Asante v. Cal. Dep't of Health Care Servs.
Asante v. Cal. Dep't of Health Care Servs.
Opinion of the Court
Nineteen hospitals
BACKGROUND
The Hospitals filed a complaint in the Superior Court of the State of California on June 12, 2014, alleging that portions of the Department's reimbursement methodologies violated the dormant Commerce *799Clause.
After the district court issued its summary judgment ruling, the parties met and conferred and the court issued another order entitled "Order Re Outstanding Provisions" which clarified and resolved several of the issues the court had raised in its summary judgment order and enumerated steps that the Department was required to take in order to ensure that its reimbursement methodologies complied with the dormant Commerce Clause. The district court later denied the Hospitals' request for retroactive monetary relief under California Civil Procedure Code section 1085 for certain reimbursements incurred between July 1, 2013, (the date on which the Department implemented its current methodology) and December 21, 2015 (the date on which the district court issued its summary judgment order).
The Hospitals then filed a premature appeal to this court that was dismissed. Following that, the Department filed a motion for reconsideration of the summary judgment order on the grounds that the Hospitals had waived the federal claims and were relying solely on California Civil Procedure Code section 1085, which did not provide a basis for relief. In response, the Hospitals sought leave to file an amended complaint to add a civil rights claim as a basis for their constitutional and statutory claims. See
JURISDICTION AND STANDARDS OF REVIEW
The district court had jurisdiction pursuant to
"We review de novo a district court's grant of summary judgment." Martinez v. City of Los Angeles ,
DISCUSSION
While the parties have raised a *800number of other issues,
The Commerce Clause provides that Congress shall have the power "[t]o regulate Commerce ... among the several States." U.S. Const. art. I, § 8, cl. 3. "Though phrased as a grant of regulatory power to Congress, the Clause has long been understood to have a 'negative' aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce." Or. Waste Sys., Inc. v. Dep't of Envtl. Quality of State of Or. ,
However, states are not merely regulators, they are also economic actors that participate in the marketplace. When a state is acting as a market participant, rather than a market regulator, its decisions are exempted from the dormant Commerce Clause. Davis ,
An activity is exempt under the market participant exception if it is a "proprietary rather than regulatory activity"
*801that may be "analogized to the activity of" a private entity. New Energy Co. of Ind. v. Limbach ,
In drawing the line between regulators and market participants, we have pointed out that "a court must examine whether the state or local government has imposed restrictions that 'reach beyond the immediate parties with which the government transacts business.' " Big Country Foods, Inc. v. Bd. of Educ. of Anchorage Sch. Dist. ,
Here the Department sets rates of reimbursement to hospitals for those who are essentially insured as beneficiaries under Medi-Cal in a manner much like that of a private insurer participating in the market. See, e.g. , DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc. ,
This program is very similar to the program endorsed by us when we decided that the State of Alaska was acting as a market participant when it instituted a milk-purchase plan. There, as here, the state received federal funds to purchase benefits for its citizens.
*802Big Country Foods ,
It is worth noting, also, that the Medi-Cal program does not resemble a situation where a state has absolute monopoly over a resource and uses that monopoly to interfere with interstate commerce. See W. Oil & Gas Ass'n v. Cory ,
Finally, we have not overlooked the Hospitals' argument that due to federal law
Thus, Alaska's purchase of milk for its citizens is not at all unlike the Department's purchases of medical services for its beneficiaries.
CONCLUSION
The district court's resolution of the market participant issue was the foundation of its decision's whole edifice and with the demolition of that foundation, the whole edifice falls and shatters. Thus, we need not and do not opine on the questions presented by the other issues placed before *803us in No. 16-16866 and No. 16-17080. Of course, with that determination, the attorney's fees award falls also; thus, we will not discuss the questions involved in No. 17-15550.
REVERSED.
Those hospitals are encompassed by the entities listed in the caption of this case. Hereafter, we refer to them collectively as "Hospitals" or "the Hospitals."
See
See
See U.S. Const. art. I, § 8, cl. 3.
