LOUISE W. FLANAGAN, District Judge.
This matter comes before the court on plaintiffs' motion for preliminary injunction (DE # 31) and first motion to certify class (DE # 34). Defendant Albert A. Delia ("defendant Delia") filed response in opposition and defendants Pamela Shipman ("defendant Shipman") and defendant PBH also filed response in opposition. Plaintiff filed separate replies to both responses. On March 7, 2012, plaintiffs were granted leave to file supplemental declarations. Defendants were also granted leave to supplement their filings accordingly. Plaintiffs filed a second reply. In this posture, the issues raised are ripe for ruling. For the following reasons the court grants plaintiffs' motions.
Plaintiffs filed complaint as putative class action on July 5, 2011 against defendants. Plaintiffs allege violation of due process protections with respect to alteration of Medicaid benefits and seek preliminary and permanent injunctions. On July 12, 2011, the court entered order denying plaintiffs' motion for temporary restraining order, which motion was lodged in the complaint. On August 24, 2011, plaintiffs filed the instant motion for preliminary injunction. On August 29, 2011, plaintiffs filed the instant motion to certify class.
On September 6, 2011, the court stayed the time for defendants to file responses to the motions for preliminary injunction and class certification pending ruling on plaintiffs' motion to disqualify counsel, filed August 23, 2011.
On October 20, 2011, plaintiff intervenor M.S. filed motion to intervene and complaint in intervention, which motion the court allowed on December 5, 2011, in order lodged on the docket at entry 67.
Plaintiffs filed second motion for temporary restraining order on December 20, 2011, which motion was denied on December 28, 2011. On January 6, 2012, the court held administrative telephonic conference with the parties (excepting former counsel for defendants Shipman and PBH from Womble Carlyle). Briefing schedule for the instant motions was memorialized and deadlines were set, including date for oral argument.
Upon review of the briefs filed in support of the instant motions, however, the court entered order on March 7, 2012, dispensing with oral argument. In same order, the court granted plaintiffs' motions for leave to filed supplemental declarations in support of the instant motions, and allowed defendants seven days to supplement their own responses, which they did. Plaintiffs filed second reply. The court has considered all of the filings in its determination of the instant motions.
The named plaintiffs are Medicaid recipients, four minors and one adult, who have chronic and disabling conditions. Although plaintiffs' conditions are serious enough to qualify them for institutional placement, they can thrive in stable home environments with adequate support. The North Carolina Innovations Waiver ("Innovations Waiver") is a Home and Community Based Waiver, approved under 42 U.S.C. § 1396n of the Medicaid Act, that offers Medicaid services to individuals like plaintiffs with developmental disabilities who would otherwise qualify for services in an institutional facility. The program is called a waiver because the federal Medicaid agency has given North Carolina permission to ignore certain otherwise mandatory provisions of the Medicaid Act. All members of the putative class are consumers of services under the Innovations Waiver. The Innovations Waiver currently has approximately 675 total participants. Pls.' Mem. Supp. Mot. Prelim. Inj. 5.
The North Carolina Department of Health and Human Services ("NCDHHS") is the single state agency designated to administer or supervise the administration of the state's Medicaid program under Title XIX of the Social Security Act. 42 U.S.C. § 1396a(a)(5); N.C. Gen. Stat. § 108A-54. The NCDHHS's division of medical assistance ("DMA") is responsible for the day to day administration of the Medicaid program. Defendant Delia is the head of the NCDHHS.
Defendant PBH is a multi-county area mental health, developmental disabilities, and substance abuse authority. Defendant Delia contracts with defendant PBH to perform certain functions in operating the Innovations Waiver. Defendant PBH is a local management entity ("LME"), which is defined by statute as a local political subdivision of the states.
The DMA entered into a contract with defendant PBH to arrange for and manage the delivery of services and perform other waiver operational functions through its prepaid inpatient health plan ("PIHP") for Medicaid recipients in its area. Defendant PBH manages the PIHP through which all mental health, developmental disabilities and substance abuse services are authorized for Medicaid. Def. Delia's Resp. Opp'n Mot. Prelim. Inj. 4.
Under the Innovations Waiver, participants meet with a PBH employee, called a care coordinator, once every twelve (12) months to develop a service plan of care, which specifies the services requested to be authorized for the next twelve (12) month period. The plan is then submitted to a PBH employee in the Utilization Management section for approval or denial. Once approved, the participants twelve-month plan takes effect on the first day of the participant's month of birth. Services under the waiver are authorized by PBH for one year when the annual plan of care is approved, although mid-year modifications can be requested if a participant's needs change.
