The opinion of the court was delivered by: Walker, District Judge.
Currently before the court is a motion filed by defendant Summit
Medical Center and joined by defendant Health Advocates to dismiss
plaintiff Dynice Harding's first amended complaint. The court finds this
motion appropriate for decision without oral argument. Civil LR 7-1(b).
As a result, the hearing scheduled for March 22, 2001, at 2:00 pm is
VACATED. For the reasons set forth below, the motion is GRANTED.
Harding also sought a declaratory judgment based on her argument that
an "actual controversy" existed between the parties because they
disagreed whether 42 U.S.C. § 1396a or Cal. Welf. & Inst. Code §
14124. 791 controlled the issues of the case. The Declaratory Judgment
Act, 22 U.S.C. § 2201, however, is not an independent basis for
federal jurisdiction. William W Schwarzer, A Wallace Tashima and James M
Wagstaffe, Federal Civil Procedure Before Trial § 10:14 (Rutter Group
Practice Guide 2000) (hereinafter, Schwarzer); see also
22 U.S.C. § 2201 ("In a case of actual controversy within its
jurisdiction ***.") (emphasis added). A party seeking declaratory
relief, therefore, must first assert an independent basis for
jurisdiction. Schwarzer § 10:14 (citing Skelly Oil Co. v. Phillips
Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 94 L.Ed. 1194 (1950)).
Because this court had concluded that no private right of action exists
under the Medicaid Act, which was the basis for Harding's only claim
alleged under federal law, federal jurisdiction was found to be lacking
and the claim for declaratory judgment was dismissed. 12/29/01 Order (Doc
# 18) at 12. The court likewise dismissed all of Harding's remaining
claims in the original complaint. Id. at 13.
On January 29, 2001, Harding filed the first amended complaint (FAC)
now at issue. FAC (Doc # 20). The FAC is identical to Harding's original
complaint, with two exceptions. First, given the fact that no private
right of action exists under the Medicaid Act, Harding appropriately
deleted the cause of action based on 42 U.S.C. § 1396a(a)(25)(C).
Second, Harding added the following sentence to her claim for declaratory
Plaintiff contends that Welfare and Institutions Code
Section 14124.74 is preempted by 42 U.S.C. § 1396a
because it stands as an obstacle to the accomplishment
and execution of the full purposes and objectives of
Congress in enacting the Medicaid program.
FAC (Doc # 20), ¶ 27. Based on Harding's discussion of Cal. Welf.
Inst.Code § 14124.791 in earlier portions of the FAC, it is unclear
whether Harding asserts that federal law preempts section 14124.791 or
section 14124.74. Because the two provisions operate in tandem, however,
the court construes Harding's claim as asserting that both sections
14124.791 and 14124.74 are preempted by 42 U.S.C. § 1396a. See FRCP 8
(f). Harding alleges no other federal claims.
The FAC thus boils down to a request by Harding for this court to issue
a declaratory judgment that Cal Welf & InstCodes §§ 14124.791 and
14124.74 are preempted by section 1396a of the federal Medicaid Act. This
court previously recognized that the federal and state statutory schemes
in this area of the law present an apparent conflict. See 12/29/01 Order
(Doc # 18) at 3-4. Section 1396a of the Medicaid Act, which regulates
"State plan[s] for medical assistance," prohibits such plans from
allowing medical providers to seek payment from a beneficiary who has
collected from a liable third party by way of judgment, settlement or
otherwise. 42 U.S.C. § 1396a(a)(25)(C). California, meanwhile, has
enacted legislation that specifically
empowers medical providers "to file a lien for all fees for services
provided to the beneficiary against any judgment, award or settlement
obtained by the beneficiary *** against [a] third party." Cal. Welf. &
Inst.Code § 14124.791. Section 14124.74 makes the medical provider's
lien enforceable. See Ghazarian v. Wheeler, 177 F.R.D. 482, 485
(C.D.Cal. 1997). In essence, therefore, California law tells medical
providers that they can conduct themselves in a manner prohibited by
This conflict is the basis for Harding's preemption claim. Under the
Supremacy Clause of the Constitution, state laws are preempted to the
extent that they conflict with federal laws. Freightliner Corp. v.
Myrick, 514 U.S. 280, 287, 115 S.Ct. 1483, 131 L.Ed.2d 385 (1995). The
court believes, therefore, that there is a strong likelihood that Cal.
Welf. & Inst. Code §§ 14124.791 and 14124.74 are preempted by the
parallel provisions in the federal Medicaid Act. Indeed, defendants do not
argue otherwise. The court, nonetheless, lacks the jurisdiction to rule
on this matter.
Harding asserts that federal question jurisdiction exists under
28 U.S.C. § 1331 because she seeks equitable relief from state
regulation on the ground that such regulation is preempted by federal
law. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96, 103 S.Ct. 2890,
77 L.Ed.2d 490 (1983); Hydrostorage, Inc. v. Northern Cal. Boilermakers,
891 F.2d 719, 724-25 (9th Cir. 1989). It is well established that federal
courts have jurisdiction over suits to enjoin state officials from
interfering with federal rights. Shaw, 463 U.S. at 96 n. 14, 103 S.Ct.
2890. Moreover, courts have jurisdiction even if the plaintiff in such an
action does not possess a private right of action that he seeks to
enforce or a congressionally mandated remedial scheme under which he
seeks to act. Hydrostorage, 891 F.2d at 724-25; CIGNA Healthplan v. State
of Louisiana, 82 F.3d 642, 644 n. 1 (5th Cir. 1996). In these injunctive
relief scenarios, the Supremacy Clause itself provides the subject matter
jurisdiction. Hydrostorage, 891 F.2d at 725.
But Harding is not suing state officials. The Supreme Court made clear
in Shaw that a federal claim for declaratory judgment is stated (and thus
the court's jurisdiction is triggered) by the allegation that some state
official has violated the Supremacy Clause by encroaching on legal
terrain that Congress has preempted. Shaw, 463 U.S. at 96 n. 14, 103
S.Ct. 2890; see also CIGNA Healthplan, 82 F.3d at 644 n. 1. Some of the
defendants in Shaw, for example, were the New York State Division of
Human Rights, the Division's Commissioner and the Division's General
Counsel. Shaw, 463 U.S. at 92 n. 7, 103 S.Ct. 2890. Similarly, the
defendants in Hydrostorage included the California Apprenticeship
Council, an entity created by state statute to issue rules and
regulations, while the State of Louisiana and Louisiana Attorney
General, quite simply, were the defendants in CIGNA Healthplan. See
Hydrostorage, 891 F.2d at 724-25; CIGNA Healthplan, 82 F.3d at 644. In
the case at bar, on the other hand, Harding is suing a medical provider
and its legal representative — two private entities that lack the
ability to enact or enforce state legislation. Such defendants,
therefore, cannot interfere with Harding's federal rights under the
Supremacy Clause. In order for Harding to allege such a preemption claim
properly, she must sue the appropriate California officials. This court's
reach is circumscribed by the boundaries of federal jurisdiction and
Harding's claims against defendants at bar do not reside within those
limits. See Kokkonen v. Guardian
Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391
For the foregoing reasons, defendants' motion to dismiss (Docs # 21-24)
is GRANTED. The clerk is directed to close the file ...