’ reports
must be coilected and attached to lengthy, compli-
cated forms. Even well-trained personnel appear to
have difficulty completing to [sic] forms. After they
are sent to the state, the billings must be manually
reviewed by SURS personnel and then approved by
the HCA before being manually entered into the
billing system. Even then, the computer may reject
the claim for a variety of pre-determined rationale.
The evidence shows that, at best, the turnaround
time for a properly filed claim is two to three weeks.
However, sometimes the delay may exceed a number
of months. The “on review” system appears to be “an
anvil that has worn out many a hammer.”
Defendants claim that these harms to SOFS are
not irreparable. They allege that all harms stated are
merely economic and that if the plaintiffs prevail at
trial, money damages will be sufficient to compensate
them. However, the Court finds the precarious nature
of plaintiffs’ finances, coupled with the additional
burden of the “on review” system clearly show that
* Defendants claim that one corporate entity has survived
the “on review” procedure. However, from the evidence pre-
sented, it appears this provider has not been removed from the
“on review” status, but has merely survived for five months. In
addition, it is unclear if this “surviving” provider serves a
clientele similar to SOFS’s.
App. 68
SOFS will go out of business and lose personnel
should injunctive relief be denied. Therefore, the
Court finds that SOFS will suffer irreparable injury
should the Court decline to grant injunctive relief.
Harm to Patients
While the Court believes that harm will befall
both Evans and SOFS should injunctive relief be
denied, failure to grant injunctive relief will cause the
greatest amount of harm to the mentally ill patients
served by SOFS. The evidence shows that SOFS is
one of the few providers willing and able to care for
the chronically ill mental patients in southeastern
Oklahoma. Many of the chronic patients that SOFS
serves have been turned down by other mental ser-
vice providers in the region. One of the doctors em-
ployed with SOFS, Dr. Baumberger, characterized
SOFS as the provider of last resort for hundreds of
chronic mental patients.
In addition, the evidence presented during the
hearing shows that southeastern Oklahoma has an
unusually high need for mental health services.
Another doctor employed with SOFS, Dr. Foster,
testified that there is an unusually high incidence of
inter-generational mental problems in the area. In
addition, due to the poverty of the region, many
patients do not have the necessary transportation to
travel to medical providers. SOFS is one of the few
providers that offer in-home care for a number of its
patients.
App. 69
Most convincingly, plaintiffs showed that there
are simply not enough facilities in the region to
absorb the patient load if SOFS were suddenly forced
out of business. SOFS serves approximately 740
patients. Of those patients, testimony showed that
roughly 80% are chronically ill and extremely difficult
to place elsewhere. In addition, a significant number
of patients served by SOFS are children. Testimony
showed that other facilities are generally not
equipped or staffed to deal with the special needs of
mentally ill children. While defendants claim that
roughly ten other mental facilities stand ready to
accept those that [sic] displaced should SOFS close
down, they did not counter plaintiffs’ evidence that, at
best, 20% of SOFS’s patients could be transferred,
leaving many children and the chronically ill to fend
for themselves.
Plaintiffs also produced convincing evidence that,
even if places could be found at other providers, such
a sudden change would likely cause irreparable
damage to many of the patient population. The testi-
mony also showed that unless a proper transition
could be made, some patients will suffer from separa-
tion anxiety or abandonment. In many cases, this
anxiety would result in the need for hospitalization.
An abrupt closing of SOFS would not provide patients
an adequate transition period.
Defendants deny that patients will suffer any
harm from the closing of SOFS. They simply point to
ten different agencies in the geographic region that
accept Medicaid and claim that the patients will be
App. 70
cared for. They did not dispute Dr. Foster’s predic-
tions of numerous patient hospitalizations should
SOFS close, nor did they dispute his claim that the
chronically ill would go uncared for.
While they do not adequately refute plaintiffs’
evidence showing the irreparable harm that would
result from SOFS’s closure, defendants claim that
patients will suffer greater harm if SOFS is allowed
to remain open. They point to the lack of documenta-
tion revealed by the audits and infer that many
patients are receiving inadequate care at SOFS. The
defendants believe that documentation is inextricably
linked to the care given. However, the defendants
were not able to prove that a single patient had not
received adequate care at SOFS. The Court agrees
with Dr. Baumberger that while proper documenta-
tion is important, the level of care provided is more
important than the level of documentation recorded.
Balance of Harms
As detailed above, the plaintiffs will suffer a
number of harms should this Court refuse injunctive
relief. Plaintiff Evans will suffer an arguably uncon-
stitutional prior restraint of speech, SOFS will likely
be forced to cease business operations, and the men-
tally ill in southeastern Oklahoma will be without an
invaluable resource. Many of the patients will not be
accepted elsewhere and their condition will deterio-
rate. Clearly, the harms that will be suffered by the
plaintiffs are great.
App. 71
The question remaining is what harm will the
defendants suffer should this Court choose to grant
injunctive relief? The harm to the defendants result-
ing from a mandatory injunction appears to be slight.
The defendants claim that they have a duty to the
state to ensure that Medicaid procedures are properly
documented and performed. In essence, this amounts
to a duty to protect the public treasury. The Court
finds however, that even if an injunction mandating
plaintiffs’ return to electronic billing is issued, the
defendants should be adequately protected. The
defendants’ right to conduct audits and recoup monies
would be unaffected. In addition, plaintiffs would be
required to post a surety as required by FED.R.Civ.P.
