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The Arc of California v. Toby Douglas

November 20, 2012

THE ARC OF CALIFORNIA; UNITED CEREBRAL PALSY ASSOCIATION OF SAN DIEGO,
PLAINTIFFS,
v.
TOBY DOUGLAS, IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES; CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICE; TERRI DELGADILLO, IN HER OFFICIAL CAPACITY AS DIRECTOR OF THE CALIFORNIA DEPARTMENT OF DEVELOPMENTAL SERVICES; AND DOES 1-100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Through this action, Plaintiffs, a consortium of home health care providers, sue the State of California on grounds that the State's payment reductions affecting services to intellectually and developmentally disabled individuals (I/DD) run afoul of federal Medicaid provisions governing how states participating in the Medicaid program can use federal dollars.

This case was originally filed on September 28, 2011. On October 19, 2011, Plaintiffs filed a Motion for Preliminary Injunction and that Motion was countered by a motion to dismiss submitted on behalf of the State on November 11, 2011. On December 13, 2011, this Court stayed these proceedings pending the outcome of a United States Supreme Court case, as well as several anticipated regulatory amendments that appeared to be potentially dispositive in adjudicating certain of the claims presented by this litigation. Because those clarifications did not in fact materialize as anticipated, Plaintiffs moved to lift the stay, and the Court issued an order to that effect on August 22, 2012.

On September 25, 2012, after the case was reactivated, the State renewed its motion to dismiss, and that motion is currently scheduled for oral argument on December 13, 2012. Plaintiffs have also filed a motion for sanctions against the State for failure to comply with the terms of the Court's previous order lifting the stay in this matter. That motion is also scheduled to be heard concurrently with the Motion to Dismiss on December 13, 2012.

Presently before the Court is Plaintiffs' Ex Parte Application, filed November 12, 2012, for an Order to Show Cause as to why a Temporary Restraining Order/Preliminary Injunction should not be issued. That Application tracks to a great extent the previously filed motion for preliminary injunction filed in October of 2011 before the case was initially stayed.

The key difference, as discussed below, is that Plaintiffs request now that an emergency temporary restraining order be issued as opposed to a preliminary injunction request made by regularly noticed motion. On November 16, 2012, this Court entertained oral argument as to the propriety of a temporary restraining order under the circumstances. The Court denied Plaintiffs' ex parte application from the bench, and this Order supplements that oral ruling.

STANDARD

The purpose of a temporary restraining order is to preserve the status quo pending the complete briefing and thorough consideration contemplated by full proceedings pursuant to a preliminary injunction. See Dunn v. Cate, 2010 WL 1558562 at *1 (E.D. Cal. 2010) ("A temporary restraining order is designed to preserve the status quo until there is an opportunity to hold a hearing on the application for a preliminary injunction").

Issuance of a temporary restraining order, however, as a form of preliminary injunctive relief, is an extraordinary remedy, and Plaintiffs have the burden of proving the propriety of such a remedy by clear and convincing evidence. See Mazurek v. Armstrong, 520 U.S. 968, 972 (1997); Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 442 (1974). In general, the showing required for a temporary restraining order and a preliminary injunction are the same. Stuhlbarg Int'l Sales Co., Inc. v. John D. Brush & Co., Inc., 240 F.3d 832, 839 (9th Cir. 2001).

As recognized by the Supreme Court in Winter v. Natural Resources Defense Council, 129 S. Ct. 365 (2008), the party requesting preliminary injunctive relief must show that "he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009) (quoting Winter, 129 S. Ct. at 374.

Alternatively, under the so-called sliding scale approach, as long as the Plaintiffs demonstrate the requisite likelihood of irreparable harm and show that an injunction is in the public interest, a preliminary injunction can still issue so long as serious questions going to the merits are raised and the balance of hardships tips sharply in Plaintiffs' favor. Alliance for Wild Rockies v. Cottrell, 2010 WL 3665149 at *4-8 (9th Cir. Sept. 22, 2010) (finding that sliding scale test for issuance of preliminary injunctive relief remains viable after Winter).

The propriety of a temporary restraining order, in particular, hinges on a significant threat of irreparable injury (Simula, Inc. Autoliv, Inc., 175 F.3d 716, 725 (9th Cir. 1999)) that must be imminent in nature. Caribbean Marine Serv. Co. v. Baldridge, 844 F.2d 668, 674 (9th Cir. 1988).

ANALYSIS

With respect to issuance of an emergency temporary restraining order, as the above-stated standard makes clear, Plaintiffs must demonstrate a significant threat of imminent, irreparable injury. The Court concludes that Plaintiffs have not met that rigorous burden. In addition, the time frames attendant to the reimbursement cuts they challenge, as well ...


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