B. v. Brooks-Lasure

Background

D. B., as conservator for JOHN DOE 1; C.C., as guardian for JANE DOE 1; JOHN DOE 2; and JANE DOE 2 brought this proposed class action on behalf of themselves and others similarly situated. The defendants named in the caption were CHIQUITA BROOKS-LASURE, in her official capacity as Administrator for the Centers for Medicare and Medicaid Services; the CALIFORNIA DEPARTMENT OF PUBLIC HEALTH; TOMAS ARAGON, in his official capacity as Director of the California Department of Public Health; XAVIER BECERRA, in his official capacity as Secretary of the U.S. Department of Health and Human Services; and DOES 1 through 30.

The complaint challenged a closure and relocation plan for Laguna Honda Hospital. On November 10, 2022, the opinion says that the Centers for Medicare and Medicaid Services, the California Department of Public Health, and the City and County of San Francisco entered a settlement concerning the hospital. The settlement extended federal funding until November 2023, subject to compliance with a revised closure plan, paused relocations, and stated that transfers and discharges would resume under a revised plan beginning February 2, 2023, subject to possible extension or further pause.

Administrative exhaustion and jurisdiction

The court had previously concluded that plaintiffs had to complete available administrative procedures before the court could exercise subject-matter jurisdiction, meaning its legal authority to hear the dispute. Plaintiffs argued that the City and County of San Francisco’s decision to dismiss its administrative appeal and waive further appeals under the settlement satisfied that requirement.

The court rejected that position for two reasons. First, it said a settlement was not equivalent to the final administrative decision required for judicial review under 42 U.S.C. § 405(g). The settlement’s voluntary decision not to continue seeking an administrative decision did not satisfy the exhaustion requirement.

Second, the court explained that the City and County’s appeal had previously served as an adequate substitute for plaintiffs’ own exhaustion because a successful challenge to the hospital’s decertification would have prevented the relocations at issue. After the settlement, however, that appeal no longer served that function. The court said plaintiffs could appeal individual relocation decisions through available administrative channels once a revised relocation plan was finalized.

The court also found that plaintiffs had not shown that pursuing administrative remedies would be futile. It noted that plaintiffs did not claim a right to remain at Laguna Honda or standing to challenge the hospital’s decertification. The court said their desired relief—safe relocation of residents—was different from challenging decertification or closure, and plaintiffs had not explained why administrative procedures could not address safe relocations.

Rulings and next steps

The court stated that the settlement did not undermine its earlier jurisdictional reasoning. It denied leave for plaintiffs to file a motion for reconsideration. It then stated that the civil action should be dismissed for lack of subject-matter jurisdiction, but did not immediately enter final judgment because plaintiffs requested an opportunity to amend.

The court allowed plaintiffs until noon on February 9, 2023, to file a motion for leave to file an amended complaint. The proposed amended complaint had to be attached, and the motion had to explain how the amendments would cure the identified deficiencies and any other deficiencies raised in defendants’ briefs. The court stated that the case would be closed if plaintiffs did not file that motion by the deadline.

Judge William Alsup signed the order.