Rio Grande Community Health v. Rius Armendariz , 792 F.3d 229 ( 2015 )

United States Court of Appeals
For the First Circuit
No. 15–1745
RIO GRANDE COMMUNITY HEALTH CENTER, INC., ET AL.,
Plaintiffs, Appellees,
v.
HON. ANA RÍUS ARMENDÁRIZ,
SECRETARY OF THE DEPARTMENT OF HEALTH OF THE COMMONWEALTH OF
PUERTO RICO,
Defendant, Appellant.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, Jr., U.S. District Judge]
Before
Lynch, Kayatta, and Thompson,
Circuit Judges.
Margarita Mercado-Echegary, Solicitor General, and Susana I.
Peñagarícano-Brown, Assistant Solicitor General, on brief for
appellant.
James L. Feldesman, Robert A. Graham, Nicole M. Bacon, and
Feldesman Tucker Leifer Fidell LLP, on brief for appellee.
July 7, 2015
PER CURIAM. After a decade of litigation over the
Commonwealth of Puerto Rico's failure to make "wraparound"
payments under federal Medicaid law, 42 U.S.C. § 1396a(bb), the
district court entered an order compelling the payment of amounts
due plaintiffs according to a lawful, prospective injunction.1
When the defendant failed to make those payments in accord with
the terms of the order, and after exhausting efforts to secure
defendant's voluntary compliance, the district court entered
additional orders, one directed to the Commonwealth-owned
Government Development Bank of the Commonwealth of Puerto Rico
(attaching funds held on behalf of the Commonwealth's Treasury
Department), and a second directed to the president of that bank
(ordering her to issue a check for the amount due plaintiffs).
The defendant has appealed those orders. In connection with that
appeal, she asks that we stay the district court orders that are
the subject of the appeal. We initially issued a brief, temporary
stay so that we could consider the merits of the stay motion. For
1 This protracted litigation has reached the First Circuit
six prior times. See Consejo de Salud v. Gonzalez-Feliciano, 695
F.3d 83 (1st Cir. 2012); Concilio de Salud Integral de Loíza, Inc.
v. Pérez-Perdomo, 625 F.3d 15 (1st Cir. 2010); Concilio de Salud
Integral de Loiza, Inc. v. Pérez-Perdomo, 551 F.3d 10 (1st Cir.
2008); Dr. José S. Belaval, Inc. v. Pérez-Perdomo, 488 F.3d 11(1st Cir. 2007); Dr. José S. Belaval, Inc. v. Pérez-Perdomo, 465
F.3d 33 (1st Cir. 2006); Rio Grande Cmty. Health Ctr., Inc. v.
Rullan, 397 F.3d 56 (1st Cir. 2005).
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the following reasons, we now dissolve that temporary stay and
deny the motion to stay.
The defendant must make the following four showings to secure
a stay: "(1) a strong showing that [it] is likely to succeed on
the merits, (2) a showing that unless a stay is granted [it] will
suffer irreparable injury, (3) a showing that no substantial harm
will come to the other interested parties, and (4) a showing that
a stay will do no harm to the public interest." Ainsworth
Aristocrat Intern. Pty. v. Tourism Co., 818 F.2d 1034, 1039 (1st
Cir. 1987).
In an effort to make these required showings, the
defendant argues that the orders violate the Eleventh Amendment.
We have already rejected such an argument, albeit in dictum, in
this very litigation. See Concilio de Salud Integral de Loiza,
Inc. v. Perez-Perdomo, 625 F.3d 15, 19–20 & n.4 (1st Cir. 2010)
("[O]nly if the state were disobeying a forward-looking court order
to make such payments could a violation of that order be redressed
by a federal court remedial directive to make payments to comply
with the preexisting order.") (emphasis in original) (citing Frew
ex rel. Frew v. Hawkins, 540 U.S. 431, 440 (2004); Hutto v. Finney,
437 U.S. 678, 690–91 (1978)); Concilio de Salud Integral de Loiza,
Inc. v. Perez-Perdomo, 551 F.3d 10, 18 n.8 (1st Cir. 2008) ("Any
claims for past non-compliance with the district court's
preliminary injunction, though claims for monies due, are also not
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barred by the Eleventh Amendment."). While we reserve final
decision until we rule on the appeal, we easily find now that the
defendant is not likely to change our preliminary view. As the
Supreme Court observed in Hutto, "the principles of federalism
that inform Eleventh Amendment doctrine surely do not require
federal courts to enforce their decrees only by sending high state
officials to jail. The less intrusive power to impose a fine is
properly treated as ancillary to the federal court's power to
impose injunctive relief." 437 U.S. at 691. These orders on
appeal would seem to represent actions more modest and less
intrusive in their effect than the fines and imprisonment expressly
blessed in Hutto.
The defendant also argues that Commonwealth law does not
allow attachment of Commonwealth funds, and that the district court
under Federal Rule of Civil Procedure 69 can only attach funds to
execute on a monetary judgment in the manner allowed for by
Commonwealth law. Whether this is so we need not decide. Rather,
we need only observe that it is not likely that the court's
inherent powers in aid of enforcing its orders for prospective
payments are limited in this manner by Rule 69. See, e.g., Spain
v. Mountanos, 690 F.2d 742, 744–45 (9th Cir. 1982) (noting the
district court's "plenary power to enforce its commands").
We also acknowledge the extreme financial distress in
which the Commonwealth finds itself. That distress, however, at
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least without action by Congress, would not seem to justify a
failure to comply with a lawful order, especially where the
district court has been so patient in enforcing its order.2
For the aforementioned reasons, we dissolve the temporary
stay of the district court's orders that we entered on June 23,
2015, and we deny defendant's motion to stay those orders pending
the resolution of any appeal from the orders.
So ordered.
2 Regarding the Commonwealth's claim of irreparable harm, to
the extent the Commonwealth accessed estimated matching funds from
the federal government for the relevant quarter pursuant to 42
U.S.C. § 1396b(d) and 45 C.F.R. § 201.5(c), being compelled to put
those funds to their intended use -- Medicaid expenses -- can
hardly be classified as causing irreparable harm.
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