Of particular importance is the process defendant PBH has used and is using to impose reductions to certain participants' budgets. As part of the Innovations Waiver approved by the Centers for Medicare and Medicaid Service ("CMS"), there was a change in the method used by defendant PBH to assess the needs of program participants. The new program utilized a model called the support needs matrix ("SNM"). Under the SNM, employees of defendant PBH conducted evaluations using a "support intensity scale" ("SIS"). Defendants contend that the SIS is a valid way to assess a participant's support needs.
In March 2011, defendant PBH issued undated form letters to plaintiffs and other participants, informing them that they had been assigned to one of twenty-eight (28) categories of need using the SNM system, a score based primarily on scores determined by the SIS assessment. The March 2011 letter informed that the assignment to a category would result in new, maximum dollar limits for the individual's services. For some participants, the letter informed that the new budget limit would be in effect beginning July 1, 2011. The letter instructed each participant to contact his or her PBH care coordinator to revise the already approved plan of care, in most cases before July 1, 2011, to reduce or modify services to make them fit within the new budget limit.
The March 2011 letter contained no information about the right to appeal defendant PBH's decision. Penny C. Decl. Exh. B; Holzlohner Decl. Ex A. Plaintiffs also contend that defendant PBH's care coordinators repeatedly informed plaintiffs and others that the SIS scores and resulting assigned SNM categories and new budgets could not be challenged or appealed.
Plaintiffs contend that the summary mailed to participants did not include an explanation of the scoring system or an adequate explanation of the import of the score and what it meant for a participant's services. The March 2011 letter was accompanied by a booklet of general information. Pages 11 to 13 of the booklet include a description of a process by which a Innovations Waiver participant could request an "intensive review." Defendants describe intensive review as a process for participants who "believe that they have support needs which make them outliers as opposed to others in their Support Needs Matrix category." Def. PBH's Resp. Opp'n Mot. Prelim. Inj. 3. Defendants contend that if a participant wanted to pursue an intensive review, the care coordinators assisted the participant to gather the necessary documentation, complete the request, and submit the request to the intensive review committee. (Id.) Plaintiffs, however, contend participants could only request an internal paper review by a PBH committee, and that intensive review was limited to a small number of outliers. Plaintiffs further argue that contrary to defendant PBH's representation, care coordinators repeatedly failed to inform participants and their providers of the option for intensive review or discouraged them from requesting such a review.
Defendants dispute plaintiffs' allegations of defendant PBH employees discouraging appeals, and also describe other methods by which a participant in the Innovations Waiver can appeal a budget reduction and receive additional services. Defendants note that participants can formally request services through a Treatment Authorization Request ("TAR"). Service authorizations under a TAR are issued for specific services and for limited duration. If defendant PBH denies a service request in a TAR, the participant is given notice of his or her appeal rights.
A participant's planning team may also submit a TAR for base budget services that exceed the base budget for the participant's SNM category. In these cases, defendant PBH will authorize the services and amounts that coincide with the SNM, and deny the services that do not. Defendants contend that participants are given notice of their appeal rights upon denial. The appeal process first consists of an appeal to defendant PBH, called a Reconsideration Review. If further appeal is desired, the next level is the North Carolina Office of Administrative Hearings ("NCOAH").
Plaintiffs accuse defendants of engaging in practices that reduced and terminated Medicaid services with no written notice or right to a hearing. Specifically, plaintiffs accuse defendant PBH and its employees of: (1) routinely informing participants and providers that their SNM category cannot be appealed; (2) pressuring participants or their guardians into signing a new plan of care that does not meet the needs of the recipient, even though the previously approved plan should still be in effect; (3) informing participants that if a new plan reducing services was not signed, all waiver services would end; (4) informing participants that the SIS score could not be contested unless it was challenged within ninety (90) days, even though the SIS report contained no notice of appeal; (5) informing participants that they could not request an intensive review unless they waited six months or otherwise discouraging them from making the request; and (6) suggesting to participants that if they did not change their plans and reduce services, they would run out of money and services would stop entirely. Plaintiffs offer declarations of plaintiffs or their guardians to support each of these allegations, and supplemented many of those same affidavits which reiterate the same. Defendants deny the allegation, and contend that defendant PBH employees communicated certain ways to contest the SIS scores and SNM categorization, though at least one employee acknowledges communicating that the SNM category could not be appealed.
