Principle Homecare, LLC v. McDonald

Background

The plaintiffs filed an emergency letter motion seeking a stay pending appeal of the court’s earlier order dismissing this case. The defendant opposed the request. The plaintiffs sought to halt implementation of changes to New York’s Consumer Directed Personal Assistance Program, including the transition of patients to a new statewide fiscal intermediary.

The plaintiffs asserted that their businesses would have to close once they began transferring patients to the statewide fiscal intermediary on March 1, 2025, and no later than April 1, 2025. They stated that they had no current line of business other than serving as an authorized fiscal intermediary in the program. They also argued that the transition implicated the Contracts Clause, Takings Clause, Equal Protection Clause, and Due Process Clause.

Legal standard

Under Federal Rule of Civil Procedure 62(d), a court may suspend or modify certain injunctions while an appeal is pending. Courts consider four factors: whether the moving party will suffer irreparable harm without a stay, whether a stay would substantially injure another party, whether the moving party has shown a substantial possibility of success on appeal, and how the public interest would be affected. The court described irreparable harm and the likelihood of success as the two most important factors and emphasized that a stay is an extraordinary remedy.

Court’s analysis

The court began with the likelihood of success on appeal. For the reasons given in its earlier order granting the motion to dismiss, the court concluded that the plaintiffs had not shown a substantial possibility of success on the merits of their appeal. The court said this conclusion also weakened the plaintiffs’ claim of irreparable harm because their constitutional claims had previously been found insufficient to state a claim.

The court further said that the plaintiffs’ claimed business losses did not necessarily establish irreparable harm. Although the total loss of a business will often qualify as irreparable harm, the court found the plaintiffs’ argument less persuasive because their businesses operated in a state-created market in which the State was the only payor. The court also questioned whether an alleged constitutional deprivation automatically establishes irreparable harm under the circumstances presented.

Even assuming that the plaintiffs had shown irreparable injury, the court found that the State would be injured and that the public interest of Medicaid patients enrolled in the program would be harmed if the transition were halted at that late stage. The court therefore determined that the plaintiffs had not met their burden under the stay factors.

Disposition

The court denied the plaintiffs’ motion for a stay pending appeal and directed the Clerk of Court to terminate Docket No. 52. The court stated that the plaintiffs could seek a stay from the Second Circuit under Rule 62(g) or the Federal Rules of Appellate Procedure.