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Prime Healthcare Services - Shasta, LLC v. Price

United States District Court, E.D. California

July 5, 2017

TOM PRICE, Secretary of the Department of Health and Human Services, Defendant.


          Troy L. Nunley, United States District Judge.

         This matter is before the Court pursuant to Defendant Tom Price's (“Defendant” or the “Secretary”) Motion for Stay of Proceedings. (ECF No. 8.) Plaintiff Prime Healthcare Services - Shasta LLC (“Plaintiff”) opposes the motion.[1] (ECF No. 11.) Defendant filed a reply. (ECF No. 12.) The Court has carefully considered the arguments raised by the parties. For the reasons set forth below, Defendant's motion is DENIED.

         I. Introduction and Background

         Defendant moves this Court to stay the instant action because there are “two previously filed federal actions that likely will have direct and substantial (if not dispositive) effects on these proceedings.” (ECF No. 8-1 at 2.) The first action is United States ex. rel. Bernsten v. Prime Healthcare Services, C.D. Cal. Case No. 11-8214 (the “FCA Action”). The second action is Alvarado Hospital, LLC v. Price, C.D. Cal. Case No. 15-6312 (the “Settlement Action”).

         “The proponent of a stay bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708 (1997) (citing Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)). Defendant has not done so here. This is in part due to the quality of briefing. Nowhere in Defendant's opening brief does he address what Plaintiff will need to demonstrate to show it is entitled to relief in the instant action or the standard of review that applies to a final agency decision of the sort at issue in this case. The brief discussion of these topics in his reply brief was not particularly illuminating. These deficiencies were compounded by his sparse and, frankly, imprecise discussion of the FCA Action. While Defendant has submitted a copy of the Government's complaint in that action, this misses the point. The Court is not a litigant in the instant action. It is not the role of the Court to develop arguments for litigants or parse pleadings for actions not before this Court - with which it cannot be presumed to have any familiarity - to see whether they support a litigant's underdeveloped arguments. See Williams v. Eastside Lumberyard & Supply Co., 190 F.Supp.2d 1104, 1114 (S.D. Ill. 2001).

         In any event, the Court will analyze this motion on the merits because stays of the sort sought here are discretionary and, where appropriately granted, serve to promote judicial economy and preserve judicial resources. See Landis, 299 U.S. at 254-55. To do this in an orderly way, the Court will first set out the legal standard for granting a motion to stay. This will be followed by a brief discussion of the nature of the instant action and the related standard of review. Finally, the Court will summarize the status and nature of the FCA Action and the Settlement Action before analyzing the instant motion.

         II. Standard of Law

         The power to stay proceedings is “incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis, 299 U.S. at 254. “The proponent of a stay bears the burden of establishing its need.” Clinton, 520 U.S. at 708. A district court's decision to grant or deny a stay is a matter of discretion. Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). Indeed, “[a] trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863 (9th Cir. 1979). This rule “does not require that the issues in such proceedings are necessarily controlling of the action before the court.” Id. at 863-64. Nonetheless, “[w]here it is proposed that a pending proceeding be stayed, the competing interests which will be affected by the granting or refusal to grant a stay must be weighed.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). “Among these competing interests are the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay.” Id. (citing Landis, 299 U.S. at 254-55).

         Additionally, in determining whether a stay is appropriate, a district court should be mindful that the length of the proposed stay is reasonable in relation to the justification given for it. See Landis, 299 U.S. at 256-57; see also Yong v. I.N.S., 208 F.3d 1116, 1119 (9th Cir. 2000) (“If a stay is especially long or its term is indefinite, we require a greater showing to justify it.”). There is a general policy “favoring stays of short, or at least reasonable, duration.” Dependable Highway Exp., Inc., 498 F.3d at 1067. “Generally, stays should not be indefinite in nature.” Id. at 1066. “[A] stay should not be granted unless it appears likely the other proceedings will be concluded within a reasonable time.” Id. (quoting Leyva, 593 F.2d at 864).

         III. Nature of Instant Action

         A brief explanation of Medicare's system of payments and administrative appeals is necessary to understanding the nature of this action and putting the instant motion in proper context. The Ninth Circuit has provided precisely this:

The Secretary of Health and Human Services . . . administers the Medicare program through the Centers for Medicare and Medicaid Services (“CMS”). . . . Medicare is a federally funded health insurance program for aged and disabled persons. 42 U.S.C. § 1395 et seq. . . . Through CMS, the Secretary contracts with fiscal intermediaries, generally private insurance companies, to perform coverage determination and payment functions. Id. §§ 1395h, 1395kk-1; Erringer v. Thompson, 371 F.3d 625, 627 (9th Cir. 2004).
Medicare coverage is limited to services that are medically “reasonable and necessary.” 42 U.S.C. § 1395y(a)(1)(A). . . . [F]iscal intermediaries make “initial determinations” of coverage and amount. Id. § 1395ff(a)[.]

Palomar Med. Ctr. v. Sebelius, 693 F.3d 1151, 1153-55 (9th Cir. 2012). A determination of overpayment may be appealed through a four-tier administrative appeals process. See id. at 1155. The third-tier is a determination by an administrative law judge (“ALJ”). See id. This decision can be appealed to the Medicare Appeals Council (“MAC”) - the fourth ...

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