Plaintiffs also contend that the practices described above are ongoing. While at least two of the named plaintiffs have received notification from defendant PBH in 2012 that their SNM category has changed, resulting in higher budgets to become effective in March 2012, plaintiffs contend that defendants' practice of depriving participants of due process when budgets are reduced continues. Plaintiffs contend that reductions in their budgets over the past year have caused significant hardships, including behavioral regression, emotional and mental anguish from the same, and a fear that plaintiffs will be institutionalized.
Rule 23 sets forth the requirements that plaintiffs must satisfy to be permitted to represent a class. Fed. R. Civ. P. 23(a). First, a plaintiff must show that "(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class."
Here, plaintiffs contend they satisfy both the requirements of Rules 23(a) and 23(b)(2), which provides that class certification is appropriate where "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief with is appropriate respecting the class as a whole." Fed. R. Civ. P. 23(b)(2). The putative class is defined by plaintiffs as
Pls.' Mot. Class Certification 1. Defendants PBH and Shipman argue that plaintiffs' proposed class definition is unclear. The court disagrees. Plaintiffs make clear that the class includes those participants in the Innovations Waiver whose services will be "denied, reduced, or terminated." The proposed class does not include persons whose services are increased.
The court also finds defendant PBH's and defendant Shipman's arguments against class certification because of finite resources to be similarly unavailing. Defendant PBH acknowledges that its contract with the NCDHHS results in its assumption of the risk. "PBH's operation as a PIHP means that PBH is pre-paid by the State to provide care, and PBH accepts the financial risk for providing that care." Defs. PBH and Shipman Resp. Opp'n Class Certification 3. Defendants PBH and Shipman cite no authority to support the implication that because they have a finite amount of funds, they do not have to alter conduct that is in violation of federal law and due process. Inadequate appropriations does not excuse compliance with the Medicaid Act.
Defendants PBH and Shipman next argue that the named plaintiffs do not have standing to bring this action.
Standing is the determination of whether a particular individual is the proper party to assert a claim in federal court; it "is founded in concern about the proper — and properly limited role — of the courts in a democratic society."
Named plaintiffs who represent a class "must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent."
Defendants PBH and Shipman initially suggest that no plaintiff raises a cognizable claim and thus no class can be certified as to any claim. Defendants PBH and Shipman incorporate their arguments raised in opposition to the motion for preliminary injunction to argue that plaintiffs assert no cognizable claims. For the reasons discussed infra, the court disagrees, and finds that a
cognizable claim is set forth as to each of plaintiffs' three claims. The bulk of defendant PBH's and defendant Shipman's argument that plaintiffs do not have standing, however, is that named plaintiffs' claims are moot. Specifically, defendants PBH and Shipman contend that K.C.'s, L.S.'s, and Allison Taylor Johns's previous authorizations expired in the last six months of 2011, which mooted their claims. Additionally, defendants PBH and Shipman contend that D.C. and M.S. are both receiving increases in their budgets as a result of category changes resulting from a more recent SIS evaluation.
The court finds these arguments to be unpersuasive and contrary to case law. As to the contention that plaintiffs K.C., L.S. and Allison Johns no longer have ripe claims because their authorization periods expired, the court addresses similar argument later in this order, and references the same here.
As to the argument that because D.C. and M.S. will receive increases in their budgets sometime in the future, the court finds this reasoning similarly unavailing and finds that "Defendant[s] [do] not challenge . . . whether the named Plaintiffs had standing at the commencement of this suit, but appear[] rather to be contending that the claims of some of the named Plaintiffs are, in light of subsequent actions by Plaintiffs and Defendants now moot."
The court agrees with plaintiffs that the named plaintiffs continue to have live claims because all are participants in the Innovations Waiver and thus all are subject to the SNM and the SIS, and the use of these indexes for determining services. It is the use of these indexes to reduce plaintiffs' services without notice or hearing that is challenged in this case, not whether in a few months time, some plaintiffs might get more services than they currently have. Because defendants assert the legality of the processes for reducing services, the case falls under the class of cases in which a defendant's alleged wrong is capable of repetition yet currently evading review.
Having determined the named plaintiffs have standing to bring the instant suit, the court turns its attention to whether plaintiffs have satisfied their burden under Rule 23. As noted above, the requirements of Rule 23(a) are: numerosity of parties, commonality of factual or legal issues, typicality of claims and defenses of class representatives, and adequacy of representation.
There is no specified or minimum number of plaintiffs needed to maintain a class action.
"[T]he final three requirements of Rule 23(a) tend to merge, with commonality and typicality serving as guideposts for determining whether . . . maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence."