We note the Hospitals made a number of other claims, which, as will appear, are not ultimately relevant to the decision of these appeals.
Those are: did Congress in effect grant the Department immunity from Commerce Clause attacks with respect to the distribution of disparate share hospital payments; did the Department improperly use the Medicare index in setting forth the wage index for the Hospitals; would the ordering of retroactive payments be proper; and was an award of attorney's fees proper.
Hughes ,
Reeves ,
Davis ,
42 U.S.C. § 1395dd(b).
See
To the extent that a California court disagreed with the above explication, it incorrectly decided the federal questions in the dormant Commerce Clause case before it and, of course, its conclusions do not bind us. See Children's Hosp. & Med. Ctr. v. Bontá ,
Reference
- Full Case Name
- ASANTE, an Oregon nonprofit corporation Clark County, Nevada Renown Regional Medical Center, Nevada non profit corporation Sky Lakes Medical Center, Inc., An Oregon Non Profit Corporation Southern Hills Medical Center, LLC, A Nevada Limited Liability Company Sunrise Hospital and Medical Center, LLC, A Delaware Limited Liability Company registered in Nevada PHC-Fort Mohave, Inc., An Arizona Corporation Havasu Regional Medical Center, LLC, A Delaware Limited Liability Company registered in Arizona, on behalf of Havasu Regional Medical Center in Lake Havasu City, Arizona Valley Health Systems, LLC, A Delaware Limited Liability Company registered in Nevada Sparks Family Hospital, Inc., A Nevada Corporation Summerlin Hospital Medical Center, LLC Yuma Regional Medical Center, An Arizona non Profit Corporation Sunrise Mountainview Hospital, Inc., A Nevada Corporation Renown South Meadows Medical Center, Nevada Non Profit Corporation v. CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES Jennifer Kent, Director of the California Department of Healthcare Services, Asante, an Oregon nonprofit corporation Clark County, Nevada Renown Regional Medical Center, Nevada non profit corporation Sky Lakes Medical Center, Inc., An Oregon Non Profit Corporation Southern Hills Medical Center, LLC, A Nevada Limited Liability Company Sunrise Hospital and Medical Center, LLC, A Delaware Limited Liability Company registered in Nevada PHC-Fort Mohave, Inc., An Arizona Corporation Havasu Regional Medical Center, LLC, A Delaware Limited Liability Company registered in Arizona, on behalf of Havasu Regional Medical Center in Lake Havasu City, Arizona Valley Health Systems, LLC, A Delaware Limited Liability Company registered in Nevada Sparks Family Hospital, Inc., A Nevada Corporation Summerlin Hospital Medical Center, LLC Yuma Regional Medical Center, An Arizona non Profit Corporation Sunrise Mountainview Hospital, Inc., A Nevada Corporation Renown South Meadows Medical Center, Nevada Non Profit Corporation v. California Department of Health Care Services Jennifer Kent, Director of the California Department of Healthcare Services, Asante, an Oregon nonprofit corporation Clark County, Nevada Renown Regional Medical Center, Nevada non profit corporation Sky Lakes Medical Center, Inc., An Oregon Non Profit Corporation Southern Hills Medical Center, LLC, A Nevada Limited Liability Company Sunrise Hospital and Medical Center, LLC, A Delaware Limited Liability Company registered in Nevada PHC-Fort Mohave, Inc., An Arizona Corporation Havasu Regional Medical Center, LLC, A Delaware Limited Liability Company registered in Arizona, on behalf of Havasu Regional Medical Center in Lake Havasu City, Arizona Valley Health Systems, LLC, A Delaware Limited Liability Company registered in Nevada Sparks Family Hospital, Inc., A Nevada Corporation Summerlin Hospital Medical Center, LLC Yuma Regional Medical Center, An Arizona non Profit Corporation Sunrise Mountainview Hospital, Inc., A Nevada Corporation Renown South Meadows Medical Center, Nevada Non Profit Corporation v. California Department of Health Care Services Jennifer Kent, Director of the California Department of Healthcare Services
- Cited By
- 12 cases
- Status
- Published