65(c). As a final protection against improper billing,
plaintiffs have agreed to submit progress notes to
ensure the HCA receives proper documentation for
claims.
Nevertheless, defendants claim that monies that
might somehow be improperly paid to plaintiffs would
deprive other patients in the State of proper medical
care. The Court shares defendants’ concern for the
Medicaid recipients in Oklahoma but finds the pro-
tections against improper billing to be adequate to
protect the public treasury. Therefore, the Court finds
the potential harm to the plaintiffs significantly
outweighs the potential harm suffered by the defen-
dants.
App. 72
Public Interest
The final factor to consider is the effect of injunc-
tive relief on the public. Once again, the Court finds
the factor weighs in favor of granting injunctive
relief. The plaintiffs have provided the Court with
ample evidence in the form of affidavits and testi-
mony that the public will be better served if SOFS
remains in business pending the outcome of a trial on
the merits.
Plaintiffs have produced evidence to show that
the demise of SOFS would cause an increased burden
on law enforcement in the region. Because law en-
forcement is required to respond to every disturbance,
even a small increase in the number of mentally
unstable people in the general populace would stretch
current law enforcement resources beyond their
capacity.
In addition, the sudden closure of SOFS would
hurt the community as a whole. As the evidence has
demonstrated, many individuals currently receiving
care from SOFS would suddenly be without. Because
many of these individuals are dangerous to them-
selves and others if their conditions are not properly
treated, a failure to obtain care could have significant
repercussions.
Defendants counter these arguments by stating
that the patients will receive better care at other
facilities. Unfortunately, as discussed above, defen-
dants are unable to show the Court that these [sic]
many of these displaced patients will receive any care,
App. 73
much iess better care. Therefore, the Court finds that
the public interest is better served by the issuance of
a mandatory injunction.
Vv. Conclusion
As detailed above, plaintiffs have showed that
each of the four injunctive factors weigh in their
favor. While plaintiffs may not succeed on every claim
they assert, they have shown a substantial likelihood
of success on the merits for the majority of asserted
claims. They have also shown that they will suffer
irreparable harm should injunctive relief be denied,
that the balance of harms weighs substantially in
their favor, and that the public interest is best served
by the granting of an injunction. In addition, the
Court finds the plaintiffs have met the heightened
burden required for the granting of a preliminary
mandatory injunction. Therefore, fer the reasons set
forth more fully above, the Court:
1. GRANTS plaintiffs’ motion for a _ pre-
liminary mandatory injunction; and
2. ORDERS defendants to return SOFS to
the automated billing procedure; and
3. ORDERS plaintiffs to timely submit to
\ HCA all documentation that would be
required under a manual billing system;
and
4. ORDERS defendants to hold the termi-
nation of SOFS’s Medicaid contracts in
App. 74
abeyance pending an outcome on the
merits of the present suit; and
ORDERS plaintiffs to post a bond in
the amount of $40,000 pursuant to
FreD.R.Civ.P. 65(c).
ENTERED this 12th day of February, 2001.
/s/ Lee R. West
ul
LEE R. WEST
UNITED STATES
DISTRICT JUDGE
App. 75
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
ALFRED MILTON EVANS,
an individual; SOUTHEAST-
ERN OKLAHOMA FAMILY
SERVICES, INC., a
corporation,
Plaintiffs-Appellees,
Vv.
MIKE FOGARTY, in his
individual capacity, as well
as in his official capacity as No. 04-6007
Chief Executive Officer for (W.D. Oklahoma)
the Oklahoma Health Care
Authority; TERRIE FRITZ, aA ok Se
in her individual capacity, as
well as in her official capacity
as Director of Behavioral
Health for the Oklahoma
Health Care Authority;
DANA BROWN, in her indi-
vidual capacity, as well as in
her official capacity as Legis-
lative Liaison from the Okla-
homa Health Care Authority,
Defendants-Appellants,
and
DR. LYNN MITCHELL, in
his individual capacity, as
well as in his official capacity
App. 76
as State Medicaid Director for
the Oklahoma Health Care
Authority; T.J. BRICKNER,
JR., in his official capacity as
Vice-Chairman for the Okla-
homa Health Care Authority;
RONALD ROUNDS, O.D.,
in his official capacity as
member of the Oklahoma
Health Care Authority Board
of Directors; WAYNE HOFF-
MAN, in his official capacity
as member of the Oklahoma
Health Care Authority Board
of Directors; JERRY HUM-
BLE, in his official capacity
as member of the Oklahoma
Health Care Authority Board
of Directors; CHARLES
ED McFALL, in his official
capacity as Chairman of the
Oklahoma Health Care
Authority Board of Directors;
GEORGE MILLER, in his
official capacity as member
of the Oklahoma Health Care
Authority Board of Directors;
LYLE ROGGOW, in his
official capacity as member
of the Oklahoma Health Care
Authority Board of Directors,
Defendants.
if
App.
ORDER AND JUDGMENT"
(Filed Jan. 26, 2005)
Before KELLY, ANDERSON, and
O'BRIEN, Circuit Judges.
Defendants Mike Fogarty, Terrie Fritz and Dana
Brown, employees of the Oklahoma Health Care
Authority (““OHCA”), seek an interlocutory appeal of
the district court’s order denying their request to file
a third motion for summary judgment asserting that
they are entitled to
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