As discussed above, the court finds the proposed class to be sufficiently defined as to include only those Innovations Waiver participants whose services were reduced. Defendants' arguments that the commonality requirement cannot be satisfied because of the competing interests of class members whose services were not reduced is without merit.
Defendant PBH's and defendant Shipman's arguments that class counsel have conflicts of interest which would impact their ability to represent the proposed class is similarly not well taken where this argument is premised solely on the assumption that the proposed class includes participants whose services were not reduced. As such, the court finds no apparent conflict of interest in the proposed class counsel.
Finding defendant PBH's and defendant Shipman's arguments as to the Rule 23(a) factors to be unavailing, the court proceeds to analyze whether plaintiffs' claims satisfy the commonality, typicality, and adequacy of representation requirements. The court finds that all three requirements are met. The requirement of commonality can be satisfied by just a single common question of law or fact.
The court finds that all of the named plaintiffs' claims arise from the same legal theory and the same factual circumstances as those of the class: the named plaintiffs and class members live in the PBH catchment areas, are eligible for Medicaid services through the Innovations Waiver, and had services authorized prior to July 1, 2011, that were reduced based on application of the SNM and the SIS. Common questions of law include whether violations of the Fourteenth Amendment to the United States Constitution occurred through the use of the SIS and subsequent alleged lack of notice and opportunity for hearing after services were reduced, and whether federal law also was violated by the lack of notice and opportunity for hearing. Any differences among the named plaintiffs and class members are minor and do not disturb the similarities noted above. Ultimately, the claims of the named plaintiffs are "so interrelated" that the interests of the class members will be fairly and adequately protected.
Lastly, the court finds that the adequacy of representation requirement is met. Where the Fourth Circuit has two requirements for this element to be met—that the named plaintiffs do not have antagonistic interests to the class,
Finding the Rule 23(a) requirements to have been satisfied, the court moves to defendant Delia's argument that plaintiffs have failed to satisfy this requirement.
Additionally, the court finds plaintiffs' argument well taken that the necessity argument contradicts the language of recent Supreme Court precedent. "In other words, Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class."
Accordingly, having found that the requirements of Rule 23 are met, the court, in its discretion, grants plaintiffs' motion to certify the class. Counsel requesting to be appointed as class counsel in plaintiffs' motion for class certification lodged on the docket at entry 34 are appointed pursuant to Fed. R. Civ. P. 23(g).
"A preliminary injunction is an extraordinary and drastic remedy."
Defendants PBH and Shipman contend that the correct legal standard to be applied is the stricter standard required for mandatory preliminary injunction. Mandatory preliminary injunctions do not preserve the status quo and are only granted in very specific circumstances, usually only when extreme or serious damage will result.
Plaintiffs, except plaintiff Johns, seek a preliminary injunction to restore their services to the level authorized the day before the instant suit was filed, thus June 30, 2011, and an order preventing further reductions until a final ruling by this court. As to plaintiff Johns, since she was told her services would stop on October 31, 2011, she seeks a preliminary injunction to prevent defendants from terminating or reducing her services as of that date.
As plaintiffs note in their reply, the basis of their motion for preliminary injunction is that their services, to which they were entitled for an authorization period of one year, were cut short in the middle of the authorization period, thus the status quo would be the amount of services to which they believe they were entitled for the authorization period that was cut short July 1, 2011. The same argument applies to plaintiff Johns, with the exception that the status quo of her benefits is what she received prior to October 31, 2011, when defendant PBH stated her services would be terminated.
Several general issues must be addressed before the court analyses the specific merits of plaintiffs' motion for preliminary injunction.
First, the findings set forth herein apply to all defendants. The court rejects defendant Delia's argument in his response in opposition to plaintiffs' motion for preliminary injunction that plaintiffs do not allege direct action by him or that plaintiffs are alleging an impermissible form of respondeat superior liability. Def. Delia's Resp. Opp'n Pls.' Mot. Prelim. Inj. 7. As the head of the single state agency responsible for administering the Medicaid program in North Carolina, NCDHHS, defendant Delia remains accountable for the administration of the Medicaid program through contracts with defendant PBH. This finding is supported in the case law cited by plaintiffs.
