B. v. Brooks-Lasure

Background

The plaintiffs are four patients or residents of Laguna Honda Hospital, a skilled nursing facility, suing on behalf of themselves and a proposed class. The caption identifies D. B. as conservator for JOHN DOE 1, C.C. as guardian for JANE DOE 1, and JOHN DOE 2 and JANE DOE 2 as plaintiffs. They sued federal and state officials in their official capacities, the California Department of Public Health, and other defendants.

The plaintiffs alleged that ending Laguna Honda’s Medicare and Medicaid provider agreements, and relocating residents to other facilities, violated the Rehabilitation Act, the Americans with Disabilities Act, the Administrative Procedure Act, due process, and federal mandamus law. They sought to stop the funding termination and relocation process and moved to certify a class under Federal Rule of Civil Procedure 23(b)(2).

The opinion describes repeated surveys finding serious health and safety violations at Laguna Honda. The Centers for Medicare and Medicaid Services terminated the facility’s provider agreements on April 14, 2022. The City and County of San Francisco appealed that decision through the agency’s administrative process, but the appeal remained pending when the opinion was issued. Laguna Honda later submitted a closure and relocation plan, and the agencies approved continued funding for a period tied to relocation.

Subject-Matter Jurisdiction

The court held that all of the plaintiffs’ claims against the federal defendants arose under the Medicare Act. That law requires claimants to present their claims to the Department of Health and Human Services and generally complete the agency’s administrative review process before seeking judicial review. The court treated the Rehabilitation Act and disability-discrimination claims as challenges to the denial of Medicare and Medicaid benefits.

The court also held that the Administrative Procedure Act and due-process claims concerning safe and orderly relocation were closely connected to the benefits dispute. Extending the relocation process while continuing post-termination funding would effectively require approval of a benefits claim. The court further held that the claims against the state defendants were disguised disputes with the federal agency and that it could not exercise supplemental jurisdiction over the state-law claims without federal subject-matter jurisdiction.

The court separately rejected mandamus jurisdiction. Mandamus is an extraordinary remedy available only when the plaintiff has no other adequate means of obtaining relief and the official has a clear, nondiscretionary duty to perform a specific act. The court found that Tomas Aragon had discretion concerning whether to approve a relocation plan, so the plaintiffs did not show a clear duty supporting mandamus.

The court found that the plaintiffs had satisfied presentment, meaning that the claims had been presented to the agency. They had not, however, exhausted administrative remedies because the City and County’s appeal was still pending. The court declined to waive exhaustion because the claims were essentially benefits claims rather than claims separate from the benefits dispute.

The court also rejected the exception that can permit immediate court review when agency procedures would otherwise provide no review at all. It reasoned that individual patients could appeal relocation decisions, the City and County could pursue the benefits appeal on their behalf, the City and County could later seek judicial review of the relocation plan, and the patients could seek judicial review after the administrative process was completed.

The opinion additionally stated that the plaintiffs’ due-process claims lacked merit because the alleged harm resulted indirectly from enforcing health and safety standards against a decertified facility. The court concluded that the plaintiffs had not shown a protected life, liberty, or property interest in continuing to receive care at that facility after decertification.

Class Certification

Because the court concluded that it lacked subject-matter jurisdiction over the claims, it denied class certification. The court also gave an independent reason for denying certification. Rule 23(b)(2) permits a class when the opposing party has acted generally toward the class and one injunction or similar order would appropriately apply to everyone. The court found an inherent conflict because some residents might prefer transfer to another facility, while the named plaintiffs wanted to remain at Laguna Honda. An order stopping closure and relocation would therefore not be appropriate for every proposed class member.

Disposition

The court DENIED the motion for class certification. It stated that the civil action and a companion action should be dismissed for lack of subject-matter jurisdiction, but it did not enter that dismissal in this order. Instead, Judge Alsup ordered the plaintiffs to show cause within fourteen calendar days why the cases should not be dismissed. The order stated that judgment would be entered if they failed to respond.