Second, defendants PBH and Shipman suggest in their response in opposition that plaintiffs' motion for preliminary injunction does not touch plaintiffs' first claim for relief in the complaint, which alleges violation of due process for non-arbitrary standards. Plaintiffs oppose this position, arguing that their first claim is based on defendant PBH's failure to disclose how SIS scoring or the support needs matrix categorization works. Plaintiffs' memorandum in support of the motion for preliminary injunction does address the issues raised in this first claim; specifically, that defendant PBH's use of the support needs matrix and corresponding SIS number was not explained to participants, nor was the import of the score explained to illuminate for participants what it meant for them.
Third, the court notes that defendants, in their respective responses in opposition to the motion for preliminary injunction, suggest that the court has already addressed the merits of plaintiffs' motion in its denial of plaintiffs' motions for temporary restraining order, the first filed in the original complaint and the second filed in late December 2011. As the court's orders addressing both motions for temporary restraining order noted, the court found the extraordinary remedy sought in those motions to be inappropriate without a thorough consideration of both sides' arguments as to the motion for preliminary injunction. The court did not consider the merits of the argument presented in plaintiffs' motion for preliminary injunction before the motion was ripe. Thus, contrary to what defendants assert, the court has not considered and found deficient plaintiffs' arguments as to either the motion for preliminary injunction or motion for class certification.
Plaintiffs have demonstrated a likelihood of success on the merits. Title XIX of the Social Security Act establishes the Medicaid program. 42 U.S.C. §§ 1396-1396w-5. State participation in the Medicaid program is voluntary, and participating states are reimbursed by the federal government for a majority of the costs of Medicaid benefits. § 1396-1. States that elect to participate must "comply with detailed federally mandated standards."
As the head NCDHHS, defendant Delia heads the single state Medicaid agency which directly oversees the Innovations Waiver and ensures that Medicaid rules are followed. Federal approval specifies that defendant Delia must provide the opportunity for a fair hearing pursuant to federal regulations, 42 C.F.R. § 431.200 subpart E, to every waiver participant whose services are denied, suspended, reduced, or terminated. 42 C.F.R. § 431.200(a). Defendant PBH, as a managed care organization contracting with NCDHHS, must also provide the individual with proper written notice of his or her right to appeal a decision as provided in the federal regulations. 42 C.F.R. §§ 438.404(b).
Defendants' primary argument turns on whether or not defendant PBH has undertaken an agency "action" requiring enrollees to have opportunity for fair hearing. Defendants argue that because PBH operates as a PIHP, the applicable regulations for managed care entities in 42 C.F.R. § 438 only require notice and opportunity for fair hearing when the PIHP has taken an "action," and that defendant PBH has not taken such action. The regulations define agency "action" as:
In the case of a MCO
42 C.F.R. § 438.400(b).
As to this argument, that defendants have not taken agency action, the court disagrees. Though numerous, lengthy briefs by both sides have to some extent confused the issues of what exactly defendant PBH has done, the court finds that defendant PBH, under defendant Shipman's direction, has taken action that "reduc[ed], suspend[ed], or terminat[ed] . . . a previously authorized service," the previously authorized service being a particular enrollee's authorized services budget for one calendar year.
In March 2011, defendant PBH took action that reduced or suspended the participants' previously annually authorized services.
Plaintiffs' legal claims include allegations that: (1) defendants use the SIS to determine plaintiffs' level of need without an opportunity for a fair hearing; (2) plaintiffs are assigned to a SNM category and base budget without an opportunity for fair hearing; (3) plaintiffs are denied intensive reviews without opportunity for a fair hearing; and (4) plaintiffs were told they have to sign new plans of care reducing their services and failure to do so would result in all of their services stopping. Defendants contend that none of plaintiffs' legal claims are agency "actions," but rather are part of the "managed care planning process." Def. PBH Resp. Opp'n Pls.' Mot. Prelim. Inj. 19. While each one of these efforts might not be an agency "action" itself under the regulations, the court finds that agency action was taken, often in conjunction with the above mentioned efforts, when plaintiffs were notified that their annual, authorized base budget was no longer effective in July 2011.
Having found that defendants engaged in agency action of terminating or reducing benefits, it follows that plaintiffs were entitled to the notice and appeal rights outlined in the Medicaid regulations, cited above, as well as under general principles of due process.
Federal regulations require that a managed care provider such as defendant PBH must provide notice and opportunity for hearing when action is going to be taken.
The requirements for appeal of an agency action are set forth in 42 C.F.R. § 438.406 and include ensuring that the individuals who make decisions on grievances and appeals are individuals not involved in any previous level of review or decision-making, providing the enrollee an opportunity to present evidence and allegations of fact or law in person or in writing, providing opportunity for an enrollee to examine his or her file, and including as parties to the appeal an enrollee and his or her representative.
Defendants did not satisfy either the notice or appeal requirements. While the SIS score itself is not being challenged, plaintiffs note that the SIS assessments mailed in 2011 did not explain the significance of the score or how to challenge it. Pls. Mem. Supp. Mot. Prelim. Inj. 7. The score summary did not inform participants that failure to challenge it within ninety (90) days would bar future appeals of termination in service.
In March 2011, plaintiffs and proposed class members received undated letters from defendant PBH stating that according to the SNM, new budget limits for the participant's category of need would be implemented in July 2011. The letters did not contain information about appeal.
The court further finds that plaintiffs are likely to succeed on the merits on their claims that the same actions violated plaintiffs' due process rights under the Fourteenth Amendment. Plaintiffs have set forth the applicable law in detail, including the Supreme Court decision in
Because defendants rely on the premise that no agency action has been taken, defendants lodge no meaningful argument that what was provided to participants in the form of the March 2011, adequately complied with the requirements of
Considering the foregoing, the court finds that plaintiffs have made a sufficient showing of likelihood of success on the merits of their claims that defendants' notification of reduction in services in the spring of 2011 and after violates applicable federal regulations as well as due process.
Plaintiffs have also demonstrated irreparable harm. In the absence of an injunction, plaintiffs risk constant re-evaluation pursuant to the SIS and SNM without notice and opportunity to appeal the same. Plaintiffs have submitted multiple affidavits from plaintiffs or from individuals who care for plaintiffs who cite deteriorating and regressive behavior from lack of services, serious financial strain on plaintiffs' families, and for some, the threat of being institutionalized, as a result of reduced budgets since July 2011. While defendants suggest that some plaintiffs are about to enjoy increases in their benefits, without injunctive relief as to the lack of notice and opportunity to appeal, such benefit could be reduced without due process as quickly as it is given.
Further, where defendants suggest that every plaintiff could simply submit an over-budget request for services, such argument does not change the fact that defendant PBH took agency action when it notified participants that previously authorized services were to be reduced, without providing proper notice and opportunity to appeal. Additionally, plaintiffs have offered evidence that it is defendant PBH's policy to deny such requests to the extent they exceed the budget defendant PBH determines to be appropriate.
Taken as a whole, the serious physical and mental entry or forced entry into an institutional setting for many of the named plaintiffs and members in the class if injunctive relief is not provided constitutes irreparable harm.
Finally, plaintiffs have also shown that the balance of equities tips in their favor and that the public interest supports the issuance of an injunction. As noted earlier, where defendants complain of fiscal complications and insufficient funds to comply with relief plaintiffs seek, fiscal concerns cannot be held to outweigh harm to plaintiffs' safety, health, and well-being.
Additionally, the public interest always lies with upholding the law and having the mandates of the Medicare Act and due process enforced. As plaintiffs have shown a likelihood of success o the merits as to these claims, the court finds that an injunction is in the best interest of plaintiffs and the public.
Plaintiffs request that the court waive any requirement to post a cash bond under Federal Rule of Civil Procedure 65. Rule 65(c) provides,
Fed. R. Civ. P. 65(c). While plaintiffs offer case law from other circuits suggesting that no bond is required here, the language of Rule 65 as well as Fourth Circuit precedent counsel that "[f]ailure to require a bond before granting preliminary injunction relief is reversible error."
No defendant has raised objection to plaintiffs' request for the court to waive the bond, nor have defendants suggested that if a preliminary injunction is otherwise deemed proper, plaintiffs should be required to post security. Considering Fourth Circuit precedent as well as plaintiffs' status, the court orders that plaintiffs post a nominal cash bond in the amount of $100.00 as security for the payment of such damages as any person may be entitled to recover as result of wrongful injunctive relief. Defendants may move to amend the order if they assert that the limited preliminary injunction will cause them to incur expenses for which plaintiffs should be required to provide security.
Based on the foregoing, plaintiffs' motion for preliminary injunction (DE # 31) is GRANTED. Plaintiffs' motion to certify class (DE # 34) is GRANTED.
Counsel for plaintiffs are directed to provide appropriate notice to the class pursuant to Rule 23 of the Federal Rules of Civil Procedure. Counsel requesting to be appointed as class counsel in plaintiffs' motion for class certification lodged on the docket at entry 34 are appointed pursuant to Fed. R. Civ. P. 23(g). Plaintiffs shall post immediately the bond discussed herein. Further order shall follow addressing case scheduling issues.
SO ORDERED.
